World economy talk

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US 10 yr yield 1.75%

a bit lower is record low

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Spain 10 yr 6.5%

Italy 10 yr 6%

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re this:

Central bank head George Provopoulos told Papoulias that Greeks have withdrawn as much as 700 million euros

update: that's just one day

5 billion euros have already been withdrawn from Greece banks since May 6

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They picked leaders that has polarized their goverment, and then abandon their banking system...that's greek patriotism.

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NYMEX Crude

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Brent US$ 110, NYMEX US$ 93...

Greece and Oil

Oil dropped in New York to the lowest price in more than six months after U.S. crude stockpiles grew and talks to form a coalition government in Greece collapsed, raising concern that the region's debt crisis will worsen.

"We have demand destruction at the same time that supply risks are being relieved," said Hakan Kocayusufpasaoglu, chief investment officer at Archbridge Capital in Zug, Switzerland, who predicts that commodities will recover in the second half of the year. "What took the market by surprise is how quickly the European economic situation deteriorated. If Greece leaves, it sets a precedent, and the consequences for Europe would be catastrophic."

"Demand destruction is back on the agenda," said Jonathan Barratt, chief executive of Barratt's Bulletin, a commodity- markets newsletter in Sydney. "The market is going to remain weak over the next month or so until we get some clarity of what's happening in the world. The Greek turmoil is a problem."

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^^

it's coz of flight to safety. sell stocks&commodities, buy USD

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Brent-WTI spread widens

very high crude inventory at Cushing

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ECB stops operations with some Greek bank: sources | Reuters

(Reuters) - The European Central Bank has stopped monetary policy operations with some Greek banks as they have not been successfully recapitalized, euro zone central bank sources said on Wednesday.

[Monseratto]

It's like saying the house is already on fire but it's not yet burned out...

Meanwhile, Greece's president Karolos Papoulias has taken a similar tone in that the withdrawals are frightening but not a sign of mass panic. "Of course there’s no panic but there’s great fear which can evolve into panic,” the president said. Not the most reassuring words but I guess that's how they do business in Greece.

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Japan

Japan GDP Rebounds On Government Spending, Strong Domestic Demand - WSJ.com

TOKYO—Japan's economy grew an annualized 4.1% in the January-March quarter as resurgent domestic demand and government spending helped fuel recovery from last year's natural disasters and supply chain disruptions that suppressed growth.

The result beat expectations. Economists surveyed by Dow Jones Newswires had forecast that Japan's real, or price-adjusted, gross domestic product would expand 3.5% from the October-December quarter.

The GDP figures released Thursday by the Cabinet Office show that domestic consumption and government outlays for reconstruction from last year's earthquake and tsunami disaster is boosting the economy at a time of international vulnerability for export-dependent Japan as Europe's still unresolved debt crisis weighs on the global economy.

On a non-annualized basis, GDP expanded 1.0% in the first quarter from the fourth, according to the data.

One major driver of the first quarter expansion was public investment, or government spending, which grew 5.4% on quarter after having contracted in the two previous quarters.

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Bankia clients pull out over 1 bln euros -report | Reuters

May 17 (Reuters) - Clients of troubled Spanish bank Bankia, nationalized last week, have taken out over 1 billion euros ($1.3 billion)from their accounts since last Wednesday, El Mundo newspaper reported on Thursday citing information from a board meeting held yesterday and seen by the paper.

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talk Moody's to downgrade Spain banks

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Moody's downgrades 16 Spanish banks | Reuters

(Reuters) - Moody's Investor Service carried out a sweeping downgrade of 16 Spanish banks on Thursday, including Banco Santander, the euro zone's largest bank, citing a weak economy and the government's reduced ability to support troubled lenders.

[Monseratto]

Back in recession....

MADRID: Spain tumbled into recession and European stock markets and the euro fell Thursday as Greece installed a crisis government to tackle its crippling debt, EU leaders prepared for talks and analysts raised the spectre of a run on eurozone banks.

"Markets are worried about eurozone bank deposit runs and an escalating banking crisis," London-based VTB Capital economist Neil MacKinnon told AFP.

Heavy withdrawals of deposits have been reported in Greece and Spain, and top European Union leaders were to hold a videoconference later in the day.

They were initially to discuss an upcoming G8 meeting of industrialised countries but were now faced with a serious deterioration of the situations in Greece and elsewhere across the eurozone.

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US 10 yr yield

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Germany 10 yr yield below 1.4%!

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Greece's foreign bank exposure looks miniscule compared to "too big too fail" Spain...

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Greece's foreign bank exposure looks miniscule compared to "too big too fail" Spain...

what makes Spain dangerous are its banks

the banks have tons of bad loans

the govt will have to bail out the banks when they start failing

then the govt will have to be bailed out

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i'm watching Spanish bank CatalunyaCaixa