Yesterday and today, I offloaded most of my holdings except for the ones I have selected as key long term positions. The reason for the sell-off is that I believe major correction is imminent. The rationale for this can be found from my earlier posts like "Financial Crisis 2.0" or my recent posts in Twitter. Simply put: the Greek crisis is just the first domino in a long series. Even that has not been solved yet - far from it!
A paper from Bank of International Settlements titled "The future of public debt: prospects and implications" sum up the upcoming problems quite bluntly:
"Our projections of public debt ratios lead us to conclude that the path pursued by fiscal authorities in a number of industrial countries is unsustainable. Drastic measures are necessary to check the rapid growth of current and future liabilities of governments and reduce their adverse consequences for long-term growth and monetary stability."
It's not just the PIIGS. There is UK, Japan, US and many others which are in a very bad trajectory.
Any one of these countries default or start monetizing debt in serious way (i.e. printing money to pay back debt), there will be serious consequences. Actually, nothing really needs to happen. It is enough if markets as whole loose faith.
I will be going step by step my remaining portfolio in forthcoming blog posts. Also, I will be looking at some short positions and other speculative bets as well.
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