Monday, April 26, 2010

ALERT: Two Year Greek Notes Climb 300 Basis Points

The market does not believe for one second that Greece will be bailed out.

The yield on two-year Greek government notes closed at 13.52%, up from Friday's close of 10.50%.

This is the highest yield on short-dated government debt in the world, according to US bank, Brown Brothers Harriman. 

Keep in mind this is just the first inning, Spain and Portugal are up next, followed by Italy and Ireland. Somewhere in the middle of all this the U.S. show begins with trouble for Los Angeles, Detroit, Nevada, Arizona, Florida and California for starters. Bennie doesn't have the balls to stand up to the political pressure that will demand he start bailing out cities and states. The potential inflation ahead will be mind boggling. Remarkably, right now, we are still in deflation mode. M2 is not moving and the stock market could crash at any minute. The big money will be made by those willing to  step up to the plate and short the stock market, but this is not a move for babies. Then, in order to keep the money, traders will have to flip positions and go long gold. If this sounds to you like wild west trading, it is. These are wild west times with gunslingers running the country. For those more conservative, as I have been writing, it's okay to start to hunt and peck at the real estate market. Don't chase deals, but if they come to you at a fire sale price grab them.

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