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greece (6)

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Money Surges To Europe; Growth To Follow

If you ignore the ongoing Greek sideshow, rarely has European money growth been as accommodative as it is today. Europe has enormous structural problems of too much debt, an inflexible currency and an ageing population, but cyclical factors are very positive. Leading indicators are also positive, and the problems in Greece practically guarantee that the ECB will remain extremely accommodative even though Germany will require some tapering of QE.  Barring major contagion from Greece, any equity weakness in Europe will represent a buying opportunity.  Real M1 in Europe is growing at 11%, and the collapse in the price of oil means that excess liquidity is surging now and is as high as it was in 2009 and higher than it was in 2004-05.

While investors are worried about the fallout from Greece on the European banking system, we offer the…

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Gold Shrugs Off 'Armageddon'

This was the week Greece inched closest to chaos, as a bank holiday and a technical default caused markets around the world to erupt in turmoil. They recovered somewhat Tuesday, and futures looked stronger Wednesday morning, but on Monday, the NASDAQ Composite Index lost 2.4 percent, the Standard & Poor's 500 Index lost 2.09 percent and the Dow Jones Industrial Average fell 1.95 percent. Volatility exploded, as the Chicago Board Options Exchange Volatility Index surged 35 percent, its biggest increase in two years, to 18.85. …

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Market Pause. Would You Buy Here?

With all of America's 401k's flowing into equities and with CNBC continually saying bonds are the worst trade around, one has to determine if continuing to buy here is the smartest way to go or take partials, roll up your stops and raise cash rather than buying this top.

Technically the monthly chart shows MACD posed to bear cross although the month is far from over.  The bollinger band is flattening out which does not say to "buy" here but remain cautious and sit on hands.

Here TLT for a quick glance at the monthly and yeah, it's still selling.  Could see a temporary bounce (here or there) but overall, the trend is still down so equities (or cash) it is.…

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Cyprus, Stress Tests And That VIX

For those who found themselves busy fertilizing their lawns and Spring cleaning this weekend, you missed a market-moving decision as Cyprus announced (quite conveniently after Fridays close) an unprecedented levy on all bank deposits of 6.75% for accounts below $100,000 euros, and 9.9% for $100,00 euros and above.  OUCH

Adding insult to injury, if you lived in Cyprus and needed cash from an ATM machine, you were out of luck as  Cypriots awoke to find bank transfers already frozen as the government prepares to seize the assets when their banks re-open on the 19th although the glimmer of hope exists the final vote…

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*Lehman Moment* [a/k/a Extend & Pretend]

Originally posted by Doug Noland @ http://www.prudentbear.com/index.php/creditbubblebulletinview?art_id=10543 on how *extend and pretend* are the new normal and why Greece could very well be the tip of yet another Lehman Moment.

 

Isn’t it incredible that the failure of one firm, Lehman Brothers, almost brought down the global financial system?  It is equally incredible that, less than three years later, a small country of 11 million has the world teetering on the edge of another systemic crisis.  Today’s circumstance is a sad testament both to the instability of the international Credit “system” and to the lessons left unlearned from the previous crisis.

For about 15 months now my analysis has attempted to draw parallels…

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