I've been off for a few days and hoped Greece would be resolved by the time I got back. I guess three days just wasn’t enough time. Monday’s overly optimistic rhetoric was just that — rhetoric. The situation is still in play with the next deadline just five days away. Every day brings new opportunities for traders to create hope and fear through rumors and misleading headlines.
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That Wednesday's talks failed to produce a resolution produced a slide in stocks and a modest rally in bonds. There were stories as of Thursday morning that the two sides are moving closer despite yesterday’s failure. On this “news,” Dow futures were up approximately 80 points and bond prices were lower.
I would like to believe the Greek crisis conclude by at least next Tuesday, if not earlier, but I have an uneasy feeling it might not. This is what traders live for.
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Dwight Johnston is the chief economist of the California and Nevada Credit Union Leagues and president of Dwight Johnston Economics. He is the author of a popular commentary site and is a frequent speaker at credit union board planning sessions and industry conferences.