Archive - Jul 2015

On the heels of a weekend which saw Beijing launch a series of ad hoc policy maneuvers designed to stop the bleeding in China's equity markets, the SHCOMP opened sharply higher Monday only to give back half of its opening gains minutes later in a preview of what will likely be a week of unprecedented volatility as panicked housewives and banana vendors looking to sell the rips battle the PBoC for control of China's stock market mania.

Here are the two choices for today's caption contest: we leave it up to readers to decide which is more appropriate.

"The A-share market may not bottom until the government, possibly via the PBoC, becomes the buyer of the last resort. It seems that the government might have just taken the first step in that direction on Sunday night with PBoC’s promise to provide liquidity support to stabilize the market. If PBoC becomes the main source of market-supporting liquidity, we expect the central bank's credibility to be hurt."

Today, Greeks sent a resounding message to Brussels, Frankfurt, and Berlin that they are not willing to acquiesce to further humiliation at the hands of creditors. Now, a stunned sell-side — which had, over the past three months, very carefully tweaked their base cases to reflect the growing risk of Grexit — is scrambling to explain to nervous clients what happens next.

With virtually all polling completed, the final result is 61.3% No, 38.7% Yes - a whopping rejection of Troika hegemony which may also be the final nail in any negotiations between Greece and the Eurogroup.

The number everyone's been waiting for all afternoon is finally here: moments ago ES opened for trading after the holiday weekend and it's not pretty, down 1.5% to 2035 in early illiquid trading.

Just out from Reuters:

FINANCE MINISTERS "WOULD NOT KNOW WHAT TO DISCUSS" AFTER EMERGING GREEK 'NO' VOTE-EURO ZONE OFFICIAL

May we suggest containing the fallout, whether in capital markets or in the resurgent mood in the other PIIGS, as a primary topic?

Perhaps the best summary - or epitaph, some would say - of the shocking events that took place in Greece this afternoon, and the resultant falling dominoes that are about to be unleashed, was given by Slovakia's finance minister Peter Kazimir, who summarized events as follows: "The nightmare of the 'euro-architects' that a country could leave the club seems like a realistic scenario after Greece voted No today."  So here is JPM's Malcom Barr with the bank's latest take on Greece which is that at this point, a Grexit is JPM's "base case"... and it only goes downhill from there.

If marriage insurance sales take off, it's only a matter of time before Wall Street repackages it and sells it to investors via subprime marriage-backed securities. A boom in marriage speculation would ensue. Did you see your neighbor with his mistress last night? Buy some MBS credit default swaps on him and tell his wife what you saw.

"This 'No' from the Greek people must pave the way for a healthy new approach," said Marine Le Pen.  "European countries should take advantage of this event to gather around the negotiating table, take stock of the failure of the euro and austerity, and organize the dissolution of the single currency system, which is needed to get back to real growth, employment and debt reduction."

With nearly 60% of the Greek refrendum vote counted, and the No's leading by a landslide 61%, it is clear that the Troika's gambit failed, unless as Goldman wrote and we first noted, it was the ECB's intention to force a Grexit all along, thus permitting the ECB to engage in more QE: QE which would in Goldman's estimation, push the EURUSD down 7 big figures and further toward parity, sending global stocks soaring in one last central bank-inspired hurrah.

Congratulations Greece: for the first time you had the chance to tell the Troika, the unelected eurocrats, and the entire status quo establishment, not to mention all the banks, how you really felt and based on the most recent results, some 61% of you told it to go fuck itself. Now comes the hard part.