Cashin On Equity's Premature Victory Lap

Tyler Durden's picture

Whether its performance-missing anxiety or premature exuberance, UBS Art Cashin notes (as we did on Friday) the disconnect between Bonds' less sanguine appearance and equity's which "seemed determined to take a victory lap even before the polls opened – forget about closed." As Cashin notes, equities were also helped by the quarterly expiration as well as the S&P reweighting which seemed to keep a bid under stocks throughout the day. As the week will be focused on attempts to form a Greek government (in a relatively light macro data week), the avuncular Art summarizes perfectly the situation as "Greek elections may just delay and not decide" as markets appear to be sensing the stalemate and yielding initial gains.

Markets Decide Greek Exit Fears May Be A Trojan Horse

 While the financial media on two continents was on full Def Con alert about the weekend Greek elections, markets assumed the fix was in. Maybe that declaration requires a bit of an explanation. Debt markets (that would be bonds if you are burdened with a graduate degree) remained a little nervous, with yields in Spain, Italy and the rest of the periphery hanging close to recent record highs.


Equity markets seemed determined to take a victory lap even before the polls opened – forget about closed.


European stock markets closed in a celebratory manner.

The Greek Elections May Just Delay And Not Decide

 As we suggested long before the election, the results would lead to discussion and not decision. Even if Syriza had won a lopsided victory, I doubt they would have simply dropped the Euro. They, along with all the other parties, wish, primarily, to negotiate a less onerous austerity package to win the thanks of the populace. That posture will likely complicate or, maybe, prevent the formation of a new government. On paper, New Democracy should link up with Pasok to form a government. The compromise might be for Antonis Samara (head of New Democracy) to stand aside and allow for the appointment of a Mario Monti style technocrat to act as Prime Minister.


The trouble is Pasok wants Syriza inside any coalition (see Lyndon Johnson’s quote about “inside the tent”).


Pasok fears that Syriza, or any non-coalition partner would spend the next few days and weeks and months carping from the outside, blaming the coalition for each new sacrifice imposed upon the populace. Then, in a few months, the outsiders could force yet another election, winning full control as the popular outsiders.


Markets appear to be sensing another possible stalemate and are yielding initial gains.

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Stoploss's picture

The vortex of deflation now openly consuming any and all new issuance in an immediate fashion.


Steady as she goes retards.

slewie the pi-rat's picture

for some reason the MSM and art among them do not seem to think that the fact that antonioSam and gPap were college roommates is even interesting, much less sognificant

i have pointed it out at least 20 times and consider it the key to understanding greek politics

oh well, art is art

and, everything is still screwed down tight

William113's picture

Its all about the American election in the fall. THEN FULL RETARD AHEAD and the world will shit itself.

RobotTrader's picture

VXX  and TVIX are getting destroyed.


Pity to the guys who piled into those before the elections.

FlyoverCountrySchmuck's picture

Not so fast....

ND likely will not be able to form a government in the next 3 days, which means we get to play out this whole show, yet again.

distopiandreamboy's picture

By that time though the G20 will have announced a new global "growth" initiative and the Fed will have some half assed easing program. Nothing will be solved but the markets will rally.

Saro's picture

I have no pity for anyone still in the market, at this point.

HelluvaEngineer's picture

I love the smell of BTFD in the morning.  It smells like...full retard.

mrktwtch2's picture

buy the rumor..sell the fact..very profitable of late..

DrDre's picture

" ... a Mario Monti style technocrat ..." -- heaven forbid. For the record, all that mister Monti has manged to do has been to raise punishing taxes on whatever wealth remains in Italy. A lot of fanfare on cutting the costs of politics or reforming the labor market, but business as usual. Monti is a member of the socialist thinking elite who think great public subsidies is the way to create jobs.

Rest assured, Europe can only impode from here, even though it may take some more time until they have consumed every bit of residual wealth.


ArgentoFisico's picture

700 billion € of public spending. Same analysts say at least 200 billions can be cut that are made of public spending to parties & their friends (electors), pure robbery to the citizens' expenses..

200 billion in manouvers in the last 3 years: 75% new taxes.

We're going right into the hole.

I wonder who will put his hands on "our" 2450 tons of Gold ...

Lionhead's picture

Here's another LBJ quote:

"If the circumstances make it such that you can't fuck a man in the ass, then just peckerslap him. Better to let him know who's in charge than to let him think he's got the keys to the car."

Private comment, found in White House Tapes: Eavesdropping on the President (2003) edited by John Prados

Seize Mars's picture


Great, not only was the guy a vulgar misanthrope, he also mixed metaphors.

falak pema's picture

no wonder we got Watergate ! They were looking for those priceless LBJ quotes, most of which were stored in the Democrat HQs as historical mementoes of the past. They were worth their weight in GOLD and RN, having got off the gold standard, KNEW everything in gold would go up!

LBJ should have had made his dikk's live sized fully erected effigy moulded in gold as memento like Mr Bettencourt did in France. Rumour had it that all political shills  who came to receive handouts in cash from the richest man in France, then from his wife, main shareholder of L'Oreal,  for their upcoming political campaigns, had to kiss the golden effigy and say thank you to the Oligarch, like to Don Corleone, or subsequently to his wife. It doesn't say what his wife said in return as she has since those lovely, powerful days of wine and roses lost her memory.  

Boilermaker's picture

Well, Ben's right there shoving the entire market higher again today.

So, seriously, what is the point of dissecting the movements when they are slammed upward by the powers-that-be?

Go have a martini, Art.

gjp's picture

No kidding, and really, where is the disonnect when bonds are going higher and stocks are going higher too.  All assets going higher (even PMs, sometimes).  Isn't this the unstated mandate of the Fed and their cronies?  When it's all based on money printing to buy assets why shouldn't the 10-year yield zero while S&P is at 2000?  It's appalling, but short of the supply chain choking somewhere, it's hard to see where it stops.

Boilermaker's picture

I can hear the FED grunting as they keep forcing the SPX higher.

REITs now hitting the channel and being bid up successfully.

I love this daily shit.  It's awesome.

RobotTrader's picture

IBD Mo-Mo Top 50 stocks are on fire today.


IBD's growth stock vs. income stock ratio hit 9 month lows last week.

So everybody has decided to buy "bargains", like ISRG and CERN which have a P/E ratios of 45, down from a peak of 70 earlier this year.


Boilermaker's picture

There's not even a point in dignifying with a response.

derek_vineyard's picture

robo traders exist on most every internet phenomena-- in its truest form; pure sarcasm

firstdivision's picture

The problem with looking at the 10Y is that when there is an expected Fed Twist coming down the pipe, it distorts the 10Y pricing.

adr's picture

and somehow Facebook is up 4% over $30. Fuckign daytraders were looking at crossing over $30 as a huge buy signal. Of course they don;t focus on fundamentals or anything real. Just price target thresholds.

Yes if a stock hits a target that means buy or sell. Really intelligent.


Seriously the average P/E of the momo stocks is above 50. Every single one is somehow going to dominate the entire market? $1 billion corporations are all going to figure out how to become $10 billion within a single year?

The growth is bullshit, it is all inventory accounting games. When the blowup happens it is going to be beyond catastrophic. $390 88 P/E stocks going to $20 in a day.

Boilermaker's picture

Look at the REITs just fly fly fly.

Man, CRE shore does look purdy right nows.

justsayin2u's picture

must . . . have . . more . . qe . . . cant . . stop . . till . . yeilds . . are  . . negative . . need wealthe effect . . need rising markets . . need more policy for congress and banks to front-run . . cant . . stop . . till . .

Eireann go Brach's picture

Stocks vs Bonds.. Like Fat fuck Larry Summers vs Mike Tyson in his prime!