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11/08/2011

Not enough write-ups you say?

As you’ve probably noticed, the Market Doctor team has been a bit spotty on analytic write-ups over the past few months, but the reasoning should be no surprise due to the state of affairs of the global marketplace.  Just some updates on the state of the international financial markets.

Over the past few months, US Stocks have experienced about a 15% decline in prices as measured by the major Indexes, which was followed by a nearly 20% increase off of lows set at the bottom of the correction, which was followed by about a 5% decline off of recent highs….All of this has largely been a result of massive uncertainty regarding the plight of Greece and the EUROZone’s plans in dealing with the bankrupt nation. 

Traders and investors’ eyes have been on any positives that have been released by EuroZone leaders (e.g. Merkel and Sarkozy).  The last plan which involved major banking institutions forgiving 50% of Greek debt sent international stock indexes screaming higher (the 20% up-move from lows).  This was quickly thwarted by the Greek prime minister Papandreou who announced a referendum to the Greek people to see if the plan would work for them.  As a result, the major stock indexes quickly sold off but days later the referendum was cancelled and Stocks rallied again.  The latest news however according to major media channels has the prime minister resigning. 

This chaotic roller coaster has only addressed the Greek situation, but reality is that more serious chaos could be quickly introduced by the plight of Spain and Italy, much larger economic zones in the EUROZone who are having nearly unsolvable problems in servicing their debt.  And unfortunately, or should we say fortunately, all this nonsense has diverted attention from the dire situation of the US, which has been slowly eroding over the past months as well.

The bottom line remains…the state of the macro/global-economy is dire, which we have been describing for over a year.  Many of the major industrialized nations are in trouble of paying their debts…and in case you’re a China bull…if the US or the EURO Zone really take it hard….China will most likely suffer three fold the negative consequences in comparison simply because their prosperity is built off the established industrialized nations.

So, you say you’re unhappy over the reduced frequency of Market Doctor write-ups ??? Do you really need these reminders on a weekly basis??...kind of depressing, but they’re real.