I guess it's good news because it means that Greece stays afloat a bit longer. I am with you, however, and I don't get it.
"Speaking in Cannes, Papandreou said he was forced to call the referendum after it became clear there was no "broad support" from opposition parties for the bailout deal reached with the rest of the eurozone and big banks just a week ago. Read more: http://www.businessinsider.com/gree...lt-over-referendum-plan-2011-11#ixzz1cdhLXO5T" As suspected the reason he called the referendum was because he saw stuff backstage that told him the game was up
The current bubble now has to be correlations. I read yesterday where some CBOE Index of such has hit never seen before levels. The movements of the AUD, EUR, ES are so attuned as to where they might as well be the same instrument (you could throw others in there as well). I suppose a short in AUD is a way of betting on this breaking down as fundamentals in Oz and China weigh more than whatever side of the bed some douchebag eurocrat wakes up on in the morning.
I'm not sure how the Greek system works but if the government falls won't they have some kind of temporary government till the elections? I believe in Portugal they did, and it was the same guys who were in power before. They only got out when elections where held It seems that Greece is bankrupt after Nov 15 according to the Business Insider article. So there is not a lot of time And I'm tempted to increase my short on the EUR materially
I believe the IMF has indicated Greece will get its money if the referendum is cancelled. Given that PASOK no longer controls Parliament, the referendum looks dead no matter what G-pap wishes. His own finmin has come out against the referendum as well. Either some sort of coalition gov't is on the way or there will be new elections.
The current bid in the market is most likely due to reports that referrendum is not going to happen. So risk-on everywhere, however market is losing sight of the fact what will happen after govt falls (some interim govt, elections, greece bankrupt etc.). Also if referrendum is cancelled there is a chance that EU/IMF might release the next installment of bailout funds. I am tempted to increase my short position, however there is always a risk that i might not be able to hold it if price moves against me substantially and i might have to book a loss. A more prudent idea would be to enter with x/2 or x/3 position here, and add at a significantly worse price (1.39/1.3950). Separately, adding after a confirmed break (backed by news) might be a more surer way to escape drawdown.
I'm not sure they will get EU and IMF money. Papa own's call was that the bill would not pass, hence he went desperate with the referendum. He already told that in public and probably personally to Merkozy. Unless they are insane they wont give money that they know won't serve any purpose and won' come back But yes, I'm afraid this market might run irrational for a bit longer so I will just watch for now
Actually, the current bid could be because a surprise 50 bp rate cut is about to be announced by the ECB in 45 minutes, maybe even a renewed commitment to sov. bond purchases. Italian and French 10 year yields are plummeting ... IF ECB goes 50, EU stocks might be up 5% today.
Greek opposition leader just made statement that he would approve the Oct. 27 bailout deal, but wants new elections. The whole G-pap referendum thing was about internal politics and a bid to save his own skin. Greece isn't rejecting the bailout. Euro shorts about to get their faces ripped off.
If 50bps rate cut is in the offing, doesn't it mean stocks/risk asssets etc. go up but euro should go down ?? or is it just due to correlations you think that are driving euro higher and will fall later on, once the dust settles ??