My late night post (a little back pain keeping me up) talked about the lack of clarity regarding what the E.U. In general is going to do about heir bailout facilities for the PIIGS countries (Portugal, Ireland, Italy, Greece and Spain). I swear I didn't know anything about the finance ministers meeting Brussels, I just woke up and looked at some charts. They said nothing and did nothing regarding expanding the bailout facility which weighed on European sentiment, which weighed on European economic equities.
When I mentioned the risk on/risk off cycle in Europe which now has a shelf life of about 3 days rather then months, I didn't know that Portugal's Prime Minister begged for help/bailout last week. Apparently he virtually begged Angela Merkel according to eyewitness accounts. It was neat that eyewitnesses were there and even better that Dominique Strauss-Kahn the head of the IMF as well as the Italian Foreign Minster who's been leading the charge for a Eurobond. Here's where it gets good. Merkel put the request on hold to consult with her visitors and Strauss-Kahn told her the request was pointless because Portugal wouldn't follow any advice given. The actual term used was, “he was dismissive”!
Now this is interesting on it's own: Portugal is now in the hot seat, the power players that can help them are dismissive, contagion fears are back, but we get an added bonus, the sentiment survey released after Jobs announced his leave of absence at AAPL appears to be a complete farce! How can those numbers come out like they did-doubling when Portugal is the next of the PIIGS to fall?
Furthermore, regarding my comments on the Euro bank 2011 theme, Ireland is said to be Junior Bond holders of Ireland's Allied Irish Bank are being told to take a deal to buy back bonds at 30% of face value or risk getting the “stick”! Bond Holder Haircuts anyone?
Back to Greece, I'll keep it short, but as the fears have been for several months, their just recirculating, there's fear that Greece can't repay it's debt which means it will have to restructure the bailout they received in May as they've broken the terms and lied at least twice since then, I doubt the restructuring will be favorable if it's offered at all.
Moving on, AAPL is down from last night's 5% after hours trade and near flat on the day.
AMR's earnings beat, the stock is down thus far on the day. Remember these earnings picks aren't beat or miss, just what happens next. Well, lets see. Other picks from last week, JPM and INTC are also down on the day and made no forward progress after earnings. We might be heading towards 3 for 3.
No comments:
Post a Comment