The Vast Greece Troika Disconnect

Greece is weighing heavily on markets again, as Greek Prime Minister Papademos and Greek politicians across all parties walk a political tightrope. At issue, the demands of its debtors to meet steep fiscal goals, upon which depends the fate of Greece. At play, likely elections that could see wholesale eviction of incumbents. At loss, the credibility of the Greek government, which promised Greeks there would be no new austerity.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

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Greece Troika Disconnect

What seems a simple sell for the disconnected Germans and French, is political suicide for Greek politicians and economic torture for the Greek populace. It’s easy for the somewhat dependent yet disconnected European financiers to demand numerical goals be met, as they do not face the once again intensifying protests of the Greek people. The threatening words of Greek Finance Minister Evangelos Venizelos, that Greek default would only bring more difficult days for Greeks, are less believable with each passing day of despair. Meanwhile, opposition party leader Antonis Samaras, increasingly issues opposing rhetoric while quietly complying to the demands of the troika. The Greek people are not fools, though, and so Greece is left wide open for dangerous political change that could issue in a bold nationalist with a different view. Thus, Europe would be wiser to lower the bar for Greece, before losing it to Russia and/or China, despite blood ties.

It is precisely austerity which is keeping Greece from meeting budgetary goals, as the nation’s GDP faces a steepening uphill battle. Now the desperate actors are seeking even a reduction in the minimum wage. How dare they! The argument that Greece has made its own bed and can face the consequences if it doesn’t like Europe’s demands is losing credibility, because if Europe is sincere in its intention to preserve Greece’s membership in the euro zone, it should be to preserve Greece’s stability as well. Otherwise, it will end up with a Moldova like member that could weigh on its longer term progress besides costing it heavily today. Europe has to decide how far it is willing to hobble its partner for the sake of retaining it. I reiterate that austerity measures would be more effective if implemented over a longer time span, allowing for their less disruptive reformation of Greece’s economy.

As mentioned here in the past, the latest Greek delays may simply be wise posturing by Greek leaders intended to illustrate to Europe the parties’ codependence upon one another. It’s a wise strategy, if I see it correctly, after perhaps inspiring it even with my little column. As Portugal pivots and Spain shivers in fear, Merkel and Sarkozy might consider the political cost of too little support to Greece, should the entire ship sink with the dingy. I suspect Greek leaders might help their cause by bringing their friends home for a meeting in Athens, with a dose of good Greek hospitality. These days, that comes with a Molotov cocktail in the place of ouzo. I would suggest Greek hosts escort their allies through the fiery streets of the hard road Greece is being forced to traverse. It might just open the eyes of the disconnected to the human costs of austerity, and the economic damage of fiscal goals driven by pride and political prowess.

Surprisingly, the Global X FTSE Greece 20 ETF (NYSE: GREK) is holding near recently attained highs, I suppose on disbelief that this could end in Greek default rather than agreement at any cost. The iShares S&P Europe 350 Index ETF (NYSE: IEV) is similarly slanted. We’ll see how much the Greek people will bear.

Editor's Note: This article should interest investors in National Bank of Greece (NYSE: NBG), Hellenic Telecommunications (NYSE: OTE), Coca-Cola HBC (NYSE: CCH), Teekay Corp. (NYSE: TK), Navios Maritime Holdings (NYSE: NM), Navios Maritime Acquisition (NYSE: NNA), Navios Maritime Partners L.P. (NYSE: NMM), Tsakos Energy Navigation Ltd. (NYSE: TNP), Overseas Shipholding Group (NYSE: OSG), International Shipholding (NYSE: ISH), Excel Maritime Carriers (NYSE: EXM), Safe Bulkers (NYSE: SB), Claymore/Delta Global Shipping ETF (NYSE: SEA), Genco Shipping & Trading (NYSE: GNK), Diana Shipping (NYSE: DSX), Danaos (NYSE: DAC), Tsakos Energy Navigation (NYSE: TNP), Ship Finance Int'l (NYSE: SFL), Nordic American Tanker (NYSE: NAT), Seaspan (NYSE: SSW), General Maritime (NYSE: GMR), DHT Maritime (NYSE: DHT), Brunswick (NYSE: BC), Marine Products Corp. (NYSE: MPX), DryShips (Nasdaq: DRYS), Top Ships (Nasdaq: TOPS), Eagle Bulk Shipping (Nasdaq: EGLE), Sino-Global Shipping (Nasdaq: SINO), Paragon Shipping (Nasdaq: PRGN), K-SEA Transportation Partners (NYSE: KSP), Euroseas (Nasdaq: ESEA), Star Bulk Carriers (Nasdaq: SBLK), Omega Navigation (Nasdaq: ONAV), Knightsbridge Tankers Ltd. (Nasdaq: VLCCF), TBS Int'l (Nasdaq: TBSI), Golar LNG (Nasdaq: GLNG), Claymore/Delta Global Shipping (Nasdaq: XSEAX), American Commercial Lines (Nasdaq: ACLI), Deutsche Bank (NYSE: DB), ITA (Nasdaq: ITUB), Banco Santander (NYSE: STD), Westpac Banking (NYSE: WBK), UBS (NYSE: UBS), Lloyd’s Banking Group (NYSE: LYG), Barclay’s (NYSE: BCS), Credit Suisse (NYSE: CS), Allied Irish Banks (NYSE: AIB), Banco Latinamerican (NYSE: BLX), Bank of America (NYSE: BAC), Citigroup (NYSE: C), Goldman Sachs (NYSE: GS), JP Morgan (NYSE: JPM), Morgan Stanley (NYSE: MS), European Equity Fund (NYSE: EEA), Vanguard European Stock Index (Nasdaq: VEURX), Powershares FTSE RAFI Europe (NYSE: PEF), Europe 2001 (NYSE: EKH), S&P Emerging Europe (NYSE: GUR), Ultrashort MSCI Europe (NYSE: EPV), Vanguard Europe Pacific (NYSE: VEA), Wisdomtree Europe SmallCap (NYSE: DFE), Wisdom Tree Europe Total Div (NYSE: DEB), iShares S&P Europe 350 (NYSE: IEV), Morgan Stanley Eastern Europe (NYSE: RNE), DWS Europe Equity A (Nasdaq: SERAX), DWS Europe Equity B (Nasdaq: SERBX), Fidelity Europe (Nasdaq: FEUFX), Fidelity Europe (Nasdaq: FIEUX), ICON Europe A (Nasdaq: IERAX), Pioneer Europe Fund (Nasdaq: PBEUX), ProFunds Europe 30 (Nasdaq: UEPIX), Putnam Europe A (Nasdaq: PEUGX), Rydex Europe 1.25x (Nasdaq: RYAEX).

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Apocalypse Now or Later?

Greek Readers will note from our initial 2012 forecast:

"Any further upside rally in early 2012 should be contained in both price and duration. If prices fall below 1242 without reaching fresh highs, wave 3 down has already begun. Instead, a definitive break above resistance at 1292 would suggest an alternate wave count and could ultimately lead prices as high as 1350 before wave 3 down begins."

Prices for the S&P Index touched nearly 1345 intraday. The target for alternative Elliot Wave count is now nearly satisfied for an ending diagonal pattern. Prices should turn down from here.

Article should interest investors in SPDR Dow Jones Industrial Average (NYSE: DIA), SPDR S&P 500 (NYSE: SPY), PowerShares QQQ Trust (Nasdaq: QQQ), ProShares Short Dow 30 (NYSE: DOG), ProShares Ultra Short S&P 500 (NYSE: SDS), ProShares Ultra QQQ (NYSE: QLD), NYSE Euronext (NYSE: NYX), The NASDAQ OMX Group (Nasdaq: NDAQ), Intercontinental Exchange (NYSE: ICE), E*Trade Financial (Nasdaq: ETFC), Charles Schwab (Nasdaq: SCHW), Asset Acceptance Capital (Nasdaq: AACC), Affiliated Managers (NYSE: AMG), Ameriprise Financial (NYSE: AMP), TD Ameritrade (Nasdaq: AMTD), BGC Partners (Nasdaq: BGCP), Bank of New York Mellon (NYSE: BK), BlackRock (NYSE: BLK), CIT Group (NYSE: CIT), Calamos Asset Management (Nasdaq: CLMS), CME Group (NYSE: CME), Cohn & Steers (NYSE: CNS), Cowen Group (Nasdaq: COWN), Diamond Hill Investment (Nasdaq: DHIL), Dollar Financial (Nasdaq: DLLR), Duff & Phelps (Nasdaq: DUF), Encore Capital (Nasdaq: ECPG), Edelman Financial (Nasdaq: EF), Equifax (NYSE: EFX), Epoch (Nasdaq: EPHC), Evercore Partners (NYSE: EVR), EXCorp. (Nasdaq: EZPW), FBR Capital Markets (Nasdaq: FBCM), First Cash Financial (Nasdaq: FCFS), Federated Investors (NYSE: FII), First Marblehead (NYSE: FMD), Fidelity National Financial (NYSE: FNF), Financial Engines (Nasdaq: FNGN), FXCM (Nasdaq: FXCM), Gamco Investors (NYSE: GBL), GAIN Capital (Nasdaq: GCAP), Green Dot (Nasdaq: GDOT), GFI Group (Nasdaq: GFIG), Greenhill (NYSE: GHL), Gleacher (Nasdaq: GLCH), Goldman Sachs (NYSE: GS), Interactive Brokers (Nasdaq: IBKR), INTL FCStone (Nasdaq: INTL), Intersections (Nasdaq: INTX), Investment Technology (NYSE: ITG), Invesco (NYSE: IVZ), Jefferies (NYSE: JEF), JMP Group (NYSE: JMP), Janus Capital (NYSE: JNS), KBW (NYSE: KBW), Knight Capital (NYSE: KCG), Lazard (NYSE: LAZ), Legg Mason (NYSE: LM), LPL Investment (Nasdaq: LPLA), Ladenburg Thalmann (AMEX: LTS), Mastercard (NYSE: MA), Moody’s (NYSE: MCO), MF Global (NYSE: MF), Moneygram (NYSE: MGI), MarketAxess (Nasdaq: MKTX), Marlin Business Services (Nasdaq: MRLN), Morgan Stanley (NYSE: MS), MSCI (Nasdaq: MSCI), MGIC Investment (NYSE: MTG), NewStar Financial (Nasdaq: NEWS), National Financial Partners (NYSE: NFP), Nelnet (NYSE: NNI), Northern Trust (Nasdaq: NTRS), NetSpend (Nasdaq: NTSP), Ocwen Financial (NYSE: OCN), Oppenheimer (NYSE: OPY), optionsXpress (Nasdaq: OXPS), PICO (Nasdaq: PICO), Piper Jaffray (NYSE: PJC), PMI Group (NYSE: PMI), Penson Worldwide (Nasdaq: PNSN), Portfolio Recovery (Nasdaq: PRAA), Raymond James (NYSE: RJF), SEI Investments (Nasdaq: SEIC), Stifel Financial (NYSE: SF), Safeguard Scientifics (NYSE: SFE), State Street (NYSE: STT), SWS (NYSE: SWS), T. Rowe Price (Nasdaq: TROW), Visa (NYSE: V) and Virtus Investment Partners (Nasdaq: VRTS).

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Facebook IPO Windfall if Open to its Users

Imagine how awesome it would it be for Facebook (NYSE: FB) to offer its shares via a social IPO™. With some 800 million users of its now iconic social networking platform, the new king of the internet might score yet more points with its “friends” if it were to offer them access to the company’s IPO. Beyond being just a brilliant public relations maneuver, such access to the new shares should allow the company to achieve an even better valuation than it might otherwise.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

For Facebook a Social IPO Would Rock

Just do the math. With 800 million active users, if it were to offer its shares at $100 per, Facebook could generate $80 billion if each of its members bought just one share. Valuation aside, the unsophisticated marketplace would likely bid up Facebook’s value beyond the $100 billion valuation some sophisticated investors say Facebook is worth. And given that there would likely remain strong demand among many institutions, Facebook might then achieve an even greater than $100 billion valuation.

Furthermore, the news of a social IPO would likely push more people globally to join the social network, giving lift to the company’s intrinsic value. Thus, like a Newton’s Cradle, the metal balls that rock each other in perpetual motion on executive desks across the country, Facebook’s members would drive its share value as its share offering drives membership growth. I think that’s just brilliant.

As is, the Facebook IPO is the most heralded and anticipated since Google’s (Nasdaq: GOOG) blockbuster offering about a decade ago. The offering’s proceeds and valuation should exceed Google’s and other major internet IPOs like that of Zynga (Nasdaq: ZNGA), Groupon (Nasdaq: GRPN), Vonage (NYSE: VG), Orbitz Worldwide (NYSE: OWW) and LinkedIn (Nasdaq: LNKD). Just the news of Facebook’s registration sent the shares of stocks that might benefit from Facebook’s valuation soaring. Renren (Nasdaq: RENN) and Zynga (Nasdaq: ZNGA) took off like rockets late last week.

I only wonder if the bankers at Morgan Stanley (NYSE: MS), the investment bank said to be heading up Facebook’s offering, have considered this novel idea. If not, just a tiny cut from the commission would do me just fine fellas.

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.