It’s Sunday evening, just looked at stock futures (not pretty) and caught up on the election results in Greece and France (very not pretty)…
A new crop of politicians seized the opportunity to make entirely unfulfillable promises… Shaming their predecessors who dared to renege on all their unfulfillable promises just because they didn’t have the revenue to make the payments on all the debt they incurred to fund the deficits they incurred to fund all their unfulfillable promises… Of course if the opportunists had been at the helm all this time, the citizens of these two great (not!) countries would be enjoying the spoils of robust economies, or so they promised (I honestly don’t “know” what they promised, but politics ain’t rocket science)…
“So then”, you ask, “if, when the dust settles, this is bad news; what’s the likeliest scenario for the economy and the stock market for the balance of the year?” “Sorry”, I reply, “I won’t prognosticate on either, but I’ll be happy to speculate on the responses of policymakers” (odds are good that I’ll be right on two of these three [number two being the least certain]):
1. In response to panicky credit markets in Europe (spiking interest rates) the ECB will open yet more windows for banks to come get really cheap money…
2. The EC, the IMF and the ECB (the so-called troika) will meet the new regimes at the negotiating table… Yes, alas, there’ll be private meetings, public promises and plenty of printing till they come up with enough somethings to calm the debt markets and justify the next round of bailouts… (This one’s likely, but a tough one for the troika, particularly with regard to Greece… They’ve been very definite with their threats to abandon the bailouts if austerity measures aren’t implemented…)
3. As for the Fed: QE3 is a coming if this gets ugly…
But you’re still wondering what’ll happen (in the near-term) with stocks? Is it d