Saturday,
Greek officials walked away from debt negotiations and announced a
referendum vote for July, 5th on the proposed debt repayment plan. In the
interim week, Athens imposed strict capital controls. Today, Greece is due to
pay the IMF 1.6 billion euro; however, default here seems likely. The Greek
appear to be divided on accepting the EU's bailout plan: with it will come
a salvaged economy, albeit with increased taxes and cuts to their much-loved
pensions; but without it, Greece could be forced off the euro, and possibly out
of the EU itself. Monday, with news of shuttered Greek banks, markets across
the world opened in the red. Investors in U.S. markets were only slightly
cooled by Greek worry, with the Nasdaq, Dow, and S&P 500 all opening about
.7 percent down. European indices faced losses greater than the U.S., (2-3
percent declines) but overall, no major economic turmoil. In
this time of economic worry, investors are moving away from volatile equity
markets and parking assets in stable U.S., UK, and German bonds, all of which
have seen an increase in price, and inversely proportional drop in
interest rates. [more...]
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