It’s been good news as if we had not expected it – Greece voting to comply and China out of the woods and Yellen on track for the first rate hike from the world’s largest central bank after zero interest rates for 6 1/2 years.

Markets reacted as they MUST – mild and cautious risk-on with the USD rallying, stock market holding ground and bonds unchanged.

Does anybody out there feel a slight tinge of doubt ?

Me, me, me !

It stuck me with this headline out of Fortune magazine, for who else dares to be accused of pessimism and spreading panic these days ?

What’s the point of a Greek deal no-one believes in?


True, for if even the Greek prime minister himself does not believe in the bailout package, what hope is there for success ? As he was quoted, “We don’t believe in it, but we are forced to adopt it”. http://live.reuters.com/Event/Greek_Debt_Crisis_4?Page=45

What about the miraculous Chinese GDP numbers that did not lead to another rally ?

With another 1200 stocks halted limit down yesterday after their sterling GDP and retail sales numbers that beat expectations, we had 3 mega hedge fund managers coming out openly to say that China scares them.

“Hedge fund manager Paul Singer said that China’s debt-fueled stock market crash may have larger implications than the U.S. subprime mortgage crisis, echoing warnings from fellow billionaire money managers Bill Ackman and Jeffrey Gundlach.”

And is there a need to deny it ?

“”China does not underestimate its GDP deflator and we don’t overestimate our GDP,” National Bureau of Statistics spokesman Sheng Laiyun said Wednesday. ” http://money.cnn.com/2015/07/15/news/economy/china-gdp-economic-statistics/

What About The Fed Rate Hikes ?

This is what Yellen has achieved for the Eurodollar futures curve. Yes, it is lower.


And what does Jeff Gundlach, the New Bond King, thinks ?

Bond manager Jeffrey Gundlach said he doesn’t see the Federal Reserve raising interest rates in 2015


There is a clash of beliefs at play here and there is no doubt about it.

This is what happens in over extended markets that are plain tired and buckling under the strain of over stimulation in the face of just stagnant growth.

You can bring a horse to the water but you cannot make it drink.

Safer to be under-invested than to be compelled to act on events you do not really believe in.