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Latif: Greek Debt Drama a ‘Game of Chicken’

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    Wasif Latif, USAA Investments VP, on the latest drama in the Greek debt crisis.

  • Duration 3:42
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Perhaps a very different opinions on next guest says the psychological battle is playing out like that game of chicken.

Joining us is what safe Latif vice president of equity investments at US FAA investment management company was -- thank you so much for joining us.

I'll -- were already getting reports from Dow Jones that to the ECB now has an.

In house experts calculating the the impact on the firewall of Europe where if Greece indeed does in fact drop out of the eurozone.

I guess my question to you is do you expect Greece to full away from the Euro and what does that mean for our markets here.

Well it's not a foregone conclusion yet whether.

Greece will unfriendly the rest of the eurozone -- not so at 8888 really is.

That -- will -- happen from here on.

The game of chicken is is ongoing its continuing.

The last two weeks have increased the probability of such an amendment is not a foregone conclusion yet so what they're doing is they're trying to figure out.

How can we ring fence.

The other institutions and primarily.

The rest of the Euro zone particularly the the other countries that are at risk not like Spain in particular.

But what's the turning point but what's what sets it over the ads is that -- social unrest.

The inability to get a government together I mean -- quite frankly that the bank run could even be on the table as well.

Yeah would would so many different intertwined tentacles there's there's really no way of predicting.

Exactly what corner will spark.

Or may spark something like this so.

You really don't know but the issues are are all -- like you said it could be a bank -- could be.

Containing money flows out of the Greek banking system that force some activity in action out of the out of the ECB.

And then to the central Bank of Greece he could be increased populism which is now fighting with the austerity that we're going on.

And it could be the elections that are gonna take place again in Greece.

But the bottom line is that Greece by itself is PE is not as big of a deal in terms of its right eighty.

-- total debt.

But it is the sentiment that impacts the other parts of Europe that's gonna have the contagion effect yet and why does it matter to us is because.

Just like we had our troubles in 08 and that landed on their shores.

Their troubles this time around if they are unable to keep them at bay could land up on our short.

-- -- -- policy is a battle between austerity which the Germans are preaching and those -- believe -- has to be some growth issues as well.

Right Angela Merkel is gonna feel very lonely at the G-8 I think -- Camp David this weekend because they're going to be pressing her to kind of you know relax a little bit now austerity is she gonna have to do that.

Well I think they'll be some kind of a a medium in between because.

You are getting this populism and backlash if you will -- -- folks are getting elected like -- alarmed in France.

We're saying that well maybe austerity isn't the only way out maybe there's something else we can do maybe we slow and on the austerity maybe there's some growth in there.

That's great but you can't.

And always grow volume problem if you don't have the means to -- so it's great threat to promise all of that but if you don't have the means to deliver on those promises and that's going to be challenged.

But I do think that.

Merkel.

And and and the other the hard countries.

Are going to have to come to some kind of a compromise between the austerity.

Right and as well as the the populace and the new world -- will continue.

Compromise all right.

Let's see -- thank you so much of you as a a investments very interest thing that has to be a compromise but the.

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