Lot's of buzz over the weekend about the possibility of Cyprus taxing bank accounts to fund a bailout. Look at the all jokers on the yahoo message board go ape shit over this squeeling with delight.What does that tell you? It tells you that the song remains the same....that despite the market being spitting distance from making an all time high, the typical retail schmuck trader is still bearishly inclined. Most of these guys I'm sure are deep in the red over the past 4 years if not entirely broke and so it's beyond pathetic for them to be gizzing on their computer screens like this.
At first blush, this Cyprus situation strikes me as a one off much like the Dubai crisis in 2010. Cyprus is an island with a population of 1 M and apparently is a haven for Russian money laundering. They are beyond insignificant, but the fear is that this is a black swan event and it will lead to a widespread run on the Euro as people start worrying that bigger European countries could eventually have to resort to the same tax levy on depositors. I have to admit, I'm not fully informed on what's going on with this issue as of yet, but to me such fears smack of paranoia.
With the market having the torrid run that's had, an unexpected negative like this could very well be the trigger for a dip but it seems to me this it the type of catalyst that is short lived in nature like what we saw with Dubai in 2010 and the Japan Tsunami in 2011. If I was short I would be covering into such a dip. I don't mean to sound complacent though. I need to dig into this "crisis" further without the use of permabear sites like zerohedge. Anyone who has made trading decisions based upon the info on that is beyond broke by now.
I meant to talk about other things this weekend but things got derailed by this whole Cyprus thing and I just wanted to document it.
This is totally disgusting. They call this a bail in, and not a bail out. All these names give me the spooks. This is nothing more than robbery.
ReplyDeleteThe guy from http://sentiment-trader.blogspot.com/ and who is very accurate with this market calls, is saying this will be the next catalyst for the market to fall and sell off.
The bears are hilarious. I wouldn't be surprised if some of these idiots lost a majority of their capital shorting the rally. The U.S. economy is improving and jobs are finally back in the 200k range. This is probably just a short term correction. I got plenty of cash on hand to deploy.
ReplyDeleteIs everyone here sick of the stories coming out of the Eurozone by now? This is the 4th year running and we still hear about Eurozone crisis.
ReplyDeleteHey Dennis long time no see. How are things?
ReplyDeleteAnon, I hear you. Europe is definitively annoying but unfortunately we have to deal with it. At the end of the day you have to ask yourself how these problems in Europe are ultimately going to impact the companies you own. I'm sure for the most part the answer is next to nothing. I realize though that a macro concern like Europe could drag down the entire market and therefore any stocks you own. It's frustrating. One thing you can do is buy some index hedges to cover yourself over the summer months. This is something I'm inclined to do.
What do you guys think will happen when Cyprus banks reopen? Will there be panic withdrawals or will it be business as usual?
ReplyDeleteNo idea. Your guess is as good as mine
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