The Bear dreams of a Yellen rate hike in September or sooner. The Bear believes the Fed has to raise rates within 3 months or come across like a frightened ostrich with its ugly head stuck in the sand. The Bear also dreams of a Greece default by the end of the month and a very unhappy ending in EuroLand. The Bear smell volatility right around the corner as panic selling kicks in and investors check out.
The Bull dreams of a Fed hike in early to mid 2016 and hope Yellen keeps her dove feathers on for another six months. The Bull also dreams of a last minute deal between Greece and Creditors where everyone comes out friends kicking the can down the road for another 16 to 24 months. The Bull see's no volatility on the horizon much less a bump in the road.
So whose "Dream" turns out to be reality when the Bear or the Bull wakes up? Let me give you a hint. Its the one with lot of hair on its body who like honey for breakfast after a 20% market correction.
Gabriel, the leader of Merkel’s Social Democratic Party coalition partner, who in February urged patience and dialogue with Greece, was more direct. “We will not let the German workers and their families pay for the overblown election promises of a partially communist government,” he said.
If anything the gap between Greece and Germany doing a bail out deal is HUGE and getting bigger. So wide that Greece slips through the widening hole into Default Land by the end of this week or certainly next.
A majority of Germans now want Greece out of the single currency, while an overwhelming majority believe that Europe shouldn't offer Athens any new concessions to keep it in the bloc, according to a new poll from the German broadcaster ZDF. Sure look like a dead end for Greece since Germany is the only country in Europe that has Euros of bail out Greece. Everyone else is broke.
Today Greece ruled out cutting pensions and demanded a debt restructuring so put a "Fork" in it and call it a day.
Yep - those German's always a head on the curve. Question is are you still long SPY with very dark storm clouds forming over Greece?
On Thursday evening the International Monetary Fund (IMF) effectively walked away from bailout talks, citing "no progress" on the "major differences" with the Greek government. Now Germany's Bild tabloid reports that Berlin is resigned to a Greek default, making preparations for debt haircuts and capital controls.
As in "World Wide Market Corrections".
Oh and I thought after yesterday's"Kumbaya" moment over Greece - Germany Love fest everyone in Europe would be dancing in the streets. My my how things change in the wink of an eye or shall we say until Syriza reads the fine print of Creditors plans. Lets see how market reacts tomorrow since we are now T-18 days until Greece default.
Gee - the IMF just took the (spiked punch bowl) away from Greece. Now the question is does Merkel have enough German Beer nearby to drown out her default worries?
Oh my and we all know the IMF can't stand to be in the same room with Greece PM and Finance Minister.
Greece has lost its most valuable ally in negotiations and that is the European Commission, the report continues. According to officials briefed on Tuesday’s meeting of 29 commissioners in Strasbourg, EC President Jean-Claude Juncker said that Athens had “lost the European Commission.”
Juncker so mad he called Wolfgang Schäuble and said "Do we kick them out this week or next".
Greece and its international lenders moved closer to the brink on Wednesday with the leaders of Germany and France holding off on an expected meeting with Prime Minister Alexis Tsipras to press for more concessions from the Greek side. You can only kick a dog (Germany) so many times before it bites back. Looks like Tsipras kicked one time to many.
The stock market has an empirical rule: interest rates lead stocks. And the current interest rate environment is pointing to a massive decline for the U.S. market. The first week of June recorded the highest interest rates since December. Bond prices are down about 12% since the end of January. The stock market, meanwhile, follows the bond market’s direction — except by a much wider margin. A multiple of 2.0 is conservative. A 2x multiplier figured against the recent 12% plus loss in bonds prices would generate a 24% decline in stock prices. At current levels, such a slide would equate to a loss of about 500 points on the S&P 500 SPX, +0.04% and a Dow pullback of close to 4,300 points.
The “actual” bond market is already into a bear market, with declining tops and lower lows since the end of January. The stock market is vulnerable here. The first week of June saw interest rates spike, with bond prices losing 2.5% of their value. This is comparable to around a 7 1/2% loss in stock prices in one week. The pressures are increasing exponentially since the decline in bond prices has not resulted in a stock market slide. And the greater the pressure, the greater and quicker will be the downward move.
You Have Been Warned!
Yes - investors now feel like they are sitting in the dentist office waiting for the needle or drill. Both hurt but its the waiting that's the worst part. The Fed says the "September Rate Hike" won't hurt but we know different since it starts the long awaited tightening clock ticking.. And the pain will be very severe for the "Bull" since there are so many places the needle and drill can be applied. Over and over again.
and here's why - Jean-Claude Juncker accused Tsipras of distorting proposals by international creditors for a cash-for-reform agreement and of dragging his feet in offering an alternative. Oh the mud slinging will pick up this week as Greece spins it tail of being unloved while stabbing everyone else in the back. Kind of makes you think of Putin as he turns the wheels to turn Russia into a Fascist state. Just like Greece is doing now.
and word on the street is, the European designated creditors would rather see Greece sink into the Aegean Sea then loan the country another euro. If world markets don't see Greece default coming then they must be totally blind or have very dark sun glasses on.
The eurozone, which holds most of the debt, does not even want to start discussing any form of debt relief before Greece implements reforms promised in exchange for the money it has already received, on which talks are deadlocked. "Greece has to focus on the completion of the program — that's a mutual priority, debt restructuring is not on table," Slovak Finance Minister Peter Kazimir said on Twitter. The eurozone has explicitly ruled out any write-off of principal as the clock ticks down.
and at the end of June Europe's Troika asks Greece "where's our IOU money" while also screaming "No 7.2 billion bailout package for you". Talk about REJECTION
When is a default not a default? Greece finds itself not so much “in default”, but “in arrears” on the #$%$305 million payment due to the International Monetary Fund (IMF) last Friday. It has used a little known IMF provision which allows the bundling of several payments due in a month, a total of #$%$1.6 billion. Unorthodox, but permissible, the IMF says. There are “deadlines” and “deadlines”. Now the real crunch will be the end of the month. Meeting that, however, remains impossible without the unfreezing of the #$%$7.2 billion promised from the European Commission, European Central Bank and IMF under Greece’s second bail-out plan. Which the ECB, IMF and EC will not approve. Boy end of June sure looks messy.
Agree Pandy but Cramer is still alive. Yesterday he said 230,000 payroll number was "the number the market did not want to see". As in Fed rate hike coming sooner versus later if number hit 230,000. Then this morning he talks about all the bad stuff in Europe and overseas and low wages as if the Fed should do nothing. The guy is a complete egg head who always plays both sides day in day out. Should be interesting to see where market closes today.
Talk about being in between a rock and a hard place.