“Grecian Vortex”
From the Telegraph.
“Portugal appears to have entered a Grecian vortex and monetary trends have deteriorated sharply in Spain, with a decline of 8.4pc,” said Simon Ward, from Henderson Global Investors. Mr Ward said the ECB must cut interest rates “immediately” and launch a full-scale blitz of quantitative easing of up to 10pc of eurozone GDP.
Full article here.
Remember Spain and Italy?-they still have some minor problems
Spain reporting unemployment rate of 21.5 %, a 15 year highs. When unemployment gets to those levels, things become unmanageable.
Italy has neither changed, despite the furious market bounce we have seen over the past days. Just a reminder chart below. Wonder what haircuts China would be willing to bail out in Italy?
News That Matters
Ft.com
Cognetas is risking a clash with its investors after the European mid-market private equity group proposed a more generous performance fee for its ailing second fund, the FT reports. At least one large investor is already rebelling against a plan to link the management’s performance fee to gains on the portfolio’s depressed net asset value at the end of June, http://ftalphaville.ft.com/thecut/2011/10/28/714861/cognetas-angers-investors-with-fee-plan/
Samsung Electronics surpassed Apple as the world’s top smartphone maker in the third quarter, Reuters reports, as the company announceda record profit from handset sales in the third quarter on Friday, with more than 40 per cent shipment growth. Samsung, http://ftalphaville.ft.com/thecut/2011/10/28/714736/samsung-take-smartphone-crown-in-q3/
Companies round the world rushed to sell bonds on Thursday after a eurozone deal to tackle the region’s sovereign debt crisis sparked a rally, writes the FT. In the US, IBM, BP and Verizon were among the issuers that sold more than $12bn of debt in what was one of the busiest days for investment-grade issuance this year, http://ftalphaville.ft.com/thecut/2011/10/28/714731/market-bouyancy-prompts-rush-of-debt-issuance/
After hours stats
Some after the close stats. It took the market 48 days to fall from1290 to 1090. It took us 18 days to go from 1090 to 1290 during this past aggressive squeeze. Short gamma got killed both ways. They still tell us market falls in panic mood….
Market Update
The outlined Trend Channel we have been posting over the last couple of weeks is still intact. The circle marks the shake out before we got the final short capitulation today. There are many big “smart” guys getting run over today, especially in Europe. In this complex world, it’s best to keep it simple. Stay tuned for our full chart review later.
Hugh Hendry Must See
Although not really in fashion today as the ES futures are soaring, we present some must see videos with Hugh Hendry.
More videos below.
Rational Markets and Herd Behavior
Somehow this video says a lot about the action we are witnessing today. ES futures up 55 handles in less than 20 hours. I buy, you buy, I buy, you buy, I sell…. People’s psychology does not change.
New Transatlantic Cable Built to Shave 5 Milliseconds off Stock Trades
This is Evolution, period. Too bad there is no cable we could connect to Greece and just fix the problem. By Popular Mechanics.
Hibernian Atlantic is building an undersea fiberoptic cable that will stretch from New York to London. The purpose of this engineering feat? To allow computers to complete financial transactions 5 milliseconds faster than their competitors. Finance is now increasingly dominated by automated trading, and to a computer 5 milliseconds is an eternity.
Read more: A Transatlantic Cable to Shave 5 Milliseconds off Stock Trades – Popular Mechanics
How much does it take to reduce the Debt to 90% Debt to GDP?
Now when Greece is fixed, let’s shift focus back to Italy. Good Luck.
Chart, courtesy McDonough
Snapshot of Economic Crisis
Guest Post by World Complex.
Today we look at the monthly change in net foreign purchases of US long-term securities. Data comes from the US Treasury site. By net foreign purchases they mean the difference between foreign purchases of US long-dated securities and US purchases of foreign securities.
What I found most surprising is the negative bias. In this chart, a negative number means US purchases of foreign long-dated securities exceeds foreign purchases of US long-dated securities. We note the negative bias becomes quite pronounced beginning in the early ’90s (wasn’t this the era of the US strong dollar policy?)
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