According to the afternoon updates, Ulrich Wilhelm indicated that no decision on Greece was close at hand, adding that “If Greece obtains help, then only under strict conditions and only if the Greek govt drastically reforms the state.”

In short, the Greek govt, facing imminent strikes, will have to steal a page from Margaret Thatcher’s playbook. Thatcher adopted a strategy that gradually reduced the power of the trade unions. Most notable was her 11 month long victory over the coal miner union strike over Thatcher’s proposal to close unprofitable mines in 1984-1985. To win the strike, Thatcher had to build up substantial stockpiles of coal beforehand. Nigel Lawson, then Chancellor of the Exchequer, later recalled, “The miners strike was the central political event of the second Thatcher Administration…the eventual defeat of the [coalminers] etched in the public mind the end of militant trade unionism which had wrecked the economy and twice played a part in driving elected governments from office.”

What the Greek govt is about to undergo in confronting striking public unions will be akin to the challenges faced by Thatcher in the 1980s. And the public union challenges that the Greek govt is about to confront beginning on Wednesday are the same challenges the rest of the PIIGS will be facing and all developed countries in the months and years ahead, including the US. Unfortunately, none of today’s leaders appear to have the backbone, savvy, or the political will and resolve of a Margaret Thatcher. Though the Greek govt says they are up to and committed to the challenges that lie ahead. Developments of striking unions in Greece bear watching closely.

But I digress. Returning to a consideration of today’s stock market rally, if no decision on rescuing Greece is imminent, this would contradict what was intimated by comments from Olin Rehn earlier this morning that “support will be discussed in coming days…We are talking about support in the broad sense of the word. I cannot specify now.”Rehn’s “support in the broad sense of the word” has a ring to it that reminds me of US Secretary Treasury Hank Paulson’s Bazooka Plan for Fannie Mae and Freddie Mac. Paulson’s idea was “If you have a bazooka in your pocket and people know it, you probably won’t have to use it.”Market forces put Paulson’s Bazooka assumptions to the test months later, and Paulson proposition proved to be a false premise. What gives is that market forces have a way of calling govt bluffs. If the EU hems and haws and procrastinates over a bailout of Greece’s short term liquidity crisis, the low set at 1058 this morning in the SP500 on Rehn’s proclamation of broad support will give way to lower prices.

And on the back on Rehn’s proclamation potentially bearing no fruit we get this from Iran’s Ayatollah Khameni via The Telegraph today thathis country was set to deliver a “punch” that will stun world powers during this week’s 31st anniversary of the Islamic revolution. “The Iranian nation, with its unity and God’s grace, will punch the arrogance (Western powers) on the 22nd of Bahman (February 11) in a way that will leave them stunned.”

The strikes begin on Wednesday Feb 10 in Greece, Bernanke will submit his written testimony of his exit strategy for unwinding emergency lending facilities on Feb 10, the EU summit is Thursday Feb 11, as is Ayatollah’s “punch” to stun the world.

And at first blush, we might have thought this would be a quiet week. Once again, two days up in the stock market do not make a trend. Momentum on the intraday SP500 e-mini chart will remain aggressively bearish with all trading below 1078-1081 on Wednesday Feb 10. The Jan 27 FOMC low was 1078, the day the Fed announced it would unwind the emergency lending facilities. (chart not included)

Final outcomes in the stock market this week will depend on market reactions to Bernanke’s testimony and the strikes in Greece on Wednesday, the EU summit and Ayatollah’s punch on Thursday. The emerging crisis of confidence amongst investors in Q1 2010 may not be over with Rehn’s morning statement at all.

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