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Sentiment Slipping As Greek Debt "Deal" Elusive For Third Day

Tyler Durden's picture





 

Remember that Greek bondholder PSI agreement that was "imminent", and which we said ain't coming any time soon, probably never? Well, the latest bout of the IIF's overpromising and never delivering, something the Charles Dallara agency has been so good at in the past, is starting to creep into market sentiment, precisely as predicted by the Einhorn diagram that explains market trading patterns, and newsflow excrement, better than anything in the past year. Below Bloomberg summarizes just how the latest revulsion at leadership betrayal is starting to hurt the market which may be about to lose all its recent gains driven purely by optimism.

From Bloomberg:

First Word Cross Asset Dashboard shows sentiment slipping with FX, commodities, equities lower as markets pare risk ahead of expected Greek debt swap agreement by week’s end, writes Bloomberg analyst TJ Marta in following note:

  • Initial Greek debt agreement announced according to Greek newspaper Proto Thema; IIF MD Dallara says may have something to announce on Greek talks today
  • Asian equities, yields reflected generally positive sentiment; equities up moderately to significantly, led by TOPIX +2.0%
  • EU equity indexes mostly down moderately, led by Euro Stoxx 50 -0.6%; U.S. futures mixed in moderate ranges
  • US$ modestly to moderately higher vs all major FX; European currencies, which rallied strongly earlier this week, are underperforming; euro down vs all except krone, krona
  • Commodities mostly modestly to moderately lower with US$ strength
  • Treasury yields mixed in modest ranges, with curve steeper
  • Bund yields moderately higher; EU sovereign yield to bund spreads mostly tighter; exception is Spanish spreads extremely wider, with 2yr +30bps, 2.0 std. devs. to 325bps; Spain seeks 20% cut in bank branches, jobs
 


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Fri, 01/20/2012 - 08:32 | Link to Comment French Frog
French Frog's picture

IIF's overpromising hasn't morphed into any negative sentiment for stocks yet ...

Fri, 01/20/2012 - 08:38 | Link to Comment Clam McCain
Clam McCain's picture

Keep buying stocks bitchez - this is going to end in tears

Fri, 01/20/2012 - 08:40 | Link to Comment HoofHearted
HoofHearted's picture

All the other risk assets are down. I mean, who wouldn't rather have pieces of green paper that say "Federal Reserve Note" on them instead of something like silver that has a million uses and has been considered valuable forever...there's no way that taking on pieces of paper could ever end badly. What do you mean, have I ever heard of John Law???

Fri, 01/20/2012 - 08:53 | Link to Comment Comay Mierda
Comay Mierda's picture

FRNs work pretty well as toilet paper.

Fri, 01/20/2012 - 09:49 | Link to Comment _ConanTheLibert...
_ConanTheLibertarian_'s picture

or in the stove

Fri, 01/20/2012 - 08:57 | Link to Comment slaughterer
slaughterer's picture

I find it amazing that we open unch after Hilsenrath, the official mouthpiece of the FOMC, pre-loaded the "No QE3" result of the next meeting in the NYT yest.   Is the market THAT manipulated and/or braindead?

Fri, 01/20/2012 - 09:32 | Link to Comment plantigrade
plantigrade's picture

both ?

Fri, 01/20/2012 - 08:40 | Link to Comment Oh regional Indian
Oh regional Indian's picture

Greek debt debacle drama is like the American debt ceiling debacle II, soon to be launched.

First every one will wring a lot of hands, do the whole Drachma Drama.

Can't wait for the great debt ceiling debate in Vichy, I mean Dichy, I mean DC to start again. Right about Superbowl time maybe? 

Fun. Sentiment? Slip Slidin' Away.

ori

shattering-midass-curse-gold-de-spell-ed/

Fri, 01/20/2012 - 08:38 | Link to Comment fonzannoon
fonzannoon's picture

Yup thats right. Italian bond yields dropping. Earnings have not been a disaster. Trillion in QE coming next week. All is well. Vomit.

Fri, 01/20/2012 - 08:38 | Link to Comment qussl3
qussl3's picture

This is setting up to be one of the most ridiculous mismatch between expectations and reality.

No deal, no qe3, no RRR come next week.... will be interesting.

Ofc if they pull any of the above out their butts, its off to the races for the blowoff top.

Either way the boat is waaaaay loaded on one side.

Fri, 01/20/2012 - 08:40 | Link to Comment pbracken
pbracken's picture

European press is reporting a deal is set to be announced. It caused a 30 point spike in the DAX

Fri, 01/20/2012 - 08:50 | Link to Comment moriarty
moriarty's picture

Wondered what it was. I saw the jump via the FTSE100 @ approx 10.15 GMT

Fri, 01/20/2012 - 08:55 | Link to Comment EscapeKey
EscapeKey's picture

Oh ok, will this "new deal" solve the issue permanently - again?

Like the previous deal? Or the deal before that?

Fri, 01/20/2012 - 08:58 | Link to Comment SeattleBruce
SeattleBruce's picture

They've been talking about 'a deal' for years now...always get that good short term kick out of it...

Fri, 01/20/2012 - 09:23 | Link to Comment greensnacks
greensnacks's picture

A deal that how many will agree to accept?  They talk about this like 100% of the lenders are sitting in a room and hashing out a plan to save europe.

Fri, 01/20/2012 - 08:40 | Link to Comment oogs66
oogs66's picture

Why does anyone in their right mind think the IIF should be negotiating this? And what qualifications does Dallara have?

Fri, 01/20/2012 - 08:55 | Link to Comment slaughterer
slaughterer's picture

There is still a conflict of interest if Ackermann were to negotiate it directly. 

Fri, 01/20/2012 - 08:42 | Link to Comment fonzannoon
fonzannoon's picture

So go to cash, short the euro here? If this market gives it up silver will be $24 in a heartbeat. buy with both hands?

Fri, 01/20/2012 - 08:54 | Link to Comment pbracken
pbracken's picture

I don't think it's time to SHORT the Euro, fonzannoon. Wait till after Greek bondholders take their medicine, since news of it is likely to send the Euro higher. 

Fri, 01/20/2012 - 09:10 | Link to Comment fonzannoon
fonzannoon's picture

I agree. I would not short anything this year. I think the black swan this year is the market rallies huge. SPY up 10% plus by labor day. Then you will hear all the "sell in may and go away guys yelling". Then CNBC will make fun of them in september because they missed another run up over the summer. By November people will be hailing Bernanke not vilifying him for his brilliant monetary policy and his incredible ability to stand his ground while his detractors tried to take him down. You will get another 5% just for the hell of it for Santa. There may be some "healtyhy corrections" in there but nothing too much. The Republicans will yell about the defecit but one will care. Most people will get poorer but be too stupid to notice.

Fri, 01/20/2012 - 08:49 | Link to Comment slaughterer
slaughterer's picture

Dallara and his cronies have to build up their DAX shorts before announcing no deal. 

Fri, 01/20/2012 - 08:50 | Link to Comment pbracken
pbracken's picture

A decent commentator reckons a Greek bond deal is 90% priced in, and I agree with him. So expect a euphoria-spike when the news finally hits the wires. 

That might be the time to phase in some SHORT positions. I'm not convinced we can expect more than a 300 point correction on the DOW, though, and I'd be minded to swing LONG were we to get it. 

Fri, 01/20/2012 - 08:52 | Link to Comment fonzannoon
fonzannoon's picture

300 points on the dow? Thats it? Wow. the shorts would have just doubled down at that point after taking a beating already and then get skewered.

Fri, 01/20/2012 - 08:54 | Link to Comment slaughterer
slaughterer's picture

Expect no announcement of PSI debt swap talks intraday today (the talks will resume at 12:30 pm EST).  Any announcement will be made at 5 before midnight Sunday.    It will take a full day before the media lets us know who is holding out or taking legal action for maximum nuisance value, if they have not been bought out today.  

Fri, 01/20/2012 - 08:57 | Link to Comment agent default
agent default's picture

Yeah, everything is priced in lately.  When everything is priced in, nothing is priced in at the end.

Fri, 01/20/2012 - 09:00 | Link to Comment EscapeKey
EscapeKey's picture

Are you fucking kidding me? We've had at least 15 rallies on the basis of "Euro debt talk hopes" already, amounting to something around 2-3,000 points on the Dow. But somehow, this isn't priced in already?

It's deliberate goosing of the equities to lull back in investors.

Fri, 01/20/2012 - 09:11 | Link to Comment pbracken
pbracken's picture

Sure, but you probably didin't see the market reaction when Bloomberg reported that it's a done deal. I was at my UK desk and European bourses surged.

I think it might be wise to prepare for another sentiment boost for equities, that's all. 

Fri, 01/20/2012 - 08:50 | Link to Comment firstdivision
firstdivision's picture

So this is bullish for the AUD and bearish for UST's....sure makes sense...

Fri, 01/20/2012 - 09:04 | Link to Comment The 100 Trillio...
The 100 Trillion Dollar Man's picture

I am the only one to think it strange the talks are resuming after dark?

If they are going to do it in a bar somewhere on Friday night, I'd say Venizelos could drink most people under the table.

Fri, 01/20/2012 - 09:10 | Link to Comment slaughterer
slaughterer's picture

Need to slip those stubborn bondholders a "mickey" via the generous Ouzo on a Friday afternoon, then they wake up and have to "look for Doug" all day the next day, staring at a gigantic haicut and a 2% coupon on the new bonds.  The "Hangover 3" -- on the telephone back to home office: " uh, man, we fucked up in Athens."

Fri, 01/20/2012 - 09:05 | Link to Comment chinaguy
chinaguy's picture

Haw Haw

Portugal to need "Debt Haircut" as economy tips into Grecian downward Spiral.

http://www.telegraph.co.uk/finance/financialcrisis/9026144/Portugal-to-n...

Fri, 01/20/2012 - 09:12 | Link to Comment slaughterer
slaughterer's picture

The "haircut syndome" is Europe's new "solvency solution." 

Fri, 01/20/2012 - 09:23 | Link to Comment CaptainObvious
CaptainObvious's picture

 Some simple math for the fearless leaders of Europe:

 

debt + interest = more debt

debt + interest + more debt + more interest = overwhelming debt

debt + interest + two years of ineffectual talks = overwhelming debt + riots in the streets

debt + default = 0 debt

 

There now, that wasn't so tough, was it?

Fri, 01/20/2012 - 09:27 | Link to Comment Bohemian Clubber
Bohemian Clubber's picture

I say I say I say we bomb this tiny island full of fuckers and sell sell sell the land. That way we make sure the other fucker countries around will pay pay pay.

Fri, 01/20/2012 - 09:32 | Link to Comment EscapeKey
EscapeKey's picture

Were you listening to techno techno techno music while you wrote wrote wrote this by any chance?

Fri, 01/20/2012 - 09:35 | Link to Comment CaptainObvious
CaptainObvious's picture

Nah, that would never happen.  We only bomb countries with oil.

Fri, 01/20/2012 - 10:22 | Link to Comment chubbar
chubbar's picture

foghorn leghorn?

Fri, 01/20/2012 - 11:29 | Link to Comment Bohemian Clubber
Bohemian Clubber's picture

'zactly joined with some Sarkazme

Fri, 01/20/2012 - 10:25 | Link to Comment falak pema
falak pema's picture

If the Germans had paid back to Greece the WWII damages they promised they would at reunification; Helmut Kohl himself made that promise and its never been kept, it would do a LOT to appease the Greek debt. Just saying, the uber alles economy has NOT kept its given word to Greece.

Fri, 01/20/2012 - 11:03 | Link to Comment Instant Wealth
Instant Wealth's picture

... so when it comes to lying it's GREECE vs GERMANY 1:1 ?

Fri, 01/20/2012 - 12:42 | Link to Comment dlsamg
dlsamg's picture

Buy every one point dip in the eminis.

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