Eurozone finance ministers, including the troika, have finally fixed the Greek debt issues. Really? Yep, that’s what the PR releases and bullish headlines suggest. So what’s the deal? From what we know Greece won’t have to make payments on these loans for 10 years, interest rates will be significantly reduced and the ECB will be buying their bonds. Significantly, this means Greece will get its €50 billion next week to avert a major default. The downsides of the deal are the so-called “firm commitments” Greece must adhere to on austerity and other goals to meet certain targets. These include a debt to GDP ratio of 175% in 2016, 124% in 2020 and 110% or lower by 2022. It’s all well summarized byMark Grant here who calls it a fairy tale. I would observe most of the deal participants will not be around in 10 years and have merely kicked the can down the road. 

There was initial relief on the settlement since algos really don’t have the time to look under the hood at the details these days.

Meanwhile the OECD has now estimated the eurozone to have -.4% GDP growth in 2013 and estimated U.S. GDP down to 2% from previous 2.5% estimate. Their recommendation naturally is for more monetary easing and stimulus. If the fiscal cliff should occur then all bets are off.

India is experiencing slower GDP growth by their standards 5.3% vs 5.6% and higher inflation over 7%. The political will there has become fragmented making solutions as difficult there as elsewhere. But on the news, stocks rallied…snicker.

Durable Goods Orders were flat at 0% but beat some estimates. Consumer Confidence rose slightly to 73.7 vs prior 73.1. Case-Shiller Home Price Index showed small continued gains of .4% vs .5% previous and 4% YTD increases overall. The Richmond Fed Mfg Index increased substantially (9 vs -8 expected & prior -7) offsetting yesterday’s stinker from Dallas.

The Fed is now fully engaged with POMO activities injecting $5.7 billion to primary dealers.

SAC hedge fund will have a conference call with their investors Wednesday to assuage concerns and reassure them that Steve Cohen had absolutely nothing to do with insider trading and it’s something they’ve never done before or will do in the future. There is the small matter of $275 million in profits that need to be returned which will come out of investors’ pockets theoretically. Perhaps Steve will cover it out of his pocket which he can easily do. I guarantee you there will be news reported about this via leaks from third parties.

Stocks in the U.S. fell as fresh worries about the fiscal cliff emerged not based on anything specific other than investors rediscovered its existence. But we really shouldn’t worry since GS Blankfein will be doing more of God’s work in a scheduled meeting with Obama. Leading the way lower were miners (XME) and financials (XLF). Bonds (IEF) were mildly positive. The dollar (UUP) was stronger and gold (GLD) was weaker. Commodities (DBC) and oil (USO) were also weaker on the stronger dollar.

Volume overall remains weak but was lighter Tuesday on selling. Breadth per the WSJ was negative.

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