TUESDAY APRIL 27, 2010

Euro Contagion

The European stock markets all lost roughly 2.5% in trading today on concerns, once again, over  Greece.  After weeks of bluster, the horrible financial condition has not improved and the Greek government has shown little commitment to making the difficult budgetary decisions.  Indeed, government employees continue to protest any changes at the same time S&P cut the rating of Greek government debt to junk bond status!  Investor are watching this Greek tragedy and know the story will not play out much differently in Spain, Portugal or Italy.  So, Europe is suffering from Greek contagion.

Meanwhile, on our side of the pond, the New York Government announced that the Governor, Assembly and Senate are "no where near" a budget agreement that was due on April 1st.  Apparently, the looming $8 billion deficit is no cause for urgency in our state.  Every cut in spending is met with opposition from a special interest.  Gee, this sounds like, well, Greece!

The economy and the stock market are doing well for the moment.  However, the financial status of many of our states and the federal government continue to threaten the recovery.  Federal Reserve Bank Chairman Ben Bernanke has stated that these deficits may jeopardize the economy.  Greek contagion?  We better be careful.  Based on the circus in Albany, maybe it is time to get concerned.      

POSTED AT 1899-12-30 11:35:00.0

KEN ENTENMANN, CFA
SENIOR VICE PRESIDENT AND
THE DIRECTOR OF INVESTMENT MANAGEMENT SERVICES

Ken is a Senior Vice President and the Director of the Trust and Investment Services at Alliance Bank, N.A. He has 23 years of investment experience and oversees the management of assets totaling $1 billion. He holds a B.S. in Applied Economics and Business Management from Cornell University and an M.B.A. from the William E. Simon Graduate School of Business Administration at the University of Rochester. He has also earned his Chartered Financial Analyst designation. He is a member of the Executive Committee of the Trust Division of the New York Banker's Association. He is also a director of the Central New York Community Foundation.

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