From Bloomberg:
Feb. 9 (Bloomberg) -- U.S. stocks rose, recouping yesterday’s losses, as a European Union official held out the prospect of bailing out Greece in return for progress in reducing its budget deficit.
The Standard & Poor’s 500 Index climbed to its highest level of the session after Olli Rehn, who takes over as EU economic affairs commissioner tomorrow, said support for Greece will be discussed in coming days.
Someone forgot to tell the market pumpers (along with those who started buying Euros and Pounds against the dollar) that Greece is a bit player in this mess.
What 'ya gonna do about Ireland - a nation that has enough out there in bank debt to make Iceland look like a Girl Scout picnic? Or Spain? Portugal, which has had an actual failed bond auction already?
Oh, Germany is going to bail them all out eh?
With what? The German people's good looks?
This is truly laughable. It is like arguing that "we can bail out California" but forgetting that as soon as you do Florida, Michigan, Illinois, Indiana and Arizona will instantly appear with their hands outstretched.
Never mind that state revenue as a percentage of domestic product, along with their budget deficiencies, are both trivial compared to the problems over in Europe.
These sorts of "rumors" amuse me. They remind me of the "rumored" rescues of Ambac and MBI, which CNBS trotted out literally on a daily basis as we were headed directly into Satan's Maw in 2008.
Each day after the market had declined, or was on the precipice of a breakdown there would be "another rumor" that these firms would be saved, and the DOW would rocket up 100, 200, even 300 points.
The next day, no solution having actually been cemented, the market would start to flag again, and then again there would be another rumor.
For the EU to "bail out" Greece the entirety of the EU Zone would have to agree. Best-a-luck on that one. A bilateral deal - that is, Germany deciding to bail them out, would lead one to question "why?" Are Germany's banks overly exposed to this mess? I'm sure they have some exposure, but will they literally die if Greece defaults? I doubt it.
Never mind that the people of Greece aren't exactly going along with proposed austerity measures, having called general strikes, blockading roads and similar anti-social responses to "expectations" that the citizens will have to take the pain. (This, of course, leads one to question why we Americans literally bent over the couch without complaint and let the banksters abuse us back in 2008... but I digress.)
Furthermore, the follow-on effect if Greece gets a bailout but the other members of the PIIGS do not are likely to be severe. And there's literally no chance that Germany, standing alone, can or will bail out all of the PIIGS.
Reality?
This is, thus far, yet another rumor used to gas the market, burn the shorts and especially fry the currency traders, who have piled in short in a serious way on the Euro in the last couple of weeks. I'm sure there will be more than a couple of FX traders who play "Russian Roulette" with six loaded this evening - that move was beyond insane and if you didn't have stops and were in that market short you got destroyed this morning. Never mind the damage done to the Bunds after the cash market closed (isn't it nice to hose people when they can't do anything about it?)
The take-away from this episode is that when the politicians and "newsmakers" feel the need to do this you know the stability of the markets is in question. This is the time to take these ramps and use them as gifts to get out of the way - they are the "little tornadoes" that precede the Cat 5 hurricane coming ashore, just as they were in 2007 and 2008, and those who ignore them have nobody to blame but themselves when the 30' high wall of water appears at their back door.
狗仔卡
发表于 2010-2-9 06:01 PM
提升卡
置顶卡
沉默卡
喧嚣卡
变色卡
发表于 2010-2-9 06:11 PM
发表于 2010-2-9 08:01 PM
