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Monday, July 23, 2012 – There Are Problems With Spain And Greece And Germany

There Are Problems With Spain And Greece And Germany – by Sinclair NoeDOW – 101 = 12,721SPX – 12 = 1350NAS – 35 = 2890 10 YR YLD – .02 = 1.44%OIL + .10 = 89.81GOLD – 7.30 = 1577.70SILV -.27 = 27.16PLAT – 17.00 = 1404.00There are problems with Spain. We’ve been talking about the problems for quite some time; they had a housing crash; a whole bunch of real estate is underwater; the banks were clobbered; the unemployment rate jumped up to more than 25%, which is in line with unemployment during the Great Depression. The IBEX 35, the Spanish equivalent of the Dow Industrials finished the day down 1.1% after trading as low as -5.8%, and the FTSE MIB (Italian index) was down 2.76% on the day. Spain announced that it is banning all short selling for the next three months. Italy announced it would ban short selling for banks and insurers.  The move echoes decisions in August last year by the two nations plus France and Belgium after European banks hit their lowest levels since the credit crisis of 2008 and 2009. The ban worked, sort of; the IBEX rose 6% last year during the ban, and the financial stocks that were covered under last year’s ban they gained 10%. Most bank stocks extended their decline once the bans were lifted. Last time around it didn’t really have any lasting impact. They artificially propped up prices but they didn’t correct the underlying problems. This is trying to avert hedge …

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Monday, June 18, 2012 – G-20 Declares Ceviche Tasty and Democracy Messy – by Sinclair Noe

DOW – 25 = 12,741SPX +1 = 1344NAS + 22 = 289510 YR YLD un=1.58%OIL -.26 = 83.01GOLD + 2.00 = 1629.70SILV un= 28.84PLAT – 1.00 = 1489.00The results of the Greek election shows conservative New Democracy taking 29 percent, with the radical leftist Syriza bloc just behind on 27. The Pasok Socialists were set to take 12 percent of the vote. The scenario is similar to the results of an earlier round of voting. ND also came in first in May 6 elections, again with Syriza running a close second, but failed to form a government then. And 38% of eligible voters did not vote yesterday; that’s more votes than any one party received. The headlines say that a pro-bailout, pro-remain in the Euro-union party won the Greek elections; it’s not that simple. There was no majority. The next step is for New Democracy leader Antonis Samaras to form a coalition government; not an easy or certain task, and it must be done within the next 10 days. Look for a combo of the New Democracy conservatives and  the Pasok socialists; the same group that governed Greece into this mess in the first place. Pasok, the Socialist party, called for a government that would include Syriza, the far left party, but  Syriza ruled out joining a coalition that would stick to the punishing bailout terms that have helped condemn Greece to five years of record recession. Alexix Tsipras, the leader of Syriza, had vowed to tear up the terms, betting that …

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Monday, April 16, 2012

DOW + 71 = 12,921 SPX – 0.69 = 1368NAS – 22 = 298810 YR YLD – .02 = 1.97%OIL +.24 = 103.17GOLD – 5.60 = 1653.90SILV +.03 = 31.63 PLAT – 10.00 = 1581.00 Spanish 10-year government bond yields broke above 6 percent for the first time this year as concerns over the country’s ability to keep its finances under control pushed debt markets back into crisis mode. Spanish 10-year yields were at 6.15 percent. Five-year yields topped 5 percent, while two-year yields spiked to 3.70 percent, all 2012 highs. Six percent is psychologically important because the the quick slide in prices has accelerated on previous occasions when that level was broken. Beyond 7 percent, Greece, Portugal and Ireland struggled to raise cash in the market and were forced to seek financial aid. The cost of insuring Spanish debt against default hit a record high Monday of $520,000 a year to buy $10 million of protection; that is to buy credit default swaps, and after the Greek fiasco, nobody really knows how much protection a credit default swap really buys. The ECB seems reluctant to resume bond purchases. We’re back in full crisis mode, it is looking more and more likely that Spain is going to have some form of a bailout. Absent an intervention from the ECB, you would not see a cap on Spanish yields; they would just keep increasing.” Top European Central Bank officials are calling on the rest of the world to pledge more money …

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