So the main issue to the US is not Greece per
se, but rather, what happens to the other troubled countries in Europe and then
the follow-on impacts to the Euro-economy.
A friend and I were discussing this question
the other night: “Why is the market
doing so well considering the Euro-risks?”
One answer may be the one Mr. Dimon gave above. As reported by the Wall St Journal (WSJ), another
is that the European Central Bank (ECB) is loaning money ($632-billion dollars
so far) to back-stop the Euro-banks. As
a result, yields on debt are dropping across Europe. The yield on Italian 2-year debt is now
3.9%. It was 7.8% last November. Falling European yields takes a lot of
pressure off the sovereign debt issue and gives stock markets world-wide some
reason for optimism. Regarding Greece –
as we have seen from many sources – it is expected to default.
Before
we got too complacent, there is the other side as outlined by Deutsche Bank CEO,
Josef Ackerman, who says…people underestimate the collateral damages (of Greek default) that
include the payment system within the central bank and exposure to Greek
companies, not just a sovereign consequence.” He paints a dark picture. Video at…
I
think the Market likes Jamie Dimon’s version rather than Mr. Ackerman's.
The
Navigate the Stock Market system doesn’t try to predict which of those bankers
is right. Predicting the future is a
fools game; NTSM follows the market action for its BUY or SELL recommendations.
Today
the NTSM remained BUY.
I
bought back into the stock market at S&P 500, 1155 on 7 Oct after the 6 Oct
NTSM buy signal. I remain 100% long in
the long term portfolio (100% stocks in the 401k.). (See the page “How to Use
the NTSM System” – the link is on the right side of this page).
Just
a reminder: 100% invested in stocks is way too much for most rational folks. Don’t do it unless you have a high tolerance
for risk.
I’ll
be busy for a while so I probably won’t post Friday’s analysis until Sunday.
