RANsquawk European Morning Briefing - Stocks, Bonds, FX etc. – 21/07/11

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buzzsaw99's picture

selective default = banks get paid first, also, the tangled webs of cds, cdo, etc., are closely examined to pick winners and losers. Pension funds will get hosed.

scratch_and_sniff's picture

Man I must say, my tinfoil hat is glowing red this morning. Just at the UK open this morning a big buyer of Euro comes in and lifts it up to 1.4294, it was classic baiting, and it was obviously someone with the clout to move things around. So the pair starts to fall neatly to around 4220, what happens next is kind of laughable. Juncker comes WALKING(YES WALKING!) around the corner, past the press, to the debt crisis summit and says all this spiel about a selective default being a possibility, pandemonium ensues…how many diplomats walk to work? I think Juncker wanted to run into the press today, and I think a default today is out of the question, hence a possible rally from here.

hedgeless_horseman's picture

how many diplomats walk to work? I think Juncker wanted to run into the press today

Thank you for the analysis.  This IS how they roll.

scratch_and_sniff's picture

Yeah probably, no proof though. If anyone in the ECB know that he had seen that draft lastnight, they will know what he was doing today. Omitting hard proof, you have to say, the circumstantial evidence is strong…

slaughterer's picture

hedge funds will also get hosed...

slaughterer's picture

Juncker went short the EUR/USD on his iPhone trading app as he rounded the corner. 

hedgeless_horseman's picture

(Don't) Rock the Casbah.

News Corp. Chairman Rupert Murdoch, facing the fallout from alleged phone-hacking at a London newspaper, got a vote of confidence from Saudi Prince Alwaleed bin Talal Al Saud, one of the company’s largest shareholders.


tom's picture

what juncker meant by "can't be ruled out" is that the eurogroup has basocally decided it will go for some kind of coerced swap, and they know ratings agencies will likely call it a default

the questions are the terms of the swap and how the coercion will work. i don't see much scope for further rally, as either way, when the details are all available we'll see that the debt reduction is minimal and does nothing to reduce the inevitably of bigger default later, and a precedent has been set for accepting some extent of default, which will weigh on italy and spain.