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Why Stocks Are Soaring (For Now)
Some interesting observations from Bloomberg's Richard Breslow, seeking to explain why stocks are soaring (although the optimism appears to be waning in the last few minutes as reality intervenes) on absolutely nothing.
The market has shaken off Friday’s Greece jitters and has convinced itself a deal remains the base case, or indeed the only case.
Even with capital controls as an interim step, the argument goes, such a harsh reality will bring compromise. This argument is proffered by those who think Greece is being “difficult.”
Another argument says the EU and IMF know that a Greece default is a bad thing, perhaps a really bad thing (despite all the protesting to the contrary) and will see their way to a deal. If only Greece would give them a face-saving way to pull it off.
What an unexpected irony it would be if the IMF had to be the fall guy. It is quite clear that the rest of the world has no appetite to experiment whether there will be contagion and have made that clear to the EU.
So today equities are flying, risk is bid and peripheral spreads are tightening at speed. Read another way, excess cash suddenly feels, well, excess, and long-standing short EUR positions are being wiped out ad seriatum. So what might happen when the dust settles?
Bunds don’t look very good. No matter where you draw the retracements from, 10-year yields look technically set to test 0.88% and through there have another go at 1%. Not really what the ECB intended with QE. Let’s not forget that the Bundesbank has not been exactly bund-friendly, as it has been cutting the duration of its QE purchases.
The U.S. 10-year yield is also remembering this morning that whether it is September or December, official rates are set to go higher. It was only June 10 when 10-year rates were pushing up against 2.50%. What if those numbers we are data dependent on start to pick up, as forecast?
In the last period, the back-up in haven market yields led to the EUR rallying against the USD on yield spread narrowing. That argument sounded good, especially with an enormous, and stale, CFTC-reported EUR/USD short position. That position was cut by a dramatic one-third in the most-recent report. The Fed is tightening. The ECB isn’t. Does the ECB want a EUR over 1.1500? Unlikely. Technicians are calling for 1.1800. The protests from the Chambers of Commerce in Europe will be loud and clear.
If the USD starts to leak, commodities are likely to be bid; oil, gold, iron. Maybe good for the ruble and shale producers. Less so for the rest of the world. I have a hard time seeing it.
However you slice it, deal or no deal on Greece, markets are not at equilibrium and are set to move.
* * *
Then again, this is all merely goalseeking a narrative to a market snapshot in time, driven as much by stop-hunting algos as central banks using the CME's Central Bank Incentive Program.
And now sentiment is suddenly shifting to the negative following headlines such as this one:
- ECB NOWOTNY: TO REVISIT ELA DECISION IN LIGHT OF TODAY'S TALKS
Which is basically the ECB's own ultimatum that Greece needs a deal done today, or at least to concede to all Troika demands, or else the ECB pulls the plug. Let's see just how much furious optimism stocks will have in that case.
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Hahaha. Nothing new, no deal, confusion, "we have no new proposals".
Hahahahahahaha
Breaking news.
Eat shit futures!
http://www.theguardian.com/business/live/2015/jun/22/greek-crisis-eurozo...
Be careful....that's wet paint!
Love it how ZH always spins the story in order to, sort of, show how they are always correct.
First it was a Grexit and a "Lehman weekend" with "capital controls on Monday," and now after they completely misjudged the political (!) situation they start to back peddle.
p.s. not saying that the EUSSR is great and that the €uro is a great currency. Not at all, but the final blow will probably come from some external event because a) the politicians will "do whatever it will take" to keep the European Soviet Union going and b) the politicians will want to wash their hands in innocence claiming that "they could not have seen that coming," by blaming something/someone else.
As long as the politicians have some credibility (fiat!) and a printing press, all scaremongering about Greek Black Swans will be futile.
As long as the politicians have some credibility
They don't....but thankfully we still have a plethora of village idiots.
They don't....but thankfully we still have a plethora of village idiots.
Nope, we have the media brainwashing the general public.
I don't think you're really paying attention here.
You saw the "general public" and it was U !! Now wipe Yennen's junk off your face.
Good news or bad news! the paid analysts are always able to see one cause and effect story... life goes on ... who cares.
zerohedge, you did not comment anything about the story... why?
http://just-a-thought-from-thinair.blogspot.com/
Gardner: Greece is solved.
Bwahahahahaha.....the ECB is going to let Greece restructure, they have no other choice. Ask Larry Summers. Now form an orderly line Spain, Portugal, Italy, and France.
You could have asked the same question for numerous days since the financial crisis of 2008
More Central Bankster money printing could be one answer
Central bankster buying to prime the pump for more buying by investors is another.
Manipulation and fraud continue to levitate all markets - stock, bond and real estate.
"Why Stocks Are Soaring"?
Because its Monday!
It's a hoax! Be warned!
duh, i just can't get a grip anymoar...
the fed cannot raise interest rates, or reduce money supply..forget greece or any other debt problem..
you will know the economy is in fact better when they can..don't hold breath.
i care but i don't. i do know they will kick the can. i want to help my kids but i know i will not help them in life, SO I DON'T-TUF FOOKING LUV...
BUT we know that is NOT what will happen to greece. moar coddling, and luvy dovy bullshit with the average greek moar fooked..
Because they printed 3 trillion dollars with the only goal of making stocks go up. Then they passed Obamacare which funnels everyone's last bit of beer and food money into insurance compapnies that buy stocks with it. Then the Fed decided it was the market maker of last resort and keeps an unlimted bid in the markets. How could it go down?
Short, concise, and to the point.
Well done!
Know this, Greece will make its debt payment, even if Draghi has to print the money, hand it to Greece, and Grecce will hand it off to their CP's. Remember, GS is a Greek CP. I'd love to see Greece default, cause the ISDA decision would be fucking epic as everyone trys to cash in on the CDO's their holding. Too bad for them the CP isn't good for the full IOU on the CDO.
Because Obama
yup, and now the healthcare providers are banks providing loans to payoff high deductables and 20-40 percent patient portion. whod a thunk. debt servatude via healthcare.
nobody, nowhere, has printed a piece on why the Germans are so terribly desperate to keep Greece in. The number they are willing to pay is quite large, likely 50-100 billion in haircuts, plus another 100 billion or so in a new program. What is the real reason? Are they truly afraid of the Deutsche bank derivatives? Afraid of a Greek pivot east? Would really like to know what leverage little ole greece actually has.....
Ha. They need the Greeks to offer them something to"save face"!
Bullshit!!
"Saving Face" is merely a Asian thing. Westerners aren't worried about such stops things as "saving face!"!!
Pull the other one ZH!!
So true. Asians value "saving face." Westerners are only concerned with saving their asses.
Really? No one here could had forseen "everything's ok" and ramped futures this am? You reallly think they're gona let their precious EU breakup and let Russia into the mix? Hell, they're still trying to join countries together at the hip in the west!
What fucking money? These people have printing presses and digital zeros. They can keep going until they can't anymore. As long everyone keeps accepting the funny money this can continue.
When everyone finally stfu up over all this Greece bullshit, that's when it happens. If ever. I certainly didn't lose any sleep.
There was a time in my life when I believed that there were indeed free markets and did not think that all of the financial news was just bullshit propaganda that provided cover for policy and covetness.
Then the evidence became overwhelming that all of the markets were just rackets designed to pump money to those inside and steal from those who were not insiders. It made me question the entire money system, whether the market were ever fair and free markets and started me on a path of discovery of other false paradigms in history, science, religion and the nature of our existence.
It made me understand that there is real evil in this world, that evil has a name, and the evil has many willing minions who prosper under that evil.... minions in finance, government, law, the media and industry.
Now, while the existence of that evil and the weakness of men frustrates and dismays me, it is much easier to see it for what it is and see its hand. And while there are real people whose lives "may" be affected by the Greece situation and the reasons for it, it is clear that the situation is being used by pundits and propagandists to further manipulate people and as an excuse for other things. It is getting very old.
I'm sick to death of hearing about fucking Greece! ZH will you just stop posting articles on this topic. Nothing will change, its all show, theatre, they're under full control off the IMF and always will be. They will NEVER default! Enough!
They will NEVER default!
Well.......OK then.
Austerity Obsession is down .... Quantitative Easing is up ! .... Algorese
This has been going on for how long since last year??? fuck deal or no deal...just implode ...fuck.
The game of hot potato is getting old to read..
And FUCK YOU obama,beranke,greenspan,yellen and the rest of the criminal cartel and the IRS
When in doubt .... PRINT !
It's all about getting stocks ever higher. It's the only game for the central banks and government.
And Zimbabwe economics.
stocks higher so they can withstand a 10% 'healthy correction'
so all last week i heard from the msm how ''markets'' do not care about greece, but now all the sudden they do care?
as many ppl have said, this all a shit show used to pump up ''markets''. everyone knows greece is not defaulting, its all fucking bullshit
they only 'care' when it fits their agenda.
WHat puzzles me is that if a Grexit is inconsequential for US stocks why do the US futures rally so hard whenever a rumour of a Greek deal being reached hits the wires?