Stocks Rise as Athens Burns

Over the weekend, the Greek parliament passed its highly unpopular “austerity budget.” They had to do this in order to get another 130 billion euros of bailout coins from the EU and IMF.

Meanwhile, Athens burned as rioters took to the streets to protest. Party leaders put the squeeze on their members to vote for the budget. In fact, a number of MPs got expelled from their parties for not marching along.

On Wednesday, European finance ministers are getting together to sign off on the Greek plan. Let me caution folks not to get too worked up about the news you may hear. The authorities there will do something. It may not be smart. It may not be timely. But they will do something. The German finance minister said that Greece “will be saved in one way or another.”

The stock market had its biggest drop of the year on Friday. Perhaps the more compelling news is that the biggest drop of the year was a measly 69 bip downturn. That’s nothing compared with some of the volatility we saw six months ago.

The market looks to rally this morning. My take is that we’re going to see higher stock and gold prices and lower bond prices for the next few weeks.

Posted by on February 13th, 2012 at 9:15 am


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