Oh Wait, Things *Aren't* Alright

So, the market sold off significantly today, allegedly due to fears that the aid package wouldn't help Greece. Really? So, yesterday "the Street" thought things would all work out just fine, but then over Cheerios this morning they all realized "oh wait ... we're all doomed".

I actually don't blame the financial media so much for this. They have a job to do, and their foremost job is to provide answers (or something that looks like answers) for the ever-present question "Why did the market go up/down today?" Nobody ever seems to need to explain a flat market ... though I feel like those are the days when we hear about "battles" between bulls and bears over the latest worries and wild hopes.

Look, Greece is bad and it's going to get worse. The "aid" package isn't going to help and will probably do little more than roil the markets and prop up some European banks long enough for them to move that Greek debt off their balance sheets in a way that doesn't totally devastate their earnings and capital ratios in the short-term. Longer term, there's just no realistic chance that this package spares Greece from default.

And that's okay. Default, like bankruptcy, should be the logical consequence of a series of bad mistakes. It's the ultimate expression of "okay, we eff'ed up ... now we need to start over". What is almost always worse, though, is what people, companies, and nations will do to stave off that bankruptcy. When people are desperate, they get dangerous. Suddenly, stupid risks and ridiculous plans seem reasonable, because the ultimate consequence (bankruptcy/default) looks the same to them. So, they flounder around and make a mess of things for everybody else because they see their downside as being limited to that worst case scenario.

As I said before, I'm not *that* worried about Greece. I'm getting hosed on my Societe Generale stock, but then I have been for a while now anyway. And I still hold that stock because I believe the company will ultimately recover and deliver value in excess of its current price. But will Greece crush us? No.

Now, if Greece, Spain, and Portugal go down, we have a bigger risk. But that's another post for another day.

In the meantime, the stock market was overbought anyway, so we have a market in search of an excuse to go down. The Greek problem is a good enough excuse for now, but even if that problem magically went away, another one would suffice.

Keep holding good stocks and hope for the best. It's dangerous to be blindly optimistic, but there's not a lot of profit in pessimism either.

(Disclosure - I own Societe Generale stock. God help me.)