What's Important in the Financial World (8/22/2012)

Trading Volume at Five-Year Low

CNNMoney is the latest media outlet to acknowledge the fact that trading volume is light. In their estimation, it is at a five-year low. There could be several reasons for this. The most obvious is that it is summer and many buyers and sellers, both individual and institutional, are away. The explanation probably goes deeper than that. The most convincing argument is that individual investors have watched the initial public offerings and insider selling debacles at Facebook Inc. (NASDAQ: FB). These same people have witnessed what were considered premier IPOs, like Groupon Inc. (NASDAQ: GRPN), unravel. According to CNN:

What’s more, the unusually low volume comes as stocks trade near four-year highs, raising concern that the recent move higher lacks conviction, and it’s just a matter of time before markets are mired in a sell-off.

It is always just a matter of time before a sell-off. But, as the harsh economic news that is likely to come out for the balance of the year is released, volume will have nothing to do with it.

Nokia Late to Launch Windows Phone

Nokia Corp. (NYSE: NOK) will release a Microsoft Corp. (NASDAQ: MSFT) Windows Mobile powered phone on the Verizon Communications Inc. (NYSE: VZ) network before the end of the year, according to several rumors. The launch is very late. The Nokia alliance with Microsoft was meant to give the phone maker an entirely new line of products. It was meant also to boost adoption of Microsoft’s operating system, which has been hammered out of the market by Google Inc.’s (NASDAQ: GOOG) Android and Apple Inc.’s (NASDAQ: AAPL) iOS. Scores of Android-powered phones have been launched since the alliance was announced. And Microsoft has moved on to the release of its own Surface tablet and an alliance with Barnes & Noble Inc. (NYSE: BKS) for the software in its e-reader the Nook.

Greek Prime Minister Wants More Time

Greek Prime Minister Antonis Samaras says he needs more time to repair the financial and economic damage done to his country, or by his countrymen, over the years since the recession began. For some reason, be believes that time will help reverse the nation’s GDP plunge, which shows no sign of ending, or a 20% plus unemployment rate, which will not change because businesses in Greece cannot afford to hire workers. Samaras told Germany’s Bild newspaper, according to Reuters:

All we want is a little more air to breathe to get the economy going and increase government revenue. More time doesn’t necessarily mean more money.

What economist believes that without stimulus and a postponement of austerity that Greece has any chance to recover? Either action takes money, in the form of dollars invested in the economy or in larger deficits that will need to be funded in later years. Samaras meets with Angela Merkel this week. The German leader has become increasingly frustrated with the progress in Greece. The “more time, but not more money” argument will not wash with her.

Douglas A. McIntyre