You can just hear Greek Prime Minister Alexis Tsipras asking the European Central Bank that question after the ECB called his bluff and refused to advance Greek banks any more emergency funds, forcing them to close for at least a week and the Athens stock market to also suspend trading. Needless to say, Greece will default on a $1.7 billion debt payment to the International Monetary Fund that comes due June 30.
Until the ECB finally learned how to say No (or, in this case, Nein) over the weekend, Tsipras was confident that his following the J. Paul Getty school of financial negotiating ("If you owe the bank $100, that's your problem. If you owe the bank $100 million, that's the bank's problem") would work and that the ECB and its fellow official creditors to Greece would eventually knuckle under to his anti-austerity demands and continue to kick the can down the road yet again. Continue reading "Their Greece, And Now Ours"→
Was May's better-than-expected jobs report strong enough to convince the Federal Reserve to start interest rate liftoff in September?
Based on the market's reaction on Friday, the answer sure looks like yes. Yields on long-term U.S. Treasury bonds spiked to their highest levels since last October, and stocks were mostly lower.
But let's not carried away with one number and one report. Certainly the data-paralyzed Fed won't. If we get three solid months of positive economic statistics, then I’ll think there's a chance – albeit a slim one – the Fed will make a move in September. Until then, we'll have to wait and see.
Notice I've already written off next week's Fed meeting as the first interest rate increase. While the minutes of the Fed's April 28-29 monetary policy meeting "did not rule out" the possibility of raising rates at the June meeting, it was "unlikely" that economic data would justify doing so by then. Nothing's happened in the meantime to change that. Continue reading "Jobs Report Not Enough to Signal September Liftoff"→
This morning, Christine Lagarde, the boss of the International Monetary Fund, announced to the world that the Federal Reserve should hold off raising interest rates until 2016. I do not ever remember the head of the IMF ever saying anything like that before.
So the question begets, is she trying to save her own skin by doing a classic political move and pointing the finger at somebody else, in this case Janet Yellen, head of the Federal Reserve?
My advice on this, it's not going to be pretty and the IMF should take care of its own screw-ups (like Greece) before trying to fix the screw-ups in America.
With that said, let's take a look at what's really going on in the marketplace today. I'm going to look at the major indices with the Trade Triangle technology, which by the way is totally nonpartisan and unbiased, and just goes with the flow.