Wall Street Tanks on Economic Concerns, Oil Selloff, Possible Greece Default

Date: 6/23/2011

Wall Street Tanks on Economic Concerns, Oil Selloff, Possible Greece Default Jobless claims rise more than expected, Oil drops 4 percent on weaker economic outlook, Is America the next Greece? We'll discuss the current market conditions has the Dow Jones Industrial Average fell 220 points intraday.

JP Morgan and the banking sector are very weak. Key economic data such as China PMI and the higher weekly jobless claims in the United States contributed to today's weekness. New home sales for May slipped by about 2% month over month to an annualized rate of 319,000 units, which is greater than the pace of 305,000 units that had been anticipated among economists polled by Briefing.com.

All three major equity averages are down in excess of 1.5% this morning. The -US Dollar- showed strength as a flight to safty which caused gold & silver and other commodity stocks to sell off. Gold ETF (GLD) declined $2.71 or 1.79% as spot gold prices fell by $26.403. The CRB index falls to near its year-to-date low. Is the ECB Solvent? At SMF we believe they are not solvent and the degree of systemic risk of multilateral default is very high.

QE2 is over and as a result we're seeing massive inflation well above what the -Federal Reserve- and -Ben Bernanke- are telling us. It is interesting to note that 28 countries agree to release crude, oil prices plunge. Yesterday's late day comments by Bernanke leaves the door open to more stimulus should the economy fail to rebound. We also saw -U.S. credit swaps- approach an 8-Month high after trichet warns on bank risk. In the currency and forex markets we saw the euro falls to new record low against the swiss franc as -currency default- probabilies increase. We saw crude oil tumble to a four-month low after IEA says it will tap reserves.

Oil for August delivery dropped $4.55, or 4.8 percent, to $90.86 a barrel at 9:34 a.m. on the New York Mercantile Exchange. Earlier, futures touched $90.32, the lowest level since Feb. 22. Prices have gained 19 percent in the past year. Market volatility has returned as we saw spikes in the (VIX) (VXN) (VXO) (GVZ.X) CBOE Gold Volatility Index and the (OVX.X) CBOE Crude Oil Volatility all moved higher as concerns over a -Greece Default- continue to persist. In other related news we saw the SEC Expands Oversight Rules Over Hedge Funds and Private Equity.

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