Greece is resolved!
Well, sort of, maybe – who knows? The EU made some nice noises and it does seem there is an agreement which I detailed in my previous post so let’s move on and see what that’s going to do for us today. We’ve been playing for a resolution in Greece giving us a boost back to test 10,300 but yesterday’s market movement was, as they say at Wharton, LAME and we’re going to have a tough time punching through 10,058 and 10,165 on the way to 10,300 today (see yesterday’s Dow charts), even if the Dow were so inclined.
10,300 is 2.6% higher than yesterday’s 10,038 close but a little far away considering commerce is still shut down in about 1/3 of the US today as we sit under a massive amount of snow. This kind of weather is bad for most retail but good for HD and LOW, who sell salt and shovels and other fun snow stuff. Business people are stranded all over the country, moms are suddenly found unexpectedly with kids at home and people can’t park anywere – a big problem when you have this much snow as you run out of places to push it to.
Another problem with snow is it’s an unavoidable cost, like disaster spending, that couldn’t be hitting cities at a worse time. Washington DC had already blown through their $6.2M snow budget for the year before yesterday’s storm, which may doulbe the costs, adding to the city’s debt woes. 230,000 Federal employees are off for the 4th day in a row today, costing the US government $100M a day in lost productivity. Public transportation is down and over 6,000 flights were canceled with travelers being told “maybe Sunday” for flights they missed on Wednesday – Greece’s national strike is nothing compared to the economic impact of this storm!
Speaking of coming storms. We’ve been leery of getting back into SRS but I’m back to liking them (and the short IYR plays) as a report by the Congressional Oversight Panel shows nearly 3,000 small banks may have to dramatically cut lending as losses on commercial real-estate loans, which could reach as high as $200B-300B. Banks “are about to get hit by a tidal wave of commercial-loan failures.” This should finally push an issue we’ve been discussing since last Fall onto the front pages, where we can make some money.
We’ve learned to be very cautious with SRS but I do like the…
