Global Macro Perspectives
I have to ask why? This cannot end well. Finacial TImes story: Greece set to return to finance markets. Greece is preparing a make-or-break return to the financial markets next month as it plans to raise about €4bn in its first borrowing attempt since last month’s bail-out by the European Union and International Monetary Fund. […]
After frustrating American and Asian sessions, looks like the markets have calmed down. After opening sharply lower European equities are trading at -0.6%. What to say on the U.S. action yesterday? Maybe only that the technology has evolved since Black Monday in 1987 and the trading programs were shut down (changed) very fast enabling the […]
Looks like politicians have managed to calm the markets down with words of support for a Greek bailout. Apparently the newly issued debt will be junior to the one outstanding. There is even some talk that the program would be a fully funded 2-year program. This means something like $100 – $150 billion. Greek government […]
Well, the Greek government bonds are getting destroyed, Portuguese follow suit. European politicians have to send some kind of message of reassurance to the markets otherwise we could be bound for a quite of a collapse. Chart 1. Greek Government Bond Yield Curve Chart 2. Portugal Government Bond Yield Curve
All the fuss today is the markets realizing that EUR 45 billion is not enough to save Greece from debt restructuring. Looking at the yield curves markets believe maturities shorter than 2 years will be paid in full. Longer duration holders could see some principal loss in debt restructuring. Portugal off-course followed Greece lead. Markets […]
Well, the time has come to put the money on the table. The problem is that the amount promised has to probably be multiplied by a factor of 3 to be enough to finance Greek budget deficit and refinance Greek public debt, to only subsequently result in an wasted time and money. Again, only principal […]
Apparently the agreement on potential bailout of Greece has been reached. Bloomberg story: Sarkozy Reverse on German IMF Demand Caps Losing Week. The whole story with the Greece is stupid, they have not defaulted jet, so they do not have to be saved. Only thing it could help them in the moment is an EU […]
Greece government introduced yesterday a new austerity package and a tax increases. The value of the package is 4.8 billion of EUR. Half is aimed at spending cuts and half on tax increases. The tax increases will only ad to the dead spiral decreasing economic activity, and then again decreasing tax revenues… But that is […]
The initial jobless claims positively surprised declining 40.000 from the prior week and reaching 440.000. The consensus was at 467.000. It looks that combined with census hiring the positive cold continue. The markets yesterday closed positively yesterday on news that E.U. will back up Greece. The statement was obviously a product of lack of consensus. […]
The equity indexes moved higher on the statement by EU officials and European politicians on Greece. In short the statement offers no concrete solution; it orders Greece to cut it’s deficit; to solve the “statistical measurement problems”, even calls the IMF… A mess and we move higher on that…
The quantity of news articles and blog post on Greece reached greatest number ever. Too much of attention to a issue that is important to the markets only if we look at it as a warning signal. The U.S. trade deficit unexpectedly rose to $40.2 billion vs. $35.7 billion consensus and $36.4 billion November. Well, […]
Markets still focus on Europe and in particular Greece. There are some rumors today that Unicredit and Deutsche bank have ceased to accept Greek government bonds as a collateral; there are also some rumors that the capital flight from Greece is reaching alarming levels. It looks the Greece story is approaching its climax and we […]
The market looks like today is just an intro. The 1.085 level broken, and technicians say the next target is 1.035 (I don’t believe in that, but since a lot of investors looks at that…). Beside bad initial jobless claims (480.000 vs. 455.000 consensus and 470.000 consensus) the main theme is PIIGS (Portugal, Italy, Ireland, […]
Equities We have seen a meaningful correction in equities in recent couple of weeks, we have a market that fails to react to presumably good news, we have low levels of cash in equity mutual funds and still high number of bulls; high beta stocks suffered massively; For me this is a setup for reversal, […]
Record Bund/Greek government bond spread is crucial market moving factor today. A lot of rumors on the issue. Bloomberg story: Papandreou Says Rumors Hurt Greece, Not Seeking Aid. As I wrote before I expected a meltdown before this weeks bond issue, but apparently they manged to sell the bonds, but the pain continues… Durable orders […]