Yet Another Bailout Rally

by Larry Levin

Yes sir, today was the 6th, or 7th, or 10th...or 20th mega-rally based on a Greek bailout. If we're lucky, the powers that be (central bankers) will keep the Greek economy on life support - just barely keeping it from being a corpse. This way, whenever Benron Bernanke or Tax-Cheatin-Timmy want to send a little sugar to their Fraud Street cronies they can pull another miracle: a never ending just-in-time bailout.

Once again, failure was not an option for a central banker - moral hazard be damned. Will this bailout hold? It probably will, but I won't completely believe it until the Germans approve the cash layout, and Greece receives it from the ECB. Hopefully Greece will get those Euros quickly; after all, there are 50-year old bakers and hair stylists that want to retire now or they will riot in the streets.

It's no surprise that France really wants to get this behind them because the French are on the hook for a lot of money if the PIIGS fail. According to the following numbers are accurate.

If Portugal defaults, France loses $45,000,000,000.00
If Ireland defaults, France loses $60,000,000,000.00
If Greece defaults, France loses $75,000,000,000.00
If Spain defaults, France loses $220,000,000,000.00
If Italy defaults, France loses $511,000,000,000.00 (nearly 20% of the French GDP!)

The PIIGS owe France nearly $1 trillion dollars.

I suppose things will really get interesting if (when) Spain and/or Italy get into worse shape.



Previous Day's Trading Room Results:

Trade Date: 5/3/10

E-Mini S&P Trades*
(before fees and commissions):

1) Pivot sell @ 11:50am at 1199.00 = +.25 (1 lot)

2) Algorithm positions (6)

3) “Reading the Tape” positions (6) …combined Secret’s, Algo, & “Reading the Tape” total…+2.50



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