Archive - Nov 3, 2011

I said it in the past and was proven correct twice. It happened again, big time - and is now incontrovertible. Contrary to popular belief, Squids can't trade!

• There were conflicting reports that Greek PM Papandreou has resigned. It was also reported that the EU referendum is off the table
• Also, according to party sources, Greek socialist MPs are forging proposal for coalition government headed by former ECB vice-president Papademos
• EU Commission said that the only option is for Greece to stay in the Euro as treaties don’t foresee an exit from the Eurozone. It also said that the Greek tranche payment is conditional on austerity implementation
• Market talk that Qatar is willing to invest into the EFSF, however earlier the Chinese President said that the Eurozone problem should mainly be solved by Europe
• According to a senior G20 official, the G20 is assessing the cost of a Greek default

One can kneejerk every headline coming out of Europe, or one can buy gold, which has finally had enough with this endless BS and has realized that no matter what the ECB will have to print, followed by everyone else.

Update: it is now officially cancelled

WTF is going on in Europe?

• VAN ROMPUY, BARROSO PRESS CONFERENCE DELAYED
  
• VAN ROMPUY, BARROSO PRESS CONFERENCE `NOT YET CANCELED' EU SAYS
  
• VAN ROMPUY, BARROSO MEETING WITH FRANCE, GERMANY, ITALY, SPAIN

And the statement that explains it all:

• EU SAYS `NOT SURE' IF VAN ROMPUY, BARROSO BRIEFING TO HAPPEN

We use the term "explain" loosely...

Greece's government was on the brink of collapse on Thursday, casting doubt on plans to hold a referendum on staying in the euro zone, as European leaders contemplated a Greek exit to preserve their single currency.

Today marks the beginning of a new era for the ECB, with Mario Draghi taking over the helm from Jean-Claude Trichet as the President of the central bank. Unfortunately for Draghi, the changeover is to take place at a very critical juncture and at a time when market participants are demanding that the central bank takes more pro-active measures to stimulate the stagnating economy which stands on the brink of a double dip recession. However, such action may prove difficult for Draghi to push through the governing council since doing so only few months after Trichet announced that the central bank is to resume covered bond buying and 12-month LTROs risks undermining the central banks’ credibility. Another reason why a rate cut may prove futile is that the meeting coincides with the G-20 summit where leaders of the Eurozone are expected to endorse use of the leveraged EFSF fund as an investment opportunity for countries with a large budget surplus such as China and other BRICS. In turn this indicates that comments stemming from the summit may have a more profound impact on investors’ appetite for the EU related financial instruments and therefore determine whether the EUR/USD pair consolidates above the 1.4000 level.

And refuting another rumor re-refuted previously just minutes ago, we hear from Dow Jones now that G-Pap will submit his resignation today and will ask for unity government, according to Star.gr. Oh thank god things are clear because this headline hits the tape just as we get this: Greek premier doesn't plan to resign according to Proto Thema. Needless to say, kneejerk reaction trading robots are breaking everywhere as the EURUSd trades. No point in even attaching the EURUSD chart- by the time it is up it will be off by 100 pips.

Total chaos in the markets in the past few minutes following a headline from Bloomberg that the Greek Prime Minister George Papandreou may withdraw his proposal for a referendum, an official with the ruling Pasok party said in Athens today. The official declined to be named. Obviously this is not the first time an unnamed source has spread precisely this rumor, only to be refuted minutes later and we give it the appropriate credibility. Needless to say if true this is indeed political suicide by G-Pap. The EUR needless to say soars in kneejerk reaction to the news, although the far more important Italian-Bund spread has done precisely...nothing.