It was only logical that following this weekend's quote unquote surprise announcement by Juncker that a third Greek bailout is likely in the cards [7], that Angela Merkel would follow up during her much anticipated Bundestag speech today and tell fellow politicians that there is no guarantee that a Greek bailout will work. That was to be expected. That this announcement is somehow responsible for the market selling off, and the EURUSD being at the lows of the day, once again proves that the market is no longer a discounting mechanism, and merely reacts to headlines that could be anticipated by anyone who steps back from the blaring noise and flashing headlines for even just one minute.
From Reuters:
There is no guarantee that a new bailout package for Greece will succeed, Chancellor Angela Merkel told German lawmakers on Monday ahead of a parliamentary vote needed to approve the 130 billion euro ($175 billion) rescue programme.
"There is no 100 percent guarantee that the second bailout programme will succeed," Merkel said, adding that the benefits of backing the programme outweighed the risks.
Merkel also said she expected Germany would contribute 11 billion euros of its contribution to the new permanent bailout fund, the European Stability Mechanism (ESM), this year and the second portion could be paid out next year.
None of this should be a surprise. And yet it is. Perhaps it explains why the only human on the floor of the NYSE this morning at CNBC employees.
However, one thing that bears noting is that fact that Merkel once again said the colonization shall continue:
- Merkel Says EU Commission Will Boost Control Measures in Greece
Translated: "Hello Kosta Papakosta, Ich bin Franz und Ich bin dein tax kollector. Hand over das geld (und gold) bitte." [sic]