Greek protest of the day - tax offices blocked around Greece. Power bill hikes will be greater than expected. Greece likely to have secured second tranche of latest aid package. Overnight news and data from Asia and europe , as well as a wrap of events from the US on Monday.

http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_1_15/01/2013_478627

Split with IMF delays Cypriot bailout package A planned aid package for Cyprus is being delayed by the government’s differences with the International Monetary Fund over Cypriot banks’ capital needs, President Dimitris Christofias said on Tuesday. “The problem of the banks has completely overturned the apple cart,” Christofias told reporters in Strasbourg, France. “The IMF believes that our needs are maximum needs. We believe that they are lower. We are now awaiting clarification of the situation so that we can confirm finally what the exact figure is.” Cyprus has been negotiating with the IMF and the euro area for seven months over the size and terms of a rescue for the government and lenders weakened by their exposure to the Greek economy. Cypriot financial institutions such as Bank of Cyprus Plc and Cyprus Popular Bank Pcl lost more than 4 billion euros in a Greek debt restructuring. After commissioning Pacific Investment Management Co to determine how much banks in Cyprus need, the Cypriot government hired BlackRock Inc to assess Pimco’s methodology. An initial draft of Pimco’s report led Cypriot central bank chief Panicos Demetriades to estimate that the rescue of banks in Cyprus may cost as much as 10 billion euros. The final figure is scheduled to be published around the end of this week. [Bloomberg]

http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_1_15/01/2013_478658

Qatar withdraws from tender for Elliniko Qatar has pulled out of the bidding for the development of the site of Athens’s former international airport at Elliniko. The tender details issued by the Hellenic Republic Asset Development Fund (TAIPED) last week were only picked up by three interested parties instead of the four that the fund had short-listed for the second round of bidding. The three bidders that are still in the running for the development and utilization of the Elliniko plot are Israeli-based Elbit Cochin Island Ltd, the Latsis Group’s Lamda Development SA and Britain’s London & Regional Properties. According to the terms of the tender, the three suitors will have to submit their business plans for the development of Elliniko within six months. The Qatari Diar Real Estate Investment Co, a subsidiary of the Qatar Investment Authority (QIA) that had initially taken part in the tender, did not come to sign the documents of confidentiality to receive the tender details for Elliniko. Qatar’s departure from the tender constitutes a blow for the tender, as it will reduce the level of competition for the property. QIA manages some $100 billion euros and was seen as one of the most desirable suitors in the project. This of course does not suggest that the three remaining suitors are not strong entities, with Elbit now emerging as the favorite for the tender. Meanwhile the Finance Ministry confirmed on Tuesday the targets of the government’s privatizations program. Minister Yannis Stournaras and TAIPED chief Takis Athanasopoulos agreed in a meeting that at least five sell-off projects will have to be completed in the first quarter of the year and another 11 will need to get going within the first half of 2013. Among the privatizations that must be completed by end-March is that of the OPAP gaming company. According to a high-level ministry official, besides OPAP, TAIPED will have to complete the projects concerning the Public Gas Corporation (DEPA), the gas transmission network operator (DESFA), and the properties at Afandou on Rhodes and Cassiope on Corfu. The TAIPED board is scheduled to convene on Wednesday to approve the terms of the contracts for the privatization of DEPA and DESFA.

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Stournaras eyes another haircut  Finance minister says a further debt restructuring will become possible in case of a primary surplus By Sotiris Nikas Finance Minister Yannis Stournaras said another Greek debt restructuring is possible, but only on the condition that Greece secures a primary surplus. That will not be known before the end of 2013, he said in an interview with state broadcaster NET TV. “Another [restructuring] would be welcome. We will not say no to another haircut. We express our arguments but it does not depend on us,” he said, adding that both Greece and the International Monetary Fund have spoken in favor of a haircut but the proposal was not accepted. The minister did stress, however, that the recent decision by the Eurogroup provides for a new reduction in the country’s debt if the Greek state manages to end this year with more revenues than expenses, excluding interest payments. Stournaras also confirmed that following the affirmative parliamentary vote on tax reform last Friday and the law ratifying the Legislative Acts on Monday, the Euro Working Group of eurozone finance ministry officials will recommend that the Eurogroup scheduled for next Monday approve the disbursement of the January bailout tranche, which amounts to 9.2 billion euros. What he did rule out was the possibility of a new settlement for taxpayers’ expired debts, as it appears that the ministry has failed to convince the country’s creditors that a new settlement is necessary even though such debts have soared to 53 billion euros. Of that figure, no less than 12 billion was created within 2012. “Based on logic and the figures, the chances of us succeeding are much greater than those of failing,” the minister said, asking citizens to be patient. He added that if the country fares better than the targets set, it will be able to decide by itself how it will administer its surplus. That would be either for the benefit of the poorest social groups, by expanding the application of solidarity benefits, or for tax reduction (in the case of property) or for the reduction of value-added tax on food catering. Regarding Hellenic Postbank and the opposition’s reaction to its planned split and privatization, Stournaras said that “we have to sanitize it. There are no magic solutions.”

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Protesters blockade tax offices around Greece Nine tax offices around Greece were blockaded on Tuesday by members of the public -- as well as local authority officials in some cases -- in protest at Finance Ministry plans to merge tax offices in order to bring down their operational costs and streamline procedures. In Athens, a group of protesters blockaded the tax office in the western suburb of Egaleo and municipal garbage trucks barricaded the street in front of the building, preventing staff from transferring files from Egaleo to the Haidari tax office, where the two authorities will be housed jointly. In Deskati in northern Greece, police dispersed a crowd of people preventing the move of the local tax authority to more central Grevena. Grevena Deputy Regional Governor Giorgos Dastamanis, the mayor of Deskati and local community officials joined the protesters calling for the merger of the two tax authorities to be called off. Dastamanis said that he would be petitioning the Finance Ministry to leave the Deskati tax office in place, arguing that the village is often cut off from Grevena in the winter due to snow. In Naoussa, also in northern Greece, protesters blocked the move of the local tax authority to Veria for the second day in a row, while protests were also ongoing in Karystos in Evia, in Atalanti in Fthiotida, in Kalloni on Lesvos and in Kyparissia in Messinia, among others. Greece has pledged to it foreign creditors to reduce the number of tax offices around Greece to 120 by the end of 2013, compared to 290 that were operating in 2011. Finance Minister Yannis Stournaras has said that most of the services carried out by the defunct tax offices will be processed by specialized Citizens' Advice Bureaus (KEP) placed in local authority offices. http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_1_15/01/2013_478444 Power bill hikes to be greater than expected Consumers will be facing larger electricity bills this year that will come in above the 10 percent hike announced by the Environment Ministry last month, Public Power Corporation's new rate chart, posted online on Tuesday, suggests. The biggest rise in charges will be experienced by consumers with summer homes and secondary residences, as well as those who use up to 800 kilowatts per quarter. Households that stick close to the average consumption rate will also see a greater-than-expected rise in the cost of electricity, as, for example, consumption of 1,600 kilowatts per quarter will cost 15 percent more this year than last. PPC expects to collect an additional 2.89 billion euros from the rate hikes. http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_1_14/01/2013_478405 Greece all but secures next tranche  Euro Working Group is said to have approved the disbursement of 9.2 bln, to be ratified by the Eurogroup By Nikos Chrysoloras The disbursement of the January tranche of the bailout loans to Greece, amounting to 9.2 billion euros, can now be taken for granted, following Monday’s favorable decision by the Euro Working Group in Brussels that is expected to be ratified by the Eurogroup council of eurozone finance ministers next Monday. Sources point to the approval by the meeting yesterday of the group of finance ministry officials, who are responsibly for preparing the agenda for Eurogroup meetings, and add that this was mostly a formality, given that the political decision had been made in December and the first tranche has already been paid out. Consequently the only pending issues are the formal implementation of the prior actions scheduled for January, which Finance Minister Yannis Stournaras on Monday said are being fulfilled. On Wednesday the International Monetary Fund’s executive board will convene to approve its share of the package to Greece, amounting to 3.3 billion euros. The head of the fund, Christine Lagarde, said on Monday that Greece will show better-than-expected results, while noting that Athens will have to try harder in terms of tax collection. Economic and Monetary Affairs European Commissioner Olli Rehn’s spokesman, Simon O’Connor, hailed the Greek government’s affirmative vote for the new tax law, branding it an important step toward the simplification of the country’s tax system and the broadening of the tax base. “What the technical analysis and the history of crisis management have shown is to act strongly and powerfully at the start in order to bear the fruit later. Greece has made great efforts and that is good news,” said Lagarde. The Greek member of the European Commission, Maria Damanaki, said on Monday that the climate is now much better for Greece in Brussels and that the country has avoided the worst. After her meeting with President Karolos Papoulias in Athens, Damanaki said that “it is now the time for Greece to act. The Greek political forces ought to draft and implement a plan for the country’s growth, for a serious public administration, for tax efficiency and for the banking system. We cannot and should not expect that from the country’s creditors.” and...... http://www.zerohedge.com/news/2013-01-15/overnight-sentiment-first-leg-german-recession-now-official-yen-collapse-ends Overnight Sentiment: First Leg Of German Recession Now Official, As Yen Collapse Ends Submitted by Tyler Durden on 01/15/2013 07:08 -0500 Apple   Ben Bernanke   Bond   CDS   Debt Ceiling   Dell European Central Bank   Finland   Fitch   Germany Greece   Gross Domestic Product   headlines   Italy Japan   Nikkei   ratings   Recession   Tim Geithner Unemployment   United Kingdom   Yen And so the consequences for Europe of accommodating the US, and the rest of the world, in having the EUR soar following ECB intervention while everyone else's currency is diluted to death, comes to the fore, following today's announcement of German 2012 GDP which came below expectations of 0.8%, printing at 0.7%, with government adding a substantial 1.0% to this number, while plant and machinery investment tumbled by a whopping -4.4%. And while the specific Q4 data was not actually broken out, a subsequent report by the German stat office indicated that Q4 GDP likely shrank by 0.5% in Q4. All that is needed is one more quarter of sub zero GDP, which will almost certainly happen in Q1 absent a massive surge in government spending which however will not happen in tapped out Germany, whose resources are focused on keeping the periphery afloat, and thus the EURUSD high, and Germany's exports weak. Confirming this was a Bild report which stated that the government now sees 2013 GDP growth of a paltry 0.4%, which assumes growth in H2. One wonders just how much longer Germany will opt for a currency regime that punishes its primary GDP-driver: net exports, at the expense of nothing beneficial but making tourist trips to Greece far more expensive than under the Drachma. There was however, much cheering in depression riddled Spain (unemployment in the mid 20%s and rising): earlier the country sold €5.75 billion of 12 and 18 month bills, at rates that tumbled compared to the like auction in December. Just more draining of Social Security Funds, or yet another ECB backdoor bailout? Does anyone even care any more: it is not like the bond market in the periphery reflects anything besides the intentions of German taxpayers to keep funding the endless PIIGS bailout. The other big overnight news was the reported end of the JPY collapse, with the USDJPY now trading at 88.30, some 130 pips lower than last night's highs, following various comments from various Japanese officials, some of which may have been misinterpreted, but all of which served to remind the market that the period of promises by the BOJ and Abe is over. Now is the time for action, and sadly as has been the case in Japan in over 30 years, it is the "action" part that is sorely lacking. Either way, the global non-US based risk rally came to a screeching end with the end of the JPY collapse, and hopes that Japan just may succeed in clawing its way out of a deflationary hole on the back of currency debasement without actually seeing a comparable surge in bond yields that would crush its banking sector. And perhaps most ominously for the US, Fitch once again woke up the headline scanning giant, with comments by its Global Analytical Head Ian Linnell who warned that both UK and US ratings are now under threat. Time for the US downgrade rumor? More on the overnight trading and event recap from Deutsche Despite a +3% rally in Chinese equities yesterday, the S&P500 (-0.09%) remained largely in consolidation mode after hitting a post-financial crisis high of 1472.12 last Thursday. I suppose 2012 should be a lesson in the fact that Chinese equities can go in a completely different direction to the main developed market equivalents. The US seemed to be held back by Apple (-3.6%) with technology (- 0.8%) and telecoms (-1.06%) leading declines after reports surfaced in the Nikkei on Monday that the company’s 1Q13 component orders have been in cut in half due to lower than expected demand for the iPhone 5. To be fair I haven't bought a new Apple product for about 10 months now. A lifetime in Apple time! Technology stocks would have ended the day even lower were it not for reports that Dell was in talks to go private (Bloomberg). The stock bounced 13% following the report and its 5yr CDS widened by 110bp to 315bp, which drove some of the underperformance in the CDX IG credit index (+2bp) yesterday. In the US, leaders from both parties ratcheted up the rhetoric over the debt ceiling debate. Risk generally traded with a weaker tone leading into Obama’s final press conference of his first term. Obama told reporters that Republicans were threatening to hold a “gun at the head of the American people” and that he wasn’t willing to negotiate around spending cuts in return for an increase in the debt ceiling. Nonetheless, it appears that we’ll need to dig in for another round of protracted negotiations after John Boehner and Mitch McConnell responded that the upcoming debt ceiling debate is indeed “the perfect time” to “get serious  about spending”. Outgoing Treasury Secretary Tim Geithner sent a letter to Boehner reiterating that the US treasury would exhaust its extraordinary measures between mid-February and early March and urged Congress to lift the debt ceiling well in advance of that point. It was a relatively active day in the world of Fedspeak with Williams, Evans and Lockhart all speaking yesterday ahead of Bernanke’s Q&A session after the US market closed. The usually dovish Williams said that the Fed will continue to purchase MBS and treasuries well into the second half of 2013 while the more hawkish Lockhart warned that QE could have “longer-term consequences that are worrisome”. Bernanke himself offered very little new information, saying that he remains concerned about the state of the labor market and defended the impact of QE saying the “significant inflation” will not result from asset purchases. He dismissed the idea of the Government minting a trillion-dollar platinum coin to pay off debt, saying that he was “not going to give that (idea) any oxygen”. Turning to overnight markets, most major markets are trading higher with the highlight being another positive day for the Shanghai Composite (+0.38%) following yesterday’s +3% gain. Elsewhere in Asia, continued concerns over Apple’s component orders are leading equities lower in Korea (KOSPI -0.95%) and Taiwan (TAIEX -0.75%), while a number of technology stocks on the Nikkei are also underperforming. Meanwhile, the broader Nikkei index (+0.57%) has pared earlier gains and USDJPY is down 0.55% after Japan’s economy minister Akira Amari said that the country faces risks from any excessive decline in the value of its currency. Amari added that the yen is correcting in line with economic fundamentals. Ahead of next week’s BoJ meeting, governor Shirakawa noted the downside risks to Japan’s economy particularly in terms of export markets, and said that the central bank will continue to pursue “powerful easing”. Japanese 10yr JGB yields are below 0.8% for the first time in more than a week. In the credit space, both the Australian and Asian IG indices are trading 1-2bp wider on the day. Recapping the European headlines, S&P affirmed Finland and Luxembourg's AAA ratings and revised their outlooks to stable from negative. S&P added that "the Finnish government appears committed to pursuing strong fiscal and structural policies that should enable the economy to grow above 1% in the medium term". Luxembourg's ratings "reflect our view of its wealthy economy with a strong government balance sheet and sizable external surpluses," S&P said in a statement. Moody's rates both sovereign's at Aaa with negative outlooks. On the data front, EU Industrial production for November was weaker than expected at - 0.3%mom (vs +0.2% expected), falling for the third straight month, partly driven by a - 1.0%mom reading in Italy (vs -0.2% expected). Turning to the day ahead, the highlight during the European session is likely to be Germany’s 2012 GDP and inflation data in the UK, Italy, Spain and Germany. Germany will auction EUR5bn in 2023 bonds. In the US, the focus will be on retail sales, PPI and the Empire manufacturing survey for January.