-- Posted Monday, 18 June 2012 | | Disqus

[The following was written a day before Greece's election. Although the outcome seems unlikely to live up to its cliffhanger billing, it'll be interesting to see how U.S. markets react when index futures begin to trade Sunday evening. Our guess is that the institutional provocateurs who control the markets will use the outcome, whatever it be, to short-squeeze the bejeezus out of stocks. If they do, you should be ready to sell this last-gasp bear rally short. Click here to join us as we attempt to pick the Summer of 2012's exact top. RA]

As the weekend approached, the outcome of Sunday’s election in Greece was being touted by the news media as “a cliffhanger,” a “Lehman moment, and “too close to call.” But does anyone actually believe the ultimate outcome is in doubt? The drumbeat reminds us of the sensationalized news coverage that froths up every time America’s do-nothing Congress approaches a budget deadline. Greeks have been rioting in the streets for the better part of a year, and so it seems likely that even if they vote to stay in the EU, they will struggle in vain to fulfill the terms of future bailouts. Under the circumstances, political sentiment will continue to shift left, ultimately giving the radical Syriza party effective control of the nation’s political and economic machinery. A Marxist takeover of a deadbeat nation that owes everyone would be bad news for Europe, but it is predictable that stock markets around the world will turn riotously bullish no matter what the outcome. Bad new is good news on Wall Street these days, and good news — i.e., a vote on Sunday to retain the status quo — would be even better. Our hunch is that even if a military junta were to seize control of Greece’s government, it wouldn’t matter one iota to the speculators who goose, diddle, jockey, juggle and criminally rig the markets. Stocks will soar on Monday regardless, and the op-ed pages will nod approvingly, noting that now, at least, the trains will run on time. Or some such.

Lunatic Fringe

Keep in mind that the champion of Greek’s radical left, Syriza, really does represent the lunatic fringe. Their idea of fixing the country’s economy would start by having the bankrupt government hire 150,000 new employees instead of eliminating 150,000, as budget cutters, including some socialists, have proposed. Meanwhile, among the 17 nations in the Euro so-called Union, Germany in particular has reason to be scared to death while Wall Street parties. The Germans have plenty of skin in the game, after all, and if Greece were someday to walk away from the table as seems likely, inspiring like-minded Spaniards and Italians to follow suit, the financial consequences for Germany would be dire. For now, though, a tight-fisted Merkel is being made to walk the plank, and you can hardly blame her for taking mincing steps. She has the support of German voters to buck her up, but Germany could eventually find itself flanked on all sides by rioters looking for a scapegoat. (And wouldn’t that be ironic, given that there are so few Jews left in German banking circles.).

We await the results of this weekend’s supposed “cliffhanger” much as we might the arrival of the #17 bus. Leftist radicals are destined to take over sooner or later, and there’s not much Germany or anyone else can do about it. In the meantime, party on, Wall Street!

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-- Posted Monday, 18 June 2012 | Digg This Article | Source: GoldSeek.com

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