Only A Calamity Will Straighten This Financial Mess Out

June 14th, 2012
in Gary's blogging

Midday Market Commentary For 06-14-2012

By noon the markets were stable after the 10 am rise of 1% and the volume fell off to anemic levels. It appears that few investors wants to make a move while the politicians across the globe sit on their thumbs wishing things would get better. I like to blame the Keynesian politicians for the financial troubles we are witnessing, but in reality the whole lot, including the USA elected officials, don't have a clue what to do and are pointing fingers at each other.

The clueless French voters elected a Socialist and it appears the Greeks will too sending the European Union into a deeper abyss than previously imagined if their action are not curtailed. The similarly misinformed US President Obama is trying to convince Germany's PM Merkel to open up their coffers and throw more money at the problem. Right now all the negative news is being disregarded and partially ignored and 'hopium' is in great supply with lame promises of more to come.

What we need right now is a calamity to straighten this mess out. The economies of the World need to deleverage one way or another and the sooner the better.

Follow up:

The DOW is at 12609 up 113 or 0.90%.

The 500 is at 1325 up 10.72 or 0.82%.

The $RUT is at 7.60 up 8.16 or 1.08%.

SPY is at 133.13 up 1.05 or 0.80%.

The trend is neutral and the current bias is up.

European markets closed mostly down today in the wake of continued negative news coming from the EZ and fears of the looming Greek election on Sunday. The FTSE 100 in London is closed at -0.31% while the German DAX closed down -0.23%. The CAC 40 in France closed up 0.03%. The Asian markets closed down as reported earlier with the Hang Seng at -1.15%. The Shanghai Composite down -0.99%. The Nikkei down -0.22%.

Kevin Flynn has good advise to the 'sheeples' out there when it comes down to jumping into the market fray in the article below. The action next week, particularly Monday, is going to be interesting to say the least and it all revolves around the election results in Greece. Some analyst's are claiming the markets will solidly gap up or down, depending on the election results.

My feeling is that there will be no large gaping, but a muted reaction compared to a panic. If the anti-bailout party wins the markets will move down, but not a large gap and the same goes for the pro-bailout party moving up. The reason is because there are not that many investors in a buying mood and those that ARE in the market are few. Forget the funds as participants as they are like tanks in that they like to stay put and are hard to maneuver. So what ever happens on Monday the markets will be back to business as usual in a few hours.

A Case For Staying On The Sidelines by Kevin Flynn

You should be cautious too, at least when it comes to the current market and any potential fireworks next week.

Europe almost certainly needs to be forced into greater cohesion, and we continue to believe that the gaze into the abyss is likely to be the only thing that does the trick. Our markets wouldn't escape the fallout, even if we do get a 2008-style rally-in-the-face-of-death next week.

Yes, the European situation is in dire straits and probable will get worse considering the Keynesian s at the helm, unwillingness of the EZ members to stop spending and the outright stupidity of some of the southern members.

To contact me with suggestions or deserved praise:

gary@econintersect.com

Written by Gary















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