The Greek stock market reopened on Monday… and immediately crashed.
Regular readers know we’ve been closely following the financial disaster in Greece. For years, Greece spent more than it took in in taxes. This led to a financial crisis that looked like it might destroy Europe’s financial system.
The Greek government imposed capital controls to stop the country’s financial system from crumbling. It closed Greek banks. It froze bank accounts and put severe limits on ATM withdrawals. It also closed the Greek stock market.
After a 25-day closure, the Greek stock market finally reopened on Monday. Greek stocks crashed 16%. It was the Greek stock market’s worst day in at least 30 years.
Greek banks crashed the hardest. Bloomberg reports that Piraeus Bank SA and National Bank of Greece SA both dropped as much as 30%. Greek regulators halt trading on any stock that falls more than 30% in a day.
Bloomberg reported that the Greek financial system is in chaos:
Traders in Athens said the market couldn’t function properly because of continuous halts as prices plummeted. They expect stocks to hit their lows in coming days before the market can gain any semblance of normality, according to Stavros Kallinos, head asset manager at Guardian Trust.
“It’s a total disaster, it’s like hell here,” he said from Athens. “You can’t have a market working properly with capital controls. It will be a gradual process. We’re moving forward, but a step at a time.”
• We explained how to protect yourself from situations like this last week…
The Greek government didn’t just close the stock market. It closed Greek banks too.
As of today, Greek citizens still can’t take more than 420 euros ($455) in cash out of banks per week.
This is a good reminder of something we stress often: the government controls any money you have in the bank. It can decide you’re not allowed to touch your own money at any time. Or it can put severe restrictions on how much money you can take out, like the Greek government is doing right now. At that point, there’s nothing you can do.
We wrote Going Global 2015 to show you how to protect yourself and your family from situations just like this… but you have to act before a financial crisis hits.
Going Global 2015 is our guide to surviving financial crises. It shows you specific and easy steps for protecting yourself and your family from the next financial disaster.
Right now, we’re giving this hardcover book away for free. Click here to claim your free copy of Going Global 2015.
• After you’ve taken smart steps to protect yourself from financial disaster, consider “playing offense”…
Most investors want nothing to do with the Greek stock market. It’s probably the most hated stock market on the planet, and for good reason. Greek stocks are down 43% over the past year. They’ve lost an incredible 88% since their 2007 peak.
Doug Casey often says any sector down 90% is worth a look. It’s where you can find a dollar’s worth of assets trading for a dime or less.
• Greece is down “just” 88%…
That was close enough to Doug’s 90% rule of thumb for Nick Giambruno, editor of Crisis Speculator, to go bargain hunting in Greece.
Nick found something you’ll only find in a country deep in crisis: a strong, safe, 12% dividend-payer trading for pennies on the dollar.
It’s a Greek shipping company. Greece dominates the global shipping industry, as Nick explains:
For many Greeks, the shipping industry is a matter of national pride. It has been at the center of the Greek economy for thousands of years… and still is to this day. Greeks are still the biggest shipowners in the world. They control more than 4,000 merchant ships, or about 16% of the world’s fleet… Greece’s shipping industry is largely immune to the Greek debt crisis… but is nonetheless on sale at bargain-basement prices.
Nick knows the shipping industry better than almost anyone. He used to cover Greek shipping stocks for a large financial institution. He got to know the big players in the Greek shipping market and found them to be “intelligent and professional businesspeople” with free-market outlooks.
This company also has a strong balance sheet and generates a steady stream of cash. And you can buy its stock through a standard US brokerage account.
You can get in on this opportunity by taking Crisis Speculator for a risk-free test drive today.
You should know that we’re ending Crisis Speculator’s introductory pricing of $199 per year very soon. We’re raising the price to $2,499.
We realize this is a huge increase. When we launched Crisis Speculator last year, we priced it very low.
The goal was to expose as many investors as possible to this unique research that shows you the cheapest and highest-potential investments in crisis markets.
Most investors don't realize this, but a crisis is the only time you can be sure you’re buying at bargain prices. It’s one of the world’s greatest wealth secrets. When people panic, they dump stocks, bonds, and almost everything else with little regard to real value. They just want out.
Frightening news, the scarier the better, can make quality companies cheap for you to buy.
It takes a lot of resources to fly around the world and dig up these opportunities. And for that reason, our special introductory price of $199 is expiring soon. And we’re raising the price to $2,499 per year.
However, if you subscribe today, you still pay the bargain price of just $199 for a one-year subscription. And more importantly, you’ll lock in this low rate for the lifetime of your subscription.
Click here to start your risk-free subscription to Crisis Speculator… and to lock in the introductory $199 per year rate.
Chart of the Day
Today’s chart shows the huge crash in Greek stocks.
We mentioned earlier that the Greek government closed the Greek stock market for 25 business days. On Monday, the Greek stock market reopened for the first time since June 26.
Below, you can see how Greek stock prices didn’t move for more than a month. With the market closed, investors couldn’t sell.
When the Athens stock exchange reopened on Monday, all the investors who had wanted to sell their Greek stocks could finally dump them.
This led to a 16% plummet. It was the largest daily drop in Greek stocks since modern records began in 1985.
Delray Beach, Florida
August 05, 2015