Published On: Wed, Feb 11th, 2015

Greece bailout talks: No agreement in Brussels

Well, it was “no deal” last night in Brussels after all! Yanis obviously thought he had conceded what his government had allowed him to concede (or did he?), and everyone believed a compromise had been reached – but when he phoned home, the boss told him “óchi!” (That’s “no”, by the way…) He had to go back in to the meeting – many of whose delegates had already left, including the German finmin Schaeuble – and suggest that “It’s only natural to wait until Monday.” So for today, although it’s “no deal”, the markets are still holding their breath, because there are even more talks going on, and Monday will become the crunch day now. I suspect however it will be even more fudge and onwards can – kicking, because Yanis Varoufakis, the Greek finance minister, may be thinking he has overplayed his hand by having been more than a little too pushy these past weeks, antagonising everyone who matters – except Christine Lagarde – the IMF head – who has obviously fallen for his macho good looks…. Maybe it was the Burberry scarf that turned her head – being French, she understands “style” – and it has to be admitted that none of the other EZ/EU politicos understand anything of that topic! It’s interesting that Varoufakis has now taken to praising Angela Merkel as being “The most astute politician in Europe” and even suggesting that Schaeuble (with whom he couldn’t even “agree to disagree” at their Frankfurt meeting the other day) is “the only European politician with intellectual substance”. That hardly says much for his opinion about the rest of them! Now I rather suspect that everything emanating from Mr Varoufakis to date, has all been carefully choreographed by him and his chums in Athens, and the agenda that underpins it all is still “default, but not by that name”. It’s entirely inevitable that default will ensue – and indeed I’m not that sure Mr V himself has much by way of true “intellectual substance” – at least not when it comes to translating fine phrases into actions that will truly benefit the people of his country. Unlike almost all the media – and Mme Lagarde – I’m not taken in!

Elsewhere, unless gold can gain some traction very shortly, it looks like falling below $1200 (basis April). It needs to break above $1240 to have any real prospect of hitting $1300 again, perhaps not even this year.

As far as stocks go, my least favourite car maker (Tesla) has seen its losses for 2014 widen sharply to $294. I just can’t foresee it ever making a profit in fact.

European Bond Markets decline as trading hit by Greece Turmoil

Another day when Greece dominates the headlines, economy – wise. Will they get some kind of bridging assistance from Russia, as their defence minister threatens? Their foreign minister is in Moscow today, “having talks”, while the finmin, Mr Varoufakis, is speaking at a Eurogroup “emergency meeting” where he’ll be requesting bridging from the Eurozone. As we know, Germany has dug its heels in and is refusing to negotiate, but it’s possible – likely even – that they will change their tune at the last minute. The threat of Russian influence within what is still a Nato country, won’t cut any ice with Berlin – I suspect they’ll realise it’s only a negotiating ploy – but the realisation that Greece just might walk away from the euro, will send shivers down their collective spines. It’s not because Greece itself matters – frankly, it doesn’t. It’s a failed state and pretty much always has been in modern times. The new government simply won’t be able to overcome all its endemic tax evasion, corruption, nepotism and fraud. “Ethics” isn’t a word bandied about very much by the Greek population. The idea they’ll ever actually pay back all that they owe, is naive in the extreme in my view. But if Greece does leave the eurozone in a so – called “Grexit”, it’s the fear of knock – on effects that puts the wind up the powers that be in Brussels, Strasbourg, and indeed Berlin. If Greece goes, so too will Spain, Portugal and probably Italy – in fairly short order at that. Spain faces elections this year, and the “Greek equivalent” party – Podemos – is knocking on the door of power. Indeed, throughout the entire area of “Club Med”, the anti – austerity movements are gathering strength and challenging the perceived wisdom. If Greece leaves, they’ll gain even more traction in their countries. On the other hand, if Greece bluffs successfully and gets its debt writedowns as demanded, these other political movements elsewhere, will also gain strength from that fact. “If Greece can get away with it, why don’t we do likewise?” So whatever happens next, I suspect we’re entering the next phase of the end game for the euro.

Elsewhere in the markets, a push above the February 6th high on Cable (GBPUSD) should usher in even higher prices – likewise a push above 120 on USDJPY should put 122 at least in the crosshairs, while a break below 17600 on the Dow Jones index (DJIA) could see 17000 revisited over the coming week or two.

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About the Author

- Ian Williams has been trading stocks, indices, forex and commodities on his own account for over 30 years. He set up a "trading training" company in 2004, and since then he has helped a large number of people to become successful traders. His hobbies are skiing and flyfishing, spending his winters in the Alps and summers in Scandinavia. He can be contacted via