Archive - Jan 19, 2011 - Story

Markets trading slightly off this AM ahead of the housing data for December. The VIX has bounced off its lows from last week and should trend higher in our opinion, the possibility of a stellar 4Q10 GDP number notwithstanding. Preliminary earnings reports seem to illustrate growth, with financials being the only real variables early in the process.

Just housing starts today, following this morning’s weekly report on mortgage applications, which showed a third consecutive decline in the purchase loan index as nobody even pretends the housing double dip is not here… Daily market ramp closes at 11:00 am when Sack Frost completes purchase of $6-8 billion in 2013-2014 bonds (and Apple stock).

Europe is abuzz this morning following a Die Zeit article indicating that Germany was planning for a Greek debt restructuring, one that would allow Greek to retire debt earlier than expected. From Market Watch: "The German and Greek finance ministries on Wednesday denied a report in the German weekly newspaper Die Zeit that the German government was weighing a plan that would allow Greece to retire some debt early, using subsidies from the European Financial Stability Facility, Dow Jones Newswires reported. Spreads on Greek credit default swaps, or CDS, initially widened but then narrowed after the Die Zeit report was denied." And while everyone is of course immediately denying that the EFSF is nothing but one big ponzi vehicle, which it would turn out to be should this report be proven true, Goldman's Dirk Schumacher has released two notes which confirm that this is indeed precisely the plan. And just as Goldman dictates US fiscal and monetary policy, so its European strategists are critical in determining European pyramid, kick the can down the line plans.

RANsquawk European Morning Briefing - Stocks, Bonds, FX etc. – 19/01/11