From
MSN Money - After a strong October rally, stocks and the economy seemed poised for a typical Santa Claus rally into the new year. But a Grinch from Athens has put all that at risk. Fate has been a cruel taskmaster lately. For more than two years, stocks have stumbled through a broad trading range as the initial excitement over the end of the recession was replaced by alternating waves of greed and fear. For the better part of October, it looked as if a turnaround was at hand. The NYSE Composite gained nearly 23% in just four weeks. Confidence was rising. Money was flooding into the stock market. Even the housing market was showing signs of life. The pieces were in place for a classic Santa Claus rally, lifting everyone's spirits and giving us hope that maybe, just maybe, the market could push to new recovery highs and the economy would break out of its jobless funk in the new year. Then, it all went wrong. The market turned down on Monday, Halloween, as the market realized Greece wasn't quite settled yet. But the real blow came Tuesday, when Greek Prime Minister
George Papandreou dropped a load of napalm on the revelry. He would let the people of Greece decide what to do by holding a referendum on the latest bailout plan by January. The question would be simple: Do we reject or accept Europe's new plan for us? This pull of the string is unraveling a seam along what was always the eurozone plan's point of vulnerability: a lack of political support from Greek citizens unwilling or unable to bear the burden of their national debt.
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Did the Greeks just steal Christmas?
From FoxBusiness.com - As expected, the Federal Reserve Board stood pat on Wednesday, refraining from further economic stimulus programs and leaving interest rates alone. The Fed said economic growth “strengthened somewhat” during the third quarter, which reflected a reversal from the spring when growth slowed due primarily to temporary factors such as the Japanese earthquake and tsunami in March. The question on many minds ahead of the Fed’s decision was what weapons the Fed has left to spur economic growth. Another round of quantitative easing has been hinted at but there is strong opposition both in Congress and among the handful Fed dissenters to the central bank buying up more debt on top of the nearly $3 trillion already purchased since the 2008 financial crisis. The first two rounds of quantitative easing have been met with limited success at best and skeptics say another round isn’t likely to help much either. Besides, improving liquidity by essentially printing money eventually leads to inflation. Read more
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