Had a crazy "work on the house" day. Moved tons of furniture that we are getting rid of out to the garage, of course most of it was on the second floor and had to be brought downstairs. Mowed the front and back lawns because it was finally dry for like 3 hours today, woo hoo. Cleaned up the den area where the magic of Economic Disconnect get done. Finally settling in for the evening. The open of "True Blood" is tonight and my wife is a monster fan so I will be watching that in case Anna Paquin is naked again, lol.
The Easy Solution
I was thinking about this Greece debt thing and it finally hit me what the easy fix is. Good thing is not only will this work for every other problem the markets are having, but it has already been used to great effect as well. I have no idea why this has not happened yet.
So Greece is having issues because they are broke and spend too much and take in too little. Who doesn't? The problem is Greece is part of the Euro and so cannot just print their way to prosperity, but must work withing the Euro framework. As Geek debt can only be issued to "real" investors at rates that are far to high (over 10% on the 5 year I think) for the country to pay, the ECB (Euro Central Bank) makes their own loans to Greece at low rates (more around 3-5%) by issuing new money and other games. This way Greece can take longer to not be able to pay and by some miracle maybe will be able to years later.
So why not just cut out the process of it all? In the new world market, Germany pays say 2% for 5 year debt, so Greece should pay 4% because they are having issues. By decree the "market" price for Greek debt can only be sold at 4%! Problem solved! This can work for any problem out there where a free market is saying risk is not being paid for, just eliminate that entirely.
But GYSC, won't the bond vigilantes get mad? Won't market players shun Greek debt because of the risk and not making enough to justify it? They can try it. But where else are they going to go with their cash? They will take what they are told and like it, especially if a guarantee is behind it. If we are going to play fairy land pretend, we might as well get to it in size.
By various routes all debt is being artificially fixed at some price not set by free markets anyway, so let's just stop all the games. The central banks of the world can set prices wherever they feel is correct, and market players can take it or leave it. If they leave it in droves, the central banks just buy it all anyway, so there is no difference here. The Greek debt games is a sick pantomime of silliness anyways, why not take it to the next level? I am right about this because anyone using their own money will not loan to Greece, but the ECB/IMF will buy all the debt anyway. The Parliament vote is a joke, makes no difference what those clowns do, this is going on.
It is homework night but I think I would have to see what happens tomorrow before I could place positions anyway. Tonight I will work out a watch list with targets and ideas, then tomorrow see what I think will work. I am still in SH and PSQ, and made a nice win on MAKO this week. It's annoying but a bunch of the stocks I worked on over the last 2 Sundays have popped really nice (WSTLA, HNSN, CNU) but what can you do.
Have a good night.