My Big Fat Greek Write Down ~ The Risk Averse Alert

Tuesday, March 06, 2012

My Big Fat Greek Write Down

What to make of Greece's struggle with investors holding its sovereign debt who must in the majority "voluntarily" ratify its write down, this for crisis in the euro-zone to abate, if only for a Spanish minute?

They say it's not over until the fat lady sings. Well, the best we can do here is check out the pipes on the Greek finance minister...
Nice, but look at the condition of those buildings! It's all over except for the shouting. Trouble is the clamor for debt write down can only grow louder from here on out. So, chances are the Greek finance minister will once again bend over as far as he can and extend the PSI "negotiation." Every minute counts when your banking system is stuffed to the gills with "assets" already marked to fantasy that, likely face further pressure in the murky domain where Greek debt write down could bring unintended consequences born of either a deeper hit on euro-zone confidence, or a stronger shot of sovereign boldness challenging the much hated troika. Every minute counts. That's why a strictly technical trade could persist as it has and give out so decidedly, as happened today. $NYA Today's gap lower is one huge Venizelos. With relative strength and momentum both turning down hard, suddenly shorter is the time and space for the market to weaken further in the lead up to its anticipated collapse. Confirming likelihood the market has further to fall is the CBOE Put/Call Ratio. A setback like today's, were it but a pause in the market's advance, would have seen buyers who stepped in more aggressively hedge their long equity positions with put options, that is were the likes, indeed, strong hands. There's still time for this to happen. So, it is still too early to claim with any conviction that, the fat lady has started to sing. Yet sing, without a doubt, she will. Fast Money
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