It was reported this morning by Sky News that the G20 is now preparing for a Greek default, AFTER Cannes. How gay. They (Greece) will likely get stop-gap funding, then an “orderly” default. I am not so sure about that.
The only silver lining from last week is Italian and Spanish yields didn’t go parabolic. Italian yields are 5.60%ish and Spanish are around 5.2%. Both high, but not signaling catastrophe yet. My guess, the ECB has given up on Greece and is trying to ring fence Italy and Spain. Should the contagion spread to Italy and Spain, you better get to cash an/or net short quickly. Also, keep a close eye on French and German banks, all showing signs of extreme distress.
If you want to do some homework, go out and find who has the most exposure to Europe and set up some short sales. This feels like the 3rd inning, so there is still plenty of time to play “the next Lehman” game.
UPDATE: The drama continues. It appears Europe is preparing a “multi-trillion” dollar fund to crush the crisis, all backstopped by Germany. Naturally, this is all talk and we know how the Europeans love to drag their feet. This would likely result in a Greek default and a complete ring fencing around Italy and Spain, in order to stop the contagion. Under these conditions, I’d expect stocks to gap up sharply, as the global money supply increases.
If you enjoy the content at iBankCoin, please follow us on Twitter
http://www.telegraph.co.uk/finance/financialcrisis/8786665/Multi-trillion-grand-plan-to-save-the-eurozone-is-being-prepared.html
Thanks for that link.
the least I could do.
The Bearded Clam is going to need a bigger boat.
http://youtu.be/8gciFoEbOA8
too funny
it already loses all credibility in the first sentence…
European officials are “working” lol
btw:
“The EFSF’s sole purpose is the financing of states and that’s in order as long as it’s done via the capital market. If it’s done via the central bank it constitutes monetary state financing, which is forbidden under European Union rules.” — Bundesbank President Jens Weidmann.
2 trillion dollars fire power, without any need for govnmt approval
FIG
I thought it was funny that there are immediate announcements about a multi trillion “Dollar” plan to save the “Euro”
i don’t think my euro short is safe anymore, lol.
shouldn’t euro now go down? i mean, we do know, where all this gazillions of euros will come from, right?
face rip for euro shorts
Last weeks global loss = 3 trillion
Entire Greek funding deficit = 200 billion.
Much to do about nothing. Unless you are an overexcited, impetuous investor.
This is not about Greece.
Please explain.
it’s pretty much about itly and france. 2 trill would buy greece 5 times over and still have something left to tip the waiter. they are trying the herculean task of keeping itly and france from falling into the vortex of collapse. greece has already collapsed, the authorities just havent put their wax stamp on it yet is all
Many European banks have high exposure to Greek bonds with very high leveage. A Greek default means they go under. When they go under then their share holders and bond holders are in danger of going under, thus the term “bank contagion” that’s bandied around.
The bottom line is that there is so much irresponsible leverage around the world that even a “minor” event like Greece defaulting could lead to a global leverage uwind resulting in a massive crash in all assets.
thats why everyone and their grandma went to cash. the great washout.another scam like head fake tuesday.the so-called “global” economy experiment is,in itself is a washed out experiment, along with the euro dollar. just cant wait for all the unintended consequences from a poorly designed and executed plan.
Are you expecting a gap up starting Monday?
I would be a seller on a big time gap up.. This Greece news is 2 years old. The real problem is our domestic economy which can’t be solved until after the elections
i would respect a big time gap up if eurozone really decides to do something. DAX was at 7300 at the end of July, two months later, it’s at 5200. If it decides to rally and rally sticks, it could easily go up 500 – 1000 points, no biggy. Which would have some implications for the US markets as well. ESTOXX50 is also at record lows, plenty of space up there. I do not know about the EURO. If the news are bullish for EURO, which right now is at record short interest in the EUR/USD pair, then… Well, you know what happens, when E/U goes up.
gsavli: just curious when you think this gap up would start being that the next meeting to decide this is in November
i was just musing about the possible bullish scenario and what-if it comes into play. i am otherwise bearish as fuck. that’s one more reason to look for bullish scenarios – to offset the bias.
Definition of “orderly”: Pretending we know what we are doing and have control of the situation. See “spin” and “bullshit”.
Or buy TLT.
Not this week, HH. The market may like the bullshit Euro plan, even though it’ll get kicked around for a few more months and it’s still bad news in the long run. Plus, your TLT just went parabolic. Aren’t you worried about a double top there, HH?
I am a man of conviction, I am not worried. Perhaps long bonds will correct, but the secular bull market in treasuries is not over yet.
If things are bad, wouldn’t long volatility, be a better play? TLT pricing in 2008 like FUCKERY while the Vix is only pricing in 2010 like decline. Sounds like a pair trade of long VIX short TLT might be worth thinking about.
A bet on treasuries is a bet on the U.S. Budget. If we go into a second depression, what do you think is going to happen to our already-shit budget?
Soon, treasuries will be an epic short. Very soon….
I am missing the thumb “button”. Up in this case.
I’ve heard this all before. All your mustaches will be mine, very soon.
Hugh:
I0 year is below 2%. there’s not much more they can go and the US is NOT Japan with internal financing.
What happens to silver and gold now, or is it anyones guess?
Silver goes way higher–killer squeeze on Monday.
Here’s what I think happens to silver in the near term, at least.
Amusing vid on the tax talk, as well.
______________
Read the article carefully folks. The hope would be to unveil the plan and stem the crisis at the G20 meeting in early November. There is no plan today, nothing agreed to at all just a lot of pressure on the EU to fix the problem. Between now and November there is a lot of road to travel.
And we will see what we saw before. “Journalists” trying to explain the movement of the market with gems such as, “market gains relief as investors hope for EU intervention.” “Market regains confidence on hopes of EU monetary intervention” Sound familiar?
“Market edges higher on hopes of QE3” This was what we were told until Bernanke announced it was a no-go.
QE3 and more …
LOL
“Stocks jump on hopes for a Europe fix; Dow up 272 ”
http://www.forbes.com/feeds/ap/2011/09/26/general-industrials-us-wall-street_8701682.html
The easy solution to the Greek Crisis is to send in an atomic bomb, killing everyone sending the value of the country to zero, and nuking all the major bond holders of Greek debt.
Either that, or have Gillette make a 20 blade razor and start mandatory testing by Grecians.
hey,is it true that eva brauns snatch, tastes like braunshwieger
And how can a tasteless fucker like you write a question like that?
You libs have always loved Germans (and Hitler).
Treu.
Aside from Marx’s works, the Progressive movement derives largely from a number of 19th century German academics and civil service advocates that fashioned Otto Von Bismark’s state — the same state that started two world wars.
Well into the 30’s, America’s leftists were lauding the Nazi Party right along with the Bolshies in Moscow.
________________
Don’t be a donkey–i.e. republican;) Actually, libs tradition stems from the same Enlightenment ideals, mostly French, that formed the US. So cut the nonsense!
And, while you’re at it, go read some Adam Smith and see what he has to say about progressive tax rates. Seriously, go look. Do you want the chapter and verse? I trust you know your way around Smith, that German bureaucratic academic who flamed nationalism in Germany and indirectly led to two world wars.
You’re a smart man, Jake. Just take off the blinders.
Wrong. The ideals that formed America were English… (Adam Smith was English, dolt). The other great philosopher behind the American revolution was John Locke. There couldn’t be anyone more opposed to nasty French philosophy like that of that nihilist asshole Rousseau, who was the root cause of the BLOODY French Revolution, which has been the basis of every other bloody revolution since, including your bloody statist Bolsheviks and their kin.
Learn your history Spooks, or you WILL get schooled.
___________
Before I’m killed by the Scots, I’ll admit that Smith was a Scottish moral philosopher, not English.
And you can quote him all day, Spooks. All fucking day.
_____________
WTF?
The Frogs? The only thing the Frogs ever did other that surrender since the 1800’s is give us modern day communism from their Revolution.
That’s it and perhaps a youthful Brigitte Bardot
Nevertheless, since we’re talking about the famous Scotsman, I recommend Book V, chap. 2 “Funds of the Sovereign.” But just to lay it out quickly, Smith proposes four rules for a fair tax system: first and foremost, proportionality to one’s income (i. e. a progressive tax, not a flat-rate), transparency, regular and reasonable collection, and efficiency of collection.
Where did ben Franklin live? Not London? Paris, pal, and was the fre chief that helped us out.
Locke was a primary influence on the French, but he was seventeenth century.
And if don’t like Rousseau, you should look into smith’s reading if Rousseau. Major and direct influence there.
Seriously man you’re an amateur philosopher, and the Rousseau led to statism is nothing but stupid isaiiah Berlin nonsense that was debunked in the sixties. Time to update your readings.
What’s even funnier is that current antistate ideas on the right all derive directly from Rousseau, who believed in small local govt. Direct influence on Jefferson. Seriously, you’re bit even in the ballpark.
In any case, all of the freedom of speech and rights of the individual come from
The 18th century. What comes from Locke are property rights, but there he’s only one of many. Modern “classical” economics and theory of the markets come from french liberal theorists, the physiocrats… These are the true progenitors of today’s republicans. Smith was far closer to those you call the left. I’m
On my iPhone, but I’ll have to dig up smith on taxes for you.
Spooky, facts are not relevant to political ideologies. Political ideologies are based on perceived self-interest and one’s sense of identity. Facts will always be selected, re-interpreted, denied, or altered in order to serve the main thing– the ideology– which tends to be central to a person’s identity and to their inclusion in the group they identify with.
On the Internets, we don’t know who each other are, so it’s hard to know what their political self-interest would consist of. But it is right there all the time, behind the discussion, completely controlling it. If e.g. Jake Gint is Glenn Beck’s son or Dick Cheney’s nephew, do you really think you are going to persuade him of anything by using facts?
Good point!
Jake Gint is Glenn Beck’s son??? Omg!
That was just an example of how we don’t know who each other are on the Internet. I have no idea whose son he is.
But I do know that one’s family, church members, or other associates make a big difference in one’s political views. And folks go talking on the Internets about politics as if family and associates don’t make any difference– as if facts were more important than that. Not so.
I can see it now as babylon crumbles the euro crum bums will be sipping wine and eating crimpets waiting for a stupid film to begin in cannes
rofl
You sound like the first couple of pages of Mark Steyn’s new book: “After America.”
He was talking about how much easier it is to meet the end game while in a country rich with centuries of cultural and physical capital. This is the source of the Euros’ most glaring blindness.
___________
“Complacency is a state of mind that exists only in retrospective: it has to be shattered before being ascertained.”
Same dude that said this:
“You can always count on a murderer for a fancy prose style.” Perhaps, The Fly???
THIS IS A FUCKING HEAD FAKE IF IVE EVER SEEN ONE.
I’m starting to think that as well. I ask myself, WWRRD? Unfortunately, I have no fucking clue what Rick Ross would do.
Rick Ross might go to Houston’s and have a cheesburger with fries, barbeque pork ribs with loaded baked potato, side of iron skillet beans, a full size traditional salad to keep it healthy, and finish it off with apple walnut cobbler topped with ice cream. And take a warm five nut brownie home for a snack later.
(thumbs up)
“fuck you, you’re dead” fashion. It’s one thing to be oversold, but another to be dangerously oversold. The market is whispering something to us, ever so quietly.
where have i read this before ?
Ominous glitterati missed my gin tonic i’m wrong about everything always. Milsap my funk! drinking money can be an underwhelming experience.
I’m thinking the Euro’s have been on the phone to China seeing how much of the continent they would have to sell to raise some cash. They are not dragging their feet, they are in negotiations as we speak.
If the plan goes ahead this is will avert the storm for now.
Let the Euro have it’s rally and then sell it.
US bank stocks should do okay I thinking for the next few days at least.
crashes do not happen when everyone expects a crash….too much fear … we have massive rally very soon
Who’s expecting a crash? From what I can tell people still think this is a temporary correction and everything’s going to be fine in a month. (Well in the commodities at least, if nothing else.)
Talked to a guy at work the other day, his broker is still telling him the banks are a good value buy…Long story short, alarm bells started ringing in my head and I had to end the conversation and short everything his broker told him to buy.(True story)
you talked to a guy at work and based on that conversation you shorted everything bah blah blah… great analysis
In 1987 the market lost a great deal in the 6 week period before the 10/19/87 crash.
There were a couple of down 100 point days which was fairly hefty back then.
Fear was building up and most were expecting an oversold bounce especially after a bad 10/16 Friday.
Then over the weekend Treasury Sect’y Baker started talking the dollar down vs Yen and DMark.
The rest is history.
I wonder if the French denial of a plan is the equivalent.
When it comes to the market never say never.
Great post…Hip Hip Hooray for buying weakness!!!
Interesting scenario, although the Robots won’t let that happen.
If we fell 20% in one day, the Robots would take it back up 18% the next day.
If you’ve been around longer then a cup of coffee May 6th, 2010 might ring some bells for you.
@TC – I was thinking the same thing last Thursday. The psychology seems eerily similar to 1987.
Yeah, I’m a retard but the Eurotards will bail me out next week ….and then I retire to a distinquished respectable career in online poker.
Good friend of mine who sells reverse mortgages for M&T Bank and who has worked for the bank more than 30 years tells me our economy is fucked when we discussed the economoy yesterday. However, he has no problem buying shares of MTB on any further dip because the company is profitable and not exposed to any of the concerns emanating from Europe crisis. Some banks, he said, are like babies being thrown out with the bathwater.
http://www.dailymail.co.uk/news/article-2041522/Bank-France-chief-denies-1-7trillion-backroom-deal-save-eurozone.html?ito=feeds-newsxml
euro shorts are alligator meat
Huh…why you say that?
I’m looking for 1000 pt moves starting Monday…time to break the market for everyone.
Then, maybe they’ll fix it.
Germany has trillions to toss around like Schlitz Lite. Is anybody dealing with earth bound facts? A gap up because of new found trillions. Ok, gap up because money supply expands. This sounds like yahoo message board insights. Please ban me as WTF is this site about.
ppt paying customer
Bills beat Patriots! That and the Anchor Bar wings are better than pussy! Uh, for a little while anyway.
If the euro-trash bankers blow 2 trillion Euro’s buying up Spanish\Italian\Portuguese debt, the greenback is going to fucking soar.
Im looking for a 10,000 point drop on Monday. We can’t possibly not crash on monday with news like this.
http://www.bloomberg.com/news/2011-09-25/king-abdullah-gives-women-in-saudi-arabia-the-right-to-vote-for-first-time.html
An OEW update on the Fed’s adjusted monetary base: A clue to QE
“This weekend, with the current economic situation in mind, we reviewed the FED’s recent chart to determine if it could provide any clues of another Quantitative Easing program in the near future. It did, AND MORE!”
http://caldaro.wordpress.com/2011/09/25/feds-adjusted-monetary-base-3/
“QE 3 is likely to be started in October/November and last until June 2012. An extended QE 3, or a QE 4, will follow and end in June 2013. The FED has recently provided some clues to fit this potential scenario.”
“At the conclusion of the August FOMC meeting the FED issued this in their statement: The Committee currently anticipates that economic conditions–including low rates of resource utilization and a subdued outlook for inflation over the medium run–are likely to warrant exceptionally low levels for the federal funds rate at least through mid-2013.”
“They followed up this meeting with an extended two-day FOMC meeting in September. Former chairman Alan Greenspan was also invited. At the conclusion of this meeting the FED issued this in their statement: To support a stronger economic recovery and to help ensure that inflation, over time, is at levels consistent with the dual mandate, the Committee decided today to extend the average maturity of its holdings of securities. The Committee intends to purchase, by the end of June 2012, $400 billion of Treasury securities with remaining maturities of 6 years to 30 years and to sell an equal amount of Treasury securities with remaining maturities of 3 years or less. This program should put downward pressure on longer-term interest rates and help make broader financial conditions more accommodative. The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate.”
“The first item of interest is the extended period the FED plans on holding down Fed Funds rates, mid-2013 or June 2013.”
“The second item of interest was the implementation of the $400 bln ”Operation Twist” with a sterilized approach (selling short term treasuries to purchase long term bonds) ending by June 2012.”
“The third observation is that the meeting was originally scheduled for one day, increased to two days, and former FED chairman Greenspan was invited.”
“This suggests the FED created a game plan going forward. FED chairman Bernanke certainly did not need two days, and Greenspan’s presence, to suggest and get approved a sterilized program like Operation Twist by the committee.”
“Notice June 2012, and June 2013 dates have already been mentioned. When we take into account all the various bits and pieces of data we track, we conclude the FED is likely to start a $1T QE 3 program in the next couple of months. They already know what a program like this would accomplish, in terms of the economy and the stock market. We will know for certain before year end.”
Where is TradingNymph when we need her for analysis, interpretation and prognostication?
Speak up Lady!
Here is Obama talking at the Congressional Black Caucus (Yesterday?).
What exactly is he saying about Jews, Janitors, or Jewish Janitors?
http://youtu.be/CTveeRIg2wo
I don’t remember the details, but the so called Bush tax cut actually had a bracket (maybe in the $15-25k range) that had a cap gains or qualified dividend rate of 10%. Obama, who just had 1.7 mill in income down from the previous year, is of course is trying to play games with a far too complex tax code. . Nearly 1/2 the population doesn’t pay income tax. Only moron Obama supporters believe his crap.