Greece

More Un-Predictions: Deutsche's 13 Outliers For '13

Following on the heels of Byron Wien, Morgan Stanley's Surprises, and Saxo's Outrageous Predictions, Deutsche Bank's FX strategy team has created a who's who of 13 outliers for 2013. Quite frankly, given the extreme nature of monetary (and now fiscal) policy, asset allocation decisions, and bankers' and politicians' willingness to go into the media and lie directly to our faces, the comprehension of the possible (no matter how improbable) is far more important for risk management than the faith in the centrally-planned unreality our markets (and therefore ourselves) currently find themselves in. As they note, all too often, the tendency to not stray too far from a self-anchoring recent-history-extrapolated consensus (while apparently highly profitable for some for a microcosm of time) leads to unrecoverable drawdowns exactly when career-risk was the limiting factor. From Malaysian elections and EM bubbles bursting to Fed monetizing equities and South China Sea escalation, these outliers seem all to 'normal' in our brave new world.

Berlusconi: "Italy May Be Forced To Leave The Eurozone And Return To The Lira"

Reminding the world of just the kind of truthiness that got him sacked originally by that other Italian, the Ex-Goldmanite Mario Draghi, back in November 2011, and which the world has to look forward to when Silvio Berlusconi returns to power some time in 2013, even if not as PM (a position he currently has a snowball's chance in hell of regaining based on current political polls), Reuters informs us that the Italian, who certainly has not read the Goldman book on status quo perpetuation, just said the unimaginable: the truth. To wit: "If Germany doesn't accept that the ECB must be a real central bank, if interest rates don't come down, we will be forced to leave the euro and return to our own currency in order to be competitive." Berlusconi said in comments reported by Italian news agencies Ansa and Agi. The 76-year-old media tycoon has made similar remarks in the past about the possibility of Italy, or even Germany, leaving the euro, but has often at least partially rectified them later." Not this time. Now with Germany and the Buba folding like a broken chair, Silvio is coming back and knows he can demand anything and everything, and Germany has no choice but to accept, Merkel reelection in a few months be damned.

Guns Are The New Greece

Just over a year ago:

  • METLIFE SAYS `NO MATERIAL EXPOSURE' TO GREECE - BBG

Just over a few seconds ago:

  • METLIFE SAYS `NO MATERIAL EXPOSURE' TO GUN MANUFACTURERS - BBG

How the times change. Does this mean that the ECB now accepts 44 caliber hollow points as Tier 1 collateral?

AVFMS's picture

Another boring session, worsened by year end inactivity… Good close. Fiscal Cliff haggling on-going with a positive spin this time and Risk riding high.Spain catching up and paring yesterday’s soft patch, as is Italy. ESToxx at the highest since Aug 2011. Credit very squeezed. EUR strong. Merry Mood!

"I Saw Mommy Kissing Santa Claus " (Bunds 1,42% +5; Spain 5,29% -12; Stoxx 2647 +0,7%; EUR 1,322 +50)

Overnight Sentiment: Nothing But Cliff

By this point it has become clear to everyone that all fact-based news can be safely ignored, and all that matters is the ongoing Fiscal Cliff pantomime as has been the case for the past month. Sure enough, looking at the futures, it is clear that following yesterday's detailed disclosure, the market is convinced, that a deal is virtually assured. This is in stark contrast to 48 hours ago, when it thought the opposite. It will likely continue thinking this until Boehner has a TV press conference later today and bursts the latest bubble of bipolar enthusiasm which has now shifted to euphoric for the time being.

Marc To Market's picture

Last week Eurogroup head Juncker warned that the situation tiny Cyprus was more worrisome than Greece.  While this seemed to be an exercise in hyperbole, sure enough Monday, a Cyprus official was quoted on the news wires warning of an imminent default.  

 

Hang on.  Didn't Cyprus reach a memorandum of understanding with the Troika ?  Indeed, it did. However, it will take some time to deliver the funds.  

AVFMS's picture

Utterly boring Monday session, worsened by year-end inactivity… Won’t get any better going forward, probably. Fiscal Cliff a cliff-hanger (I know, cheap)… Spain on the heavier side with contingent funding holes still popping up here and there.

"Jingle Bell Rock" (Bunds 1,37% +2; Spain 5,41% +4; Stoxx 2628 unch; EUR 1,317 +30)

Phoenix Capital Research's picture

 

 As I mentioned before, without a doubt 2013 will be a disastrous year for the global economy and for the financial markets. Things could get ugly before then due to any number of issues that are boiling just beneath the surface… but barring any sudden developments, most of the key players will try to hold things together into year end.

 

"Greece Is Not Japan"

"Greece is not Japan" - at least that is the forecast reality when comparing official IMF projections for the two depression-torn countries. Yet one needs to see the projected GDP/debt chart side by side to truly appreciate the humor and lunacy of Greek economic expectations. We give Greece 3-4 years before its ongoing socio-economic collapse, and its relentless plunge in GDP, brings it on par with Japan's basket case economy. End result: both countries will proudly sport debt/GDP in the 250% ballpark by the middle of the decade. But for now, let's pretend that Greece is not Japan.

17 Macro Surprises For 2013

Just as Byron Wien publishes his ten surprises for the upcoming year, Morgan Stanley has created a heady list of seventeen macro surprises across all countries they cover that depict plausible possible outcomes that would represent a meaningful surprise to the prevailing consensus. From the "return of inflation" to 'Brixit' and from the "BoJ buying Euro-are bonds" to a "US housing recovery stall out" - these seventeen succinctly written paragraphs provide much food for thought as we enter 2013.