Stocks Completely Erase Losses (SPY, DIA)

stocks

Stocks are erasing losses as the U.S. markets approach their final hour of trading.

News flow in the U.S. has been light, but it has generally been positive.

Homebuilder Lennar announced Q3 earnings that blew past Wall Street’s expectations.  New orders jumped 44%.

“The housing market has stabilized and the recovery is well underway,” said CEO Stuart Miller.

The Dallas Fed manufacturing index slipped to -0.9 from -1.6 a month ago.  However, this wasn’t as bad as teh -2.7 economists were expecting.

Across the pond, headlines continue to remind us that the euro debt crisis remains unresolved.

According to a new report from Der Spiegel, Greece’s budget deficit may amount to around €20 billion ($26 billion), which is double previous estimates.

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Read more from source:“Business Insider”

When The Prime Minister Of Greece Says A Eurozone Exit Would Be ‘Catastrophic’, This Might Be What He Means

Greek prime minister Antonis Samaras

Today in Athens, Greek Prime Minister Antonis Samaras said that a Greek exit from the Eurozone would be “catastrophic.”

What did he mean?

Well many people have predicted that a Grexit would lead to another leg down in the economy, but there’s also a political angle.

Earlier in the week we posted the thoughts of a Greek hedge fund manager, who commented on the likely outcome of elections if Greece left…

Such elections would see a radical left Syriza victory and a very good showing from the neo-Nazi Golden Dawn party. If the Germans decide to continue aid to Greece and a more tenable solution is worked out (including possible ECB and Euro debt haircuts/restructurings and bailout extensions), it would be considered a victory for the coalition government and we would see elections again in 2-3 years. In which case Syriza would probably win but not as a radical left party but as a re-incarnation of the dying Pasok party.  While elections are no guarantee in the next few months I think Greece will be the source of some dramatic headlines in the near future.

So right off the bat, it’s very plausible that an eleciton would cause a huge surge in the radical parties (which both did very well in this summer’s election), and so that would make for something of a Democratic crisis there.

Today after Samaras’ comments, we talked to Greek hedge fund manager Jason Manolopolous, author of the book Greece’s Odious Debt.

His description of catastrophe was far more severe.

He told us: “If Greece left the Eurozone here, there would be helicopters dropping food.. The whole machine would break down.There would be garbage on the streets.”

Rather than elections, the three things everyone would be thinking about would be “getting fuel”, “getting food”, and “creating security on the streets.”

Unlike in Italy, which is used to endless political upheaval, Manolopolous argues that Greece is not well equipped to have a functioning government during times of major politcal turmoil.

As for the negotiations going on, Manolopolous denies that any negotiations will really happen. Instead it’s just about whether Germany wants to toss Greece a bone or not. Samaras has no leverage.

And even if Greece does get a reprieve of several months, he says: “Sooner or later we’re going to have the issue… we’ll have 27-28% unemployment. And idle hands are the work fo the devil.”

SEE ALSO: A traveler in Greece sent us these depressing photos >

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Read more from source:“Business Insider”

A Greek Fund Manager Explains Why Greece Will Soon Be The Source Of Some ‘Dramatic Headlines’

trading desk

During my trip to Greece this past summer, I got to meet a Greek fund manager.

As negotiations about Greece’s bailout and role in Europe are set to resume, I asked him for his take on things right now.

Preferring to remain anonymous, here’s his take:

Regarding the situation in Greece, the feeling among the business community is that when the summer holidays end things will get worse. The Greek public cannot endure much more austerity and the German public cannot endure any more bailouts.

There is a fear that the Germans, now, want Greece out of the Euro. While it is possible for the coalition Government to agree on a set of measures, those measures may not be accepted by Europe. If the German mood truly sours on Greece then there is little any government can do. That would lead to an exit from the Euro, the stress of which would likely lead the country to new elections quickly.

Such elections would see a radical left Syriza victory and a very good showing from the neo-Nazi Golden Dawn party. If the Germans decide to continue aid to Greece and a more tenable solution is worked out (including possible ECB and Euro debt haircuts/restructurings and bailout extensions), it would be considered a victory for the coalition government and we would see elections again in 2-3 years. In which case Syriza would probably win but not as a radical left party but as a re-incarnation of the dying Pasok party.  While elections are no guarantee in the next few months I think Greece will be the source of some dramatic headlines in the near future.

Greece stuff really cranks back to life this week. As NYT reports, Greek PM Samaras goes to Germany on Friday. We should know more soon.

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Read more from source:“Business Insider”