Reading Material, December 14, 2011By David Urbanhttp://atruecontrarian.blogspot.comUPDATE 2-Greek debt swap talks make progress, no deal yethttp://www.xe.com/news/2011/12/13/2344037.htm The good news is the Greek debt negotiations are moving towards a conclusion with both sidesexchanging proposals on the interest rates for the new debt. Haircuts are expected to be greater than 50% but less than the 75% originally offered by the Greeks.The difficult part will come soon when they determine where the new debt falls on the peckingorder in event of a default and will it be subject to English or Greek law.Both sides continue to make progress which bodes well for a first quarter rally.
This time we really mean ithttp://www.economist.com/blogs/graphicdetail/2011/12/daily-chart Euro members talk about getting their individual houses in order but in reality only Germany andFinland in the chart play by the Maastricht criteria of a budget deficit limit of 3% of GDP.As 2012 moves forward the question on everyone’s mind will the European governmentsactually make budget cuts in the face of a slowing economic growth?France and Greece have elections next year which will be watched very closely by the markets.
HOW TO PLAY IT: Recession still Europe's greatest worryhttp://finance.yahoo.com/news/HOW-TO-PLAY-IT-Recession-rc-4133297355.html The slowing economic growth will put pressure on Europe early next year. The Eurozone should be in a recession right now if the PMI numbers are to be believed. The slow progress handlingthe debt crisis hampers efforts for businesses to effectively plan their budgets in the comingyears.Businesses do not like uncertainty and the slow progress by governments on both sides of theAtlantic have caused businesses to lower growth prospects.