Greece Passes Austerity; Next Up: US Debt Limit

While there was little doubt that the Greek parliament would "do the right thing" and pass the 5-year austerity package in order to secure another $17 billion in their continuing slavish relationship with the IMF, ECB and EU, the results on the streets of Athens suggest that the plan may not be to the liking of the average Greek, if there is such a creature.

Imagine this happening in the United States. A consortium of banks hold the US government hostage, saying, in effect, "do this, or we cut off your allowance." The this being the layoff of thousands of government employees, wage cuts for others, a 10% tax increase and the selling off (privatization) of state assets, one wonders how the Greek populace will like living in abject poverty for the remainder of their lives. In America, one need not wonder. It would most likely pass, but the popular fury and anger would be ferocious.

So it is in Greece, where protesters hailed rocks and stocks at police throughout the day and police returned with salvos of tear gas. There was a great deal of looting and confrontation with the police, but few arrests. It seems the Greek police, some of whom will be paid less in a few weeks than they are now, or may not have jobs at all, have a bit of a heart for their countrymen and women.

Essentially, along with the 10% tax increase, services will be cut by about 25%, along with available government positions and wages. $50 in Greek assets will be privatized, begging the question of just what the Parthenon may be worth to some European oligarch-trash who wish to add it to their art collection.

The measure passed with a vote of 155-138, with some abstentions, since the Greek parliament is comprised of 300 members. But one has to wonder just how long it will last before the money-starved Greeks begin to turn on the government again and again, seeing the bailout as nothing more than another stalling tactic for a bankrupt nation and largesse for the elitist bankers.

Stocks and commodities both were buoyed by the passage, as the globalists averted another crisis in the flawed and corrupt fiat money system. So, the result, higher prices for everything, except, of course, wages.

The next chink in the armor to be fixed would be the US insolvency issue, that of raising the debt debt ceiling so the world's largest net creditor can continue to borrow and spend until the elections of 2012, at least. The deadline of August 2nd approaches with all due haste, though both houses of congress will not be convened at the same time, if they keep to their schedules.

The House was already in recess this week and will be until July 5th, though the senate recess - scheduled for July 4-10, is in doubt, with Democrats seeking to cancel it, and Republicans all too willing to stay in Pro Forma session, fearing recess appointments by the President.

With any luck, the tow houses of financial horror could actually do some deal-making between the 10t of July and the August 2 deadline, and that would be almost a surety, as both houses will recess on August 8 and not return until September 5, after Labor Day and well beyond the statutory constraints of passing a new debt ceiling.

Just like in Greece, however, it's expected that the senate and the president will approve some kind of deal at the last moment, ensuring maximum discomfort and anxiety for the good people of America. Of course, any talk of a balanced budget amendment, currently being espoused by various Republicans, should be recognized immediately as a complete sham, though there is some hope that some semblance of spending restraint may be written into any new bill. The long money is on the government beating the deadline by days and getting back to doing what they do best, spending money they don't have.

Dow 12,261.42, +72.73 (0.60%)
NASDAQ 2,740.49, +11.18 (0.41%)
S&P 500 1,307.41, +10.74 (0.83%)
NYSE Composite 8,228.50, +92.52 (1.14%)

Gainers beat losers by a solid margin, 4185-2361. On the NASDAQ, new highs were better than new lows by a 100-29 margin, while on the NYSE, the new highs outnumbered new lows, 81-14. The combined total of 181 new highs to 43 new lows suggests that we're back to "risk on" for the foreseeable future, though, being summer, a sideways trend always has great potential. Volume was light, but not actually awful.

NASDAQ Volume 1,816,885,000
NYSE Volume 4,316,723,500

WTI crude futures rose remarkably again, up $1.88, to $94.77, along with gasoline, which has been rocketing of late. The most recent price gouges have not shown up at the punp yet, though they surely will by the weekend. AAA reports that the average price of a gallon of unleaded regular is $3.54, with higher price in the more populous states of the Northeast and West coast.

Gold got a little nibble of a bid, rising $9.10, to $1511.20. Silver spiked 92 cents, to $34.86.

Tomorrow morning initial unemployment claims numbers may do damage to the current three-day rally in stocks, though a positive report could produce more cries of "soft patch" and a continuation of the "risk on" trade.

Markets Up on Greek Deal Hopes

Well, that headline is not a joke. Surely, nobody on Wall Street has ever heard the phrase, "beware Greeks bearing gifts," though by tomorrow, everyone will know whether the second bailout of Greece - with a third coming by the end of August, almost certainly - will be a bonus or a canard.

The issues facing the Greek government are the roll-over of some $10 billion in maturing debt, plus another $40 billion in August. Right now, the deal is on, if Greek prime minister, George Papandreou, receives a vote of confidence from the Greek parliament, in a vote scheduled at the stroke of midnight in Greece (5:00 pm EDT).

Papandreou looked to have enough votes to win the crucial vote of confidence in parliament which would pave the way to passage of the latest austerity measures next week, ensuring a $12 billion advance from the ECB and the IMF.

With time winding down on the vote, crowds were beginning to form in Syntagma Square, directly across from the Parliament building. A vote of no confidence would be seen as a victory for the Greek populace, and if Papandreou does get the needed votes, rioting and confrontation are a near-certainty, as much of the population would like to detach Greece from the EU, return to the drachma and move on. (We will post an update of the vote as soon as it is confirmed.)

Elsewhere, investors looked past more horrifying housing numbers, as existing home sales in May fell by 3.8% from April and are down 15.3% from the same time last year, according to the report released by the National Association of Realtors (NAR).

So, once again, Wall Street demonstrated just how far detached from Main Street it really is, a chasm that only seems to keep widening.

Dow 12,190.01, +109.63 (0.91%)
NASDAQ 2,687.26, +57.60 (2.19%)
S&P 500 1,295.52, +17.16 (1.34%)
NYSE Composite 8,156.27, +124.05 (1.54%)

Advancing issues defeated decliners, 5430-1205. On the NASDAQ, there were 55 new highs and 32 new lows. The NYSE registered 68 new highs and 25 new lows, effectively ending the 12-day stretch in which the lows held the advantage with the combined numbers at 123 new highs and 57 new lows. What a difference a Greek makes!

Volume on the day was marginally better than on Monday, which is saying very little.

NASDAQ Volume 1,825,893,375
NYSE Volume 3,913,965,750

WTI crude futures edged up 14 cents, to $93.40. Gold added $6.30, to $1546.80 and silver was up 37 cents to $36.43. The moves in precious metals reflected the uncertainty of global economic conditions.

Tomorrow the Federal Reverse Open Market Committee will issue another one of the periodic edicts, keeping interest rates at near ZERO, and, presumably, will include the words, "extended period" for how long they believe it will be before they actually raise rates one iota.

The Fed is stuck in no-man's land, with a stumbling, structurally-impaired domestic economy and the threat of inflation due to a falling dollar. Thus far, the Fed has taken the easy route of monetary stimulation, throwing trillions into a stagnant economy, and that's likely to be their choice for many months, if not years, to come.

In reality, Greece is a side-show.

American Sheeple Love to Be Fleeced and Played

The lies, half-truths and material obfuscation by the government has reached new heights with the latest flip-flop on the "Osama bin Laden is dead" story.

Now the president won't release a picture of a dead bin Laden because it might inflame the Jihadists of the world. Rubbish! Pure, unadulterated nonsense from the man who is supposed to be the leader of the greatest nation on the planet, but is now exposed as nothing more than a simple liar.

Lies, lies and more lies are all the American people can expect from the most corrupt government the world has ever seen. The details of this entire, "we got him" affair have changed so often as to strain credulity until it doubles over in laughter or vomiting, or both.

First, the story originally released by AP on Sunday night, May 1, was that bin Laden was killed a week prior and that the White House had been waiting for DNA tests to confirm that the victim was indeed the world's bogeyman. Anyone watching the news scroll on FoxNews or CNN saw it, undeniably. That story vanished as soon as the president stepped up to the podium that Sunday night.

Then there were reports of a firefight, now, no firefight. Osama was armed, then he wasn't; he used his wife as a human shield, then he didn't and it wasn't even his wife, then it was his wife and she was shot because she rushed one of the Seals. There were two helicopters, no, three, no, there were four. Then Osama bin Laden is taken out of the compound to Afghanistan and rushed to an aircraft carrier for a proper burial at sea. Sure, that's completely understandable, especially if you believe Osama bin Laden was a seaman or a pirate.

Of course, there's the implausibility factor of a huge compound with 18-foot high walls, topped by barbed wire in a town populated by retired Pakistani military people, which never raised any suspicion for five or six years. That's certainly believable.

The entire episode is one huge farce and sadly, the iPad buying American sheeple public-at-large will gooble up every last sound bite of it, all the while chanting, USA, USA, USA! because the American sheeple actually love being conned, swindled, cheated, fleeced and sheared by their government. After all, this is the culmination of the 9/11 attacks, the major farce that has to this day never been adequately explained.

But, so what? Osama the Terrible is dead, right, and whether he's been dead for five, six or seven years is really immaterial because the powers that be are changing the narrative. They had to, because the most recent narrative of borrow and spend and gas at $4.00 a gallon and rising food prices and war on three fronts wasn't really going all that well, was it?

So, now, we have crashing commodity prices, falling stocks and oil down seven bucks in three days. Get ready for the new AUSTERITY coming to America. The sheeple will be fleeced from an entirely different direction and instead of calling it a recession or a depression, it will be known as a period of "slow growth" or "stagnation." Anything but calling a spade a spade, a recession a recession, a depression a depression.

The American sheeple will receive less in government service and be taxed more for it all in a "shared sacrifice" decade of austerity that is evolving even as we sit back and watch the latest American Idol or Star Dancing. America has been permanently dumbed-down and defeated, and the government loves it because an ignorant public is a well-behaved public. Give them their bread and circuses, today known as food stamps and football, and they'll just blindly follow along.

That's just the way it is, sheeple, one and all. You love being played.

Dow 12,723.58, -83.93 (0.66%)
NASDAQ 2,828.23, -13.39 (0.47%)
S&P 500 1,347.32, -9.30 (0.69%)
NYSE Composite 8,506.61, -78.07 (0.91%)

For a change, everything (except bonds) went down. Declining issues overwhelmed advancers - for the third day in a row - by a score of 4700-1904. On the NASDAQ, the flip required to shake the markets from rally mode to selling spree occurred today with 52 new highs, but 53 new lows. On the NYSE, stubbornness prevailed with 89 new highs and 28 new lows, but it's getting closer. Volume, unsurprisingly, was up again today, on a down day, an ominous warning that more selling is on the way.

NASDAQ Volume 2,250,185,000
NYSE Volume 5,078,037,500

Commodities continued to be whipped into submission. WTI crude oil futures fell another $1.81, to $109.24, the lowest price in two weeks. Gold tumbled another $20.60, to $1516.50 and silver took another massive beating, down $2.27, to $39.39. And, this just in after the close, margin requirements on silver are being raised again by the CME. Apparently sending the price of silver down $11 in three days isn't enough to square all of HSBC's and JP Morgan's short positions.

The often-discredited ADP Payroll report for April was released prior to the open today, showing private payrolls increasing by 179,000, short of consensus. But the real news was that the ISM Services index fell from 57.3 in March to 52.8 in April, a pretty big loss and well below consensus estimates of 57.5.

Tomorrow comes another week of initial unemployment and continuing claims, which precedes the BLS non-farm payroll report on Friday.

Prepare for disaster because we've been living one for the past three years.