Global Market Commentary, Analysis and Investments
What’s Bill doing in Cyprus…?
We’ll get to that. First, what happened in the markets? On Friday, the Dow rose 267 points. Gold went up too — $23.
A big move to the upside. And why? No apparent reason. Gaddafi bit the dust, almost literally. And the Europeans seemed to be stumbling to yet another solution…in which they borrow more money to help fund the troubles created by borrowing money in the past.
[Read more...]Sure, the US has its own huge debt problem, with a bit of a “ceiling” issue which urgently needs to be resolved before all hell breaks loose. Perhaps that’s all the more reason to appreciate a catchy and upbeat song about a crisis elsewhere. In this case, the euro zone, where Portugal, Ireland, and Greece have already received bailouts and Spain could soon be up next.
[Read more...]“Read All About It!” You couldn’t not read all about it! The media was full of reports about how happy stock market days were here again. After a stormy start, June closed and July began with US benchmark indexes racking up their biggest weekly gains in two years on good news: the US manufacturing index had unexpectedly risen, and the beleaguered debt-burdened Greeks were bailed out yet again – piling un-payable new debt on top of un-payable old debt.
[Read more...]Austerity measures provide the obvious economic solution for overly-indebted nations in Europe — like Greece, Portugal, and your editor’s present location, Spain. Yet, for some reason, the basic concept of reduced government spending remains a mostly foreign concept to US political dealmakers.
[Read more...]In at least half the instances when asked, your editor’s friends and family forget whether he’s been in Sweden or Switzerland over the past couple of years. Something about the “sw”-starting sound… and, well, perhaps blond locals. That said, investors retreating from the many perils of the quantitatively-eased US dollar and the GIIPSed-out euro should avoid the same mistake.
[Read more...]With many of the giant US institutional funds holding commercial paper from European banks, your dollars in US money market accounts may not be much safer than euros at a Greek bank. For example, France-based BNP Paribas holds over $7 billion in Greek bonds, and it — along with other foreign banks similarly exposed to a potential Greek contagion — is widely-held by US money market funds.
[Read more...]Despite last year’s 110 billion euro Greece bailout — from the European Union, the International Monetary Fund, and the European Central Bank — there remains serious concern that the periphery EU nation will be unable to continue its debt repayments. Due to the increasing severity of the problem, and the ongoing resistance to additional support, the Central Intelligence Agency has now issued a report warning on how worsening Greek unrest could bring rise to even a military coup.
[Read more...]Beijing-based Dagong Credit Rating Co. is China’s leading credit rating agency and, despite the limited international influence of its ratings, it keeps pumping out sovereign debt downgrades for the industrialized West.
The latest nation up… or down as the case may be… is the UK. It was already cut from its triple-A standing — as indicated by ratings from US agencies — to AA- in Dagong’s first headline-inducing ratings release. Recently, the UK has again been downgraded, this time to A+ with a negative outlook, due to its deteriorating solvency.
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The Economy Has Changed Expect Hopes, Dreams and Lifestyles to Follow
Not much action in the markets on Friday. It was a helluva week, though. At the beginning it looked like Europe wouldn’t make it to the end. Yields were rising to dangerous levels. Greece was clearly bankrupt. Italy would fall too, unless Germany came to the rescue. And investors weren’t too sure about France.
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