|Dow||-95.08 to 17,729.21|
|S&P 500||-8.73 to 2,046.74|
|Nasdaq||-18.39 to 4,726.01|
|10-YR Yield||+.01 to 1.948%%|
|Gold||+$6.10 to $1,240.70|
|Crude Oil||+$1.15 to $52.84|
Can Things Get ANY Worse in Europe?
You know things are getting serious in Europe when Greece starts asking for World War II reparations from Germany!
But as crazy as that may sound, that’s exactly what Prime Minister Alexis Tsipras just demanded in a speech before the Greek Parliament. Nazi forces occupied Greece during the great war, for which Germany paid Greece 115 million deutsche marks as compensation 55 years ago.
That effectively ended discussions of additional reparations. But Greece’s new leader is agitating for more money in an obvious political ploy/negotiating tactic to antagonize his European creditors. Germany said Greece has no legal standing due to a landmark 1990 treaty that was signed when the former East and West Germany united — and that it has no intention of handing 162 billion more euros to Greece.
|Germany has no intention of handing 162 billion more euros to Greece.|
But even if a single euro never changes hands, the clash over reparations reveals just how poisoned the relationship between debtor and creditor has become. That’s why many investors and government officials are getting closer to conceding that a “Grexit” from the European currency union is all but inevitable.
Former Fed Chairman Alan Greenspan just predicted that would occur. Investors in Greek bank shares are throwing in the towel and dumping like mad because they believe a Grexit would spark widespread bank runs. And U.K. officials are scrambling to come up with contingency plans to limit the damage in that country.
Bottom line: The crisis clock is ticking — loudly! European officials are meeting for an emergency session on Wednesday, and if common ground can’t be found with Greece, things could get ugly fast. Greece has been saying it needs to reach a “bridge” agreement within two weeks … or else!
So what do you think happens here? Is this another time where things will come right down to the wire, then a last minute deal will be reached? If that happens, what impact do you think it will have on stocks, bonds, and the euro currency?
And if a deal is not reached? Do you think the Germans are so fed up with Greece, they’re ready to boot the country out of the euro zone? Do you believe officials who say the event wouldn’t be so bad after all? Or is that just happy talk?
Definitely head over to the Money and Markets website and share your thoughts. There isn’t much time left until the crisis comes to a head — so I’m sure your fellow investors will appreciate your insights!
|Our Readers Speak|
Interest rates and cooked up government statistics were the focus of website discussion in the wake of one of the strongest U.S. jobs reports in several years.
The general consensus? That nothing from Washington is to be believed!
Reader Joe C. said: “Do you really believe that B.S. about the job market and employment stats? How can employment stats be the best in 17 years? A labor official said yesterday lots of engineers would be unemployed stats if they did not go out to mow lawns a few hours a week.
I’ve never seen so many people in Atlanta without jobs. Crimes are up. People are following the mailman robbing mail from mail boxes. 75 percent of those working are surviving from paycheck to paycheck.”
Reader Donald L. then picked up the torch, saying: “The real labor rate, just like the real inflation rate, is distorted by the government for its own purposes. Nobody believes them but everyone thinks it will all work out. With an $18T debt and the costs of servicing it, I sincerely doubt it.”
And Reader Dick added: “I do not believe these government numbers and am surprised you do. Oil companies eliminating 25,000 jobs which hurts many other unrelated companies. GDP, unemployment, and inflation numbers are all not realistic as the government changes them to fit their politics.”
Thanks for your feedback. I don’t think the numbers are 100 percent accurate, either.
|“If you ignore what they’re saying about the economy or suggesting about the future direction of policy, you do so at your own financial risk.”|
But here’s the thing: They’re the only numbers we get, so they’re the numbers that matter! They’re the numbers that policymakers follow and that big money investors use when making “buy” and “sell” decisions. So if you ignore what they’re saying about the economy or suggesting about the future direction of policy, you do so at your own financial risk.
Reader Tony G. took a more practical approach with his question, arguing not about the veracity of the numbers, but what they mean. His comment: “Since the job market is doing so well, would an increase in interest rates be favorable to the market, sort of cooling things a bit?”
I think it depends what market you’re talking about, Tony. The risk of a “Bloody Wednesday” response to any tightening move by the Fed is high. But the pain will likely be felt in stages. Bonds and Eurodollar futures would likely get hit first. Then many weaker stocks would suffer later as the pressure from rate hikes builds.
I hope that helps, and that my comments provide you with some food for thought. Feel free to add your own over at the website!
|Other Developments of the Day|
Lower oil prices seem to be having their desired effect, or so says the OPEC cartel. The group said demand for its oil would rise 100,000 barrels per day this year, rather than fall 300,000 BPD as previously forecast. The group also raised its U.S. gasoline demand forecast, and lowered its forecast of how much U.S. supply would come online.
European diplomats are desperately trying to calm the tensions in eastern Ukraine. Ministers from the European Union pushed off the implementation of fresh anti-Russian sanctions to provide time for peace talks in Belarus. The leaders of Russia, Ukraine, France, and Germany will gather there on Wednesday, following talks in Kiev, Moscow, and Berlin.
I’m not really one to care about awards shows. But Sam Smith was a big winner at the Grammys last night, taking home the best new artist, best song, record of the year, and best pop vocal album awards. Beyonce and Pharrell were two other big winners at the annual music awards show.
It’s snow joke — New England is getting socked with yet another winter storm! As much as 16 fresh inches of the white stuff are expected through Tuesday, leading to more school closures and mountains of snow being piled up on city streets throughout Boston. Hundreds of flights have also been cancelled.
Is the snow piled up so heavy against your door that you can’t get out? Then don’t just sit there — share your thoughts on the weather or any of the other news stories you’re following at the website!
Until next time,