When I awoke yesterday morning and glanced at the crawlers on my TV screen, I thought perhaps I was still dreaming, lost my mind entirely, or was watching some kind of fantasy show and not the financial news.
That was because the stock future prices, including the Dow, NASDAQ and S&P were rapidly climbing skyward, making absolutely no sense to me. Because the Supreme Court had just OK’d one of the biggest tax increases in history which soon will likely dampen the economy to practically a standstill, if not reverse it into another recession. In fact, I believe this huge step toward outright socialism might kill our business spirit altogether, whereas I can’t imagine anyone with any ability or iota of common sense who’d work diligently to financially assist some strangers who don’t work at all or contribute whatsoever.
However, I soon found out that the stock market surges had practically nothing to do with our new U.S. health care taxes at all, but were due to Europe’s reaching agreement on handling its financial crisis, which frankly confused me almost as much as would a celebration of the president’s economic mistakes.
According to CNN on-line, “Under this deal, European leaders agreed to create a single supervisory body to oversee the Eurozone’s banks which could use the single currency area's rescue funds, the European Financial Stability Facility or European Stability Mechanism, to aid banks directly without adding to governments' debt.”
They go on to report that an EU statement said “European Union leaders are hoping for implementation of the agreement by July 9, and the deal means Spain's formal request this week for Eurozone bailout funds to recapitalize its troubled banking sector will not add to its sovereign debt. Madrid had feared the increased debt load would send its borrowing costs even higher.”
So, here we have a case where other nation’s funds are being donated to a country that’s basically destitute and has no current solution to correcting its situation via productivity. However, the inflow of funds won’t be treated as a loan since they’re a gift. But, nonetheless, the underlying problems remain and consequently, when these new funds are exhausted, Spain will still be broke, hapless and hopeless, and thus I simply don’t understand why investors and oil speculators think this news is good.
In the meantime, though, while all these nations, including our own, wheel and deal and manipulate loans, gifts and new taxes, the folks who I think stand to potentially lose their proverbial shirts are the individual securities traders trying to figure out the markets. Because if all the nation heads, major banks and “sophisticated” market players have no clue as to what to buy or sell or bet on, or why or when, the odds for “little guys” doing well are probably far better for them at the racetrack.
That’s it for today folks.
Adios
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