Greece Going Lehman On Us UPDATED

Big news this morning is Commerzbank pulling its repos that are supporting the Greek banks. These are overnight facilities, and may lead to runs on Greek banks. Unless someone steps in (IMF? IMF?) this should put the Greek banks into a liquidity meltdown. This chart from ZH shows the yield curve "pancaking" - going to flat - because the short term (3-6 month) rates have shot up, with spreads at an "all time record for a developed country."  This usually indicates a default coming. ZH predicts:

• failed next bond auction for Greece
• Euro drops below $1.30
• Greece pushed out of EU
• Euro to $1.15

Update mid-day: ZH reports that Greek banks have now called the remaining E17B of a 2008 backstop plan. Deposits have dropped E8.4B since Dec. The Bundesbank may be also close to pulling its life-support backing. They need to fund E8.2B rolling over in Apr20, and E27B over the next seven weeks.Tomorrow the head of the ECB is expected to provide its plan for Greece Last chance before they swallow the bitter pill the IMF is offering? 

(photo courtesy Telegraph.) 

Those contrarians among you may consider that if Greece accepts IMF's tough terms, default will be avoided and these bonds will pay handsomely (since their rates will drop all the way back on a bailout). 

Comments

[vipul garg]

for ES to drop below 1165 without breaking 1200 will take some effort.

[da bear]

Perhaps gold is up big today as investors/traders start to discount sovereign defaults.
Yes, that means gold may be rallying due to DEFLATIONARY pressures.
Gold is the only money that is not encumbered by debt.

da bear

Meet the new money. Same as the old money.

[JT]

The funny thing is . . . is that Greece has been in "default" 90 of the last 100 years!

[Chabazite]

Now who should we believe - Barclays’s head of global economics and emerging-market research, or Yelnick? "U.S. Will Avoid Double-Dip Recession, Barclays Says" http://www.bloomberg.com/apps/news?pid=20601087&sid=ajsD53MKNHsg&pos=4 “We are extremely comfortable that the U.S. will not be in a double-dip recession any time soon,” ... “We are seeing the basis for a sustainable recovery in the U.S.” Hmm - lets face it, the Barclays guy has form, a big important job title, and probably a HUGE salary. So we should believe him. But if he is like some other bankers I know, then he probably knows nine tenth's of f' all! My money's with Yelnick.

[nspolar]

Wonder how the neely longs are fairing today?

ns

[yelnick]

Chab, the latest FOMC shows they are worried about a double dip now:

"The FOMC staff did make modest downward adjustments to its projections for real GDP growth in response to unfavorable news on housing activity, unexpectedly weak spending by state and local governments and a substantial reduction in the estimated level of household income in the second half of 2009.

"The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period."

http://seekingalpha.com/article/197476-fed-policy-minutes-show-double-dip-concern

[nspolar]

Yelnick, exactly. That was why they did not raise.

They are trying as hard as they can to 'elevate', in hopes that this then will soften and limit the damage on the next fall down.

Now you have not mentioned it directly, but if one professes to believe in EW theory, and say for example you have a bearish IT count from the big top down ... well imo it makes little difference what they do. It is too late and has been for a long long time.

Greenie made some decent comments today imo, like em or not. "The concept that U.S. taxpayers should bear the cost of bailing out financial institutions that are “too big to fail” is wrong and “cannot be allowed to stand,” former Federal Reserve Chairman Alan Greenspan told a bipartisan Financial Crisis Inquiry Commission today."

I remain in that I believe a 'C' wave down is coming, to coincide with what I believe was a A down off the top. C waves are tight channels, driven by fear. The length is related to degree, this degree of C wave coming is such that it is not a minor.

If it comes ... there will be no more bail outs. That would be my prediction. The masses will not accept it. Da boyz unloaded all they have available on the first go.

ns

[nspolar]

JQP sentiment comment.

A technician here at work called me today. Knows I piddle in market stuff.

"Well it looks like the market is stabilizing and going to hold!"

This is what he told me about 2.5 hours ago.

ns

[nspolar]

"Consumer borrowing falls $11.5 billion in February"

http://news.yahoo.com/s/ap/20100407/ap_on_bi_go_ec_fi/us_economy

"The $11.5 billion decline in consumer borrowing in February pushed total borrowing down to $2.45 trillion, 4 percent below where it was a year ago. The Fed's measure of consumer credit excludes home mortgages and other loans secured by real estate."

Lunch over, back to work.

ns

[marketman]

Carl Futia was right again with a solid call!

[nspolar]

marketman ... I see Carl also thinks Apple in early stages of a bubble. We can argue about timing, but I think the Apple bubble is further along probably than Carl does.

ns

[jeff]

OK, so the train departed the station a little late.

My call for an April Fool's Day melt-down came today:

April 1 + 3 TDs.

Jeff Clark

[Hockthefarm]

And all the colored girls go dutadutadudutdu:

From a private financial conference:

1. Get a copy, if possible, of the BBC movie, "The Last Days of Lehman Brothers" it is exactly what occurred. They were flushed and allowed to go down. Those that did so made billions.

2. The same people that sold Greece the products to hide the true condition of their finances ratted them out and are hugely short of Greek debt at this time.

3. The more these people win at what they do, the more powerful they become.

4. The failure of Lehman set off the bankruptcy(s) that allowed government money (your money) to flow to large institutions, who were the winners on the bet.

5. The next phase of problems will come about because of a loss of confidence in currencies themselves.

6. Regulators are totally ineffectual in dealing with what is occurring.

7. If we have a failure of Greek debt it will be catastrophic and you and I will pay. If Greece does not fail, we will have money printing (quantitative easing is the buzz word) to infinity.

8. China is actively seeking control of the resources of the world, all JSMineset speculation on this has far exceeded what was postulated.

9. With the incredible bonuses being paid to Wall Street executives, you have to know it is there last lick of the cone. They know profits are not real.

10. To balance the US balance sheet, gold would have to go to insane numbers. The mechanism is in place to drive gold to incredible numbers.

11. Credit default swaps are being used as the hammer to destroy nations. They are doing this by shorting sovereign debt, then using the media to bring about the profit of their position (ie calling nations PIIGS – this isn’t flattering and does not inspire confidence, causing people to stay away). The players doing this have no conscience, are oblivious to the side effects, are power crazed, and believe they are gods. Sovereign debt is the next bomb to implode.

12. The only currency that will sustain what is coming is gold.

13. We are headed for a one world currency with a central bank of central banks. The world is going to change dramatically in possibly as little as two months.

14. The individual states in the US, which are bankrupt in many cases, will be attacked next. Big money is already hugely short of state debt. Ultimately this will take down the US dollar as well.

15. A one world government is coming.

16. Hyperinflation is a loss of confidence in paper currency.

17. Gold is money without liability on the other side. It stands alone. Make your balance sheet as good as it can be.

18. If Greece goes (is flushed and not bailed out), then the whole world changes, perhaps overnight. Look for 200 dollar swings in the gold price. Because the "dark side" (those who are in control of this) are smarter than you are, add to your positions in gold on reactions. Gold is an insurance policy.

19. China will rule the world. Friends of China will benefit from that. China’s interest in Africa and its treasure chest of mineral wealth isn’t an accident.

20. Yuan denominated paper, if one can get it, might be a place to be with some of your investment portfolio.

21. Equity markets may in fact go up due to a Weimar effect. All that money created from nothing finds its way into the stock markets of the world.

22. He stressed simplicity in your personal life. Be focused, balanced, and go back to basics. This is not a time to get fancy.

23. There will be no end to naked shorting by the players. The real game is destroying nations, countries (think Dubai, Iceland…)

24. He feels the flushing is in fact deliberate. If Greece does in fact go down, it will definitely be deliberate.

25. Gold’s window is still open here because those that know what is coming are still accumulating. Expect it to be closed by year end. That means if you don’t have any, don’t expect to be able to get any.

26. Hold any stocks you happen to own in certificate form in your hand, and don’t lose the certificate. If you are a stock player, check out true custodial accounts. Make certain that your holdings are in fact yours and NOT on the books of the bank.

27. A question was asked: If I had a million Canadian dollars to invest right now, where might I put that? The answer was 1/3 into gold bullion, held close, 1/3 in both Canadian Tbills and Swiss Franc’s, and the remaining 1/3 into what you do best.

28. Major financial houses today are acting like countries. Greece does not control its destiny, it is in the hands of those houses which become stronger with each situation they take down.

29. Expect mining company consolidations to greatly accelerate.

30. The Canadian dollar is very much a wild card. It may rise nicely, because it and Canada generally have remained conservative as opposed to other far more leveraged approaches. Canada is currently sitting in the cat bird seat, and it’s not really helping Canada because of our export based economy.

31. The number to watch on the Euro is 1.29 against the US dollar. Should it go lower, the Euro is in serious trouble.

32. The US has no strength for geopolitical disruptions at this time. It’s a house of cards that could come down at any time.

33. Keep it simple! Back to basics.!

34. The Asian and the Polish crisis were precursors to taking down the Euro. If the Euro is torched, the pound and dollar are next. As a side note, Jim Rogers feels the British pound is months or possibly weeks away from being heavily attacked once again. This is my comment, not Jim Sinclair’s. Look for the pattern here.

35. Money (the wealth of the world) has been concentrated into a very few hands. They are currently only interested in tearing down. There is no interest in creating, only destroying. China is building up. Algorithms (computer modeling and trading) are being used to destroy.

36. Gold stocks should leverage 2 to 5 times a bullion position.
//
"Hey Joe, where you goin with that gun in your hand"
jimi

[David]

i have posted a new video update for those interested... the media has sold the recovery well ;-)

http://www.tradeyourwayout.com/2010/04/has-bear-come-out-of-hibernation.html

[Glenn Loser Neely]

WHERE IS DG?

UPPS...IT IS WEDBESDAY... AND HE HAS TO WORK 16 HOURS ON HIS MC DONLAD'S POSITION AS A JANITOR..

I AM WAITUNG FOR HIM TO APPEAR AND DEFEND HIS LOVER NEELY!!

LONG AT THE TOP????? WHAT A LOSER!!

JUST WAIT FOT TOMORROW...AND ONCE AGAIN THE MARKET WILL PROVE THAT GLENN NEELY IS AN IDIOT!! BULLISH AT THE TOP...

COME ON DG.... WHERE ARE YOU?.... DEFEND THE LOSER NEELY!!

[Clif Johnson]

Wonder how the neely longs are fairing today?

Neely´s long position is based on his MOAT index, a technique he used a long time ago, abandoned, and then recently resurrected. I guarantee you that anyone taking his trades based on MOAT will lose money over the long run.

[nspolar]

Yelnick, was that you that threatened Pelosi?

Eh man, kidding!

Have you met her? Not a bad looking ole Granma ... no comment on the polootiks.

ns

[NeelyTheGuru]

JUNE 16, 2009
Glenn Neely - 50% decline before end of year
NEoWave Institute's Glenn Neely is forecasting the largest vertical drop of the decade for the S&P 500. Neely predicts the stock market will decline 50% in the next 6 months.

Aliso Viejo, CA (PRWEB) June 16, 2009 -- Glenn Neely, founder of NEoWave Institute and prominent Elliott Wave analyst, today announces a startling prediction: The S&P 500 is forming a major top in June, which will be followed by a large decline, eventually pushing the stock market to record lows for the decade.

"Technically speaking, according to NEoWave a correction began at last October's low; the March-June rally is the final leg of that correction," Neely explains. "The March-June rally is now ending, allowing the bear market to resume. During the next six months, the S&P will decline 50% or more, breaking well below 500!" Currently, the S&P is hovering around 917.

Glenn Neely is providing this information not as a specific trade recommendation but as a general public service announcement. A prominent Elliott Wave analyst, Neely was recently recognized in Timer Digest's May issue as the #1 stock market timer for the past 12 months.

[yelnick]

ns, never met pelosi, but have been to town meetings of her local partner in crime, anna eshoo. neither holds a candle to your sarah palin. pelosi does strive for perfection, and both holds herself well and dresses well. she has shown herself to be a capable majority leader.

[Glenn Loser Neely]

DG,

where are you?
.. funny...since your boyfriend went long... you have been VERY quiet!!

We are all waiting to hear from you!!

Glenn Neely is an idiot... his method is useless!! This is the truth!!

[DG]

Geez, relax people.

Neely already got out of his long recommendation with a small profit.

I'm also a skeptic on the use of the MOAT index. I don't like proprietary indicators, really. But, I'm glad to see him get a winning trade for his subscribers, although I am not trading his recommendations trade for trade right now. I went long on April 1st at a lower price and was stopped out of that trade yesterday and had another long stop out today with a loss.

As for missing the call last summer, let he who is without a missed stock market forecast cast the first stone already. Some of you act as if you've predicted every squiggle. Everyone knows trading and forecasting are probability-based. You get some right and you get some wrong. I've already posted all of Neely's "major announcement" e-mails in the past. Anyone who approaches the issues with an open mind can see that he's had many, many good calls in those e-mails. One missed call doesn't erase that fact.

[nspolar]

Yelnick, agreed.

Our country takes and tolerates all types, in its own way.

Sarah .... had to LMAO at what she supposedly pulled on McCain .... coming onto the stage dressed in biker Mama gear. Appears as if Sarah decided no one is going to tell her what to do ever again.

Sarah went to my alma mater by the way!

ns

[nspolar]

Neely:

"NEoWave Institute and prominent Elliott Wave analyst, today announces a startling prediction: The S&P 500 is forming a major top in June,.."

A fairly safe bet would be to bet he will once again be wrong.

The market is going to continue to make him look not only like a fool, but a fool's fool. He has had it coming. More so than Prechter.

That is my opinion and am sticking with it until the market/record changes.

If one Ewave's Neely's recent record, we are some where in a wave iii impulse! Maybe about at an end to wave iii, hitting a iv here. Then a final blast.

ns

[David]

great post yelnick as usual!

[DG]

That is my opinion and am sticking with it until the market/record changes.

What "record" would this be? I've never seen you post a single thing that wasn't your "opinion". Well, you know what they say about opinions, right?

He has had it coming.

You're like a little girl with your complaining.

http://www.youtube.com/watch?v=8wGiJcq95Ug

[trendlines]

Yelnic, thanks for keeping us posted with analysis from the fundamentals front.

[NeelyTheGuru]

" let he who is without a missed stock market forecast cast the first stone already"

what a foolish comment. It is not about missed forecast. It is about claiming a superior method. It is about claiming it is a scientific. It is about elevating NeoWave to the same level of Calculus with zero mathematical prove. you fool.

Not only missing one of the strongest rise in the history of the markets, but going against it.

[mateo]

thought i'd share the definition of a banker that showed up at Zerohedge the other day:

banker: scum of the earth in really nice suits

[cribrange]

Dear all,

What I don't understand, is that a couple of weeks ago, Neely called a top based on his MOAT index, as he stated that oversold levels had been reached on daily AND weekly time frames. After being stopped out, this same oversold MOAT index on multiple time frames, was then used to predict a rise. All this, in a matter of a week or so. Now, if this MOAT index was indeed showing oversold levels on a daily and weekly basis and observing that in essence, the market has done nothing in reality over the past fortnight, how could this same index be used to call a rise?

Once again, it isn't so much the error in delta forecast that I bothers me (although the string of losses cannot be very good marketing material for his fund), but it is the seemingly complete lack of logic surrounding his approach that confuses me. If you replaced 'Neely' with say 'Mr.X', I would be forced to conclude that he is a complete and utter charlatan.

On a final note, should this market finally commence a retreat today or tomorrow and provoke a short trade from Neely, this would be the final straw.

Thank you all for listening,

Cribrange.

[DG]

what a foolish comment. It is not about missed forecast. It is about claiming a superior method. It is about claiming it is a scientific. It is about elevating NeoWave to the same level of Calculus with zero mathematical prove. you fool.

Not only missing one of the strongest rise in the history of the markets, but going against it.

Posted by: NeelyTheGuru | Wednesday, April 07, 2010 at 09:28 PM

Show me your long-term trading track record and then we can have a discussion about what is and isn't "superior", OK?

It's almost as if you have ZERO experience in how to PROVE something, as opposed to simply ASSERT something. Are you capable of understanding the distinction between those two methods of discourse? If not, why are you wasting my time?

[cribrange]

Erratum : replace 'oversold' with 'overbought'.

[DG]

Now, if this MOAT index was indeed showing oversold levels on a daily and weekly basis and observing that in essence, the market has done nothing in reality over the past fortnight, how could this same index be used to call a rise?

I think you meant "overbought", right? It was overbought when he called a top and oversold when he went long.

Anyway, I don't know about the MOAT index and, frankly, I am very skeptical of it and it seems to be functioning as an excuse to trade to the long side after a long string of failed shorts. The dubious ethical ramifications of that aside, some indicators CAN work off overbought conditions simply via sideways movements, such as what we've basically seen over the past two weeks. Not saying that's what happened, but it's a plausible explanation.

[EW]

Hi all Neely basher, well said... well said...

[vipul garg]

if bull mkt means a new all time high , then its not one.
if bull mkt means not breaking the lows , then it is one.

in neelys defense i would say that he is almost alone ,in the e wave community in public domain, when it comes to figuring out the long term position of the market.
the current structure he has on spx makes a whole lot of sense and with maybe one final revision he will get it spot on.

trading is a different beast altogether though and this is where neely like almost every trader out there is trying to do on continous basis: improve his skill set.