Will March Be This Year's Cruelest Month?

Tyler Durden's picture

Knight Capital has released a sovereign roadmap Catalyst Calendar which is a must read for anyone who trades with more than a 15 millisecond eye on the markets. And while everyone is now focused on what is going on with the Chinese tightening regime (with expectations of two-three more liquidity tightening steps over the next several months) with much speculating over just how priced in all this is (not much if one looks as the Bombay Sensex or even the SHCOMP for that matter), the real focal point should once again be on Europe. The reason: March is coming fast, and March will likely be the cruellest month for Europe, and possibly for the stock markets, and serve as the catalyst to introduce QE3 in all its glory.

Why March?

From Knight Capital...

March Madness -Political Risk Is High and Rising

  • Funny thing about democracies is the feedback loop between electorates and national policy
  • Policy risk remains tethered to national, and even regional political risk across the European Union
    • Higher risk within coalition governments
    • Breakdown of coalition (i.e. Ireland) can lead to snap elections and uncertainty around policy action
  • Two primary sources of political risk as it relates to the Euro sovereign crisis
    • Stressed states (periphery Europe) lose the electoral support to carry out reforms, trim deficits, and curtail debt
    • Core Europe or payer states (e.g. Germany) lose electoral support to bail out Peripheral Europe or debtor states
  • EurozonePolitical Sound Bites:
    • “We believe that Ireland may be left with no option, in the absence of a renegotiated deal, but to write down the value of the bonds in the Irish banks or face the prospect of a hugely damaging sovereign default”
      • Fine Gael, Irish Opposition Party, February 2, 2011
    • “62% of [German] voters oppose further bail-outs of weak euro members….”
      • The Economist, January 13, 2010
    • “49% of Germans would like to have a return of the D Mark”
      • YouGovInsitute, December 26, 2010
    • It may be “useful for the €440 billion European Financial Stability Facility to buy government bonds”
      • Jean-Claude Trichet, January 26, 2011

Showing this visually:

The biggest concern: the refi cliff that is coming in March, in parallel with 3 Germal regional elections:

What is the deux ex machina proposed by the ECB? Why, the EFSF, which in our opinion is nothing less than a debt spiral. Luckily, Knight agrees (partially)?

And while sentiment on Europe has largely normalized lately, the truth is that nothing has been fixed.

Key Takeaways:

Primary catalytic events revolve around two key themes

  • Slippage on fiscal reform in the GIIPS
  • Popular (read voter) revolt in both the adjusting countries (e.g. GIIPS) and/or the paying countries (e.g. Germany)

Volatility should remain a defining market characteristic in the coming year as policy action attempts to simultaneously address

  • A sluggish economic recovery
  • High unemployment
  • Record levels of fiscal imbalance

Our question: just how many double POMOs will Brian Sacks release in the end of February and beginning of March to "buy" all of these incipient problems? Find out tomorrow at 2PM...

Full Knight presentation


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mynhair's picture

Tomorrow, tomorrow!  It's always tomorrow....tomorrow is only a day away.


There is no 'down'.

In Fed We Trust's picture

Dear Tyler,

As a big fan of yours, I want to know your opinion on a hypothical situation.

If the US were to default, wouldn't the FED that is holding the MBS bag and an increasing share of Treasaries, have legal claim , ownership of the real estate at the bottom of the MBS bag of bullshit? And claim to US infrastructure , as a result of the bag of Treasaries they are holding?

The Fed encourage us to bloat out Freddie and Fannie Mae in the 70s and 80's. Now they are bailing us by buying all those properties. Kicking the can the road, while they get paid commission fees.

But ultimately when the dollar collaspes, or US default, they will be holiding the assets for the forign banks that they really represent?

So, Bernake may not want default this minute, (raise the debt ceiling, NOW) but the FED has planned(ENDGAME)0 for the US to default,

and if needed they will raise interest rates to make it happen.

In comes the currency/system/chip

And meet the new land lords.  Same as the old Land lords?




mynhair's picture

Though I am not Tyler, and never played him on TV, I would say: how fast can the Bernank & Co. run from the mob of torches and pitchforks?  You seem to believe there is Law that circumscribes behavior...

In Fed We Trust's picture

Bernake flys off in the chopper while the media spins it as you guys couldn't figure out your fiscal/ budget issues.

Or you guys didn't change the TAX CODE in time.

Or the war , or the Chiense dumped their Treasarys,

Or Wiki Leaks.  Plenty of scape goating.

Or you guys didnt raise the debt ceiling.

90% of Americans will not know the true enemy, even after they have been captureed.

In Fed We Trust's picture

Futher more, as heard on the Bernake testimony today, German, French and Swiss banks were given TARP money.

What is wrong with this? Forign banks getting paid because they have local addresses?

To the bankers, soverignship does not exist. As a country, you are just another borrower or corporation.

But the spin/blame will always be bak to the nation/state and their policies.

snowball777's picture

Who wants to own a giant pile of burning domeciles?

themosmitsos's picture

While I disagree with a lot of what u said, I like your thinking. Well done :)

themosmitsos's picture

While I disagree with a lot of what u said, I like your thinking. Well done :)

buzzsaw99's picture

If Germans would get with the program and btfd maybe they wouldn't be so angry all the time. bitchez.

Bigger Dickus's picture

Dude, the Germans are the some of the biggest sheeple in Europe. As a jew, I find them to be disgusting. Same goes for the Zionists and left-wing globalists who run the economy just about everywhere (especially Israel). You can bet they are buying the dip with bothe hands and will get their asses handed to them in the end.


There is no middle class in Germany anymore

frenchie's picture


well thank you

you must be a honest jew

Sudden Debt's picture





arkady's picture

Wow that is some disgusting stereotyping right there.  Bravo champ. 

In Fed We Trust's picture

Speaking in terms of "German" or "French" or "American" makes no sense. These national/soverign boundaries do not exist in the eyes of the people that rule over us.


Bigger Dickus's picture

Not true. You have taller and more blond people in northern than southern Europe; people in Portugal have bigger ear lobes than in Spain; in Brazil a given foetus is slightly more likely to turn out to be a girl than a boy: this is all due to genetics. Genetics can also explain the way people have interacted and bred in the past and can account for the way people act and think: have you ever talked to someone from Brussels? Dude, step across the border into the city (which is actually a kind of country with its own ministers and separate lobbyists) and it's as though you have stepped into a zombie movie.

Modus's picture

from what u are saying i guess you are some fuckin retard living in iowa.

Non Passaran's picture

I don't know if he's in Iowa, but I believe you got the rest right. Sadly we have to put up with individuals like that agent provocateur.

Modus's picture

from what u are saying i guess you are some fuckin retard living in iowa.

Bigger Dickus's picture

Nope, I'm a professional web designer living in Switzerland. I have a Patek 5960 on my wrist and I'm waiting delivery of a Honda racing motorcycle. So no Iowa retard here.

scratch_and_sniff's picture

Any Nazi gold lying around...you sound like you would know?

Bigger Dickus's picture

I only know 2 or 3 people who work in finance here so I wouldn't know more than the average Zerohedger about that. Switzerland is no more of a tax haven than Delaware or Belgium. Look at the way the politicians caved in to Hillary Clinton on that issue. The last traces of the real Switzerland disappeared in 1999.

dark pools of soros's picture

aren't we a snooty chosen one eh??   my grandfather's old pocket watches look better than your overpriced wrist turd

Bigger Dickus's picture

Maybe so, but who wears a pocket watch nowadays?

dark pools of soros's picture

you just inspired me to carry around his old Hamilton miltary model 23 - its been through a world war so I doubt I will break it.  i'd hate to scratch his others

snowball777's picture

No, you're a Swiss retard...I bet you got the Patek by acting as a fluffer at Davos.

Bringin It's picture

the Germans are the some of the biggest sheeple in Europe.

Years ago, I used to live there, working for my uncle and I was impressed.

Now, I meet Germans and most are as dumbed down as 'mericans.

Politically, they're still an occupied country and have to do what they're told.

I don't know about the disgusting part though.  They're usually nice people IMO.

TooBearish's picture

And while sentiment on Europe has largely normalized lately, the truth is that nothing has been fixed.

And its fixed here?....weeeeeeeeee!

raya123's picture

As the euro resumes its fall due to this crisis, it will drag equities with it just as it did in April - May 2010.  I would not buy that dip unless / until the market turns back up upon the announcement of QE3....

DaBernank's picture

But I heard "52-week high" about every 45 seconds on cnbc today.

mynhair's picture

43.2 seconds, to be exact...

In Fed We Trust's picture

Repetition is the key to programing.


Ending the piece with the same words, crucial.


A casual give and take between expert and lay person. Priceless.

Just ask NPR/Soros


Yancey Ward's picture

I hear Madame Sosostris is working for the Fed.

In Fed We Trust's picture

As heard on the Drudge today.

NYSE to merge with German Stock Exchange.


Whats next? The Fed merges with the Bundsbank?

cowdiddly's picture

Ha I noticed they retermed the PIGS to GIIPS. Now that some sure enough lipstick. Add on  Eygpt, Algeria,Tunisia and Saudia Arabia and see how the PIGS find something to EATS. This little piggy had roast beef, this little pig had none. The Pee Little Thrigs. I will huff and Ill puff and.............................................

In Fed We Trust's picture

Until I sell out my media empire for $315 million dollars, because everyone has a price. Huff and Puff you prostitute.

My name is.................

It starts with an "A"

Clayton Bigsby's picture

I saw that too - what a buncha crap - PIIGieS is much better and much more appropriate - if it looks, eats, oinks, and rolls in shit like a pigg - it's a pigg

scratch_and_sniff's picture

All we need is for Malta to go tits up, then we could call them the GIIMPS.

Bear's picture

The Euro at 1.37 ... why isn't this short a slam dunk?

Bigger Dickus's picture

Same here, but we could see 1.42 before 1.32

Yancey Ward's picture

Mice probably think the same thing when they find cheese in dark corners.

mynhair's picture

Perhaps the USD is a slam drunk, hit by that SUV Escalade driven by a 69 yr old baby boomer.

Bear's picture

Its who gets to the cliff sooner ... I'll pick the 25 year old in his BMW any day

In Fed We Trust's picture

The USD short is a slam dunk.

Bye, bye dollar.

Hello, he Credit/chip or SDR

But how do you collect the USD short when the USD is worthless?

You better trade from abroad, I hope!

DaBernank's picture

Yes, but it's all about timing isn't it?

Bear's picture

Euro at 1.35 2/10 ... timing ... on pm of 2/9 all hell broke loose and risk off became the watch word ... WS, silver, gold, euro, and oil hit the skids ... all recovered except the euro. Slam dunk at 1.37, timed right.

dcb's picture

what I charted all the crap out i get about march 7 as a big day. but being a smile minded fool I refuse to believe the stuff is fixed in  advance, stupid me

OptionsHedge's picture

"And while sentiment on Europe has largely normalized lately, the truth is that nothing has been fixed". Catch 22. If nothing is fixed, why has the sentiment normalized?