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Last stop, folks … end of the line!
You’ve probably heard that announcement on a subway train before. Now, that’s what Greece’s creditors are saying.
Fed up with Prime Minister Alexis Tsipras, Finance Minister Yanis Varoufakis, and the rest of the Greek negotiating team, they’ve put what looks like a final deal on the table.
No more pension or tax goodies.
No more compromises on budget surplus targets.
No more well-choreographed, delicate negotiating dances.
The message coming out of Europe sounds much more like “Take it or leave it!”
Here’s the key right now: Weekend talks between Greek officials and their European counterparts in Brussels reportedly collapsed in just 45 minutes. That leaves a June 18 meeting of finance ministers in Luxembourg as the likely last-ditch opportunity for Greece to secure a deal.
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| Greek Prime Minister Alexis Tsipras is battling it out with international creditors. |
Failing that, Greece will likely soon default on payments due the International Monetary Fund, the European Union, or both. It will be forced to enact capital controls to keep more money from fleeing the country’s banking system. And it will probably have to exit the euro currency union, with untold consequences at home, throughout Europe, and around the world in financial markets!
I know what you’re thinking. We’ve seen this movie before. We always get down to the last minute. Then the politicians manage to come up with a buzzer-beater save. Those saves never solve the underlying problem of too much debt, too little growth, and too many unreasonable promises made by a series of Greek governments. But they buy some time … until the next deadline.
The difference now is in the language coming out of Europe. Officials are genuinely fed up, and sick and tired of the wheeling and dealing. Greece has to pay 1.6 billion euros to the IMF at the end of June, and 6.7 billion euros to the European Central Bank in July and August. The current bailout program ends on June 30, and European officials won’t release a 7.2-billion euro tranche of aid unless Greece stops playing games.
Indeed, German officials wrote today in an op-ed that “Not only is time running out but so too is patience across Europe. Everywhere in Europe, the sentiment is growing that enough is enough.”
The Belgian Finance Minister warned: “There is no free lunch being part of the euro zone. It requires discipline.”
An unnamed official quoted by Reuters said “This is very disappointing and sad. It was a last attempt to bridge our differences but the gap is too large. One can discuss a gap, but this is an ocean.”
Despite all that “take it or leave it” style talk, the Greeks still haven’t budged. After the latest talks failed, Tspiras retorted: “We will wait patiently until the institutions adhere to realism … We are shouldering the dignity of our people.”
| “I know what you’re thinking. We’ve seen this movie before.” |
The latest Greek chaos comes at a potentially dangerous time for the markets. We’ve already seen key sectors like the transports and utilities break down. We’ve also already seen multiple “Bloody Wednesday”-style selloffs in government bonds.
If we get a real Grexit-driven panic, there’s a lot of air under the broader averages. So stay alert and prepared to take further action at any time – to protect yourself and profit from the consequences of the “Take it or leave it” talks in Europe.
So what are your thoughts? Is this finally the end game, and how does it conclude? Does Greece have a chance to save itself, or are its European creditors ready to give up on the country and its leaders? Let me know over at the website ASAP!
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On Friday and over the weekend, many of you weighed in against the trade bills President Obama and his Republican allies of convenience are still trying to push in the wake of Friday’s defeat in Congress. The general consensus? A new Pacific agreement would be bad for America overall.
Reader Mike S. said: “The Republicans (who are supported by Big Business and the Conservative Ultra Wealthy (CUWs) have brought a number of Trade Agreements before TPP … Every one of these have resulted in millions of good-paying, Middle Class jobs being sent off shore
“Because of that, our trade deficit has grown even larger. Why should we trust that this newest Republican trade bill will be any different? Wouldn’t it be unique for the GOP to bring legislation that actually helped the average American citizen?”
Reader Howard said: “In the Great Depression period, protectionism had some positive benefits. In the current crisis, leaders seem to be trying to resolve global issues while ignoring local ones.
“We need to act locally and think globally. What is the point of any deal that harms our local people? All that does is betray common trust. Washington needs to remember whose interests it represents.”
Reader RP M. added: “The TPP trade bill is another toxic piece of unnecessary and harmful legislation. Its purpose, like that of the Patriot Act and Obamacare, is to divest Americans of their freedom to conduct their lives without interference from government or the tight group of crony corporations that curry favor through heavy lobby payments.
“American productivity would go through the roof if only government stopped ‘managing’ our free enterprise system, and simply tended our borders properly.”
Reader John had this to say: “The TPP trade deal’s secrecy cannot be explained by government people as some sort of necessity due to the sensitively of negations between the various parties. It’s clear that the bill contains some features that would be unaccepted by the American public at large, and that is why we have been kept in the dark.
“This is hardly the accepted approach to governing in a free country. There should be dialog and discussion about important bills that will have a large impact on the American people. The president’s efforts to keep the public (and U.S. lawmakers) in the dark about this package raise clear questions about exactly who will benefit from TPP, and why.”
Finally, Reader Rich said: “Trade deals are good for corporations, but deadly for workers. They send jobs overseas and the profits stay there because of taxes if brought back here.
“They are killing the Middle Class here with no jobs and lower wages. They are also killing off their business here because with lower wages, people buy less. Most other countries look out for their own. But that is not the case here, it is all about profit.”
Bottom line: It’s clear that you and your fellow investors here aren’t thrilled at all with the provisions of these trade bills, or the process by which the President is trying to get them passed. The bills aren’t dead yet, though. So we need to stay focused on what’s happening in D.C. in the days ahead.
Anything else on trade that you’d like to weigh in about? If so, please do use the website as your outlet.
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Jeb Bush made it official today, announcing his candidacy for the Republican presidential nomination at a Miami event. He will then travel to New Hampshire, Iowa, and South Carolina in an attempt to drum up support and separate himself from a crowded Republican field.
Is UTX making the right move? Will this latest anti-terrorism strike help pacify militants in Africa? Any other stories I’ve covered make you want to sound off? Then you can do so at the website here.
Until next time,
Mike Larson
Mike Larson graduated from Boston University with a B.S. degree in Journalism and a B.A. degree in English in 1998, and went to work for Bankrate.com. There, he learned the mortgage and interest rates markets inside and out. Mike then joined Weiss Research in 2001. He is the editor of Safe Money Report. He is often quoted by the Washington Post, Reuters, Dow Jones Newswires, Orlando Sentinel, Palm Beach Post and Sun-Sentinel, and he has appeared on CNN, Bloomberg Television and CNBC.
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Too much debt and too little growth are the cause of the problem. But you can’t solve the debt problems by more austerity. Until the European countries recognize that, there can be no solution. More austerity always causes more debt.
I agree with BobJ…We have massive programs for Greece once the Government settles down one way or the other first. Greece will be back in super business. Let us see where it goes…
It will be tough on France and Germany, but Greece needs to default now.
Twenty years after our very good manufacturing job was decimated by Chinese, the USA is finally waking up to this insidious threat. Our market and our jobswere exchanged for naught.
There was a solution for the USA, but no one took it…May be someday…but we are going to Greece now.
I firmly believe that the Greek PM is off to Russia and will strike a deal for Putin to advance them some money (which he doesn’t have either). His trip is no coincidence! As Jethro Gibbs says – – “There are no coincidences”. That will scare the EU, Germany, France and the U S to death and they will craft a solution so that they can avert the Russian advance into western Europe!
Most Latin American countries have defaulted at one time or another and the sky did not fall. Although that should have been a warning to Greece’s creditors, they seemed oblivious to the possibility and went on lending them money. The only answer now is to financially quarantine Greece and hope the contagion does not spread. As far as the money; it’s gone, just like the WWI loans we made to Europe.
Free trade is great as long as its 2 way. Our reluctance to deal with a level playing field is what allows the Corporations to be greedy. Capitalism is wonderful as long as it doesn’t come at the expense of the majority which seems to be happening now. The Fed, Congress and this President have no idea how much pent up frustration the middle class has with them. One day it will explode and we may become Rome with the Barbarians at the gate and Nero fiddling.
Mike, no problem for the Greeks to leave EU…This would be a clear indication that the EU experiment of centralized monetary control without political and fiscal control does not work for the people, whether that be the Greeks or Portuguese or Spaniards or French or Italians etc..etc..So…..let them go back to taking back control of their OWN monetary policy, print drachma and inflate their way out the the OFF BALANCE SHEET DEBT THAT WAS FORCED ON THEM BY THE MEGA BANKS TO JOIN THE EU IN THE FIRST PLACE! Actually, if there is a Grexit, it will have a more devastating effect on the EU NOT Greece…Greece is simply the tip of the massive and obscene DEBT pyramid…Just watch what happens with the rest of the PIIGS and even France as well….
nicely put Billy,BUT what scares everyone is the aftermath,I don’t even want to think about it,and what will Yellen pull out tomorrow,I bet it wont be a rabbit.I just wish the Greeks would do the honourable thing,but honour these days does not exist
“centralized monetary control without political and fiscal control does not work for the people”. True enough! Someone should tell the people in Washington, Billy.
The Greek situation is really just the first stage of a much bigger crisis. The entire European Union is a poorly conceived and executed idea that was doomed to failure before it began. The entire house of cards will come tumbling down under the weight of its massive debt and lousy leadership. We should watch closely if we want a peek at our future. Socialism at its finest! Jim
Greece has to know that there free lunch is over. If they do not make sacrifices then Greece will have to default, and their economy will collapse.
really? not so fast.
Let’s see! 11,000,000 people. $380,000,000,000 in debt. Game over!
The Greeks think that Europe is bluffing and are holding out for a better deal. But the Europeans are not bluffing because if they gave in they would have to offer better deals to all the Club Med countries and this would become a transfer union which the German taxpayers are totally unwilling to underwrite. Ultimately the Greeks still see themselves as Greeks and the Germans still see themselves as German and as long as those nationalistic associations remain stronger than feelings of association to Europe then a political and economic union just will not work.
It is as if New yorkers felt themselves to be New Yorkers first and Amerricans second and refused to pay a Federal Tax increase designed to support poorer states like Louisianna or Mississippi. See the difference?
GREXIT at last in sight, which will allow Greece to inflate its way out of debt and find a fiscal balance which Goldman Sachs (not the MegaBanksters) allowed Greece to fake their longstanding horrors before their entry into EU. Goldman Sachs made some $300 million in fees that Greece might try to claw back…
You can’t trust ECB in that play, since chairman Mario Draghi was a partner at Goldman Sachs at the time, and then in charge of Goldman Sachs Europe. Isn’t that enough to remove Goldman’s license to operate in the Eurozone, at least for a few years until they amend their ways? We might as well clean up the whole cesspool…
Where are the Rothschilds and George Soros???
All debt is either written off or paid off. Since Greece can not or will not pay off their debt, their only option is to reach agreement with their lenders on how the debt gets written off. It appears that they need to default in order to accelerate the write off process. Their challenge is that they will have to make some hard decisions in order to go forward not being able to borrow money.
I notice that the Fed’s Manufacturing Index was off .2% in April after a .5% decline in March, and has been flat or negative for the last six months. This does not look very promising for meaningful creation of better income employment in the manufacturing sector. So much for ABC News’ “Made In USA” campaign.
Looking at the past we see that freedom has weakened as the populations grew and grew. Who was freer than a cave man? But we’ve now reached the point of being face to face with living within our means –our means provided by mother earth, our environment. Every other issue is just a lot of b s.
Thomas Jefferson: “When we get piled one upon the other in large cities, as in Europe, we shall become as corrupt as Europe.”
Many analysts have been stating the fate of Greece’s membership in the EU is now driven by local politics. Leaders of northern European countries are loathe to admit it their constituents that Greece will not be repaying its debts. Pay attention to the public pollsters to get an idea how this will end, or not.
If Greece is forced out of the EU, IMHO it’s a trading opportunity in the US markets. Buy the dip and sell the bounce. Repeat when the FED raises rates later in the year. Airline stocks are looking tempting again.
I really don’t know if the trade bill before congress is good for the US, its businesses or its workers, precisely because I don’t know what the terms of the trade agreement actually are. I’m not in the habit of forming uninformed opinions. And I’m not sure how anyone else can responsibly do so. That said, I would love to be reliably informed as to the content of these bills. A service that summarizes the terms of major legislation would be much appreciated. I would even welcome employment as one who summarizes such legislation.
so, by the end of the week we will either be treated to the ‘Grecian formula’ that solves the problem or we will be serenaded by a Grecian Chorus as we head for the Grexit doors.
Wonders never cease, it is really a bad situation with the Greeks and it is overdue that the Greek government who is scheming one terrible excuse after another to make someone else responsible for their disgraceful treatment of debts to others. As we all know , beware of Greeks bearing gifts …..what a waste of excuses forthcoming from their newly elected leaders to run their country !!
They have been getting away with promises for the last 5 years , but never showed any support or compliance to remain a loyal & deserving partner in Europe.
There is not much choice for the other E/C members but to end it all before it gets totally out of control ( which it is know) and put the entire world into a financial nightmare!!!
Good bye & good luck !
PAYDAY LOANS TO COLT FROM MSSB
According to today’s Wall Street Journal, Morgan Stanley loaned Colt Firearms Inc. $70 Million last month to make interest payments on its debt. What kind of investment is this and who pays for any capital loses if Colt can not repay the loan? It had to be astronomic interest. Very irresponsible. I hope it was not from Cash in my account. They are relying on the FDIC to cover losses.
America is headed for more trouble when Colt gets liquidated eventually. In fact, we are all headed for big trouble. Its unprofitable. All they can salvage is their firearms patents at a discount as a distressed seller. Good deal for Ruger Firearms and Smith and Wesson. Very concerned. Most common people don not see anything coming. They are unconcerned, and have let their collective guard down again.
Where is Forrest when he is sorely needed?? Is the EU that stupid that they would further wed their energy reliance on Mother Russia? Do they not grasp geography and the strategic location that is singularly Greece for energy transport? As to assets, Greece is NOT broke, far from it, their assets are just a bit under water and need to be developed as energy for the EU!
The problem is, as is most of the World’s Economic issues, a problem of… now, what’s that word that is “good”: GREED… well, NOT!! Rather than beat up on Greece, the EU needs to negotiate with / beat-up on its Big Energy companies and utilize Greece’s important strategic location and off-shore assets to create a more controllable long-term energy supply scenario from the south, strengthen the Greek economy, and further the move away from reliance on Russian energy. The idiotic arguments pointing to the currently projected higher costs of these through Greece enabled or supplied energy assets are playing the idiots game of not counting ALL costs including the externality costs of business as usual with Russia. But then, my bad… I forgot, BIG ENERGY is also in bed with the Russians!
What do I know, I only take garbage and turn it into useful energy and kind’a fight some of the same battles… BUT, what I have learned is that these Big Guys are NOT dumb, they are way ahead in their thinking, even when they are way behind what their markets want, or need. They are just strategizing to take as much off the table as they can grasp and on their most preferred time table.
Such noted, my bet is that we will see some further kicking of the can buying time for the Big Boys to determine how they best profit from the squeeze play with Greece and the energy opportunity. As bert noted a bit earlier, a Grexit will allow Greece to pay-off debt on their terms and in the process force Greece into closer alliances with NON EU friendly OIL money. Bottom line, the EU needs Greece far more than Greece needs the EU. Such is that reality that is occasioning the chaffing beneath the wadded-up drawers of the EU politicos.
Mike,we have heard ‘this absolutely is the end of the line’ so many times before with Greece.Well,maybe so,but I wouldn’t be so confident.
Greece: the children, wives and mistresses of the EU negotiators are giving them all an ear full to cut and run on Greece and let them default. Why? There is no way those Europeans will give up their August holidays…especially for Greeks which they view as a lower class of people as compared to French, German, Italians, Brits.
I agree with the first of your readers’ thoughts
Another unfortunate, abserd and disgusting
element demonstrated by the Republican
vote is that these people that we call representatives
is their handing over so much of their responsibility
to a president that has proved to be very
consistently against our constitution as well as
patently dishonest and crooked.
I have contacted my “representative!” ,senators
and made John Boehner aware of my opinions,
which all need to do.
regarding this issue.
know
Dear Sir: You say we need to be ready to take further action if Greece defaults. I am however confused about cash. Some say have plenty on the sideline to take advantage of major dips. Yet, many articles are saying, Do not have very much cash in the bank as it is liable to be confiscatedb y the government. I would welcome your advice. G. W. Schweer
Terrorist leaders are like the potato chips, you can never have just one. There are always another several willing to take his place. In what other business can you get such a fast track to the top? As for UTX selling off Sikorsky, sometimes the central corporate management become too focused on one unit of a conglomerate, or they try to tie units together parts wise they ignore better solutions from the outside that quality and costs suffer. Sometimes the people at a component feel they are being given short shift like the people at General Motors’ locomotive division, they are part of Caterpillar. Every situation is different, for GM to sell off EMD was akin to selling part of their heart and soul, they taught the world’s railroad how to dieselize, the 1939 FT is the diesel that did it. Changed the way railroads would haul freight.
Greece lived beyond its means, and borrowed to finance that (too high) standard of living. The lenders took a risk, and if Greece will default, the lenders and their countries will lose value equivalent to the goods and services that Greece bought with the defaulted loans. Since the lending countries (and their banks and investors) are large and numerous, the loss for them is small relative to their GNPs.
Unless lenders will lend to Greece again (in spite of the default), Greeks will have to learn to do with less (i.e. lower their standard of living). For them the decline in their standard of living in the coming years will be quite substantial. Moreover, if no new loans are forthcoming, the lack of Euros will force Greece to leave the European Union (E.U.) and start printing its own currency (Drachma) to avoid economic, social and political disasters. Unfortunately for the Greeks, leaving the E.U. (which is among other things a custom union for goods and services), Greek goods will have to pay custom when sold at the E.U. countries; this means that Greek exporters will receive less than the price at which their goods have been sold (in Euros), forcing Greece to reduce its standard of living even farther. Finally, leaving the E.U. is likely to reduce the ability of Greek workers to work in E.U. countries, causing an additional loss of standard of living for the Greeks.
This analysis suggests that defaulting on the loans may lead to disastrous effects for Greece. The effect on the rest of the E.U. will be minimal and since it will not need to help Greece anymore, the E.U. may be even better off. Lastly, If Greece leaves the E.U., and especially if it is as disastrous for Greece as I think it will be, there will be no incentive for other countries to default on their loans and leave the E.U.
What is happening in Greece will soon be happening right here in the good old USA. If our congress and senate dose not stop the current administrations spending binge. I have svery little pity for Greece, they made there bed and now must lay in it.
There will be no Greek-Exit. The EU is as much a political union as an economic union. Greece is strategically located for a pipeline from the middle east to counter the Russian pipeline. Therefore, Greece cannot be allowed to leave the EU and fall into Russian hands. What we are now seeing is political theater at its finest, designed to save face on both sides.
The leadership of Greece have been staling for years . They want to keep their lavish life style and pay very little to the country who keeps them. Most of the people of Greece have very little knowledge of what the government is doing. The government people are more or less looking after them self and do not give a dam for the average person.
It would not surprise me if the Greek government is as in the past align them self with the Bolchevics or the Chinese system. Than there will be the great awakening but it will be to late and the people will suffer for that. The leaders of the country do not give a dam anyway. Lot of people will suffer for the greed of a few.
Herb Voigt
Obama is being sucked into TPP just as Clinton was to NAFTA by his Wall St.
advisers. Presidents have to trust their advisers.
No president has time to get into the details of trade deals, what with all the other things he has to deal with, especially when the opposition party’s only agenda is to prevent his functioning.
Of course the Republicans want TPP, just as they did NAFTA, it’s a big business deal.
A
ZA freeze on all funds in the country, going out or going in at once. Only cleared funds go in or go out of country. This allows the fianc.of the country to be controled to help stableize the present Gov.t. Yes unrest may come and will have to be delt with at once. Those who feel they have to extract their funds and leave can’t. No funds to leave in hope the country can ‘squeeeeeeeeez’ by pn the end. Depression is best, bust is last.
Economists can prove that SOME trade is better than NO trade in a world where there are no costs of adjustment [i.e. that people can move among industries, states and countries at zero (economic and psychological) costs]; but even in such a THEORETICAL world one CANNOT prove that ADDITIONAL trade is necessarily better than the existing amount of trade.
In the REAL world there are costs of adjustment (and border restrictions) and it may well be that no trade is better than some trade; this will happen when the benefits from trade is less than the costs of adjustment. The cost-benefit calculation should be ESTIMATED BEFORE any trade agreement is concluded if a country wants to be prudent.
When a new trade agreement is promoted without a cost-benefit calculation, one does not have even an ESTIMATE (let alone the TRUE value) of the net benefit of the agreement; one simply HOPES that her/his country will be better off. As well, since there MUST BE winners and losers, honesty and fairness require that the winners WILL compensate the losers. This is not a simple matter to perform, but congress Must enact a process by which workers who lose jobs in the contracting industries are provided, at least, re-training allowances, moving allowances and also a certain allowance compensating for the trauma that they suffer (for the benefit received by the winners). Unfortunately, so far, congress seems to reject the idea of compensating the losers of the trade agreement that is currently considered.
Greece gained admittance to the EU on false pretenses. Time to throw their asses out if they default. Defaulting would not be the end of the world for Greece. They may have to change some policies, choke up some retirement benefits etc. They will survive.
The bigger question is: should the EU survive? Who will be the next Greece? Italy, Spain, Portugal, maybe even France, and how is Ireland performing these days?
We have our own idiocy here. NAFTA was a BAD deal for many Americans, TPP will be worse. Conceived by corporate control, developed in secret…in an allegedly “FREE” society? Oh forgot, since 9/11 we have o constitutional protections anymore. Vote?
Vote for what, exactly? The corporately dominated political parrot I want controlling?
Effem. Who cares? Let them join Russia. We are heading to a superpower standoff soon. Cold War II (yes you heard it here first). Get ready and invest accordingly.
Jim
Daniel A. Arnold, in his book “The Great Bust Ahead” writes on what we can do for our
country to counter the Great Depression caused by the loss of the 45-54 year old
demographic – the big spenders – the ones who cause good economies. (They actually stop spending about 10-11 years before retirement.)
“Support initiatives and those politicians that push to increase our exports. The more we export the more we can make our economy dependent on people other than our big-spending 45-54 year olds.
Obama really is working for the Nation. – Republicans have not been.
Arnold and Dent, I believe are way off on that call. The idea that the Baby Boomers will stop spending as they hit retirement age simply isn’t so. I’m right in the middle of this demographic and I assure you that whether I retire or not I can’t just stop spending. I may spend it on different things but I will be spending just as much as I did ten years ago. First, I can’t retire, I need to keep working thanks to the wonderful Obama economy. Me and most of my brothers and sisters don’t have the kind of savings just to pack it up and go relax somewhere. I’m supporting adult children who can’t support themselves because of the wonderful Obama economy. Our health will permit most if us to continue enjoying life to its fullest. There is no depression looming in our future if we would just elect some responsible pro growth leaders, instead of the distributionist pinheads we have in their now. Our economy is poised to explode to the upside if some intelligent policies are pursued. Quit listening to that doom and gloom crap. They only do it to scare the shit out of us so we will buy their books. If we can survive six years of Obama’s incompetence we can survive anything. Jim
The problem the way I see it we still have all of the rest of 2015 , 2016 and early 2017 to deal with OBAMAS wealth redistribution economy destroying policys
OH CMON you say OBUMMER is working for the nation, what nation……………. the nation of Islamic extremeists or his nation of fat and lazy welfare receipients oh cmon you remember wealth redistribution that’s what HILLERY calls it same as OBAMA
Yes, you all write about the crisis over sea’s yet you never truly speak about what we here in the US should do to protect ourselves from the same types of issue’s that can happen here. What we always hear from you is we aren’t licensed brokers so we can’t give investment advice. Why not try to give stronger idea’s as to where we would be safe to keep our funds and cash to protect us from some sort of government collapse here in the US. Come out and name ways to do so. You have plenty of paying subscribers that really do deserve some legitimate help as these are the ones that really afford you to exist.
Here are two suggestions, but remember that my analysis may be WRONG:
1. Buy U.S. government REAL RETURN BONDS (or relevant Exchange traded fund like TIP, traded on the NYSE) IF you are afraid of INFLATION. If the economy continues to improve, the printing of money of the last 7 years [which SAVED the capitalistic system that we (those who are reading the comments) seem to admire] are likely, according to economic research and past experience, to lead to increased inflation. Please note that business cycles are part of the capitalistic system and recessions DO Happen every 7-10 years. Thus, soon we are due for a recession. During the current cycle, the recovery mode has lasted longer and has been relatively weak, so the conditions leading to a recession (like speculations and excessive risk-taking by companies and individuals, accumulation of inventories of goods due to overproduction in the housing and other markets) do not seem to be strong enough at THIS point. My guess is that the next recession will happen by 2018-2020 period. Note that this situation will moderate the expected inflation.
2. Given my above analysis, be careful NOW when buying stocks (since we may be closer to a recession that most people think) and bonds (interest rates are on the rise until the next recession). Decide to accumulate cash (maybe hold some of it in real return bonds and some in shares of big banks and relatively safe companies like GE and CSCO that pay reasonable dividends) BUT RESOLVE to use the accumulated “cash” to buy shares of good companies that pay dividends WHEN the next recession will come. This is easier said – to buy stock when others sell as if there is no tomorrow – than done!!! When you buy close to the bottom of the stock market, you have a lower risk of losing your money.
Greece will not pay their debts and will issue their own currency. Russia China and India have created their own well funded version of the IMF and will support Greece to the dismay of the Eurozone.
It should be interesting at the least.
This whole Greece debacle is a bigger sign of things to come. The politicians who over the decades put Greece in this situation are long gone dead or retired drinking mint julips in the sun. The pensioners of Greece are asked to take a second round of pension cuts so that the big money boys can have their pound of flesh. It is just another example of the “big money boys” trying to take over the planet one country at a time and they are all ripe for the pickings loaded with a hopeless amount of debt and politicians looking for personal financial gain only. The big money boys stay in the shadows dealing through surrogates playing their game of world monopoly. Who is next. Stay tuned.
Well this is the way I see it . Not sure it’s the correct way but until someone shows me something different that makes sense this is how I see it . The borrower looses the lender wins , it is the nature of money and debt . Money is borrowed into existence . Please think very carefully about this . What comes first , the money in the form of debt or the economy . If there is no money there is no economy . For the last while the fed has been printing money and giving it to the banks . If no one borrows that money , then it stays with the bank . In order to make money in an environment where nobody wants or can borrow the banks have been playing in the markets . Manipulating this and manipulating that . All totally illegal and the banks get fined billions for their little games . They pay a fine and carry on . HELLO , if I rob a bank I go to jail . If the bank robs me they get a fine . This is a recipe for revolution . When the banks have all the money , then what . You have no economy , then you have total collapse . The banks can manipulate all markets because they have unlimited amounts of cash to push the markets in which ever direction they please . The real market place no longer exists . Supply and demand mean nothing .
Remember this , money is borrowed into existence but the interest you have to pay on the principal has never been printed . Somewhere down the road the shit will hit the fan .
Cheers and good luck
When bankers collude to raise the interest rate, as they were caught doing the CEO, COO and other managers who participated or approved the illegal activities SHOULD be prosecuted and go to jail! Does the party, or the president, that you support in elections wants this to happen?
Greece is still a EU member. Ukraine is not but Kiev’s IMF loans are being guarnteed by the USCongress in the bill Ukraine Support Act of 2014 and S.2828. These are loans that, without the US taxpayer, Ukraine coulld not repay in ten-thousand years. A rare form of Obamanation building. The IMF, Christine Legarde are no longer just in Paris but now firmly ensconced in New York City and Washington DC. Looks like the dumb US taxpayer will be on the hit list for a good long while. Angela Merkel is dancing the rhumba. German taxpayers will not have to bail Kiev Nazis out.
Good point. Unfortunately, Ukraine is lucky that the cold war between the U.S. and Russia is back. And when that happens, it does not matter who is the President of the U.S. or who controls the Congress. Why pick on Obama in this case too? Obama does not have money, the Republican Congress could have refused to allocate the funds; it seems to have authorized it, instead.
Greece: The Mouse That Roared. Has anyone heard it?
Once a devastating earthquake hits Greece followed by a monster tsunami, then Greece will get all the aid and loan forgiveness and rebuilding teams they need. Problem solved.
Mike, how can other countries support Greek’s life style of early retirement–over 25% of the [population ages 27 to 50 going into retirement at 80% of salary?
Is there any possible way that you guys can stop obsessing about Greece and the Middle East.There is a whole other world out there.
Mike, if the IMF brings China’s yuan into the world currency basket in October ,what is the impact on the US dollar and dollar assets like stocks and bonds etc? Also what happens to China stocks if they have to adhere to more austere rules and regulations to get in??
Greece would have to be stupid to accept the Euro solution. If they did, the people would demand another Election, with worse results, Instead let the Euro kick them out.
Then have the West place sanctions against Greece. Thus Greece will deal with the new Chinese Banking system which will be up and running by the end of June, thus bypassing the American Banking system completely.
Then pay off its debts with its renewed old Currency at 1 cent on the dollar. Then made a deal with Russia and China.
End of Story. The US Banking system is no longer the only game in town.
PeterW
Greek Default: Is this any different from all the other defaults of all the other defaulting countries? Bond holders will suffer losses, and they should have known that bonds can lose value and there’s been no lack of warning about Greek bonds.
After the default, Greece starts over. The pensions will be re-calculated into drachmas and while the initial value of the pension will not change the inevitable drachma hyperinflation will relieve the Greek government of the pressure of paying pensions. Further, the pensioners will succumb to either the ignominy of returning to work or will die. It won’t be pretty, but communism never has been. Speculators of the world will readily offer credit to the Greek government at appropriate rates of interest.
Trans Pacific Partnership: The details are still secret, and I still don’t know if it would be be a net help or a net harm to any of the signatory states.
I seem to remember you guys being perma bears. How can you claim to have predicted stuff when the market has doubled since your bearish calls?
William Charlton
Charlton Specialist Partners
It is not a question, if Greece will leave, but can the ECB afford to let Greece go Bankrupt.
The train left the station and there is no going back, the markets in Europe will plunge HARD this coming week. Most Asian markets will do the same. The US being still the strongest in the world, might make hesitant moves down, but if I were to sell anything why not start with EU Indices,
Greece is the perfect example of mentality of the socialist world. They just want more money. They don’t care about budgets because that speaks of humility. They feel the EU, Germany and IMF are trying to humiliate them by loaning them money “with constraints”. I’m glad to see this come down to name calling because maybe then these socialists will grow up.
If there is some great advantage to more “free trade” then why can’t we hear about it before Congress votes on it. Judging by the effect of NAFTA and world trade agreements and direction the only thing I can hear is the giant sucking sound of jobs leaving this country. Ricardo’s theory of Comparitive advantage is the most absurd theory I’ve ever heard. It makes a lot more sense to think American workers are pitted against societies making 1/10 their pay and benefits which matches the job loss of the American middle class which we have seen since NAFTA and world trade direction.
Personally I take a slower but more stable economy and a more diversified economy where America manufactures the bulk of it’s own goods and services rather than simply cheap prices we can attain with offshore goods.