June 2011 Market Brief

June 2011 Market Brief

Welcome to the Market Brief from the Investment Department of Argyll Investment Services Limited our monthly brief discusses the highs and lows across the market.

“The rumblings of “will Greece default or won’t they?” continued during the month, with almost all commentators predicting, as a minimum, a restructuring of their debt. In reality, this is a technical default and the billions of Credit Default Swaps (a derivative “insurance product” on an issuer’s debt) will be triggered should this occur. There does seem to be little alternative at this juncture, as their public finances are in a desperately poor state. Whilst the austerity measures were eventually passed by the politicians, the increasingly violent protests that show the general public is not  supportive of the belt tightening measures. The irony of this should not be lost on the neutral observer, given the enthusiasm with which the Greek populace embraces its pursuit of tax evasion, evidence of which is alarming, if not comical.

In the wealthy northern suburbs of Athens, for example, just 324 residents checked the box on their tax return form, admitting that they owned a swimming pool (a taxable property feature). Disbelieving tax inspectors then used satellite photos of the area and came back with a slightly different number: 16,974 pools! Yet the European Union and IMF are expected to bail out a country that cannot even help itself collect a modicum of the tax it is owed.

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