While the US markets are closed, the world is still turning and the Fundamental event that retail risk takers didn't pick up on last Friday in to the close as one of the largest short squeezes in years was run with retail chasing it higher in to the close (who do you think was selling to them?), was Greece today as the Euro-group met for a second go-around at trying to find a solution or more appropriately, force their only solution on Greece who has made it clear, they will not accept said solution which is why Syriza was elected in the first place.
So Friday's momo chasers are probably not going to be too happy if they take a look at the EUR/USD and Index futures (although volume is of course light for a holiday/closed US markets.
The fundamental catalyst or wild card... that which cannot be known and you don't want to get caught on the wrong side of when the market is closed...
- GREEK GOVT OFFICIAL SAYS THAT "IN THESE CIRCUMSTANCES, THERE CANNOT BE A DEAL TODAY"
- EUROGROUP DISCUSSED "UNREASONABLE", "UNACCEPTABLE" DRAFT TEXT INSISTING ON EXTENDING BAILOUT
- *GREEK GOVT OFFICIAL SAYS NO AGREEMENT POSSIBLE AT EUROGROUP
- *GREEK GOVT OFFICIAL SAYS EU PROPOSALS `ABSURD,' `UNACCEPTABLE'
EU creditors are desperate to keep the loan on the books as is without impairment (losses or write downs), but they very well should have known that Greece would never have been able to pay the loan or live up to the terms so what do they do, they do it again, all to keep the original loan on the books.
From an EU perspective, this is about keeping the loan on the books, not realizing losses, keeping the status quo, not finding a solution that will help Greece right the ship because that would require the EU lenders to take some financial responsibility in making a bad loan that they either knew and expected the status quo would remain or should have known, the Greeks could never escape the tentacles of the loan.
From a Greek perspective, this isn't so much about trying to stiff creditors, but to acknowledge reality which is Greece cannot live up to the terms and ever escape the loans and become a thriving culture under the burden of the loan. While it's easy to blame the Greeks, it's not the Greeks in power who agreed to the terms, they voted against them, but we are past all of that.
The Greeks are looking for a credible way forward, any credible way forward will still be a burden on the Greeks, but it will also mean that the EU creditors that made a loan they knew the Greeks could never escape (unless the puppet regimes stayed in place and kept Greece in perpetual servitude), also accept their share of the responsibility for making a loan that they knew could never be fully put to rest, it's just like the sub-prime loan origination profits and passing risk off, it's unsustainable and the Greeks in this case are much more realistic than the EU, although the EU will do everything it can to keep that loan on the books as is.
The EUR/USD plunged on the news...
And Index futures plunged...
Now will a conciliatory statement be made to help prevent further outflow from Greek banks which are already far beyond the ECB's Emergency Lending (ELA) or will the EU just let that pressure boil the Greeks for a bit and see if it makes them more malleable?
I said I don't see a good ending to this almost two weeks ago and the reason is that each side is working toward a completely different goal, there's no common ground, what one side wants is diametrically opposed to what the other side wants, how do you negotiate that?
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