Greg Guenthner

Last-minute bailout…

Where have I heard this one before?

Eleventh-hour deals are quickly becoming the norm these days. Cyprus has become the latest member of the just-in-time club, notching a deal late last night in Brussels to grab its $13 billion bank bailout.

The third-smallest eurozone economy didn’t come out squeaky clean, though. There’s still the matter of shuttering its second-largest bank. And anyone with an account larger than 100,000 euro is taking it on the chin.

Of course, these new developments have triggered a huge relief rally for the U.S. markets, which plummeted last week as the Cyprus banking crisis began to unravel.

Wait a just a minute — that’s not what happened at all…

In the real world, the S&P barely budged last week, finishing Friday afternoon down less than a quarter of a percent since the weeklong crisis began. This morning, S&P futures are up four points. That’s it. Four measly points. Hardly worth noting, really. In fact, the reaction to the entire Cyprus situation here in the U.S. has been completely and utterly mundane.

If I could somehow black out your access to charts or any other market information, you probably would have thought that the situation in Cyprus had brought the market to its knees last week. The financial media was all over this one (again) with its manic reporting. Every headline and blog post just one week ago breathlessly predicted doom and turmoil. This morning, they flip the switch to talk of all-time highs again:

Reuters Headline

The financial media has you strapped to some sort of twisted carnival ride, yanking at whatever vulnerable emotion happens to bubble to the surface any given moment. The fiscal cliff reporting just a couple of months ago was no different. Same with sequestration. Now it’s Europe again.

You can’t build a solid investment plan off these sensational headlines. There’s no sense in puking your guts out on the media’s spinning wheel of terror. When you buy and sell based on the crisis du jour, you’ll find nothing but pain and losses…

Greg Guenthner
for The Daily Reckoning

Greg Guenthner

Greg Guenthner, CMT, is the managing editor of The Rude Awakening. Greg is a member of the Market Technicians Association and holds the Chartered Market Technician designation.

Recent Articles

The Wreck of the Monetary Hesperus

David Stockman

For 73 months running, the Fed has lashed the money markets to the gross financial anomaly of zero interest rates. Never before in the history of the world has any central bank dared to hand out so much free money for so long. David Stockman has the scathing report… and how it will splatter into a world of hurt…


“Two Percent Inflation” and the Fed’s Current Mandate

Ron Paul

Dr. Ron Paul, via his Ron Paul Institute for Peace and Prosperity, has written a full-blown indictment of the Fed and their 2% inflation target. It’s below, complete with 14 lessons we’d be wise to heed. It’s lengthier than our normal feature, but well worth your time...


The Opportunity Most Investors Missed Last Year, But Not You!

Frank Holmes

2014 was a hard year for commodities, but there were some surprising opportunities, for in-the-know resource investors like you. Today, our friend Frank Holmes discusses some of the winners and losers and why we saw the market take the shape that it did. But more urgently for you, he also points out an unlikely winner…


Take a “Hack” At Cybersecurity Stocks for 20% Gains

Greg Guenthner

Sony's recent hacking incident with The Interview is only part of the reason I believe the cybersecurity industry is on the verge of a breakout year. Target and Home Depot also suffered embarrassing incidents recently. The demand is enormous--companies just can't ignore the dangers of data breaches any more.