Posts Tagged ‘Greek bailout’

EURO EXPERIMENT: German Steel or Schmucks?

EURO EXPERIMENT: German Steel or Schmucks?

Courtesy of Gordon T. Long 

The European Crisis is proving to be more of an unraveling than a contagion. 

I have long written that the European Monetary Union (EMU) constitution and Euro currency should be viewed in the context of a risky bet versus a sound regional monetary strategy. The odds of the EMU’s survival are presently reflected in a plunging Euro, despite a historic and unprecedented intervention. This indicates that the EMU’s existence in its current form is now a bad bet. 

The good news is that this is becoming obvious and it suggests that the serious governance flaws of the 17 year Euro Experiment may finally be addressed. It took a crisis to see its first test which has been the generally accepted view of when the euro experiment would prove its viability. The established momentum of the EU since its inception and its broad acceptance prove that its survival is presently a matter of European preference with most Eurozone members feeling it an absolute necessity. We would therefore expect to see the EU constitution reformed. What should concern investors the most however is how the mechanics of what will be a ‘forced reform’ unfold. The highly visible process will have profound implications to the stability of global financial markets and to a very tenuous global economic recovery.  

I see the long standing philosophical difference between Germany and France to be at the core of this potentially very public resolution. During the recent behind closed door emergency bailout negotiations, these differences are reported to have come to the fore. Additionally, Frau Merkel and Monsieur Sarkozy are very different personalities. Will Frau Merkel show German Steel or as the German tabloid Bild proclaimed on news of the Euro bailout, become ‘schmucks’? Will Sarkozy the ever populist media hound prove to be a true diplomat or display what Germans perceive as insulting French arrogance? Unfortunately, the world must wait and watch while financial markets will no doubt fluctuate wildly on the uncertainty of the outcome. 

What financial markets are oblivious to is just how crafty these two politicians are. There is more going on regarding a European strategy than the media once again fails to recognize and which I will speculate on later.

For the full unabridged version of this article with slide presentation see: Tipping Points – Commentary

WHY
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What If Doug Casey Is Right?

What If Doug Casey Is Right?

By Jeff Clark Editor Casey’s Gold & Resource Report

Pig whispering in another pigs ear, close-up

Gold is once again above $1,200 and making new highs. And yet, Doug Casey thinks we’re just getting started, estimating gold could touch $5,000 before this is all over. A titillating thought, to be sure, but… how likely is that?

Gold’s latest rise stems from mounting fear that the Greek bailout will be followed by other euro-area countries queued for a me-too handout. In other words, gold is serving its historical role as a safe haven, a store of value, and an alternate form of money when governments recklessly plunge themselves heavily into debt and abuse their currency.

But Jeff, $5,000 gold is a long way up,” the skeptics observe. “If you step back and look at the big picture, isn’t the gold price bubbly here?”

One way to test Doug’s thinking is to look at other simmering trouble spots that would similarly impact gold should they boil over. So, let us indeed review the big-screen events I believe could send gold a lot higher. See if you agree.  

ONE: The PIIGS are not done squealing.

Greece’s Gordian Knot of public debt has not been solved. In fact, Moody’s is considering downgrading Greece’s debt to junk status, stating that the announced €750 billion aid package will be “inadequate to stabilize the problems…
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E.U. ANNOUNCES $645B BAILOUT, MARKET SOARS

E.U. ANNOUNCES $645B BAILOUT, MARKET SOARS

Courtesy of The Pragmatic Capitalist 

Markets are set for another Monday Melt-up as another Sunday evening comes to an end with a new Greek bailout plan.  Bloomberg is reporting that the latest and greatest bailout will amount to a staggering $645B:

“European Union finance ministers moved toward agreement on an unprecedented loan package worth at least $645 billion to prevent Greece’s fiscal woes from triggering a broader sovereign-debt crisis and shattering confidence in the euro.”

I don’t have much of an opinion on this as of now, but the market certainly appears to like the news as S&P Futures trade higher by 1.8% and the Euro rockets higher by 1.2%.  Of course, we’ve seen the same thing in response to each of the last few bailouts and the markets were quickly rattled in the subsequent days.  This plan looks like it could have some near-term positives though it ultimately kicks the can down the road.  We’ll have more details as they’re released.

ES E.U. ANNOUNCES $645B BAILOUT, MARKET SOARS


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IS THE ECB ABOUT TO GO NUCLEAR?

IS THE ECB ABOUT TO GO NUCLEAR?

Bikini Bomb

Courtesy of The Pragmatic Capitalist 

The ECB is in a most unenviable position.  As the EMU begins to falter they are confronted with few tools with which to fight this battle.  The market called their bluff yesterday with the Greek bailout and is clearly looking past Greece at Portugal and Spain while daring the ECB to make a move on either country.  The bond “vigilantes” are betting on the fact that the ECB has overplayed their hand with the Greek bailout.  At this point, it looks like the vigilantes are correct.  The ECB put a gun on the table and it turns out to have been nothing more than a water pistol.  Unfortunately for the vigilantes the ECB is not out of tricks.  They have a Hank Paulson like bazooka in their option to buy bonds on the secondary market.  But can they use it?   RBS analysts believe they should not hesitate in acting:

“The ECB should not wait for a renewed deterioration of the periphery before acting. It should regain its leadership in tackling the crisis following a complete communication and coordination failure amongst euro area fiscal authorities around the Greek crisis. Should contagion reappear, there will probably not be enough time to go through a similar backstop facility to that of Greece for the next country. There simply will not be enough time. Better breaking the rule-book than breaking up the euro area!”

Unfortunately, the decision is a bit more complex than the Fed’s decision to buy assets directly from the U.S.banks – what many refer to as “quantitative easing”.  As we’ve previously explained, the Euro is flawed primarily because it is one currency housed under several economies with multiple governments.  They are not truly unified because their economic strategies differ which make their inherent monetary needs different.  Using the same currency for economies as different as Germany and Greece is truly forcing a square peg in a round hole.

Where are the potential roadblocks to QE?   First of all, the program would have to be massive.  Credit Suisse estimates that the cost to bailout Spain, Portgual and Greece could be as high as $600B.  The program would almost certainly have to be as large in order to quell any and all market fears.  But the bigger roadblock is the Maastricht treaty.  Although the ECB could technically…
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Why big businesses move their headquarters around the world - tax, talent and trepidation

 

Why big businesses move their headquarters around the world – tax, talent and trepidation

Shutterstock

Courtesy of Carmen Raluca Stoian, University of Kent

Ever since the EU referendum of 2016, well-known companies have announced decisions to relocate outside of the UK. Electronic giant Panasonic has gone to Amsterdam, where ...



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ValueWalk

Ray Dalio Gives 3 Financial Recommendations For Millennials

By Jacob Wolinsky. Originally published at ValueWalk.

Founder, Chairman and Co-Chief Investment Officer of Bridgewater Associates Ray Dalio talks to Julia La Roche in 2018 of Yahoo Finance about the value of savings and investing.

Ray Dalio Gives 3 Financial Recommendations For Millennials

Q4 hedge fund letters, conference, scoops etc

Trans...



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Kimble Charting Solutions

Giant Topping Pattern Could Be Forming, Says Joe Friday

Courtesy of Chris Kimble.

The first fact of the day; The long-term trend for tech remains up and the decline into the lows on Christmas Eve DID NOT break this trend!

This chart looks at NDX 100 ETF (QQQ) on a weekly basis over the past 14-years. For the past decade, since the lows in late 2009, QQQ has remained inside of rising channel (1). As you can see the decline into the end of the year lows, did nothing more than test support, which held and a strong rally has followed!

Over the past few months, QQQ could be forming a “Head & Shoulders&...



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Zero Hedge

Yesterday's Perfect Recession Warning May Be Failing You

Courtesy of ZeroHedge. View original post here.

Authored by Michael Lebowitz via RealInvestmentAdvice.com,

Recently, Wall Street and the Financial Media have brought much attention to the flattening and possible inversion of the U.S. Treasury yield curve.  Given the fact that an inversion of the 2s/10s Treasury yield curve has predicted every recession over the last forty years, it is no wonder that the topic grows in stature as the difference between the 2-year Treasury yield and the 10-year Treasury yield approaches zero. Unf...



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Insider Scoop

Salesforce.com's Q4 Report Should Trigger Higher Valuation, Says Bullish Oppenheimer

Courtesy of Benzinga.

Related CRM Oppenheimer Praises HubSpot's Execution, Downgrades On Valuation Benzinga's Top Upgrade...

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Chart School

RTT browsing latest..

Courtesy of Read the Ticker.

Please review a collection of WWW browsing results. The information here is delayed by a few months, members get the most recent content.



Date Found: Thursday, 02 August 2018, 07:48:20 PM

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Comment: $600 BN interest payments for US gov, print baby print



Date Found: Sunday, 05 August 2018, 09:22:26 PM

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Comment: Hire FED interest rates always brings double trouble



Date Found: Monday, 06 August ...

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Digital Currencies

Cryptos Are Surging: Bitcoin, Ethereum Hit One-Month Highs As Institutions Dip Toes

Courtesy of Zero Hedge

Cryptocurrencies are surging while the US equity markets take the day off. Ethereum is up over 18% from Friday's 'close' and the rest of the crypto space is a sea of green. While no immediate catalyst (headline or technical level) is clear, increasing chatter over institutional investors dipping their toes in the space have prompted an extension of the positive trend.

A sea of green...

Source: Coin360

Ethereum is leading the charge follow...



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Biotech

Cancer: new DNA sequencing technique analyses tumours cell by cell to fight disease

Reminder: We are available to chat with Members, comments are found below each post.

 

Cancer: new DNA sequencing technique analyses tumours cell by cell to fight disease

Illustration of acute lymphoblastic leukaemia, showing lymphoblasts in blood. Kateryna Kon/Shutterstock

Courtesy of Alba Rodriguez-Meira, University of Oxford and Adam Mead, University of Oxford

...

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Members' Corner

Why Trump Can't Learn

 

Bill Eddy (lawyer, therapist, author) predicted Trump's chaotic presidency based on his high-conflict personality, which was evident years ago. This post, written in 2017, references a prescient article Bill wrote before Trump even became president, 5 Reasons Trump Can’t Learn. ~ Ilene 

Why Trump Can’t Learn

Donald Trump by Gage Skidmore (...



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Mapping The Market

Trump: "I Won't Be Here" When It Blows Up

By Jean-Luc

Maybe we should simply try him for treason right now:

Trump on Coming Debt Crisis: ‘I Won’t Be Here’ When It Blows Up

The president thinks the balancing of the nation’s books is going to, ultimately, be a future president’s problem.

By Asawin Suebsaeng and Lachlan Markay, Daily Beast

The friction came to a head in early 2017 when senior officials offered Trump charts and graphics laying out the numbers and showing a “hockey stick” spike in the nationa...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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