Tomorrow and Wednesday are keys days. I said a week ago I was sniffing some sort of top. Obviously Friday we had the hard sell off. Tomorrow we can move up but if we do we can't on Wednesday also. Tomorrow actually sets up interestingly becasue if Goldman's results are to good that could actually be bad for Goldmand and hence bad for the stock market. I mean if your Goldman do you really want to blow out earnings and show how much money you are making? That will just make the situation worse.
Greece continues to fall apart. New highs for yields on government debt. Not a good situation. China was down over 4% yesterday. Chopping about sideways today which seems bearish.
I think the top holds (at least for the S&P 500) for now and we get continued selling.
Interesting interview in the German newspaper the Spiegal of German Finance Minister Wolfgang Schauble. Shows everything wrong in the world. One of the few Germans who actually wants to bail out Greece. From the Spiegal
Schäuble: I'm a firm believer in the monetary union. At the time, I felt exactly the same way as the current president. The only problem is that the world has changed. The capital market has become globalized to a degree that we couldn't have imagined at the time. And we have experienced a financial crisis from which we in Europe must draw a clear lesson: We cannot allow the bankruptcy of a euro member state like Greece to turn into a second Lehman Brothers.
Interviewer hits the next question on the head.
SPIEGEL: You are exaggerating. In past years, it's happened again and again that a country couldn't pay its debts, and yet that hasn't led to a collapse of the global financial system. Why should this be different in Greece's case?
Look at the response. It tells everything wrong in the world. How does a country as meaningless as Greece become so important?
Schäuble: Because Greece is a member of the European monetary union. Greece's debts are all denominated in euros, but it isn't clear who holds how much of those debts. For that reason, the consequences of a national bankruptcy would be incalculable. Greece is just as systemically important as a major bank.
He is probably right but continuing on bailing out Greece doesn't solve the problem. It just makes it bigger.
The rest of the interview turns into more of an argument where the interviewer is nailing the German Finance Minister. Why don't we have this type of journalism here?
Look at this exchange. Wow!!
SPIEGEL: In other words, you were playing poker.
Schäuble: Playing poker is the wrong expression. The situation is too serious for that. Germany has embraced its leading role in Europe. We will help Greece in the event that its government, despite a comprehensive restructuring program, falls victim to international currency speculation once again.
and what about contagion? The ostrich head in the sand is always the preferred approach it seems.
SPIEGEL: The Greek crisis is particularly controversial, because there are other euro countries that are also up to their necks in debt. What happens if Portugal or Italy requests financial assistance next?
Schäuble: There are no indications that this will happen, which is why no finance minister would answer such a speculative question. If he did, he wouldn't be doing his job well.
and the municipal situation apparently isn't much better in Germany
Schäuble: Germany's municipalities are in an unusually difficult financial situation at the moment.
SPIEGEL: Are Germany's towns and municipalities truly in such bad shape?
Schäuble: Some are. They have fewer and fewer options, and some are now under the mandatory supervision of the federal states. This is a dangerous development, because local self-administration is the core of our democratic system. That's why the government has made the municipalities' financial problems a priority