Markets were down world-wide on the expectation that Greece will default any day now. Greece has heartily denied this at least three times in the last week. This coming week it's all about Greece and European banks and dominoes.
Short blog this week. Football has started, and a guy's gotta have his priorities. Besides, outside of Greece-related stuff there was not much news this week.
Obama has described a jobs plan he will send to Congress - spending roughly $450 billion to save jobs, primarily his. This week he'll be describing where the money will come from. Let me save you the suspense: more debt. There's no magic bank account anywhere, everyone on the continent is broke. Unemployment in this country is substantially due to a profound mismatch between worker's skills and business needs. No president can magically change 17 million unemployed worker's skill sets. Meanwhile, the number of employed continues to drop, and the average duration of unemployment continues to increase at approximately one week per week.
Greece debt is now priced indicating a 94% chance of default. Portugal and Ireland debt is prices in the 50% region; Spain and Italy in the 30's. Germany is now working on "firewalls" to save their own banks when the end comes. And it will come. Everyone in Europe is drawing cash out of banks, refusing payment with Visa, and generally preparing for a financial meltdown as best they can. Why the Visa thing? When you buy something from me, I charge your Visa card. Your bill reflects this immediately, but I don't get paid for three days. When I accept a Visa, I am presuming that three days from now your bank, my bank, and Wells Fargo (my processor bank) will all still exist and be willing to talk to each other. European businessmen are no longer making that presumption.
Unemployment in this country is taking a nasty turn. Older people are working longer for less money, as they have few retirement choices. Younger people are finding a profound lack of jobs - our youth employment rate is at a historic low. Since the retirement programs are funded by young people, this situation will not end well.
Europe's Problems Summed Up:
Science stuff: Why does the earth have gold? Early in the earth's formation, all the heavy stuff sank to the core, mostly made up of nickel and iron. The core of the earth has enough precious metals in it (gold, platinum, etc) to coat the surface of the earth 12 feet deep. The surface, the mantle, is made of the lighter stuff that floats on molten metals, which we mostly see as silicates and rocks. New evidence is that the heavy metals available to us came from meteoroids hitting the earth. The 5th planet broke up for some reason, exposing its core and producing the asteroid belt. A lot of the meteoroids come from the resulting asteroid belt. If the 5th planet had not broken up, perhaps there would be almost no metals on the surface of the earth, and perhaps therefore little or no advanced life (we need iron to make blood, for example), much less such highly advanced organisms as Tiffany's or Fort Knox.