Hello traders everywhere! Jeremy Lutz here with your mid-day market update for Monday, the 14th of May.
While Adam is away we will be providing the daily update in written form each day, with videos on Monday, Wednesday, and Friday each week.
DailyXchange
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Stock on the move: BMC (BMC Software)
DON'T FIGHT THE MARKET … MOVE WITH THE MARKET!
TODAY'S MARKET MOVING SECTORS:
Percentage changes in stocks are relative to the S&P 500
CONSUMER GOODS: +0.06% Top Stock AVP +5.29%
SERVICES: -0.15% Top Stock BBY +2.34%
HEALTHCARE: +0.18% Top Stock VRTX +5.61%
ENERGY: -0.47% Top Stock CHK +7.10%
TECHNOLOGY: +0.28% Top Stock GRPN +11.00%
FINANCIAL: -0.33% Top Stock SPG +1.17%
INDUSTRIAL GOODS: -0.43% Top Stock NVR +1.63%
BASIC MATERIALS: -0.39% Top Stock RNF +3.87%
UTILITIES: +0.09% Top Stock DYN +3.15%
Now, let's analyze the major markets and stocks on the move using MarketClub's Trade Triangle Technology. Click Here
Greece : I think more has been made of a possible default of this country then Anything in the trading-world. When was the "Last-Time" anyone in the world looked at what they just gotten from a store "And saw Made In Greece ?
If this country produce ANYTHING worthwhile, it would have my 100% attention as far as a default, but it don't. Use the Sky is Falling (Greece) to make money, and don't Run with the other Sheep.
Real intelligent reply Nigel.
If Greece leaves the EU it will not be a big problem. Greece was not one of the original joiners anyway. If my cloudy memory is correct she was added somewhat later almost as an afterthought and then only after a lot of debate. By the way, both Britain and Switzerland still retain their own currencies since neither of them has become full members by their own choice.
"If Greece leaves the EU it will not be a big problem." Really, Jerry? I'm relieved to hear it. From whose standpoint exactly? The inhabitants of planet Zog?
I have nothing to do with Jerry, but I share his view.
Let me explain. BTW: Greece won't leave the EU or NATO. Greece will more likely than not leave the Euro, but that's it. They'll run out of money on May 31 and Germany will be inclined to refuse a further ECB donation as Greece has not, as was agreed, implemented the austerity measures. There is a meeting pending between the German chancellor and the new French president. German line is austerity austerity jawohl austerity, New French line is let's spend our way out of this crisis -ca ira. If the two get along, Greece might be offered a second chance because everybody is desperate to keep them in line and in the Euro.
If not, the money tap will be turned off and they'll default.
If Greece defaults, all the lenders will lose their investments. Who was lending? Some big banks, mainly - many of them British. These banks have already written their investments off. The main danger for the Euro is that the Greek model might suddenly look attractive to Portugal, Ireland and other shaky candidates. Once they realise that a default and introduction of a new currency is not the end of the world, it will be tempting to follow suit.
What happens when a country defaults? The basic idea is that when a state goes bankrupt nothing really happens. The Germans won't come to Greece and take away their tellies, their cars and their marbles and auction it off. They would very much like to do that - but they can't. The Greeks with money in the bank or the attic would lose it in a default, but the ones with money usually are the clever ones and they will have taken it out already. The rest will receive their pay with new money. The country is, all of a sudden, remarkably free of debt. One cannot import much as nobody outside will want the strange new currency. So there will a problem with goods which don't grow on olive trees like cars and electronics. It will be very much like before the Euro. The Greek will be able to retain the absolute essential of life, that is a retirement age in the early fifties. As nothing has changed, they'll have their old inflation back which takes care of the have-nots at the expense of the have-its (might come to America, too). As far as I know, the calculation in Greece is that a new drachma will cause 3 years of austerity and pain, whereas keeping the Euro means 10 years of pain and austerity. So, a default has a lot going for it.
If they do it right, that is quick, there will not be much hoarding in the shops before the new currency comes out. I'm sure they are thinking about it right now.
And the Euro? Do you really think it will be shaken to the core by a Greek default? Greece already is a liability, not really an asset, this has become very clear in the recent past. It would, of course, be tempting to sell short the Euro when the news comes out, but once people cool down, we might see a nice short squeeze which pulls the Euro back up.
I certainly would not bet on a big collapse of the Euro. I would assume that a Greek default has been taken into account in the Euro exchange rate by now. After all, pairs like EUR/GBP have dropped for quite a while already. However, I could be wrong - we should know in a few weeks. In that case, I'll think about Zog.
I think we all should think none of this really matters cos it looks like its all just a big scare tactic, if not dont you think we should start all over again or just keep paying the losses of big private financial systems? Every one of us are going to suffer cos they lost the power over the sheeple. The banking system has been a crime for a few years now or it has now been noticed and paid attention to.