Yesterday was ugly, with the Dow dropping almost 400 points. Earlier this morning, the futures market indicated the Dow would open up over 100 points but has been drifting down since then. It looks like it will open slightly down right now.
Traders, especially high-frequency traders, are driving the market now. (Investors try to pick good companies in good sectors of good countries. Traders don't care about that.) Traders don't like to be exposed over the weekend, especially if the weekend might bring bad news.
With the G-20 meeting and rumors that Greece will announce its default this weekend, today should be another down day for the market.
Frankly, I'm ready for Greece to default. While it will be bad for the European banks, it will be worse for the Greek people, who will immediately be shut off from the flow of borrowing that keeps them afloat. The banks will then be bailed out by their governments, and their taxpayers will pay the bill, as usual.
The question is whether it will be a Lehman-event. Will it threaten the world's financial system? Probably not, but the jury is still out . . . way out!
Life goes on . . .
Traders, especially high-frequency traders, are driving the market now. (Investors try to pick good companies in good sectors of good countries. Traders don't care about that.) Traders don't like to be exposed over the weekend, especially if the weekend might bring bad news.
With the G-20 meeting and rumors that Greece will announce its default this weekend, today should be another down day for the market.
Frankly, I'm ready for Greece to default. While it will be bad for the European banks, it will be worse for the Greek people, who will immediately be shut off from the flow of borrowing that keeps them afloat. The banks will then be bailed out by their governments, and their taxpayers will pay the bill, as usual.
The question is whether it will be a Lehman-event. Will it threaten the world's financial system? Probably not, but the jury is still out . . . way out!
Life goes on . . .
