Week June 11 2011 – Weekly Recap & The Week Ahead
“The problem with socialism is that eventually you run out of other people’s money [to spend].” — Margaret Thatcher
1. Greece’s Q1 GDP grew at a slower than expected 0.2%, after shrinking for four consecutive quarters. On a year-over-year basis GDP growth declined 5.5%. Investment plunged 19.2%.
2. Goldman the subject of yet another probe — the SEC is investigating whether Goldman Sachs (GS) and other major banks may have broken bribery laws in dealings with Libya’s sovereign-wealth fund, sources said. Officials are scrutinizing a $50M fee Goldman offered to pay the fund as part of a proposal to help the latter recoup losses of 98% on $1.3B that it invested with the bank.
3. Debt talks to continue as Fitch warns of downgrade — Congressional leaders and White House officials met last Wed. to continue talks on raising the U.S.’s $14.3T borrowing limit and cutting the deficit, a day after Fitch became the third ratings agency to threaten to downgrade the government’s credit status if the ceiling isn’t lifted. Republicans and Democrats have until August 2 to reach a deal or risk the U.S. defaulting.
4. Fed now largest holder of U.S. Treasurys — following its multiple quantitative easing operations, the Fed surpassed China as the largest holder of U.S. Treasurys at the end of the first quarter. By the time QEII ends this month, the Fed will hold 16% of U.S. paper vs. 12% for China.
5. AAII Sentiment Survey: Bearish Sentiment Surges to 47.7% — this is the lowest level of optimism recorded since August 26, 2010. Bullish sentiment has now been below its historical average for eight consecutive weeks.
6. Notable video from Jim Rogers– courtesy from MarketWatch.
The week ahead — Economic data from Econoday.com:
