World economy talk

[uls]

RE MF Global

hundreds of millions of dollars of customers' money missing

[Monseratto]

After all the hard work twisting the arms of the private debt holders...

Greece will hold a referendum on a new European Union aid package intended to resolve the country's debt crisis, Prime Minister George Papandreou says.

Last week eurozone leaders agreed on a 100bn-euro loan (£86bn; $140bn) to Athens and a 50% debt write-off, in a effort to tackle the euro crisis.

But there have been large-scale protests in Greece against austerity measures demanded by the EU.

Analysts say a referendum could derail the wider deal on the euro debt crisis.

The Greek rescue package is a key part of the agreement reached last week after marathon talks between eurozone leaders.

They said banks holding Greek debt accepted a 50% loss, the eurozone bailout fund will be boosted to about 1tn euros and banks will have to raise more capital.

Asian markets fell on Tuesday amid renewed worries about the eurozone. The main indexes in Japan, Hong Kong and Australia were all down by at least 1.4%.

Benchmarks in Singapore, India and Indonesia were also down.

People rule

Opinion polls in Greece show that most people do not support the austerity deal.

Mr Papandreou told a meeting of his governing Socialist party that Greek people would have the final say on the package, which is designed to reduce Greek debt by about 100bn euros.

"The command of the Greek people will bind us", he was quoted as saying by AFP news agency.

He set no date for the referendum, but indicated that it would be held after details of the deal have been finalised with the EU and the country's creditors.

It is a big gamble for Mr Papandreou, who will argue that it is in Greece's national interest to support the deal, the BBC's Europe editor Gavin Hewitt reports.

But our correspondent says that many people in Greece say they prefer the chaos of default to years of hardship.

The junior party in Germany's governing coalition has criticised the referendum plan.

The parliamentary leader for the Free Democrats, Rainer Bruederle, said a No vote would mean the Greek government was declaring bankruptcy.

"This sounds to me like someone is trying to wriggle out of what was agreed - a strange thing to do," he told the Deutschlandfunk radio network.

The referendum is another hurdle for the eurozone to get over, says the BBC's Matthew Price, in Brussels.

It comes at a bad time for the eurozone and those who hoped the crisis was being contained, he adds.

Analysts say the promise of a referendum allows Mr Papandreou's government, which has born the brunt of public anger over the austerity measures, to pass responsibility for the country's future to the Greek public.

"The new agreement will be submitted to parliament for approval and then submitted to the judgment of the Greek people," Finance Minister Evangelos Venizelos told the Antenna TV channel.

"The Greek people can, of course, say no but must bear in mind the consequences of that decision."

The CDS will be worth something afterall. The Greeks are willing to shoot themsleves on the foot...

[Monseratto]

Europe Markets are crashing...CAC and DAX down more than 5%.

NEW YORK, Nov 1 (Reuters) - U.S. stocks were set to slide at the open on Tuesday as the deal to rescue Greece and prevent a wider sovereign debt crisis was thrown into disarray and as Asian economic data reignited fears of a global slowdown.

On Monday, U.S. stocks racked up their best month in 20 years in October.

Greek Premier George Papandreou said he will put Greece's bailout deal through a referendum, potentially undoing a long-awaited agreement struck just last week and sending European stocks down 4.4 percent. The region's bank shares fell 7.9 percent to $16.2.

"The market did not see this Greek referendum coming, which is potentially a killer and could knock the wheels off the bus of the whole (European rescue) plan," said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont.

"If the Greek people were to vote for this it would give it a lot more weight," he said. "It's just the uncertainty between now and then what puts the rally in question."

[uls]

there's more than CDS to worry about if Greece decides to default entirely

50% loss becomes 100% loss

even if bondholders get paid, those who pay the bondholders suffer the loss

CDS sellers are also financial institutions

the global financial system is still fragile

Greece default will be 2008 all over again

[uls]

flight to safety

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US markets just opened and it already down just over 2%...

[uls]

3 Greece ministers ask Papandreou to cancel referendum

emergency cabinet meeting at 16:00 GMT

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if Greece defaults it could leave the eurozone

if 1 member can leave, why not another... and another

if Greece defaults there will be a chain reaction which could lead to the breakup of the EU

there will be bank runs throughout Europe

unthinkable?

[Monseratto]

Papendreou is doing a pontious pilate. Passing the buck...

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ekathimerini.com | Sixth tranche from IMF in doubt

The sixth tranche of Greece’s bailout from the International Monetary Fund is now in doubt following the unexpected call by the government in Athens for a referendum on the October 27 eurozone deal.

The IMF, which was completely taken aback by the announcement, believes that the new climate of prolonged uncertainty renders the Greek debt unsustainable, according to sources.

Given the funding conditions in the IMF charter that require a clear horizon for the next 12 months, the share of the 8-billion-euro tranche that would come from the IMF cannot be disbursed.

[Monseratto]

Papandreou is gonna get a earful later...It will an early winter in Cannes.

PARIS (Reuters) - French President Nicolas Sarkozy and German Chancellor Angela Merkel will hold an emergency meeting with Greece on Wednesday to push for a quick implementation of Athens' bailout deal, the "only solution" to its debt crisis, Sarkozy said on Tuesday.

"This announcement took the whole of Europe by surprise," Sarkozy said in a rare televised address on the steps of the Elysee palace in Paris.

"The plan ... is the only way to solve Greece's debt problem," he said after a lengthy meeting with his top ministers and the central bank governor to discuss the referendum decision.

Sarkozy said a hastily arranged meeting for Wednesday in the Riviera resort of Cannes with his German counterpart Angela Merkel, Greek Prime Minister George Papandreou, European Union and IMF officials would "examine the conditions under which the commitments made could be maintained."

Share prices of French banks and other lenders exposed to Greece and other weak euro zone countries slumped on Tuesday.

Societe Generale tumbled 16.2 percent and BNP Paribas and Credit Agricole fell more than 12 percent. They are among the most exposed to Greece through sovereign debt holdings and loans.

"We have just added fuel to the fire and we don't understand at all the decision of the Greek PM," said Marc Touati, chief economist at Assya Compagnie Financiere in Paris.

"If there is a referendum the 'no' will win. Greece is playing a suicidal game that could lead to its exit of the euro zone so there is fear on French banks, but also on (euro zone) states."

The Greek government's decision brought a sharp rebuke from a former industry minister and close ally of Sarkozy within his UMP ruling party, Christian Estrosi, who called the move "totally irresponsible."

"When we are in a crisis situation and others want to help you it is insulting to try to save one's skin rather than to face one's responsibilities," said Estrosi

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the austerity measures forced on them is very very unpopular

so Papandreou will let the people decide if they want to take the medicine or not

also decide if they still wanna stay in the EU

this threatens the EU project

if Greece can hold a referendum to decide to leave EU, other members can do the same

that scares the hell out of the EU powers

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France - Germany 10 yr spread

[Monseratto]

Greeks with squatter mentality... they blame others for something of their own making.

A cartoon by Stathis Stavropoulos, staff cartoonist for the liberal daily Eleftherotypia, which depicts Greek Finance Minister Evangelos Venizelos (C) is seen in this handout photo obtained by ******* on October 26, 2011. The dark shadow of German-driven austerity measures squeezing Greece has revived historical enmities and evoked comparisons to the massive destruction of the Mediterranean country at the hands of Nazi Germany over 65 years ago. Cartoons have sprung up depicting the European Union's "troika" as ferocious soldiers in World War Two German uniforms, and some Greeks are beginning to resent the German tourists flocking their ancient sites. Stavropoulos has drawn dozens of such cartoons in recent months, often showing Venizelos giving the Nazi salute "Sieg Heil" (Hail Victory) to a soldier. "I used the German uniforms symbolically," cartoonist Stathis Stavropoulos told ******* through an interpreter. They show that what Germany did not manage with weapons during World War Two, it is now trying to do through economic means," he said.

A man displays a postcard-sized poster depicting German Chancellor Angela Merkel in a Nazi uniform with a swastika surrounded by the EU stars, in Athens October 28, 2011. Despite a deal clinched on Thursday at an EU summit to cancel half the value of Greece's 200 billion euro debt in the hands of private bondholders, many Greeks are deeply resentful of what they see as foreign meddling in their affairs, reviving memories of the wartime Nazi occupation. EU paymaster Germany, which has been vocal in demanding economic and fiscal reforms in return for its financial support, has become a target for demonstrators' derision. The accompanying words read "From Hitler to Merkel" and "Citizens Movement Porta-Porta".

[eld]

Greece hasn't been relevant since they were invaded by Alexander the Great.

Andrea Merket = really born on HItler's birthday.

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people ask why Greece matters

Greece is small

it's not really Greece that matters. it's who Greece owes money to. some of the biggest banks in Europe are creditors of Greece

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I meant the Greeks themselves still think they're important just because they're the birthplace of democracy. The truth is they're just a laughing stock like the rest of the PIIGSU. Gusto nilang maging Germany. Buti sana kung kaya nila ang engineering prowess ng bansang yan. Hindi nga kaya ng Japan at US talunin ang Germany sila pa kaya?

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December 4 could be the beginning of the end of the EURO. Place your bets...

CANNES, France (AP) — European leaders drew a line in the sand for Greece on Wednesday, saying its referendum on a hard-won bailout deal will decide whether it stays in the eurozone — and vowing Athens will not get new aid until the result is in.

The acknowledgment that the vote — which will likely take place on Dec. 4 — could see Greece leaving the currency union is the first official admission that such an exit is possible and follows almost two years of pledges to the contrary.

The move to tie the vote to the fate of the euro is a huge gamble that could endanger the future of the currency union, the centerpiece of Europe's postwar unity, and potentially push the world economy into another recession.

"The referendum ... in essence is about nothing else but the question, does Greece want to stay in the eurozone, yes or no?" German Chancellor Angela Merkel said at a news conference together with French President Nicolas Sarkozy.

The exit of the eurozone's weakest member could trigger a dangerous domino effect that could quickly see Ireland and Portugal, the other two countries that have received bailouts, also leave the currency bloc and cause the financial collapse of Italy and Spain, which are barely hanging on.

The alternative to the new rescue deal would be a hard default by Greece within days after the referendum, potentially toppling banks across Europe and further undermining an already slowing economic recovery.

While Merkel and Sarkozy both stressed the democratic right of the Greek people to decide its own destiny, Jean-Claude Juncker, the prime minister of Luxembourg and chairman of the Eurogroup, was more direct.

"Greece had 8 billion — Greece has lost 8 billion after having made a decision to put all these questions to a referendum," he told journalists. "That's a pity."

[Monseratto]

China steps back from the ESFS.



BBC News - China refuses to commit to EFSF amid Greek concerns

3 November 2011 Last updated at 01:26 GMT

China has said it cannot commit to investing in the European Financial Stability Fund (EFSF) until the situation with Greece has been clarified.

European leaders hoped that China would buy EFSF bonds, injecting capital in the region's financial markets.

The EFSF was one part of a three pronged rescue plan put together to solve eurozone's debt crisis.

Last week, eurozone leaders agreed to boost the EFSF capacity to 1tn euros.

European leaders had been seeking investment from China, which has $3.2tn (£2tn) in foreign exchange reserves.

"The fund has not established details of its investment options so we still can't talk about the issue of investing." Zhu Guangyao, China's deputy finance minister.

[Ry_Tower]

December 4 could be the beginning of the end of the EURO. Place your bets...

Greeks would vote against the austerity, Greece would fall! Greek PM would resign!

Euro would be a warzone (of separatist)!