Greece is broke, a basket case. Think the 1930s Great Depression and you have Greece today.
Greece has the Euro. That means it has no control over its own financial destiny. It relies on handouts. It needs more, because it’s meant to pay interest on its loans.
Greece owes $430 billion.
When Greece received its first bailout in 2010, according to the New York Times, the Europeans insisted on severe austerity while predicting that Greece’s gross domestic product would shrink by only 4 percent. Over five years it shrank 25 percent.
The fear is Greece will pull out of the Euro and default on its loans.
Default means European banks will lose money. That fear hasn’t been good for the Euro, which has plummeted in the past year.
To me, it’s totally amazing that Greece, a country of 10 million people, could so hurt Europe with 300 million plus people. Here’s the Euro over the last year:
The New York Times Magazine’s weekend cover story is called “A Finance Minister Fit for a Greek Tragedy?” Click here.
What to invest in now?
Invest in “opportunities that are harder to get to, and therefore less crowded.” That quote is from Mohamed El-Erian on CNBC this morning.
He didn’t expand. To my mind, he means investments like real estate. Especially those which you can add value to.
“The end is near.” It’s obviously not. Andrew Ross Sorkin interviewed Bill Gross:
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Bill Gross Thinks the End Is Near You had a tough 2014. In September, you left Pimco, the investment firm you founded in 1971, where you became known as “the bond king.” What was the hardest part about the past year for you? The fact that I was fired. That was hard – very hard – for me, because I’m sensitive. I’m just sensitive to negative criticism – which I think was unfair and unjust. You haven’t been divorced yet, have you? Nope. I’m happily married. Sorry, the “yet” was not appropriate. Just to explain, it’s sort of like divorce. You don’t want to get up and get out of bed. It is depressing, and it was a hard period of time and sort of still is. But it gets better every day. Like when you’re divorced, you have to meet new people, and life goes on.You have to deal with the market and your business and then your personal life. Are you good at compartmentalizing? I think I’ve been able to do that really well. I don’t know if that’s a positive, but I think I can separate it. I went through a nasty divorce years ago and powered through it while building a business and doing well in the market. Maybe that doesn’t speak to being a well-rounded human being. I don’t know.As an undergraduate at Duke, you majored in psychology. Do you use what you learned there when you invest? You don’t need a degree in psychology to understand human nature. There was an old dude, Jesse Livermore, who wrote a great book that said the most important thing in investing was to know yourself — your weaknesses, your flaws and your strengths. The big question on Wall Street right now is when the Fed will raise interest rates. When do you think they’ll go up? Probably sometime this year. You know, if you’re sick in bed, you’re lying around for 24 hours, at some point you just want to get out of bed and walk around the house for a Do you think that this low-interest-rate environment has helped or hurt the economy? The savings side of the economy has been damaged. At 2 or 3 percent interest rates, there’s no way insurance companies and pension funds can justify their liabilities and guarantees going forward. Same thing with Mom and Dad and their expectations for education, retirement and so on. So what’s the average person supposed to do? Save more. An investor could also take on more risk. I wouldn’t recommend that, but that is something investors are doing, which suggests there’s a bubble. Is the bubble in stocks or in bonds? I think both. I sort of have a sense of an ending. I think that the 35-year bull market in bonds and in stocks is ending. Now, when you say something like that, it conjures up a crash. It doesn’t have to be that way. It probably ends, like T.?S. Eliot said, with a whimper and not a bang. |
On CNBC this morning El_Erian referred to the Fed’s upcoming rate hikes as “the loosest tightening in the history of modern banking.”
Good description.
For the kids
+ An Indian chief was feeling very sick, so he summoned the medicine man. After a brief examination, the medicine man took out a long, thin strip of elk rawhide and gave it to the chief, telling him to bite off, chew, and swallow one inch of the leather every day. After a month, the medicine man returned to see how the chief was feeling. The chief shrugged and said, “The thong is ended, but the malady lingers on.”
+ There were three Indian squaws. One slept on a deer skin, one slept on an elk skin, and the third slept on a hippopotamus skin. All three became pregnant. The first two each had a baby boy. The one who slept on the hippopotamus skin had twin boys. This just goes to prove that…the squaw of the hippopotamus is equal to the sons of the squaws of the other two hides.
+ A skeptical anthropologist was cataloging South American folk remedies with the assistance of a tribal Medicine Man who indicated that the leaves of a particular fern were a sure cure for any case of constipation. When the anthropologist expressed his doubts, the Medicine Man looked him in the eye and said, “Let me tell you, with fronds like these, you don’t need enemas.”
For the mother
A woman takes her 16-year-old daughter to the doctor.
The doctor says “Okay, Mrs. Jones, what’s the problem?”
The mother says, “It’s my daughter, Debbie. She keeps getting these cravings. She’s putting on weight, and is sick most mornings.
“The doctor gives Debbie a good examination, then turns to the mother and says, –
“Well, I don’t know how to tell you this, but your daughter is pregnant – about 4 months, would be my guess.”
The mother says, “Pregnant?! She can’t be. She has never ever been with a man! Have you Debbie?”
Debbie says, “No mother! I’ve never even kissed a man, I’m still a Virgin!”
The doctor walked over to the window and just stood there staring out of it.
About 5 minutes pass and finally the mother says, “Is there something wrong out there doctor?”
The doctor replies, “No, not really, it’s just that the last time anything like this happened, a star appeared in the east and three wise men came over the hill. And there’s no way I’m going to miss it this time!!!!”
Harry Newton who wagers he’ll eat his hat if Charter is allowed to buy Time Warner. To justify the high price, Charter will have to cut Time Warner’s abysmal service. Just what we all need. I missed on buying TWC. Now it’s up even more. Dumb me. I’m not good with tables, either — like the one with Bill Gross above.
I am sorry that Greece is having such financial problems…they have some beautiful country, especially Santorini. On the other hand I love what they are doing to the euro…we leave for Europe tomorrow evening and will be there for 3-1/2 months…go Greece!