5 Things To Ponder: While We Wait On Greece

5-Things-ExtraAnother week has come and gone, and there is still no resolution on Greece. Germany’s Angela Merkel has firmly stated to the EU party members on Thursday that a deal on Greece must be on the table before the markets open on Monday. She also stated that “we won’t be blackmailed.”

Not only has the entire Greek “drama” to the point of boredom in the media, it is Greece who should realize that they are under no obligation to do anything. It is the EU banks who have absorbed the Greek debt in massive tranches to garner higher yields with the belief that the EU will always bail them out. However, as the old saying goes:

“If you owe your banker $100,000 it is your problem. If you owe the bank $1 million, it is the bank’s problem.”

With primarily banks and hedge funds owning the bulk of the Greek debt currently, each bailout of Greece so far has only benefitted the owners of those bonds as the bailouts passed directly through Greece to those portfolios. It seems that this is a “bank problem” rather than a “Greek problem.” And if that is indeed the case, it will be the ECB and the EU giving into a deal for Greece sooner rather than later.  

In the meantime, as we await the final capitulation by the ECB, EU and IMF to provide Greece another bailout, I have assembled a list of reading for you that has ABSOLUTELY NOTHING to do with Greece.

1) What To Expect In Second Quarter GDP by Elizabeth MacDonald via Fox Business

“While blame is placed on the cold weather and the west coast port strikes, Stephanie Pomboy at MacroMavens notes a weird anomaly that may explain why growth continues to flatten.

Consumer spending growth is key to the U.S. economy. But spending slowed just as job growth stepped up, as the U.S. economy continues to muddle through in its seventh year of the weakest recovery in the postwar era. Since President Obama took office in January 2009, GDP has grown at an average annual rate of 1.8%.

“‘It should be patently clear that something isn’t what it purports to be on the surface,'” Pomboy says. Something else is trimming away at consumer wallets, besides glacial job and wage growth.”

Read Also: Harsh Winter/ObamaCare Boosted Economy In Q1 by Tyler Durden via ZeroHedge


2) Pants On Fire: 10 Lies In The Financial Services Industry by Robert Seawright via Above The Market

“We all lie, especially to and about ourselves. Sometimes the lies are overt. Sometimes they are unintentional. Sometimes they are sales puffery. And sometimes they are devious. What follows are ten great lies in the financial services industry. The first three are propagated primarily by academic finance. The fourth is within the province of the academics but is a bigger problem amongst the professionals – advisors and money managers alike. The next three are predominantly professional lies. Number eight is asserted most often by the professional class and believed by consumers while the last two are universal but play out most unfortunately amongst consumer investors. I’m sure there are more. Do you have others to suggest?”


Read Also: Predicting The Future Is Difficult by Streettalklive.com

3) Still Waiting For A Breakout by Lawrence McMillan via MarketWatch

“On the upside, the S&P 500 is eyeing record highs. Unfortunately, we don’t see the confirming buy signals that one would normally expect if another major upleg was about to unfold.

Equity-only put-call ratios are meandering sideways. They are stuck in neutral. Technically, the standard ratio is creeping slightly downward, and thus would be in a bullish mode. The weighted ratio, conversely, is edging higher and is thus in a bearish mode. But neither is trending strongly, so in reality neither is giving a tradable signal at this time.

Market breadth is an indicator that we closely follow — especially on upside breakouts. When the S&P 500 rose to record highs a month ago, breadth was mediocre at best. The desired combination is to see the market breaking out to the upside and breadth expanding rapidly — becoming overbought while the market breaks out. That combination is usually a strong one and indicates that the breakout is strong and broad. However, that didn’t happen in May, and given recent mediocre breadth figures, it’s doubtful if there would be upside confirmation from breadth in the near future, even if SPX does mange to claw its way to new record highs.

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Read Also: Fear And Greed Collide In The Stock Market by John Kimelman via Barron’s 

Read Also: Don’t Fight The Market by Joe Calhoun via Alhambra Partners

4) How The Federal Reserve Has Distorted The Economy And Markets by Doug Kass via Kass’ Korner

“The Federal Reserve’s extended six-year policy of injecting massive amounts of system liquidity and stabilizing interest rates at near zero has been a powerful force on our capital markets and on stimulating rate-sensitive economic sectors (e.g., housing and autos). But, in maintaining monetary indulgence for such a lengthy period of time, our central bank has now distorted and screwed up our economy and our markets – perhaps for some time to come.”


Read Also: How The Reach For Yield Ends by Charlie Bilello via Pension Partners

5) The Hegelian Dialectic by Cam Hui via Humble Student Of The Markets

“Regular readers know that I have been cautious on the US equity market for several months. Instead of re-hashing the same points over and over again, I thought that I would try something different this week. I will re-examine the bull and bear case for stocks in the framework of the Hegelian Dialectic of ‘thesis, antithesis and synthesis’, otherwise known as ‘thinking outside the box.'”


Read Also:  The Worst Case Of Investing In A Hot Stock Market via CNN Money


The New American Dream Under Obama: Renting by Andrew Malcom via IBD

To Boost Freedom, End The Free Lunch by Jeffrey Dorfman via Real Clear Markets

It’s No Time For Bulls To Get Complacent by Avi Gilburt via MarketWatch

CNBC Demystified via Doug Litowitz via TheAlphaPages

“You’re cruisin’ for a bruisin’.” – Kenickie, Quote From “Grease”

Have a great weekend.

Please, send emails and comments to lance@stawealth.com or tweet me.