Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24
US House Prices Trend Forecast 2024 to 2026 - 11th Oct 24
US Housing Market Analysis - Immigration Drives House Prices Higher - 30th Sep 24
Stock Market October Correction - 30th Sep 24
The Folly of Tariffs and Trade Wars - 30th Sep 24
Gold: 5 principles to help you stay ahead of price turns - 30th Sep 24
The Everything Rally will Spark multi year Bull Market - 30th Sep 24
US FIXED MORTGAGES LIMITING SUPPLY - 23rd Sep 24
US Housing Market Free Equity - 23rd Sep 24
US Rate Cut FOMO In Stock Market Correction Window - 22nd Sep 24
US State Demographics - 22nd Sep 24
Gold and Silver Shine as the Fed Cuts Rates: What’s Next? - 22nd Sep 24
Stock Market Sentiment Speaks:Nothing Can Topple This Market - 22nd Sep 24
US Population Growth Rate - 17th Sep 24
Are Stocks Overheating? - 17th Sep 24
Sentiment Speaks: Silver Is At A Major Turning Point - 17th Sep 24
If The Stock Market Turn Quickly, How Bad Can Things Get? - 17th Sep 24
IMMIGRATION DRIVES HOUSE PRICES HIGHER - 12th Sep 24
Global Debt Bubble - 12th Sep 24
Gold’s Outlook CPI Data - 12th Sep 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Britain Adds More Drama to the EU Crisis

Politics / European Union Nov 27, 2012 - 05:58 AM GMT

By: PhilStockWorld

Politics

Courtesy of Daniel Sckolnik: “When you are thwarted, it is your own attitude that is out of order.”   — Meister Eckhart

While the U.S. equity market was having something of a party over the course of the holiday-shortened week, the European Union (EU) was entrenched in yet another series of issues that would seem to indicate just how tenuous the region’s alliance might be. 


Over the course of the last four days, the Bulls made up a lot of the ground they conceded for November, and as of Friday, the major indices remained only slightly mired in the red for the month to date.

Leading the charge to reverse the month’s downtrend was the Nasdaq Composite Index (COMP), which ended up a stunning 4% on the week. The benchmark S&P 500 Index (SPX) also impressed, gaining 3.6% over the last four sessions. Finally, the Dow Jones Industrial Average (DJIA) shot up 3.4% over the same time frame.

Technically speaking, Friday saw the Dow break above the psychologically important 13,000 mark for the first time since the November elections. Likewise, the SPX moved past the 1,400 line for the first time since Wall Street got bearish immediately following Obama’s reelection.

One reason for the uptrend, beyond the current sense that the fiscal cliff issue might actually get addressed, is that investors appear to be buying into the idea that Greece will remain in the eurozone, at least for the foreseeable future.

This sentiment is no doubt influenced by the fact that over the course of the last few months, the Eurogroup, consisting of the Eurozone’s finance ministers, seems to be pounding out an agreement that will allow Greece to actually receive the next tranche of bailout funds, $45 billion, that was conditionally promised earlier this year.

Though there has certainly been the usual amount of high stakes bickering among the summit participants, particularly between the Eurogroup and the International Monetary Fund (IMF), the fact that the arguments seem limited in scope to specific conditions and dates, as opposed to broad-based rhetoric and accusations, may be seen as a positive sign by investors that Greece will get what they need to continue to function, at least for the time being.

But the rhetoric and accusations seems to have found a new home. At last week’s EU budget summit meeting, deep fissures between EU member-states emerged, as a slightly different version of the global question of “austerity verses stimulus” moved to the fore.  

Britain, an EU member that retains its own currency, and has indicated it has no intention of adopting the euro at any point in the near future, insists that the next EU budget is simply too big. The budget is slated to go into effect in 2014, and the number being bandied about to cover the cost of EU programs and operations is about 1 trillion euros. While the number is staggering, it represents just 1% of the EU’s combined projected GDP. Still, it is a huge number, and one that is serving as a political hot potato for a number of the EU’s political leaders.

Britain’s Prime Minister David Cameron, for example, is insistent that British tax payers will not foot the bill for the EU’s  “increased extra spending.” 

A rising sentiment among the British electorate is one that questions the benefits of remaining in the EU. Though this debate has been ongoin  to a certain degree in Britain for decades, it is now gaining traction, and as the country has retained its own treasury, its withdrawal from the EU would be far easier for it to accomplish than any country tied directly to the euro.

Keeping Greece in the eurozone remains an important effort for the EU, because once one country departs others could be expected to follow. The crack in the damn would be hard to patch.

On the other hand, a departing Britain, with the second largest economy in the EU, could create a deluge that might make containment most unlikely, perhaps even impossible.

ETF Periscope

Full disclosure:  The author does not personally hold any of the ETFs mentioned in this week’s “What the Periscope Sees.”

- Phil

Click here for a free trial to Stock World Weekly.

www.philstockworld.com

Philip R. Davis is a founder of Phil's Stock World (www.philstockworld.com), a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders. Mr. Davis is a serial entrepreneur, having founded software company Accu-Title, a real estate title insurance software solution, and is also the President of the Delphi Consulting Corp., an M&A consulting firm that helps large and small companies obtain funding and close deals. He was also the founder of Accu-Search, a property data corporation that was sold to DataTrace in 2004 and Personality Plus, a precursor to eHarmony.com. Phil was a former editor of a UMass/Amherst humor magazine and it shows in his writing -- which is filled with colorful commentary along with very specific ideas on stock option purchases (Phil rarely holds actual stocks). Visit: Phil's Stock World (www.philstockworld.com)

© 2012 Copyright  PhilStockWorld - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in