Joe Weisenthal
Citi's Steven Englander put out an interesting note yesterday titled: If the Greek bailout is so bad, why is the EUR so strong?
The argument goes like this: Everyone and their cousin believes that the Greek bailout is a joke that doesn't stand a snowball's chance in hell of really working. A lot of people thing Greece will leave the Euro this year. And then that opens Pandora's Box for more trouble in Portugal, and everywhere else. And yet! Peripheral yields are calm, and the Euro is robust.
There's a disconnect between what everyone is saying about Europe and what's happening in markets, which is calm.
And actually, he doesn't have much of an answer.
He does point to this chart, showing the general collapse in volatility around the world -- basically Euro volatility vs. the VIX -- as being indicative of ongoing calm everywhere.
Citi's Steven Englander put out an interesting note yesterday titled: If the Greek bailout is so bad, why is the EUR so strong?
The argument goes like this: Everyone and their cousin believes that the Greek bailout is a joke that doesn't stand a snowball's chance in hell of really working. A lot of people thing Greece will leave the Euro this year. And then that opens Pandora's Box for more trouble in Portugal, and everywhere else. And yet! Peripheral yields are calm, and the Euro is robust.
There's a disconnect between what everyone is saying about Europe and what's happening in markets, which is calm.
And actually, he doesn't have much of an answer.
He does point to this chart, showing the general collapse in volatility around the world -- basically Euro volatility vs. the VIX -- as being indicative of ongoing calm everywhere.
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