MS, BAC, EBAY, VMW and FFIV are doing well post earnings. Actually, as a whole, about 80% of companies are beating expectations. Nonetheless, this game isn’t about earnings, unfortunately.
When I woke up this morning S&P futures were +9 and Europe was up more than 1%. By the time I sat down to eat, things reversed, spearheaded by the drunkards in Spain, completely voiding the rally that had sustained while I slept. This is terribly chagrining, especially since the root of the problem isn’t going away.
When LTRO was launched, markets rejoiced because Greece and the European banks had been saved. But now the bond wolves are clamoring for Spanish and Italian blood. I’m afraid they will not stop until they get it. Now the end result will likely be the same: more bailouts, more liquidity. However, before we get to that, we need to deal with now.
Spanish yields and CDS are creeping higher and their fucking stock market is shit. It’s only a matter of time before this becomes a major topic of discussion, just in time for the cocksucking month of May.
Yes, it’s true, I was buying MLNX sub $20 and was praising them before Ellison bought in. It’s also true that I sold out, like a pussy, before the run. There is a conundrum when dealing with the complexities of macro market timing: you miss out on good ideas due to fear. Well, the only way to deal with that is to accept volatility and potential downside in favor of dollar cost averaging. The only way to effectively conduct such a strategy is to possess ample cash reserves, especially before the market declines–something I lack.
In short, the game has changed and the hunters have become the hunted. But it’s important to remember, good ideas are always worth their salt. A delicate balance must be adhered to in order to participate in the upside, while trying to avoid the murderholes of the market.
Remember what I said: the best time to buy a winner is anytime.
http://www.youtube.com/watch?v=-MzrAGZHDvo
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france to leave the euro?
no way
re:http://moneymorning.com/2012/04/18/france-may-be-domino-that-causes-euro-to-collapse/
I understand the political landscape may change and that may be the trigger that brings about the end of the Euro. But it’s never going to come down to whether or not France, the worlds sixth largest economy, gets a bail out. The Euro will be long gone before that happens. Regardless of what the writer may think, the idea that a French bailout would be considered before a bailout of the worlds 12th and 8th largest economies happens, is pretty freaking slim.
At least the market seems to be recognizing problems for what they are much faster than when this whole thing started. It’s not like they’ll be able to kick this can for 2 years, like they did for Greece.
Hopefully what used to take months the market will now want done in a few short weeks.
I want to be a Bond wolf.
cougar, merlin, maverick and goose…
is spain too big too fail, too big too save? the LTRO gave liquidity, but not growth.
my thoughts as this plays out are, germany and france will have to bail out all of europe. but they have their own problems. if your neighbor needed help from drowning, would u save him if you only had a 1 man raft?
I don’t know about Spain but Italy will probably be too big to save. Both are obviously not too big to fail because they both are presently in the process of doing so.
It will take concerted effort by more than just the Euro’s to “save” Spain. Others will have to get involved via IMF. Print. Print. Print. Inflate. Inflate. Inflate. The only other option at this point is to allow deflation and reset to run its course and that would not be pretty.
neither option is good. in my opinion.
My understanding of it all is that the bigger the country the more complicated the problems.
Spain and Italy’s problems go beyond “we’ve spent more than we could afford.” Spain has serious labor market issues that make it very difficult to hire and fire workers. These things take time to properly fix, but it looks like the markets are demanding solutions at a faster rate. This is a recipe for politicians attempting sweeping reforms that try to patch over everything aka swinging for the fences.
In the end it will come down to printing, until someone runs for election on the premise of “fuck you and your austerity, we want out.”
Spain is reaping the whirlwind they’ve sown over the last forty plus years.
The collapse of the European states’ economies would occur in unison were it not for the differing sizes of their respective instituional capital bases.
For example, the Netherlands — the original capitalist economy, despite it’s arrant (and errant) socialism today?
They will be the last man standing, IMO, maybe even over Germany. Deep, deep, institutional capital base, despite the current statism.
(Note, if wearlth confiscation becomes de riguer, then all bets are off)
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Robert in Canada | April 18, 2012
In spite of the absolute proof that left wing policies lead to social and economic ruin, a lot of people support left wing politicians.
They just refuse to accept that failed states like USSR, Greece, Spain, Italy, Argentina, Cuba, Venezuela, Zimbabwe, etc. became basket cases due to left wing policies.
It’s kind of amazing, isn’t it? But it’s just cognitive dissonance.
People tell themselves “oh, we’re not socialist…, we are NOTHING like Venezuela…”
Of course, at one point, not even Venezuela was like Venezuela…
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Sitting in the tall grass, Spain have played the waiting game to assess how they would negotiate with the ECB/France/Germany. Call it manufactured or whatever you want but Spain was always going down this path. They will now be better placed to get the financing and bailout conditions in order to help them recover. Well played Senor Rajoy
All countries and individuals with debt should just announce “we are canceling debt.
What the fuck are the bankster and bondholders and mortgage holders and derivative owners gonna do about it?
The global debt problem is so easy to solve.
Then when they need credit again?
Right.
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bottom line is that you need growth, and by the looks of it, its not coming. with 10y in the 6s 1% GDP aint gonna cut it.
Its a matter of time, they will continue to kick until they cant and than its a global restructuring.
I still don’t see how they can let this market fall much and admit the failure of their policies. There is a recovery goddamit!
They cannot let the people know it is based on money printing and BS.