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Overnight Senitment Worsens As Europe Again "Risk Off" Source
There was a time, about 4 weeks ago, when the overnight session was assumed by default to mean lower futures just because it was "the time of Europe." Then markets took one glimpse at the ECB's balance sheets and realized it had grown by more in 6 months than the Fed's during all of QE2, and decided that the central bank will not let the continent fail, and despite how ugly the European interbank market continues to be, Europe was ironically a source of optimism, no matters how ugly the actual news. In other words, a carbon copy of January 2011. Alas, January 2011 ended, and so is the currency phase of Risk On on everything European. Which explains the shift in overnight sentiment. As Bloomberg explains, the First Word Cross Asset Dashboard shows sentiment retracing from early European session rise, with commodities, FX, equities lower after Greek debt negotiations hit snag, according to Bloomberg analyst TJ Marta. EU finance chiefs balked at private investors’ offer of 4% coupon for new Greek bonds; EU wants lower; IIF’s Charles Dallara to hold press conference at 8:30am EST; EU equity indexes lower, led by OMX -1.6%; U.S. futures moderately lower, led by S&P -0.5%; US$ outperforming on risk aversion; Commodities generally modestly to moderately lower. Finally both Portugal, and thus Spain, are once again back on the radar screen. Only this time the Greek "deleveraging" model will not apply, as Zero hedge first noted, and as MUFJ picked up on in its overnight note: "It would likely be more difficult for “Portugal to restructure its private-sector debt than for Greece,” Bank of Tokyo-Mitsubishi UFJ’s Lee Hardman says, without necessarily noting where he got the idea. A higher share of Portugal’s outstanding debt is governed by English law which offers greater protection to creditors vs 90% of Greek government bonds covered by local law. Finally, Hardman says that Eurozone lacks a credible firewall to ensure contagion from eventual default in Greece. That may be the case until the ECB does some gargantuan LTRO on February 29, as those in the know already expect.
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There's that word 'gargantuan' again...
Combined with that chart that was up yesterday... I think we've reached the point of SUSTAINABLE GARGANTUANISM...
Transitory gargantuanism, don't you mean?
If only there was some way to sell tickets to this show. We'd make a fortune.
Unfortunately everyone already (thinks) they have a seat. Certainly, they can all hear the music. Till it stops.
your seat has been rehypothecated... Thanks for playing...
LTRO 2.0 = €250b (meh)
LTRO 2.0 = €500b (hmmmm)
LTRO 2.0 = €1t (gettin' there)
LTRO 2.0 = €10t (gargantuan!)
"Super Mario vs the Gargantua LTRO" (3D Blue-ray available 29 Feb 2012).
Pantagruellian comes to mind, written by same author... puerile but facile comparison of greed beyond stomach capacity...head for the toilets, what goes in must come out!
TD : change to "sentiment" please, its a gargantuan urge to be spelling NAzi !!
One of these days they will have to admit the game is up, just how long will they keep dragging it out.
I would like to know how many hundreds of rumors have been released over the last year to keep the markets positive in Europe. Anyone ever count the amount of rumors? What are we at one thousand now? All the rumors and no real solutions or movement. Why in the world would anyone still believe the BS being spewed?
But the market isn't up over there. Equities were killed in Europe last year. Since that's a leading indicator...
Time for CDS rack?
You mean "hope" not "expectation." hope is not an investment strategy. Adding terrorism to the list only only clarifies the issue at hand. Once the people in charge of the banks successfully...
market waiting for AAPL earnings....then we will see some moves up or down
Has the can reached critical mass yet and rendered kicks down the road impossible?
Gargantuan--anybody see "Kill Bill"? Often difficult to find a context to use that word--needs the fine offices of government to provide it.
Wait, so Tyler was right? This can't be... ;)
OK - Choice law English. Is there such a thing? How is it defined? England is part of the United Kingdom.
Next and bigger question.
Why assume it will be tried in a British court and not a Portuguese court applying "English" law.
You know what the Portuguese are going to say and to whom can bond holders appeal when they lose in the Portuguese court system?
It won't be pretty and it will take years to resolve and no way Portuguese will recgonize the authority of a foreign court. Only trouble for the Portuguese if the bond documents specifically grant foreign court authority.
Meanwhile the Portuguese will do what is needed to survive.
Yes I am a lawyer but not an international bond lawyer.