Archive - Mar 2010 - Story

First trading day of the month has a mild bullish bias (new money in IRA’s, pensions, etc.). Overnight, there are, yet again, rumors of a Greek rescue package. That has boosted the Euro and softened the dollar. The Pavlovian response is firmer prices for stock futures, oil, and gold. If there is a deal, and details follow, stocks could benefit further. If the deal disappears, stocks could suffer.

It appears all it takes these days to get invited for some free ouzo and a little sirtaki is to issue a note that one's minions are about to downgrade Greece. This is precisely what has happened to analysts from S&P, which last week announced it was looking at notching Greece closer to junk status (currently BBB+). Market News, quoting Greek officials who apparently have a rumor retention span of about 2 seconds before they blast anything and everything to their entire rolodex, reports that "a team from ratings agency Standard & Poors is on its way to Athens for talks Tuesday with government officials about the country's economy and ongoing efforts to reduce its public sector budget deficit." Not too surprisingly, S&P had no comment by how much it would upgrade Greece following this gift reception ceremony.

Shaking hands with the government was a brilliant strategy in 2009 when it was assumed that governments had an infinite capacity to leverage themselves. But what if they didn’t? What if, as Carmen Reinhart and Kenneth Rogoff have pointed out in their book, “This Time is Different,” our modern era was similar to history over the past several centuries when financial crises led to sovereign defaults or at least uncomfortable economic growth environments where real GDP was subpar based on onerous debt levels – sovereign and private market alike. What if – to put it simply – you couldn’t get out of a debt crisis by creating more debt? - Bill Gross

RANsquawk 1st March US Morning Briefing - Stocks, Bonds, FX etc.

• Evans-Pritchard: Don't go wobbly on us now, Mr. Bernanke (Telegraph)
• Euro drops, pounds plummets below $1.48 for first time since May (Bloomberg)
• Greece now, U.K. next as Scots ready for pound plunge (Bloomberg)
• Summarizing eurozone's derivative deals, at least those known to date (XE.com)
• Alphaville's 72 hour delayed breaking news on Weimar hyperinflation: about par for the comfortably oxygenated FT blog (FTA, and Zero Hedge)
• RBS paid £1.3 billion to bankers on profit of £1.0 billion in 2009 (Telegraph)

• Buffett sees US housing recovery by 2011, prices below 'bubble' levels.
• Car makers on Tuesday are expected to report disappointing U.S. sales for February, mainly due to snowstorms.
• China's manufacturing growth slows in Feb, PMI falls from 55.6 in Jan to 52.0.
• Copper rises most in 11 months as Chile earthquake cuts power, halts mines.
• Crude near $80 a barrel after 9.3% monthly rise.
• Europe demands Greece cut budget deficit as Bloc crafts $34B rescue.
• Greece loses Kokusai as investors demand 7% on bonds.

RANsquawk 1st March Morning Briefing - Stocks, Bonds, FX etc.

RANsquawk 1st March Morning Briefing - Stocks, Bonds, FX etc.