Out Fox The $treet

Anybody wanting to debate what Europe should do with specifically Greece and possibly Italy and Spain should look no further than the results from Iceland (default) and Ireland (austerity). Iceland just exited the IMF program as a success and though Ireland is muddling along it has at least returned to solid growth. The Bond Vigilantes blog has a good post on the two options. Clearly the best path is to decisively pick an option and move forward. Both countries are moving forward while Greece continues to flounder. The problem with Greece is that austerity plans and the lack of growth initiatives are killing the country. Less government spending leads to a smaller economy and in the end it makes no progress on the debt plans. Have to agree with Jim that a quick haircut by the bondholders would've helped move the Greece situation forward a lot quicker. The market continues to fret over default or no default, but the real question is the size of the default. Honestly, most peo...

Still amuses us that the market is more focused with Greece than China and/or Japan. China is the number 2 economy and it's stock market has slumped since mid April with fears of rate tightening caused by inflation. With the significant drop in oil prices over the last few months, those inflation fears are starting to subside. Japan recently dropped to the number 3 economy and was devastated with the March earthquake and tsunami. The combination of which sent industrial production down some 15%. Production is expected come close to the February levels in June. Instead of looking at Japan coming back online and China beginning to push back to growth mode, the SP500 is slumping for what would be an 8th straight week  if not for a minuscule gain last week. What is concerning the markets the debt problems in Europe and more specifically Greece. Yet, both the EU and IMF have pledged to ensure that Greece doesn't fail and cause and collapse of the financial markets in Europe. W...

After a day like today the question about European debt becomes a big scare. Will the market continue to plunge or was that swoosh around 3pm ET the bottom? Nobody really knows but I do like the fact that just about every guest on CNBC suggests more pain tomorrow and down the road. Some are already dismissing the lows because of the questioned trades. Interesting though history has typically dictating that such rebounds from the lows of the day turn out to be the bottom. Interesting note from First Trust on past debt crisis. The Latin American debt crisis in the 1980's had a bigger impact on US banks then this crisis. Maybe it can be argued that the European countries will impact the economy more but do you really think Italy and Spain will default? Without them running into problems, Greece and Portugal aren't big enough to do damage. Based on this chart, the 1980's saw significant market gains even with all the countries defaulting on debt. With a positive vote from Germ...