Hey, 2 days in a row: Futures are showing 24 points down on S&P, 154 points off on the Dow. Yesterday, futures were down only 100 to start the day, and we ended up getting shellacked for a 2- 2.5% drop.
Today’s early morning negativity is in response to more sturm und drang in Europe. It seems the Greeks don’t care much for the European austerity proposals. Greek Prime Minister George Papandreou called for a referendum to be voted upon, potentially derailing Europe’s bailout effort.
Here’s a little secret for ya: Greece has already defaulted on its debts. Anytime a creditor declares his intention to not pay back 100 cents on the dollar n a timely basis, its effectively a default. We are kidding ourselves debating the differences between a 22% and 50% haircut — its irrelevant to the question of solvency.
The best thing for the Greek people would be to leave the Euro, start printing Drachmas, and make Greek an inexpensive tourist destination for Europeans, Asians and Americans. Greek exports (olives, olive oil, cheese, lamb, etc.) would be even more competitively priced. Then the Europeans could focus on saving the economies that really matter — like Italy, and to a lesser degree Spain.
My advice for the Europeans: Stop trying to put Humpty Dumpty back together again, and start moving forward, focusing on what matters.
If you haven’t figured out that day to day action is noise, you haven’t been paying attention . . .