Greek Fire, Part 20

Looks like another bad day on Wall Street ahead.

Stocks slid for a sixth day and U.S. index futures declined as the euro weakened against the dollar. Oil fell and palladium extended its losing streak to the worst since July.

The MSCI World Index of 23 developed nations’ stocks fell 0.5 percent at 11:45 a.m. in London for its longest losing streak in four months. The Stoxx Europe 600 Index dropped 0.5 percent and futures on the Standard & Poor’s 500 Index retreated 0.6 percent. The euro weakened against the dollar, trading near the lowest level in four years. Palladium lost 7.5 percent, extending its six-day slump to 22 percent.

European finance officials meet in Brussels a day before the German parliament votes on the country’s share of a $1 trillion bailout to backstop the euro in the wake of a worsening sovereign debt crisis. Stocks plunged yesterday as Chancellor Angela Merkel’s unilateral effort to control what she called “destructive” markets rattled investors. The German ban on some bearish bets against financial companies and government bonds wasn’t replicated in other European states.

“My major concern in Europe is that in order for the zone to start kicking in you need to see some serious austerity,” said Jonathan Plant, a strategist at Liberum Capital Ltd. in London. “It goes back to whether stocks are cheap, and they are just not cheap enough for me.” 

After stocks went up for no apparent reason over the last 12 months, reality is starting to kick in.  Tyler Durden has the real story however:

The last time Greeks were shown to be storming their parliament on live TV, we got a 1,000 point drop on the Dow Jones. Today, another 100,000 protesters of austerity are expected to hit the streets as the entire country is essentially shut down. From the BBC: "Much of Greece's transport network has been immobilised, as trade unions stage another 24-hour general strike against austerity measures. Ferries are tied up in port, railway stations shut, and the Labour Ministry occupied by communist protesters. Organisers are hoping that up to 100,000 people will join protests on the streets later. There are fears of renewed violence after protests in Athens two weeks ago led to the deaths of three people. The country's main civil service and public sector unions say they represent some 2.5 million workers. "People are bleeding financially but they will participate in the strike," Ilias Vrettakos, a senior member of the ADEDY union, was quoted as saying by Reuters."  

It's going to be a really, really bad day in the markets, folks.  And there's going to be a lot more of these bad days ahead.  The Greek Fire is now burning through all the Eurozone.  Germany has already been scorched badly, and the euro itself is providing ample tinder to keep the Greek Fire burning for a long time.

It's going to be a long, hot summer.