http://hat4uk.wordpress.com/2012/07/20/crash-2-thank-god-its-friday/
http://www.athensnews.gr/portal/1/57121
Submitted by Tyler Durden on 07/20/2012 07:08 -0400
http://www.telegraph.co.uk/finance/debt-crisis-live/9413279/Debt-crisis-live.html
13.24 Stock markets in Spain and Italy have taken a nosedive this afternoon. The IBEX 35 in Madrid has fallen 3.7pc to 6,393.05, while the FTSE Mib in Milan is down 3.5pc at 13,187.33.
Today's unanimous endorsement by the Eurogroup of the sectoral programme for Spain opens the way to the necessary recapitalisation and repair of the country's financial sector. The aim of this programme is very clear: to provide Spain with healthy, effectively regulated and rigorously supervised banks, capable of nurturing sustainable economic growth [...] Spain will be expected to maintain its commitments to correct its excessive deficit in a sustainable manner by 2014 and to adopt the structural reforms set out in the country-specific recommendations adopted by the Council on 10 July. The explicit link between these obligations and the sectoral programme is deliberate and pertinent. It is only through determined action across all of these fronts that Spain can create the financial stability and competitive, dynamic economy that will bring about a steady and lasting fall in unemployment.
13.09 Cristóbal Montoro, Spain's finance and public administration minister, said Spain would pay an extra €9.2bn (£7.1bn) to service its debt next year.
12.16 Mr Katainen also rejected that the idea that Finland's low borrowing costs would compensate for a decline in demand. He stressed:
Finland isn’t benefiting from the crisis [...] We’re an export-driven economy and once the European market isn’t doing well, we suffer a lot.
We will not and do not consider exiting the euro [...] We want to be at the heart of European development. A stronger euro, a better euro is the only, and reasonable, thing for Finland.
Ryanair objects to the Spanish government’s decision to double airport taxes at both Madrid and Barcelona airports. Sadly, this will lead to severe traffic, tourism and job cuts at both airports this winter. Ryanair’s cuts alone will cause a combined loss of 2.3m passengers and over 2,000 jobs at Madrid and Barcelona El Prat airports to other lower cost airports elsewhere in Europe, where Ryanair continues to grow.
For one, the ECB is worried about the potential negative side effects of further measures on its credibility, as well as how these are viewed by the general public. Moreover, the ECB sees itself as being engaged in a strategic game with governments. A proactive stance risks governments reducing their efforts to stabilise the system. Thus, a deterioration in the situation is, to some extent at least, a necessary condition for further ECB action.
This government cannot choose between good and bad options, but between bad and worse, which is what we are doing. If we maintain this common-sense policy, Spain will emerge from the crisis.
CRASH 2: Thank God it’s Friday?
I don’t like Mondays
It may be Friday, and there may be two days of respite in which lies can be spun and bailouts cobbled together. But this time, none of the idiots who got us here have anywhere to hide.
The bankers face the collase of their short-term pr campaign to dub Bob Diamond a lone rotten apple. The barrel is fermenting unpleasantly, and the obviously global nature of the Libor scam continues via the US, Canada and Asia. Wednesday, regulators were investigating named executives Michael Zrihen at Credit Agricole, Didier Sander at HSBC and Christian Bittar at Deutsche Bank. There will now follow an attempt to make these apparatchiks carry the can. It won’t work.
The UK Government Minister of Trade & Investment Stephen ‘The Baron’ Green looks on in horror as all the full depravity of his Christian HSBC is laid before a by now exhausted public. He does have a line of defence (see the Slog later today) but it’s not original, and carries all the credibility of Nick Buckles for Minister of Defence.
Camerlot has run out of excuses for being a half-hearted member of the least successful trading union of modern times. The IMF is backing away from any further eurozone support, Spain’s bond yields have reached the ‘we now give up’ point in the markets, Mario Monti’s Italian miracle has proved to be just another mirage, the German public is fed up of bailouts, and twenty CDU members voted against Merkel’s latest piece of Fiscal Union railway track. The UK is back to exporting more to non-EU countries than EU. And the clamour for an in-out referendum is growing in Britain. By the time it happens, it will be more like a post mortem.
Brussels too is all out of fantasies. Most of the FU members are already debtors (or on the verge of it), the ESM has attracted close to zero ex-EU investors, and Mario Draghi has as good as said that Brussels in general and the euro in particular are dysfunctional. The entire Union outside Germany is in recession, Greece has all but collapsed as a modern society, Turkey has an eye on Cyprus (as does Moscow), and – as noted above – struggling Infant School sums under-achiever Christine Lagarde has called time on IMF contributions. Herman van Rompuy is down to the “and then aliens from Space save us” outlook.
Rupert Murdoch survived last year’s Newscorp AGM, but the vote against him at this year’s session will be far more negative and concerted. Eighteen institutional shareholders are said to be cooperating in an attempt to oust the Digger dissembler. Jeremy ‘Whaddock’ Hunt may have limped on as UK Culture Minister, but the Murdoch cheerleader is, I hear, doomed once the Shambolympics have unravelled. This and a growing revulsion for tabloidism means Newscorpse will soon be a reality.
And a prime mover in getting the Games to London, Lord Coe, now finds himself fighting a war against not-very-blacked-out adverse publicity about Olympic levels of disorganisation and risk. The ‘organising’ outfit he heads, Locog, has messed up at every turn: lost bus drivers, unfinished accommodation, overwhelmed transport, bonkers venue choices, and the disastrous choice of G4S. The appointment of a closet Islamist may also come back to haunt the clowns who put together the odd Board composition of Locog. In the event of a terrorist attack, those of us who are awake rather than politically correct will continue to ask what on Earth Mohammed Bari was doing with access to sensitive security information.
Penultimately, and very much least, although the MSM remain slow in grasping this, David Cameron is a busted flush with the electorate. Lord Ashcroft, the Conservative Party’s former deputy chairman and arch-enemy of the Camerlot style, notes that 33% of those who voted Conservative in 2010 have defected to any one of UKIP, Labour, the Lib Dems or abstention. Astonishingly, the LibDems are felt not to have enough influence on Tory policy, a finding on a par with EU voters saying Angela Merkel should be given sweeping dictatorial powers. But this may reflect the feeling that Tories are nastier than LibDems, and thus the Cleggies might have been able to stop a few small ethical hiccups like Newscorp, Libor brokerage, Lord Green, Jeremy *unt, and devious spin about the nhs. Dear me, a lot of voters really have been inattentive in class. They must try harder. 3/10.
“Ah but ah but yes but no but,” I hear you protest “you’ve left off Barack Obama”. I have indeed, and for a very good reason: the Black Dude may have failed to con his supporters into believing that America is recovering (mainly because it isn’t) but he, Geithner and Bernanke still have their stainless steel alibi: “It was all the fault o’ them Goddamm yerpeens and sleazy Brits”. The White House and the Feds were always going to play this card, and they play it now on a near-daily basis.
But while they will perhaps get away with it and help re-elect the emptiest President in 44 attempts to date, one final Candidate for long overdue reality won’t.
Wall Street is viewed by many Sloggers and the world at large as both unassailable, and beyond the very short arm of the Law. But events are now so neatly arranged into what is being called The Perfect Storm, I do not think the Street will survive as an institution of World significance. An EU heading for the cliff will overwhelm the American banking system in a Second Flood of poorly managed derivatives and obligations, revealing for good and all how investment bankers had their Tulip Moment by ridiculous over-valuation of what is, in most cases, nothing more than the IOUs of bankrupts.
As and when this happens, if it’s before November this year, Obama will use it as a stick with which to beat Mitt Romney and his addiction to the Greed is Good philosophy. If it happens later (and that is still the most likely outcome) he will use it to bash the Republican Party and have his revenge upon Lloyd Blankfein and his pals. It won’t alter the reality of a USA very quickly drowning in debt as the inevitable global protectionism takes hold of everything from imports to interest rates, but it will damn banking globalism to history. And as American power thus fades, the Stall Cheat Wankers will never rise again.
and news of the day from and in Greece ...
| News bites @ 10 | |||||
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1 FIRES RAGE ON A wildfire raced through forests near Athens on Thursday, destroying or damaging several houses and forcing residents to use garden hoses and tree branches to fight the flames. Fanned by strong winds, fires in Keratea, in southeastern Attica, charred the roofs of five houses. A retirement home, monastery and camp ground were evacuated. TV pictures showed thick plumes of black smoke rising into the air as the fire tore through vast areas of rural land." We were surrounded (by flames) within seconds. The house was destroyed," resident Yiorgos Germanakis told Antenna TV. Dozens of firefighters, 35 fire engines, five aircraft and two helicopters attended the blaze.
2 AGENCY MERGERS The government has launched a plan to abolish 270 public sector bodies by the end of August and to merge them into other agencies. The move will affect 4,000 public sector employees, who will be moved to new positions but not fired. Among the agencies to be merged will the Thessaloniki International Fair, Helexpo and the Hellenic Export Agency.
3 RESIGNATION The chief executive of the state privatisation agency, Costas Mitropoulos, has resigned. "He has submitted his resignation," one senior government official said on condition of anonymity, without elaborating on why he was quitting. "The government will move quickly with its privatisation programme in order to make up for lost ground and put the programme back on track," the official said.
4 RACIST ATTACK Pakistani and Indian nationals have spoken about their ordeal at the hands of racist attackers, who assaulted them and smashed up their homes in Menidi, north of Athens, on July 17. Addressing a press conference (see video below), the victims accused police standing while the attacks took place. Pakistani community leader Javed Islam said: "These attacks by fascist gangs must stop. The (attackers) tell us they are from Golden Dawn, so why don't we say so. But we don't care if the police or the government says it wasn't them. Let the police tell us who it was."
5 POWER RESTORED Hours after it was cut off for failure to pay the special property tax, power was restored on Thursday to a state hospice catering for 260 disabled pensioners. The Public Power Corporation (DEI) reconnected the institution, located in the inner city district of Kypseli, after Prime Minister Antonis Samaras himself intervened. DEI later said that its staff were not aware that the connection supplied the institution as the electricity bill, through which the property tax is paid, was in the name of a private citizen. The 170 employees at the foundation, the Asylon Aniaton, have not been paid since March.
6 XIROS EYE SURGERY Convicted November 17 member Savvas Xiros underwent two eye operations at a Thessaloniki hospital this week, after a court decision last month authorised his transfer from Piraeus' Korydallos prison, where he is serving consecutive life sentences."Savvas Xiros is essentially blind. The damage he has sustained to his eyes does not offer the prospect of him seeing again. We, as physicians, have the obligation to do what is best for the patient, regardless of who he is and what his political beliefs are," the head of the AHEPA hospital's ophthalmology clinic, Panayiotis Economidis, said on Thursday.
7 TRANSPORT SALES DOWN Ticket sales on Athens public transport sales were down 24 percent in the first half of this year, according to data released by the operator STASY. The economic crisis and suspected fare-dodging are cited as reasons for this decline. Although this is the first year the ilektrikos green line has been running properly after undergoing renovation work over two years, the ticket sales for this route have dropped 17.5 percent.
8 DIGITAL SWITCHOVER If you live in Athens and turned on your television this Thursday morning, you're probably wondering where most of your channels have gone. That's if you don't have a digital receiver. Why? As of today, analogue broadcasting from Mt Ymittos has ceased and has been replaced by a digital signal. The three stations from state broadcaster ERT will continue to be broadcast on analogue until August 17, after the London Olympics. Formore information on digital television, click here.
9 CHEAPER MOBILE CALLS The cost of calling a mobile phone number in another phone network, ie from a Cosmote to a Vodafone number, is expected to fall by 45 percent by January 2013, the National Telecommunications and Post Commission (EETT) is expected to announce on Thursday. The so-called termination fee is currently 4.95 cents per minute. But EETT has decided to reduce the fee by 80 percent over the next five months to around 1.01 cents. Providers will pass on some of reduction to consumers.
and from Zero Hedge ....
Market Response To Schrodinger Spain
We are saved. No, we are doomed. The reaction to the much-heralded agreement to bailout Spain's banks is not good. Spanish bond yields are at their post-Euro highs at 7.21%, Spanish bond spreads (and 5Y CDS) are trading at 600bps as Valencia calls for its bailout, Montoro denies, then admits that indeed they are part of the fiasco. Spain's front-end is very weak with 3Y back over 6% with the entire curve at its flattest in 6 months. Italy is also cracking wider with the short-end getting crushed (2Y +42bps at 3.9%) - exactly where all that LTRO collateral is being held (more ECB margin calls?). While Italy's has reverted back to a zero basis to CDS, Spain has continued to see its bonds underperform CDS dramatically - which in the case of Greece and Portugal was the litmus test for a market switchijng from muddle-through to pending PSI as trust in CDS triggers reduces. Meanwhile, Germany's 2Y rate hits a record low below -6bps. Spain's IBEX is down almost 4% as EURUSD cracks below 1.22 once again. European financial credit (senior and sub) are getting cruyshed and it appears that broadly speaking equitieas are starting to catch up to the reality in credit markets - though have a long way to go. S&P 500 e-mini futures are down ove 9 pts from the close (and over 15pts from yesterday's highs).
Full Statement by the Eurogroup
and.... ( Spain's political leadership either just isn't ready for prime time or they are the world's worst liars ) Valencia Announces SOS, Needs To Tap Government LIquidity Support Just Eurogroup Accepts Spanish Bailout PlanUPDATE: It would appear the right hand has no idea what the left hand is doing in Spain, as via Bloomberg:
but
Just as today's largely expected announcement that the Eurogroup has formally agreed to accept the Spanish bail out (details still lacking), the Spanish region of Valencia just became the second to officially demand a bailout following Catalunya's comparable announcement at the end of May, and has announced it will need to tap the government liquidity mechanism. Kneejerk reaction: EURUSD sharply lower and below 1.22 for the first time in days.
From Reuters:
Concurrent with this announcement, Spain also announced an update to its deficit projections, whose details are meaningless as they will be revised adversely shortly, which confirmed that the Spanish economy continues to deteriorate at an accelerating pace.
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http://www.zerohedge.com/news/overnight-sentiment-europe-threatens-market-surreality-again
Overnight Sentiment: Europe Threatens Market Surreality Again
It is a quiet session so far with risk in the Off position (for now - we have yet to see the sinusoid HFT stop triggering function which rises stocks artificially as yesterday demonstrated so very well to nobody's surprise). All eyes are once again focusing to Europe, pushing the EURUSD lower for at least a few more hours until Europe closes and the repatriation resumes. In terms of key European events, today is the EU finance minister’s conference call on Spain today. As DB summarizes, officials are expected to approve the EU100 billion Spanish bank rescue plan however the exact size of the loan will probably only be determined in September pending the result of a bank-by-bank stress test. This will then pave way for restructuring plans for the sector in October which is broadly consistent with the timeline set out in the leaked draft MoU. At the previous meeting finance ministers agreed to first disburse EU30bn to Spain by the end of July so we will watch out for further confirmation of this today. We may also get the terms of the loan today. The conference call is expected to start at 10am GMT. What is odd is that unlike before when the mere possibility of a European catalyst was enough to push risk higher, this is no longer the case, and Spanish spreads to Bunds just hit another all time wide, with the Spanish 10 Year plunging to 7.11%, another post-summit high, this time dragging the Italian 10 Year which was at 6.10% at last check. And as explained before, the European uber pair trade means that as PIIGS yields soar, the core drops to new record, in most cases, negative nominal lows.
Will the world once again be able to ignore the once-again imploding European reality (and American: Of the 35 S&P 500 firms that reported results yesterday, about 74% of those came ahead of market consensus but only 57% of those topped sales forecasts.), and send the ES to a green close on the day? Or is today the day when reality comes back with a vengeance? Stay tuned and find out.
and....
http://www.telegraph.co.uk/finance/debt-crisis-live/9413279/Debt-crisis-live.html
Spanish borrowing costs climb back above 7pc, as eurozone ministers hold a teleconference to approve up to a €100bn bank rescue.
13.32 And those Spanish borrowing costs just keep on rising. The yield on ten year government debt is now at 7.17pc.
13.24 Stock markets in Spain and Italy have taken a nosedive this afternoon. The IBEX 35 in Madrid has fallen 3.7pc to 6,393.05, while the FTSE Mib in Milan is down 3.5pc at 13,187.33.
13.21 In a statement, Olli Rehn, the EU's economic and monetary affairs commisioner, said:
Today's unanimous endorsement by the Eurogroup of the sectoral programme for Spain opens the way to the necessary recapitalisation and repair of the country's financial sector. The aim of this programme is very clear: to provide Spain with healthy, effectively regulated and rigorously supervised banks, capable of nurturing sustainable economic growth [...] Spain will be expected to maintain its commitments to correct its excessive deficit in a sustainable manner by 2014 and to adopt the structural reforms set out in the country-specific recommendations adopted by the Council on 10 July. The explicit link between these obligations and the sectoral programme is deliberate and pertinent. It is only through determined action across all of these fronts that Spain can create the financial stability and competitive, dynamic economy that will bring about a steady and lasting fall in unemployment.
13.15 Spain's rescue loans will have a maximum maturity of 15 years, and will average 12.5 years, the Eurogroup said in a statement.
13.09 Cristóbal Montoro, Spain's finance and public administration minister, said Spain would pay an extra €9.2bn (£7.1bn) to service its debt next year.
13.02 Unemployment in Spain will remain close to its current level of 24.6pc until the end of 2013, the government has said.
In a statement published today after a cabinet meeting, the government said that the Spanish economy would not return to growth until 2014.
It forecasts that the economy will contract by 0.5pc in 2013, compared with previous estimates of 0.2pc growth.
12.48 BREAKING Eurozone finance ministers have approved Spain'sbank bail-out. Luxembourg's finance minister Luc Frieden did not specify a figure for the rescue, and told reporters that audits were ongoing.
12.16 Mr Katainen also rejected that the idea that Finland's low borrowing costs would compensate for a decline in demand. He stressed:
Finland isn’t benefiting from the crisis [...] We’re an export-driven economy and once the European market isn’t doing well, we suffer a lot.
Finland's two-year borrowing costs turned negative this month, meaning investors are effectively willing to pay to lend to the country.
Not happy: Jyrki Katainen told Bloomberg that negative bond yields were not a substitute for a decline in demand.
12.08 Finland has denied suggestions that it is mulling a euro exit. Jyrki Katainen told Bloomberg:
We will not and do not consider exiting the euro [...] We want to be at the heart of European development. A stronger euro, a better euro is the only, and reasonable, thing for Finland.
Economists including Telegraph columnist and Wolfson Prize winner Roger Bootle and Nouriel Roubini have suggested that Finland could be better off outside the euro-area.
11.43 The pain in Spain means our holidays there could become a lot more expensive. Ryanair has cancelled 11 routes out of Madrid and four out of Barcelona because of the government's decision to double taxes at these airports. Several routes will also be reduced, the low cost airline said in a statement.
Ryanair boss Michael O’Leary said:
Ryanair objects to the Spanish government’s decision to double airport taxes at both Madrid and Barcelona airports. Sadly, this will lead to severe traffic, tourism and job cuts at both airports this winter. Ryanair’s cuts alone will cause a combined loss of 2.3m passengers and over 2,000 jobs at Madrid and Barcelona El Prat airports to other lower cost airports elsewhere in Europe, where Ryanair continues to grow.
The announcement confirms reports in Spanish business daily Expansion of the cuts.
11.24 One record that has already been broken today is the difference between Spain and Germany's debt service costs.
The "spread" between Spanish and German 10-year yields widened to 590 basis points - a euro-era high.
11.09 This is below the intra-day high of 7.28pc hit on June 18. However, if the yield (which has just hit 7.11pc), stays at this level - it will surpass the current closing euro-era high of 7.07pc.
11.02 Spanish bond yields have crept back above 7pc. The yield on 10-year government bonds is currently at 7.09pc.
10.38 France's lower house of parliament has passed a new budget that will raise about €7bn (£5.5bn) in new revenue by targeting the big corporations and the wealthy. The measures reverse measures passed under former French president, Nicolas Sarkozy.
The vote goes to the Senate on Tuesday.
09.21 What can the European Central Bank do to ease the crisis? Quite a lot, according to economists at Goldman Sachs.
Mario Draghi, the ECB's president, has reminded us on several occassions that the direct funding of governments by the ECB is forbidden. However, Dirk Schumacher at Goldman highlights that the central bank has enough monetary gadgets in its toolbox to deal with the crisis effectively.
Mr Schumacher highlights two reasons why the ECB has decided not to spring into action thus far:
For one, the ECB is worried about the potential negative side effects of further measures on its credibility, as well as how these are viewed by the general public. Moreover, the ECB sees itself as being engaged in a strategic game with governments. A proactive stance risks governments reducing their efforts to stabilise the system. Thus, a deterioration in the situation is, to some extent at least, a necessary condition for further ECB action.
08.46 Finland has approved Spain's bank bail-out this morning. Parliament voted 109 to 73 in favour of the deal.
Finland struck a deal with Spain this week to receive collateral worth up to €770m (£601m) in exchange for the aid.
The country struck a similar deal with Greece last year.
08.28 Eurozone finance ministers will hold a conference call at 11am today where they are expected to approve a bail-out of up to €100bn to shore-up the country's ailing financial sector.
We're still uncertain of how much of the €100bn Spain's banks will need. The amount is not expected to be finanlised until September, when a round of in-depth audits are completed.
08.15 The protests continued into the night, as Spain ratified €65bn in budget cuts announced by prime minister Mariano Rajoy before the weekend. Earlier this week he said:
This government cannot choose between good and bad options, but between bad and worse, which is what we are doing. If we maintain this common-sense policy, Spain will emerge from the crisis.
A girl holds a poster depicting German Chancellor Angela Merkel as the mother of Spanish PM Mariano Rajoy during a protest against government austerity measures on Thursday. The poster reads: "Mom Merkel feeding: Either you eat up the bail-out or there are no sweets for you (Photo: Reuters).
08.08 Spain's borrowing costs surged to euro-era highs yesterday despite draconian fiscal cuts and backing from the German parliamentfor the country’s €100bn bank rescue package. A raft of new austerity measures sparked protests in cities all over the country, includingBarcelona, below.
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