Archive - Feb 20, 2015

Did anyone honestly not think the German finance minister would not have the final word?

GERMAN FINMIN SCHAEUBLE SAYS AS LONG AS THE PROGRAMME FOR GREECE ISN'T SUCCESSFULLY CONCLUDED THERE WILL BE NO PAYOUT
GERMAN FINMIN SCHAEUBLE SAYS 'THE GREEKS CERTAINLY WILL HAVE A DIFFICULT TIME TO EXPLAIN THE DEAL TO THEIR VOTERS'

He's right.

Greek Finance Minister Yanis Varoufakis is holding a press conference to explain the decisions that led up to what by appearance seems to be a Greek fold...

VAROUFAKIS SAYS GREECE STOOD TALL DURING EUROGROUP TALKS

Why 4 and not 6 months? Simple: so that the humiliation of the Syriza government can continue with yet another bailout, aka "current programme", aka Memorandum extension request just ahead of the biggest debt maturity for the remainder of 2015.

Just out from the Eurogroup, the final statement. Bottom line: Greece caves on pretty much everything, however it has two semantics successes: the dreaded "Troika" words has been replaced with "institutions" and "Current programme" has been changed to "Current arrangement" - surely nobody will notice. Sarcasm aside, Greece has just kicked the can for four months. Why four months? Because that's just ahead of the big Greek debt maturity.

A literal Tour de Force, likely the most indepth, practical analysis of the Grexit situation as you will ever read. This is why I like blogging... You can never find stuff like this in the mainstream media.

In October 2014, we noted the massive surge (amid a slowing economy) in VLCCs bound for China as they began rebuilding their Strategic Petroleum Reserve, buying the newly low priced crude providing 'artificial' demand not reflective of actual current activity. Crude prices continued to drop and China-bound tankers remained high. But, as Bloomberg notes, this week saw the number of supertankers heading to China drop to 62 - the lowest since September 19th (before China began its restocking efforts) - strongly suggesting that 'artificial demand' has been removed from the global oil market.

Meet SuperFish - Lenovo's, the world's largest computer manufacturer, pre-installed, image recognizing tracking software that monitors everything you do, and breaches web security... all for the purpose of pushing more ads in your face. After its initial approach of being completely unapologetic and dismissal, Lenovo is now groveling for forgiveness. The company’s Chief Technology Officer now says, “We messed up badly here,” and “We made a mistake.”

Update: EUROGROUP SPOKESPERSON SAYS AGREEMENT REACHED ON GREECE

While the Eurogroup will supposedly present a Greek deal in a few minutes some of the key terms remains undisclosed, and somewhat unexpectedly Reuters reports that Greece will have until Monday, which is a national holiday, to list the planned measures it intends to take. It is surprising that Germany has agreed to an open-framework of this nature, which also means that once the final momerandum is available, everyone will dissect the language to find out just who folded. So while we wait, the Eurogroup's press is said to begin momentarily. Watch it live below.

It appears that Grexit fears were all that was left to hold back equity enthusiasm as, based on the latest (non-official) details of a Greek deal, the S&P 500 has broken to new record highs (and Dow ripped 230 points off the lows). Gold has been jettisoned en masse, back below $1200... and crude is sliding.

Perhaps this explained why Greece and The Eurogroup have (reportedly) come to an agreement to avoid an actual Grexit for 4 months. As Die Welt explains that Euro-area nations will face losses of up to EUR330bn as Greek outright government debt, ECB capital needs, and TARGET2 liabilities have soared in the last 2 years since the crisis last erupted...

"... we almost hope those forecasts are proven wrong. They imply a widening gap between valuations and traditional fundamental relationships. They imply a dearth of yields and spreads that will almost invariably push more and more investors into positions they would ultimately rather not take. But if the old adage that markets move in the direction that causes the most pain to the largest number of people is anything to go by, then we suspect that this is what will happen. Depressingly, our instinct is that those new forecasts are more likely too conservative than too aggressive. Longer-term, sweet dreams really aren't made of this."

Why Does America Keep “Losing” Its Wars?