The Eurozone continues to be the dominant factor in most market activity. This week after the Moodys previously announced downgrade of Spanish Banks, Standard & Poors announced additional Spanish bank credit downgrades. The ongoing credit crisis in Europe is accelerating rather than abating and the ramifications of a Greece expulsion or voluntary withdrawal from the Euro is of great concern. The removal of Greece could affect the overwhelming debt already incurred by Greece and which cannot be serviced by the Greek economy. It will also raise additional concerns that Spain and Italy may be next in the "limelight" affecting investor psychology. As I stated in earlier commentaries providing additional bailout funds to Greece in order to keep them in the Euro is tantamount to "throwing money down a well". Adjusting the total debt or reducing interest has no real value to the International community since Greece cannot, based on is current economy, pay it back. I do not believe in artificially supporting a situation that cannot have positive results in any "stretch of the imagination". Stop "putting lipstick on a PIGG". Commodities closed the week with the biggest weekly loss in five months tied to the Eurozone concerns and slowing global economic growth. Now for some actual information ...even though without clarification of the Eurozone situation markets will continue to move "aimlessly" eluding reality or the possibility of intelligent market analysis........

Interest Rates:

June Treasury bonds closed at 147 23/32nds, up 7/32nds as treasuries remain the "safe haven" for investors globally. Concern that the Euro could be "dismantled" with the removal of Greece and the growing problems Spain and Italy. We have been warning investors of the potential ramifications of a Greece withdrawal from the Euro and what it could mean to global banking systems when, not if, they default. Bonds have breached what I expected would be the higher end of a 135-145 range and have traded as high as 148 before settling back to closing levels. The yields on the 10 year and 30 year paper have declined substantially to 1.746% and 2.846% respectively and are at record lows. Unfortunately, even with low rates, the U.S. economy is slowing as the availability of "qualified borrowers" is also at a low given the concern that the U.S. housing industry may have to absorb a million or more mortgage defaults and foreclosure threatened homes. I continue to view treasuries as a trading affair and would not take any net positions for now with the exception only of options.