As Syriza Concedes Defeat, EURUSD Forgets To Soar - Is A Spanish "Bail Out" Market Response In The Works?

Tyler Durden's picture

In a perilous replay of the Spanish bank "bailout", the proxy for bailout sentiment, the EURUSD pair, was up 61 pips to just under 1.2700... and that's it. Naturally, if the world suddenly thought Europe was "fixed", Spain notwithstanding, one would imagine the reaction by the FX market would be just a little more invigorated than merely confirming that what is playing out (namely the lack of a definitive Greek government) has already been priced in. And yet here we are...

As the WSJ reports:

"The head of Greece's radical left Syriza party conceded defeat Sunday
after closely fought national elections that were seen by many as a de
facto referendum on the country's future in the euro zone. With more than half of the vote counted, the conservative New
Democracy party--which supports the European-led bailout needed to keep
Greece in the euro zone--was leading with 30.3% of the vote against
26.31% for the antiausterity Syriza party. Speaking in a nationally televised statement, Syriza leader Alexis
Tsipras said he had called his rival--New Democracy party chief Antonis
Samaras--to congratulate him on his victory. A little while ago, I called Mr. Samaras and I congratulated him. He
now has the ability to form a government," Mr. Tsipras said"


"In his remarks, Mr. Tsipras said his party would continue to "be present in developments in the position of the honorable opposition," implicitly ruling out any cooperation with New Democracy in a cross-party coalition."

  In other words, anyone hoping that Greece will promptly form a pro-bailout government will likely be disappointed, especially if Pasok was not merely posturing and indeed demands Syriza, which said it will do no such thing, form a coalition government. On the other hand, there is nothing quite like have a coalition government between the two parties that brought Greece to its knees in the first place, to fix the country... Somewhat like when all the central banks ganged up and fixed the world last time around in November.

To Germany, the vote, has one meaning: that Germany won the game of chicken. From Reuters:

"The German Federal Government would consider such a result a decision by Greek voters to forge ahead with the implementation of far-reaching economic and fiscal reforms," Schaeuble said in a statement.


Schaeuble added that New Democracy Chairman Antonis Samaras had told euro zone finance ministers in February he was committed to the bailout programme.


"This programme, developed and agreed with Greece, has only one goal: to put the country back on the path of economic prosperity and stability. This path will be neither short nor easy but is necessary and will give the Greek people the prospect of a better future," he said.

Europe, of course, is completely oblivious to the German stance, and instead sees itself as having gained the upper hand, insloventy and lack of money notwithstanding. From the Consilium, or rather, from Cabo, Mexico.

Los Cabos, 17 June 2012


Satement by Presidents Herman Van Rompuy and José Manuel Barroso on the result of the Greek elections


The Greek people have spoken. We fully respect its democratic choice. We are hopeful that the election results will allow a government to be formed quickly.


Today, we salute the courage and resilience of the Greek citizens, fully aware of the sacrifices which are demanded from them to redress the Greek economy and build new, sustainable growth for the country.


We will continue to stand by Greece as a member of the EU family and of the Euro area. We look forward to work with the new government and to support the continued efforts of Greece to put its economy on a sustainable path.


The second economic adjustment programme agreed between Greece and the Eurogroup 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.

Finally, from a capital markets standpoint the only thing that should matter is that there will be no coordinated central banker intervention tonight, or tomorrow, as we explained on Friday. That is of course, assuming New Democracy does somehow manage to cobble together a coalition government with either the Neo-Nazis or the communists, if indeed Pasok is out.

Our only question: will the record short rally in the aftermath of the Spanish "bailout" be of shorter or longer duration than that of the Greek "resolution." We would take the latter.

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Eireann go Brach's picture

Everyone in Europe is watching the football! The Greeks are still drunk from last nights victory! Greece vs Germany..bring on the riots!


I've often wondered that.....let these countries battle it out on the pitch.  Forget all of these stupid elections and emegency meetings. The world is tired of that crap. 

LuKOsro's picture

Thanks bitches. Just closed my EUR/USD position at 1.2744 for 130 pips. 

smlbizman's picture

one of the reasons you dont vote, is how they translate it.....30%....and that means to them fuckers rumpoy et al. ...."see they want us to do whatever we want, however we want, anyway we want...." 

the true 99% are 99% of global politicians at every level are self serving incompetent corrupt cocksuckers...

malikai's picture

Greece v. Germany.. It couldn't be more fitting a match.

Bay of Pigs's picture

It's all Schweinsteiger! lol...


malikai's picture

I think I heard his name a thousand times tonight.

TrillionDollarBoner's picture

And in both cases - finance and football - there is no doubt who will win (even if it goes to penalties).

mick_richfield's picture

No, in finance they're both losing.

ACP's picture

Germany can rightfully take back all the gold that was taken from them after WWII, after the Germans wrongfully stole it during the war.

Who'd have thought the Germans never even had to invade a country to destroy/plunder it, just let it destroy itself over a long period of time. Hell, how much easier can it get?

GOSPLAN HERO's picture

The Germans fund their war effort by plundering their enemy.

The USA war effort is funded by deficits - thereby plundering the savers and taxpayers.

The German plunder method is the better method to fund war.


RiverRoad's picture

True, ACP.  And TPTB will drag this thing out until every country in the EU is on it's knees and BEGS to be taken over by Germany.  That is the only way Rockerfeller & Rothschild Inc. can create their United States of Europe.

GMadScientist's picture

They do have to pay royalties on the method, if you catch my drift.

slewie the pi-rat's picture

herrSchaeuble is certainly off his coconut!  quoting antonioSam's campaign promises?   finiMini's on the weekend?  priceless X2 

francis_sawyer's picture

 "Monkey in the Wrench" party demands a little Peter Gabriel...


slaughterer's picture

We will be pouring billions of dollars in re-shorts at EUR/USD 1.28 and SPX 1350.  

imbrbing's picture

Germany needs to take their football home and let the Greeks fall where they may.

Tsukato's picture

Fucking Greeks! What a disappointment. Thought they were going to bring it all down :( Anyway, I had a thought last night: Why aren't the Greeks leaving the Euro, and just using the $US? Could fuck off all those debts, not have to worry about a drachma devaluation, could trade Euros for $s, no problem. In fact it would be a coup de grace to jump into dollars after fist fucking the euro. It would be a helluva return on their exchange from euros to dollars too, cuz they would be abandoning the boat that they helped sink. Oh well.

I may be a fool. but it seems to me that everything happening now is nothing short of economic warfare, with the last standing being the victor? The Fed keep conjuring money but it hasn't such a detrimental affect on exchange rates right? Why not invite all the periphery euro countries to dump the euro for $, and no matter how much printing Ben Shalom does, it won't matter because everyone will be running for dollar safety. Could be that this will be the case against all currencies until someone backs their with gold. Am I mistaken? If so, please fill me in.


Ghordius's picture

LOL, you begin with "fucking Greeks!" after the just had an election and go on with "Perhaps I'm a fool" and "Am I mistaken? If so, fill me in." ?

Using the dollar is the standard reset of this world, this is what you do when as a government you have no other option left. Zimbabwe, though, uses South African Rands and gold more than USD, and are courting the Chinese to use the Yuan.

Yes, in one point you are right, we are in economic warfare, and you and me are pawns on the chessboard. The peoples of the periphery of the EURozone want to keep it because it's the harder currency.

The fight between gold and the USD is specific of this pair. The EUR was born because of this.

In fact, you can say that it's on one side the USD complex and on the other side gold and all the other currencies.

HelluvaEngineer's picture

Yay, the criminals win again...

Boilermaker's picture

As I mentioned, there was no fucking way the election results would have EVER went any other direction. Now we need a 40 handle ES as 'market confirmation' that the troubles are behind us.

Yea, it is a god damn joke. But, at least I know how totally subordinate the 99% are. We nothing more than fucking worker bees, drones, and fleas to the cream.

That's how it is.

macholatte's picture




.... conservative New Democracy party--which supports the European-led bailout needed to keep
Greece in the euro zone-....



The can shall be kicked!

"So let it be written. So let it be done."

TrillionDollarBoner's picture

The people of Greece have spoken. They say that on second thoughts they would quite like to stay in line at the fleecing pen thanks. baa

monad's picture

You don't get it. They were offered free lunch. Nobody turns the free lunch down. It must be awesome. 

GMadScientist's picture

I turn down discount cheese (especially the 100% discount, gubmint kind).

TrillionDollarBoner's picture

You're right in the near term - they were offered a free lunch and it was hard to turn down.

But in the long term you don't get it - they will find out soon enough that the free lunch comes with strings attached, namely high taxes, massive spending cuts, slow growth, low employment, potentially for decades...

The bailouts keep them on the bankers' hook

hugovanderbubble's picture

Credit Agricole = nationalization = emporiki losses > 19.000 Mn Euros up to 33.000 Mn Euros.

Conman's picture

Yes thats the real question. We rallied 600 points on QE expectations. Europe was just a distraction and possible QE trigger. Now that europe is fixed for now, hows that QE looking for this week? Not good in ym opinion. Benny will hold off till he needs it. It seems like the threat of QE is more potent than actual QE.

VonManstein's picture

So ZH predicts a complete reversal by the AM?


we shall see how things play out.

Ive been using gold and silver as indicators recently, they seem to drag things around rather than visa vis.

max2205's picture

Must. hold. it. back. So GS can get net long

Abundance's picture

In honor of my Dad on Fathers day, "This is so stupid!". nothing has changed the inevitable outcome.

The Big Ching-aso's picture



The Greeks will embrace bailout assterity like asking them 2 work overtime on Fridays without pay, ouzo, & an 8 hour lunchbreak.

Snakeeyes's picture

The ECB holds about 30% of Greek debt. You don't REALLY thinks they would let Greece default, do you? See chart.

Dragonsgrace's picture

See everyone here on Zero Hedge is so pessmistic. It is all fixed now.  Oh....why is everyone laughing. 

Alpacanio's picture

Yes, the people voted slavery. Nothing to see here now, move along as we close the boxcars.

Dismal Scientist's picture

Lets hope the macro data from US keeps getting worse. That might finally prompt Uncle Ben to get his put out again. For all you bankster haters btw, the Euro crisis doing a fine job of sending bankers home for good this time. Watch for unemployment in the sector to rise faster than the economy at large...

RiverRoad's picture

Oooh.  Maybe we'll finally be able to call it a Depression then, since a Depression is when you lose your job.

valley chick's picture

Why do I feel that this is nothing more than a play on a stage and we are the audience?  Unless I missed something, nothing is fixed.  Just wish they move on to the next act....Italy.

Mentaliusanything's picture

Can't you wait till the Fat lady sings the Spanish Act out. Italy is the "finis" of the this sad opera.

Quite please - the 4th act is reaching a climax and I've run out of popcorn damit

you enjoy myself's picture

doesn't this strike anyone as the worst possible outcome for the markets?  because greece itself is irrelevant, its only central bank printing that matters - and this just took any immediate heroin fix from the ECB and Fed off the table.  

Conman's picture

Agree 100% . Threat of QE causes squeezes. Actual QE i not doing anything to help global economies where debt does not equal growth.

Boilermaker's picture

+20 handles on the ES before the rooster crows.

They need to 'market confirmation' and all that shit.

Wave-Tech's picture

ES +9.50 to 1347  @ 6:25pm EST ...


We're long from 1320 and see an upside price target at 1391 so long as the market can sustain trade north of 1320 +/-



GMadScientist's picture

Waves in the kiddie pool...

asteroids's picture

Schaueble is a moron. There's no mandate for austerity. The clever Greeks have show everyone that they will have to be thrown out! The next decision is for Germany to turn off the tap and ending the game. Unless they want to drag this out past August. By that time god knows what condition Spain and Italy will be in.

Alpacanio's picture

Face it. The EURO and US will be maxed to the limit. Then the Elite will pull the plug. We still have some ways to go. Greece had their chance to say FUNG CHEW! But, they didn't...


So... Italy is next for the horse whipping. Then, the US will print and get a downgrade. Then of course, war is still on the horizen.

thejollyprophet's picture

EURUSD has rallied 30 pips since this article was written. I cannot understand why.

A_MacLaren's picture

Because ZH called it flat(ish), aka reminded the controllers that manipulate, "Hey dumb-Euro-chees-lovers, you are supposed to rally..."

And in this way, TCTM and their weak willed minions who do are they are told, can point to ZH and say: "You are so wrong..."