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Paths To Take

June 15, 2012 – 5:00 pm

All eyes are on the Greek election again. Of course they just had one a month back but that election didn’t result in a coalition government. Many democratic systems have a number of political parties that never get a clear majority so they attempt to compromise and form a type of partnership picking the leaders to form a government. If that does not happen after an election, which is what happened in Greece, they try another election and that is going to happen this weekend.

Central banks have let it be known that whatever the results might be in Greece they are prepared to step in and calm the financial fallout if there is one. There are two choices for Greece. Either they elect people that want to stay in the EU and work through the problems or they elect leaders that want out of the EU. Either way apparently the central banks around the world are ready to deal with the results. At least that is the word on the street.

None of the Greek issue of course addresses the larger problem of high borrowing cost for some of the other EU members, i.e. Spain and Italy to name just two. It will take time and a monumental effort to solve this ongoing strife. There are hints that a solution might be on the way and that is probably why the stock market acted a little better this week. Any solution will be long in development but the stock market only wants a path to the solution not the actual resolution. By that time stock prices would have long rallied.

Good Trading
Steve Peasley

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