World economy talk

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Uls, ano nangyari Kay tidus?

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di ko po alam

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This doesn't look good...

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that light blue line... domestic holders... those are Spain's and Italy's banks. they borrowed money from the ECB (LTRO 1&2)

then the money is lent to their governments

foreign investors have dumped Spain's and Italy's bonds months ago

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Besides Sarkozy clinging to dear political life in the French presidential election, Greece is also holding parliamentary elections. Suffering 2 years from recession and austerity measures, guess who is gaining ground due to voter's discontent...Nazis.

ATHENS—After two years of government cutbacks brought on by Greece's debt crisis, the signs of social decay are everywhere in Athens and the mood in the capital is despondent.

Downtown Athens today is a shadow of its former self. Its streets, formerly once lined with crowded elegant stores and vibrant cafés, are now scarred by shuttered shopfronts, crime, homelessness and periodic rioting.

Businesses are closing at a record pace, and unemployment in the greater Athens area has soared to more than 23%, above the national average. Regular demonstrations have frightened away tourists, and thousands of the city's hotels and retailers are teetering on the verge of bankruptcy.

Beyond the social turmoil, this new reality presents a particular political problem for Greece's main conservative party, New Democracy, which hopes to win Sunday's parliamentary election and lead the next governing coalition. Athens has always been their stronghold, but the city's unhappy residents are abandoning them for fringe parties of the right and left, including the neo-Nazi Golden Dawn.

With such newfound supporters, Golden Dawn, using neo-Nazi rhetoric and a logo of an ancient symbol resembling the swastika, is poised to enter Parliament for the first time. Recent public-opinion pPolls show support for Golden Dawn, hovering between 5% and 6%, well above the 3% minimum threshold needed to enter Parliament and potentially securing them as many as 15 seats in Greece's 300-member legislature.

The party advocates the immediate expulsion of all illegal immigrants and "Jobs for Greeks." Its platform states that e country's borders with Turkey should be sealed with land mines. Immigrant groups have accused Golden Dawn members of abuse, beatings with iron rods and threats of reprisals when the immigrants speak out. The party denies those allegations.

Its economic manifesto includes foregoing all debt repayments, forming "special teams" to investigate corrupt practices, arresting and imprisoning politicians and state servants found guilty of economic mismanagement, nationalizing banks, and returning "to traditional family values."

Such rightist ideology until recently has won gained little traction in Greece. In the 2009 elections, Golden Dawn managed a meager just 0.23% of the vote. In 2010, it the party was able to take took a seat on the Athens city council, its first ever electoral victory. A variety of community initiatives, such as having party members escort elderly residents to the bank and providing food for the needy, those in need, have helped win over local residents.

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US April job figures are out and it is below market expectations...

Only 115,000 jobs were added to the economy in April, according to the Labor Department, nudging down the unemployment rate slightly to 8.1 percent.

The slight drop in the unemployment rate is due to the more than 300,000 unemployed people who gave up looking for work last month.

On Fox News Friday morning, Mitt Romney called the report "terrible" and "disappointing." Obama has emphasized that economic indicators are improving, albeit slowly, while Romney blames the unemployment crisis on Obama's policies. The Federal Reserve has predicted the unemployment rate will be between 7.8 and 8 percent by election day.

Earlier this week the Labor Department reported that jobless claims fell 27,000 to 365,000. That was the steepest weekly drop in a year.

About 12.5 million Americans were unemployed in April, including 5.1 million who have been looking for work for more than 27 weeks.

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risk: Greece elections

Greece has to implement an austerity plan

the EU/ECB/IMF-imposed austerity plan is very unpopular

the political parties have been distancing themselves from the austerity plan during the election campaign

question is -- after the elections, will the austerity plan still be implemented?

if not, additional bailout funds won't be released

and Greece will run out of cash

and exit the euro

[Monseratto]

First major political casualty of the Eurozone financial crises...

French socialist Francois Hollande has won a clear victory in the country's presidential election.

Mr Hollande - who polled just under 52% of votes in Sunday's run-off - spoke of his pride at becoming president.

Admitting defeat, centre-right incumbent Nicolas Sarkozy wished "good luck" to Mr Hollande.

Mr Hollande capitalised on France's economic woes and President Sarkozy's unpopularity.

The Socialist candidate has promised to raise taxes on big corporations and people earning more than 1m euros a year.

He wants to raise the minimum wage, hire 60,000 more teachers and lower the retirement age from 62 to 60 for some workers.

In his concession speech, Mr Sarkozy told supporters: "Francois Hollande is the president of France and he must be respected."

The outgoing president said he was "taking responsibility for defeat".

Hinting about his future, he said: "My place will no longer be the same. My involvement in the life of my country will now be different."

Mr Sarkozy, who has been in office since 2007, had promised to reduce France's large budget deficit through spending cuts.

He is the latest European leader to be voted out of office amid widespread voter anger at austerity measures triggered by the eurozone debt crisis.

It is only the second time that an incumbent French president has failed to win re-election since the start of the Fifth Republic in 1958.

The last was Valery Giscard d'Estaing, who lost to Mr Mitterrand in 1981.

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Greece leftist parties win majority...

New Democracy leader Antonis Samaras said he would form a national salvation government to keep the country in the euro.

But he said he would seek to "amend" Greece's controversial EU-IMF bailout agreement in order to boost growth.

Syriza leader Alexis Tsipras said he wanted to form a left-wing coalition rejecting the terms of Greece's bailouts.

"The parties that signed the memorandum (with the EU and the IMF) are now a minority. The public verdict has de-legitimised them," he said.

"Our proposal is a left-wing government that, with the backing of the people will negate the memorandum and put a stop to our nation's predetermined course towards misery."

[Monseratto]

Greece results show no clear majority...and the clock is ticking again.

Greece faces an acid test as soon as next month when it must give parliamentary approval for over 11 billion euros in extra spending cuts for 2013 and 2014 in exchange for more EU/IMF aid.

That looks like a tough task even if a new government can be formed in time, given the success of anti-bailout parties.

Under the constitution, Greek President Karolos Papoulias will give the biggest party after the election three days to form a government. If it fails, the next largest group gets a chance and so on down the line. If they all fail, new polls would be called about three weeks later.

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Greece faces an acid test as soon as next month when it must give parliamentary approval for over 11 billion euros in extra spending cuts for 2013 and 2014 in exchange for more EU/IMF aid.

looks like the scenario i described in the previous page will become a real risk

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Risk assets weaken after French, Greek elections | Reuters

risk off

TOKYO (Reuters) - Risk assets fell broadly on Monday after elections in Greece and France fuelled questions about commitments from struggling euro zone economies to pursue austerity measures, widely seen by markets as crucial to resolving the bloc's debt crisis.

France

Socialist Francois Hollande swept to victory in France's presidential election, ousting incumbent Nicolas Sarkozy who had played a key role in structuring bailout schemes for indebted euro zone members and pushed for strict fiscal policies aimed at managing huge debts, in close cooperation with German Chancellor Angela Merkel.

Greece

In Greece, election results suggested the two pro-bailout parties would struggle to renew their coalition. It put at risk the policies that have shielded Athens from bankruptcy and a euro exit, threatening the fragile political consensus that has kept Europe's currency bloc intact through more than two years of crisis.

AUDUSD


and the risk on/risk off proxy -- AUDJPY

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NYMEX Crude

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Oil Price

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Spain's banks have big exposure to the housing market

the banks are in trouble

here's why

[Ry_Tower]

^ nak nang, negative na.

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Greece political parties are still trying to form a coalition govt

if they fail to form a coalition govt there will be elections next month

Greece has to present budget cuts to the troika to get additional bailout funds next month

good luck

http://dawn.com/2012/05/09/greek-lef...mf-loan-terms/

ATHENS: The head of Greece’s radical left-wing Syriza party said Tuesday his cabinet will reject all austerity measures imposed under an EU-IMF loan deal, if he manages to form a new government.

“The public verdict has clearly nullified the loan agreement and (pledges) sent to Europe and the IMF,” Alexis Tsipras said in a televised address.

[Monseratto]

Greece political parties are still trying to form a coalition govt

if they fail to form a coalition govt there will be elections next month

Greece has to present budget cuts to the troika to get additional bailout funds next month

good luck

Greek leftist vows to reject EU-IMF loan terms | DAWN.COM

Palpak nga...

The leader of Greece's far-left Syriza bloc, Alexis Tsipras, has abandoned his efforts to form a governing coalition.

Mr Tsipras said he had failed to reach agreement with mainstream parties because of his insistence on rejecting austerity measures demanded by the EU and IMF as part of a bailout deal.

He made the announcement after failed talks with the Pasok and New Democracy parties, which support the bailout.

Pasok leader Evangelos Venizelos is now expected to try to form a coalition.

The BBC's Mark Lowen in Athens says there are serious doubts over whether Mr Venizelos will succeed - meaning a new election and a prolonged political crisis seem increasingly inevitable.

Financial chaos has sparked huge social unrest in Greece and led to a deep mistrust of the parties considered to be the architects of austerity.

An earlier attempt by New Democracy (ND) leader Antonis Samaras to form a coalition failed on Monday.

However eurozone governments agreed to give Greece another instalment of 5.2bn euros (£4.2bn; $6.7bn) to allow it to meet its immediate financial obligations.

The board of the European Financial Stability Facility said on Wednesday that an initial 4.2bn euros would be paid on Thursday, while the remaining 1bn euros would be paid out later "depending on the financing needs of Greece".