June 17th, 2012
03:29 PM GMT
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London (CNN) – For London’s investment community Sundays are more about talking pizzas than politics.

They’re the last chance to unwind before buckling up for the bumpy ride when the markets open on Monday morning.

But across Europe’s financial hub, traders are keeping an uneasy eye on events in Athens and preparing themselves for what many reckon will be a wild week at work.

Veteran London hedge fund manager Lex van Dam has lived through more than one financial crisis and worked for some of the biggest names on the street, like Goldman Sachs and GLG.

The 43 year-old Dutchman shot to fame three years ago at the height of the credit crunch as the forthright financier on the BBC’s reality show "Million Dollar Traders."

Van Dam now spends his time running Hampstead Capital, a fund with 500 million euros ($630 million) under management, as well as his new initiative: The Lex van Dam Trading Academy, set up to teach would-be dealers how to manage money.

He took time away from his weekend lunch (and 26,000 followers on twitter) to answer five key questions on what the Greek elections mean for the markets.

1. Will Greece leave the euro?

Yes. They will leave very soon unless the Germans change their tune and throw more money at them. It is slightly unfair though as most of the help Europe gives them is to help the Europeans themselves as opposed to helping the Greek people.

2. Is austerity the right answer?

Austerity is not the answer. The Greek economy is absolutely collapsing and the tax base is going down with it. The American and British solution of printing money is not the answer because it will lead to a total lack of trust in the government because paper money will be worthless. The answer is accepting that people in the West need to work harder and longer.

3. Will the euro survive?

The biggest chance is for a two-speed Europe to emerge with Germany leading the euro pact and Italy in the second group. The German euro will be very strong, the Italian euro very weak though.

4. Eurobonds: The perfect cure or recipe for disaster?

The Germans have done a massive amount of austerity at home with a higher retirement age and lower wage inflation than in the southern European nations. They will not write a blank cheque to the south. Eurobonds mean that the Germans will become responsible for the Greek debt. It will not happen unless countries such as Spain and Italy give up part of their sovereignty.

5. Where are you putting your money now?

My money stays in cash and real assets such as property and gold. Shares are not expensive right now but if interest rates go up even a little they could drop a lot.




June 17th, 2012
02:32 PM GMT
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Athens (CNN) - Whichever way the Greek people vote in these elections, there are no easy options for the country. It is almost certain no one party will get a majority – even with the top-up seats given to the front runner.

We are facing days of horse-trading.

Voices of Greece

The best that can be hoped for is that the leaders of New Democracy and PASOK follow through on the noises they are making. That it is time for unity.

They know what that means. That they are going to have to get into coalition with each other. If they do that, Greece carries on.

However, even if these so-called “sensible parties” get into bed with each other, they will still want to renegotiate the deal with Europe.

Cafes buzz with political talk

Europe will not budge on issues such social security, pensions or privatizations. But they might be willing to talk on deficit targets and taxation levels, for example, given the difficulties created by the recession.

There are 1,001 ways that Greece can stay in the euro. But even if the austerity deal is renegotiated, the Greek people face another three to five years of pain.




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