Tuesday, November 13, 2012
Decoding the soundbites...
GREECE - EU-IMF FEUD ERUPTS OVER GREEK DEBT
Market response: If even the EU and IMF cant agree on a package what hope for EU/IMF-Greece resolution? Bad news Greece is going to blow up. Sell Europe, sell "risk".
TMM response: It is preety clear that the IMF and EU are not going to let Greece go and just like TMM and Mrs TMM may fight over how to bring up the children, we certainly don't want them dead. Greece has funded all its bills today and the level of progress Greece has made with its budget is impressive. This is a non-story.
GERMAN ZEW INDEX FALLS TO MINUS 15.7 VS EST. GAIN TO MINUS 10
Market response: Germany is going down the pan as local sentiment is collapsing, this must be forward looking as to market price, so sell Europe.
TMM response: TMM have never understood why people look at the ZEW. It's a survey of "investors" not "business". The IFO is worth looking at, but not ZEW. Presumably if we going to react to investor sentiment surveys in this manner, we should be selling equities when the AAII Bearish sentiment survey shows people are bearish. Or buying USTs when the CFTC shows investors are bullish on bonds. Why do we view these as being counter-indicators, but the Zew as directional? Do we somehow think german private banks and funds know something special? Given they were the ones that bought all that fantasticly well-performing ABS CDOs and Southern Periphery debt, we are somewhat sceptical that they do not know much at all, other than how to buy structured toxic waste.
Market Response: Stay quiet as it doesn't quite fit what we were saying about the fiscal cliff last week and anyway have you seen the ZEW and Greece (we may adapt our view on the cliff though).
GERMANY PRESS: GREECE TO GET E44 BILLION IN AID IN ONE PAYMENT - MNI
Market response: Oh, so Greece IS going to be OK? Better buy all that Euro stuff back.
TMM response: It'll probably be denied, but it's a hint that Greece will be OK.
RTRS - GERMAN FINMIN SPOKESWOMAN, ASKED ABOUT NEWSPAPER REPORT, SAYS NO FINAL DECISION YET ON GREEK LOANS
Market response: I'm not selling again, I've just been taken out... I'll wait for more news.
TMM response: Back to sleep.