"Ireland"

 

 

by Larry Levin

 

One of today’s main topics of discussion in the markets was not just the wide net thrown by the FBI over insider-trading hedge and mutual funds, but also Ireland and its bailout. What was news at the time was that a portion of the Irish government, the Green Party, had threatened to withdraw from a coalition formed within the government thus severely weakening it.
Since then the Irish situation has escalated. From the New York Times online we read this headline: Irish Leader to Dissolve Government After Budget

DUBLIN — Prime Minister Brian Cowen said late Monday that he would step down once a series of fiscal packages and budgets were in place next month, acceding to the demands of the opposition and its coalition partner, and injecting the threat of political instability into a financial crisis that already has markets on edge.

Earlier in the day, the minority Green Party declared that the public had lost faith in the government after its acceptance of a $100 billion rescue package over the weekend and that it would pull out of the government. It called for elections early next year, when a second round of austerity measures, forced on Ireland as a condition of the bailout, will be put before voters who have already suffered through three years of recession.
“The mood in the country is for an election and the people want a new mandate — that much is clear,” said Joan Burton, deputy leader for the Labour Party.

In agreeing to step down, Mr. Cowen became the first political casualty of the sovereign debt crisis in the 16-member euro zone. While Prime Minister George Papandreou in Greece has seen his popularity wane as the cuts mandated by the International Monetary Fund have begun to bite, he came out on top at a recent by-election and seems, for the moment, to have the backing of the country.

Speaking of Greece, it seems to already be out of money. If you remember, many in the EU recently claimed it would withhold bailout bucks for Greece and others.
From Bloomberg News we read in part - Parts of Greece’s government may be forced to “shut down” as early as next week if the country isn’t able to cover a revenue shortfall after its European Union partners delayed its next tranche of aid money, High Frequency Economics Ltd. said.

“Unless the government gets funds soon after Nov. 30, it will run out of cash,” Weinberg said. “If so, the government will have to shut down, at least in part.”
Although the European banking crisis is getting worse, the bankers and their investors sure don’t have to worry about it; the EU and IMF are getting them off the hook and making taxpayers pick up the bill. Something tells me that, like in Greece, this isn’t going to go over so well with the average person in Ireland.

Portugal’s and Spain’s banking systems are getting worse as the rating agencies threaten to slash its credit ratings. If these counties buckle, Italy will surely be next.

Trade Date: 11/22/10
E-Mini S&P Trades*
(before fees and commissions):

1. No “Secret” trades were filled today.
2. Algorithm positions (1)
3. “Reading the Tape” positions (6) combined Secret’s, Algo, & “Reading the Tape” total… +1.25

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