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Greece 'Unable to Avoid a Restructuring': Fixed Income CIO

Friday, 13 May 2011 | 2:47 PM ET

Greece will be "unable to avoid a restructuring," Stephen Walsh, chief investment officer at West Asset Management, told CNBC Friday.

Walsh manages $456 billion in global fixed income assets.

"The question is not really if, it's a matter of when. Their debt to GDP [gross domestic product] ratio, as well as, their fiscal challenges they face clearly put them in the position where they'll have a hard time getting out of this difficulty without ultimately a restructuring," Walsh said.

Countries normally try to grow there way out of the problem, but Friday's GDP saw the core of Europe do very well "but the periphery actually underperformed meaningfully. So growth doesn't seem to be a likely option [for Greece]," he added.

In addition, he went on to day that since Greece is part of a fixed rate regime within the euro, devaluing is also not an option.

For that reason his biggest move has been to reduce spread risk or credit risk and to increase U.S. Treasury allocation across all portfolios. "The beneficiary has been U.S. Treasury securities."


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