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By Jason Stipp | 05-07-2010 04:33 PM

Younes: The Whole World Is Greece

The Artio International manager says most of the world's governments face issues similar to Greece, and precious metals will be the winners in the medium term.

Jason Stipp: I'm Jason Stipp with Morningstar. The European markets this last week wiped out most of the gain that they've got for this year. I've got on the phone, I'm lucky enough to be speaking with Rudolph-Riad Younes.

He's a former Morningstar manager of the year and the manager at Artio International and Artio International II. He has a lot of expertise in investing in Europe. He's going to tell us a little bit about his thoughts on the situation there. Thanks for joining me, Riad.

Rudolph-Riad Younes: Thank you for having me, Jason.

Stipp: Sure. First question for you. I think when some of the issues a few weeks ago started to be persistent in Greece, I think for a lot of investors they thought this was going to be a situation that was contained.

It seems over the last few weeks it has really spilled over to become more of a regional problem. Some folks think more of a global problem. Obviously, I think a lot of the sell-off that we were seeing there is related to this.

Do you think the extent that the markets are down is justified based on the sovereign debt issues that we're seeing in Europe?

Younes: The key starting point to understand is that there is not just one Greece. The whole planet is Greece. Every government you look at today, and you hide the name, they look like Greece, even worse.

From the U.S. to U.K .to Japan. I mean there are very, very few countries, maybe it could be counted on one hand, who you could say are reasonably solvent as governments. What happened is the market many times tends to ignore fundamental deviations.

Like, for example, valuation-wise you could see Nasdaq going to crazy valuation in the late '90s. Then, finally, people wake up and react to something they should have reacted to many years before.

Likewise, last year the markets rallied despite many fundamentals [that] were very ugly. And today the logic, this year, finally the market is trying to attack the weakest countries.

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