Greece’s Finances are Messing Everybody Up; Puerto Rico’s in a Debt “Death Spiral”; Housing Up and About

It’s all Greek to me…

Image courtesy of Salvatore Vuono/FreeDigitalPhotos.net

Image courtesy of Salvatore Vuono/FreeDigitalPhotos.net

They gave us philosophy and high-protein yogurt. But now Greece is giving us nothing but global fiscal chaos as its banks are on the verge of collapse while the country prepares to maybe give a big fat default on its loans tomorrow. That is assuming it doesn’t pony up a $1.8 billion re-payment. Greek Prime Minister Alexis Tsipras gave a very unwelcome surprise to Greece’s creditors on Friday when he called for a referendum to take place on July 5 on whether or not Greece should follow the plan that the creditors have in store – which is, basically, good old-fashioned austerity and some deep deep spending cuts. Greeks will have plenty of time to ponder all this as they wait on endless lines just to withdraw about $60 bucks. That is, if the ATM’s still even have cash in them, since hundreds are already empty. Too bad the banks will be closed for the next six days. As for the question surrounding the “Grexit,” as in, Greece’s potential ugly exit from the European Union…well that remains to be determined. But, I’m guessing those creditors really want Alexis Tsipras to think long and hard about that 240 billion in euros the country has been getting since 2010 and how much they would really appreciate getting it back. Actually, I’m guessing everyone wants Alexis Tsipras to do something, as the situation in Greece is messing with financial markets all over the world.

Speaking of debt-laden countries…

Image courtesy of renjith krishnan/FreeDigitalPhotos.net

Image courtesy of renjith krishnan/FreeDigitalPhotos.net

Puerto Rico seems to be inadvertently channeling Greece’s debt problem as its Governor, Alejandro Garcia Padilla, said the island’s debt is “not payable” and even asked for help to be pulled from its fiscal “death spiral.” His words. Not mine. Puerto Rico’s debt is a lot less than Greece’s but no less daunting with its $72 billion price tag. One of the problems facing Puerto Rico is that because it’s not a state, it doesn’t even get to file for bankruptcy. This puts the territory in quite the pickle. So like any other borrower, Puerto Rico is going to attempt to restructure some of those loans and see about getting some deferments. Otherwise, fiscal disaster looms and it could be years before it climbs its way out of that menacing “death spiral.”

And not in Greece or Puerto Rico…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Housing recovery is…recovering. At least based on the number of pending sales from previously owned homes. But hey, we’ll take it. That figure, brought to us courtesy of the National Association of Realtors, is up .9% for May and up to 112.6. And bonus: that was the fifth straight gain. And more bonus: it’s at its highest point in nine years. And who doesn’t like straight gains and high points? Better employment, (slightly) increasing salaries and lower borrowing costs are all helping in this arduous recovery process. Interestingly enough, those higher sales came from the markets located in the Northeast and West part of our country. Not so much from points in the Midwest and South which actually took a bit of a hit. A teensy one. Well, teensy enough that it was over-shadowed by those impressive gains in other parts of the land. In case you were wondering, the median price for a home these day is $228,700, almost 8% higher than last year.

Wild Things at the ECB Conference; Google Gets Antitrust Slapped by EU; Smith & Wesson’s Shares Shoot Up

Think you’re having a bad day?

Image courtesy of noppasinw/FreeDigitalPhotos.net

Image courtesy of noppasinw/FreeDigitalPhotos.net

Mario Draghi, President of the European Central Bank just might be having an even worse day than you, this April 15. And he didn’t even have to file his taxes. As Mr. Draghi was speaking at a conference in Frankfurt, Germany today when a female protester literally jumped onto the table from which he spoke and threw a stack of papers and confetti at him screaming, “End ECB dictatorship!” Now folks have been known to take intense issue with what they consider to be measures that are just a bit to harsh for fiscally challenged European countries, especially Greece and Spain, but if I didn’t know any better, I’d say Ashton Kutcher was somewhere in the room telling Mario Draghi he’d just been punk’d. But…Ashton wasn’t there. Alas, if only the rest of the conference had been as exciting. Instead the ECB President went on to discuss the less riveting topics surrounding the state of the European economy, how it’s allegedly improving and that the $1.2 trillion quantitative easing program is apparently working. In case you were wondering just what on earth is quantitative easing, or QE, as the cool kids call it, it’s a super special type of monetary policy used when the regular one doesn’t seem to be working properly (the details of which I will not delve so as to maintain my audience). As for the protester, Josephine Witt, who managed to pass through multiple security checks posing as a journalist, she gleefully tweeted: “I would say, the #ecb ‘s security service is just as good as putins.”

Speaking of Europe…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Google’s not having the best day in Europe either. The all-mighty search engine is getting called out by the European Union for abuses of power. The EU is handing Google a “Statement of Objections,” with an antitrust complaint that accuses the company of favoring and promoting its own services and products over competitors in user search results and comparison shopping. Google has a 90% share in Europe’s search engine market and 35% of Google’s ad revenue comes from Europe. The United States also began a similar investigation but dropped it after Google graciously agreed to make some changes. The changes, however, weren’t enough for companies like Microsoft, Yelp, Expedia etc., who are happy about this probe since they feel that Google’s search engine dominance is making for a very uneven playing field. The EU is also investigating whether Google forces mobile device companies to use them and whether or not those companies are even allowed to tweak Android software.

Shoot ’em up…

Image courtesy of Surachai/FreeDigitalPhotos.net

Image courtesy of Surachai/FreeDigitalPhotos.net

Firearms: Love ’em or hate ’em matters not when there’s money involved. Shares of gun maker Smith & Wesson saw a 13% increase on shares today as the company announced that orders for firearms are picking up.  In fact, the stock hit a high today of $14.75 and is up over 50% since the beginning of 2015. Last year the company took in over $626 million in sales, a record for the company. Even though sales aren’t expected to come close to that figure this year, Smith & Wesson is still expected to rake in between $546 – $550 million dollars –  and no one seems to be taking issue with that. Well, at least not on Wall Street.