Enough already! I am tired of seeing my ancestral homeland sink. We offer Greece some advice in the paragraphs that follow, so please be sure to find it below.
I think we have all contracted Greece news on the brain disease by now. The Greek drama has been playing out for what seems like an eternity at this point. Of course, we have European Disunity to blame for that, along with Greek government mismanagement and Wall Street swindling. Thank the Greek Gods, the devil, or rather S&P, seems to have found the ingredients to bring the EU toward a reunion of sorts... finally. We cover the latest Greek news, provide important advice to Greece, and report on all of the day's American and global market-moving news in today's copy.
"The Greek" earned clients a 23% average annual return over five years as a stock analyst on Wall Street. While writing for Wall Street Greek and others, he presciently predicted the financial crisis and housing and banking failures of the Great Recession. Visit the front pages of Wall Street Greek now to see our current coverage of business news, global financial markets, real estate, shipping, fine art, technical analysis and global affairs.
If not for Greece news overload, we would have just the two usual economic reports to worry about today. Well, that and a storm of earnings reports, plus a few more Congressional hearings. The day's economic data proved bland while providing more of the same data trends that have played true for too long now. Both the Weekly Jobless Claims and Natural Gas Inventory Report offered little to salt markets today. That said, we always have Greece news to provide a little zest, albeit without the olive oil and lemon.
Greece News & My Disgust
In yesterday's Coffee, entitled "S&P Downgrades Spurred European Response," we noted the vast global market decline that followed the rating agency's downgrades of Greece, Portugal and Spain. The IMF and EU responded quickly to the downgrades though in assuring investors that a distribution of aid is just days away. Greek markets recovered before closing yesterday, and in today's activity through publishing, we saw the remainder of Europe regain lost ground.
Germany's DAX Index +1.0%
U.K. FTSE 100 +0.56%
France's CAC 40 +1.42%
Spain's IBEX 35 +2.69%
Italy's FTSE MIB +0.9%
Portugal's PSI General +4.53%
Ireland's Irish Overall +3.53%
Greece's Athens Composite Share +7.14%
Of all these movers, the Greeks might be wisest to take these gains and move to Cyprus. The austerity measures being introduced to help Greece attempt to turn its economy on a dime threaten to drive civil unrest and engineer deep political divide. That's not to mention that Ben Bernanke keeps reminding Americans that these kinds of actions turned an average recession into the Great Depression in the US.
Pressured by the stupid Europeans (I can't find a better description), who seem unwilling to endure the bad times with the good, Greece is forcing a new set of austerity measures down its citizens throats. I feel the Prime Minister is making the kind of mistake here that ensures a radical political party will win government control at the next election... and oh by the way, that could come via coup given the degree of disgust Greek citizens have for the current situation. The feeling on the streets is simply understood: Why should Greeks suffer for the corruption of their government officials and the mismanagement of Wall Street?
The answer is simple as well: They shouldn't!
Greek union officials reported today that the IMF is requiring Greece to raise sales taxes (further), scrap bonuses and accept a three-year pay freeze. The bonuses union members have grown accustomed to amount to two months salary, and therefore mark a significant cut in pay. Prime Minister Papandreou is a wonderful gentleman, but we hope he has a talent for sales as well, since he is going to have to sell "saving Greece" to a passionate people that see the product as skata (read shit).
For the sake of justice, the pious people of Greece burned a Christmas tree; and for the sake of justice, they drove the soldiers who guard the tomb of their beloved unknown soldier away. We are talking about a people who have pelted their politicians with objects of all sorts, including fists. We are talking about a people who will not be taken advantage of, nor burdened with the weight of government corruption and Wall Street swindling.
As a matter of fact, I think it would be wise for Goldman Sachs (NYSE: GS) and crew to remove any signage, and consider hiding Greek operations on some deserted island for a few years. I feel sorry for the Prime Minister, because in saving Greece, he will likely lose his government. And neither will the New Democrats take it back, since they have been attributed with much of the blame.
Greece would be wise to consider these ideas for starters:
Tax tourists, not your citizens! Same as in New York City, a leader from the upper class places the burden of economic decline on his already stressed working class. Just as New York will always attract tourists, Greece will as well (as long as it is peaceful). So instead of strapping your hard working blue collar countrymen, it would be wise to look toward visitors to bear the cost.
Shipping Companies must pay taxes! Shipping companies do not really pay taxes in Greece, despite running most of their operations from the country. Rather, because assets consist of seaborne vessels, they place a small office in Liberia, The Canary Islands or some other lie, and pay virtually no taxes to Greece on the exorbitant wealth stores they amass. I say Greek shipping families should decide if they want to be Greek citizens or not. If they do not pay taxes to Greece, then they should lose citizenship and move elsewhere. Greeks may be a proud people, but we are not a stupid people, and we are tired of being screwed.
Penalty for government corruption must be merciless! If you give these gentlemen to the crowds of rioters, they will eat them like cabbage, so to speak. The people run the government! This is democracy! So, to preserve the cabbage industry, it would be wise to put corrupt leaders into Turkish prisons. Greek prisons would be too kind.
Seek retribution for the stolen riches and history of Greece! Force Germany, the United Kingdom and Turkey to repay Greece for the wealth stolen over the centuries.
If you want real change the people can support, these are the kinds of measures you must institute. Penalize unfairly earned wealth, tourists who will come anyway, and the cheaters who have caused this crisis by mismanagement and corruption. Do not torture the good Greek people who work hard for a simple existence.
The current plan inspired by Greece's big brothers is not feasible. It will only open up black markets, torch the streets of Athens and lead more Greek wealth to leave the country. It will only usher in a radical government to replace the current. Please, I beg any intelligent reader with reach to the Greek government to share my words with them, and let them consider these words carefully. I'm sure I could enhance Greece's budget plan and save Greece much pain, if only you will give me a chance to. I am available to help serve Greece's effort.
House Panel Keys on Goldman's Swaps & Greece
A House of Representatives panel took up the subject of credit-default Swaps and their role in Greece's debt crisis today. In other words, the feds are doing all they can to turn up the heat on Goldman and Wall Street, which works in favor of getting financial regulatory reform passed. Meanwhile, the Senate Banking Committee is reviewing "short-termism" in financial markets.
Weekly Jobless Claims
Weekly Jobless Claims were reported today for the period ended April 24. New unemployment benefits filers numbered 448,000, about in line with the economists' consensus for 447K. Claims were lower than the prior week's revised number of 459,000, and also significantly shorter than the data from two weeks ago (480K). However, the four-week moving average tells a sad story. That telling metric produced an increase of 1,500 claims, to a mark of 462,500. Perhaps census hiring is still not a factor.
The consistency of employment outflow illustrates a desolate labor market, and implies that elevated unemployment will persist for some time to come. Next week offers market watchers the latest unemployment figures, and we see little reason to be enthusiastic about that. The insured unemployment rate stuck at 3.6% for the April 17 period.
The largest increases in initial claims for the week ending April 17 were in Puerto Rico (+3,549), Iowa (+1,606), Georgia (+1,412), Connecticut (+768), and Florida (+422), while the largest decreases were in New York (-21,010), California (-15,380), Pennsylvania (-4,512), Oregon (-4,317), and New Jersey (-3,777). This data seems to show cyclical gains beginning in the hardest hit regions of the country. Though, all indications are that small business is not participating in any hiring. This illustrates a failing of the Obama Administration's job incentive program, which is geared toward small business.
EIA Natural Gas Report
The EIA's latest Natural Gas Report showed another increase in inventory, this time by 83 Bcf (versus last week's 73 Bcf). The report, covering the period ended April 23, shows natural gas inventory 303 Bcf above its five-year average for this time of year (last week's data showed it 286 Bcf above). Based on the EIA's charts, it looks to us as though natural gas inventory is already above the upper limit of the average range for this time of year. Thus, there seems little reason to forecast higher pricing, unless you see near-term global economic growth higher than economists estimate; or if you foresee a conflict with Iran in the near-term.
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