Friday, June 17, 2011
Going nowhere fast
Despite all of the volatility in the markets this week, stocks did nothing. The S&P 500 ended last week at 1,270, and closed today at 1,271. It is comical to watch the day-to-day trading action, with the markets being shoved around by traders reacting to the same old news from Greece. Nothing has changed - Greece is bankrupt and can't pay its bills. That's it. Nothing is new and nothing has changed. Nothing is going to change either. The EU will provide the money (170 billion Euros at last count) to keep Greece afloat, and they will never pay it back. They will simply take that money, roll over their debt, and anything that is left-over, they will give to their citizens as they always have. The most concerning part of this bail-out is that each EU member country, including Spain, Portugal, and Ireland, will have to pony-up their proportionate share of the 170 billion Euros, even though all three countries are completely broke and in equally poor shape. Where will the money ultimately come from? Go look in the mirror.