As rumors about Greece run rampant, it is apparent that Greek FINANCE MINISTER VENIZELOS has stepped to the fore to try to influence his hand as the leader of Greece. THE COURT-APPOINTED LUCAS PAPADEMOS HAS BEEN QUIET OF LATE AND IT IS VENIZELOS LASHING OUT AT GREECE’S EUROPEAN “BENEFACTORS.” The fact is that there are so many microphones in EUROPE in search of an expert that all the media reports prove to be worthless. Timelines of action are void as soon as they are presented yet the markets continue to be affected by random noise.
The sad truth is that in EUROPE there is no real sources of information or credibility because every politician and technocrat has an agenda. That is the rationale behind the noise pollution. It appears that the same thing is happening at the FED under the guise of TRANSPARENCY.
FED PRESIDENTS PLOSSER AND FISHER were opining how unlikely another round of QE would be and that it is basically a Wall Street fantasy. It seems that the two FED policy makers failed to read Bernanke’s speech on HOUSING delivered in Atlanta February 10. That speech expressed concern about the softness in the housing and was read in a manner that suggested the FED will be vigilant in doing all it could to keep rates ultra low to aid new home buyers.
Besides, Chairman Bernanke is very concerned about the credit crisis in EUROPE undermining the nascent recovery in the U.S. Plosser and Fisher seem to speaking GREEK when it comes to interpreting the FED chairman’s desires, especially now that the Japanese have entered the fray. If anything, the two FED “HAWKS” ARE OUTLIERS AND CAN BE LABELLED BLACK SHEEP. To paraphrase the WIZARD OF OZ: Pay no attention to the people behind that microphone for the FED‘s policy is being set by the chairman and he has the votes to prove it.
***THE CHINESE ARE, AGAIN, MAKING NOISE ABOUT COMING TO THE AID OF EUROPE BY BUYING PERIPHERAL DEBT DIRECTLY OR THROUGH THE EFSF. MR. ZHOU, the GOVERNOR OF THE PBOC, said that the BANK is ready to step in and buy EUROPEAN SOVEREIGN AND CORPORATE DEBT for it is in the best interest of China to support its largest market. The Chinese will provide a type of VENDOR FINANCING to provide money to sustain the EURO economy.
This rumor has gone on for more than two years and when it finally comes true it will mean that the Chinese have made enough money manipulating the markets with these rumors that the funds are now available to provide debt financing. The bonus for the Chinese is that they will be able to buy the DEBT at much cheaper prices.
When China decided against buying the initial tranche in December 2009, GREEK YIELDS were substantially lower so the Chinese have made a very wise decision. The ZHOU statement originally put a bid to the EURO and all risk assets but by day’s end the market seemed to realize that it had seen the ACT before.