Markets In Risk On Mode Following Greek Non-Default And Denials Of Greek Referendum And Siemens SocGen Bank Run

Tyler Durden's picture

Anyone who may have gone to bed last night assuming some version of long-termist reality would finally creep back into the market following rumblings of all out trade war between China and Europe will be sorely disappointed as instead stocks are once again focused on the purely superficial, such as that Greece did not go bankrupt last night and did make its €770 million payment this time, although what will happen in the future depends entirely on the Troica. As for the Troica, their animosity toward Greece will hopefully be moderated after Greece denied a report from Kathimerini, which as we expected had about zero percent chance of any credibility to it, that it would go ahead with a eurozone participation referendum, which obviously would have ended the Euro as the majority of people in Greece (and all of Europe) are well over the monetary experiment. Lastly, Siemens scrambled overnight to clarify the FT news that it had pulled money from a French bank, SocGen as it turns out, but says that this happened back in July, and had nothing to do with the current troubles at the French bank. Lastly, two bond auctions by Spain and Greece came at around previous result, and hence much better than the collapse expected further adding to the short covering pressure.

From Reuters on the anticipated Greece referendum denial:

Greece denied a report on Tuesday that it was considering holding a referendum on the country's membership in the euro zone.


Kathimerini daily wrote on Tuesday, citing unnamed sources, that Prime Minister George Papandreou was considering calling for a referendum on whether Greece should continue to tackle its debt crisis within the euro zone or by exiting the single currency.


The government has long said it was planning a referendum on political reforms but has repeatedly denied that it would concern the country's euro membership.


Asked if the referendum would be about staying in the euro zone, deputy government spokesman Angelos Tolkas said: "No. We haven't discussed such an issue, definitely not."


He said the government had put to parliament on Monday a bill aimed at allowing the country to hold referenda but without specifying any issue.


"Yesterday we tabled a bill about referenda ... but we have not discussed anything more than holding a referendum."

Next, on Siemens' denial it is concerned about SocGen:

German engineering group Siemens (SIEGn.DE) withdrew deposits from Societe Generale in July because of the funds' underperformance and not because of fears over the French bank's financial health, a Paris-based source said on Tuesday.


The Paris-based source told Reuters the deposits, while at SocGen, had been placed in an investment vehicle but was unable to say what the amount was.


"Siemens withdrew funds (from Societe Generale) before the publication of the outcome of the stress tests (in July)," the source said. "The withdrawal was for reasons related to performance and not to French bank issues."


Fears over a Greek default and the spread of the euro zone debt crisis have roiled European bank shares in recent months. French banks, perceived as relatively undercapitalised and dependent on wholesale short-term funding, have been hit hard.


SocGen declined to comment. Siemens said the FT report was "factually incorrect".


SocGen shares were down 3.1 percent at 0907 GMT, the biggest faller among European banking stocks . Larger rival BNP Paribas was down 2.5 percent, and smaller peer Credit Agricole was up 0.2 percent.

And lastly, the French and Italian bond auctions:

Spain announced it raised €4.46 billion in 12-18 month bonds, with a target raise of €3.5-4.5 billion.

  • 12-mo auc avg yld 3.591% vs 3.335%, bid/cover 2.78 vs 2.14
  • 18-mo auc avg yld 3.807% vs 3.592%, bid/cover 2.74 vs 3.23

Greece announced €1.625 billion 3M Bill auction results, in line with prior:

  • 3-mo auc avg yld 4.56% vs 4.50%, bid/cover 2.84 vs 2.95

And this is why everyone is ignoring the far more important and bigger Chinese news overnight... At least for the next few hours as the short covering relief rally fades away.

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speconomist's picture

Siemens denies withdrawing money from one French bank.

It's actually true, read between the lines:

Siemens confirms withdrawing money from all the French banks.

falak pema's picture

its old soup if it was in JULY...Socgen has seen a tsunami since then.

spiral_eyes's picture

What risk, bitchez?

No drama Obama got the American people by the throat and he's ready to strangle them with more taxes, and more bailouts for banks. 

No risk of anything much else. 

Vincent Vega's picture

Pa-raize Jeez-us the world is saved! Well maybe not...think I'll keep stacking and storing, just in case.

GeneMarchbanks's picture

No, no Zh was on the money last night: Corporate bank run has begun.

Fips_OnTheSpot's picture

Yeah, and why wait for zillions of sheeples running to the counter -- just suck it out in 500M "charges".




Nice deal!!

yabs's picture

only a retard could think there is upside here even if QE 3 does get passed doies anyone think this will help the economy at all with oil nearly 100 dollars a barrel

its QE@ which caused the double dip which we are now in. Qe3 would crush margins and hence stocks

TradingJoe's picture

This kind of frantic behavior and outright lying only confirms THE END IS NEAR!
Will use today's "rally" to short some more via puts and add to my PMs via Physical!
Many pathetic little lives will finally get the "check" they had a long time coming!

twotraps's picture

10 yrs ago any one of these headlines carried significant weight.   'Bad News', in terms of the stock market actually going down has morphed into what the fed/govt./central banks Don't do in light of what used to be bad news.  Bad news and no free-cash-bailout-accounting holiday-special risk sharing that might be construed as bad news.  Just a regular bank run and sovereign default followed by more imaginary money is nothin to worry about.

yabs's picture

two traps I said as much on another thread



you used to be able to see world evenst on stock markets ie 9/11 etc but now they just sho2w when Ben turned on or off the printing press

a truellly pathetic state of affairs

Fundamentals, techincals or anything for that matter mean anyhting, it all relies on Bens press

How theer havn't been more protests at this I do not know

Its a a f*cking travesty

twotraps's picture

sorry yabs, didn't see the thread.  Its the only thing that came to mind as I read it....I'm guilty of still trying to be reasonable while I read and digest the news in terms of what may happen in the market.  Must stop doing that.

Ursa Major's picture

Funny thing, but Greek CDS just came in by 1,400 points...apparently, the 106% certainty of default wasn't quite a certain as some folk thought...


DormRoom's picture

FOMC 2day meeting starts today. front running, bitches.

yabs's picture

If there is QE 3 you should execute ber nankle fopr treason

remember it says in the constitution that devauling the currency is a capital crime

msmith's picture
An AUDUSD retracement developed, but the trend remains clearly to the downside. The AUDUSD has been quite weak relative to other USD pairs.
YHC-FTSE's picture

It might seem flippant, even simplistic, but we're all living in a monster version of the Japanese economy now - I know I'm not the first to say it nor will I be the last. If they can handle debts of over 200% GDP, fantasy island banking industry, and inane smiles in the face of economic/social/political malaise (As well as a tsunami and nuclear meltdowns), then we can too. For a long while yet. Reason, logic, or even the frightening reality of being on the verge of a economic precipice no longer applies. It's a risk-on world, and hang the consequences. Nothing has essentially changed, but imo, the euro can be fudged to run indefinitely even if Greece defaults, Soc Gen goes down, and everyone has the conniption fit for a day or two.


The world is the stage on which the biggest theatrical production of fakery and alternative realities are being played out: Debt is an asset, slavery is freedom, war is peace, and (no)work makes you free. In essence, the reserve currency and its pretender-in-waiting have almost an equal chance of collapsing, but that chance is also getting close to zero in my lifetime - TPTB are just too clever. I'll keep my gold, just in case, but there's money to be made riding the fake rising surfs of the stock markets. BTFD never made more sense for infrequent day traders waiting for the FOMC announcement to pimp and pump the markets on schedule. 

yabs's picture

two traps

no aplogies needed

I was just backing up what you said.

Its a joke

look  throught her history of the market anbd all major events can be seen but now as you say bad news resulst in stocks going up

Bernanke must be seperated from his press

yabs's picture


they are smart I agree but the whole world cannot ride like Japan

remember they had their bad years when the rest of the world was ok an d their own people bought their debt

this circle jerk ponzi scheme cannot continue forever

I may eb wrong thought its made it past 2 years now

YHC-FTSE's picture

By all that is sane and reasonable, you are of course right. The world cannot ride like Japan indefinitely. But that is precisely what the world is doing. When does a Ponzi scheme collapse? When the new customers for fantasy wealth run out, or When somebody has the gall to point out the emperor has no clothes. The whole planet has bought into the fiat, fractional reserve Ponzi, and we're never going to run out of people fantasising about wealth, even if that wealth is their own unpayable debt or the unpayable debt of others. I've been waiting for the collapse, but countries and people are incredibly resilient when it comes to their own stupidity and rationalising the irrational. 

mendigo's picture

i am starting to feel that tyler is a bit of a pessimist

the appropriate headline would be: Greece Does Not Default!

now that we (even the slow like myself) can reasonably assume this corrupt system will collapse, the greatest danger is that our keepers are planning Global Econ 3.0 - which will appear a bold step to save the world (as we know it) and will ensure that right-thinking people remain in control

adr's picture

The question is where did Greece get the money to make the payment? We know they didn't have it. The answer is the US Fed printed by the US treasury sent through the shadow banking system.

A little over $1 billion, please the US government loses that in couch cushions every day.

The Fed's mandate is to keep the global ponzi running. Inflation and employment is just a cover story. When all else fails the Fed steps in as lender of last resort. Problem is that changed in 2008 and now the Fed is the lender of first resort.

The Fed lent trillions to keep the financial ponzi from collapsing. You don't think wasting a few billion on Greece is even a blip on the radar.

This scheme will never end as long as the Federal Reserve exists and the US Treasury is willing to print and endless supply of dollars. American workin families don't mean a thing and they are collateral damage in the war to protect the elite.

New_Meat's picture

"When all else fails the Fed steps in as lender of last resort. Problem is that changed in 2008 and now the Fed is the lender of first resort."

if ("First" = "Last")

    { Lender := "Only"; };

yabs's picture


you arew rigth it all coe4ms down to pschycology

I am in the teh extreme minority who even know what QE is and who coinsider it to be wrong

everyoln e just loves the system as it is it seems

I tried to talk to several peol;le at work about it and the response was they would rather talk about work than econom ics

they do not realize that its due to bad economics that they will be working at a shitty job till they drop