World economy talk

[uls]

again... US 10 yr yield



for a while the 10 yr yield was below 2%

that's below Lehman-panic era

[uls]

earlier tonight -- Philly Fed business activity index -30.7 from +3.2 a month ago

far below expected +3.7

[uls]

Greece bailout 2.0 in trouble

some EU countries asking Greece for collateral

no collateral no bailout

[uls]

measure of a bank's strength: tier 1 capital and tier 2 capital

tier 1 capital (or core capital) is more important. it's shareholder equity

look what's happening to BofA stock

the market is forcing BofA to raise capital

[uls]

restoration of Libya oil production should have no effect on WTI

Libya oil exports go to Europe

WTI


__________________________________________________ ______________


overreaction (Brent fell to $105 yesterday) that Libya oil will be back on the market

Libya oil production isnt gonna be restored anytime soon

Brent


Oil Rises a Second Day on U.S. Fuel Demand, Libya Crude Production Outlook - Bloomberg

Libya Revolt

The Libyan revolt, which began in February, has reduced the availability of light, sweet crude, or oil with low density and sulfur content. The country’s output fell to 100,000 barrels a day last month, a Bloomberg News survey showed. That’s less than 10 percent of the 1.6 million barrels the nation pumped in January, before the uprising.

It may take until 2012 before oil exports resume if the government falls, Emmanuel Fages, an energy analyst with Societe Generale SA in Paris, said yesterday. Goldman Sachs Group Inc. said resuming shut production will be “challenging,”according to an Aug. 22 report.

[Monseratto]

Gold broke US$ 1900...

[uls]

GLD is now the biggest ETF in the world

bigger than SPY

[Monseratto]

DOW fell 303 pts last night. DAX -4%. Another volatile week...

[Ry_Tower]

G7 vows robust action to fix global economy - Yahoo!7

G7 rich nations vowed tough measures Friday to get the global economy back on track but were short on detail and admitted the problems were so complex that a unified response was impossible.

Interesting quote.

[Monseratto]

Egyptian protesters stormed the building housing the Israeli embassy. Israeli ambassador flee Cairo. Israeli PM Netanyahu orders it's proxy Obama for help.

[uls]

rumor last night of Greece weekend default (no, there won't be a default this weekend)

BUT

Greece govt IS running out of money. it still has to receive next tranche of funding

[Monseratto]

Kick the can down the road or bite the bullet and face the music?

Germany Is Said to Prepare Plan to Assist Banks If Greece Defaults on Debt
QBy Alan Crawford - Sep 9, 2011 11:09 PM GMT+0800

Chancellor Angela Merkel’s government is preparing plans to shore up German banks in the event that Greece fails to meet the terms of its aid package and defaults, three coalition officials said.

The emergency plan involves measures to help banks and insurers that face a possible 50 percent loss on their Greek bonds if the next tranche of Greece’s bailout is withheld, said the people, who spoke on condition of anonymity because the deliberations are being held in private. The successor to the German government’s bank-rescue fund introduced in 2008 might be enrolled to help recapitalize the banks, one of the people said.

The existence of a “Plan B” underscores German concerns that Greece’s failure to stick to budget-cutting targets threatens European efforts to tame the debt crisis rattling the euro. German lawmakers stepped up their criticism of Greece this week, threatening to withhold aid unless it meets the terms of its austerity package, after an international mission to Athens suspended its report on the country’s progress.

Greece is “on a knife’s edge,” German Finance Minister Wolfgang Schaeuble told lawmakers at a closed-door meeting in Berlin on Sept. 7, a report in parliament’s bulletin showed yesterday. If the government can’t meet the aid terms, “it’s up to Greece to figure out how to get financing without the euro zone’s help,” he later said in a speech to parliament.

Credit-default swaps insuring Greek sovereign bonds jumped 212 basis points to a record 3,238, according to CMA. The five- year contracts signal there’s a 92 percent probability the country won’t meet its debt commitments.

Germany Is Said to Prepare Plan to Assist Banks If Greece Defaults on Debt - Bloomberg

[Ry_Tower]

Brent down by 1.55% but overall trend seems to me to be is still upward...

[uls]

Kick the can down the road or bite the bullet and face the music?



Germany Is Said to Prepare Plan to Assist Banks If Greece Defaults on Debt - Bloomberg

Germany has bailout fatigue

Germany is preparing for Greece default

--

2 scenarios --

Greece defaults, stays in the eurozone

Greece defaults, abandons euro, goes back to drachma

[Monseratto]

Dexia down 20 percent more...

[uls]

Italy downgraded 3 notches by Moody's

________________


US stocks strong rally in last 45 minutes of trading on EU plan to recapitalize banks

[uls]

report Dexia to be restructured

[Monseratto]

Opposite of "flash crash"...Melt Up.

(Reuters) - In less than one hour on Tuesday, the U.S. stock market surged by 4 percent -- for no apparent reason.

The last hour of trading was the most volatile final hour in two months -- and it occurred at a speed that frightens many, from experienced hedge-fund managers to mom-and-pop investors.

The late-day "melt-up" that pushed the S&P 500 index markets/index?symbol=us%21spx">.SPX out of bear-market territory might be construed as good news. But it brings back echoes of the "flash crash" that saw markets dive by several hundred points in a matter of minutes, and it's a big reason many are staying away from the market.

"Everyone is scared in both ways -- the shorts are scared, the longs are scared, everyone is scared. The high-net-worth investor is very, very scared," said Stephen Solaka, managing partner at Belmont Capital Group in Los Angeles, which manages money for independent wealth advisers and family offices.

The ostensible reason for Tuesday's move was an article published late in the day on the Financial Times website quoting the EU's commissioner for economic affairs, Olli Rehn, saying a plan was being worked out to recapitalize the region's troubled banking sector.

But Reuters reported similar comments earlier in the day, and Rehn's comments struck some people as covering old ground. Ken Polcari, a veteran of the NYSE floor at ICAP Equities, found the reasoning insufficient.

"There is no clarity -- 'no formal decision' -- just more speculation, more rumors, and more innuendo," he said of the FT article.

U.S. stocks' massive melt-up fans investor fears | Reuters

[Monseratto]

hmmm... how long before we see local copycats doing the same in Ayala Triangle Makati?

[safeorigin]

Hmmm... let me guess, all for a free lunch?