The turmoil over Grexit could benefit the canny investor

Outlook

Now might be a good time to buy shares. It’s true that the market is currently in turmoil thanks to the situation in Greece and it will be choppy for some time. But, as Goldman Sachs and others have argued, the danger posed by the fall-out from a Greek default and its subsequent exit from the euro may not be as severe as some people fear.

Since 2012 – the last time things got really serious as opposed to one of the interminable mini-crises periodically thrown up by Greece – financial institutions have taken the opportunity to reduce their exposure to the stricken economy quietly.

There will undoubtedly be disruption if Grexit becomes a reality. But, as I have pointed out before, Greece would represent an ongoing headache for the eurozone even if some sort of deal is eventually cobbled together.

So when EU President Jean-Claude Juncker says it’s either all win or all lose when it comes to the country, he is being rather silly. Economically, the eurozone may win in the long term without Greece. As for the latter? It will be the loser whatever the result. Its stricken economy will undergo more ructions, its people will endure more pain regardless of which bad option they choose in their referendum.

Mr Juncker’s unhelpful comments are political, a cynical attempt to get his excuses in early. They were made because he knows well that the eurozone’s crisis – and the crisis for the entire European project – is as much political as economic.

The plunging stock market and the chaos on the currency markets have been prompted as much by uncertainty as anything else. That is why the stock market sell-off may present a buying opportunity for the canny investor. “May”, because the trouble with Greece, at least in the short term, is that no one is quite sure what will happen next. We are in uncharted waters and one bookmaker – William Hill – has suspended its market on Grexit before 2016, saying that the situation is so volatile and fast-moving it is difficult to have any confidence that its odds will be accurate.

Interestingly, Betfair still has it as odds-on that Greece will stay in.

Much has been written about Greece’s economic failure. But this crisis is as much Europe’s failure as it is Greece’s.

Meanwhile, Britain is still odds-on to stay in the EU when it holds its referendum. Unfortunately, Greece’s continuing agony only makes life harder for those of us arguing for that outcome. Those odds may soon change.

Surely the Ladbrokes-Coral merger is a non-runner?

Talking of betting, all was quiet as regards the potential merger between Ladbrokes and Gala Coral. But the steady drift downwards of Ladbrokes shares tells its own story. The market has started to bet against the deal happening. So it should.

Ladbrokes’ competitive performance in recent years might have looked more like what you might find in a selling hurdle on a weekday at Plumpton rather than the feats of equine athleticism on display at Royal Ascot. However, put together with Coral it would dominate the betting shop field to such an extent that rivals might not be able to get past, at least after the bloodletting from where the two businesses overlap has been completed.

The two might argue that gambling is a competitive sport, with multiple channels and multiple operators all competing hard for the punter’s pound. But that doesn’t mean they should be allowed to dominate one of those channels to the unhealthy degree that they would if the deal were allowed under starter’s orders.

The high street betting shop has been the subject of considerable criticism of late. But their proprietors – and their users – should still be entitled to the same sort of protections from deals that endanger competition as those in any other sphere.

Ladbrokes should see sense and declare this deal to be a non-runner when it next updates the market.

A lot of hot air over the proposed fracking site

News from another Plumpton – Little Plumpton in Lancashire, rather than its Sussex namesake where the aforementioned selling hurdles are staged.

Little Plumpton was supposed to be the venue for a rather less popular activity: the extraction of shale gas by energy firm Cuadrilla via a process that has come to be known as fracking. Unfortunately Lancashire County Council has told Cuadrilla to … well, frack off.

The decision was hugely popular and demonstrates how right the Cuadrilla chairman, Lord Browne, was to sound a note of caution, due in part to Britain’s sclerotic planning process, when people started getting frothy about this country replicating America’s shale gas boom. It has rightly faced plenty of criticism.

There will likely be an appeal, which will land this particular hot potato with a Conservative government that would dearly like to see fracking moving ahead, but which would badly damage its already limited support in the North of England if it finds in favour of the frackers.

Lord Browne has talked in the past about the “benefits” of his company’s plans for a local community that doesn’t see them. Perhaps he should be working not so much on an appeal to the Government’s planning inspectors as enhancing his appeal to his prospective neighbours.