How about we start with today’s market action explained at the Huff Po of all places and visit with Zachary Karabell:
The Greek debt crisis finally spilled over in full force to U.S. markets, aided and abetted by extreme statements emanating from such esteemed and prominent voices as Muhammed El-Erian of the large bond investor Pimco, who warned that Greece could be just the beginning of sovereign debt catastrophes. In the space of minutes, the major U.S. indices plunged more than 10%, fueled by the same programmatic electronic trades that were part of the battering in late 2008 into 2009. And then in the space of 15 minutes, they recovered, without — it’s fair to say — much human decision-making during that interval (and if an individual even tried trading during those 30 minutes, they would have found it difficult or impossible, as web sites such as schwab.com were completely overwhelmed with traffic).
Fair enough but the man’s conclusions past this point aren’t worth printing here on Slabbed. Program trading will be with us forever but it is not the culprit here despite the uninformed rantings of the author who is obviously long the market now most likely stuck (stuckholder in finance board parlance). For my part I sold in April and went away (a month ahead of time). That said I am not Carnac the Magnificent but besides staying at a Holiday Inn last night I also read Yves Smith over at Naked Capitalism.
To the extent the problems with Greek debt were hardly a secret Yves is not special among financial bloggers. What makes Yves special is the fact he understands the ramifications of the interconnectivity in global finance and in the case of Greek debt there is a special connection I’ll now share with the Slabbed Nation: AIG most likely will be on the hook for a decent chunk of Greek National debt should there be a default. Continue reading “How about a quick finance post for those that are trying to get the license plate number of the Greek semi that ran them over today.”