Lunchtime Report
SET 1011.50 (-11.44)

SET declines on the same old reasons, plus Basel plans to raise reserve requirements for banks. The market is unpredictable as usual, a sideways behavior. For the afternoon, SET is to test the 1010 support area.

Also, Soros speaks on the idea of an exit plan for countries to discard the Euro. The problem lies in that the EU uses the same currency for different countries; therefore, treating these countries as if they were states and provinces when, in fact, they are not. The EU lacks control over individual countries the way a government controls states and provinces. Political and economic situations that are idiosyncratic to each countries interferes with the success of the EU. In order for the EU to function properly, countries would really need to act in accord with each other for the greater good. However, one cannot expect that to happen, since each country is ultimately looking out for their own benefit. The difference in politics, economic health, culture, and beliefs results in clashes, whether direct or indirect. Also, you have the problem of one country dragging its legs.

People are having doubts on whether or not Greece will be able to meet the conditions in paying back their loans. And they should. Greece suffers from a crucial problem of being "stuck in the middle". This refers to Michael Porter's theory that a company must choose whether or not they will be a niche producer or a low-cost producer. Being neither results in being stuck in the middle. Greece doesn't have a large poor population like many of the developing and underdeveloped countries, which means that it isn't likely to become a low-cost provider. At the same time, it does not have an advance enough infrastructure to really do very high-tech or niche products. This, in turns, causes Greece not to have any real competitive advantage. Either way, unless they are able to somehow become the main supplier of a new product, commodity, labor, services, whetever, their growth outlook is mediocre at best. (Greece's real GDP growth (adjusted for inflation) from 2003-2008 was roughly around 3.70%, whereas projection for 2011 is -4.8%.) I guess this is what happens when you have a mediocre economy with no real edge and slow growth, trying to recover from a global financial crisis. I don't think this is a problem that plagues only Greece. There are many countries becoming this way. Hell, even the US can't seem to recover.

You can always count on me for overcast skies.
Good Afternoon.