Don't Worry, Be Happy
Research for Online Investors

by John Dalt

10/12/11

Slovakia voted down the enhanced European Financial Stability Facility (EFSF) yesterday.  The markets hardly flinched.  We didn’t get final word on the defeat until after U.S. markets closed.  But it didn’t matter.

CNBC carried a report mid-day about the Slovakian vote.  The parliament was expected to defeat it, out of political expediency, but believed it would pass before the Eurozone leaders met later this month.  And, if tiny Slovakia didn’t pass the authorization to enhance the EFSF, the European Commission could “work around it.”

How do you “work around” a requirement for unanimous agreement?  Like we have said before, bureaucrats and politicians will spend other people’s money (OPM) to further their goals.  The European Commission must do everything in their power to ‘fix’ the Greek problem, or they become irrelevant.  That is the worst thing that can happen to a bureaucrat.

Slovakia is one of the eurozone’s smallest countries.  They are being asked to underwrite more than $10 billion dollars towards the enhanced EFSF.  That is almost 12% of the country’s annual GDP.

Richard Sulik, head of an opposition party in Slovakia said “A few years back, we survived an economic crisis.  With great effort and tough reforms, we put it behind us.  Today, Slovakia has the lowest average salaries in the eurozone.  How am I supposed to explain to people that they are going to have to pay a higher value-added tax so that Greeks can get pensions three times as high as the ones in Slovakia?”

Slovakia’s average monthly wage is about $1000 per month.  We don’t see the rational either.

Twenty-five years ago, I stopped in a 24-hour grocery store to get a pop and candy bar at midnight.  I had worked all day installing a new retail store and was bone tired.  My wife and kids did without as we built our business, and I was on the road three days a week.  A woman in front of me was checking out, buying steaks and every expensive kind of food, and paying with food stamps.

It made me angry.  I commented my family didn’t eat that well, and here I was working long hours away from home to provide for them.  She shot back that her husband had left and she was dependant on food stamps to feed her children, she deserved and needed the help.  I told her my wife was smart enough not to marry a worthless man that would leave.

Greece has been living "Don't Worry, Be Happy" too Long.

This is how the Slovakian’s feel.  Why should they work hard to pay for someone in another country to enjoy retirement, or a cushy government job?

However it all works out now, it is going to blow up before it is over.  Either Greece will pay now for their free spending and easy financial controls or other countries will pay for Greece’s mistakes.

Our Long-Term Portfolio subscribers are selling into this rally.  We bought last week, and now we are selling.  If you would like to have a little help with your investments, why not subscribe and use our system to protect yourself?

The mailbag:
Florida now requires drug testing to receive welfare, great idea.---Long-Term and Buy, Sell, Hold subscriber R.A.

John’s reply: This ought to be a federal law for any and all benefits, ie: unemployment, social security, medicare, welfare, food stamps, aid for widows and infants, earned income tax credit, and on and on and on.  How about drug testing for Obama’s Czars?

I sure could have used your “Hidden Hand” observation last Friday.—Long Term subscriber G.O.

John’s reply:  I may be late, but always ready to identify the corpse.

The information presented in this newsletter is based on generally available news releases, corporate filings, current events, interviews and the editor’s opinions.  It may contain errors and you should not make investment decisions based solely on what you believe you have read here.  Do your own research, it is your money.  If you lose it, it is your responsibility, not ours or your grandmothers!  The editor may or may not have a position in any securities discussed.  The editor may have held a position in a security earlier, or in the future.

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