World economy talk

[uls]

risk off dude

equities selloff is relentless

[uls]

E-mini

200 day moving average

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last night (2pm NY time) CNBC reported that major banks will have to set aside only 2 to 2.5% more capital (instead of 3%)

that's on top of the minimum 7% under Basel III standards

that bit of news saved stocks from falling further

XLF (financials ETF)

[Ry_Tower]

last night (2pm NY time) CNBC reported that major banks will have to set aside only 2 to 2.5% more capital (instead of 3%)

that's on top of the minimum 7% under Basel III standards

that bit of news saved stocks from falling further

XLF (financials ETF)

Looks like it did prevent further slide. Is this because they have more cash/assets to lend to consumers?

[uls]

Looks like it did prevent further slide. Is this because they have more cash/assets to lend to consumers?

it's coz requiring banks to set aside more capital makes it tougher for them to make money

[tidus1203]

E-mini

200 day moving average

Tipping point... We are testing the March lows...

[uls]

New Zealand earthquake

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China -- banks made fewer loans in May

money supply growth slowed

[uls]

hacker group Anonymous next target -- the Federal Reserve

[ame=http://www.youtube.com/watch?v=XySGw-g2tyk]YouTube - ‪A99 OpESR Communication #2: Ctrl+Alt+Bernanke‬‏[/ame]

operation Empire State Rebellion June 14

[Monseratto]

Rock bottom...

Greece falls to S&P's lowest rated, default warned | Reuters
By George Georgiopoulos and Walter Brandimarte

ATHENS/NEW YORK | Mon Jun 13, 2011 6:49pm EDT

ATHENS/NEW YORK (Reuters) - Greece became the lowest-rated country in the world according to Standard & Poor's, which downgraded it on Monday and warned that any attempt to restructure the country's debt would be considered a default.

Greece now has a lower credit rating than countries such as Pakistan and Ecuador, which has been shut out of international markets since a 2009 default. The cost of insuring Greek debt is now almost twice as much as the price of insuring Pakistani bonds.

[uls]

Greece is now rated CCC

soon it will be SD (selective default)

[Ry_Tower]

Rock bottom...

Akala ko may some kind of bailout na. What's taking them too long to decide?

[uls]

may bailout nga. kaya lang kasama sa bailout ang pag pilit (pero voluntary daw) sa mga bondholders na tumanggap ng longer maturity bonds kapalit ng mga hawak nilang bonds na malapit na mag mature --- an event which the ratings agencies consider default

tama ang mga ratings agencies -- when you screw with the dynamics of the debt (interest payment, maturity, principal) -- it's default

[Monseratto]

Condition yan ng Germany that private creditors, including the IMF to "extend" the maturity period. Tututol talga ang IMF diyan.

[uls]

Condition yan ng Germany that private creditors, including the IMF to "extend" the maturity period. Tututol talga ang IMF diyan.

the ECB. the ECB has around 40B euros of Greece bonds

[uls]

in bond land, 5 yr Greece govt bonds are now trading at around 50% face value

that means the market thinks Greece bondholders will only be getting half their money back

[Monseratto]

Oo nga pala, ECB vs Germany... di pa guranteed yung bailout.

ECB and Germany at odds; Greece default warned
Tue, Jun 14 2011, 03:05 GMT
by Ivan Delgado Egea - FXstreet.com

The confrontation between Germany and the ECB over how to involve private-sector holders of Greek bonds in a second rescue package of Greece remains on a standstill. Ecofin/Eurogroup meeting on 20 June and the EU summit on 24 June should provide an end to the deadlock, if not, Greek defaulting on part of its debt may be a reality.

The lack of consensus between Germany and the ECB on the role of commercial banks in Greek debt relief pushed peripheral Euro zone spreads wider again on Monday, while sovereign CDS hit new highs, with Greece at stratosferic levels of 1,600 basis points now. To make the picture look even bleaker, on Monday, S&P downgraded Greek Government debt 3 notches to CCC, officially the worst credit-worthy nation on earth.

Berlin stood firm on its hard-line position and demands an extension of bond maturities, which ratings agencies and investors regard as a default. On the contrary, the ECB opposes categirically, not supporting anything leading to a ‘credit event’ or ‘selective default’. ECB’s Trichet reaffirmed on Monday that Governments are responsible for their debts, not the ECB.

Supporting the Germans, Dutch finance minister De Jager said the private sector must offer 'substantial' contribution if they are to agree to further Greek aid. This could take the form of extending debt maturities, he added. “Northern European Governments are not willing to budge on private sector involvement in return for the new rescue package” said Chris Walker at UBS.

[uls]

interesting to see how this would play out

politicians are clueless. they don't know how the market will react

people in the ECB know (it's scary)

that's why they're against debt restructuring

politicians don't understand the interconnectedness of the global financial system

a restructuring of Greece debt will trigger default insurance payouts

whoever sold default insurance on Greece bonds will have to pay up

who are the counterparties of European banks (Greece bondholders)? US banks

a restructuring of Greece debt will also cause a selloff of Portugal, Ireland, Spain, Italy bonds (massive drop in asset value)

who are holding those assets? European banks

who are the counterparties of European banks? US banks

[uls]

Sean Parker: You know what's cooler than a million dollars?

Eduardo Saverin: You?

Sean Parker: A billion dollars.

-- The Social Network

and what's cooler than a billion dollars?

News Headlines

Facebook IPO Valuation Could Top $100 Billion: Sources

Facebook, the social-networking site that is one of the most closely-watched private companies in the world, is likely to go public by the first quarter of 2012, say people familiar with the matter, at a valuation that could be pegged at north of $100 billion.

[Monseratto]

Anyone for Greek CDS?

The Greek five-year credit default swap spread continued to rise to fresh highs, according to data-provider Markit. “Volumes are very low and there’s not a lot of liquidity in the market–hence the size and speed of the moves,” said one trader.

Ahead of the U.S. open, the Greek five-year CDS spread was at 1612 basis points, 70 basis points wider than Friday’s close. CDS are derivatives that function like a default insurance contract for debt. A rise of one basis point in the cost of five-year CDS equates to a $1,000 increase in the annual cost of protecting $10 million of debt for five years.

The debate over Greece’s rescue has carried over from last week, when German Finance Minister Wolfgang Schaeuble called for “substantial” participation in a Greek debt restructuring by private sector creditors, while European Central Bank President Jean-Claude Trichet reiterated the institution’s opposition to any form of restructuring.

With no consensus in sight, the growing discord has unsettled market participants. The CDS spreads for other heavily indebted euro-zone economies were under pressure as well, although they had tightened slightly from earlier Monday.

“People are worried about the lack of resolution (to the Greek crisis),” the trader said, specifically noting protection buying on the SovX Western Europe index, Spain and Italy, where liquidity was more substantial.

The five-year CDS spread on Spain was seven basis points wider at 283 basis points, from 289 earlier. Italy was three basis points wider at 178 basis points.

The SovX Western Europe index was six basis points wider at 215 basis points, near its widest level of 222 basis points reached Jan. 10. The index dropped to 157 basis points in early April before starting its steady climb on renewed concerns about Greece.

Elsewhere, the five-year CDS spread on Portugal was 30 basis points wider at 763 basis points, while Ireland was 24 basis points wider at 736 basis points.

“Macro risk rules and keeps many investors on the sidelines, short of any clear conviction and rather reducing risk,” said Anke Richter, credit strategist at Mizuho. “Unfortunately, we cannot see this investor apathy changing unless some positive momentum either on U.S. growth or Greece comes along.”