Wednesday, March 27, 2013

Eurogroup English Dictionary (EED)

Trying to decode what the Eurogroup is saying into English is getting harder as policy becomes less distinct. However we have uncovered a small segment of the equivilent of the Rosetta stone. Plain English on the left and Eurogroup English on the right. We hope this helps.

    Irish    (adj) - Not Greek

    Portuguese    (adj) - Not Irish

    Spanish    (adj) - Not Portuguese

    Italian    (adj) - Not Cypriot

    Cypriot    (adj) - Unique

    Ubiquitous    (adj) - Unique

    Systemic    (adj) - Unique

    Endemic    (adj) - Unique

    Theft    (n) - 1) Tax 2) contribution 3) Fair share.

    Deposit    (n) - Bank share holding.

    Depositor    (n) - Money Launderer

    Uninsured Deposit Loss    (n) - Insured Deposit Protection

    Capital Control    (n) - Cautionary measures.

    Economic Collapse    (n) - Difficult times.

    Discord    (n) - Unity

    Compromise    (n) - Strong Agreement

    Retard    (n) - Dutch Finance Minister

    Own Goal    (n) - Mr Dijesselbloem's statement

    Vague Idea    (n) - A Commitment.

    Hope    (n) - Commitment to the commitment

    Inappropriate    (adj) - Template

    Unsuitable    (adj) - Template

    Master Plan    (n) - Template

    Template    (n) - Not a template

    Dead Cat Bounce    (n) - Encouraging signs

    Dysfunctional Family    (n) - Europe

    German Foreign Policy     (n) - European rescue program.

    Economic Repression    (n) - Prudent policy.

    Vengeance    (n) - Necessary adjustments.

    Free Market    (n) - Moral hazard

    Haphazard Moral Hazard    (n) - Flexible policy.

    U-turn    (v) - Clarification of earlier statements.

    Implicit Guarantee     (n) - Will do what is necessary

    Panic    (v) - Urgently striving to do what is necessary

    Failed to do what was necessary    (n) - Rapidly changing environment.

    Pommel Horse    (n) - Cyprus Parliament

    Whipping Boys    (n) - Cypriot Government

    Outrageous Assumption    (n) - Realistic target

    Last Hope    (n) - Mr Draghi

    Fourth Reich    (n) - The Eurogroup


Anonymous said...

C Says

Depression = No results containing all your search terms were found.

Growth = No results containing all your search terms were found.

Anonymous said...

Troika = Inquisition

Anonymous said...

quoniam punitio non refertur primo & per se in correctionem & bonum eius qui punitur, sed in bonum publicum ut alij terreantur, & a malis committendis avocentur

Leftback said...

Bazooka = Stick of rhubarb in Draghi's pocket.

OMT = Outrageous Monetary Transfer.
EFSF = Europe's F*cking Still F*cked.

Leftback said...

Our Carry Monkey is looking a little fatigued and down below its 50dma. This 120 support level is critical in the short term.


Anonymous said...

C Says'
Now I know a little bit about our friends the Cypriot banks so here is what I expect shortly. They are going to find that the number of uninsured deposits falls short of what they thought there would be (cough). The question will be are there still enough at all in the two issue banks to do the job of meeting The Inquisitions target bail-in,or are they going to have to spread the net to make up the shortfall.
Bottomline,nothing is ever what you thought it was going to be when it comes to Cyprus.

Uninsured = Gone fishing

Leftback said...


One or two "officers" of the Cyprus banks may not come to work tomorrow. Would not be surprised to see a bit of the MF Globals emerge. You know, "trading positions appear to have deteriorated further, creating additional shortfalls in capital reserves". The Wonga later shows up at Squid HQ or JP Morgue. Corzined....

The action in bunds and Treasuries today tells you that when PC Papa opens the doors to the smiling depositors, Stavros might not be a very happy camper. Ivan's been and gone already for his stash of course, bringing the muscle along with him.

Something tells me this story isn't over.

Anonymous said...

C Says'
You got it,thing 'get done'.

And this story has barely started.
If we thought Greece was tricky dicky when it got rolling then Cyprus will be really educational.

Leftback said...

We have just arrived once more at Negative Schatz.

German 2y Yield

Leftback said...

The Fat Lady is warming up. Mr Margin is standing by.
Operator..? I need to place a call....

Margin Debt At Very High Levels

Anonymous said...

C Says


So this guy maintains there is still only one Euro etc etc. I bet he is wrong.He is simply not seeing how it is changing at this point.
For example;supplier A has two clients he transacts with in Euros.Client X is in Germany and clinet Y is in Cyprus.Prio both enjoyed equivalent T & C.What will be happening is supplier A is now more likely to remove the credit terms and issue on a proforma basis.Hence ,the existence of two Euros because one client has lost the value attributable to credit being extended. That is a fairly likely scenario.

Anonymous said...

"margin",yes that's the stuff that normally means nothing much has decoupled.

Anonymous said...

C Says'

bonds are showing it now HYG/JNK to LQD and then treasuries each reacting to a move towards safety and the RUT now underperforming BigCap.

Leftback said...

Yes. FX carry, European equities and credit are singing one song, and US equities are singing a completely different tune. Groundhog Day for Macro traders, as punters line up for the Show That Never Ends...

Welcome Back My Friends

Anonymous said...

C Says
The song that has not yet played,but I think it's going to be memorable is the backtrack on Jap Equity when they realise we bought all this stuff when the Jap economy was just getting worse...we bought the bad news good monetary spin not the we need our margin back ..."get me out of here".

Anonymous said...

C Says
Euro3000 limit per foreign trip. Northern Cyprus is going to be very popular this year.Book your safety deposit box well in advance to avoid dispointment.
No limit on foreign tarde so...'ello Stavros my old mate,weather nice over there? knock me off an invoice for 10k worth of tiles mate and I'll throw you a drink.
More holes than a sieve in cap controls.

Anonymous said...

Having different credit conditions for different counterparties is normal business practice, how is that proof of two euros?

Anonymous said...

Anon @ 7.59

Both counterparties are governments resp states which are supposed to have the same credit risk under the current regime. At least this is what the Euro zone with convergence and stuff was all about...


Anonymous said...

C Says
Anon 7.59
If prior business practice changes subsequent to cap controls then in effect such a change is attributable to those changes along with any implied loss of value due to the geographic location of the transaction. If that is the case then the currency value of the transaction in force really is not the same and that is not what is understood to be the case within the Eurozone.

You might well demand a different interest rate for sovereign debt across the zone according to risk rating.However when in effect this permeates down to everyday commercial activity through different T & C then it's time to admit that currency risk has taken on a new dimension that is not in accord with the basic principles of the Eurozone and value and location are interconnected in a way that it's membership never agreed to.

Anyway at this juncture I am only speculating as to what might happen.We will have to wait and see if it does.

Anonymous said...

By the way you misunderstood the argument.It is not that different T & C do not already exist. The example foe ease assumed they were the same to highlight only how they might not be after cap controls come in this highlighting tahta detrimental change had occurred because of that event.

Anonymous said...

C says
Easter beckons and not just for me.
End of month end of quarter ,that last chance to jump a fund EOM div etc etc.No panic so square off.

Anonymous said...

Let them have a nice warm feeling to end the quarter and send out some pleasant looking statements. Have a few days out, whistle past them deflationary looking bond markets, never mind them limit down Chinese banks with a lazy half tn in crap to park somewhere. Things will be fine. Even the shiny yellow stuff is getting a bid again.

Mr Shorty may well be top of the class in q2 me thinks

Anonymous said...

Frozen assets in a bankrupt bank under emergency restructuring *are* worth less than freely available capital. This is what happens in a restructuring. Try getting your MF Global dollars back.

Leftback said...

Speaking of Mr Shorty and Japan, the EWJ puts are quite ridiculously inexpensive, obviously b/c "the yen is going down forever due to BoJ" and "Japanese equities are cheap and under-valued". We are not talking front month either, check it out.

In fact we recently saw Japanese equities being touted to eager US punters on Bloombag, surely a Contrarian Indicator if ever there was one. Usually stories on the Nikkei are as welcome as a leper in a nudist colony.

Of course cheap things can get cheaper, especially when the Carry Monkey isn't on your side. God forbid that monkey might ever turn around and bite you. For example, when Chinese banks get into a spot of balance sheet bother and Emerging Asia goes all Safety Trade on you almost overnight.

JPY longs might be the most unpopular trade on the planet right now, but wait until US consumer data and Chinese "growth" softens a bit more....

{LB sits back to await torrents of abuse.}

Leftback said...

In the US, today's Chicago and Kansas City data were pretty dire, and initial claims jumped over 350k. Looks like a US 4% GDP "escape velocity" scenario to me.... *

*Irony detector engaged.

Leftback said...

More "encouragement" here for Housing Bulls:

Global Housing and Demographics

Can't fight those demographics.... Grammy's house is going to go on the market when she moves to a condo in Florida or into care, and then one by one all her cohort of Boomer friends are going to put theirs on the market, to be bid on by a small group of new young buyers, mostly without high incomes or savings for down payment.

Alongside these retiree homes will be the homes offered by disillusioned "investors" who can't make the rental model work, and the homes offered by banks who have been told to "get this shit off our balance sheets now", and the new homes banged up by Bobby the Builder (motto: just f**king build it as fast as you can, and then get out of town quick).

Then we will find all of those "tight inventory" concerns will be a thing of the past... along with those "price surges" and "bidding wars" and other parts of the "housing recovery" that are really little more than a figments of the NRA's fevered imagination in most areas of the US.

Leftback said...

Charts from Chris Kimble via Doug Short. Bond sentiment measures approaching extreme lows. Readings of 25% bond bulls or below, are associated with rallies.

Bond Bulls At Extreme Lows

Even as Copper and 10Y yield are both breaking out of wedge patterns - to the downside, a consistent macro (slow down) message at odds with surging Spoos:

Dr Copper and Mr Bond in Agreement on Macro Slowdown

Leftback said...

A few more detailed thoughts on US housing.

Housing Recovery or Housing Inflation?

The point being, QE can serve to stimulate asset prices, as we have seen briefly with commodities, but these effects are quite transitory in the absence of increasing demand. The BoJ's QE program was unable to prevent the droop in Japanese Real Estate b/c of underlying demographic trends.

The glacial pace of the recovery in US home construction is a better indicator of demand than are prices, which also reflect lower mortgage rates, the availability of credit and local factors such as fluctuations in short sales and REOs.

Anonymous said...

C Says
I suspect that many of the baby boomer concerns will not come about in the way you imagine.
I put it to you this way.

Amongst those who historically should be retiring and downsizing (thus depressing the market) we shall see this.
Many will be in no position to retire as they might have historically done. They will continue to work additional years and they won't be buying that thing in Florida in the same numbers anymore .Good reason why property in retirement locations will continue to lag markets that are associated with employment factors.

I see the whole demographic thing being something of a smoothing,or adaptive issue not dissimilar to redating debt...the maturity of the issue is going to keep being pushed out.

We live longer.We will work longer.We will receive retirement benefits later. We will make retirment decsions later etc etc.

rossmorguy said...

LB, I've followed your comments over the years, probably because I often agree with you. My reaction to your latest series of comments: quit fighting the Fed. LOL

Anonymous said...

Cyprus Haircuts Getting Steeper

Lefback said...

In other news, the Nikkei is suddenly "tankan" again:

Tankan Declines

Never get tired of that one....

Whammer said...

@rossmorguy, I am also a long-time LB follower, and I know what you mean about "fighting the Fed"... But he is also pretty good at observing how the bond market fortells the equity markets, and you can certainly see how the Japanese equities have performed over the last 20 years...

charles said...

You forgot
European (adj) : German

Anonymous said...

whammer. Well then, this:

Anonymous said...

Please add

Eurogroup = EURO NOSTRA

Polemic said...

Re additions.. this is a fast evolving language and as this post was done in haste there will be many omissions that we d be delighted for you to offer us.

Anonymous said...

C Says

Working Capital = Govt Reserves

Leftback said...

rossmor guy:

It's good to know at least a few people read my drivel. In the present, LB thinks that the truest expression of Fed fighting would be to short the long end - while the Fed is buying and probably will be buying for some time. That to me is the epitome of futility, the ultimate Widowmaker™ (see TMM's glossary of terms).

As for equities, there are times when it appears as though SPX is simply a linear function of liquidity, but there are also these things called earnings that have been known to intercede at times... now, if we are talking about housing, my point is that is in fact now a very flat business with a tremendous ability to tell porkies about how well it is doing. The transmission mechanism between POMOs and home prices seems to be inefficient at best.

Leftback said...

Weak ISM number. We almost had a normal market there for a few seconds.... wait, there's an announcement on the PA:

"We apologize for the brief jolt of economic reality that some of you may have just experienced. We will now begin a regularly scheduled POMO maneuever, after which we will absorb the Q2 fund flows from 401k plans. Please replace your rally caps and party hats. There is no cause for alarm..."

Quiz Time:

Short Yen/Long Nikkei is....?

A. Taking a breather.
B. So ov-uh.
C. Executing a wicked Fibonacci retracement.
D. Giving Momo Monkeys a bad morning.
E. DXJ - last month's ETF du jour?

LB is on the other side of this trade for now, believing that (C) is the correct answer.

Leftback said...

Any April Fool entries? David Bianco of the newly renamed Deutsche Reichsbank may have been pushing his luck a bit here, it is April 1st...

April Dip Unlikely - David Bianco

Anonymous said...


Wrt the Yen,

Wave 4, 38.2% retracement. Then a move to 100. Maybe. I'm not much of an elliotician. Ben has taken their hero behind the woodshed for some cold steel several times.

Whammer said...

Thanks for that, Anon at 11:42 AM.

Leftback said...

I was hoping to read something crazy on April Fool's Day about a bizarre banking crisis in the small island of San Seriffe, where the banking system is 800% of GDP, along with the hapless attempts of the EU to solve it by haircutting small Seriffian depositors and offering them shares in the Bank of San Seriffe, followed by useless Dutch bureaucrats pouring gasoline on the fire, while in the background, a bearded man feeds $85B EVERY MONTH into the financial system in order to ensure crony capitalism remains dominant in the USA.

But it has already happened....

Anonymous said...

egywwms390LB, I have no doubt you're familiar with this man's work. But he is all over your concerns regarding earnings. This is his latest brilliant piece, poor guy.

Cheers, rossmorguy

Anonymous said...

LB, sorry to deluge you with unsolicited info but you might get a kick out of this, regarding US housing.

Cheers, rossmorguy

Anonymous said...

de nada
anon 11:42, aka rossmorguy lol

Johanes said...

Great vacation might be your dream. Travel to Bali is not always expensive as there are many international flights providing special rates for early bird booking. There are also many selection of Kuta hotels offering special discount rates including Seminyak villas and budget Bali accommodation

Anonymous said...

C Says
Dynamics of this week are shaped by a bank hol Mon whereby 1st day of a new week/month/quarter for reinvesting div's also falls into the shortened week containing a couple of central bank meetings. This favours the longs initially for obvious reasons.I don't read anything more to it than that.

Europe PMI's are uniformly bad.It's just a question of which one's are the worst. Step up Italy,Spain and Ireland with the first two accelerating downhill and Ireland taking a step back. France and Germany relative stars of the show,please do get the irony.

Anonymous said...

Just to show no bias I should have added UK was no better than the two "stars".
Austerity is clearly working.

Anonymous said...

C says'
Sarris is gone.Such is the power of the church in Cyprus.Politically and then economically it could get very interesting there if the church agitates for an exit.Lot of influence.

Leftback said...

thanks @rossmor, good stuff, I visit with those nattering nabobs of negativity on a regular basis... Hussman is a great read and very smart, but has made so many bad calls in the last year or so.

Well, earnings don't matter today, for sure. Silly Season in full swing. Announcement upcoming from TSLA, and Elon gave the shorts a nice going over this week with Cold Steel, now he is going to power the new car with Musk Oil, or is it Snake Oil?

Best time to short? After a monster squeeze to a blow off top. Nobody left to buy. market again today. I expect to see a Pets Social Media IPO at any moment. Doggy Dating? Feline Friends? Hamster Home? Hello? No, I'm sorry, Richard Gere, it's just a joke....

"The Original" made a good call on EURUSD the other day, at least short term. European data so miserable it almost has to get better b/c it can't get worse?

Does anyone have any idea why AUDUSD and CADUSD are up here, instead of down there, a lot lower? Miners and energy very weak on slower demand and massive supply.

US jobs report bingo starts tomorrow with ADP. Eyes Down....

Leftback said...

EURJPY below 120 support. Carry monkey is tired.

Leftback said...

Nice collection of charts here and a summary of most of what we have reviewed here on a regular basis, i.e. the divergence of FX and credit trends from equities. In fact, many "risk" proxies like EURJPY and EMB are declining even as the SPX continues to grind higher.

We have seen this kind of action before, a kind of "macro disconnect", along with peaks in P/E multiples, during past Aprils of the ZIRP era. Seasonality, QE style.

Bonds and Currencies Still Not On Board

Anonymous said...

C Says
Add this to your list the transports failed to confirm that up day and indeed the BP was down on the SP and the NYSE.Only the NAS went the the other way.
Without meaning it as being of any interest to day traders I think US equity is now in broad shorting territory for a topping range.

Skippy said...


On AUDUSD and CADUSD, the diveregence between them and key commodity prices is curious. My understanding is that the FX piss takers ("reserve managers") still find the "relative" carry (and AAA)attractive.

I had a meeting with a board member of an Asian CB last year (probably the biggest piss taker of them all) who bemoaned other regional CBs managing their reserves like macro hedge funds. In the same breath he was talking about buying more Australian bonds.

Skippy said...

From a pure price perspective the AUD direction may be resolved very soon. The consolidation (wedge/triangle) pattern since the end of 2010 is either a nice continuation pattern - with a final break out to 1.18? Or the start of a material downward correction?

In my humble opinion, The price action in commodities and defensive leadership within equities suggests to me the odds are with the latter. As you noted the other day, Mr. Bond and Dr. Copper are not exactly screaming "strong global growth"

Anonymous said...

C Says

oh hello.

Not exactly a direct replica of days of old,but we have not read anything about this taboo since 2008.

Leftback said...

ADP was a bit light. ISM services declining, with the employment component notably weak, a data point of some considerable importance since the US does more servicing than manufacturing these days.

I don’t have anything of great macro significance to offer today {insert sarcastic commentary here}, except to say that this is the typical seasonal jobs pattern that we have seen emerge over the last 3-4 Aprils, and that modest market declines have begun soon afterwards (Spring Dip), followed by some kind of “event-driven” (i.e blamed on Europe) major sell-off later in the summer (June Swoon).

am a bit irritated by the AUD. With China still tightening to control inflation, we expect to see AUDUSD and AUDJPY reverse hard before long. Skippy, thanks for comments.

We only have a few more trading days before Alcoa (so beaten down that it is likely to be irrelevant) and then the more meaningful Q1 earnings begin. Before that we get a NFP number on Friday that could be anywhere between 125-175k. As usual, 200k the euphoria number.

As I write this, dodgy US beta (homebuilders, NFLX, skanky biotech) may just be beginning to form a line behind the woodshed, and the 10y is back to 1,83%. It's been a while since we had a good puke. Will Mr Market wait for Friday or get it over with early and then JBTFD?

The media have been selling the idea that a major sell-off can’t happen in a period of continuous QE. That concept is about to be tested. Watch out momo monkeys, Mr Margin has you on speed dial.

Leftback said...

Btw, the web site that Shall Not Be Named couldn't help pointing out that the number of US construction jobs created was.... 0, and we repeat that here. This seems a relatively small number considering the "burgeoning recovery" in the "vibrant" US housing sector, as discussed here on several occasions.

Which goes to show you can't always tell what's going on in the country from watching tree fellas (Irish builder joke) doing a teardown next door for some bloke who does insider trading, (sorry, that's "information arbitrage") for SAC.

Speaking of which, wouldn't it be good for markets and national mood if Someone Really Big went away for cheating and did a decent stretch in the pokey?

Anonymous said...

C Says

A day for Irish jokes is it?
How about this then.

Saul Bollox said...

All going a bit pear-shaped today. Innit?