Some Folks Are Experiencing Difficulty Today, . . .

. . . as their creditors fear they may not be paid back.

Like the Nation of Greece where the country’s two-year yield—highly sensitive to investor fears of default—soared above 35% today, a rise from 20% just last Friday.
The banks are closed in Greece today, . . . well, in fact, all this week; many Greek ATMs ran out of drachmas over the weekend, as the citizenry scrambled to get as much cash as they possibly could.

And the Commonwealth of Puerto Rico where the PUERTO RICO COMMONWEALTH GOVERNMENT DEVELOPMENT TAXABLE SENIOR NOTES SERIES B with a coupon rate of 4.7% will yield the patient investor 84.4%, if he will hold onto them until maturity in May 2016, . . . and if the Commonwealth of Puerto Rico has the money pay them off then.
The good news on The Island of Enchantment is that it is not lawful for the Commonwealth to default on its bonds; the bad news is the Commonwealth is going to default on its bonds.

Investment Tip of the Day: DonDiego counsels even the most gullible investor to not purchase these notes.

DonDiego recalls Margaret Thatcher one-time Prime Minister of Great Britain who remarked "The problem with socialism is that you eventually run out of other people's money." Turns out, it's pr'bly true.

DonDiego suspects defaults on sovereign notes are likely to become more common over the next several years as some profligate Governments follow a similar financial path.
So, be careful out there, . . . eh.

The Greek financial dilemma makes me chuckle. The citizens have voted against balancing the budget, and they next demand that others give them money to cover the deficit. Is DD mentioned above, socialism comes to a grinding halt once other folks money runs out. This is indeed these case in Greece.

when socialism evens everything out, so that everybody has what everybody else has, and nobody has anything unless everybody else has it too, no frills and no extras, who foots the bill for something else?

Socialist Greece is squabbling with Socialist Germany. One socialist country pays its bills and one doesn't.

Socialism didn't cause Greece's financial problems. An attitude of "deficts dont matter" did.

Wait - where have I heard that phrase before?

I had an economics professor in college who consulted with the US government and many international countries on budgetary policy. This dude was considered an economics big shot. He argued that running a continuous deficit of a certain size was good. I argued that running a deficit every year for eternity has a mathematical certainty of financial collapse and economic failure.

How can anyone (with a straight face) argue that a plan to always run a deficit isn't certain to eventually implode?

What failed was the austerity measures imposed by foreign creditors. The austerity fetishists said if you impose these austerity measures the confidence fairy will reward you with economic growth. Instead of growth the Greek economy has shrunk by 25% since 2010 and their unemployment rate also sits at about 25% today.

Instead of admitting their failed polices led to these problems the austerity fetishists are insisting the only way for the Greek people to experience economic pleasure is through even more pain.

Creditors are not responsible for Greece's fiscal irresponsibility.

Greece has been plagued with unsustainable policies for years - and it is impossible to get elected into office in Greece unless you support them. I don't feel bad for a country that allows people to retire at 50 with a full pension.
75% of Greek Pensioners retire early

If the people of Greece demand these policies stay in place going forward then they should figure out how to fund those policies themselves instead of asking Germany to do it for them.

Those are the mistakes of the past. Greece wanted a stimulus package to fix their economy. Instead an austerity package was imposed with predictable results. Paul Krugman has wrote extensively on this:

His Latest:
https://krugman.blogs.nytimes.com/2015/06/28/grisis/?_r=0

The Dow Jones Industrial Average was down 350-points today, jes' 'bout 2%.

This Greek thing and this Puerto Rico thing and some other things might be a drag for a while. Chinese economy looks to be a'slowin' too.
And them there ISIS fellas seem to be winning; apparently ISIS is actually governing the city of Ramadi and things are functioning OK; DonDiego wouldn't be surprised if'n they become at least a semi-permanent fixture in Eastern Syria and Northern Iraq.
And mor'n likely them there sanctions against Iran are gonna be a'lifted soon, . . . in exchange for their promise not to make a nuclear bomb, which they will proceed to do thereafter.

Buying stocks might not be a winning strategy for a while.

As has been noted in several posts within this Forum over the past 4 or 5 months DonDiego's been lightening his stock positions, . . . pr'bly only 'bout 25%-or-so invested now. The stocks he's been a'selling were down today anywhere from Exxon off a mite o'er 1% and Anheuiser-Busch down o'er 3%.
Luckily his major remaining holding was up 3%; it's something of a hedge against hard times and/or inflation.

DonDiego can't say what'll happen next, . . . but he's a'supposin' the stock markets'll be lower by year end, . . . 'less the Government keeps up with Qualitative Easing and/or does some other fancy manipulatin' to keep things up.

And when/if the Central Bank lets interest rates rise, . . . whew-ee! Things'll not go well when that happens.

I bought stocks today. Hoping for a rebound tomorrow.