DJIA 11058 11152 +107.16 SPX 1204.74 +13.38 Nasdaq 2495.55 +23.75 VIX 21.10 18.80 -2.28
Gold 1168.2 -3.60 Silver 18.30 +.193 Oil 85.32 +2.10
Dollar Index 82.20 -.335 EURO 1.3237 +.0048 Brit Pound 1.5266 +.0075
IEV(Europe Index) 37.22 +.49 EEM (Emerging Market Index) 42.45 +.58 EWZ (Brazil) 72.70 +1.70 FXI (China Index)40.93 +.05
TLT (LT US Bonds) 90.75 +.05 IEF (7-10 yr US Bonds)90 -.02
Greece readied severe austerity measures on Thursday to secure multi-billion dollar aid, providing relief to financial markets but drawing threats of a mighty battle from Greek unions. A union official said the IMF had asked Greece to raise VAT, scrap salary bonuses amounting to two extra months of pay in the public sector and accept a 3-year pay freeze.
"It's a done deal," said Ilias Iliopoulos, general secretary of public sector union ADEDY after meeting Prime Minister George Papandreou. Sources familiar with the talks said officials were expected to announce the details of a three-year deal by Monday. Hip Hip Hurray!!!! Greece is saved!
Well if Greece agrees to that then they will be buying a multi year depression. There are rioters in the streets and their Air Force is calling in sick. The money is leaving the banks because the government can not longer be trusted to back its deposits. Its just the beginning in Greece. Up until now government borrowing has been unlimited. This says that government borrowing is not unlimited. That has got to scare alot of government officials.
In other news, Goldman Sachs may soon settle its fraud case with the U.S. regulator, the New York Post reported on Thursday, opting to end a legal fight rather than endure a repeat of the public flogging it received this week.
The Post report, citing sources familiar with the matter, said Wall Street's top investment bank was mulling closing the fraud case with the U.S. Securities and Exchange Commission (SEC) to limit damage to its reputation. "It's almost a certainty that there will be a settlement," the paper quoted a source as saying. Hip, Hip, Hurray!!!!! Goldman's reputation is saved!
I don't know how Goldman officials endured such a public flogging. The settlement will say that Goldman will neither admit or deny fraud but they have to pay a fine. Remember Lehman? The public testimony of Richard Fuld? Who has paid for that one? Not the officers of Lehman. They are past that one now. What about the banks? You remember the hearing with all those bank CEO's testifying don't you? What ever happened to them? They all got a public flogging and of course. public money. I think that is a good trade don't you. We sure got our money's worth on those deals. Now its Goldman's turn to get flogged.
I spent 20 years in the stock business and I saw in almost every case the principals of the firms I was with selling products that were not in the best interests of their clients. Not a day went by were I was not appalled by what I saw. The "flogging" of Goldman's CEO by congress was a complete sham. They knew damn well and so did everyone in the industry what Goldman was and IS doing. This is with the blessing of the system. I am still appalled by what I see and that is why I write this blog.
There you go its all fixed. Goldman gets a slap on the wrist and Greece gets the bailout and the workers get screwed, justice served. More well spent public money. I think that if you close your eyes until they are almost shut and let your mind wander you can see a Greece in the US economy. You can only pretend everything is OK for so long before it blows up in your face.
The point is that this type of borrowing is not sustainable. The workers are being screwed and in the end that is what brings things down. They can borrow and wave their magic wands but in the end they have not fixed the economy and we have not either. Now they are paying the price. Do you think Congress and the President are scared about all of this borrowing? You remember in my blog yesterday saying that they have to cut the deficit. Why do you think they are saying this. The handwriting is on the wall for them to see now that Greece, Portugal and Spain are going up in smoke.
The analogy to this is that when sub prime lenders started to blow up in early 2007 and Bear Sterns was going down. The Fed arranged a merger of Bear Sterns and JP Morgan and dropped rates. This saved the system at that time. The big banks saw the handwriting on the wall and started to be more responsible with their lending. If you read the statements of the CEO's of that time they were reassuring the public that it was only the sub prime lenders and not their banks that had the problem. The Fed chairman said to was not a systemic problem and it was contained.
The big banks stocks rallied from Feb of 2007 until the end of May back to their highs as the Fed came to the rescue and merged Bear Sterns to JPM. The break down came in Aug of 2007 but that is where the FED cut rates and proclaimed that everything was OK. The stocks again rallied until October of 2007 before they rolled over for good. To me Greece is a sub prime lender and the US are the big banks in that analogy. This is the beginning of the end similar to May of 2007. I think that the US has gotten the message.
I started shorting the banks in mid 2006 because I saw real estate blowing up. I did not get paid for 18 months and during that whole time it was obvious what was happening. The officials continued to deny it just as they are denying what is happening today.
The stock market is up over 100 points on this wonderful news. Why? Because it shows that the crooks are still in control. At some point the rats will jump ship but they are still slimy enough to pull this hoax of a recovery off. So, for now anyway, Party on boys. I will say that you can only sweep so much under the rug before it starts coming out of the other end. There is still a lot more to sweep under this rug. The lie is so big now that Madoff would have left the country.
This last sell off was another trial balloon. It tells the shorts not to touch the stove or you are going to get burned. It tells the longs buy the pullback no matter what the news. It is about conditioning now. I still have not had a sell signal but the low for the Goldman sell off close below 10973 looks like a sell signal to me.
The beat goes on and on and on!!!
Mikey
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