[闲谈] This is why market reversed all gainings

BigFool

German Finance Minister Shoots Down Levered Euro-TARP
Published: Thursday, 29 Sep 2011 | 10:55 AM ET Text Size By: John Carney

So much for the idea of a levered Euro-TARP.

German Finance Minister Wolfgang Schaeuble told lawmakers the European Financial Stability Facility  would not be used to create a leveraged bailout vehicle, according to Dow Jones Newswires.   

Schaeuble was attempting to reassure members of the Free Democrat party as they prepared to vote on an expansion of the EFSF. The lower house of Germany’s parliament approved the expansion Thursday. The Free Democrats are part of the governing coalition that, along with the Christian Democratic Union and the Christian Social Union, control Germany’s parliament.

Financial regulators from the United States had reportedly been urging European counterparts to consider a leveraged fund that would issue its own bonds and use the proceeds to buy sovereign debt  of distressed euro zone nations. Earlier this week, reports suggested that plans to create this fund were underway.

Now it seems like the idea is dead.

Otto Fricke, the budget policy spokesperson for the Free Democrats, described the idea of a levered fund as “nonsense.”

BigFool

if this is true, and there is no way for ECB to involve in any bailout action, Europe is dead and so all the world.

yijianmei

if this is true, and there is no way for ECB to involve in any bailout action, Europe is dead and so ...
BigFool 发表于 2011-9-29 14:18

This is exactly what the FED wanted. Kill the Euro, set up another one similar, but with FED involved, 趁火打劫，发国难财，花街的拿手好戏。

BigFool

if you believe in this theory, I have no doubt you will get killed on the bear side. The demise of euro will trigger a domino effect on european sovereign debt and the consequences are fathomless. With spx 500 companies getting 45% of their revenue from outside US, I don't think FED wants to see that.

Greece is going to get tranche soon, once they get it, we can at least have 6 months peace days,  CDX on Italy, Portgul and Spain all dropped, though German Finance Minister ruled out the possibility of leverage of ECB money, ECB will intervene if later things become uncontrollable. I want to reiterate it, printing money CAN solve the problem.

I admire you have the determination of staying on the sidelines for 5 months, however it is a pity to see you re-enter the market with a bearish bias, it will make your staying outside the market completely pointless. You could take advantage of the sell-off and make a fortune.

This is exactly what the FED wanted. Kill the Euro, set up another one similar, but with FED inv ...
yijianmei 发表于 2011-9-29 15:13

yijianmei

回复 4# BigFool

Well, I stayed out of the market for 5 months because I wasn't sure what to do. "When in doubt, get out". It took me 5 months to realize the market trend had changed (you probably disagree with me on that). If I had known the market would go down 5 months ago, I sure would have shorted as you said. But I am not smart enough.

Now 5 months later, I am bearish biased rather than bullish biased, why? Because, like in 2001 and 2008, each after a multi-month correction, if you had jumped back in the market, as a bull, it would have been too early. I guess it all comes down to the fundamental difference between our views of the markets today. You see the current condition as a correction, albeit quite deep and prolonged, in an on going bull market, but I see it as a transitioning phase from a bull market to a bear market. In fact, in my view this is just the beginning of a new bear market, even though it might be short and shallow, but still a bear market. And the worse of it is, it is induced by the FED, just like the bull market from Mar. 09 was too. If you check the history of the stock market, especially after 1913, almost all the bull and bear phases of the market have something to do with the FED. On a side note, although I am bearish biased, I am not saying I will only short this market. Actually I have a range to go long or short, depending on which way the market goes.

BTW, for anyone interested, I covered my shorts in the afternoon. I'll stop DT again. Every time I try to DT, I find it just too stressful and time consuming.