It will hit stock markets very hard across the world, not just inside the EU. It doesn't matter if you are in for the long term though.

http://www.cnbc.com/id/17689937 futures data - big drops for the s&p 500 at the moment, although of course things could be very different at the opening bell.

Starting from 15 minutes when NZ opens the OP is gonna have a very bad day tomorrow . If a deal is struck however everything will be reversed to huge gains just as quickly.

Finally, Bloomberg is on.....been checking the cable news all day and found zero coverage of this.

Like I said in the chat on Friday, the market cares about this issue but has been irrationally discounting the chance of exactly what happened. This is despite Tsipras and others making it abundantly clear over weeks that trouble was coming.

If it's chaos in Greece, the markets will care. There's still a ton of European money spread across the system, held in and owed by Greece. You don't send a shock of hundreds of billions into the EU finance system and have everything be ok. It's nowhere near as bad as it would have been, since Greece is far more contained and the debt is less dangerous, but there will still be lots of fear until things are sorted out.

about 250 Billions actually, situation is really complex and keep changing very rapidly.

usd/euro is gonna go up for sure in a few hours from now and noone knows when that will stop, EU wants to control that but its not gonna be easy.

http://thereformedbroker.com/2015/06...u-lose-your-s/

The thing outsiders don't seem to understand is that Southern Europe has had out of control unemployment for a 20 year olds going on 10 years now. They have been told to relocate to Germany were the jobs are. Meanwhile Germany has been breaking export surplus rules set by the EU. Who do you think they are exporting to?

Here's the real rub, the current EU rules don't work. As good as some of the benefits, there were bound to some real losers. The day has come. Should Greece bleed out while their friends watch on and ask when they will be paid back? Maybe there is a credible fix to be found, but ECB has lost its damn mind if they think Greece will continue on destroying their own economy just to prove a point.

Any short term pain by default and going back to a Greek currency easily outweigh continuing the course without structural changes. The Greek economy is in shambles. The poor have already gotten poorer. How much worse do you really think it can get?

I am not expert on Europe or Economics, but it seems to me that the writing is on the wall. Does the EU have the political will to do what is in their own self interest? If Greece leaves the whole wall of cards will fall down. Just my opinion.

Actually worth reading.

probably yes, just a few hours ago Jean-Claude Juncker stated a few things, most of those being almost complete lies, so if my guess is correct EU still gives its best try so they can avoid risking that wall of cards you mentioned. Is this going to be enough tho? That I dont know.

Its worth noting that the current impasse is for a loan to pay back a loan and the conditions the Greek Gov has been resisting is an increase in VAT and an increase in the pension age for PSW, both reasonable requests for a country that is effectively fiscally insolvent.

Lets also not forget that Greece was not undone by the collapse of a large financial sector (it does not have one) and it did not have an especially viscous housing bubble like Spain and Portugal. It was undone simply by the contagion caused by those problems in other economies into bond markets. The countries the big first effect problems happened in have ended up less ****ed than Greece, which shows you how terribly managed Greece was before the Financial Crises.

Of course it should default anyway and leave the Euro because having the same monetary policy as Germany is absurd.

Anybody who can predict correctly how the referendum will turn out will make a boatload of cash. Three options as I see it, Yes, No, and Referendum cancelled. It could be that the Greeks see the bank holiday as a preview of life outside of the Eurozone, and are scared into voting Yes. Or they could be so pissed off at Merkel et al. that they want to leave at any cost. Or Tsipras might see polls indicating that a Yes vote will win, and find some reason to call off the referendum.

Honestly, it's really, really hard to make any predictions from the outside. There have been two polls, prior to the announcement of the referendum, that indicated strong majorities in favor of agreement with Europe. The first poll that comes out will substantially move markets.

What I dont get is that the payment is due tomorrow and the referendum is on Sunday and the IMF already said no we wont extend the deadline.

Totally wrong. a) There are no export surplus rules in the EU, b) Germany has almost no export surplus within the eurozone.
http://de.statista.com/statistik/dat...aendergruppen/

The German export surplus is mainly a result of the industries that are strong in the country (such as automotive, chemicals and pharmaceuticals, weapons etc.) and has been roughly at the same levels since before the Euro.

No need to predict. Just short the uncertainty. This situation has been a gift. A week of uncertainty and fear.

There are provisions (not to mention, discretion of IMF bosses) that hold of declaring a default until several weeks time.

What, specifically, do you mean by shorting the uncertainty? Are you saying a trader tomorrow morning should make long or short bets on the VIX or the SP?

Today I shorted various stocks (just a proxy for SPY) when it was clear to me this was a major sell down with nothing to turn it around (about two hours in).
Tomorrow, I'll do the same thing. The only risk is news of some new deal that brings certainty sooner than the referendum, and that seems fairly unlikely. And no, definitely don't short vol - yet.

I followed the speech quite closely and he was definitely "spinning" a few technicalities, I couldn't spot any outright lies. Can you give a few examples?

So, in just about every thread, you're telling people not to make whatever move they're proposing, because the market has priced it in already. Why is the market wrong now? Why will it continue to go down throughout the week?

Since I know VIX products, the reason to not short them yet is because you are now paying a premium to do so. You lose unless VIX drops by by more than 9% over the next 30 days.

Here is a pretty graph (that will change over time, so look quick): http://vixcentral.com/

Also, the reason to say "it is priced in" is always in hopes that the person you are talking to will share a valid argument as to why they think the market is wrong.

Are you talking about how the spot vix is at 18.85 but the front month future is at 17.10? There's no way to actually buy or sell spot VIX, so what does that matter? Any vehicle that trades on an exchange (UVXY, XIV, TVIX, etc.) holds positions on the futures, not the spot.

The futures move towards spot over time. If you short a July VIX future, you break even (after trading costs and spreads) if VIX is below 17.10 on July 21st.

(Technically, you break even if VRO is 17.10, but that is just the name for the VIX settlement value)

http://www.spiegel.de/international/...-a-933439.html

Whats this about then?

On the contrary, I usually disagree with "the market has priced it in". In 2p2 chat on Friday I was arguing that the market is insane not selling down, that it was complacent about Greece and was misjudging the odds of default/mess.

Markets price some things in, but they can't price in flows of money.
As long as fear continues the market continues to sell. But I don't know what it's going to do. Which is why I'm saying that you probably don't have an edge blindly trading at this point. Too many variables of too much magnitude. This is a situation where you trade the flows when the flows are predictable, and stay the hell out otherwise.

But if you want to blindly short vol, be my guest...

OP if you're still reading I'm pretty sure those funds you're in are all equities btw. Maybe looked at diversified growth or absolute return funds if you are worried about losing money.

This guy doesn't like Greece much:
http://tocqueville.com/insights/sell-rumor-buy-news

"Investors have been selling the rumors lately, inverting the old adage. Rumors of a Greek default and a Fed rate hike have sent investors panicking for the nearest exits. But, will they buy the news? Who knows, but they should.


I cannot think of two better advertised negative events than these, all the more so for their triviality. Greece is a country that peaked around 400 B.C. and is of no economic importance, even to Europe, much less the world. On top of which, Greece has already defaulted more than five years ago. Neither the word “default” nor the word “bankrupt” have the slightest bit of meaning if they can be neutered merely by someone providing more loans to repay the existing ones. Indeed, a recognized Greek default might even have the salutary effect of alerting governments of the need to tailor fiscal policies so that spending and revenues bear some relationship to each other. If European—and U.S. and Japanese-- governments could learn THAT, a Greek default should qualify for the Nobel Prize for Economics."

That quote is gold.