Late Sell-Off

by Larry Levin
 

The crack pipes were so stuffed with Hopium Tuesday that the opposition of members of the German high court didn't affect the market at all.  Equities gapped open MUCH higher...then died.  The first 5.5 hours of the day was terribly range-bound with no volatility at all.  When new news hit the tape late, however, the market went into a tailspin.  
 
 From the FT traders read...

 
http://www.ft.com/intl/cms/s/69902e72-e926-11e0-af7b-00144feab49a,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F69902e72-e926-11e0-af7b-00144feab49a.html&_i_referer=http%3A%2F%2Fwww.ft.com%2Fhome%2Fus#axzz1ZCCvrTej

A split has opened in the eurozone over the terms of Greece's second €109bn bail-out with as many as seven of the bloc’s 17 members arguing for private creditors to swallow a bigger writedown on their Greek bond holdings, according to senior European officials.
 
The divisions have emerged amid mounting concerns that Athens' funding needs are much bigger than estimated just two months ago. They threaten to unpick a painfully negotiated deal reached with private sector bond holders in July.
 
While hardliners in Germany and the Netherlands are leading the calls for more losses to be imposed on the private sector, France and the European Central Bank are fiercely resisting any such move. They fear re-opening the bond deal could spark renewed selling of shares in European banks, which have significant holdings of Greek and other peripheral eurozone debt.
 
Because of the recent economic downturn and Greece's slow implementation of austerity measures, officials estimate Athens' funding needs over the next three years have grown beyond the €172bn forecast this summer. The scale of the shortfall will be determined by international lenders over the next few weeks.
 
The Europeans would have been much better off if they told the banking mafia to "eat it" 2-years ago, when Greece first became a problem.  Now they’re deep in a hole, yet they continue digging.
 
Never fear though folks, the 3rd quarter is almost at an end and Fraud Street will do whatever it takes to keep the market higher through the end of this week.  How they spin it we'll only find out as the rest of the week plays out.

 

Trade Date: 9/23/11

E-Mini S&P Trades*

(before fees and commissions):

1. No "Secrets" trades filled today.

2. Algorithm positions (10)

3. "Reading the Tape" positions (1) ...combined Secret's, Algo, & "Reading the Tape" total...-2.25

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