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Greetings!
The June Swoon was in full swing for the first four weeks of the month. Then, just when things were looking their bleakest the market had a very good final week with all three indices jumping over 5%. We still ended up down for the month but just by a hair.
Open Close Diff.
DJIA 12,569.34 12,412.07 - 157.27
NASDAQ 2,829.39 2,775.08 - 54.31
S&P 500 1,345.20 1,320.64 - 24.56
(Yahoo Finance. Past performance is no guarantee of future results. Indices are unmanaged and connot be invested into directly.)
The Greek riots dominated most of the month's news and one thing is for sure, investors do not like to see rioting in the street.
The Greek situation took a turn for the better when Prime Minister George Papandreou won by a thin margin a vote of confidence by the Greek Parliament on June 21 Vote of Confidence Article NY Times. Then on June 29th the Parliament voted in favor (again, by a very slim margin) of austerity measures that will include budget cuts, tax increases and asset sales. The passage of the austerity vote was required before the European Union would offer more loans to bail them out of a short term liquidity crisis.
The rioting in the streets was covered extensively by my three favorite stations, CNBC, Bloomberg and the BBC. I've been thinking of this Greek debt crisis for more than a year. (We first wrote about Greece and their debt problem last year in April and then again in May.) Here is what I came up with: Doesn't it always seem to be the case that whenever there is a dispute between a borrower and a lender it is the lender that turns out to be the bad guy. Nobody ever bellyaches about the bank when applying for a loan; no, usually you are busy jumping through hoops and gathering documents and doing whatever you can to get the bank to lend you what you need. It is a happy day when they call and say your mortgage has been approved.
So when the Greek government went to bond issuers on bended knee and asked them to lend them billions more than they've ever collected in revenue--was their rioting? Did the government employees strike when the Government borrowed to pay their salaries? No, of course not. Greece borrowed tons of money and sincerely promised to pay it back with interest and now when the Banks and bond holders have the audacity to ask for their money back--as promised--it's they who are being unreasonable.
Similarly, when people were cheating and reporting imaginary income on their loan applications, who was portrayed as the bully when the the borrower stopped paying on their mortgages? Those nasty bankers! My Dad used to lend a few bucks to his fellow firefighters "till payday" and over the years he lost quite a few friends when a few of them failed to pay him back. The lesson I learned very early on from him was that if you're not a bank don't lend money! It almost never works out as intended.
Marty | 
