World economy talk

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Greece govt to run out of money in Oct

ekathimerini.com | Prospect of empty coffers looms large

The government is facing the possibility of not being able to pay wages and salaries in October if its international creditors do not approve the pending 8-billion-euro sixth installment immediately.

The country’s foreign lenders have made disbursement conditional on the government’s adoption of new measures that will target the collection of at least 1.7 billion euros. Without the sixth tranche, the public purse will be 1.5 billion euros short on October 17.

The prospect of a freeze in payments appeared even more serious on Thursday, after Greek commercial banks failed to cover the sum of 300 million euros of supplementary, noncompetitive bids for Tuesday’s auction of T-bills, providing only 155 million. The shortfall is interpreted as a clear message by banks to the government that they are unwilling to fund future issues of T-bills.

The gravity of the situation is indicated by the fact that the government has frozen all disbursements apart from salaries and pensions.

[Monseratto]

EUD falling slo-mo

[tidus1203]

Juergen Stark (a former Bundesbank hawk) resigned from the ECB... They say its personal reasons. The rumor is he is not satisfied and fiercely oppose the bond buying of Italian bonds by the ECB...

Euro reacting to it. Good thing last week I sold all my Euro and swapped them for CAD...

[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.

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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...

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