John Ward – Crash2: Greek Panic Followed By Global Flight To Safety – 15 October 2014

dominoesptnetAthens exchange dives by 10%, biggest buy-in ever to US T-Bills, FTSE suffers biggest decline since 2012, oil slides again. Is this the end of the beginning?

You have to ring some alarm bells when dramatic market price movements occur in the context of large trading volumes. That’s what has been happening over the last 36 hours.

Yesterday, the Brussels goblins rather less than politely informed fantasist and human olive stone Antonis Samaras, the Prime Minister of Greece, that the chances of his country escaping from bailout/support mode were lower than the likelihood of Queen Elizabeth II winning the 2028 Grand National ridden by Prince Philip.

As a result of which, today (Wednesday) for the second consecutive day, the Athens Stock Exchange has been plunging. More than €4 billion euros have been wiped from the exchange: the percentage dives were 5.7% yesterday, 10% today.

So it seemed more than likely that this would have at least some knock-on effect. And at the opening Bell this morning EST, there was a flight to the safety of T-Bills such as has never been seen before: three times the normal volume…with demand so vastly exceeding supply, an awful lot of investment money failed to get into the lifeboats. By 11 am there, explosive trading in Treasury futures – over 1 million trades – had computer-screen-shiny faces looking distinctly uneasy.

By midday, all the S&P’s year-to-date gains had been wiped out. And things weren’t helped by US retail sales for September falling back to a much lower level than forecast.

Further awareness of the reality of Global slump was supplied by yet another drop in the price of crude oil to $81.84.

And in London, the FTSE 100 finished 2.8% down – the biggest one-day percentage decline in 16 months, and the lowest level since the middle of 2013. / link to original article


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