"Haircut," of course, is a euphemism for DEFAULT - a term jounalists are being kind enough to avoid. But that's what this is - a default.
So, we're now seeing that the FIRST step the EU takes to solve its debt problem is to default on debt. That's actually smart. It's what we will eventually do with our debt. (Versus the alternative, to print the money and pay it.)
Guess what SHOULD happen to interest rates now in the PIIGS countries? (Portugal, Italy, Ireland, Greece and Spain)
They should jump, doing further damage to home prices and business outlooks throughout the EU. Everyone who bought Greek bonds just got the shaft, so investors should be TRIPLY cautious about buying more from any of these nations. The EU has shown its hand.
Surprisingly, here at home, the pundit predictions for Market Open are that there will be an entry "stampede" - a term usually reserved for panics. Oh well. My 401(k) money exited the markets on Friday. If the Nasdaq climbs 50 points and remains there for two days, then the "strong resistance" I called at 2700 will be breached.
So, let's see if that happens.
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