The headlines in Greece today suggest that social unrest is far from over.
Here are just a few of the headlines in Greece this morning:
“Greek Protesters Warm Up Ahead of New Nationwide 24-hour General Strike”
“Greeks Strike to Protest Pensions, Labor Law Overhaul”
“Youths Clash With Police As Greek Unions Strike Over Proposed Reforms”
Looking at the Greek CDS numbers, the probability of default is well above 60% and the Greek market is the worst performing equity market on the planet (China is next followed by Spain). The citizens of Greece are speaking out loud and clear yet there is nothing the government can do; they are handcuffed by a leveraged balance sheet.
The equity market in the USA is only just beginning to reflect the harsh reality of out leveraged balance sheet. At the time of writing the S&P 500 is trading at 1,047. If it closed below 1,051 there is no support to 1,018…
As I said in the Early Look today, one of the most poignant Hedgeye sayings is “austerity equals civil unrest” and civil unrest is in full force in Greece. Spain is not far behind. When a country is mismanaged, it can only end BADLY.
Howard Penney
