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Not at all impressed as Europe agrees to -- in Spain as much as 125 billion dollars to save its banks this after the Dow had its best -- so far this year.
Last week so will good news continue our we've got to hit a summer slowdown joining me now is Joseph -- United Capital -- thanks so much for joining us we appreciate it.
Thank you hear -- Spain -- was all anybody was talking about over the weekend anywhere I was it seemed like it was gonna be a big panacea for the markets and that are.
For this problem I should -- because the markets did have a good week last week.
Why -- -- kind of falling flat this morning.
Well obviously haven't most US investors are looking what's happening at a interest rates and Spain and Italy.
And that really tells you whether the solution is -- -- and what you've seen as we saw a temporary drop.
In Spanish rates and then a resumption and so what -- seeing about Spain and Italy.
I view does those select the canaries in the -- -- does interest rates.
And it tells you whether the solution Israel will not so I think it's still not clear where the money's coming from who's actually writing -- check.
To the Spanish government for 120 billion -- most importantly how does that get paid back.
Because the biggest issue is that the Spanish government hasn't taken on that that itself because it couldn't find it how does that -- -- payments.
And so obviously what is happened is that this solution is not enough to to.
Calm concerns that people are taking a billion dollars a day from these Spanish banks.
And that's the big issue is if you don't stem that tide.
-- this solution is not good not to me it seems like it should be enough.
But the markets are never ignore what it tells me and and it tells me that that -- clearly that people are aware that the solution is not enough to solve the problem.
Yeah absolutely somewhere focused turn now in your opinion what's the next thing that you're watching.
So for me that the big question is again those interest rates yet they've two things that I'd be watching of interest rates in the second.
What is the outflow from Spanish banks and I think what shall find.
Is that this solution has not yet.
Created -- monster because there is nobody in the European -- system that is saying.
Here is our ultimate solution for this problem it's still not clear whether -- gonna have some countries that leave the Euro and come back like Greece or Portugal.
-- and whether we're looking -- Spain becoming like Ireland.
Which basically ends up funding all of its bank obligations and stifling growth for the long foreseeable future.
-- -- regardless of the solution web thing we notice that the European markets are in the -- for a very messy time.
And we in the US have are ahead of them by several years because we've dealt with a lot of us are crisis but it will have ripple effects it -- -- velocity -- Because I was gonna come in and just suggests that we're watching geopolitics obviously the debt crisis here in the US it's an election year.
So many things always come back to politics but what -- just the simple health of corporations.
How much of that.
Bullying of fact if you will that have sit to keep markets steady because as we know or seasonally at a at a week time of the year for financial markets.
You know where they've two things are happening where -- -- time of the -- this time the last two years we've fallen 16% from April.
So the end of summer so we've had this not he has an -- Feels like a redux of the same thing.
I'd say the two things that I'd be looking at one.
If the government does nothing to address the tax debate.
Sooner than -- that that's a huge overhang that's gonna create uncertainty for everyone.
The health care debate's gonna get cleaned up relatively soon and that has big tax implications.
The tax debate is a very big one.
The second big issue looming is how is Europe -- clean up its mess.
But for us in the US the good news is that the corporations have priced in a slowdown in Europe so most of their earnings -- costs.
Have already priced in the slowdown and it's reflective -- valuation today which is not extreme.
And so what you're gonna see I think it's just a muddling through the summer.
At -- big focus will be on what happens with taxes likely we've got the Olympics to get distracted by but for now.
As a big -- is what happens without tax debate because I think this swing between.
Whether we increase taxes or not that is by far more important to us today than the European mess and certainly that's the issue the will be living for the -- -- comes out politics the end of it all.
Judge -- thank you so much -- interesting perspective.
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