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| The Euro Deal is Done | |
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| Third Quarter GDP | |
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| Year End Rally |
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| Fellow Investor,
Amazingly, it's being reported that Europe has come to an agreement on bank recapitalization plans and Greek debt forgiveness. The banks will have to get their Tier 1 capital up to 9% by June. That 9% will be calculated based on the value of sovereign debt they hold after write-downs.
Back in July, Euro-banks were stress tested for Tier 1 capital of 5%, and that was assuming that all sovereign debt on the books could be valued at 100%. Greek debt forgiveness will be 50%. Euro-banks will add $140 billion to their balance sheets.
The EU is expected to appeal to China for investments in its banks. And China has sounded willing to help. That's a good thing, as there aren't that many ready sources of liquidity in the world today.
All in all, the market seems to like the news coming out of yesterday's summit. And it occurs to me that if banks raise cash before Greek debt is actually written off, then we might even avoid the downside that I've assumed is unavoidable.
One thing that seems to be missing is the timetable for Greek default. It would be good to know exactly when the Euro-banks have to book the losses.
Investors certainly like the news today. The euro is up huge against the dollar, and that's always good for stocks.
The stock market is set up for a strong end of year rally.
Economic numbers have been... [continue reading at WyattResearch.com] | 
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| How to profit when the market dips
The Dow Industrials first broke 10,000 on March 12, 1999. Ten years later, on March 12, 2009, the Dow closed at 7,170.
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Record home foreclosures?
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Invest in quality American companies, and buy their stocks at a discount. You can never go wrong investing in Great American companies, especially in times of crisis.
Click here to find out how to spot these companies and how to buy them for a fraction of what everyone else is. |
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Market Snapshot
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| | U.S. Markets - Oct 26 Close | | Dow Jones | 11,869.04 | +162 | (+1.39%) | |  | | S&P 500 | 1,242.00 | +12.95 | (+1.05%) | | | | Nasdaq | 2,650.67 | +12.25 | (+0.46%) | |  |
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