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Greek Prime Minister Alexis Tsipras probably has 48 hours to resolve a standoff with creditors before civil unrest breaks out and ATMs run out of cash, hedge fund Balyasny Asset Management said.
Fund managers are questioning how the International Monetary Fund and Europe’s leaders can seal a deal with Athens following the “no” vote in a Greek referendum on Sunday. Sixty-one percent of voters rejected austerity, increasing the likelihood of an exit from the euro area.
“I don’t see a good resolution any time soon,” Colin Lancaster, senior managing director with Balyasny, a $9 billion fund based in Chicago, said in an e-mailed response to questions. “The big question is whether the EU adopts a strategy of waiting them out. The hope would be that the unrest leads to a unity government or change in government.”
Bruce Richards, co-founder of U.S. hedge fund Marathon Asset Management, said last week Tsipras will be gone within 30 days regardless of the outcome of the nation’s referendum.
A “no” vote would cause “rioting in the streets come weeks from now when the banks are closing and you have drachma,” he said in an interview on the television program “Wall Street Week.”
Europe’s leaders run the danger of setting a precedent for other governments if they agree to a writedown for Greece, said Savvas Savouri, chief economist at Toscafund Asset Management, a $3 billion London-based hedge fund.
“Other debt-burdened countries will campaign for the same treatment,” he said. “That is especially relevant with a Spanish election in December.”
Full article: Greece ‘48 Hours Away From Unrest’ (BloombergBusiness)