The financial problems in Greece are not unique to that country.  Rather, the same spending and borrowing spree that brought Greece to its economic knees has taken place throughout much of the rest of Europe.  This has forced the 16 nations in the European Union to package together an enormous $1 trillion rescue plan.  The region's crisis is all about too much debt used to fund too many promises.  The austerity plan that the Eurozone countries are considering will involve higher taxes and lower government spending, a combination that most Europeans are dreading (source: BTN Research). 
 
Nervous investors globally pushed the price of gold to an all-time record high of $1,243 an ounce last Wednesday (5/12/10).  More and more stock buyers have retreated from equities to the perceived safety of bonds, pushing up bond prices and driving yields down.  In turn, the average interest rate on 30-year fixed rate mortgages fell to 4.93% last week, its lowest level of calendar year 2010.  Even with the spate of bad news that flooded the financial headlines, the S&P 500 rose last week and is now up +2.6% (total return) YTD through 5/14/10 (source: NYMEX, Freddie Mac). 
 
A key vote is expected this week in Washington that would curtail some of the freedoms of the Federal Reserve.  The Senate wants (and will likely receive) more details on the behind-the-scenes lending activities of the central bank during the 2008 financial crisis, but is a long-shot to receive prior notice before the Fed changes short-term interest rates in the future (source: Senate).