Consider the old adage of real estate where location, location, location are the sole determination of a property value. Now ponder the situation that the Eurozone finds itself in with the poor southern country of Greece. Long a basket case economically with it’s reliance on tourism and the joke of a tax system, Greece will not be leaving the Eurozone, even though it probably should get the boot. No, Greece will stay in the Eurozone because of politics, politics, politics.
Once again, the Greeks are throwing the toys out of the pram over budget and bailout negotiations. Their actions have renewed awareness that this country has not solved all of its financial woes and this carries geopolitical risks. An equity shocker such as this combined with a 30% drop in oil will add volatility to all asset classes as adjustments to risk must be made.