Morning Commentary
We begin today’s session looking beyond our borders for closure and clarity.
The Prime Minister of Greece is in Brussels for yet another showdown and another summit. Europe’s leaders love to meet and chat up the topics of the day then adjourn after agreeing to meet again.
Unfortunately, the clock is past midnight for the Greek people that have dug themselves into a hole. And the ultimate solution will come down to a combination of sanity and insanity living side by side.
Driving the compromise is the notion of hubris developed by the ancient Greeks.
Hubris is where actions of one person or persons go to an extent to shame and humiliate others for personal pleasure. The concept saw such infractions of mortal versus mortal to be judged by the gods. In the Greek saga, one could ask who is the guilty of hubris.
Germany? Many Greek citizens feel humiliated and shamed by the onerous demands of creditors. In front of the entire world, a beaten nation is scorned and shamed as they are asked to make more sacrifices.
Greece? Many Europeans view Greece as a nation that has clearly ignored contract law and has clearly abused the generosity of its neighbors while living at standards well above their own means.
In America, we have celebrated hubris when it’s the underdog defeating the unbeatable, but in recent years such attitudes have been considered in poor taste. (Years ago I watched a special on Muhammad Ali and my son said he felt Ali bragged too much and belittled his foes. As a child growing up during that civil rights era, I saw him a father figure and warrior for those fighting against the odds.)
Other Global Stories
Iran – the deadline is today and the oil market has signaled it sees something happening that will benefit Iran and open up markets for its oil thereby increasing supply. I fear such a deal will begin the countdown to a nuke deal that will cast a shadow over the Middle East and the world that will be omnipresent and always a danger to humanity.
China – the government has taken a hands on approach to either engineering a soft landing to the stock market or propping it long enough to bring in even greater fools.
The Shanghai Composite was 2059 a year ago, then it broke out through 2500 late last year and took off for a triple digital gain as millions of individuals joined the market each month. It’s not unusual to see a 50% retracement of such moves and that would bring the index to 3619. Yesterday’s low was 3653!
Overnight, however, things got even more confusing as the Shanghai market took another 1.2% hit driven lower by state-owned banks and oil companies. 1,600 stocks hit the 10% daily down limit and $1.4 trillion in stocks have halted trading.
Is this finally the Chinese comeuppance so many have predicted for years or just growing pains that are unavoidable in any economic system? It remains to be seen.
Today’s Session
Futures are higher, but drifting lower and we are not going to force the issue. There are great opportunities developing, but the risk-reward of forcing it at this very moment isn’t where I want it to be.
Comments |
Any country that won't even collect taxes due it is nuts. Why should someone else pay for their upkeep. Greeks are a spoiled people having a ball at the northern country's expense. England will leave the EU all together shortly, Italy, Spain will be in same boat as Greece. EU should never have been started in the first place.Good motivation but very bad execution. tom wayne on 7/7/2015 8:50:52 AM |
humiliation plays no part in this economic drama. It is touted as a player, but this is 6th grade logic. The situation really dictates lots of common sense, which is a very rare commodity. It is impossible for Greece to pay this debt without lots of inflation, which deficit spending banks on. greece is now looking to sell assets to Russia and China, rather they should use those assets as a trade to their European partners as an asset payment in a bankruptcy, which they are in. This way it keeps it in the European Union and at least gives their lenders some income/return on their investment. David Huber on 7/7/2015 9:13:18 AM |
It is hard to imagine an entire nation of individuals who behave and think like entitled adolescents expecting others to assume responsibility for their irresponsible behavior. Zetta Hadden on 7/7/2015 10:49:29 AM |
I'm bearish. Are you? Jim Singer on 7/7/2015 11:18:06 AM |
Like any other country, Greece cannot rest on ancient laurels. If you aren't dealing with the present and planning your future, you aren't succeeding. Patricia Flynn on 7/7/2015 11:20:42 AM |
Iron and clay. Russ on 7/7/2015 11:23:06 AM |
However Germany needs to share the blame for letting it get so out of control. Germany should have known they were over extending their credit. Now it's going to be almost impossible to get the genie back in the the bottle. Gordon Massae on 7/7/2015 11:43:21 AM |
It didn't take a profit to see what was going to happen to the Chinese stock market. A year of more ago, an Austrailian videographer produced a documentary called "The Ghost Cities of China."(PBS Broadcast) In it, he showed how the Chinese government built and Build and BUILT huge cities in which NO ONE LIVED and where commercial centers barely eked out an existance. Perhaps it's time we ALL observe CLOSELY the "writing on the wall" here in the good ole U.S. of A. and NOT be so fascinated by what is taking place in Greece, China and (potentiallly) ELSEWHERE in the world. James Allen on 7/7/2015 12:47:27 PM |
I remember 30 years ago how every one said that Japan would be running America's economy and owning everything. Look where they are now. China is just the next example and will suffer the same fate as Japan. Unlike Japan, however, China is a nation of billions of people, with a huge armed forces, and armed with nuclear weapons. The potential for damage both financial and physical (from armed conflict) beyond China's borders is far more likely. Lonnie Bristol on 7/7/2015 1:21:28 PM |
It's a sad commentary that anyone would think to fault Germany for perpetuating the Greek drama, after every other EU country was kicking Germany when they threatened to turn off the funding faucet. Even parents stop loaning deadbeat kids money after they lose enough. Greece shouldn't be allowed to sell assets, they should be using them to offset or pay back loans from their creditors. Did any of these "world leaders" take basic economics? Where is the collateral for all this paper Greece issued? If I was Germany right now, I'd only offer funds with 4x hard asset collateral, to incent Greece properly - and possibly start collecting on the bad paper they've issued so far. Mike Hammer on 7/7/2015 3:50:36 PM |
Zetta wrote: "It is hard to imagine an entire nation of individuals who behave and think like entitled adolescents expecting others to assume responsibility for their irresponsible behavior. Are you talking about Greece or the United States? It's only a matter of time before we're in the same boat. Isn't that what led to 2008? Greece should be a wakeup call for us. Dennis Howard on 7/7/2015 5:07:10 PM |
Greece SHOULD BE A WAKE UP CALL TO THE USA, any contender for President of the US who chants this gets my vote. Joe Cayman Joe Cayman on 7/8/2015 11:10:27 PM |
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