Overnight Sentiment: No Dead Cat Bounce

Tyler Durden's picture

With expectations that Europe will once again become a flaming powderkeg after the US elections are over running high, Europe has so far not disappointed. And as usual, the focal catalyst of greatest pain remains Greece, which is only now learning what ZH readers knew days ago, namely that the Greek "austerity" vote was merely theater, and that Europe, i.e., Germany, has certainly not decided to release any of the much needed cash that Greece needs not only to run its society but to make a key bond payment on November 16. Confirming this was German finance ministry spokeswoman Marianne Kothe, who said on Friday that Eurozone finance ministers will probably not be able to decide at their upcoming Eurogroup meeting on Monday whether to disburse a badly-needed €31.5 billion loan tranche to Greece, as MNI reported earlier. "Speaking at a regular government press conference here, Kothe reminded that German Finance Minister Wolfgang Schaeuble needs the approval of the German Bundestag, the lower house of parliament, before being able to approve any further aid for Greece. “It will be difficult to achieve this by next Monday,” she said." In other words, the Greek default is suddenly in the hands of the German people, of whom at last check  about 60% wanted Greece gone. There is yet hope for Greece, with a story overnight running that George Soros is ready to commit "serious funds to aid Greece." Surely that generosity too will end well for the Greek people who by now must feel as if they are in the 5th circle of a NWO globalization hell.

In other news, the European economic basket case refuses to go away: reports overnight showed that Industrial Production continues imploding, with France tumbling -2.7%, on expectations of a -1.0% drop (down from 1.5%), the worst plunge since the 2009 crisis, Italy dropping -1.5% and -10.5% Y/Y, and Greece down 7.3% compared to a year earlier. Europe is stuck between a rock of a low EUR indicating redenomination risk and a hard place of a high EUR now guaranteed to crush any economic status quo, let alone growth.

All of this, and the continued negative sentiment from the past 2 day sell off means that US traders walk in to another sea of red, with futures solidly in the red, the EURUSD back to testing 1.27, Asia lower across the board, Europe unhappy, and Spanish 10 Year once again eyed closely: the next resistance level is 6% here, and once this breaks it slowly but surely puts the (long, long overdue) OMT activation in play.

To summarize: no dead cat bounce. At least not yet.

A more comprehensive recap from DB's Jim Reid follows:

There have been quite a few soothing words around markets recently on the likelihood that the fiscal cliff, Greece and Spain will all be resolved in a market friendly manner but the US election seems to have been the excuse for the market to start to want to see a bit more actual proof rather than hope on a number of these issues. On the US, newswires are reporting that President Obama plans to make a statement today about his plan for spurring economic growth and addressing the deficit which is likely to serve as the opening gambit in the President’s fiscal cliff negotiations. Republican House Speaker John Boehner stepped up the rhetoric late yesterday, posting on Twitter that while “Obamacare is the law of the land….(the Republican) goal has been, and will remain, a full repeal”.

The S&P500 yesterday closed at the day’s lows of -1.22% which also wraps up the worst 2-day performance in 2012. The index also finished firmly below the 200-day moving average with all industry sectors finishing in the red. The market was initially buoyed by the better-than-expected US trade numbers for September (-$41.5bn vs -$45bn expected) but this was eventually outweighed by news that McDonald’s monthly global sales contracted for the first time in almost a decade and also not helped by another poor day for Apple’s share price (-3.6%). A Reuters article yesterday noted that Samsung’s Galaxy S3 has displaced Apple’s iPhone as the world’s best selling smartphone last quarter. Apple’s recent slide continues to attract plenty of focus as the company’s market capitalisation has now fallen 23% since the peak struck 8 weeks ago. This decline is worth around $155bn or 3.8x what Greece is hoping to get from its next bailout tranche! Over the same period the overall market and the tech sector are down 6% and 12% lower, respectively.

Gold bugs are having a decent run with the precious metal rallying every day over the past week in what is the longest streak since August. Gold is up 3.3% this week but interestingly still around 2% below pre-QE3 levels. The search for 'safe haven' assets was also behind the strong performance in government bonds yesterday. Indeed the 30yr UST bond yields fell nearly 8bps to a two month low of 2.751%. A solid 30-year auction yesterday clearly helped. On the subject of safe havens, German bonds are also having good run, with 10yr yields finishing lower in 12 out of the last 16 sessions. On the other hand, Spanish 10yr yields have crept up gradually after having risen higher in 7 of the last 9 trading sessions. The Spanish spread to German government bonds is now at its highest in 6  weeks (449bps).

The market wobbles were also not helped by some fairly downbeat European headlines yesterday suggesting that Euro-area finance ministers may delay a decision on approving the next bailout payment for Greece until late November as they await a full report on the country's compliance with the terms of its bailout. It appears that the Troika won’t be ready with a full report on Greece until after the Eurogroup meeting on Monday (12th).

Turning to the ECB, Draghi’s post-meeting press conference was relatively dovish, but stopped short of providing assurance that the ECB will move to ease imminently.

On the OMT, Draghi reiterated that the ball is in Spain's court. Nothing new here but suggests that the current stalemate is likely to continue. On Greece, Draghi identified a route by which the ECB might be willing to play a role in helping Greece through an amended troika programme via the ELA – essentially allowing the GGBs to redeem, funded by t-bill issuance financed by the ELA via the banks. Sounds like a game of musical chairs! The WSJ yesterday reported that the Eurozone is considering cutting interest on Greek bailout loans to EURIBOR+80bps (currently EURIBOR+150bp) and increasing the repayment period.

Back to markets and the US selloff is once again setting the risk-tone for Asian markets with major bourses in the red. The Hang Seng (-0.43%), ASX200 (-0.49%) and Nikkei (-0.75%) are all trading lower although off their intraday lows. The risk tone perhaps found a floor following a relatively benign Chinese inflation print (+1.7% vs 1.9% last month and 1.9% expected). Chinese equities (+0.02%) are up for the first time this week although is still poised to 2.2% lower on the week. As we go to print the rest of China's main monthly data has been published with Retail Sales, Industrial Production and Fixed Asset Investment all slightly above expectations.

Turning to the day ahead, it will be relatively quiet with France and Italy reporting September industrial production. Over the weekend, the Greek government is set to vote on the 2013 budget. In the US, the UofM preliminary consumer sentiment reading is the main print. President Obama is expected to deliver his statement from the East Room of the White House, although no time for the statement has been given.

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GetZeeGold's picture



Bad news....the parrot is also dead. Might be able to cut you a good deal on a gerbil.



JPM Hater001's picture

<------Cat in the box is dead

<------Cat would have bounced higher if not in box

Spirit Of Truth's picture

The stock market is currently following an analogous pattern to the 1929 and 1987 stock market crashes. If the parallel holds true, then we are about to enter a free fall:


The question is: Why?

Let's hope and pray it's just Greece to worry about.  My concern is high regarding Syria and the potential for all-out war to erupt in the Middle East:


saturn's picture

So is Greece going to be Soros's new kingdom or just a colony? For ie. a lot of colonoscopy?

oldman's picture

When reading the bad news about the Euro I kept thinking that I was listening to a report on the dollar.

Are they the same?

Losing track of any difference         om

Quintus's picture

Greece will get the money to avoid default on the 16th.

Some mechanism will be found whereby the EU or ECB provides the funds.  This mechanism will likely be illegal under the relevant EU/ECB rules, but everybody will look the other way and pinky-swear that nothing untoward has taken place.

The only way this will end is when the Greek political system has lost even the last shred of credibility and is overthrown by the people, leaving the Troika with nobody to agree their cunning can-kicking schemes with.

What happens then is anyone's guess.

GetZeeGold's picture



The only way this will end is when the Greek political system has lost even the last shred of credibility



Quintus's picture

Since they're still in office, it seems that somebody somewhere still believes that they have some credibility left.  

I suspect that this situation will not persist much longer.  There must be any number of Greek Military officers concocting interesting schemes right now.

hawk nation's picture
















George Soros is there to help. God help them if they make a deal with the devil













HelluvaEngineer's picture

Whitespace violation.  2 minutes in the penalty box.

GetZeeGold's picture



Cut the kid some slack....he's new.


Member for 6 weeks 6 hours


I'll take white space over condescending bold text anytime.

fonzannoon's picture

George Soros said Europe had 3 months, 7 months ago.

GetZeeGold's picture



Give George a break.....he's getting old. He's a tad off his game.


In his youth he helped the Nazis round up the Jews in a fairly proficient manner....except for himself of course. He told them he was from Austriala...,.I guess they believed him for some reason. Come to think of it...he does sorta sounds like an Auzzie.

Dugald's picture

Ok I'm hooked, where the hell is Austrialia......

Translational Lift's picture

What a f'n joke....George Soros made most of his money by breaking the B of E and now he's comming to the rescue of .....wait for it........GREECE!  He couldnt scrape together 10% of the $31BB tranch Greece is expecting..............

F'N JOKE..............

goldenbuddha454's picture

Ya, right on!  I'm sure we'll see a rally when Soros throws 3 billion into the Greek Tragedy.  A rally like the Bernanke bounce we get every 6 months or so.  Wait, there's no bounce anymore from that QE crap.  Really, what Soros can contribute will be used for the next mega-bash on Thesaloniki!  Catch some tasty waves and party on dudes!!!

razorthin's picture

Well, what is there left to proclaim?  We found room beyond infinity?

Abraxas's picture

That's what we thought pre 2008 with the housing market and 'prosperity'. Prosperity and growth to infinity. Also, gravity is just an option.

PUD's picture

Like George "helped" the bank of England..bwaaaaa

muppet_master's picture

futures down!

last night spx futures up 5 points = +0.3% or so..now -0.3%..

ZH says:  "With expectations that Europe will once again become a flaming powderkeg after the US elections are over running high, Europe has so far not disappointed"

you gotta see everything through the odummernomics context...HE told the europeans....."WAIT AFTER THE ELECTION"...THEN you can RELEASE whatever concerns you have. He told LOTS OF PEOPLE....the same thing !! benghazi = AFTER the elections...DEBT BOMB = AFTER the election..........

by the way ZH thanks for the delightful japanese model




i also like the first poster (blogger) said where the heck is my japanese babe !! i don't want to see a graph !! LOL!!!

besides there is NOT much enjoyment from a graphic either...flesh and bones is better.....i gotta remind myself to go to one of those IMMUNOLOGY SEMINARS in..........drumrolls......japan !!! tell the wife and 18 month old daughter....

"what happens in those immunology seminars STAYS in those immunology seminars".....well, i love my 18 month old daughter too much AND my wife too!! to do those kinda things

MFLTucson's picture

There is yet hope for Greece, with a story overnight running that George Soros is ready to commit "serious funds to aid Greece."


If in Greece, choose hunger and hoplessness over Soros, its one in the same in the long run.

GetZeeGold's picture



If he offers to reach in his chest and hand them his still pumping heart....we'll know he's serious.

GetZeeGold's picture



He has someone's heart......not sure who's.

muppet_master's picture

soros is NOT a TRILLIONAIRE !!

he's got what 20b??? and its MANAGED $ = meaning that he is managing OTHER PEOPLE's $..just like madoff was....soros is a freaking illusion in fool's minds....i ain't buying jack !!!

he tells u to jump over a bridge...I'll help the fool by giving him the plank, go ahead and jump.....by the way how are those ITALIAN BONDS that HE bought from corzine doing??? LOL !!!!!!!

anyways, its 5AM here in CA...time to hit the gym !!!

GetZeeGold's picture



5AM here in CA...time to hit the gym !!!


The gym is under new marxist management.....so don't be surprised if it hits you.

semperfi's picture

What, the Kenyan Thug sent his New Black Panther poll watchers over there?

Darksky's picture

Is there a gym tax there yet?

GetZeeGold's picture



You must be thinking tanning beds......I've really cut back lately. It's just too damn expensive anymore.

GoodMorningMr.VanRumpoy...'s picture

Soros is a Lt. of the Rothschilds.

orangegeek's picture

This turn down has been a long time in the making.




And there isn't much in the way of slowing these markets down as they head south.

GoodMorningMr.VanRumpoy...'s picture

If George Soros really said he will send money to shore up Greece, it's pretty telling. Trying to use his "legendary hedge fund manager" moniker that the MSM always gives him, to lure other elites to support this cause.

It's telling because the globalists must really need Greece to succeed if they are going to plow ahead with plans for eventual one world government.

If Greece goes, domino rally time, as more EU countries default enough times to be booted out of the union.

Why do the Globalists need the EU to succeed? It was to be the prototype and model for a North American Union and Asian Union. Individual counties were to be erased in favor of regional control grids.

It's about power and control. With religious fervor, Soros and the other Globalists will hand-over-fist throw good money after bad in an attempt to preserve their delusional dream.


BTW: George Soros' son is an idiot.

goldenbuddha454's picture

Soros giving to Greece is like Obama giving a break to the banks.  Could it be that Soros stands to lose his A^& because he's gone and bought a bunch of greek bonds which will never be repaid?  Just sayin

falak pema's picture

France in recession; Germany in frisky panic, questions french determination to clean house; UK in financial austerity cum signs of inflation and QE gridlock; Greece says give me back what's left of my shorn, torn fleece; and Spain sings "arriba espagna, we are 60% unemployed and so we will now sleep in CAmp Nou day and night!";... the winter will be frosty fun n games.

Meanwhile in USA, post-election day they sing :  "yeh-hey yeaaah, four more years, four more years and the best is still to come."

then this :

OECD: China's Economy Will Overtake US - Business Insider

Rude awakening! If its true and not BI/OECD goo! 

disabledvet's picture

it's all about austerity in the USA...this is America after all and what goes on outside the borders (outside of the war front of course) is of little to no consequence. Insofar as markets are concerned. Thus "we're talking capital gains taxes." In other words "i'd better get mine before the Government does." It is ironic that it is the Republicans that control "the People's house"...but hey, those are the folks closest to those who pay for things. those who pay for everything actually....

semperfi's picture

Greece getting what it deserves.  I hope they get it good and hard. Bend over and Greece up for more anal raping because that's what they signed up for.

semperfi's picture

And that's what we signed up for last Tuesday here in the USSA.  Anal raping. Good and hard. No Greece.  Its what we voted for, its what we deserve. I hope the Kenyan Thug and his Army give it to us good and hard, so that it blows up as soon as possible so all the fucking thugs and parasites are fucked, having their big daddy govt security blanket and baby bottle taken away.

overmedicatedundersexed's picture

I miss my days of innocence when Ben would strongly say: "I will not monitize the debt of the Treasury"..aaah those halcion days of old..miss the old ben I do. when lies were ones I could believe in yes hope and change were everywhere..

Flakmeister's picture

That cat don't bounce....