It feels familiar, this time last year, and the year before… yes, the markets were sinking and there is one undeniable reason — debt crisis in Europe made so very loud and clear by the problems of Greece. Summit after summit after summit after summit – two years on you’d think they got this sorted instead they’re going in circles ( it’s probably the beer!!!) 🙂 With the last elections in Greece, France and Germany toppling the governments that agreed to the bailouts and austerity — all those agreements made uncertainty more pronounced and fear in the markets back in vogue.
I am happy to be proven wrong but, I think things will rebound a teeny bit but will resume its downward move for weeks to come.
The oil stock that I’ve been holding in my retirement account it’s down to December – pre- Iran levels. I have a wide stop on it and sure makes me uncomfortable seeing it nearer the designated stop, but as I have ability to protect it on the downside it does not bother me as much. For those who are wondering what’s going on, good time as any to learn what’s driving the market because the stock’s fundamental and technicals got nothing to do with this!
This CNN article “Oil prices hit five-month low” puts it quite plainly:
The problems in Greece and the fallout if the country leaves the eurozone seemed foremost on investors’ minds. If Greece leaves the common currency, it could touch off a deeper recession in Europe that would cut into oil demand.
“The markets are pricing in gloom,” analysts wrote Monday in the Kilduff Report, an industry newsletter. They are worried about “demand growth as the EU’s maladies spread; and spread they will.”
The uncertainty is causing investors to leave assets like stocks and commodities and flock to safer bets like bonds. ”
There is so much political uncertainty, the powers who hammered down the bail out packages and austerity measures – France and Germany — both lost their recent elections. What this means is that, there will be all new negotiations, it seems nobody wants to tighten their belts, but where to get the money?
“Merkel’s party takes a loss in Germany” http://edition.cnn.com/2012/05/13/world/europe/germany-election/index.html?iid=HP_LN
“Greek government talks turn ugly” http://edition.cnn.com/2012/05/13/world/europe/greece-politics/index.html
Oh, and before we forget JP Morgan’s whale of a loss for this quarter that isn’t even finished is now on the sidelines but doesn’t mean there is no more of the same possible goings on–Â banking problems of scandalous proportions could be the next.
So for people who can trade on the bearish moves with options, warrants and other instruments, it could be very profitable (could – because this still takes serious skills!) . Glorious gloom awaits…
Glorious gloom by Fr. Noel Azupardo
