Doc is back and we are chatting about metals
Doc is back home and spent some time covering the Greek vote and moves on quickly to gold. He has some senarios fr gold that could take hold as early as next month.
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Welcome back DOC……….
ditto on the transports…….
ditto on the sellers out of the market………..
WELL…..TUES……..AND THE MAFIA IS BACK…….DUMPED $1BILLION ON MKT. check the charts at zerohedge
IT’S GKAY……..LET THEM CONTINUE TO PLAY THE PAPER GAME……..IT’S OKAY LET THEM TAKE IT DOWN TO ZERO BECAUSE THEY ONLY HAVE ABOUT THREE MONTHS LEFT BEFORE THE COMEX GOES BUST !!!!!!!
THIS IS WHY THEY ARE DOING THIS TO THE EXTREME NOW…………..BECAUSE IT’S ALMOST OVER……….RIGHT GUYS !!!!!!!!!!!!!
Comex is a JOKE…………..
It’s good to be back. I was going into withdrawal without looking at charts and TA.
Funny Doc….charting withdrawal syndrome. Very good to hear you back today and your thoughts are always appreciated. It looks like we are continuing in the “falling wedge” pattern (whipsawing up a down) but with a slow grind to the down-side. We’ve been discussing all year that we projected a dip in commodities in the (June-Aug) summer doldrums, and that this will synch up with the 7 year lows in the CRB commodity cycle. It seems like things are playing out right on schedule, slow grind down but not falling out of bed.
Cheers!
I also could see a rebound as well in the miners in late July/ early August, and plan on taking some positions in the small & mid-size producers for a bounce (and possibly a potential bottoming process). You are correct that there just aren’t as many sellers left in the markets at these lower levels. Hopefully the falling wedge will break to the upside when it does break out (most typical) and will be fueled by a little short-covering.
Good thoughts Doc!
Good thoughts Shad. The only concern I have via the PM stocks in August is that we’ll get a bump up and then head lower again after that for one last low.
Great talking with you earlier today, my friend!
Doc – yes I hear ya about that potential for a bump in August, but that this may just be a set up to get people bullish and then there always could be another leg down. Personally, I’m watching to see if the Nov 2014 lows get tested or not in the next month. If Gold’s lows are tested or broken, then I’d be of the opinion that a leg down like that would be the bottom. If the lows are not tested this summer, then you may be right that we get a bump then a further slump. We’ll just have to see how things progress.
Al – yes great talking to you as well. All the best to you.
You are a sick man Doc!
Zerohedge put up a headliner………GERMANS never paid their war debts , so they should not be telling the Greeks about not paying their debt.
Isn’t that an interesting point, Indiana!
Yes it is………owl……….!
No, Germany was defeated so it paid with their people’s lives, looting of their properties and rape of their women. It is the ultimate price.
Let’s not go down that path…….Poland, Russia, France, Greece……I think could say the same.
At the end of war, Ally could just kill off every German and break up the land if they were willing to. They did not do that out of conscience. The price has been paid and it can not pay twice, three time, etc.
Frank, you know the reason Germany invaded Poland in the first place?
Not trying to diminish the war in any way, just wondering if you know the reason.
Better yet, why did Churchill not negotiate the peace? As well, why force Japan to attack Pearl? I wonder if the banks had something to do with it.
Returning German land lost at Versille would have ended it allowing Germany to forgo France Britain etc and move to Russia which was the idea all along.
Lawrence is right, they paid their debt, many times over.
East and West Berlin……comes to mind again……but, the city is now one. So, if you get some land , then have to give it back, is that a payment or a loss, Or a loss and a non payment.
Agree but there are more cases that occupier simply did not give the land back and even killed everyone. European may know Attila the Hun. His ancestors lost their land to Chinese and half their population were slaughtered. His grandparent had to escape to the west to take new land from West Asia and Europe.
But not true.
You should not trust zerohedge, without verification.
The European Court made judgments in the 1950s over war debts.
Yes, the treaties were done deals.
Zerohedge was just stating what the Greeks said……….not if it was true or not….I think…………
But, the real issue is that GOLDMAN……was not accurate in the qualification for the loan in the beginning.
Interesting thoughts from Doc – very wary of, well, eveything at the moment. Doc and Gary very much echoing each other on the conventional stocks and on the metals.
Cash seems to be the best place to be this summer.
I agree Bob. Cash is hands down the best place to be. It’s interesting how so many people are waiting for drops in their respective lists to trigger buy signals but the drops have not materialized.
Central banks must have bought a lot of Euros and conventional stocks today.
Yes Bob UK, Cash is king on the sidelines, but also, it is a good idea to be building your shopping list of quality companies you purchase for a Fall bounce or even some longer term positions in the quality names. The commodities and energy sector will likely head even a little lower in July and I agree with Doc that August may be the first green shoots into to the Fall.
Good luck in your investing.
Bob – based on how things have gone today (Tuesday) going to the sidelines was a wise call. As mentioned since Feb commodities and energy were heading lower in the summer…..
HEADS UP, ALL !
GREEK REFERENDUM DISMISSED BY THE EUROPEAN COMMISSION AS BEING ”…NOT LEGALLY CORRECT ! ! !
Read all about it Here »
http://www.telegraph.co.uk/news/worldnews/europe/greece/11721043/EU-dismisses-Greek-referendum-as-not-legally-correct.html
I guess that the fat lady is not being allowed to sing!
If SOIL went nowhere today, why did DIRT take off?
Can’t help you out with that one CFS.
I assume that is an analogy of the Greek situation. Your guess is every bit as good as ours , Professor on this one!
CFS – are you talking about this agricultural ETF (SOIL)?
http://stockcharts.com/h-sc/ui?s=SOIL&p=D&yr=0&mn=6&dy=0&id=p97986322353
Yes, I see what you are saying CFS – (SOIL) has been under pressure but (DIRT) took off recently. Very Interesting divergence in the Agriculture commodity space.
http://stockcharts.com/h-sc/ui?s=DIRT&p=D&yr=0&mn=6&dy=0&id=p42944155900
(SOIL) Global X Fertilizers/Potash ETF
% of Net Assets Name
6.16 K+S AG-REG
5.18 CF INDUSTRIES HOLDINGS IN
4.92 MOSAIC CO/THE
4.90 INCITEC PIVOT LTD
4.82 ISRAEL CHEMICALS LTD
4.76 OCI NV
4.75 SYNGENTA AG-REG
4.71 YARA INTERNATIONAL ASA
4.66 ISRAEL CORP LIMITED/THE
4.66 AGRIUM INC
4.62 POTASH CORP SASK INC
4.57 TAIWAN FERTILIZER CO LTD
4.55 COMPASS MINERALS INTERNAT
4.54 SCOTTS MIRACLE-GRO CO-CL
4.48 TESSENDERLO CHEMIE
4.12 URALKALI-SPON GDR
4.09 NUFARM LTD
4.04 GRUPA AZOTY SA
3.69 SOC QUIMICA Y MINERA ADR
2.66 INTREPID POTASH INC
2.53 CHINA BLUECHEMICAL LTD –
2.21 TERRA NITROGEN COMPANY LP
1.60 SINOFERT HOLDINGS LTD
0.86 NAMHAE CHEMICAL CORP
0.78 GUBRE FABRIKALARI TAS
0.54 BAGFAS BANDIRMA GUBRE FAB
0.22 CASH
0.22 AGRIUM INC
(DIRT) is harder to get an accurate list of holding in as many sites show no data. It appears to have holdings in the actual soft commodities themselves, where (SOIL) is more phosphates and Potash and agricultural companies.
Here’s the most recent holding I could find of (DIRT) according to Barclays:
DIRT – iPath Pure Beta Agriculture ETN
Holding – Ticker – Percentage
Soybean – S – 33.82%
Corn – C – 22.77%
Wheat – W – 9.59%
Soybean oil – BO – 8.44%
Sugar – SB – 8.00%
Soybean Meal – SM – 6.98%
Cotton – CT – 4.07%
Coffee – KC – 3.98%
Kansas Wheat – KW – 2.34%
It appears that this ETN (DIRT) is much more like the iPath Bloomberg Agriculture SubTR ETN (JJA). Check out how strongly correlated (JJA) and (DIRT) are on this chart contrasted against (SOIL)
What is most interesting is that:
http://www.theguardian.com/world/2015/jul/06/greek-finance-minister-yanis-varoufakis-resigns-despite-referendum-no-vote
“Greek finance minister Yanis Varoufakis resigns despite referendum no vote
The controversial minister says he is standing down after pressure from Greece’s ‘assorted partners’
Hmmmm.
I think he is the obstacle Tsipras consider in the next negotiation. Greece need help from EU and hope referendum gives the government strong mandate to negotiate. I think they are dreaming.
I won’t be surprised if we see a couple other high ranking ministers in Greece move on.
It is a good will gesture from Greece to make negotiation easy, if there is a negotiation. If I am Germany I will walk away.
And, the Beat Goes On!
DOC…..you been around long enough to know that with this TIDAL WAVE of bad economic news world wide that this GOLD MARKET should be on FIRE right now……NO, this is nothing but all out manipulation from the FED and the COMEX BOYS holding these prices down……….BUT THAT’S OKAY because they only got about another three months to go to PLAY THIS GAME and they know it, so go ahead, take the price down to Zero, who cares, because after that, all this PRICE ACTION will move EAST……..so it’s just a matter of time for the PHYSICAL MARKETS to TAKE OVER, so right now it’s just TIC….TIC…TIC !!!!!!!
In the end game, they may as well go all the way short and order cash settlement. Then lock up the money on the long side long enough before price reaches high level. Then longs on Comex is really screwed. They lost Hugh amount of money and at same time not able to capture the price gap up.
Possible?yes. Likely ? I would do that if I own the BIS and US government.
Mark, you’re correct—–Greece is only the first domino of many and it’s starting to lean–it’s only a matter of time and the more they manipulate, the more the eventual damage— As we move deeper into the year, the greater the odds are for a sudden wake up call in the metals. Bollinger bands will narrow over time and the apex of the monthly falling wedge gold is in will narrow more with gold approaching the apex of the wedge. The odds are then for a breakout above the upper line of the wedge. We’ll know then most likely that the lows are finally in. The breakout might be very aggressive but we’ll see. Patience and cash are still the order of the day.
As we have seen with gold people in the western world only get interested when the price goes up. We need some price strength which has not been here for a number of years. Geo-political worries have not had their impact on the metals for some time. That will change but I continue to believe that the central banks have all the power especially when they are simply following the same playbook.
YES……………but CHINA and RUSSIA along with the BRICS are not reading that PLAYBOOK !!!!!
SURE…….CHINA may meet with them ( the west ) and smile in their face, but they are using their own PLAYBOOK……….REMEMBER, they invented PAPER MONEY!
Mark
……and about 57 other countries and COUNTING……FAST!
Agreed!
And with that said, I AGREE………and yes GREECE is the first domino, and keep a close eye on CHINA’s stock market because they are in free fall and they are doing everything that they can to curtail that market……IT’S ON, LOOK HOW THINGS ARE ACCELERATING RIGHT NOW……look at PUERTO RICO and their debt, oh yes it’s on and it will be on FIRE by September and they know it! BLACK SWANS are filling the pond and you know what……THAT’S WHAT THEY GET FOR LYING AND BEING SO DAMN GREEDY !!!!!!!!!!!
” THOSE WHO OWN ALL THE GOLD MAKE THE RULES ” !!!!!!!!!!!!!!!!!!
Not Chinese stock is in Free fall. This stock ran up 150% before falling by 30%. If I am the leader of Chinese government, I would support the stock market but let it fall to a reasonable level and stabilize it there. I believe Chinese government has shown zero interest to a high stock market. Instead of wealth effect like in US, Chinese government always talked about gambling effect of stock market. They now rescue it only in the sense someone is challenging their authority by pump and dump the market. People are angry and blaming the uselessness of government. Chinese Premier called the internal trouble makers devils when the market was rising fast a couple months ago. I heard initial intent was a slow bull to prevent capital flow to US but it morphed into a bubble and crash. It is a slap of the face to the current government.
Chinese QE for more house and infrastructure building? That would support the Chinese stockmarket and drive commodities higher.
Not exactly a total fee fall yet as the govt is still in there!
Doc, If they don’t fight God so hard, they will fall and stand up walking again tomorrow. No big deal. However, they rely on their nuclear option of derivatives to fight nature nail and tooth. When they do fall, it will a disaster that can never recover from. It will be financial equivalance of nuclear war.
Lawrence, it ‘s when man thinks he is a god and is smarter then past generations is when he gets his comeuppance. “I will destroy the wisdom of the wise; the intelligence of the intelligent I will frustrate.”
Exactly Doc
They do think that way and even admitted it in public
You must be an Ayn Rand fan as I am, Doc!
You are simply too smart!
Mark,
I think you are correct. Maybe 3 months to the bottom.
Chartster, you could be right about that time frame; at least you’ll be close. I’m getting this itch to purchase and you can feel we’re getting there.
Doc,
I’m thinking Gary’s 8 year cycle theory will prove to be correct. Right now it looks like gold is going up in the very near term, and then starts a roller coaster ride down. The closer to the bottom the larger the drops.
The news in Europe is about to get pretty wild. Don’t be surprised if Greece announces backing their currency with gold ( which forces the others to do the same ) I just can’t see any way around that scenario given their current predicament. It’s their only way out of this mess.
We also have a end of a 7 year CRB commodities cycle low, and this coincides with 4 years of a Bear market in Sept. Most bear markets in the PMs are around 2 1/2-4 years in duration (although, these PM markets are far from normal anymore).
Can’tagree about Greece and gold, Chart
MARK –
BINGO! Nothing like get to the heart of the matter…Absolutely no disrepect DOC!
I kind of agree with you, Mark!
Psychologically Greece may be the first domino, but in terms of GDP it is but a flea-bite on the rump of a bear. At about half a percent of World GDP, it is less than typical annual fluctuations…….Its complete disappearance could be absorbed easily were it not for the over-endebtedness rife throughout the world and the instabilities being created by endless money printing from central banks.
For decades economists have known that the only real way to stimulate any economy is to reduce the drag on the economy caused by Governments.
I.e. Cut taxation. Simplify/reduce regulations, etc. the problem is that politicians always want to increase their control and maintain their power.
We have an impasse and nothing will be voluntarily done to change things.
I feel sorry for the Greeks, who will lose, regardless of what “solution” is tried.
I really hate the word “austerity” being used to mean “getting closer to living within one’s means”.
We all know, deep down in our hearts, every family has to live within its means.
The same is true for corporations
And the same is true for countries.
There is a limit for how long one can do otherwise.
And the result of not living within one’s means for countries is becoming a third world country, as much of South America has shown time and again.
Nobody really knows what is wrong with the economic system we now have, Greece votes to reject their debt of $320 billion Euros and nothing seems to happen, gold doesn’t respond. The chickens aren’t coming home to roost, whatever happened to the law of supply and demand, why doesn’t honest money mean anything anymore is the system working without paying attention to fundamentals. It’s so crazy, why isn’t there a money panic in European banks? DT
DT; actually I believe this is not all bad since when you get something like this happening and also in the future another seeming catastrophe with no response, complacency sets in big time and that gives investors a chance to buy resource stocks really on the cheap. Then suddenly, something comes out of the blue to get things rolling. And when that happens, the fireworks can be something unimaginable. Frankly, I like this non-response since it’ll allow the final move down over the next few weeks for many resource stocks to their final lows.
I am on the sidelines as of Friday, but really Doc where this sounds ridiculous is very few people know or care what is going on and it doesn’t seem to matter anymore. It all seems like a sci-fi movie and someday we will learn that our society has been taken over. DT
DT, that’s pretty funny and you’re correct. But in a lot of sci-fi movies they have you on the edge of your seats periodically thinking everything is going to be alright for the besieged but then at the end it all falls apart for them.
I concur Doc. I also like this non-response, because it will allow a further decline, without falling out of bed, because it is providing some soft support. This will become a great time to build positions in the quality names, and plan for when the spark lights the fuse of the fireworks to come (likely fueled by a massive short-covering in commodities, and new allocation from institutional funds as they rotate out of tradition equities and into the resource sectors….finally).
Shad, there are a number of PM stocks and resource stocks I’m following that technically are still in a falling phase. I figure there will be no rally until most of these stocks have bottomed and are moving sideways. They will be my indicator to start to wade into the PM sectors. One is TCK. The chart is screaming lower prices. I can’t imagine a black swan that would move everything higher and allow TCK to continue lower—-and I can tell it’s going lower for some time. There are other similar stocks that tell me we still have a ways to go.
For now Doc I will have to give you a check, I will be waiting to see if you get a double check. DT
Doc,
That’s a very good point on “Teck” (TCK).
That chart is as ugly as they come and as you said, is an excellent company to use as a trend indicator.
Teck was a $33 dollar stock as recent as 2013 and look at the unrelenting damage that has taken place over that time to now.
Today’s chart, as you described is clearly telegraphing further weakness in the stock price as it sits at $9.39.
On the weekly, the (RSI) is 29.96 which is beyond oversold but still trending down if you can believe that.
Price is well below the 200, 50 and 20 Exponential daily averages with the candles in a clear blow-off downside move still in the cards.
The MACD has validated this move with a clear crossover to the downside with money outflows decidedly in negative territory.
This is about as ugly of a chart as it gets but representative of the greater metals markets. I wouldn’t be surprised if further general base metals weakness couldn’t possibly take TCK to as low as $5.00 in a blow-off sell panic.
Good heads up on Teck as a barometer Doc.
Appreciate all your market commentary and wisdom.
Thanks
V
Yes, I am with you there Doc. Some of the commodity stocks definitely have further to fall, and I was referring to in late July & August as a time to acquire quality names.
I agree with you on Teck Resources (TCK) as a good bell-weather for commodities. I am also watching Vale (VALE) and BHP Billiton (BHP) for indications of bottoming in the commodity sector.
Check out this chart comparing those 3 and how close Teck and Vale are correlated.
Hard to see an upturn in TCK whilst copper and coal prices continue to fall. Rio Tinto and BHP Biliton seem intent on driving prices lower in an attempt to drive their competitors out of business. Copper prices are forecast to keep falling in 2016.
But TCK could/should be a great turnaround stock if and when the price of commodities turns. It would have more upside than the bigger guys mentioned above IMPO. Just needs the Chinese to start buying copper and coal again massively.
I keep in touch with friends who work/live near Perth in Oz and they tell me that there is an outflow of mining workers leaving Oz to go work in central Asia – Uzbekastan and such countries – as the downturn in the Aussie mining sector continues to grow.
I think we are still some way from a bottom in this sector – which is good as TCK at 5 bucks would be a good longterm buy IMPO.
Very good points Bob UK. I would think when (TCK) bottoms that (VALE) will bottom as well. I also agree that both of those companies have more upside potential than the larger commodity companies like BHP Billiton or Rio Tinto.
Cheers!
Not sure who Vale are Shad – Canadian miner?
Vale is a predatory mining company from Brazil that swallowed up a Canadian crown jewel called Inco about fifteen years ago. Canadian companies are so timid that most of them fall to the sharks. TCK is one of the few Canadian hold outs. Correct me if I’m wrong!
Vale S.A., together with its subsidiaries, engages in the research, production, and sale of iron ore and pellets, nickel, fertilizer, copper, coal, manganese, ferroalloys, cobalt, platinum group metals, and precious metals in Brazil and internationally. Its Bulk Material segment produces and extracts iron ore and pellet. This segment is also involved in the production and extraction of manganese, ferroalloys, and others ferrous products and services; and extraction of coal, as well as in the provision of railroad, port, and terminal logistics services. The companys Base Metals segment produces and extracts non-ferrous minerals, including nickel and copper. Its Fertilizers segment provides a group of nutrients, such as potash, phosphates, and nitrogen. The company also invests in energy generation through operating hydroelectric plants and centers, as well as produces steel. The company was formerly known as Companhia Vale do Rio Doce and changed its name to Vale S.A. in May 2009. Vale S.A. was founded in 1942 and is headquartered in Rio de Janeiro, Brazil.
Vale is very similar to Teck Resources in that they have their business diversified in many arms of the commodities sector, and this is why I mentioned they are a good bell-weather to watch for the bottoming of the 7 year cycle in commodities this year.
Thanks Shad.
right on.
Interesting point, Mr Tennessee!
Thanks Big Al.
VALE is the Brazilian equivalent of Australia’s BHP Billiton. A huge conglomerate.
Agreed. But it is closely correlated with Teck Resources and is similar in nature.
VALE has been trading recently more in tandem with TCK, over Rio Tinto or BHP Billiton.
Here’s a composite chart on those 4 commodity giants:
http://stockcharts.com/freecharts/perf.php?TCK,VALE,BHP,RIO#
Why does not honesty mean anything anymore?
Yes,that limit is definitely there, Professor
Sometimes read what Ayn Rand has to say about paper. (Hint, run as fast as you can!)
funny.
Just think what would happen if the word “austerity” was replaced by the words”fiscal responsibility ” how opinion polls would change!
Do you want the government to endorse austerity? Of course not!
Do you want the government to exercise fiscal responsibility? Of course.
But what is the difference between austerity and fiscal responsibility? Nothing.
Just presentation.
An excellent point on positioning of lexicon and semantics for public opinion.
No sh____ professor! Doesnt ANYBODY in so-called power know what “fiscal responsibility” even is – no because they have printing presses to make financial WHOPEE….yay!!!!….:)
Welcome to the reserve currency era of Yanks and Brits.
Been a long few hundred years for the rest of the world.
At least the Greek people figured it out.
Great point, Professor! And I do mean it!
This is government manipulation.
BIG TIME MANIPULATION……………….
Claude Resources Q2 Highlights:
2015 gold production guidance increased to 68,000 to 72,000 ounces
Q2 gold production of 20,619 ounces, a 10% increase over Q2 2014
1H 2015 gold production of 41,686 ounces, a 39% increase over 1H 2014
Q2 2015 mill head grade of 8.88 grams per tonne, a 15% increase over Q2 2014
Increased cash and bullion (1) to $20.9 million which exceeds long-term debt
http://finance.yahoo.com/news/claude-produces-20-619-ounces-110000309.html
My 1st”Daily Dump” of UK Telegraph’s real-time Greek coverage.
Recommend all click the link below and view the Telegraph site directly , as copying /pasting the site’s text will not include related links, photos and cartoons [some of which are as humourous as they are incisive] 🙂
— StartPaste —
2:13PM BST 07 Jul 2015
http://www.telegraph.co.uk/finance/economics/11722511/Greece-news-live-Greeks-have-voted-themselves-out-of-the-euro-as-European-leaders-openly-discuss-how-to-manage-a-Grexit.html
Telegraph InvestorHome»Finance»Economics
Greece news live: Greeks have ‘voted themselves out of the euro’ as European leaders openly discuss managing a ‘Grexit’
EU chief Dombrovskis says Grexit “cannot be excluded” ahead of day of emergency summits in Brussels
German Finance Minister Wolfgang Schaeuble (R) talks with other ministers at the start of a special Eurogroup Finance Ministers Meeting on the Greek crisis at EU Council headquarters in Brussels Photo: EPA/OLIVIER HOSLET
By Isabelle Fraser, Mehreen Khan
2:13PM BST 07 Jul 2015
This page will automatically update every 90 seconds On Off
• Grexit “cannot be excluded” and described as “collective failure” by EU chiefs
• Malta’s finmin: we need to look at the possibility of Grexit
• Latvia: Greeks have ‘voted themselves out of the euro’
• Capital controls bite as Dixons subsidiary pays staff in cash and pharmacies short of medicines
• European Central Bank tightens noose as creditor powers punish Greece
• Why are the Greeks celebrating, ask baffled Germans
• Greek referendum: fear and trepidation in Athens’ Beverly Hills
14.20
No new Greek proposals
The FT’s Peter Spiegel is also now reporting that the Greeks have arrived without any proposals, according to two senior eurozone officials.
2 #eurozone officials tell me #Greece hasn’t arrived w/new proposal at #eurogroup. 3rd tells me it comes “tomorrow”
t.co/C6DoHjQrAf
— Peter Spiegel (@SpiegelPeter) July 7, 2015
Here’s looking at Euclid…
14.10
Not to play up the whole school playgroun thing, but this sort of speaks for itself
German Finance Minister Wolfgang Schaeuble (R) talks with other ministers at the start of a special Eurogroup Finance Ministers Meeting on the Greek crisis at EU Council headquarters in Brussels Photo: EPA/OLIVIER HOSLET
Newly appointed Greek Finance Minister Euclid Tsakalotos looks on during a Eurogroup meeting Photo: AFP
14.05
Greek president to Donald Tusk: this is what we want
Following yesterday’s national unity statement, the Greek president Prokopis Pavlopoulos has written to EU Council chief Donald Tusk today.
He’s repeated the wishes of his parliament, which include the following (quite ambitious) list of demands, which mention the issue of debt relief. Notably, most finance ministers going into today’s eurogroup have already dismissed any concessions on debt restructuring.
Here’s the letter:
The recent vote of the Greek people in the referendum does not constitute a mandate to break away from the Euro zone, but a mandate to continue and strengthen the effort for attaining a socially just and economically viable agreement. The Government will assume the responsibility of continuing negotiations, and every political leader will contribute to this effort on the basis of their institutional and political role.
The common goal, in this context, is the pursuit of a solution that will ensure:
– Covering, sufficiently, the financial needs of the country
– Credible reforms, based on a fair distribution of burdens and the promotion of growth, with as few recessionary consequences as possible
– A strong, front-loaded developmental program, primarily oriented to confronting unemployment and encouraging entrepreneurship
– A commitment to beginning a substantial discussion on confronting the problem of the viability of Greek public debt
The Political Leaders also underlined that the restoration of liquidity in the Greek banking system, in coordination with the ECB, constitutes an immediate priority.
The aforementioned consensual decision of most Greek Parliamentary parties constitutes a crucial opportunity for all euro zone partners to reach an economically and politically viable agreement.
14.03
Euclid watch
That first day at school feeling
Awkward t.co/xtSeYcVIen
— Danny Kemp (@dannyctkemp) July 7, 2015
He’s all Billy-no-mates.
Greek Finance Minister Euclid Tsakalotos at the Eurogroup meeting (AP)
Well, at least they gave him biscuits pic.twitter.com/pswBQSvAYZ
— Mehreen (@MehreenKhn) July 7, 2015
13.49
Latvian central bank chief: new currency is now likely
ECB governing board member Ilmars Rimsevics, who represents the newest member of the eurozone Latvia, has admitted that the monetary union is gearing up for life without one member.
He said today: “The Greek nation has been brave and has voted itself out of the eurozone.”
“The overall effect is that we see that a state, which has not kept its promises, which has not done the necessary homework, might be out of the euro zone one day. And it means that the euro zone might become stronger.”
ECB’s Rimsevic says introduction of another currency in Greece is most realistic scenario, may be one less Euro Zone member in future.
— Reuters Top News (@Reuters) July 7, 2015
13.35
Greeks have no proposals to hand
Greek journalist Eleni Varvitsiotis reports the Athens contingent have arrived at the eurogroup empty handed… *groan*
Acc to info:Greeks came without proposals.Tomorrow will submit new request and proposals.#Eurogroup
— Eleni Varvitsiotis (@Elbarbie) July 7, 2015
13.02
Eurogroup begins
Newbie in the room, Mr Tsakalotos (who has attended all of these meetings with Varoufakis, so not really new) is getting acquainted.
Dutch Finance Minister and president of the Eurogroup Jeroen Dijsselbloem (L) shakes hands with newly appointed Greek Finance Minister Euclid Tsakalotos (C) as French Economy, Finance and Trade Minister Michel Sapin (R) looks on during a Eurogroup meeting ahead of a Eurozone Summit meeting at the EU headquarters in Brussels Photo: AFP/Getty
Newly appointed Greek Finance Minister Euclid Tsakalotos arrives at a euro zone finance ministers meeting on the situation in Greece in Brussels Photo: Reuters
12.50
Shorter summary of today’s finance ministers meeting
We have been here before but today’s finance ministers have summed up two things: 1) they’re yet to see the Greek proposals and will mull over them today. 2) today is not the time to talk about the big debt restructuring elephant in the room.
Ireland’s Michael Noonan adds: “It’s a lot to do in a short period of time. I don’t think we’re looking at a conclusion today.”
I imagine today might be over pretty soon.
“EXTRAORDINARY EUROGROUP MEETING DOWNGRADED TO ORDINARY” #Fantasyheadlines #Greferendum #grexit #Eurogroup
— Berlaymonster (@Berlaymonster) July 7, 2015
12.45
Finland: no debt relief but we’re not looking at a Grexit
Alex Stubb of Finland says there is no chance of debt relief, saying Greece has benefitted from restructruing in 2011 and 2012 (albeit the latter was private sector debt).
“We are not in the business of restructuring debt. We are doing everything in our power to keep Greece inside the euro.”
“We have shown a lot of solidarity to Greece. Over €320bn euros. We are trying to find a solution but it is up to Greece to show the political willingness.”
“We know that money is running out by July 20.”
Mr Stubb also dismisses any notion of bridging finance to help tide the government over and prevent a default to the ECB in 13 days. “We need to see some political will, some change of attitude from the Greek government.”
12.40
It’s 15 v 4 today
The finance minsiters are in and it’s time to jot up who is on whose side today. In the Greek camp we have Italy, France and Cyprus.
Not true that just France & Cyprus want to stop Grexit. Italy in French camp. Renzi open to debt relief. t.co/VdQSPZWrN5
— A Evans-Pritchard (@AmbroseEP) July 7, 2015
French PM Manuel Valls said that weekend it was time to avoid a “Versailles moment” with Greece. He has repeated his support for Athens today, telling French radio RTL:
“We cannot let Greece leave the eurozone.
“France is convinced that we cannot run the risk of a Greek exit from the eurozone, both for economic reasons but above all for political reasons.”
The first ever departure of an EU country from the eurozone posed a “risk to growth and the world economy,” he insisted.
“Nobody can say today what the political consequences would be, what would be the reaction of the Greek people, who would feel humiliated,” he added.
The French parliament is to debate the Greek situation and France’s position on Wednesday.
Mr Valls added that “the basis of an agreement (on a Greek bailout) exists”.
“There is no taboo subject about debt, on rescheduling, reprofiling, reworking the debt,” he said.
“We were close to an agreement last week. Naturally, there was the referendum, it’s not just about Greece but the whole eurozone, but the basis for an agreement, I’m convinced, do exist.”
12.36
Inside the Eurogroup
A look behind the curtain…
#Greece- #Eurogroup begins pic.twitter.com/sCBRMsQFrE
— Frederic Jung (@Frederic_Jung) July 7, 2015
The eurozone summit starts at 5.30pm BST (after being delayed by half an hour, naturally). Will there be a deal for the leaders to talk about? Stay tuned!
12.33
Luxembourg’s Pierre Gramegna is more conciliatory.
“We are expecting a clear suggestion of the Greek government where they want to do. We need proposals, otherwise it is difficult to know where to go.
“We need to know how they solve a contradiction. They say they want to stay in the eurozone and they say the proposals are not acceptable
“We as a country that has the EU presidency, it is our task to listen to the 19 partners. The Greek government has said debt restructuring is very important, so as a presidency I say we need to listen to all the options. We have a role to play to listen to all partners.”
12.27
Spain: “I don’t think Grexit is a solution which anyone wants”
De Guindos, the Spanish finance minister, said: “The most important thing is if the rules can be followed. Any programme has conditions.
“We are in the last seconds of this crisis – I don’t think Grexit is a solution which anyone wants.”
German finance minister Wolfgang Schaeuble has poured cold water on any possibility of debt restructuring.
Schäuble asked about debt cut for Greece responds: “Whoever knows the EU Treaties knows that this is prohibited” #Eurogroup
— Open Europe (@OpenEurope) July 7, 2015
12.20
Grexit “mentioned not as a stick but as a possibility”
Edward Scicluna of Malta has said that “Grexit is being mentioned not as a stick but as a possibility. It’s a realistic possibility but really we should study both proposals, to be in or to be out.
“We should make sure in each case it is very well managed and not used as a stick to beat the others with.”
12.17
Latvian LOLs
Latvian finance minister Jānis Reirs has said that “Latvian people do not understand the Greek people”.
When asked if he thinks Tsipras is trustworthy, he says, coyly: “It’s difficult for me to answer this question… But however Mr Varoufakis I would have difficulties trusting.”
He then giggles when told by a journalist “you got rid of him”.
12.05
Dombrovskis: Grexit cannot be excluded
He said: “A lot will depend on what kind of reform proposals they present. Is it going to be a comprehensive and creidble package? We need to restore trust between 19 eurozone democracies. Only then can we move forward.”
He added, Grexit is “not our aim or intention. But if trust cannot be restore, Grexit cannot be excluded”.
11.59
Peter Kazimir: I’m sceptical a deal will be found today
Slovakian finance minister, known for his straight-forward talking, said “I’m very sceptical a deal will be found today”.
“This situation has gotten to the point where a viable deal is only possible at the highest political level”, he said.
“The referendum result didn’t change the economic reality in Greece.”
He describes debt relief is “this is a red line. This is absolutely impossible” he says of a nominal debt cut.
.@KazimirPeter mixed metaphors: “Greece is behind the curve at the moment and the bridge of trust”. Says debt relief “absolutely impossible”
— Mehreen (@MehreenKhn) July 7, 2015
11.54
“It’s becoming v urgent,” says @jvanovertveldt at #eurogroup. “Greek econ is in free-fall, banking system also more or less in free-fall.”
— Peter Spiegel (@SpiegelPeter) July 7, 2015
11.51
Moscovici’s real talk
Matthew Holehouse sends some analysis from Brussels:
Moscovici says that Grexit would be a “collective failure”.
That is a more generous, forthcoming and arguably honest stance than his colleagues – and indeed his boss JC Juncker – who have insisted this mess is entirely a Greek problem.
Indeed, only this morning Juncker wailed that he had “tried very hard. If only everybody else had tried as hard.”
11.44
Moscovici: Grexit would be a total, collective failure and debt restructuring is not on the table
European Commissioner Pierre Moscovici has said that “Grexit would be a collective and total failure.”
“This Eurogroup is not about [debt restructuring], it’s about the way forward,” he said.
“We remain available to talk, but Greece must say how it wishes to act, how it will avoid the worst case”, he added. “It is up to Tsakalotos to give concrete proposals, to say where he wants to go.”
He added Greece must say what it hopes to do, and provide “tangible, credible” reforms. “There is also a voice from the 18 other member states and we need to have a frank, clear good discussion to avoid Grexit.”
“This Eurogroup is not about debt restructuring. This is about the way forward. On Sunday the Greek people gave their voice.
“But there is also the voice of the 18 other member states and we need absolutely to have a frank clear discussion to avoid the worst which would be Grexit.”
Will the new Greek finance minister change things? We’ll see, he says, but this is not just a question of tone, it’s about concrete proposals on the table.
11.41
Dijsselbloem meeting with Tsakalotos before Eurogroup and has not seen a Greek proposal yet
Jeroen Dijsselbloem said that he will meet with new finance minster Euclid Tsakalotos before the Eurogroup meeting, and says that he has to hear what the Greeks say first.
He said that they would listen to their proposals and see if they can see a way out.
“It’s going to be very difficult – hopefully they have a proposal today”, he said – hinting that he has not seen this proposal that Süddeutsche Zeitung has seen.
“The eurogroup has been very nice in its stance”, he added. “We cannot damage our credibility. It has to be credible for Greece and the future of the eurozone as a whole.”
11.36
MEPs: why won’t Tsipras interrupt Greece’s deal of a lifetime to talk to us?
The fate of his country hangs in the balance? but MEPs outraged because @tsipras_eu won’t come & be lectured by them pic.twitter.com/prfm0sJ2e0
— Bruno Waterfield (@BrunoBrussels) July 7, 2015
11.34
Eurogroup members arrive
Finance ministers are beginning to arrive at the Eurogroup meeting in Brussels. You can watch the arrivals here.
Michel Sapin, the French finmin, and Euclid Tsakalotos enter without saying a word.
.@tsakalotos arrives at Eurogroup with weight of world on his shoulders. Manages wry nervous smile pic.twitter.com/SPqNDp7PNp
— Mehreen (@MehreenKhn) July 7, 2015
11.24
Reports: new proposal is not significantly different to the last one
The German newspaper Süddeutsche Zeitung is reporting that it has seen Greece’s new proposal. It does not differ significantly from what they term ‘Juncker’s plan’, the one that was presented the weekend before last, and which the Greeks rejected at the referendum.
It would keep the VAT rebate for the islands, leave VAT for restaurants at 13pc and contain limited cuts in defence spending.
The paper also quotes new finance minister Finance Euclid Tsakalotos as saying: “I cannot hide that I’m nervous.”
11.14
“I do not understand Greek referendum circus”, says Juncker
Matthew Holehouse writes from Brussels:
Jean-Claude Juncker has ridiculed the Greek ‘no’ vote as an unintelligible “circus”, as he sought to backtrack on previous threats that it means ejection from the Euro and Europe.
The president of the European Commission said the question posed to the Greek people was “irrelevant” and he would now try his upmost to “understand” what voters were trying to say.
On Sunday the Greek people voted down proposals for a bailout package by a margin of 61 to 39. Alexis Tsipras, the Greek prime minister, has said it gives him an unanswerable mandate to demand a more lenient bailout package that includes write-downs of Greece’s 380 billion euro debt mountain.
European Commission President Jean-Claude Juncker (Reuters) Photo: Reuters
The remarks will fuel concerns that the European Commission pays little heed to the results of popular referendums.
It comes a day after Valdis Dombrovskis, the European official in charge of the Euro, dismissed the Greek vote as “neither factually nor legally correct” because the proposed bailout had expired days before Sunday’s vote.
“The voters of Greece have spoken, and I’d like to understand what they said,” Mr Juncker said in an address to the European Parliament in Strasbourg.
“A question was put to the Greek people about something that does not exist. Perhaps you would like to explain to me in detail what the question was that was put to the Greek people – but perhaps that would be too much of a circus.”
His remarks contrast sharply with an address – interpreted in Greece as a threat – made last Monday ahead of the vote, warning that rejection of the bailout package would be “suicide”.
“The whole planet would consider a Greek ‘no’ to question posed as meaning that Greece wants to distance itself from the euro zone and from Europe,” he said then.
11.04
Today’s Matt
Matt cartoon, July 7
There’s also a great cartoon in today’s FT:
Greek cartoon of the day #oxi pic.twitter.com/iYGIde2vml
— Lionel Barber (@lionelbarber) July 7, 2015
10.51
Gabriel: Greece joining the euro was naive
German vice-chancellor Sigmar Gabriel has told Stern magazine that “The entry of Greece into the euro is carried out from today’s perspective, very naive”.
“Worse is that all have watched far too long” as Greece fell further into crisis, he said.
He added that there is nothing gained from wiping out Greece’s debt. “If we simply emphasize debt, without that much will change fundamentally in Greece, nothing is won,” he said.
He added that he was confident “at the end we will find a way out of the crisis in Greece”.
10.40
Yesterday:
A defaced sign outside the Bank of Greece reads ‘Banque de Merkel’ (Bloomberg)
Today:
A worker cleans graffiti outside the central Bank of Greece building in Athens (Reuters) Photo: Reuters
Maybe this bodes well for this afternoon’s Eurogrop meeting?
10.27
Greeks are still shopping at M&S, despite capital controls
Marks and Spencer’s chief executive Marc Bolland has said that business is still brisk in Greece, despite capital controls. M&S has 28 stores in Greece.
M&S factlet: sales at Greek stores have been c60-70% of normal despite economic turmoil. ‘That’s quite remarkable,’ said Bolland.
— George MacDonald (@GeorgeMacD) July 7, 2015
Well, Greeks have still got to by underwear and Percy Pigs…
Meanwhile, queues have become a way of life for Greeks.
10.14
Pesky voters getting in the way of real politics
Matthew Holehouse, our man on the front line of European bureaucracy, writes:
Parliament president Martin Schulz is asked by a journalist: “Aren’t you afraid that by accepting the Greek narrative of the referendum, it means that more and more populist politicians will use referendums as a political weapon in budgetary issues.”
Schulz replies that other MEPs have “raised exactly that problem”.
“What will happen if there is a referendum in another country, putting in doubt a possible compromise with Greece? What will then happen? Therefore I think we are in a difficult situation.”
Pesky voters, eh?
10.10
Schulz: “Grexit cannot be our aim”
More on Schulz, president of the European Parliament, who is giving a press conference.
He said: “I am in favour of Greece remaining in the euro zone,” despite the fact that last Thursday he said that if there was a ‘no’ vote Greece cannot use the euro. (See previous post.)
“Those people who want to split up the euro zone I think are wrong,” he said. “My personal opinion is that Grexit cannot be our aim.”
In response to a question from a reporter, Schulz said that he had never called for Greek Prime Minister Alexis Tsipras’s resignation.
“I never called for the resignation of Mr Tsipras or the Greek government.”
He also said that both sides need to move in negotiations.
09.56
Oops… Schulz caught in a flip flop over Grexit
Matthew Holehouse, our man in Brussels, writes:
Mr Juncker tells the European Parliament he has been texting Tsipras from the chamber floor. He reels against “demagogues and populists”.
Martin Schulz, the European Parliament president, is asked if he regrets saying that Greeks cannot use the Euro if they vote no. “I didn’t say that,” he snaps at a press conference.
Oh really? Because according to Reuters, he said:
“Is Greece still in the euro after this referendum? That is certainly the case, but if they say ‘no’ they will have to introduce another currency after the referendum because the euro is not available as a means of payment,” Schulz told Germany’s Deutschlandfunk radio in an interview broadcast on Sunday and taped on Thursday.
09.50
And what of Varoufakis?
He’s been spotted hanging out in Athens, drinking and chilling out – while his former colleagues sweat it out to come up with a deal.
The Daily Mash also reports* that he has “unveiled plans to ride around on his motorbike having martial arts battles with local villains”.
*This is a joke.
09.32
Capital controls taking their toll
Restrictions on payments abroad mean that there is difficulty importing goods to Greece – including pharmaceuticals. One pharmacist has listed all the medicines they are missing as a result of not being able to import them.
#Athens pharmacist shows me list of medicine she’s run out of due to capital controls #Greece #greferendum pic.twitter.com/N6D0yQfEd3
— Ilya Gridneff (@IlyaGridneff) July 7, 2015
Last pharmacist who wrote me a list of medicines he was short of was in Aleppo. t.co/4rXlxNucJm
— Richard Spencer (@RichardJSpencer) July 7, 2015
Last week, Constantine Michalos, president of Athens Chamber of Commerce, said there could be “shortages on the shelves” by early next week and tourists could be left without “basics” including food and medicine.
Meanwhile, Reuters reports that at least three large companies in Greece including its biggest electronic appliances chain have paid staff in cash.
One of these stores includes Kotsovolos, a unit of Britain’s Dixons Carphone.
A spokeswoman from Dixons said Kotsovolos paid staff in cash last week and was waiting to see what happens this week.
Two other big companies operating in Greece have also paid part or their wages in cash, while a third was considering offering its employees such an option for the next scheduled payment at the end of the month, people familiar with the matter told Reuters on condition of anonymity.
09.23
Yo, Alexis: Juncker is texting Tsipras
After being heckled in the European Parliament by MEPs, Juncker revealed that he was in text contact with Tsipras.
“Stop all this chatter about me looking at my telephone all the time. I am texting, as they say in Franglais, with the Greek prime minister,” said a clearly irritated Juncker.
“I don’t know if you will have the chance to do the same but I have to do that today. I am doing my work, so stop this stupid banter, for which there is no cause.”
I’ve just got hold of an exclusive screenshot of Juncker’s message to Tsipras.
09.17
Greece is cutting itself off from the internet
Here’s a great piece from Mic on how methods of online payment in Greece are drying up. First PayPal, then the Apple App Store, iCloud and Dropbox.
Greeks can’t activate new iPhones because it relies on money going out of the country – via the internet.
One developer has created Zero Fund with money from tech investor Marc Andreessen. It is a proxy for transactions, for those Greek companies blocked by capital controls.
08.48
Christine Lagarde is staying at home – and there will be no debt relief on the table
Already signs are pointing to a rather unsuccessful Eurogroup meeting today.
Mehreen tweeted yesterday that head of the IMF Christine Lagarde will not be attending today’s Eurogroup.
Debt relief will not be on the table today. Lagarde is not attending Eurogroup
— Mehreen (@MehreenKhn) July 7, 2015
The FT’s Lex column argues today that “If debt relief had come earlier, the eurozone would not be facing this moment of truth at all”.
It is also one of the points on the statement of unity created by the Greek political parties yesterday – and a sticking point for both Greece and the IMF, which in last week’s debt sustainability report stressed the importance of it in any new package.
08.37
Kathimerini: 16 of 18 eurozone countries want Grexit
According to Greek newspaper Kathimerini, Grexit is beginning to sound like a good option for most of the eurozone. They write:
“According to sources in Brussels, 16 of the other 18 countries in the eurozone are in favor of letting Greece leave the eurozone and they will have to weigh up the cost of any agreement to keep Athens in the single currency.”
08.34
Check-in with the markets
Ahead of today’s Eurogroup meeting, the European markets have opened quite cautiously – Frankfurt’s DAX gained 0.36 pc, and the CAC in Paris edged up 0.15 pc. London’s FTSE 100 index rose 0.1 pc, but is now down slightly.
08.29
The mantle of the Pickelhaube
Our economics reporter Szu Ping Chan has spotted a bizarre theme in all this: the Pickelhaube.
#Greece Merkel wearing Pickelhaube in Bild with call for an “Iron Chancellor”. They presented Draghi with one in 2012 pic.twitter.com/uJqZrepgTk
— Szu Ping Chan (@szupingc) July 7, 2015
The metal hat, used as armour by the Prussians and others, is now considered a sign of German imperialism. Just for fun, here’s a picture of my favourite ever German Otto von Bismarck wearing one. What a moustache.
Speaking of Bild – the German daily has a solution to this Greek thing. It’s a tad radical, however.
Bild Greek plan 1 Grexit 2 No more loans 3 Write off half the debt 4,5 Humanitarian/invest aid t.co/q0S7ue4Wlb pic.twitter.com/E7MlOUfTsl
— grodaeu (@grodaeu) July 7, 2015
08.17
Juncker: let’s turn down the rhetorical volume
Matthew Holehouse writes from Brussels:
We are watching the events in the European Parliament in Strasbourg.
Jean Claude Juncker says the purpose of today’s meeting is to restart talks, “turn down the rhetorical volume”, and offering the Greek government a chance to “explain how it sees us extricating ourselves from this programme.”
A solution “won’t arrive overnight”. “We have to put our little egos, and in my case a very large ego, away,” he says.
“We are told we must respect the Greek people’s vote. And I’ll certainly do that. The voters of Greece have spoken, and I’d like to understand what they said. A question was put to the Greek people about something that does not exist.
“Perhaps you would like to explain to me in detail what the question was that was put to the Greek people – but perhaps that would be too much of a circus.”
“My aim is to prevent Grexit. I am against Grexit.”
He is wounded by the criticism he has received since a speech last week.
“It is time to stop these outbursts, this shooting from the hip. It is unacceptable for the European Commission to be deemed terrorists by the Greek government. That is not the kind of Europe we want. We have tried hard and if only everyone else had tried as hard.”
He gives a lengthy defence of a speech last week, in which he warned Greeks not to “let down the European Union”. He also attacks newspaper reports that he has disappeared.
“I have not disappeared. I come to the European Parliament to talk about the referendum. This is the home of democracy,” he says.
He says it is “extraordinary and unacceptable” that he cannot talk about Greece.
“I am not a technocrat.”
Manfred Weber, a senior German Conservative, says they must respect the demands of all EU states. There are rules “that need to be respected and applied.”
“Sunday was not a good day for Europe. It harmed Europe.”
Juncker -who last week told Greeks not to commit suicide for fear of dying – now asks for toning down of rhetorical volume #Greece
— Jennifer Rankin (@JenniferMerode) July 7, 2015
07.59
Jean-Claude Juncker is speaking to the European Parliament.
To give you a flavour of his speech:
Today’s speech appears to be defence of last week’s speech, in which he said he felt “betrayed” by Syriza for ruining “my life’s major work”
— Matthew Holehouse (@mattholehouse) July 7, 2015
07.47
Today and beyond
Timeline: What next for Greece after ‘No’ vote?
Key events in the next 48 hours and beyond for the Greek crisis
Tuesday 7 July
European Parliament address
Mr Tusk and Mr Juncker are expected to address Europe’s elected representatives at the Parliament in Strasbourg. Nigel Farage is lined up to speak. Expect oratorical fireworks.
Eurozone heads summit
The Eurozone heads of government will meet in Brussels. They last convened last Saturday, the morning after Alexis Tsipras tore up a Euro 1.5 billion bailout deal by calling a referendum.
Looming deadlines
Any day this week
With or without emergency liquidity, Greek banks are likely to run dry.
July 13
Greece must find another Euro 465 million currently owed to the IMF. It is already in default.
July 20
Most crucially, on July 20 it must find Euro 3.5 billion to pay the European Central Bank. Default on this will force the withdrawal of those emergency bank loans. Financial collapse and Grexit follows.
07.43
French PM: there’s a basis for a deal
French prime minister Manuel Valls has said that the basis for a deal with Athens was there.
He said: “France is convinced that we can’t take the risk of Greece leaving the eurozone,” a move that would affect economies across the globe, Manuel Valls told French radio. “The basis for a deal exists… There is no taboo subject when it comes to (Greek) debt, on the restructuring.”
Optimism!
07.39
A brief timetable for today
(All times BST)
07.30 European Commission president Jean-Claude Juncker to address European Parliament
09.30 European Parliament president Martin Schulz to give press conference
12.00 Eurogroup of eurozone finance ministers to meet
17.00 Eurozone heads of government to meet
All this, plus keeping a watch out for more announcements from the ECB, and on the markets – on which the result of the referendum had surprisingly little effect. If hopes of deal are dashed once again today, expect to see some more movement there and in bonds.
07.31
Good morning
Today marks another Eurogroup meeting with finance ministers and a eurozone summit scheduled for after – the idea being that today will be a day of action, and a deal will be made.
The Greek leaders have been told that they have a deadline of this afternoon to come up with far-reaching proposals. But noises coming out of the ECB, Germany and EU leaders does not indicate total optimism about today’s outcome.
Greek banks remain closed, and will remain so for at least another two days.
Yesterday, the ECB continued its freeze on emergency liquidity assistance (ELA), rather than raise it as Tsipras wanted. But in a highly contentious move, opted to tighten the collateral rules it imposes on lenders to access the lifeline, intensifying the squeeze on the cash-starved banks, which are set to remain closed for another two days.
The ECB said the move was based on the deteriorating quality of the bank collateral, most of which is made up of Greek government bonds. It declined to specify the level of haircut imposed.
Germany’s vice-chancellor Sigmar Gabriel issued a humilitating ultimatum to Greece, and said the landslide rejection of EU austerity demands in the Greek referendum changed nothing, demanding that the Left-wing Syriza government must accept further belt-tightening without any prospect of debt relief if it wishes to remain in the eurozone.
You couldn’t make it up. The euro sign in front of ECB building is being dismantled today for maintenance pic.twitter.com/nHcMy4ovqr #ECB
— DFT (@dft) July 6, 2015
Angela Merkel met with Francois Hollande but the German chancellor failed to heal the rift with her French counterpart, insisting Greece has been offered very “generous” bail-out terms, but that Sunday’s referendum result meant that conditions for a discussion over a new deal were not in place.
Mr Hollande was more conciliatory, saying the “the door is open for discussions”.
In Greece, Yanis Varoufakis was replaced as finance minister with former chief negotiatior Euclid Tsakalotos. Tsipras rallied Greece’s five main political parties behind a national unity declaration.
It called for “substantive talks” on debt relief, an investment blitz to fight mass unemployment and an immediate shot of liquidity for the country’s banking system.
The White House intervened again last night, as President Barack Obama spoke by phone with Francois Hollande and Treasury Secretary Jack Lew spoke with Tsipras and new finance chief Euclid Tsakalotos, urging a constructive outcome.
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Gold down!
Must be a “very bad for the dollar” minutes of the Open Mouth Committee coming out tomorrow!
The stupid Chinese were buying precious metals on margin now their stock market is getting torched the margin calls are starting.
Good thing there is no counterparty risk in the PMs – baaaaaaa.
In most financial contracts, counterparty risk is also known as “default risk”.
Yes, it IS a GOOD thing there’s no counterparty risk in physical gold/silver!
The counterparty risk exists with the (margin) debt, not the metals.
Good point sir.
It does exist on the COMEX.
Yes, but the COMEX has been clear that they would cash-settle if necessary.
When the price is artificially high because people are buying on margin, there lies your counterparty risk.
You ride with them up and you take the elevator with them down.
That is a risk but it is not counterparty risk.
Your counter party is the people long on margin – why is that so hard for you to understand? The people buying tech stocks on margin where the reason it caused all of them to crash for everyone that was wrong – the counterparty (long on margin were forced to sell causing more to force sell causing more to force sell. One of the worst counter party risks to stay long beside idiots that are also long on margin.
Damn dude, why is it so hard for you to understand that that is not the definition of counterparty risk?
Margin debt that isn’t your own adds to price risk. It should be obvious that your physical metals have no default risk.
http://www.investopedia.com/terms/p/pricerisk.asp
Yeap, some of the PMs being slammed for 6% because of forced margin call would not be a counter risk for being long. When you ride with them up when they are buying on margin you take the counter risk that they will leave you holding the bag. Baaaaaaaaa.
The longs getting torched is the counter party risk when THEY bail. That is what happens with artificial prices.
No point in arguing with someone who likes to make up his own definitions as he goes.
CFS – I responded to you about (SOIL) and (DIRT) up above and threw in a chart to compare them along with (JJA). DIRT is in the actual soft commodities, where SOIL is much more focused on fertilizers and Agriculture companies. JJA is very similar to the ETN DIRT.
DIRT is very thinly traded, and it was surprising to see it so overbought. RSI about 98!
Yes, JJA tracked it very closely if you look at this composite chart. That means the soft commodities must be moving.
Here I’ll just re-post this here, but the holdings in each are up above:
It appears that this ETN (DIRT) is much more like the iPath Bloomberg Agriculture SubTR ETN (JJA). Check out how strongly correlated (JJA) and (DIRT) are on this chart contrasted against (SOIL)
The big zero meeting with Vietnam officials in the White House today; wonder what he is trying to give away this time……
New Census Bureau data released shows Anglos now out-numbered by Hispanics in California. Democratic forever, as will be the whole U.S., with pockets of Anglos in a multicultural matrix throughout.
Cruise ships to start visiting Cuba from May of next year, with Miami being departure port.
I am long DIS and HSY. HSY still owns a mega resort there from the sugar cane days.
HSY scares me because of the cacao bean shortage problem, but they are probably diversified safely and the chocolate demand seems i elastic. i.e. Not turned off by high price.
HSY has been buying other products beside chocolate – licorice, jerkies, crackers, biscuits etc, but with HSY I was thinking of a theme park in Cuba on the land they all ready have establishments on. Hershey actually moved to Cuba and lived the last of his days there.
http://www.graceland-updates.com/images/stories/15july/2015jul6sp1.png
Still want to own the stock market?
Not a very pleasant trend-line.
I have a friend that visited Cuba annually for years, I believe he left from Florida many times.
That’s over the last 10 years, he is Canadian, maybe that made a difference?
Americans have not been able to go to Cuba directly from the US since the sixties.
I have friends that have been visiting Cub and sneaking people much needed medical supplies for the last 10 years. They also got their hand slapped for sneaking out a few Cuban cigars though 🙂
In the words of the song: “How low, low, low, low can you go? “( gold and silver)
Bird had said $1130 was in his sights, guess we see from there.
Gotta be lots of silver around, jpm has amassed the largest stockpile of silver ever,
only took them a few weeks to accumulate it. Gotta be lots around.
I am hearing (reading) about shortages, but Ive heard that before and there is still all you want around here, I notice adds for silver for very low premiums too.
Why on sale if its hard to get?
1131 is the November 2014 low in Gold, so that number is in everyone’s sights. We are waiting to see if it gets tested this summer and if so does it break below that. If it does, then that leg down would likely be the bottom. If Gold doesn’t test that low, then the bottom really was in November 2014, or we get an August bump and another potential down-leg after that as Doc mentioned up above.
Personally, I’d like to see Gold test 1130, possibly break below it, and get all the sell exhaustion and the bankruptcy phase over with. My target if 1130 breaks to the downside was the Oct 30th, 2009 level of $1044.70. This lines up nicely with many other fib retracements and trendlines offering support in the $1000-$1050 range.
If things get dicey though, Gold can always surprise and not test the Nov 2014 lows, but the technical direction is the slow grind down down in the summer, as was discussed back in Feb & March. The questions are how low? how much momentum? and how much longer? So far it has been fairly orderly, mild, and the Greek situation has provided soft support for the metals, preventing a waterfall decline.
I’ve posted this a few times over the last few weeks, but thus far it has been a fairly accurate call from Jordan Roy-Byrne on the “falling wedge” and lines up with what Doc has charted, and what Gary Wagner has charted using Elliot Wave & Japanese Candlesticks. If you haven’t seen this video yet, it is worth the watch.
Precious Metals Market Update: A Technical Update on Gold – Jordan Roy-Byrne
ON JUNE 17, 2015
http://palisaderadio.com/precious-metals-market-update-a-technical-update-on-gold-jordan-roy-byrne/
Great point Matthew – technically the first support is near the March 2015 lows of 1150 (where we may see a bounce), then the Nov lows of 1137 or 1131 (1130 is the round number everyone is using, so it is has become primary), and then I don’t see support again until $1044-1050 zone.
Maybe Shad, but Bird spotted it long before anyone else.
Excluding maybe Gary, who has seen about $1000 for awhile.
On February 11, 2015 at 9:25 am,
Shad says:
I meant the spring/summer low. I have no idea of 1140-1137 will hold, or if 1050 will hold, and neither does anyone else. However, when that low comes in, I expect sentiment will be terrible, the market will be washed out, and this will be a fantastic entry point for a long term holding.
On February 11, 2015 at 11:43 am,
Shad says:
If there is to be a correction down into the late spring/summer, there is the best I can make of it for correction support levels:
1) I am using 1180 because there are 2 important levels. A low on July 30th, 2010 of $1181.40, and a prior peak on Nov. 23rd, 2009 of $1176.70. I see that range of 1177-1181 as being a support zone and so 1180 is around number that some may use with stop loss positions.
2) I am using the 1137 most recent low and as the next level of support, and that will be an obvious level to everyone.
3) I’ve been using 1050 as a nice round number on the next step down, but probably should be more specific at $1044.70 from Oct 30th, 2009.
4) after just spending a few minutes to review things below that, I really don’t see support again until the Feb 20th, 2009 peak of $993.20.
On February 14, 2015 at 12:46 pm,
glenfidish says:
4. Gold has hit to the tee a 50% retracement of that 1130 low we put in. I remain 90% confident the low in this move at least is in. The 1220/1217 I told shad I like is going to end up holding and it has.
On February 17, 2015 at 9:40 pm,
Shad says:
If Gold would have just had a small 1 week minor correction after the 1308 high and close on the 22nd of 1302, then there was a good chance gold could have kept climing. However, now it lost $100 in less than a month, and is in a much bigger hole to dig out of. Gold had really popped up above the trend line, but now is reverting back down to it, where it will bounce again, but likely not even as high as January, and then it will likely fall further on the next correction down to test 1180 and 1137. If those levels fail then $1044.70 as next major support, and then $993.20 as a worst case scenario.
On February 17, 2015 at 12:20 pm,
glenfidish says:
Doc let me rephrase i meant lower then 1130?
Like this summer?
On February 19, 2015 at 10:28 am,
Chartster says:
The only thing that looks remotely bearish in that chart is the MACD.
I use RSI, MACD, TRIX, and slow stochastic.
If you draw the line from the bottom of 1130 candle to the bottom now, and also draw the line from the top of the 1130 candle to the last top. You will see a bearish expanding wedge. Ready for a possible break down.
On February 20, 2015 at 11:32 am,
Chartster says:
If gold closes where it’s at right now , or even falls further down?
Lookout ..below…….
And 1130 is distant memory!
On February 23, 2015 at 9:56 am,
Lawrence says:
Gary, I have marked you as bearish of gold at $1130-$1200. Please don’t argue that you are bullish when price is up a lot. I will disclose this when it comes.
On February 23, 2015 at 11:09 am,
Gary says:
Lawrence,
I’m not sure what you are trying to say. Gold is in an intermediate decline. I tend to think the bear will continue until it at least retraces back to 1000-1050, but I don’t think the secular gold bull is over.
On February 24, 2015 at 7:18 am,
Chartster says:
The hardest thing in this PM market is when to buy up the mining stocks. With this next big drop coming. I believe march will see the bottom.
I do know 1130 on gold ain’t even close to a bottom.
On February 25, 2015 at 11:16 am,
stewie says:
LPG i agree….. I will go all in again near 1080 or 1130 depending how oversold indicators look. I’m sure we all will be covering it then. lol. I can’t believe how long gold spent in this stupid bear market. Unreal. Unreal.
On February 25, 2015 at 10:50 am,
stewie says:
It will eventually fail and it will first test 1130 and then we will see what happens but i would rather have a washout to 1080-1050 already then wait 6 months. My 2 cents
On March 2, 2015 at 7:08 am,
Chartster says:
True Lawrence, I did think the bottom was in November , until it stopped at 1130. It will fall under 700 soon. I’ve been wrong about when, but won’t be about ” what is going to happen!
On March 2, 2015 at 6:12 pm,
stewie says:
Wash that sh1t down to 1080 please. Bull sh1ting around for another 2 years in this range only gets you 2 yrs old and no money made. Murk that sh1t down so we can move on to 2000 gold. 1130 is coming next then 1080. Deal with it.
On March 4, 2015 at 8:36 am,
Bob UK says:
I think Gary is spot on here and that we are going to see $1130 reached later this month and perhaps go lower.
On March 4, 2015 at 1:29 pm,
Bob UK says:
….I think we will go below 1130 in gold and, as a result.
On March 6, 2015 at 1:53 pm,
Shad says:
I diversified out of many of mining stocks in Jan and Feb, anticipating the PDAC curse in March and now we have it. March and May are seasonally rough months for the PMs, but this coincides with the bottom in commodities we expected in the spring/summer in the whole commodity complex. What was odd is how weak February was, when it is seasonally a great month for gold/silver.
It seems the gold market will whipsaw from here with lower targets at 1137 and 1131. If those don’t hold, then 1044.70 is next support.
On March 6, 2015 at 2:53 pm,
Gary says:
Maybe. We’ll see how they hold up when gold reaches 1130 again.
On March 7, 2015 at 7:53 am,
Bob UK says:
I will be keeping a close eye on it next week as, if gold does drop down to $1130, I will watch how FRES reacts.
On March 11, 2015 at 12:37 pm,
LPG says:
Now gold has fallen to 1146 intraday and this is interesting. Our Daily Bearish Reversals are at 1146 and 1141 followed by 1130.
On March 12, 2015 at 10:12 am,
glenfidish says:
Gary,
Interesting points about the cycle count. For the record Gary,doc, if and when we challenge 1130, will this be a second attempt or a third attempt at 1130?
The reason I ask is because there is much discrepancy upon pundits some saying second time and others are saying third time because the swiss vote would have been the seconf time? To me it would seem as attempt number two?
On March 12, 2015 at 10:26 am,
Shad says:
I think it is attempt number two. The other time the price-point was seen was in overseas trading, the question is do you count the full 24/7 chart or the US charts?
That is why I thought 1137 was more relevant than 1130; however round numbers like 1130 are often where traders place stop/limit orders, and are psychologically relevant towards sentiment.
On March 12, 2015 at 10:38 am,
glenfidish says:
Makes sense Shad and thanks for your comments. I’m inclined to be open minded and personally I think the distance would be to short for a double bottom but you never know what mother market gives us.
On March 12, 2015 at 11:22 am,
Shad says:
That is sound advice Glen. I don’t think it helps to get married to an idea or theory, and since it is so far off, we’ll just have to wait to see what wildcards are thown at us.
However, I do believe when looking at the monthly and weekly charts in Gold that it has farther down to go before bottoming. Also, after the feeble display to try an rally in late Jan/early Feb and failing to fall lower in Feb, then that confirmed we would head lower into March and we have. At this point we have not tested the 1137 or 1130 zone yet, and as discussed, I think we are due for a short term reversal for a week or two based strictly what is going on with currencies.
Most bear markets in gold have been 3-4 years and if we are 46 months into this bear, then the bottom being in about 2 more months puts us right at 4 years. Now, could it take 4/12 or 5 year to bottom – of course….anything can happen ; – )
On March 12, 2015 at 11:31 am,
Shad says:
There still is a 10% chance that the bottom was 1130 and that we move up from here without testing that Nov low, but it seems like the market wants to test that level, and even lower to finally wash the remaining bullish sentiment out of the marketplace.
I think it will be a process of bottoming and not a one day event, and I just don’t think November was it. Hey, I’ve been wrong plenty of times before though : – )
On March 12, 2015 at 11:54 am,
Shad says:
Since gold has had a downward tendency for a while now, with the counter-trend leg up from Nov – Jan, then it stands to reason the next down leg will break through the old lows at $1137 or $1130.
My best guess would be the $1044.70 target (from Oct 30th, 2009). I think the $1048 area also matches a Fib retracement level. That area between 1050-1044 should be good support. This move down will coincide with the commodity cycle bottom and top in the dollar, so that is why I think it is the upcoming “Major Bottom” and around 4 years of the Bear market.
Just a few of the posts from Feb & March (too many to post) showing there were many on here discussing the Nov 2014 lows far before he was.
America stay away from Cuba…..do not poison it. It is a beautiful place and the people are beautiful.
GOLDMAN IS THE ONLY ONE THAT NEEDS TO STAY AWAY……………
Good to have your input Doc