Market action is NOT bullish…the EURO can not get out of its own way, on what is supposed to be the mother of all panacea bailouts. A Goldman Tax alumni and technocrat is firing elected officials in Greece who did not vote for to save German banks not to mention JPM and Goldman Tax. 40 pips does not seem like a very powerful endorsement of a deal that, though voted for, is far from done. As Athens descends into chaos, will the counterparties recognize that this deal will be reneged on? I think so…Greece stands little chance of getting or repaying anyone and Germany will likely decided that they are better off keeping their money to use to bailout their banks when they can not afford to payout on their derivatives obligations and when their assets get written down dramatically as well.
The equity markets will likely show some resilience, but I doubt much or for long. Apple computer will likely put the finishing touches on its parabola and the indexes have, for all intents and purposes, completed their symmetry targets. All in all, I think Greece issues is now progressing and we are set to begin the next phases of the saga…which calls for a dramatic move in the dollar up and risk down.
