Greece

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    Greece's Drastic "Plan B" Tells Us to Prepare a Financial Survival Kit

    By , Money Morning -

    Greece and its "troika" of creditors - the European Central Bank (ECB), the European Commission, and the International Monetary Fund (IMF) - have finally agreed on terms for its latest bailout, worth about €86 billion ($95 billion).

    Athens will pay a heavy price in sovereignty, becoming a "debt colony" of sorts. The terms require Greece to surrender policymaking power over huge swathes of its economy and, indeed, its entire society, to the troika.

    So, more than ever, I'm convinced that we need to prepare a "financial survival kit" as global debt hits record levels.

    I'm going to show you how to do that today...

Article Index

Greece's Drastic "Plan B" Tells Us to Prepare a Financial Survival Kit

By , Money Morning -

Greece and its "troika" of creditors - the European Central Bank (ECB), the European Commission, and the International Monetary Fund (IMF) - have finally agreed on terms for its latest bailout, worth about €86 billion ($95 billion).

Athens will pay a heavy price in sovereignty, becoming a "debt colony" of sorts. The terms require Greece to surrender policymaking power over huge swathes of its economy and, indeed, its entire society, to the troika.

So, more than ever, I'm convinced that we need to prepare a "financial survival kit" as global debt hits record levels.

I'm going to show you how to do that today...

Markets "Whistle Past the Graveyard" as Google Gains $65 Billion in Just One Day

By , Global Credit Strategist, Money Morning • @MichaelELewitt -

Google stock price

While markets decided to ignore what are destined to be doomed attempts to cover over intractable debt crises in Greece and China, the real action in the markets last week took place in two high-flying NASDAQ stocks - Netflix and Google.

Netflix stock split 7-to-1 and the company announced strong subscriber growth, pushing its stock up from a split-adjusted $98.13 on Wednesday to $114.77 at the end of the week. The 18% pop increased its market cap to $48.7 billion and its price/earnings ratio to 210x as Wall Street analysts competed with each other to raise their price targets to ever higher levels.

If you think that sounds giddy, look at what Google did...

Idiocy Knows No Borders

By , Global Credit Strategist, Money Morning • @MichaelELewitt -

greece crisis

As a veteran investor and hedge fund manager, I've often pursued strategies that feed off volatility. So for me, the type of schizophrenic, up-and-down action that we saw last week was just what the doctor ordered. Unfortunately, for anyone banking on a positive long-term outcome for Greece and the EU, the doctor making orders may well be named Kervorkian.

The "Gridiots" in Europe spent the week torturing a world too fearful (or stupid) to just ignore their idiocy. The dysfunctional and bankrupt Hellenic State will continue to be funded for a couple of more years - after which they'll have to go through this moronic exercise all over again. Having allowed its populace to self-immolate and vote against accepting the demands of its creditors, the Syriza government caved to precisely those demands and now the world will wait to see if the rest of the European governments will be dumb enough to fall for this charade.

Read more....

Protect Your Wealth from Greek Fears

By , Money Morning -

greece crisis

The recent disquiet over Greece has been threatening the markets and dominating the headlines, but the best course of action for investors right now is to view it as more noise than signal.

The Greek situation has taken years to play out, and the levels of non-hedged global exposure to Greek debt have been drastically reduced since 2010. There has also been plenty of time to mitigate the risk of contagion that could result from a Greek default or even an exit from the euro.

Read more here...

Broke Greece Is Sitting on an Actual Gold Mine - And Wants to Shut It Down

By , Associate Editor, Money Morning • @DavidGZeiler -

The Greek debt crisis is bigger than the fate of a single gold mine, but this is a story about how political ideology often trumps common sense.

Greece should be doing everything it can to prop up its economy as it seeks to avoid a financial disaster.

But the leftist Syriza party, elected to power in January, has done everything it can to shut down a lucrative gold mine run by Canadian gold miner Eldorado Gold Corp. (NYSE: EGO).They say it's about protecting the environment.

But there's more to it than that - and it defies logic...

"Firewall" Your Profits from Greece's Fiscal Drama

By , Money Morning -

Greek debt crisis

Greek Finance Minister Yanis Varoufakis has had a whirlwind schedule lately. On April 16 and 17 he attempted a last-ditch whirlwind "Washington Tour," meeting with U.S. President Obama, IMF boss Lagarde, ECB potentate Draghi, U.S. Treasury boss Lew, and even German Finance Minister Schäuble.

In search of sympathetic support, Varoufakis found little.

But the most intriguing meeting was with someone whose name most wouldn't recognize.

And the implications of that pow-wow could be the biggest clue of what's to come (including a "Grexit" or exit from the European monetary union), and how to prepare...

How Investors Should Play the Greek Debt Crisis

By , Associate Editor, Money Morning • @DavidGZeiler -

greek debt crisis

Last week Greece got a four-month reprieve on its bailout plan, but the risks that nation presents to the Eurozone and global markets remain.

So it's a good time to review how investors should play the Greek debt crisis.

"From chaos comes opportunity," Money Morning Chief Investment Strategist Keith Fitz-Gerald said in a Tuesday appearance on CNBC Asia's "Street Signs.

To find out how Fitz-Gerald thinks investors should play the Greek debt crisis, watch this video...

Dow Jones Dips 6 Points Wednesday in Choppy Trading Session

By , Executive Producer, Money Morning -

The Dow Jones recovered from a triple-digit loss Wednesday afternoon to finish down just six points after a choppy trading session.

The energy and the utilities sectors weighed on stocks today, while investors continue to eye negotiations between Germany and Greece about the latter country's perilous debt situation.

Here are all the top market stories from today - plus our new profit tip for investors...

Stock Market Today Moving on Keystone XL and Greece Bailout News

By , Executive Producer, Money Morning -

stock market today

Good Morning! Futures for the stock market today (Tuesday) forecast a 91-point increase for the Dow from yesterday's close.

What to Watch Today: Investors will keep their eyes on numerous earnings reports, and the continued drama in Greece. Yesterday, Greece's Prime Minister Alexis Tsipras said his nation will not consider any extension of its bailout terms.

Here's what else you should know about the stock market today - including your "Money Morning Tip of the Day" - to make it a profitable Tuesday:

Greek Stocks Are Up 19% - but Don't Fall for the Rally

By , Associate Editor, Money Morning • @JimBach22 -

greek stocks

Recently, a chorus of voices have deemed the Greek stock market undervalued.

And while they looked to have bottomed out, Greece's new government is starting to renegotiate its debts with the Eurozone. Everything is way too fragile for Greece, and this sudden rally in Greek stocks is unwarranted.

Here's what you need to know about Greece right now, and why it's not worth your money...

Stock Market Today: Fiscal Cliff Fears Can’t Stop This 160% Gainer

By , Money Morning -

The stock market today opened flat before turning negative as negotiations on the fiscal cliff have not progressed, outweighing Greece's new deal concerning its debt.

  • Greece Close to Massive Bailout- Late Monday the International Monetary Fund, Eurozone finance ministers, and Greece came to an agreement that drastically eases the terms regarding Greece's repayment of debt and sets the stage for a third bailout. The deal lowers interest rates for bailout loans, suspends interest payments for a decade, pushes the deadline back for final repayments until the 2040s, and initiates a bond buyback program. Greece is also now on the brink of receiving a $44.7 billion loan beginning Dec. 13. "The big challenge now is to implement the decisions," Greek Finance Minister Yannis Stournaras said. "Greece has huge potential." The agreed upon measures aim to bring Greece's debt-to-GDP ratio down to 124% by 2020 from the projected level of 190% in 2014. The deal was accomplished by installing unprecedented measures such as carefully monitoring how Greece spends the debt, keeping an account strictly for debt servicing, and insisting that Greece completes the bond buyback before receiving more aid. "Euro-zone countries have put their money where their mouth is," Carsten Brzeski, an economist at ING Group NV in Brussels told Bloomberg News. "However, it is clearly not a carte blanche for Greece but rather a very tight leash."
  • Fiscal Cliff Talks Resume- Congress returned from its Thanksgiving recess and the fiscal cliff will be at the forefront of discussions this week. After last week's short burst of optimism there has not been any further progress on a deficit reduction deal. But for now consumers seem unfazed by the whole debacle, as today the consumer confidence index reached levels not seen since February 2008. The onset of higher taxes coupled with deep spending cuts was thought to lower consumer confidence, but instead consumers spent a record amount of money through Black Friday and Cyber Monday. The consumer confidence gauge interestingly showed expectations for six months from now, when we could be off the fiscal cliff, unexpectedly rose. The percentage of respondents expecting more jobs to be available in six months rose to its highest level since February 2011, and the percentage expecting to buy a home in the next six months hit a new all-time high. "The consumer is in a better place than several years ago," Michael Gapen, a New York-based senior U.S. economist at Barclays PLC (NYSE ADR: BCS), told Bloomberg. "A lot of the numbers are improving, whether it is household balance sheets or the state of the housing market or employment."
While the market is trying to turn positive, here is one stock surging on a medical breakthrough, another soaring on a settlement with Google Inc. (Nasdaq: GOOG), and a third that is up after announcing a special dividend.

To continue reading, please click here...

The One Country That Could Take Down the Eurozone - And It's Not Greece

By , Money Morning -

It's been a rough few weeks for the Eurozone.

Portugal is still in trouble, Spain will be back on the coals after its Nov. 20 election, and if I were a bond trader, I would be shorting Belgium, which has serious deficit and debt problems, runs for months at a time without a government and is in some danger of splitting apart into its French and Flemish bits.

A bailout package for Greece has been agreed to, but the Greeks are struggling to form a government to implement it. And yields on Italian bonds are moving ominously higher, rising above the 7% that some think marks a point of no return.

So does this mean that a euro breakup and a Eurozone economic collapse are inevitable?

Not really.

In fact, of all the European nations in crisis, only Italy has the potential to take down either the euro or the global economy.

Just take a look for yourself.

Getting Rid of Greece

At this point, Greece obviously is a goner as far as the Eurozone is concerned.

Really, it should have been pushed out 18 months ago, when it was first revealed that the country falsified its figures to gain acceptance into the Eurozone in the first place. Its government deficit at the time was 12% of gross domestic product (GDP) - not the 6% it claimed, let alone the 3% it had agreed to abide to on its entry.

French President Nicolas Sarkozy already has admitted it was a mistake to let Greece into the Eurozone, because the gap between its economy and the well-managed polities of Northern Europe was much larger than the area's other members.

Former communist countries like Slovenia and Slovakia have integrated quite smoothly into the Eurozone, because their governments and people had already acquired the discipline necessary for membership. But since its entry into the European Union (EU) in 1981, Greece has lived on handouts, and raised its living standards artificially to a level two- or three-times the market value of its output. Exit from the euro is inevitable; Greece's problem cannot be solved in any other way.

In fact, the sooner Greece exits the euro, the better. As it stands now, it's rapidly becoming impossible for Greece to get its debt down to a manageable level, since the country's official debt has been deemed untouchable.

Once the EU leaders acknowledge the need to remove Greece from the Eurozone, the country's exit will be neither difficult nor damaging. The process of recreating the drachma will be similar to that followed in Slovenia, Croatia, and other ex-Yugoslav republics which abandoned the Yugoslav dinar in the 1990s.

Inevitably, Greece will have to default on much of its debt, but it's already doing that now.

So if it's handled correctly, Greece should not be a problem for the Eurozone or the world economy.

The PIIG Pen

The other smaller Eurozone weaklings aren't major problems, either.

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