Guy Haselmann: Pyrrhic Victory?

July 13, 2015

2 minute read

Pyrrhic Victory?

by Guy Haselmann, Director, Capital Markets Strategy, Scotiabank GBM

· The weekend negotiations process in Brussels might be as telling as the resulting proposal itself, and may ultimately mark the beginning-of-the-end of the Euro project.

· The long and acrimonious negotiations clearly showed disunity and a clash in the vision of the direction of the Euro project.

· Due to a significant lack of trust and to appease a few hardliners, creditors even rejected similar proposals to those put forth prior to the Greek referendum; ultimately, creditors imposed far more stringent demands (which need to be legislated by Wednesday).

· Should the measures not pass, a 5-year Grexit is the alternative which a confession that the Euro is revocable. Proposing and agreeing on the details of a Eurozone exit-option is a big deal, because it is the first confirmation by officials that the EU project might be reversible.

· Until this admission, the Eurozone was always considered to be ‘forever and always’ with no mechanism for exit or expulsion.

· Draghi’s promise of doing “whatever it takes” can now no longer be true.

· This acknowledgement will have longer run consequences. It might also demonstrate that creditors are less willing to tolerate perpetual and extreme misses in economic targets. Ironically, the 1992 Maastricht Treaty requirements have seldom been honored and variance from them has grown worse over time.

· The intra-EU debate, about how to tackle unsustainable levels of debt and the extent that greater levels of austerity should play, persists. In the meantime, the social contract between governments and their citizens continues to break down further. The underpinnings for social unrest and election surprises are firmly in place.

· “The supreme art of war is to subdue the enemy without fighting” – Sun Tzu

Regards,

Guy

Guy Haselmann | Capital Markets Strategy
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Scotiabank | Global Banking and Markets
250 Vesey Street | New York, NY 10281
T-212.225.6686 | C-917-325-5816
guy.haselmann[at]scotiabank.com

Scotiabank is a business name used by The Bank of Nova Scotia

Author

Guy Haselmann

Mr. Haselmann has 30 years of diverse capital markets experience, including 14 years building and managing assets at 2 well-known macro hedge funds. During his career, Mr. Haselmann traded numerous capital market securities. He has developed risk management strategies and trading procedure guidelines.

Previously, Mr Haselmann was Director of Capital Markets strategy, at Scotiabank GBM, where he incorporated a global macro approach. Mr. Haselmann has been published in academic journals, newspapers, and has written countless strategy pieces. He has appeared on various TV and Radio programs, such as BNN Bloomberg and Bloomberg. Mr. Haselmann is a guest lecturer at several universities, including his alma mater the University of Delaware Lerner College of Business and Economics. He is a frequent panelist at industry conferences.

In addition, Mr. Haselmann was a gubernatorial appointee to the NJ State Investment Council and was appointed by the chair to the Investment Policy, Executive, and Nomination subcommittees. Mr. Haselmann is President, and a member of the Board of Governors, of the NY Money Marketeers.

Specialties: Analyzing global macroeconomic policies and capital market interconnections to strengthen investment and strategic decision-making in financial markets. Providing portfolio construction solutions to enhance risk-adjusted returns. Macro trading and strategy. Risk management. Alternatives advisory services. Hedge funds and other alternative investments. Funds of Hedge Funds. Analysis for optimizing position sizes. Capital market products. Options.