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Greek Elections the Next Big Thing?

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  • Description

    Barron's associate editor Mike Santoli gives his outlook for the global markets.

  • Duration 3:34
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This transcript is automatically generated

Obviously work.

Spain's bank bailout over the weekend had some markets -- -- you see these stock gains losing steam here so -- our investors waking up to the fact that this is just another temporary fix.

What do you know -- and it's only associate editor for Barron's is here with the Spanish bond yields I think -- up.

Today itself boy here we are thinking what this'll solve everything on a Monday -- Arabia -- No I mean obviously that's been the pattern right so you get the idea that while we've taken a crash off the table immediate crash is not going to be some kind of chaotic bank run because we've.

Kind of plug this liquidity whole.

But that doesn't mean that we -- have reason for long term optimism side do you think we're on the same treadmill and a look.

We obviously rally Friday because we thought we were going to get this kind of progress we got the progress so I feel like that's why -- at a standstill right now.

How much do their Greek elections on -- the markets is that the next step that the next event.

Driven on the day -- week that we have to worry about for shore.

-- -- of course there's been a lot of chatter ahead of that that you know whatever they were gonna do over this past weekend with regard to Spain was with NI toward the Greek elections in other words try to line everything up.

To say that you know -- maximize our chances to get a better result out of the Greek elections and an even if we don't get a good result.

Kind of send a signal that -- the rest of it is is somewhat figured out so obviously that's an expecting the next one at the end of June is in European policy makers -- met and had the market binding Europe together financially in a more again and that's that the question yet still -- repeated kind of broken record conversation we've -- past couple years so -- yet we can come in between say -- -- This kind of -- depended on it but solving this whole thing is just not not -- there or we're close to being there were not really close to being and knowing and again found out is that this is and can solve that liquidity piece would basically can prevent.

You know the unraveling over night of all these kind of banking relationships -- we can't do is make an insolvent.

-- solvent -- night and so that's the hard part that's quite.

Markets had in patients with these political and and bureaucratic.

Needs because they take time they're imperfect by necessity and and you know they simply don't happen now at the speed markets want what -- -- Some money out of treasuries at this point some look at the yields that are down at one point it back if one point 6% on the ten year.

I think you know a belief in in in better world economic growth and and safety.

It elsewhere besides the treasury market you know I was looking at it Veres at least half a dozen developed market countries with.

Bond yields lower than the US economist area that US our action that's something that people -- -- so I I.

-- -- it up so there the US the UK and Germany have eight trillion dollars outstanding.

In debt that's kind of your pool of possible safe capital out there who is perceived safe.

And that's essential banks are kind of parking their money in into rather than putting it in any other kind of liquidity insurance it's not the man on the street -- the woman on the street.

Saying am I gonna give the US government one point money for one point 6% for ten years or are gonna put in something else it's simply a way to kind of a place holder for capital.

So that's I don't know what's gonna force about except obviously something that looks like risk assets are better deal war obviously if we get inflation really steam -- I don't see it happening any time soon in a measured way.

Mike good -- six countries lower than us and Germany.

Well Germany yet emails and -- -- a lot of the than you because right clearly Japan forever -- Mike thank you.

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