The post-QECB euphoria in Greek asset markets was prognosticated by those who prefer to do such things as indicative that "the markets know something," positive about Sunday's (yesterday's) election... because markets are efficient and always 'price in' events (just like 1987, 2000, 2008 etc...). However, this morning ugliness in both Greek stock (especially banks) and bond markets suggests it was nothing more than algo-driven carry-inspired short-squeezes as both stocks and bonds plunged at the open. Stocks received the ubiquitous - well it's down so we better buy 'em treatment - but even that is fading as stocks catch back down to bonds' weakness, having unwound most of QECB's goodness...
The headline-reading algos were at the top of their game this morning when milliseconds after OPEC's general secretary Abdalla El-Badri said oil prices could reach $200 a barrel if there's a lack of investment following this price slump... though failed to provide any timeline for his forecast. WTI prices jumped $1 from $45 to $46 even as El-Badri noted the market was still over-supplied by 1.5 million barrels per day.
We've heard it all: snow, cold weather, hot weather, non one-time recurring, "one-time, non-recurring" charges, and even Bush. But when it comes to "excuses" for why one is wrong, this morning Goldman's note "Central banks stall a more bearish gold outlook" absolutely takes the cake.
- Alexis Tsipras: the Syriza leader about to take charge in Greece (Guardian)
- Tsipras to form anti-bailout Greek government after big victory (Reuters)
- Tsipras Forges Anti-Austerity Coalition in EU Challenge (BBG)
- East Coast braces, flights canceled as 'historic' blizzard bears down (Reuters)
- Rebels press Ukraine offensive, Obama promises steps against Russian-backed 'aggression (Reuters)
- Syriza Victory Brings Hope for Immigrants of EU Access (BBG)
- For Saudis, Falling Demand for Oil Is the Biggest Concern (BBG)
- Oil prices fall on market relief over Saudi policy (Reuters)
This morning both the SNB stunner from two weeks ago, and the less than stunning ECB QE announcement from last Thursday are long forgotten, and the only topic on markets' minds is the startling surge of Syriza and its formation of a coalition government with another anti-bailout party - a development that many in Europe never expected could happen, and which has pushed Europe to the bring of the unexpected yet again. And while there is much speculation that this time Europe is much better positioned to "handle a Grexit", the reality is that European bank balance sheets are as bad if not worse than in 2014, 2013, 2012 or any other year for that matter, because none of ther €1+ trillion in NPLs have been addressed and the only thing that has happened is funding bank capital deficiencies with newly printed money. You know what they say about solvency and liquidity.
Amid the devastation of yesterday's Mariupol artillery strikes which killed or wounded dozens, an 'odd' clip has emerged that appears to provide all the 'proof' a US intelligence officer would need to surmise that US military boots are on the ground in Ukraine. As the following clip shows, a Ukrainian journalist approaches what she thinks is a Ukrainian soldier (since he is wearing a Ukrainian military uniform and is carrying an AK) and asked him as they run through the battlezone, "tell me, what happened here?" His response, which requires no translation, speaks for itself.
Israel indicated earlier today that it has finally had it with Obama, with the above sequence of events culminated in what Haaretz described was a reciprocal snub of the "leader of the free world" by Israel's president Reuven Rivlin, who declined a White House invitation to meet with Obama during his upcoming US trip: After consultations, Rivlin finally declined the American suggestion. His advisers explained to the Americans that the two leaders’ schedules do not overlap, because Rivlin is expected to return to Israel before Obama gets back to Washington. “At this stage, it has been agreed not to hold a meeting during his visit, due to the schedule constraints of both leaders, and that a meeting would be scheduled at a later date,” the statement said.
China has some stunningly beautiful natural landscapes, but, as boredpanda.com explains, they may not count for much when, in other parts of the country, pollution runs totally unchecked. China is very close in size to the USA. Yet, as The Burning Platform notes, their population is the size of the entire Western Hemisphere, plus Japan, Germany, and France. The land can not support this mass of humanity without very dire consequences, and these shocking photos show what severe pollution people have to deal with in some parts of China...
The drop in the Yuan over the past 2 days is the largest against the USDollar since Nov 2008 as USDCNY nears its highest (CNY weakest) since mid-2012. What is more critical is that for the first time since the new 2% CNY peg bands, USDCNY is trading at the extremes - 11.5 handles cheap to the fix. At the opposite end of the spectrum, the EURCNY just dropped below 7.00 for the first time since June 2001 with the biggest 2-day strengthening of the Chinese currency against the Euro in almost 4 years. It appears the consequences of ECB QE, SNB volatility, and now Greek concerns continue to ripple through the rest of the world.. and at a time when China faces its ubiquitous new year liquidity squeeze, that is not a good sign.
Over two years ago, we first highlighted Yanis Varoufakis' perspectives on the destruction of Greece and Europe's bogus growth pacts. Since then he has grown in both reason and popularity as his no-nonsense discussons of the mis-design of the euro (and potential solutions) have made him the front-runner to be Syriza's new finance minister. Never one to mince words or play politics, Varoufakis tells Channel 4's Paul Mason in this brief (but chilling for Brussels) interview, what his party would do if it gets into government in Greece, and admits the prospect of power in Europe is "scary". As he sums up, "we are going to destroy the Greek oligarchy system," and with it, we suspect, much of the narrative that holds the fragile European Union together...
To think that multi-national companies are not complaining to government officials at this very moment is to be fully naïve. We would not doubt, given where the Treasury Secretary is, if he hasn’t been waylaid repeatedly about “doing something” about that “strong dollar.” Unfortunately, he cannot come right out and say that corporatism despises it so the administration, like those before, would prefer it sinking like a rock. Like monetarism, the fiscal side prefers not currency stability but their own, specific brand of instability.
If the 'shadow' of the crisis has passed, does that mean the actual 'crisis' is about to appear?
The government’s health insurance website is quietly sending consumers’ personal data to private companies that specialize in advertising and analyzing Internet data for performance and marketing... but it's for your own good - The Obama administration says HealthCare.gov’s connections to data firms were intended to help improve the consumer experience.