soa #2 - over hyped or a no brainer ?, page-19

rcml,

The DOW was only off a little over 1% which is almost normal in recent times and the jobless rate is still falling even if slightly lower than forecast. Its been an election year in the US all year so far so that shouldn't sneak up and hit us either IMO. None of this helps but probably a sideline issue today.

I suggest that the French election result will be spooking people a little as they think through the ramifications. The existing French govt have been backing the German push to beat the failing debt stricten Euro nations with an austerity stick in order to keep them in the Euro while minimising the costs to the wealthier nations.

The new socialist French govt won't be overly keen to preach the virtues of a balanced budget to other nations as it will no doubt be about to embark on a spending spree of its own, as socialist governments tend to do. Splashing out cash, even if borrowed, buys much more loyalty than cutting back and shedding jobs, and with 17 years without its hands anywhere near the purse strings the new govt will no doubt be keen on the govt equivalent of retail therapy. Govts don't call it that though. They make up their own names for it like "nation building" !

This would seem to leave Germany and its satelite states as the lone voice pushing for countries to actually demonstrate some vaugue intent to actually repay their existing debts. While Germany's intent is certainly not altruistic, loss of French backing would appear to cast some doubt about the ability to follow through and enforce all those agreements argued out at length over the last year or two.

Just when Europe looked like it was taking firm steps to resolve its own issues uncertainty looks like it may return very quickly. As we have been seeing for the last couple of years, the markets don't like that type of uncertainty. Will France just be the first to fall to the socialist promise ? I doubt it. People of europe may have learned to dislike debt but they dislike being forced to repay it even less. What next ? Can the Euro survive this ?

All this will take time to play out and the turning point for SSN must be soon. With so many wells in progress results from at least a couple of them should emerge soon. Here's hoping that Defender stablises at say 250 and AUII or Gretel provide sound numbers. If all the above are average then SoA may provide us with something out of the box.