Friday, March 20, 2015


As the old song goes, Joe don't know nothin'.  Neither does Charlie.  There were half a dozen different stories coming out of Europe today concerning Greece.  I was running around all day trying to get confirmation including a couple of the few friends I have left in D.C. who of course knew less than nothing.

One tale had Greece receiving 2 billion Euros for "humanitarian relief."  Sounded fishy to me but not outside the realm of Euro-nuttiness so I tried to confirm.  No luck.  Next, came Tsipras alleging that his new best friend, Angie, had told him that there was no need to conform to much-hated the austerity measures but that now the new guideline was the February 20 agreement with which Greece would follow "at some point."  "Wha," said I?   Tried for confirmation.  Answer: if Tsipras said that he's wrong because Angie never agreed to that nor would she ever.  OOOOOOK.  Some body's fibbing.

Asked whether the Fund ever got it's payment.  Nobody knows nothin'.  Wondered whether Angie and Tsipras are running a two person negotiation.  One guy said that would be OK but the Belgian PM said not on his watch.  Asked whether the Greeks have a timetable and a source close to Greece told me absolutely not.  That's not what I hear from a source close to the Euro side. Which reminds me of the Longfellow classic:

          Beneath the dark and the daylight, when the night is beginning to lower;
          Comes a pause in the day's occupations, which is known as The Children's Hour.

Call it the weekend...same difference.

Now there was one thing clear today and that was the market has convinced itself that the Fed ain't doing nothin' for a while.  Equities soared; the 10 year fell below 2.00% and the dollar crashed against everything as the shorts covered like hell.  The fact that the 10 year is 178 points in yield above the Bund seemed to have no effect at all.  One genius on TV, was asked why anybody would by Bunds with short term negative interest rates, he answered, "capital appreciation."  So let me get this straight: you are giving up on the short end 50 basis points in carry against a dollar instrument, plus the negative carry on your instrument and how are you going to make this up?  You mean when the negative yield increases in the future?  And in the mean time how do you make money, by making it up on the volume?  Right, now is there a reinvestment risk thrown in?  No?  Why?  Oh I get it...because if you did that it would really look like a stupid trade.  But you bought Euros today?  Uh huh.  I get it.  At least I think I do.

Joe ain't the only guy out there who don't know nothin'.

Children's Hour.

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