Central Banks Scramble, Fail to Rescue Stocks, after Greece…“Europe is already surrounded by a geopolitical ring of fire.”
by Wolf Richter
WolfStreet.com
July 6, 2015
Stocks are sacred. Except those in Greece where no one knows when banks will reopen and what currency or IOUs or whatever they will dispense when they do reopen, and no one knows how Greek businesses are supposed to function under these circumstances, how they’re supposed to pay their employees and produce and sell things and provide services. And no one knows what Greek stocks are worth because the Athens Stock Exchange remains closed.
But elsewhere, stock valuations must be propped up no matter what happens in Greece.
On Monday morning in Tokyo, during the first minutes of trading, the Nikkei was down 1.6% despite the ongoing QQE by the Bank of Japan. So BOJ Governor Haruhiko Kuroda himself stepped in.
While the BOJ’s underlings were – the markets assumed – busy buying equity ETFs as promised in the BOJ’s QQE action plan, Kuroda came out in the classic manner with a statement to jawbone the markets in the right direction:
Although direct economic and financial linkages between Japan and Greece are limited, the Japanese Government and the Bank of Japan remain fully prepared to deal with possible developments in Greece. In this respect, the Japanese Government and the Bank of Japan convened a meeting this morning.
The Bank of Japan, in close cooperation with relevant domestic and foreign authorities, will continue to carefully monitor developments in financial markets.
The Rest…HERE
