The markets displayed their resiliency again last week. After a little sell off that got all the bears excited early in the week, turn-around Tuesday lives up to its name once more!
The Russell which has been lagging the markets in recent sessions decided it was time to play catch up and made a big move on Friday.
AAPL announced the new iPad, its faster and has a better screen. Not the iPad 5 with holographic interface, but good enough to keep AAPL pushing the highs.
GMCR took a hit when SBUX announced that they are entering the one cup coffee machine market. Somebody made a mint off that event because they were buying GMCR puts ahead of the news. Which one of you was it?!?
Greek CDS trigger, the market shrugs it off. Is this really a non-event or is it the beginning of something bigger?
One opinion on the matter:
CDS trigger decision by ISDA is a good news for bears. These big banks would not like to trigger the CDS but they had no choice as a negative decision will erase the credibility of CDS instruments. Yes, the CDS payouts triggered in this case is a small amount and no big deal at the moment. However, this decision sets the precedent for future decisions when Italy, Spain, and Portugal defaults. If they use CACs, they will be found in default as in the case of Greece now. When that happens, it will be a very big deal and many banks will be unable to pay those CDS payouts.
Here is a nice joke
Rest of Europe Shouldn't Follow Greek Bailout: Dallara
Dallara represented private bond holders in negotiations with Greece. Now that Greece kept 100 Billion dollars from those private investors successfully, he is worried that other EU governments may take the same path and cause more losses to these private bond holders again.
If Greece can get away with paying less, expect a few other countries to take the same route.
Like I said before, Greece is not a big deal but the precedent it sets for other EU countries is a big deal.
Economic events to watch for:
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