Here’s another article that shows how unnaturally inflated stocks are today. Sunday, the EU and Cyprus agreed to steal money primarily from deposits in excess of the insured value, to make a good bank and a bad bank, and to give the EU bailout funds threatened to be withheld. Monday stocks reacted positively to the Cyprus news. In Asia, stocks rose 1%, but by the time the European markets closed, saner thinking prevailed, sending stocks there 0.3% lower. In the U.S. stocks dropped 0.5% on low volume. Tuesday, stocks changed little in Asia and moved up slightly in Europe. In the U.S. stocks rose 0.7% on very low volume. VXO dropped over 9% to break below 12. Here’s a good article that looks at investing from a psychological view.
Wednesday, Asian stocks followed through from the West with a 0.4% gain. As Cyprian banks prepare to open Thursday, tension is rising as to whether or not there will be a run on the banks. Stocks in Europe dropped 0.4%. In the U.S. though, hope springs eternal keeping the loss to just a fraction on very low volume again. VXO did rise over 4% to close at 12.45 and the 10-year U.S. Treasury Bond rate dropped 2.7%. Thursday, stocks in Asia dropped 0.7% but in Europe managed to move up 0.3%. In the U.S. stocks rose 0.4% to move the S&P 500 Index to an all-time closing high on moderate volume. Stocks rose nearly 1% for the week and 3% for the month.
Finally, despite the stock market euphoria, if you had serious money in Cypian banks, your chances of getting much back, if any, look bleak.