Everyone Is Ready For Greek Exit From Euro, What's The Hold Up?

I'm so tired of hearing about Greece I seriously considered not even making this post. But it is amazing how European officials continue to delay and deny the inevitable Greek exit from the Euro. Despite the denials of the inevitable, plans continue to be put in place for this eventuality. I discussed this briefly in my post in January "The List of Companies & Governments Preparing for Euro Breakup Grows". This list is only growing....

This list now officially includes De La Rue. Here is the description of De La Rue via their website.

"the world’s largest integrated commercial security printer and papermaker, De La Rue is a trusted partner of governments, central banks, issuing authorities and commercial organisations around the world.

The Group is involved in the design and production of over 150 national currencies and a wide range of security documents including passports, driving licences, authentication labels and tax stamps. In addition, the Group manufactures sophisticated, high speed, cash sorting equipment."

  As reported May 18th by Reuters:

"De La Rue (DLAR.L) has drawn up contingency plans to print drachma banknotes should Greece exit the euro and approach the British money printer, an industry source told Reuters on Friday."

The Wall Street Journal also touched on it "From a Greek Drama to a Greek Drachma?"  (May 18th)

"...it emerged Friday that De La Rue, the U.K.-based banknote printer, has discreetly started to prepare for the revival of the drachma (or an alternative currency).

An industry participant, who confirmed a report in Friday’s Times of London, stresses that the development is driven by De La Rue itself for its own commercial reasons, as opposed to it being the result of a direct request from the Bank of Greece or any other government agency.

[The Bank of Greece has repeatedly declined to respond to questions as to whether it is preparing a contingency on banknotes and Friday again declined to respond.]"

Also, as reported today by Reuters "Insight: European firms plan for Greek unrest and euro exit" some specific companies making preparations also include

• Drugmakers GlaxoSmithKline and Roche
• Europe's No 2 electrical retailer Dixons
• Diageo the world's biggest spirits group
• BMW
• Mobile phone giant Vodafone

Per Reuters:

"British electrical retailer Dixons (DXNS.L: Quote) has spent the last few weeks stockpiling security shutters to protect its nearly 100 stores across Greece in case of riot."

 "As the financial crisis in Greece worsens, companies are getting ready for everything from social unrest to a complete meltdown of the financial system.

Those preparations include sweeping cash out of Greece every night, cutting debts, weeding out badly paying customers and readying for a switch to a new Greek drachma if the country is forced to abandon the euro"

"The London-based Association of Corporate Treasurers says businesses should take precautions such as demanding cash on delivery and writing sales contracts in another currency such as pounds or dollars."

Add to this list Lloyd's of London. As reported by the The Guardian:

"The Lloyd's of London insurance market has reduced its exposure "as much as possible" to the crisis-hit euro zone in preparation for a collapse of the bloc's single currency, its chief executive told the Sunday Telegraph newspaper."

""I don't think that if Greece exited the euro it would lead to the collapse of the euro zone but what we need to do is prepare for that eventuality," he said."

"On Wednesday, Reuters reported that each euro zone country was preparing a contingency plan for the eventuality of Greece leaving the single currency."

And add HSBC as The Independent reports:

"HSBC has set out contingency plans for all its 15 Greek branches to cope with a return of the drachma.  

Iain Mackay, HSBC finance director, said it had made "preparations at multiple levels" to cope with the currency's re-emergence from an 11-year hibernation should Greece leave the euro. The bank has already reduced its exposure to Greece but has also trained staff at its branch network to be ready should the worst happen. This includes work to manage IT systems, branch funding, how to deal with customers and how to update ATM systems to dispense drachmas."

So why is everyone making all these plans when the president of the Eurogroup, Jean-Claude Juncker, said that talk of a Greek exit was "nonsense, propaganda" and that their "working assumption is that Greece will stay as a member of the euro area."? Oh, I don't know......Maybe because this is the same Jean-Claude Juncker who said that "When it becomes serious, you have to lie" as can also be seen in the video below. Very bad audio but you can clearly hear it at the 20sec mark.

Everyone has had plenty of time to prepare for a Greek exit from the Euro. It is time to implement the 13 Steps For A Greek Exit From The Euro. The more denials, the more can kicking, the more money wasted delaying the inevitable.

Why Is Barron's More Bullish Online Than in Print? (Picks & Pans Breakdown)

Barron's keeps track of its stock "picks and pans" going back to 2007. Barron's defines and tracks those picks as follows:

"This feature tracks the performance of stocks Barron's has written about -- both favorably and critically. For stocks featured in Barron's print magazine, prices are measured from the Friday before publication date to their current price. For stocks featured on Barrons.com, prices are measured from the trading day of publication date to their current price. This list includes U.S. stocks only, including ADRs, but not foreign stocks."

On some occasions I have found these picks also include ETFs. However, what I found interesting when browsing this list is the ratio of bullish picks to bearish picks. Both the magazine and online feature much more bullish picks than bearish picks, and I guess that makes sense...people in general like to hear about opportunities rather than risks (and their average reader probably doesn't short to a great degree). But the most interesting thing was how much more bullish Barron's was online than in print.

As you can see in the chart below, in Barron's magazine they wrote about 4 stocks favorably for every 1 stock they wrote about critically. However, online that ratio jumped up to 7.5 to 1.

Since 2007, Barron's documented 718 stocks which they wrote about in their magazine either "favorably" or "critically" (they categorize them as bullish or bearish). Only 144 were "bearish". Meanwhile,they documented a total of 782 stocks online.....but only 92 of those were "bearish". You can see below how this disparity has grown over the last 3 years (only in 2009 was the magazine more bullish than online). Of the 42 online picks since 2011...only 2 were "bearish" and there have been none this year.

Barron's is often bullish with it's stock picks -- especially online. However, it's track record would indicate that it is only their bearish picks -- and ONLY those featured in their magazine which tend to more consistently pan out. That is completely the opposite of their bearish picks online -- those stocks you would usually be better of buying (note that in 2011 they only made 2 bearish picks online and while they were correct on Japan they got killed on Monster "MNST")

Interestingly, this same general pattern holds shorter-term. Barron's also measures the performance of the picks from the time of the pick until the end of the year in which they made the pick. For instance, if it was picked today it would measure it's performance until 12/31/12. So some picks are being measured up to a year and some possibly as short as a few days.

So both short and long-term the story appears to be that Barron's bullish picks are a coin toss (or worse), while their critical thoughts on stocks in the magazine might be worth heeding, whereas their critical thoughts expressed online might well be a contrarian indicator! So I guess the question is why the huge difference in their bearish picks online vs the magazine?