I will update some of my views later today, after I've visited the hospital.
Sunday, September 30
Saturday, September 29
Friday, September 28
Thursday, September 27
SPX and EURUSD both visited very near their probable bottom targets and turned up - but now they have reached the channel top. My gut feeling is a bull day for Friday - that would mean a breakout from the channel to the upside. My reasoning: markets were expecting bad news - and got them and rallied afterwards. After the tomorrow's bad news (The audit results of the Spanish banks are published) markets will probably rally again. I would try to buy weakness ahead of the news, but volatility might be hell. There might not be posts on Friday due to...
Budget time. Banks tomorrow. The confusion regarding ESM eligibility seems to be a big issue, after the FANG-countries announced something. Nobody is sure what it means, so you'll have to read for yourself.
Spain's budget and possible reform show, followed by plenty of bulltalk from the eurocrats. We'll see how effective this will be to soften the impact of tomorrow's data from the Spanish banks. Plenty of Finnish articles today.
Wednesday, September 26
Tuesday, September 25
Wow, just hours after I promised a touch to a resistance level, the markets decide to take out the support level. See my weekly view.
Now the latest round of rumors is that IMF will not continue funding Greece unless the debts are restructured to meet 120% debt/GDP by year 2020.
Spain is in riot mode and EU is discussing a new federal budget for fiscal transfers. On Friday expect the bank audits from Spain - original need for capital €bn mio (laughable even at the time), and now that things are much worse, my guess is €200bn. Plenty of Finnish articles at the bottom!
First reports of the ESM leverage coming out. Greek situation even worse than thought - and that is an accomplishment. EURUSD's recent downchannel is turning sideways - expect horizontal range trading for a while and an eventually a move up.
Check the two previous posts for my idea of what's going on.
Monday, September 24
So we wait the end of the week and news from Spain. Meanwhile, Merkel to meet Draghi and Lagarde in closed meetings in the coming 2 days. They are not going to be talking about golf. My conspiracy theory du jour is that the eurocrats want to prepare the leverage of the ESM because of Greece. They will kick out Greece after the US elections, and need to have enough of nominal backstoppage in place for Spain and Italy. Bond market support from the ECB, bank loans from the ESM?
The plans to leverage the ESM seem very strange. Just by planning this they are de facto announcing that the current measures are not enough - but that part we knew already. Leveraging the ESM makes it certain that a large part of the paid-in ESM capital will be spent in the eventual debt restructurings. So is the idea making everyone a single-A country in Europe, while simultaneously ensuring that the competitiveness never comes back? The politicians will get burned in the elections real bad. There is too much debt. Moving it from one pocket to another will not help - and they ought to understand this. The eurocrats are delusional.
If it ain’t broke, don’t fix it. If it is broken, Fixit. – MoreLiver
Sunday, September 23
Se todellinen markkinavoima on se hiljainen raha, joka yrittää nähdä kakanpuhumisen läpi. Sekös poliitikkoja harmittaa, kun suunnitelmien ja ajatuksien ei pidä kelvata pelkästään äänestäjille, vaan alati maailman tilaa seuraaville lompakon päällä istuville.
Äänestäjät äänestävät yleensä koko elämänsä ajan sitä, mitä isi ja äiti jo kotona opettivat. Poliitikot tekevät teatteria näille ihmisille. Markkinavoima on se kollektiivinen n. parinsadan tuhannen ihmisen joukko, joka yrittää nähdä teatterin läpi, mitä oikeasti tapahtuu, ja mitä siitä seuraa.
Markkinamekanismin hyvä puoli on, että rahat tuppaavat kasaantumaan niille, jotka näkevät parhaiten. Sen takia se on äänestäjiä parempi poliisi. – Juhani Huopainen
This weekend's sections include Economics, Regulation, Trading & Markets, Hedge Funds, Algo & HFT, Other. Some pretty interesting ones, but no absolutely must-read articles.
If anyone is having a bad day, remember that in 1976 Ronald Wayne sold his 10% stake in Apple for $800.
Saturday, September 22
Our weekly guest star Macronomics states that he spent two hours on this post. Obviously that is a lie. If you like his institutional-quality research for free, please visit and follow his site and let him know that he is providing a valuable service to you. As a blogger I know that compliments are worth a lot, so why not give him one?
Last week in review and next one previewed!
Friday, September 21
Talk that Spain would file the bailout request next week.
The best from ending week's posts.
Supposedly a quiet Friday, as there are no events or numbers marked into the calendar. I disagree. It is Friday, usually a very good day for market movement as people square off their positions ahead of the weekend. Markets are also at somewhat important levels - EURUSD has climbed back up to 1.30, and either turns down again for new lows (1.2850 perhaps) or breaks back up and the bull trend would be continuing. SPX future is similarly licking the 1560-resistance, and Spanish bond yields look far easier today, after the 6% yield was rejected yesterday. My bet is today will be a risk-on day: funny, as markets are already at resistance levels and one would easily be inclined to expect the exact opposite.
Thursday, September 20
Here we go, Italy:
*revises 2012 GDP to -2.4% from -1.2%
*revises 2013 GDP to -0.2% from +0.5%
*raises 2012 deficit target to 2.6% from 1.7%
*revises 2013 deficit to 1.6% of GDP from 0.5%
*sees 2012 debt at 126.4% of GDP, 2013 debt at 127.1%
Wednesday, September 19
Tuesday, September 18
Markets continued being soft, but not dramatically so. Boring day - but we are approaching limits of the correction. Either the risk appetite shows up now - or the bad fundamentals takes the markets lower first. The Spanish 6% yields are worrying me - the eurocrisis could flare up again very quickly.
Slight recoil in risk markets - SPX and EURUSD coming down a bit and trying to test support levels, and discussion is again moving to the political situation in US (i.e. can the congress solve the fiscal cliff or not - estimated impact of no solution is 5%/GDP). Again I remind you that a dip from current levels will incite a round of comments from the talking heads, and the current dip should be eyed as a buying opportunity. Spanish 10-year bond rose to near 6%, and that is probably the critical level to watch.
Monday, September 17
|Source: BCA Research|
Spanish yields quietly moving up, after Madrid is seen backtracking on austerity and not calling for the bailout. Expect imminent supporting statements should the yields rise more. Tonight's post has plenty of material - most notably on the QE3. Commentary on Europe is turning negative: the ECB's conditional backstop is not seen to be enough without a good banking union - whatever that means. Also, QE glory is giving ground to the fiscal cliff in US and China.
Plenty of market commentary and views in the Other section.
Sunday, September 16
First my views, followed by interesting off-topic articles and then some in Finnish... (click the charts for larger versions)
A running linkfest on the Fed's QE3 (last update 19-Sep 23:00 GMT)
Plenty of stuff - even though the ending week was rich in events and price volatility, the economists and nerds have not been lazy either.
Previously on MoreLiver’s:
The weekend's huge reading package, heavy on Europe and Fed's latest QE-dance
Saturday, September 15
Friday, September 14
Here are the “best” article links from the past week.
Very strong day, EURUSD didn't even pause at the 1.30 level and stocks continue pushing upwards. The commentary on Europe is getting, if not more negative, at least clear that the crisis is not yet finished. But for the time being, markets are "Fed Up" :)
Thursday, September 13
So we got the QE, markets are happy: stocks up but near channel highs, EURUSD up but sitting below major 1.30 resistance, inflation expectations up. Next week back to Europe, plenty of issues still ahead. Given how certain markets were that QE is coming, perhaps the move to aggressively hit where it matters - mortgage bonds - was what caused the positive reaction. So somewhat more aggressive than what had been expected.
- Whose that?
- It’s you. You ain’t got hair, but you got gums.
Fed day. My gut feeling is that after the CB action from US is seen and analyzed, markets will turn their focus to the holes in the European plan. American QE is now almost 100% priced in, so I expect slight kneejerk positive reaction followed by "sell the news" in both SPX and EURUSD.
Previously on MoreLiver’s:
Wednesday, September 12
Germany's policy seems to be avoiding doing things in open, in order not to alienate voters. The bad thing is that the solutions become less open for criticism and control. Soon everyone will be unelected, immune from prosecution and perhaps later fully anonymous.
A quick trip to hospital is in order - so posting prematurely, will update the missing pieces later.
Just a morning quickie.
Quick recap of previously posted links. Announcement at 08:00 GMT (10:00 local time). A 'Yes' is overwhelmingly expected, but possible conditionalities are of interest. Someone commented earlier that leaving in limits and conditions (e.g. need for a parliamentary approval on enlargement or new uses) effectively provides Germany a "super-veto" on future europhiling.
Tuesday, September 11
SPX trapped in range but EURUSD reaching higher towards the 1.30-level. The banking union plan has been completely leaked, and ze Germans will surely vote ja on the ESM and the fiscal pact - so the only open question now is the Fed...Plenty of QE already priced in, so "selling the news", especially with EURUSD could make a lot of sense.
ESM vote, leaked European banking union plans, and the latest Finnish 'bribery-like' (I don't want to get sued) Finnish scandal that seems to involve everyone. I'm not sure if they will even get scared or just more careful in the future. If scared, maybe we will see less shit like this in the future. If more careful, it will only be hidden deeper. Pure amateurs, they didn't even give identical stories in police interrogations. They are not accustomed to being investigated, unlike the regular criminals. They are not regular criminals, they are the elite. Do they actually belong to M.O.R.E.?
All about two things: the Fed’s possible QE and the ESM decision. So what if the ESM ruling is delayed – it is still expected to pass - unless there is something else, like a need to use the ESM in ways that are not exactly kosher.
Monday, September 10
Today plenty on the QE, fully priced in and probably that’s why markets tanked. In the old days you bought the rumor and sold the news. Apparently nowadays you have to buy on nothing and sell on rumor. Or perhaps today's market action was just a risk-off move ahead of the big events. Dutch elections, ESM vote and the ECB plan were other topics. EDIT: by the way, I noticed this is MoreLiver's 1008th post. Wow...
Markets are completely dead - literally in the eye of the storm. Missing links to be updated soon.
Still missing few entries, but posting anyways and updating later. I translated Bruce Krasting’s piece to Finnish and posted it in the Finnish blogosphere – it attracted several high-quality comments. It will be a heavy week event-wise, but I'm not expecting shocks similar to the ECB's bomb last week. Luckily today seems like a day without significant events and everyone has time to catch their breath and think what all this means. I'm scared that the more people think about these things, the more they will see the holes I have been writing about...
Sunday, September 9
Good evening everyone! First the views, followed by select articles in Finnish and ending week's Off-Topic links (see also last week's Views-post)
Weekender's background readings. Feedback is appreciated - I really don't know what my three readers like.
Saturday, September 8
The last week in review, and next one previewed!
|SKYFM Classic Rap Channel|
Here are the best links from the past week.
Friday, September 7
All the coverage on ECB’s decision is in my ECB Watch-post (continuously updated). I wrote my own quick views in last night’s US Close: "Euro-QE" (with plenty of high-quality article links). For this morning, only the regulars and couple of payroll previews. It is very hard for me to see how the payrolls could turn the market bearish right now - after the ECB the sentiment is bullish, market is technically strong, and good numbers would mean everything is good, while bad numbers would mean everything is still bad, but future looks nice and QE is more probable. I will update my views during the weekend. I was happy with the previous views and levels, and they worked up to the ECB's "bomb". I think we are in for uncertain times, as it is impossible to preview when the weaknesses in the ECB plan show up.
Thursday, September 6
The ECB decision is finally here, and hopefully the devil will not be in the details this time. It took time, but finally they came up with QE.
The dreaded ECB day is here - whatever comes out of it, the expectations seem to be very low based on the headlines. The market reaction remains a question mark - key will be the possible road map and the strength and viability of the promises to be given.
Sorry about the late update.
Tuesday, September 4
Some very interesting research notes outlined in the links. Draghi seems intent on going to support the short end of the bond market with unlimited ammunition, but it will probably not be enough.
Seems like ECB will go all-in, but it will be more like "is it already in".
Moody's negative statement on EU due to the commission's powers to loan money in the names of the member countries. Some pretty decent markets-related links at the bottom, and one particularly nasty opinion in Finnish.
Monday, September 3
Wow, I thought it would be a dull day – but while the markets are closed, the commentators are still apparently working. Plenty on the ECB and Spain, with Bulgaria announcing that they are not interested in joining the eurozone.
Of course, US is closed, but here are the headline updates.
US holiday, so probably a quiet day. During the weekend I posted on full turboboost, please see them as there were several gems in there. This week it will be the ECB rumors and in the US the unemployment numbers on Friday. Thus I would not be surprised to see quiet range-trading and minor sell-offs in risk markets. Have a good week!
Sunday, September 2
Good evening everyone! First the views, followed by my selection of the ending week's Off-Topic links and select articles in Finnish.
Sections this week include Portfolio, Trading, Hedge Funds, High Frequency and Others. No "must-read"-articles here, except for the ones specifically interested in the particular topic.
Sections this week Regulation, Economics, Housing. Especially in Economics the Gordon's paper is interesting even for non-specialists.
A lot on the banking union for Europe in this post. I believe it is perhaps even more important than ECB's response, as the ECB's response without a workable banking union will not help in the long run. So it's either a union or a break-up.