Perelman-Shortie Uncertainty Suggests Red Day Today

[Tsing Tao]

Quote from shortie:

128.10 +1%

VIX -2%, highly suspect rally IMO

Highly suspect or not, it's happening.

 

[noddyboy]

Quote from Locutus:

I sure hope not. Trend followers have been getting completely clobbered the past few months anyway so I wouldn't expect that to change to favouring a downtrend in an already edgy market.

Europe is acting like it's time to smoke some bears tomorrow though, so expect a gap up on tuesday.

Also it would be pretty naive to expect the market to stay in its range until after the Greece vote. It's never that easy. If it does stay in the range until then I would be getting more bearish though.

One other thing, while I don't think Greece matters (in particular not for long term equity returns), I think sentiment is highly overestimating the odds that the plan will be voted down. Politicians will always be weasels who will do what is politically profitable, and for the opposition it is currently more politically profitable to put up a "fight" than to not put up a fight and in the end it will be highly politically unprofitable to vote down the plan because anyone with half a brain knows what will happen to Greece then (no more retirement at all, let alone at 53).

What's particularly dumb in this whole situation is that it's the socialist party that is pushing privatisations and austerity and the conservatives are resisting it. How morally bankrupt can a poltical class become, to put populism before the good of the nation?

The actions might be dumb, but unions have not really been for the united good. Just look at how CT unions voted down the plan that would have zero layoffs. Now thousands might lose their job. The rationale? Those that would lose their jobs are not me as I have seniority. Very ugly.

 

[Locutus]

Quote from noddyboy:

The actions might be dumb, but unions have not really been for the united good. Just look at how CT unions voted down the plan that would have zero layoffs. Now thousands might lose their job. The rationale? Those that would lose their jobs are not me as I have seniority. Very ugly.

I don't see how this is an appropriate discussion to tie unions into.

That said, I'm not such a fan of the way unions generally operate across the western world either.

 

[noddyboy]

Quote from Locutus:

I don't see how this is an appropriate discussion to tie unions into.

That said, I'm not such a fan of the way unions generally operate across the western world either.

I am leveraged long, but I have to admit that the protesters led by the unions in Greece could force into irrational behavior. Probably the same irrational behavior people go through when they see their portfolios down and sell.

 

[shortie]

"Greek lawmakers begin a three-day debate today on the 78 billion euro ($111 billion) austerity measures, with a vote expected to be on June 29."

so this is the factor explaining why the volatility is bid up. if this is the case then selling volatility is easy money. the greeks won't default (at least not this time).

 

[noddyboy]

Quote from shortie:

"Greek lawmakers begin a three-day debate today on the 78 billion euro ($111 billion) austerity measures, with a vote expected to be on June 29."

so this is the factor explaining why the volatility is bid up. if this is the case then selling volatility is easy money. the greeks won't default (at least not this time).

I don't think the Greeks will default but given that I am 4x long, I wonder IF the Greek default, what my "default" action would be...

 

[joneog]

Quote from noddyboy:

I don't think the Greeks will default but given that I am 4x long, I wonder IF the Greek default, what my "default" action would be...

incontinence?

 

[Locutus]

Tbh I could see the market rallying a day after, if Greece defaulted and the world magically didn't end. Maybe a quick panic selloff, but even that I wouldn't bet money on at this point.

 

[joneog]

Quote from Locutus:

Tbh I could see the market rallying a day after, if Greece defaulted and the world magically didn't end. Maybe a quick panic selloff, but even that I wouldn't bet money on at this point.

I guess it all comes down to the EUR. A greek default hits the banks and ecb holding the paper, the interbank market, the other periphery concerns. Everyone will be running around screaming about a collapse in the EUR and right now its still 13 figures higher than its late 10' - early 11' lows.

I just don't see how the EUR doesn't get smashed on a Greek default, especially since the consensus is a bailout. If the EUR goes so does every other risk asset.

 

[Locutus]

Quote from joneog:

I guess it all comes down to the EUR. A greek default hits the banks and ecb holding the paper, the interbank market, the other periphery concerns. Everyone will be running around screaming about a collapse in the EUR and right now its still 13 figures higher than its late 10' - early 11' lows.

I just don't see how the EUR doesn't get smashed on a Greek default, especially since the consensus is a bailout. If the EUR goes so does every other risk asset.

Yes but a Greek default doesn't undermine the value of the Euro in any form. After all, default means there will be less Euros and I really don't see how a Greek default could impact the demand for Euros. After all we are talking about a sovereign default here, not anything to do with the economic fundamentals of the Eurozone.

Also for fun, a bullish article from CNBC: http://www.cnbc.com/id/43549908

Read the comments "JEFF, you should be FIRED on the spot."