Sunday, February 22, 2015

Austerity Reframed By Hope Is Still Austerity

News
While cracking down on tax evasion, corruption, and the number of civil servants offers fodder for the headlines, it's hardly the change expected by the masses. Austerity, reframed by hope and fancy speeches, is still austerity. Herbert Hoover learned the hard way that austerity only reinforces the vicious cycle (economic contraction). It won't be long before hope of an economic recovery and patience with the newly elected leadership run out.

Follow the message of the market, not headlines. Disappointment, frustration, and the need for change will be discounted by Greek stocks long before headlines confirm something is wrong. If Greek stocks (ticker: GREK) breaks the ice of support at 9, it forecasts more pain for Greece.

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Headline: Greece readies reform promises

(Reuters) - Greece's government prepared reform measures on Sunday to secure a financial lifeline from the euro zone, but was attacked for selling "illusions" to voters after failing to keep a promise to extract the country from its international bailout.

Leftist Prime Minister Alexis Tsipras has insisted Greece achieved a negotiating success when euro zone finance ministers agreed to extend the bailout deal for four months, provided it came up with a list of reforms by Monday.


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