Greece financial crisis | Latest : Deal reached with even tougher conditions for Greece.

[88m3]

Markets | Mon Jun 15, 2015 8:06am EDT
Related: GREECE
Greece contagion sweeps euro zone bond markets, hits shares
LONDON | BY NIGEL STEPHENSON

Greek Finance Minister Yanis Varoufakis listens to a question during a parliamentary session in Athens June 11, 2015.
REUTERS/ALKIS KONSTANTINIDIS - RTX1G21U

Global financial markets suffered their first bout of significant contagion from the Greek crisis this year on Monday after 11th hour talks between the near bankrupt country and its creditors collapsed.

After weeks of minor ebbs and flows on the stop-start negotiations, bond markets across the euro zone signaled alarm that a deal may not be reached by mid-year, when Athens must repay 1.6 billion euros ($1.8 billion) to the International Monetary Fund.

The premium investors demand to hold Spanish, Italian and Portuguese government bonds over low-risk German Bunds hit 2015 highs, with the 10-year yield gap between Spanish and German debt touching its widest since August.

Shares in Europe and Asia fell, led lower by banks.

The euro weakened against the dollar, pressured also by investor anxiety ahead of a U.S. Federal Reserve interest rate-setting meeting later this week.

U.S. stock index futures ESc1 were down 0.5 percent, suggesting Wall Street would extend Friday's declines, which were blamed on worries over Greece and the Fed meeting.

Talks on Sunday between Greece and its creditors, described as a last attempt to bridge their differences, broke up after less than an hour.

European Union officials said Athens had offered no new concessions to secure the funding it needs. Athens said it would not give in to demands for more pension and wage cuts.

Greece has already been bailed out twice and many banks have cut their exposure to the country while euro zone authorities have put in place mechanisms to limit contagion. However, the prospect of default and the possibility of Athens leaving the euro weighed heavily on sentiment on Monday.

"If Greece leaves the euro zone, euro zone participation will no longer be irreversible. Euro zone participation may even become an issue in elections in other euro countries where euroskeptic parties are gaining ground, such as in Spain later this year," said Ruth van de Belt, investment strategist at Kempen Capital Management.



EURO DOWN

The pan-European FTSEurofirst 300 .FTEU3 stock index fell 1.3 percent and a gauge of European stock market volatility .V2TX hit its highest since Jan. 22, days before the left-wing Syriza party of Greek Prime Minister Alexis Tsipras won power in a parliamentary election.

Banks in Spain, Italy and Portugal were among the big losers, with Italy's Banco Monte dei Paschi (BMPS.MI) down 4.5 percent and Spain's Banco Popular (POP.MC) down 4.1 percent and Portuguese Millennium bcp (BCP.LS) down 5 percent.

Athens stocks dropped 5.2 percent while the exporter-heavy German DAX index .GDAXIlost 1.7 percent.

"Sentiment remains negative with rallies likely to be sold until there is some positive news (on Greece)," said Peregrine & Black senior sales trader Markus Huber.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS dropped 0.9 percent. Tokyo's Nikkei 225 .N225 index fell 0.1 percent, with traders citing concern over Greece and the Fed meeting, which ends on Wednesday.

Solid U.S. data last week reinforced expectations that the Fed is on track to raise rates, possibly as soon as September. Investors will focus on any changes in Fed Chair Janet Yellen's language in a post-meeting news conference.

The euro was down 0.5 percent at $1.1208, recovering from a low of $1.1188. Euro/dollar one-month volatility, a gauge of how sharp swings in the exchange rate are expected to be, hit its highest for 3-1/2 years.

The single currency also hit its lowest in nearly two weeks against the Swiss franc, before recovering.

Euro weakness helped push the dollar 0.4 percent higher against a basket of major currencies .DXY.

The yen was down 0.2 percent at 123.60 per dollar.

Safe-haven German 10-year bond yields fell 2 basis points to 0.83 percent while yields on Italian and Spanish 10-year bonds rose 14 and 15 bps respectively. Greek 10-year yields rose 94 bps to 12.76 percent, still a percentage point below late-April peaks.

Oil fell as the dollar firmed. Brent crude LCOc1 lost $1.3 a barrel to $62.57. Gold was steady at $1,180.60 an ounce.



(Additonal reporting by Jamie McGeever, Emelia Sithole-Matarise and Sudip Kar-Gupta in London, Lisa Twaronite in Tokyo; editing by John Stonestreet)


http://www.reuters.com/article/2015/06/15/us-markets-global-idUSKBN0OU15F20150615

 

[88m3]

Markets | Mon Jun 15, 2015 4:20pm EDT
Related: GREECE
Stocks, oil fall as Greek talks collapse
NEW YORK | BY RYAN VLASTELICA

Greek Finance Minister Yanis Varoufakis listens to a question during a parliamentary session in Athens June 11, 2015.
REUTERS/ALKIS KONSTANTINIDIS - RTX1G21U

Stock markets around the world fell on Monday, pressured by the collapse of 11th-hour talks between the near-bankrupt Greece and its creditors, with investors worried about the possibility the country could default.

Risky assets like equities and crude oil were widely lower, though major stock indexes ended off their lows of the session and the euro recovered from earlier weakness against the dollar to trade slightly higher.

Talks on Sunday between Greece and its creditors broke up after less than an hour. European Union officials said Athens had offered no new concessions to secure the funding it needs, while Athens said it would not give in to demands for more pension and wage cuts. Greece must repay 1.6 billion euros ($1.8 billion) to the International Monetary Fund by mid-year.

"This market is moving toward the position of an increasing probability that there is going to be a Greek default," said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont. "We've never had a country part of the euro currency system default, so we don't really know what the impacts are going to be."

The Dow Jones industrial average .DJI fell 107.54 points, or 0.6 percent, to 17,791.3, the S&P 500 .SPX lost 9.67 points, or 0.46 percent, to 2,084.44 and the Nasdaq Composite.IXIC dropped 21.13 points, or 0.42 percent, to 5,029.97. The benchmark S&P earlier fell 1 percent before recouping about half of that decline in afternoon trading.

The all-country MSCI International ACWI Price Index .MIWD00000PUS fell 0.7 percent, while the pan-European FTSEurofirst 300 .FTEU3 closed down 1.6 percent, pressured by losses in bank stocks. The Hang Seng index .HSI in Hong Kong ended 1.5 percent lower. Both European and Asian markets closed prior to the partial recovery in the United States.

The CBOE Volatility index .VIX, a measure of U.S. investor anxiety, rose 11.7 percent, while a gauge of European stock market volatility .V2TX popped 10.2 percent and hit its highest since January.

U.S. Treasury yields fell after New York manufacturing data disappointed and on concerns of a Greek default and possible ejection from the euro zone. The benchmark 10-year U.S. Treasury note US10YT=RR rose 7/32 in price, pushing the yield down to 2.3559 percent.

In the currency market, the euro EUR= rose 0.15 percent against the U.S. dollar, moving to $1.1284 and recovering from an earlier low of $1.1188. The U.S. dollar index .DXY, which measures the greenback against a basket of currencies, fell 0.21 percent. The yen JPY=was flat against the dollar.

Investors were looking ahead to a meeting of U.S. Federal Reserve policymakers this week, and especially towards their statement after the two-day meeting ends on Wednesday.

Strong U.S. data last week has reinforced expectations that the central bank is on track to raise interest rates, possibly as soon as September. Investors will focus on any changes in Fed Chair Janet Yellen's language at a post-meeting news conference.

U.S. crude futures CLc1 settled at $59.52 per barrel, down 0.7 percent, while Brent LCOc1 settled down 2 percent at $62.61.

Gold XAU= rose 0.5 percent on the day while silver XAG= rose 1 percent. Copper CMCU3 fell 1.6 percent.





(Additional reporting by Rodrigo Campos; Editing by Nick Zieminski and Bernadette Baum)


http://www.reuters.com/article/2015/06/15/us-markets-global-idUSKBN0OU15F20150615


I'm sure the usual suspects will make excuses for the Greeks

 

[Futuristic Eskimo]

"If Greece leaves the euro zone, euro zone participation will no longer be irreversible. Euro zone participation may even become an issue in elections in other euro countries where euroskeptic parties are gaining ground, such as in Spain later this year," said Ruth van de Belt, investment strategist at Kempen Capital Management.

This, in my mind, is the big issue. The euro losing value is irrelevant, as the ECB is actively trying to devalue anyway, and any spike in yields gives them more room to buy up bonds.

 

[Domingo Halliburton]

I don't know how big their bond market is but the total market cap of their stock market is less than $80 billion.

been odd movements in the euro though even after they had terrible headlines today come out.

 

[Dafunkdoc_Unlimited]

This is outside my areas of interest so excuse the ignorance of this question: Why should I care?​

 

[Domingo Halliburton]

This is outside my areas of interest so excuse the ignorance of this question: Why should I care?​

could possibly be the beginning of the end of the Euro. Probably doesn't affect you in anyway. If you own stocks and/or bonds through a retirement plan they're being adversely affected probably only for the short term though.

 

[88m3]

Tsipras Lashes Out at Creditors as Merkel Seeks Greek Solution
by Eleni ChrepaArne Delfs
June 16, 2015 — 8:32 AM EDTUpdated on June 16, 2015 — 9:46 AM EDT




Prime Minister Alexis Tsipras hurled criticism at Greece’s creditors, accusing the International Monetary Fund of “criminal” responsibility for his country’s predicament.

Addressing lawmakers in Athens on Tuesday, Tsipras gave no sign of backing down in the standoff over Greece’s bailout. Instead, he blasted the IMF’s adherence to austerity and accused the European Central Bank of using tactics that were akin to “financial asphyxiation.”

“The situation in which we find ourselves today is that IMF positions prevail when it comes to the strictness of austerity measures asked, while at the same time EU positions prevail when it comes to the denial for any discussion about Greek debt sustainability,” Tsipras, 40, said.


Tsipras’s rhetoric further diminishes the chances that the Greek government will be able to bridge the divide with its creditors in the IMF, the ECB and the European Commission any time soon. With two weeks until Greece’s euro-area bailout expires on June 30, the onus on resolving the deadlock lies with a meeting of finance ministers on Thursday followed by a June 25-26 summit of European Union leaders.

IMF spokeswoman Simonetta Nardin declined comment on Tsipras's remarks.

‘Do Everything Possible’
German Chancellor Angela Merkel, speaking in Berlin at the same time as Tsipras, struck a more conciliatory tone. While she “unfortunately” saw little new to report on Greece, Merkel said she’ll “do everything possible to keep Greece in the euro zone.”

“I’m concentrating all of my energy on helping the three institutions find a solution,” Merkel told reporters.

Merkel said she was counting on the euro-area finance ministers’ meeting to end the standoff. Volker Kauder, the parliamentary leader of Merkel’s Christian Democrat-led bloc, told reporters “there’s still time until June 30 for the Greeks to present those things that can help them.”

The Athens Stock Exchange Index fell 4.4 percent on Tuesday, while the Athens Banks Index dropped 7 percent at 4:26 p.m. local time.

Greece has snubbed European pleas to submit a new proposal to avert a default, saying it was up to creditors to make the next move. The country needs to seal an accord or get an extension before the euro area’s bailout expires on June 30, or risk missing payments on its debt of about 313 billion ($352 billion) euros.

‘Need a Miracle’
“We need a miracle to resolve this next weekend,” Finnish Prime Minister Juha Sipila told reporters in Helsinki.

While Europe’s leaders seek a solution to Greece’s funding difficulties, they also have unofficially discussed a possible default, Sipila said. Talk of an emergency leaders’ summit has so far not advanced to more formal planning stage, according to a creditor official who spoke on condition of anonymity.

Finance Ministry officials from the 19-nation euro zone are due to hold a Greece call on Tuesday afternoon.

With both sides digging in, some euro-area officials publicly raised the prospect of Greece’s exit from the currency region.

Michael Grosse-Broemer, the parliamentary whip for Merkel’s party, said on Tuesday that a Greek exit from the euro area is possible if a “solid” agreement doesn’t emerge.

“This permanent position of denial is for me and many others in the caucus very difficult to understand,” he told reporters in Berlin.

Government backers plan to rally on Wednesday night at the central square in Athens.

In his speech, Tsipras warned that Europe must consider the euro-area’s future if it insists on imposing terms that are deepening Greek woes.



“I believe we are entering the final stretch,” he said. “One could say real negotiation only begins now.”

Read this next:

• Greek Showdown Puts Merkel's Teflon Legacy at Risk
• Greek Deadlock Has Leader Hoping for Miracle to Avoid Default
• Tsipras Is Out of Options and Time
• Timeline: What's Coming Next for Greece?
• QuickTake: Greece's Fiscal Odyssey

http://www.bloomberg.com/news/artic...tors-for-greek-woes-as-merkel-sees-little-new




They've got a lot of nerve

 

[Domingo Halliburton]

Safra Bank's odds:

1) Disorderly default: 35% likelihood

Greece defaults, but pays maturing bonds and loans solely on basis of cash position; creditors would have incentive to continue talks to prevent a total loss. Capital controls would be necessary to keep Greece in euro

2) Orderly default, within euro: 25%

Greece defaults, with prospect of new talks with creditors, who want part of the debt serviced in return for aid that would allow Hellenic Republic to keep euro. Capital controls would be likely; Greece might have to issue IOUs for some domestic payments

3) Interim solution: 20%

Eurogroup offers a bridging loan, which prevents Greece defaulting on its debts this summer

4) “Sticky-end” or orderly default, with euro-exit: 15%

Greece makes a clear break with creditors, embarks on its own monetary-policy course

5) Happy ending: 5%

Greece agrees on M-T adjustment program, which enables it to return to stronger growth path

 

[88m3]

Juncker says Greece is 'misleading' voters over Greece

• 2 hours ago
  
• From the sectionBusiness

Greece has been warned it is running out of time
Greece isn't any old troubled debtor

• Is Greece close to Grexit?

• What you need to know

• In depth report

Jean-Claude Juncker has accused the Greek government of misleading voters as Alexis Tsipras said its creditors were trying to "humiliate" the country.

The European Commission president said the government had not told the truth about its bailout proposals.

"I am blaming the Greeks [for telling] things to the Greek public which are not consistent with what I've told the Greek prime minister," Mr Juncker said.

Mr Tsipras said the IMF bore "criminal responsibility" for austerity measures.

Demands by its lenders for more cuts were politically motivated, the Greek leader added.

Greece needs to strike a deal with its creditors before the end of June or face defaulting on payments of €1.6bn (£1.5bn) due to the IMF.

Mr Tsipras had earlier said the main factor blocking a deal were differences between its European and IMF creditors over debt restructuring.

"The big contradiction is the IMF's presence, which wants measures and a restructuring, [whereas] the others want measures but no restructuring," he said. "They want an a-la-carte IMF."

He said he wanted a deal that would end talk of a Greek eurozone exit, but that "the mandate we have got from the Greek people is to end austerity policy".

The Greek stock market fell 4.7% on Tuesday, following similar falls on Monday and last Friday.

Elsewhere in Europe, the FTSE 100 in London closed flat after falling 1.1% on Monday, while the Dax in Frankfurt and the Cac 40 in Paris both closed up 0.5%.

Meanwhile, White House spokesman Josh Earnest said that both Greece and its creditors should aim to restore the Greek economy without disrupting global financial markets.

In Germany, a senior member of Chancellor Angela Merkel's Christian Democrat (CDU) party said that a Greek exit from the eurozone would result if Athens failed to present a convincing economic reform package.

'State of denial'
Michael Grosse-Broemer, the CDU's deputy floor leader in parliament, said: "In the event a solid reform package is not presented, then a 'Grexit' would have to be accepted if necessary."

He said it was up to Greece to give up its "state of denial", adding: "I'm not so sure anymore if the Greek government is really interested in averting damage for the people of Greece."

In another development on Tuesday, the European Court of Justice ruled the European Central Bank (ECB) had not acted unlawfully in 2012 when it said it stood ready to buy government bonds.

Germany objected to the ECB's announcement of a bond-buying programme, despite the fact it was never used, saying it contravened EU law.

The action of the ECB at the time helped to calm markets which, at the time, were being buffeted by one crisis after another.

Greece in numbers
€320bn

Greece's debt mountain

€240bn

European bailout

• €56bn Greece owes Germany
  
  
• 177% country's debt-to-GDP ratio
  
  
• 25% fall in GDP since 2010
  
  
• 26% Greek unemployment rate
  

Source: ECB, IMF, Greek National Statistics Agency
Reuters
http://www.bbc.com/news/business-33146018

 

[88m3]

Five Years of Greek Misery Laid Bare in Five Depressing Charts
by Lorcan Roche KellyMarcus Bensasson
June 18, 2015 — 3:17 AM EDT


Alexis Tsipras's determination to resist the fiscal measures that creditors are asking of his government stems from the devastating impact on Greece of five years of austerity.

Unemployment has been at Great Depression levels for years as the country has seen a quarter of its gross domestic product wiped out. The severity of the losses in income and asset values that Greeks have suffered point to a daunting road ahead for the country, whatever the outcome of the current standoff.

While more than two years of falling consumer prices has now made Greece a byword for deflation, the cost of living has only come down slowly. VAT hikes kept inflation the highest in the euro area early on in the crisis.


Budget austerity was inevitable in a country where the budget deficit ballooned to more than 15 percent of GDP. Still, the view exists that the current stand-off may have been caused by Greece's creditors' insisting on adherence to fiscal targets at the expense of growth-boosting reforms.

"Liberalisation and reforms should have been frontloaded, rather than austerity," said Michael Michaelides, a fixed-income strategist at Royal Bank of Scotland Group Plc in London. "This was done to minimize the upfront cost to Europe rather than with a long-term view of what would have made the program a success."

More than the plunge in Greek financial markets, declining house prices have also sapped the value of the main asset class owned by Greek households.

For the country's long-term rebuilding, the biggest loss may be the loss of human capital. With fewer jobs paying out falling salaries, Greece lost 4% of its population to emigration between 2010 and 2013. If the same thing happened to the U.S. it would be the equivalent of losing the entire populations of both New York City and Los Angeles.

http://www.bloomberg.com/news/artic...ek-misery-laid-bare-in-five-depressing-charts

 

[88m3]

I was watching a f24 debate on Greece this afternoon and they were talking in regards to the visit by the Greek PM to Russia yesterday and one of the guests laughed and explained the previous PM did the same thing years ago when Putin at the time was PM, when the Greek PM brought up a bailout/funding all Putin wanted to discuss was Greece buying Russian weapons.

 

[Deezy314619]

Trying to comprehend what all this is as I don't really understand yields, bonds, etc. I know Greece is/been in a similar condition as the US with their recession. I see somebody said 'the beginning of the end' for the Euro? Does the economic situation Greece is in affect the rest of the world like that? How bad is their recession compared to the US (I ask that knowing that Greece is substantially smaller than the United States)? And finally anyone care to spitball the future of Greece, Europe, the world with how things are economically across the globe

 

[Domingo Halliburton]

Trying to comprehend what all this is as I don't really understand yields, bonds, etc. I know Greece is/been in a similar condition as the US with their recession. I see somebody said 'the beginning of the end' for the Euro? Does the economic situation Greece is in affect the rest of the world like that? How bad is their recession compared to the US (I ask that knowing that Greece is substantially smaller than the United States)? And finally anyone care to spitball the future of Greece, Europe, the world with how things are economically across the globe

all governments issue debt (bonds). the yield (the interest you get for lending them money) will increase when it is considered more risky. just like any loan if you have shytty credit you get higher interest rates because you are riskier. Greece is looking like they will default and therefore becoming more risky so the yields are going up. Investors are demanding higher rates to take on this risk.

Greece has a huge public sector and along with it huge pension obligations they can't pay for anymore without borrowing tons of money from institutions like the IMF, the European Central Bank and the European Commission among others.

Like you mentioned they are relatively small when you look at it on a global scale. However they are apart of the Eurozone meaning they use the Euro as a currency. Them defaulting on their loans means most likely they will get kicked out of this union and the worry is this will spread to other heavily indebted nations like Italy and Spain which also use the Euro. Which could spell big trouble for the future of the Euro as a currency and ultimately the European Union as a united bloc of countries.

While this may not have a huge impact in other parts of the world it will probably affect stock and bond markets negatively for the short term, longer if it spreads.

The financial system is built on confidence and the world is losing confidence in Greece and its government. When you lose this confidence people stop investing and pull their money.

 

[newworldafro]

Wait for that "bail in" when they start reaching into personal savings accounts.... approved

 

[88m3]

1 Billion in capital flight from Greece yesterday.