Stocks tank, options, euro, China, ‘Grexit’ all to blame

Stocks tank, options, euro, China, ‘Grexit’ all to blame

One percent stock decline has many reasons, but all sectors hit, while uncertainty about China and imminent collapse of Communist-led Greece are most troubling.

Wile E. Coyote satire.
Wile E. Coyote (and Wall Street) look like they're in trouble again. (Satirical rework of Wile E. Coyote. Character copyright: Warner Brothers.)

WASHINGTON, April 17, 2015 – Today, at least so far, is a terrible way to end this trading week. Stocks in all sectors are jumping off the cliff like lemmings, big time. Averages are down some 1 percent, and we could be witnessing the early start of this year’s “Sell in May” party.

The Eurozone has been hammered hard by the ever-increasingly possibility of a Greek default and exit from the euro—nicknamed the “Grexit” by any number of pundits and naysayers. That possibility is increased and made more complex by the Soviet Union Russia which is likely encouraging the currently pro-Communist Greek government to cause trouble for the West as partial revenge for the West causing trouble for the Soviet Union’s Russia’s aggression against their neighbors as history repeats itself.

This kind of interference is doing no good for the feckless, corrupt, and impecunious Greek government and its greedy but politically savvy oligarchs. No one bothers with the law over there and for good reason, particularly when it pertains to paying taxes. Seeing the graft, corruption, and outright thefts of public and private money by Greek pols and their impossibly wealthy supporters for decades now, is it any wonder why the average Greek citizen has reflexively decided to do the same.

Rather than belittle the insanity and violence that has engulfed this small country (again), leading them to put in Commies and Socialists (again), we should instead look closer here to home and begin to wonder when the same thing will start happening over here. The middle class in this country is still locked in largely the same economic quandary it was locked into in 2008.

Nothing has changed. The average family is over-taxed, gets nearly nothing for their government misappropriated money, is locked perpetually into high-interest debt that’s impossible to pay off because they never get any appreciable raises. One day, maybe sooner rather than later, they’re going to start hitting the streets like the Greeks, and there’ll be hell to pay.

A genuinely evil President who has been giving daily lessons on how to selectively ignore and flout laws you don’t like has already paved the way. When the people start doing likewise, it’s all over, folks. The Greeks are merely the canaries in the coalmine for what may very well get underway on this side of the pond.

Added to this kind of existential fear is fear the Eurozone will be greatly troubled if Greece takes the next “Grexit” step, said by some to likely take place on May 9. (We’re not sure if this correlates with any predictions by Nostradamus, however.)

Added to the international mess is the continuing murderous fun in the Middle East, coupled with reports that ISIS has an encampment across the border from El Paso, somewhere in Mexico. No doubt some of these clowns are already part of President Obama’s illegal immigration plot to turn the U.S. into a One-Party State (his). Unfortunately, the way things are going, enough ISIS time-bombs will infiltrate the U.S. in the process that this feckless excuse for a Chief Executive might very well get his way. Except that the One Party State might end up being run by ISIS and all those friendly Islam fascists who want all our heads.

More fun in China as well, as things once again don’t seem to be going smoothly over in that unpredictable land. What it is this time around is increasingly hard for the Maven to comprehend. So it’s best to stay out of there, investment-wise, at least until we can read the tealeaves, something that may take us awhile.

It’s essentially a Freaky Friday out there, and we continue to sell when we can and stack up cash for when we can actually figure out what’s going on. Somebody knows. But that somebody has no intention of telling us, so it’s best to get out of the way as much as possible or risk becoming collateral damage.

Today’s trading tips

In a word, don’t do it. I.e., don’t buy anything. We managed to get 100 shares of the Party City IPO almost by accident yesterday. We’d put in for those and for shares of the evil HFT, humorously known as Virtue (VIRT), and weren’t even able to try to get shares in ETSY.

ETSY, of course, blasted into the stratosphere after opening yesterday, up a good 110 percent by the close. But that was for the rich guys, mostly as it always is, although the company did rather unusually reserve up to 15 percent of its IPO shares for the little guys, particularly those who make use of the site.

VIRT and Party City (PRTY) did pop in the upward direction as well, with PRTY doing the better of these two. So we’re in, and must hold for 30 days under the rules of our brokerage. So we’ll just have to see if we get any of that 20 percent pop when 30 days are up. Many times, we don’t, but you take your chances.

Other than this, most stocks seem like death traps these days, save for short-term traders. We’ll continue to hold our preferred stocks and preferred stock ETFs right now, but are pretty much selling everything else when we can. 2015 has been a lousy year for us so far. In such an environment, it’s usually best to bite the bullet, take your cash, and go sulk (or go on vacation) until prices become more reasonable. And stable.

Have a good weekend, and we’ll see you next week, likely on a nasty Monday follow-through to today’s very negative stock market action.

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Terry Ponick
Biographical Note: Dateline Award-winning music and theater critic for The Connection Newspapers and the Reston-Fairfax Times, Terry was the music critic for the Washington Times print edition (1994-2010) and online Communities (2010-2014). Since 2014, he has been the Business and Entertainment Editor for Communities Digital News (CDN). A former stockbroker and a writer and editor with many interests, he served as editor under contract from the White House Office of Science and Technology Policy (OSTP) and continues to write on science and business topics. He is a graduate of Georgetown University (BA, MA) and the University of South Carolina where he was awarded a Ph.D. in English and American Literature and co-founded one of the earliest Writing Labs in the country. Twitter: @terryp17