Before the Open (Mar 18)

Posted on by Jason Leavitt

Good morning. Happy Monday. Hope you had a nice weekend.
The Asian/Pacific markets closed down across-the-board. Japan and Hong Kong dropped 2% or more; Australia, China, New Zealand and Taiwan dropped more than 1%. Europe is down across-the-board. Austria, France, Germany, Amsterdam and Stockholm are down more than 1%. Futures here in the States point towards a big gap down open for the cash market.

The dollar is up. Oil and copper are down. Gold and silver are up.
The big news out over the weekend was the proposed bailout of Cyprus – a small island country in the Eastern Mediterranean Sea. But the proposed bailout is not just a handout or loan. Instead, upwards of 10% of depositor’s accounts will be confiscated to help pay for the bailout. Imagine that..you’re a citizen of Cyprus, and you wake up Saturday morning to learn the government is taking 10% of the money you have deposited in your bank account. Shocking.
For the record, the amount of money US depositors have lost over the last 5 years due to interest rates being nearly 0% is much greater than 10%. And many people lost a heck of a lot more in the housing market than 10%. Still, it’s shocking. It’s something that wouldn’t surprise you in a country run by a dictator, but a free country?
If Cyprus rejects the bailout offer and defaults, the first first two questions that need to be answered are: who owns their debt and how much leverage is in the system? The first question should be easy to answer; the second may not even be known by those who hold the debt, and the number could potentially be a very scary.
This news is the reason markets all over the world are down.
News trumps the charts, and although Cyprus is a small island country of only 1 million people and is not a big trading partner with the US, it’s hard to say what the ripple effect will be in Europe. Manage your positions wisely, and let’s see what happens this morning. More after the open.
headlines at Yahoo Finance
headlines at MarketWatch
today’s upgrades/downgrades
this week’s Earnings
this week’s Economic Numbers

0 thoughts on “Before the Open (Mar 18)”

  2. Well Jason, as you know I follow your posts with great interest and love the commentary though I rarely post.
    As I’ve always said – it will be a small event out of left field which will be the catalyst for a catastrophic event.

  3. Apologies but the last post was posted before I had finished.
    Cyprus is a small island of some 1 million people if I am not mistaken. Its debt is minuscule when compared with most of the EU defaulters and compared with Greece, hardly rates a mention.
    My question is – is Cyprus the “testing ground” for lack of a better explanation.
    If the Cypriot savers can be penalized and that penalty approved then what is to stop the rest of the EU defaulters slugging their citizens under the guise of “we need to share the burden”.
    The “savers” by and large didn’t create this unholy mess. The burden was created by those who seek to find a valid reason for the masses to pay when no doubt they have already cleared out their accounts and moved them to a safe haven.
    Don’t get me started.

    2. Good point. I hadn’t thought of Cyprus as a test. If it passes, who’s next. It would be the greatest robbery in history…to make innocent citizens foot the bill for for a corrupt government gone wild.

  4. boo hoo toil and trouble
    the down was in the charts–i minute on frid and i made money buying back oz open
    the big boys own the market and are set down but first a test of the main piviot for the nas 100–if it can make it
    the tich chart ind is in positive area but im ready to sell as it changes

  6. Just another opportunity to buy stocks in the bull market , don’t get all excited. It will take a series of issues to kill such a strong trend with ample $ still on the sidelines

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