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February, Tuesday 14, 2012

02142012 DOW + 4 = 12,878SPX – 1 = 1350NAS +0.44 = 293110 YR YLD -.07 = 1.92%OIL +.29 = 101.20GOLD – .80 = 1722.10SILV – .14 = 33.68PLAT – 26.00 = 1635.00 Over the weekend, the unelected technocrat Greek Prime Minister warned that if the terms of the second Greek bailout were not approved, there would be a “disorderly bankruptcy that would create conditions of economic chaos and social explosion. The savings of the citizens would be at risk. The state would be unable to pay salaries, pensions, and cover basic functions, such as hospitals and schools, and … the country – public and private sector alike – would lose all access to borrowing and liquidity would shrink. The living standards of Greeks would collapse. The country would drift into a long spiral of recession, instability, unemployment and prolonged misery. These developments would lead, sooner or later, to exit from the euro.” And so the Greek parliament voted to accept a plan to impose austerity on the already austere Greek economy in exchange for a 130-billion euro bailout needed to pay 14-billion in bonds that are set to be redeemed in March.  If there is a default on the bonds, it would likely start a process of national bankruptcy which in the first order would mean state pensions, wages, contracts and medical bills not being paid. From there, the insolvency would multiply outwards into the already deeply impaired private sector, where many businesses would find it impossible to stay …

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February, Friday 10, 2012

DOW – 89 = 12, 801SPX – 9 = 1342NAS – 23 = 190310 YR YLD -.08 = 1.97%OIL  –  .79 = 99.05GOLD – 7.00 = 1723.10SILV –  .31 = 33.69PLAT – 4.00 =1662.00 We’ve been talking about the debt situation in Europe because it seems important, and Greece is the linchpin whose failure could send the wheel flying off the axle. Wednesday we told you Greece would have a deal on restructuring part of its debt; that deal was announced yesterday. Thursday we told you there would be social unrest in Greece. The strikes started today. The Greeks have already been hit with 25% wage cuts; now they’re being told they must accept additional 30% wage cuts in order to pay off bondholders who recognized weakness and forced them to roll over their debt at record high rates. The wage cuts are being pushed as a way to forestall bankruptcy, but they will still be deep in debt; even with the wage cuts they will still face debt of 120% of GDP in 2020, and that is the best case scenario; it is based on assumptions of some sort of growth. So the Greek people are being asked to sacrifice their own retirement and their childrens’ futures rather than telling the Banksters to take a hike. So far, the Greeks have been volunteering for massive cuts to their retirement programs, their pensions, their healthcare, government services, and wages; they have been docile as their taxes have increased by 30%; …

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