This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Global Risk Is On, For Now

NEW YORK ( TheStreet) -- Market sentiment decidedly turned around last week, globally. Apocalyptic drama around the world is fading but this does not mean the problems are being solved -- far from it. Prospects are beginning to look not nearly as gloomy as the eager black swan hunters made them out to be. Let's count them one by one.

Fiscal Cliff Continues to Ease into Fiscal Slope

As I argued here last week, purely man-made disasters, as fiscal cliff has been made out to be, are unlikely to be so dramatic. Words continue to come out of Washington along the "constructive" line. For example, some prominent GOP figures are openly rebelling against the no-tax-hikes pledge, as reported by ABC News.

Now the ball is in Democrat's court. The end result will involve compromises on both sides, increasing some tax and cutting some spending. We're still far away from that. But the conciliatory overtone is strengthening and encouraging. I suspect anybody poisoning this rare virtuous atmosphere will risk serious political damage.

Greece Will Get Its Rescue Money

I said repeatedly here and elsewhere that PIIGS are the stronger party and Germany the weakling in the eurozone austerity/rescue negotiations. While PIIGS continue pretending to service and cut debt, Germany will continue pretending to be tough and demanding. But the money will be paid.

This is not to trivialize the pain PIIGS people, and at this point especially Greeks and Spaniards, are going through. But the hard truth is that there is no accountability for Germany to rely on unless and until they are ready to leave the euro. Austerity will proceed at a pace allowed by convenience in the peripheral, not as demanded by Germany. So far, so not bad.

The tipping point will come when PIIGS people finally realize they have the upper hand and call off austerity all together, or Germans finally realize any notion of Germany demand is an illusion and call for the new deutschemark, whichever comes first. Either way, the words "the emperor has no clothes" take away the pretence for players to continue the game.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
GLD $104.93 0.63%
AAPL $121.30 -0.87%
AMZN $536.15 -0.11%
F $14.83 -1.79%
HD $117.03 0.49%

Markets

Chart of I:DJI
DOW 17,689.86 -56.12 -0.32%
S&P 500 2,103.84 -4.79 -0.23%
NASDAQ 5,128.2810 -0.5040 -0.01%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs