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SocGen's Take On The Greek Elections And What Happens Next
SocGen summarizes today's Greek elections and their implication:
What next in Greece? As we head to press, the preliminary results (82.5% of national vote counted) of the Greek general election show 130 seats out of 300 seats to the pro-programme New Democracy Party and 33 seats to PASOK, combined the two pro-programme parties should thus have secured enough seats to form a unity government. The largest anti-programme party, Syriza, secured 71 seats, making it the second biggest party in parliament. Sunday evening, Presidents Van Rompuy and Barroso issued a statement welcoming the election outcome and noting that “The second Greek adjustment programme <..> is the basis upon which to build to foster growth, prosperity and jobs for the Greek people. We stand ready to continue assisting Greece in achieving these goals”. We expect to soon see a renegotiation of the target dates and a real effort to free up structural funds, etc. for Greece.
MARKET ISSUES: Greek euro exit fears are likely to ease for now, but even in this best case outcome, Greece will continue to struggle to meet programme targets and renegotiation with a possible third programme for Greece will soon have to be addressed. Moreover, this does not solve the fundamental issues weighing on Spain and Italy.
And as an added bonus: the French bank's take on the NEW QE:
Will the Fed adopt QE3? Yes! Will it help? Only at the margin. With economic data signalling stall speed growth for the US, we expect the Fed to lower its current 2012 growth outlook from 2.7%, narrowing the gap to our own forecast of 1.8%. This – and the risks from the euro area debt crisis – will allow the Fed to adopt QE3 at the June 20 FOMC. We estimate the Fed could extend twist by another $150bn, but our expectation is that the Fed will instead allow its balance sheet to expand a further $600bn, with purchases split 40/60% between MBS and Treasuries.
MARKET ISSUES: Opinions are increasingly divided as to whether additional QE will help – some even fear it could be counterproductive. QE works through three channels (1) the interest channel (borrowing conditions), (2) the US dollar (competitiveness) and (3) asset prices (wealth effect). We have long held the view that each new round of QE comes with diminishing returns. We nonetheless see the impact as positive – if nothing else giving the reassurance of a pilot in the plane.
All that said, in a global market in which only the next 60 seconds of trading matter, as beyond that anything is merely in the eye of the central planning beholder, and out of the purview of the newsletter one just spent $29.95 purchasing, it is all surely good enough.
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Please can someone throw some insight on this matter? When we buy gold, are we buying paper gold or are we buying real gold? If we are buying paper gold isnt it possible for us to have same problem with fiat money where the total value of paper issued is much larger than existing gold? What if there is a run on the gold market where people want to redeem their gold?
Time to ass slam the markets, no matter what.
3, 2, 1....ACTION
30 year down 1 plus 21. gold well off it's low. gold probably best bet shirt term. would consider shorts in some utilites trading at multi-year hi p/es. s&p could carry on the backs of the shorts.
Sorry, but gold is your best bet, short term, medium and long term. Nothing has changed, we are in the same spot as Friday, just more squealing from the pigs. Will this ever end.? I am so fed up with all the worthless shit being piled on high from country to country.
And someone needs to tell Robot is post on gold is way out-dated.
Yea nothing has changed. You can't take a socialst contry and put in austerity. They never intended to and they never will. All around the globe they are looking for some magic to sprinkle on a pile of shit to make it a rose. It will not happen.
All the metals look good to me; play the ratio's and convert spare fiat to Ag a/o Pt. Trade for Au at 48:1 or Pd < 20. Hoard Nickels and Cu pennies. Every which way.
I agree with BM, it's malaise for ten years min, until we beef up the young who will have seen despair.
Maybe not the despair of their parents or family but certainly despair from their neighbors and freinds,
Some will remain untouched (that's just the way life is).
But our young kids will have hearts and minds and muscles.
Unlike the toddlers of today who have mush and mush and mush.
Romney will fail, the communist after will finally destroy but our children will rebuild.
Truth ALWAYS WINS. Communism ALWAYS FAILS. Life AIN'T EASY.
God bless us. Thank me!
Is American Idol on tonite?
Horray. The Greeks lost the election.
I think I said that right.
When the choice comes down to communist,socialist,or anarchist there isn't hope or sanity. ANyone think the fas will be gone by open tomorrow?
dont worry boys....the black swan cometh!!!!
PIIGS just lie like always and Brussels and the ECB will keep the bailouts coming.
The PIIGS can dictate to the ECB. The suckers in Brussels will do anything to keep members in the Euro.
Can anyone actually answer the question why the market would be going up?
The stupid headline stories all said, market gains on hope for Greece.
What hope? Irrational exuberance was one thing. But this insanity is a completely different beast. Some retail stocks are trading al levels that would require growth past the entire market sector they belong in . Every bull case can be shot down with 1000 data points, yet the market stll goes up on hope for a solution that never comes. Banks keep on getting more money to buy stocks sending values up, even though a retail buyer will never be there to hold the bag.
Is I'll buy yours if you buy mine, really a sound investment strategy?
When shit like this doesn't add up, you can bet something else is going on behind the scenes. Tyler'll suss it out.
rallying off overbought markets, finally an excuse to short squeeze which has been trying to for the last 3wks of so. Pre 20th Fed juice job that may or may not send the indexes into new highs (no QE3 announced), should be capped. Greece was just an excuse to buy. A short term buy, sell on rallies.
ZH is on the money with watching for liquidity, LIBOR manipulation and derivative hell storm + Asia + EZ + the world economic system collapsing etc.
Haha... fucking Greek idiots. Enjoy your slavery. Get ready to bend over and spread your ass cheeks.
So Iceland is not Greece then?
Can anyone actually answer the question why the market would be going up?
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Because, it ain't a market.
Well for one thing, it's a diversionary tactic. it keeps the sheeples' mind off what's really going on.
And nobody even watching while the US escalates its war in Syria and Russia sends troops, equipment, and arms to Syria. I guess they've cried wolf so many times nobody is looking anymore, just as the wolf arrives.
And nobody even watching while the US escalates its war in Syria and Russia sends troops, equipment, and arms to Syria. I guess they've cried wolf so many times nobody is looking anymore, just as the wolf arrives.
That "small little country that didn't matter", with only 3% of the EU's GDP, suddenly mattered a lot at the market open, as that supposed marginal improvement must be the green shoot that turns around the world's $62 trillion economy. Added to that "plus", the fact that the Greeks have agreed to resume self-flagellation means that the onus of repaying the Greek debt shifts away from "Central Banks who stand willing to provide whatever liquidity is needed to stabilize the system" ( read: cover Greek debts and goose equity markets) and shifts back squarely on the shoulders of the downtrodden Greeks, who obviously can never repay. Further market euphoria can be expected now that these Central Banks can take their eyes off Greece, for at least a week or two, and concentrate on the fact that worldwide economic data is screaming recession, and ability to repay is relative as impossible is impossible even if in Spain, Italy, the US and Japan it is only marginally less impossible.
The ECB $125 billion fart (lacking substance but smelling rather bad) wafted toward the Spanish Banks recently led to a ten hour rally in world financial markets. That's the benchmark: 10 hours. Let's see what markets look like at 9 am New York time.
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With the young largely voting for SYRIZA and the old largely voting for New Democracy. I think this election is bullish for revolution in Greece. It is the young who revolt.
I also think Egypt's election is bullish for revolution too. What a sham it was.
But it all just keeps going slow, until one day finally it will go fast.
Well, if we see a graph of the Athens Stock Exchange appreciate a strong resemblance to the New York Stock Exchange in the Great Depression, and we would be close to starting the recovery.
http://agstock.blogspot.com.es/2012/06/greece-vs-crack-29.html
Typical hissy fit by the childish little bullies from Worldwide Shorts United.
"We bet wrong - but so what? No one else is in the market except us, so we can spout pure idiocy and do whatever the heck we want until somebody stops us."
Quite a lot of people will step in and try their best to stop them, IMO. But it's going to take a whole series of events, not just one.