European stock markets today decided to go with the optimists who think a Greek debt deal is likely. Stocks in Athens for example rose a big 5.61%. Looking at the fine print in yesterday’s decision by the European Central Bank to extend an additional 5 billion euros in loans to Greek banks, however, I’d have to side with the pessimists.
Germany and its austerity allies in the Netherlands and Finland have fired warning shots designed to head off any effort by the new Greek government of Alex Tsipras to reverse budget cuts and other measures initially put in place to win the 240 billion euro ($270 billion) bailout program for Greece.
In the past the financial markets in Europe have been willing to rally just on a promise from ECB President Mario Draghi to do “whatever it takes.” This time, the doubters are saying, even actual action might not be enough to turn the EuroZone economy around.
Russia’s troubles have become a key mechanism for turning the bear market in oil into a bear market for stocks, bonds, and currencies in emerging markets because of the country’s recent financial history
You’d think that the renewed possibility that Greece would exit the Euro if Prime Minister Antonio Samaras loses the snap election that he’s just called would have sent European stocks and the euro down further today. After all, if the Samaras government loses to a government led by Syriza, it’s likely that party will lead Greece out of the euro at a gallop
Wait ‘til next year for a big expansion of asset buying that is likely to include big purchases of sovereign debt. That was the message from European Central Bank President Mario Draghi today. Financial markets might have been hoping for more, but this is about as fast as Draghi can move while pulling reluctant members of the bank along with him.
Gold is down today on a new poll showing that Swiss voters are likely to reject a referendum that would force the Swiss National Bank to make a huge increase in its gold position. December gold futures on COMEX were down 1.57% as of noon New York time to $1178 an ounce
