Tsipras Takes on the Beatles

Remember last week when I said

"Wake Up! Wake Up! Mkts Exploding higher - The headlines suggest that Tsipiras has finally seen the light..."

Well - Today it's

Wake Up! Wake Up! Mkts Imploding - The headlines now suggest that the European Union has turned OFF the light....leaving Tsipras in the dark......singing the Beatles 1969 Classic - "Let it Be" -

“When I find myself in times of trouble, Mother Mary comes to me, Speaking words of wisdom, let it be. And in my hour of darkness, she is standing right in front of me, speaking words of wisdom, let it be. Let it be, let it be, Let it be, let it be, Whisper words of wisdom, Let it be. And when all the brokenhearted people, living in the world agree, There will be an answer, let it be…..”

Yesterday was a Sunday of ‘failures’….First we get news that Elon Musk’s (Space X) rocket ‘broke apart ‘seconds into liftoff – described as a ‘massive failure” – the rocket imploded while traveling 2900 mph or nearly 27 miles into the atmosphere - we can only be thankful that it was an unmanned rocket so that no lives were lost – yet plenty of money was lost…..

Next up was the news that the European Union was ‘breaking apart’ as well – as Greece and her creditors failed to come to an ‘understanding’….this also being described as a ‘massive failure of leadership’ (Greece) …..But here we must be concerned about both the lives AND the money that will be lost.

Over the weekend - Tsipras thumbed his nose at the EU - instead announcing a referendum vote on July 5th for Greeks to supposedly vote on whether or not to accept an agreement with the EU......Problem is - D Day is tomorrow - July 5th means nothing...the agreement will be null and void - in fact many are scratching their heads trying to figure out exactly what referendum the Greek citizens will be voting on...

So yesterday - The ECB froze the ceiling on the Emergency Liquidity Assistance program refusing for the first time to maintain order as the run on the banks accelerated...The news outlets lit up with what was at first ‘rumors’ of the imposition of capital controls on the Greek banks on Monday morning .....but then- as the afternoon progressed – the rumor turned into fact as news spread that Tsipras – has called for a ‘bank holiday’ thru July 6th as the country imposed the ‘capital controls’. The Athens Stock Exchange to remain closed as well until after the vote....a vote once again on an EXPIRED agreement – Or maybe the vote is really about electing a new leader - will we see a dark horse emerge from the wreckage?

Look - capital controls and a referendum vote clearly indicate that the current gov't is losing control.... Greece is now expected to default on the IMF tomorrow and as Mohamed El-Erian tells us - "There is 85% chance Greece will leave as it faces a massive economic contraction" All of this only added to the terror for Greek citizens while increasing anxiety for global investors.

Now despite his assurances last week that there would not be any capital controls – Tsipras - trying to display strength - sent out a tweet -so 21st century -
(@tsipras_eu) – very similar to one that we have heard before in a time of crisis and uncertainty….

“In the critical hours, we must remember that the only thing to fear is fear itself. #Greece”

These were the very same words used by FDR during his inaugural speech in March 1933 – as he spoke these words – let me remind you that this country was in the depths of despair – the Great Depression was more than 3 yrs old, 50% of the banks had failed, destroying the lives of so many, millions of people were out of work, others working at jobs that could not support their families, currency values dropped and the death spiral of deflation was choking off the very lifeblood of the country… Hmmm – how history has a way of repeating herself…..These words went down in history then and it seems will go down in history again.

As day turned into night in the US – night was turning into day in Asia – Asian mkts - the first to respond opened lower.....the pressure was on....China trading in a 10% range from peak to trough o/n ended the day down 3+% taking that mkt well into BEAR territory as it has now fallen 22% off its highs over the past 3 weeks..........but this has almost nothing to do with Greece......This is all about China regulation, leverage, monetary policy and huge margin debt - Greece is just a sideshow that allowed investors to jump on the bandwagon causing selling pressure in the other mkt centers.....Japan - 2.8%, Hong Kong -2.6%, China - 3.34% and ASX -2.2%.

US S&P futures plummeted at 8 pm last night – opening down 40 points (or nearly 2%) at 2057 - breaking both short term and intermediate term support - but well off testing the long term support trend line at 2035 (On the future) – Now look – even at the 200 dma – the S&P futures index would be off 3.5%.....NOT 35%... not even close to a correction move of 10%.....- which by the way would be 1904 on the S&P future…..so slow down sports fans….

Yes – we talked about this – we talked about how the mkts would react to a Greek default/exit/temper tantrum – the initial push lower as the mkt took out the weak links...... only to find support at the major trend lines – where it should find real buyers who will ‘scoop ‘em up’....As the noise and mkt action was digested overnight - we have seen the S&P stabilize and actually move a bit higher as the drama unfolds. - S&P futures are currently down 23 pts or 1.2% as a new day dawns in the US..... Today's eco calendar does have Pending Home Sales - exp of +1.4% and the Dallas Fed survey of -16....but I don't think anyone is going to pay much attention.....the show is so much more exciting across the pond....

Now - it's not over yet and a test lower could still be in the cards, but calls for Armageddon here at home are overblown. In fact - the US could be the beneficiary of all this global turmoil.....I'm just sayin.....

This morning in Europe - mkts there are re-calibrating - all are under pressure as the drama unfolds.......Remember - this is a first 'test' of the EuroZone . Never has a country in the EuroZone's short history ever defaulted and exited the union. European banks as expected are under duress - down across the board between 5% - 10% depending on which country we are talking about.........as the Greek crisis enters this new phase.....Portugal, Italy and Spain suffering the most in the aftermath of the Greek bloodbath - as the rumors fly about - "Who is next?"

From a travel point of view - Tourists with foreign credit cards will be exempt from any form of capital control while visiting Greece and the Greek Isles......Just think about the action on Priceline, Orbitz and Kayak today as so many will look to book a trip......

FTSE -1.6%, CAC 40 -3.4%, DAX -3.2%, EUROSTOXX -3.7%, SPAIN -4% and ITALY -3.9%....

Stay tuned - now it is going to get exciting as we witness history unfold.....

Greek Style Shrimp

This is an easy meal to prepare and uses one pan....a deep drying pan or 'Saganaki' pan as it is known in Greece.

For this you will need: 12 jumbo shrimp, (6-8 per pound), peeled and deveined, tails left on, 2 tablespoons lemon juice, salt and pepper, olive oil, 1 medium bulb fennel, cored and finely chopped, 5 scallions – chopped, 1 small chili pepper, seeded and minced, 1/2 cup of Greek Chardonnay wine, crumbled feta cheese.

Begin by tossing the shrimp with 1 tablespoon lemon juice in a medium bowl and sprinkling with salt – set aside.

Heat oil in a large skillet over medium heat. Add fennel, scallions and chili pepper and cook, stirring, until soft and beginning to brown, 5 mins or so. Pour in the wine. Cook, stirring, for another minute. Place the shrimp on top of the fennel mixture, cover and cook until the shrimp are pink and just cooked through, 3 to 4 minutes. Remove the pan from the heat. Now remove just the shrimp and place on a plate.

Add the remaining 1 tablespoon lemon juice, feta, salt & pepper to the pan with the fennel mixture and stir until the cheese begins to melt, about 1 minute. – Now make a bed of the fennel mixture on the plate and place 3 or 4 shrimps on top - Serve immediately.


Buon Appetito.