Greek Election Cheat Sheet
All you need to know about tomorrow's prime time event.
Central Banks Worldwide Prepare for “Chaos” That May Follow Greek Vote
by Eva Kuehnen and Sven Egenter, Reuters via, Denver Post:
Central banks worldwide checked their ammunition Friday in preparation
for turmoil from Greece’s election, with the European Central Bank
hinting at an interest rate cut and Britain set to open its coffers.Tensions were high about how to manage the eurozone’s debt crisis — epitomized by Greece’s bankruptcy and need for international aid — and a rare fight broke out between Germany and France, normally the glue that keeps the bloc together.
German Chancellor Angela Merkel criticized France’s economic performance, effectively taking a swipe at Socialist President Francois Hollande, who has called for more emphasis on economic growth and less on budget austerity.
“We must do everything possible to prevent the eurozone from falling apart,” Dutch Prime Minister Mark Rutte said on television.
ECB President Mario Draghi, one of many policymakers gearing up for trouble after Sunday’s vote in Greece, said his bank was ready to step in and fund any viable eurozone bank that gets in trouble.
Read More @ DenverPost.com
Now France and Italy may need a bail-out
by Robert Winnett, The Telegraph:
The former prime minister said that the “standard but often empty”
plans usually agreed at such summits will “not do when the euro area is
finally approaching its own day of reckoning”. He warned that the crisis
threatened to spread and lead to Italy and even France requiring
bail-outs.Mr Brown made the rare intervention amid mounting concern that the re-run of Greek elections tomorrow will lead to the country being forced out of the euro.
If the Syriza party plays a key part in forming a new Greek government, its refusal to agree to cut spending is expected to lead to the country being ejected from the single currency. Fears are mounting that “contagion” could spread quickly to countries such as Portugal and Spain, which would need international financial assistance.
There is growing speculation that central banks, including the Bank of England and American Federal Reserve, are on standby to inject billions of pounds into the global economy if necessary on Monday.
Read More @ Telegraph.co.uk
Deutsche Bank: "The Spanish Recapitalization Is Not Working" - A Market Shock Is Required
This weekend, everyone's attention will be on the Greek elections, however it is Spain that has now become the "fulcrum security" of Europe. As such, events in Greece are merely a catalyst that will set off a chain of events that will have an impact not only on Spain, but on all of Europe, and thus, the world. As we pointed out last week after the Spanish bailout announcement, based on a preliminary analysis which had been compiled by Deutsche Bank's europhiles hours before the formal announcement, and one which just happened to be a carbon-copy of what was proposed as the 'final (and failed) Spanish solution', it appears that the events in Europe are if not orchestrated by the largest German bank, then certainly receiving part-time advice. Which brings us to the present, where we find that even Deutsche Bank has given up hope for interim solutions, having realized that the market will no longer accept transitory, feeble arrangements. Instead DB is now formally calling for a big bang resolution, one coming from the ECB. Here is the punchline: "ECB has room for manoeuvre, but needs political cover for a ‘big’ policy" or said otherwise, "A shock is required to get a liquidity response." In other words: Europe's only real hope for even a stop gap solution... is a wholesale market crash, not surprisingly the very same conclusion that Citi reached on May 19 when they warned that only Crossover (XO) at 1000 bps or wider could push Europe into acting... Basically stated, anything less than a controlled market crash, one that finally gets the ECB involved with Germany's persmission of course, merely pushes the market higher on nothing but hope of an intervention that said market lift makes even more improbable, as now both Citi and DB admit, which can and will lead to an uncontrolled market collapse, one from which not even the ECB will be able to extricate Europe.Spain's Fixed??? Even Spain's PM Admits that REAL Capitalization Needs Are Closer to 500 billion Euros!!!
06/16/2012 - 10:04
Dollar Bulls Leaning Heavily on the Long Side of the Boat
Trader Dan at Trader Dan's Market Views - 58 minutes ago
Bullish bets on the US Dollar have reached at least a 7 year high as the
crisis in the Euro Zone and the slowing global economy has sent money flows
careening wildly into the Greenback.
As you look at the Commitment of Traders chart shown below, you can see
that this LONG DOLLAR trade is extremely crowded. Markets in this
condition, while they can most certainly continue heading higher, are very
unstable and quite susceptible to violent downside action should a
technical trigger force a bout of long liquidation.
Friday, we got a bit of a hint as to what might happen to the Dollar... more »
Trader Dan on King World News Markets and Metals Wrap
Trader Dan at Trader Dan's Market Views - 1 hour ago
Please join Eric, Bill and I as we discuss the gold, silver and other
pertinent market price action of the past week on the KWN Markets and
Metals Wrap by clicking on the following link.
*http://tinyurl.com/d8et8br*
*Greece — What Matters And What Does Not
So the Greek elections come and go and someone takes over or there is no government and new elections are called. In the meantime either Europe hands Greece more money or Greece defaults. It is at the point of default where consequences require central bank action and where even the best made plans may careen out of control because so much information has been hidden and not accounted for so that their consequences were not considered. Dealing with incorrect facts leads to incorrect conclusions and this is my greatest fear at present for all of the financial markets; that the pending default, it will most likely come, will not have been assessed in the manner that was needed because Europe did not allow all of the necessary data to be correctly appreciated.Europe's Dilemma: "Probability Vs Impact"
When it comes to the future of Europe, one simply has to look at the foundations or the so called "euro-architecture" which as the past two years have shown us, are in dire need of strengthening lest everything topples over. Mere talk will no longer cut it. Simplifying things further, one can distribute the potential outcomes facing Europe along two axes: Impact, or an event's likelihood of actually doing something to change the current "sinking ship" status quo, and Probability, i.e., how much resistance, mostly political, will a given plan face, primarily from Germany which over the past year has fallen into its rightful place - that of Europe's fiscal, and monetary - because even the ECB will not move without German approval - paymaster. Obviously the two are inversely correlated. Whether or not the European crises ends, will depend on precisely which of the 9 listed outcomes below Europe decides upon (or all). However, as is well-noted on the chart, There are "No obvious game changers." Which is why anyone hoping for a Deus Ex, before much more pain is first experienced, as Deutsche Bank explained earlier, will be bitterly disappointed.
Citi's Buiter: Greece will be forced out of the euro regardless of who wins the Sunday elections
06/16/2012 - 10:37
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