Leading bourses across Europe are soaring after a debt deal that, while not perfect, is more satisfactory than thought.
After hours of talks that started Wednesday evening and wrapped up early Thursday, European officials announced the following:
1) a plan under which private investors will take a 50% write-down on their holdings of Greek debt (compared to 60% sought after)
2) the firepower of the euro-zone bailout fund will be increased to around $1.4 trillion
3) European banks will be recapitalized
While we have made a strong case that the long-term solution to too much debt is not more debt, quantitative easing (QE) has had a powerful bullish effect on markets since March 2009. The two times QE ended in the U.S., the markets struggled. The U.S. Federal Reserve is now on QE3 or a stealth form of it as the U.S. markets have bounced straight up from their lows while the European Central Bank and Bank of England have also increased the scale of their QE asset purchase schemes. The ECB has agreed to around $1.4 trillion euros and the Bank of England recently increased theirs from £200bn to £275bn.
IWM (Russell 2000)
SPY (S&P 500)
UWM (Russell 2000)
SSO (S&P 500)
TNA (Russell 2000)
UPRO (S&P 500)
This information is provided by MoKa Investors, LLC DBA Virtue of Selfish Investing (VoSI) is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. VoSI reports are intended to alert VoSI members to technical developments in certain securities that may or may not be actionable, only, and are not intended as recommendations. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to VoSI, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Virtue of Selfish Investing. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2021 MoKa Investors, LLC DBA Virtue of Selfish Investing. All rights reserved.