The Monday morning news has not started yet.
http://www.zerohedge.com/news/newedge-leaves-greek-stock-market-will-only-execute-sell-orders @17:37
"Either the game of chicken in Europe has just hit and surpassed ludicrous speed, or French banks SocGen and Credit Agricole, both of which have some of the worst CT1/TA ratios in the known universe, and which are the JV participants of Newedge, have decided to formally pull the plug on Greece. As the FT reported moments ago, Newedge "has told clients that it will process only sell orders, and stop extending margin loans for existing positions in Greek securities, according to a memo obtained by the Financial Times."
Add this to news over the weekend that Euler Hermes is "reviewing Greek export coverage." To wit - "In light of the recent developments, Euler Hermes will most probably have to switch to a more prudent approach, also in the interest of its customers,” spokeswoman Bettina Sattler said in an e-mailed response to questions. “The outcome of the new elections in June remains highly uncertain. Consequently, the situation is further deteriorating. The risk of Greece exiting the Eurozone has been revived." Translation: Greek foreign trade is about to be halted dead in its tracks.A list of securities subject to the new restrictions include foreign-listed shares and American depositary receipts for Greek companies including Alpha Bank, Coca-Cola Hellenic Bottling and Paragon Shipping, a New York-listed shipowner that is headquartered in Greece.
“It is part of our ordinary risk practices to minimise our potential exposures proactively when we are concerned about potential issues,” the broker said.
Newedge – a joint venture of French banks Société Générale and Crédit Agricole – has Europe’s seventh largest hedge fund prime brokerage business, with more than $31bn in client assets, according to industry publication EuroHedge.
Its move is the latest evidence that the financial sector is preparing for a eurozone break-up, even as European officials debate the terms of the Greek bailout. A person familiar with the matter said Newedge wanted to avoid unpredictable risks in the event that Athens returned to the drachma as the national currency.
And now, as per the Newedge hint, we have a concerted effort to crash the stock market too.
In other words, in addition to a bank run (because as has been widely reported already, Greek banks have seen billions in cash withdrawn in the past 3 weeks), in addition to trade paralysis, we are about to see a full blown stock market collapse of what little is left in the Athens Stock Exchange as everyone rushes to sell any securities at firesale prices. Sadly, this is nothing but the final punishment for a Greek population which held its first quasi-referendum on being a Eurobanker tolling operation (where European "bailout" funds go simply to fund European bank capital shortfalls, and the ECB of course) and said no.
Simply said - what we are witnessing is the concerted effort of Greece's former "allies" do everything in their power to destroy the small nation just so it has a taste of what would happen if it indeed follows the democratic process. And those organizations, such as the IMF, whose job it is to mitigate such a process, are doing the opposite, and merely pouring fuel on the fire, as LaGarde's interview in the Guardian indicated.
Basically, the entire developed world has now gone all in that Greece can be scared out of doing what its population has indicated ever since the first parliamentary election, has every intention of doing.
The only question is whether, as we asked even before the election, the "Greek population has already lost everything and is now free to do anything." Because if it has, and following 2 years of wealth transfer from the Greeks to the banks the answer is almost certainly a resounding yes, the outcome for all those attempting to herd the Greeks, will be far more disastrous than any of their fearmongering attempts of a Greek social collapse ever could be."
The site is predominantly gold buggery.
They are very interested in finance though economically ignorant.
http://www.telegraph.co.uk/finance/financialcrisis/
Irate Greeks vilify IMF chief on Facebook after she brands them tax dodgers
27 May 2012
| 251 Comments Greek Facebook war on Lagarde
27 May 2012
| 223 Comments Bankia bailout an investment not a loan, says lender
27 May 2012
| 9 Comments Lloyd's preparing for euro collapse
27 May 2012
| 205 Comments Europe's Maquina Infernal has crippled Spain
27 May 2012
| 552 Comments Recession takes the heat out of Greek sex industry
'Customers just don't feel like having sex - or can't afford to buy our stuff.'27 May 2012
| 22 Comments Clegg on eurozone's weak foundations
Nick Clegg has warned that the foundations of the eurozone are "weaker than anyone could have predicted" because countries did not stick to its rules and introduce reforms.27 May 2012
| 8 Comments Brussels 'could take control of European banks'
Struggling European banks could be seized and controlled by Brussels as part of secret plans being drawn up, it has emerged.27 May 2012
| 32 Comments Greece will run out of money by end of June, warns former PM
Former Greek prime minister Lucas Papademos has reportedly warned that Greece may run out of money by the end of June if international bailout funds are cut off following next month's election.27 May 2012
| 190 Comments Ukraine facing debt blow from Euro 2012
Country may never recover billions of dollars it has spent, warn analysts.27 May 2012
| 20 Comments Clegg: eurozone foundations 'weaker than anyone predicted'
Nick Clegg has warned that the foundations of the eurozone are "weaker than anyone could have predicted", as he urged Greece to stay in the euro and stick with its austerity programme.27 May 2012
| 485 Comments The disarming charm of Christine Lagarde
Where did Christine Lagarde, head of the IMF, learn to reduce grown men – and countries – to mush, asks William Langley.27 May 2012
| 71 Comments Clear, decisive leadership is needed to get Britain growing
Telegraph View: The feeble reaction to Beecroft suggests a lack of political vision.27 May 2012
| 80 Comments http://www.guardian.co.uk/business/debt-crisis
- 27 May 2012: Peter Preston: Across the continent, where older people have a role in raising young relatives, they are also better cared for themselves 24 comments
- 27 May 2012: Editorial: The morality tale Ms Lagarde sets out is not a new one: feckless southern Europeans ran riot for the euro's first decade and now have to be bailed out from their mess 91 comments
- 27 May 2012: Letters: As director of the IMF, Christine Lagarde is in receipt of a tax-free annual salary of $468,000 (£298,000, plus perks)
- 27 May 2012: Madrid considers passing €19bn cost on in form of government debt – though markets and Germany likely to object
- 27 May 2012: Shopkeepers in border town of Clones use loophole to bring back Irish notes – and boost the local economy 49 comments
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27 May 2012: Business leader: If the eurozone were to shrink, Germany's once-captive markets would become too poor to import: and the rapid appreciation of a stronger euro would make its exports much pricier 105 comments
- 26 May 2012: Resentment over EU austerity measures and images of violent protests have led to 50,000 holidays being cancelled in 10 days
- 26 May 2012: Theresa May says 'work is ongoing' to restrict migration to the UK in the event of a financial collapse in the eurozone
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25 May 2012: Mary Kenny: Austerity quite appeals to Irish Catholics: it's the obvious loss of sovereignty that troubles us 174 comments
- 25 May 2012: Take responsibility and stop trying to avoid taxes, International Monetary Fund chief tells Athens 3223 comments
- 25 May 2012: Her charm is legendary, but Christine Lagarde, head of the IMF, is far from a pushover. She talks to Decca Aitkenhead about sexism, swimming and saving the European economy 128 comments
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25 May 2012: Rescue of part-nationalised Bankia linked to 'shotgun' cajas merger laden with toxic real estate
Der Spiegel has not updated
http://www.spiegel.de/international/topic/euro_crisis/
The Euro Crisis
- Paul Krugman on Euro Rescue Efforts: 'Right Now, We Need Expansion'REUTERS
- Free Money: German Central Bank Issues Zero-Rate Bonds
- Visit to Germany: Tsipras Says Berlin Must Back Down on Austerity
- Crisis of Confidence: Fears of Bank Runs Mount in Southern Europe
- Fleeing the Wealth Tax: Wealthy French Take Their Assets to London
http://krugman.blogs.nytimes.com/2012/05/27/austerity-defenses/
Austerity Defenses
From what I’m hearing, the current defense of Cameron’s austerity policies against people like Martin Wolf, Jonathan Portes, and me runs like this:
1. Austerity works! Look at our low, low rates!
2. Austerity? What austerity?
3. Anyway, America does it too.
So, on the first point: as Portes says, those low rates reflect pessimism about British economic prospects, not optimism about its creditworthiness.
On the second, a couple of things to bear in mind. First, spending as a share of GDP tends to rise in an economic slump even without a change in policy, both because GDP is smaller and because safety-net programs kick in. As a result, UK spending as a percentage of GDP shot up between 2007 and 2009.
What about since then? I’m suspicious of the IMF numbers on potential output, which seem too pessimistic to me. But for what it’s worth, they say that the output gap — the degree to which Britain has been operating below potential — hasn’t changed much since 2009. Given that, here’s what the IMF World Economic Outlook database says about spending:
Also, VAT went up. So the IMF’s measure of “structural balance” shows substantial fiscal tightening:
Yes, Virginia, Cameron/Osborne are sharply tightening fiscal policy in the face of a depressed economy.
Finally, about America — yes! We’re doing a lot of austerity! Not as much as Britain, I think (although the numbers are hard to parse), but when you count in state and local government we’re doing a lot of contraction. But that doesn’t reflect deliberate policy, certainly not on Obama’s part; it reflects deadlock in Washington and the fiscal woes of state and local governments.
The point is that Britain is choosing to emulate both the United States and the troubled nations of Europe when it doesn’t have to — all in the name of an economic theory that was foolish two years ago, and completely discredited now."
1. Austerity works! Look at our low, low rates!
2. Austerity? What austerity?
3. Anyway, America does it too.
So, on the first point: as Portes says, those low rates reflect pessimism about British economic prospects, not optimism about its creditworthiness.
On the second, a couple of things to bear in mind. First, spending as a share of GDP tends to rise in an economic slump even without a change in policy, both because GDP is smaller and because safety-net programs kick in. As a result, UK spending as a percentage of GDP shot up between 2007 and 2009.
What about since then? I’m suspicious of the IMF numbers on potential output, which seem too pessimistic to me. But for what it’s worth, they say that the output gap — the degree to which Britain has been operating below potential — hasn’t changed much since 2009. Given that, here’s what the IMF World Economic Outlook database says about spending:
Finally, about America — yes! We’re doing a lot of austerity! Not as much as Britain, I think (although the numbers are hard to parse), but when you count in state and local government we’re doing a lot of contraction. But that doesn’t reflect deliberate policy, certainly not on Obama’s part; it reflects deadlock in Washington and the fiscal woes of state and local governments.
The point is that Britain is choosing to emulate both the United States and the troubled nations of Europe when it doesn’t have to — all in the name of an economic theory that was foolish two years ago, and completely discredited now."
Possibly the best way to re-elect the Democrats is to panic the Republicans with a systemic collapse initiated in Europe.
Rather like removing bed bugs with a house fire.
Effective but disproportionate.
The Financial Times believes that Greece will stay on the Euro for a few more weeks. They are less sure that the Euro will last.
http://ftalphaville.ft.com/blog/
The 6am Cut London
Spain is considering directly injecting its own government debt into BFA-Bankia to help fund the stricken lender’s €19bn nationalisation, in an attempt to sidestep high bond market rates, reports the FT. The plan involves Madrid issuing Spanish government guaranteed debt to Bankia in return for equity, with the bank then able to deposit the bonds with ECB as collateral for cash.Newedge is abandoning the Greek stock market. The broker has told clients that it will process only sell orders, and stop extending margin loans for existing positions in Greek securities, according to a memo obtained by the FT. Securities subject to the new restrictions include foreign-listed shares and American depositary receipts for Greek companies.
A draft EU report on Italy is critical of the country’s efforts to combat tax evasion and shrink the black economy. Some of the more hard-hitting portions of the draft, seen by the FT, had already been toned down. The report is due out on Wednesday with reports into the other 13 eurozone countries not in bail-out programmes.
Greece’s public finances could collapse as early as next month, leaving salaries and pensions unpaid unless a stable government emerges from the June 17 election, according to Lucas Papademos, the FT reports.
Opinion polls showing New Democracy was ahead of Syriza by as much as 5.7 percentage points helped the euro rise for the first time in five days, says Bloomberg. Six opinion polls published on Saturday all put New Democracy in the lead.
Sumitomo Mitsui Trust is being investigated for alleged insider trading in a widening crackdown by the Japanese regulators, the FT reports. The bank, one of Japan’s biggest, said it was cooperating with the Securities and Exchange Surveillance Commission investigation and apologised to clients and stakeholders.
Switzerland is considering capital controls to fight a sharp rise in the Swiss franc in the event of a eurozone collapse, says the WSJ. SNB chairman Thomas Jordan told the Sonntagszeitung newspaper that preparations needed to be made for a collapse even though he didn’t expect this to happen.
The BoJ expressed frustration with expectations that it will ‘automatically’ continue monetary stimulus until its 1% inflation target is reached, Reuters reports. Some board members pointed out that economic growth, price stability objectives and risk must be balanced.
Diamond mine appetite fades: KKR has backed away from the sale of a BHP Billiton diamond mine just as peer Rio Tinto starts work on a potential sale of its diamond division, the FT reports.
JPMorgan Chase has named Teresa Heitsenrether as the new head of its global prime brokerage business, replacing Lou Lebedin, says Reuters, citing a source familiar with the situation. JPMorgan was looking for new opportunities for Lebedin within the organisation, the reports said. And the WSJ says JPMorgan will shake up its risk committee with directors Timothy Flynn and James Bell likely candidates to join, although it was not clear whether existing committee members would leave. The report cited people familiar with the matter.
Chinese industrial companies’ profits fell 2.2% in April from a year earlier, according to official data, Bloomberg reports. In March, profits grew 4.5%.
Japanese chipmaker Renesas plans to cut up to 14,000 jobs, or about 30% of its workforce, and sell its major plant to Taiwan Semiconductor, the WSJ reports, citing people familiar with the matter.
Xstrata will unveil a bonus worth tens of millions of pounds to keep on CEO Mick Davis ahead of the Glencore merger, the FT reports, citing people familiar with the terms.
COMMENT AND CURIOS:
- Wolfgang Munchau’s prescription for saving the eurozone. (Financial Times)
- News ‘tried to blackmail select committee member’ – (The Independent)
- We no longer know what things are worth, says Tony Jackson. (Financial Times)
- Facebook IPO debacle puts Morgan Stanley’s Michael Grimes, co-head of global technology banking, on the spot – (Wall Street Journal)
- How to satiate your Target 2 imbalances obsession. (Financial Times)
- Olive oil poses another problem for Italy, Greece and Spain. (Financial Times)
Sooner is better. As soon as you can is best.
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