Is This the Most Important Juncture in History?
Investors cast their eyes towards Europe.
We're now faced with the specter of the biggest guys in Europe keeping their hands stuffed in those very same pockets, with their sweaty palms gripping whatever fiat currency they have left. Every man for himself; a chain is only as strong as its weakest link; when the going gets tough the tough take care of themselves. There are a lot of ways to put lipstick on that pig, none of which are particularly pretty.
Here's the rub, and forgive the imagery of rubbed pork. Fitch Rating Agency is saying that even if the debt rollover is voluntary -- which has been at the heart of the issue -- it would still consider this to be a credit event, which is a pleasant way of saying "default."
And if Greece defaults -- and it owes roughly €26 billion by the end of August -- it will trigger a chain reaction not unlike what we saw with stateside financial institutions a few years ago... except global investors will be much quicker to connect the dots from Greece to Germany to European banks to US banks to BAM! Right here.
So yes, I want to be bullish but with a massively binary event in our immediate midst, I must defer to discipline over conviction, and that means no second-guessing regardless of how the market acts or reacts tomorrow.
And I'll remind myself of a simple fact: the definition of a "crash" is when once-reliable indicators no longer work, and those who are staring at stochastics and put/calls and Misery Indices would be wise to, at the very least, acknowledge that risk before they bank on a reward.
Good luck today.
Follow Todd and over 30 professional traders as they share their ideas in real-time with a FREE 14 day trial to Buzz & Banter.
Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at email@example.com.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Daily Recap Newsletter