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Monthly Archives: May 2011

Jean-Claude Juncker Vows to Not Let Greece Fail; Bailout Package Expected by the End of June

“European Union leaders will decide on additional aid for Greece by the end of June and have ruled out a “total restructuring” of the nation’s debt, said Jean-Claude Juncker, head of the group of euro-area finance ministers.

Inspectors from the EU, the International Monetary Fund and the European Central Bank are set to wrap up a review of Greece’s progress in meeting the terms of last year’s 110 billion-euro ($158 billion) bailout in coming days. The EU will then formulate its plan for further aid to Greece, which remains shut out of financial markets a year after the rescue package.

“We are waiting for their final judgment,” Juncker, who is also Luxembourg’s prime minister, said yesterday in Paris after meeting with French President Nicolas Sarkozy. “Their position will partly determine our position, so it’s too early. We will try to solve the Greek problem by the end of June.”

Under the terms of the rescue package, Greece was due to return to financial markets and sell about 30 billion euros of bonds next year. With its 10-year bonds yielding 16.4 percent, more than twice that of the time of the bailout, the EU has indicated Greece will need more aid to plug its financing gap. The IMF has threatened to withhold its share of the payments until the EU explains how Greece will be funded.”

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The Euro Bounces on Kicking The Greek Debt Can Down the Road

“Stocks rose around the world, paring their worst monthly performance since August, and the euro strengthened amid speculation nations will pledge more aid to Greece. The cost of insuring bank debt fell the most in six weeks, while U.S. index futures and commodities gained.

The MSCI World (MXWO) Index advanced 0.7 percent at 6:50 a.m. in New York, paring this month’s decline to 3.2 percent. Standard & Poor’s 500 Index futures rallied 1 percent. The euro appreciated to a three-week high against the dollar, and the yen fell against its major peers. The yield on the 10-year German bund climbed seven basis points, while Greek yields slid 30 basis points. Copper increased for a second day and wheat dropped.

European Union leaders will decide on a new aid package for Greece by the end of next month, Luxembourg’s Jean-Claude Juncker, who leads the group of euro-area finance ministers, said yesterday in Paris. More than $1.8 trillion has been erased from the value of stocks worldwide this month as evidence mounted that the U.S. economic recovery is slowing and EU officials struggled to contain the region’s debt crisis.

“There’s a degree of confidence that cooler heads will prevail and the next round of assistance will be forthcoming” for Greece, said Robert Rennie, chief currency strategist in Sydney at Westpac Banking Corp.

The Stoxx Europe 600 Index climbed 0.9 percent as eight shares rose for every one that declined and all 19 industry groups advanced. Alpha Bank SA and EFG Eurobank Ergasias SA led a rally in Greek banks, surging more than 5 percent. BASF SE, the world’s biggest chemicals maker, jumped 3.8 percent.”

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Oil Rises For a Second Day Along With World Markets on Potential Greece Bailout Measures

“Oil rose for a second day, trimming the biggest monthly decline in a year, on signs European officials will approve more aid for Greece and as a leak shut a pipeline carrying crude to the largest U.S. storage hub.

Futures climbed as much as 1.6 percent, topping $102 a barrel for the first time since May 11, after TransCanada Corp. (TRP) closed the Keystone pipeline that runs from Alberta to Cushing, Oklahoma, where New York-traded oil is stored. The euro rose to a three-week high against the dollar, bolstering the appeal of commodities for protecting against inflation. Oil also gained on speculation consumer confidence in the U.S., the world’s biggest crude user, increased to the highest in three months.

“Bullish factors are winning this morning, with the market again being supported by the weak dollar,” said Christopher Bellew, senior broker at Bache Commodities Ltd. in London.

Crude for July delivery climbed as much as $1.58 to $102.17 a barrel in electronic trading on the New York Mercantile Exchange. It was at $102.16 at 10:49 a.m. London time.”

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Appetites Remain Strong for U.S. Debt Despite QE2 Wind Down Expectations

“The world’s biggest bond dealers are finding fewer Treasuries to sell to the Federal Reserve as its $600 billion purchase program nears an end, a signal of rising demand even as the largest buyer steps away.

The two-week moving average of bond dealers’ submissions for sales to the Fed has fallen 37 percent to $17 billion a day from the $27.3 billion peak offered in November, according to Bloomberg data. Price swings have diminished to levels last seen before the financial crisis began in 2007, helping bonds outperform stocks this month by the most since July.

Demand for government debt is increasing even as the central bank prepares to conclude its purchases, the size of the market has doubled to $9.1 trillion and Republicans in Congress spar with President Barack Obama over the nation’s debt ceiling. By offering fewer bonds to the Fed, dealers are signaling that any rise in yields after the end of so-called quantitative easing will be limited and that Obama faces no impediment to funding the $1.5 trillion budget deficit.”

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Bears Lighten Up Position on the Greenback

“Investors are closing bearish bets on the dollar by the most since December, helping to lift the U.S. currency to an eight-week high, on speculation the global economic recovery is losing momentum.

Futures traders cut bets for a decline in the U.S. currency versus the euro, yen, Swiss franc and the Canadian dollar, and raised those for a gain in the greenback versus the British pound, according to May 24 data from the Commodity Futures Trading Commission in Washington.

Confidence in the outlook for the nations sharing the euro fell to a seven-month low and U.S. consumer spending rose by less than economists forecast in April, reports showed on May 27. The Dollar Index, which tracks the greenback against the currencies of six major trading partners, has increased 2.7 percent this month.

“The short-squeeze on the dollar is waning to an extent,” said Niels Christensen, chief currency strategist at Nordea Bank AB in Copenhagen. “Uncertainty in the euro is causing a lot of investors to unwind their long positions in the euro, and that’s causing a natural flow back into dollars. A lot of positions have also come off in the riskier emerging market and commodity- based currencies.”

The Dollar Index dropped to 74.581 as of 1:53 p.m. in Tokyo from 74.958 in New York yesterday. The gauge has risen 2.6 percent since falling to a 2 1/2-year low of 72.696 on May 4. It climbed to 76.366 on May 23, the strongest since April 1.”

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Russia Lifts Wheat Export Ban; Prices Fall Sharply

“Wheat tumbled the most in a week after Russia, once the second-biggest exporter, said it will allow grain shipments to resume after a 10-month ban.

Russia won’t extend beyond July 1 its grain-export ban, implemented after the worst drought in 50 years slashed production, Prime Minister Vladimir Putin said May 28. Wheat prices have gained 75 percent in the past year, partly after Russia’s prohibition on grain exports started on Aug. 15.

“The drop today is because of Russia,” said William Adams, a fund manager at Resilience AG in Zurich. “This is a major development.” Russia being off the market last year caused shortages, he said.

Wheat futures for July delivery dropped 20.75 cents, or 2.5 percent, to $7.99 a bushel at 10:38 a.m. London time on the Chicago Board of Trade. The price was little changed for the month. Milling wheat for November delivery gained 0.9 percent to 241 euros ($347.50) on NYSE Liffe in Paris.”

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Greeks Yank Billions Out Of Country’s Banks As Crisis Worsens

Mike “Mish” Shedlock, Global Economic Trend Analysis

Courtesy of Google translate please consider They lifted 1.5 billion Thursday and Friday from bank

Only a few steps separating from Friday to yesterday’s mass panic! From early morning to counter the banks there is serious pressure for withdrawals of deposits, especially small amounts. The pressure on banks began last Wednesday, culminating in yesterday’s day.

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Has a run on  Credit Anstalt the Greek Banks begun?

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Yet More Fun With Corporations

“Over the last two years, the Obama administration has approved a whopping $34.4 million in compensation to the top six executives of the financially troubled Fannie Mae and Freddie Mac mortgage giants while lacking basic protections to ensure such compensation is warranted, a federal watchdog found.

The largesse flowed to the six executives even though the two companies they run struggle to staunch billions of dollars in losses, remain in government conservatorship, and are required to repay taxpayers for assuming the companies’ liabilities during the mortgage crisis. Fannie and Freddie are tapping Treasury Department funds each quarter to help pay 10 percent dividends owed to the U.S. government.”

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Fun With Bailed Out Corporations

“When General Motors and Chrysler were bailed out by the Obama administration, they received not only billion-dollar deals, but also a get-out-jail-free-card for auto liability lawsuits.

Today, the newly reborn car makers don’t have to pay the plaintiffs who won lawsuits before the government-arranged bankruptcies. These legal cases stemmed from defects in GM and Chrysler cars that resulted in accidents that left passengers dead or permanently disabled.”

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Oxfam: Food Prices to more Than Double Without Restructuring

“The prices of staple foods will more than double in 20 years unless world leaders take action to reform the global food system, Oxfam has warned.

By 2030, the average cost of key crops will increase by between 120% and 180%, the charity forecasts.

Half of that increase will be caused by climate change, Oxfam predicts, in its report Growing a Better Future.

It calls on world leaders to improve regulation of food markets and invest in a global climate fund.

“The food system must be overhauled if we are to overcome the increasingly pressing challenges of climate change, spiralling food prices and the scarcity of land, water and energy,” said Barbara Stocking, Oxfam’s chief executive.

Women and children

In its report, Oxfam highlights four “food insecurity hotspots”, areas which are already struggling to feed their citizens.”

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LinkedIn Got Screwed by Wall Street

Please respect FT.com’s ts&cs and copyright policy which allow you to: share links; copy content for personal use; & redistribute limited extracts. Email [email protected] to buy additional rights or use this link to reference the article – http://www.ft.com/cms/s/2/48e72d56-8ae4-11e0-b2f1-00144feab49a.html#ixzz1NraaavAa

“Whenever a stock price goes up as much as it does with LinkedIn, you assume the IPO was mispriced and the bankers screwed up,” said Mr Thiel, an investor in LinkedIn since its launch. “There continues to be a certain antipathy by Wall Street banks toward Silicon Valley companies where they don’t quite believe it’s real

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Happy Memorial Day: BBQ Files

[youtube:http://www.youtube.com/watch?v=Vuh2UyC1vAo 450 300] [youtube:http://www.youtube.com/watch?v=B8iqA0p6IOQ&feature=related 450 300] [youtube:http://www.youtube.com/watch?v=SQBzT5BezmY&feature=related 450 300]

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Mark Mobius: Global Derivatives Exceeds 10 x Global GDP…With That Volume of Bets There Will Be Volatility and an Equity Crises

“In an almost verbatim repeat of Carl Icahn’s words of caution which we noted yesterday, Templeton’s legendary chairman Mark Mobius said that “another financial crisis is inevitable because the causes of the previous one haven’t been resolved” during a luncheon (menu included herb crusted chicken breast with cheese and tomato sauce, mashed potato and green vegetables, seasonal salad) at the Foreign Correspondents’ Club of Japan in Tokyo. Bloomberg reports: “There is definitely going to be another financial crisis around the corner because we haven’t solved any of the things that caused the previous crisis,”

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Greece is Facing a Run on the Banks

“Courtesy of Google translate please consider They lifted 1.5 billion Thursday and Friday from bank

Only a few steps separating from Friday to yesterday’s mass panic! From early morning to counter the banks there is serious pressure for withdrawals of deposits, especially small amounts. The pressure on banks began last Wednesday, culminating in yesterday’s day.

It is significant that Thursday and Friday, banking sources estimate that rose around 1.5 billion euros in total! According to the same month in May estimated the outflow estimated at least 4 billion from 2 billion in April.

The majority of depositors rushed to withdraw for pensioners and small savers and amounts ranging from 2-3000 lifted until 10 -15 000 euros. Motivation in most cases it was the fear that led the country into bankruptcy, deposits frozen even temporarily left without cash, or even lose their savings.

Politicians do not seem to fully understand the risks posed by a widespread panic, not only for the stability of the banking system but for the economy and the country…..”

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Brent Falls; Possibly Indicating Tomorrow’s Trade Direction

“(Reuters) – Brent crude oil fell below $115 a barrel on Monday, heading for its first monthly decline this year, as investors weighed the prospect that Europe’s debt crisis and a sputtering U.S. economy may slow demand.

Public holidays in the United States and the UK on Monday were limiting trading volume. The U.S. driving season, when gasoline demand usually rises, traditionally starts after Monday’s Memorial Day holiday.

Brent crude slipped 28 cents to $114.75 a barrel by 11:43 a.m. EDT, trading within a narrow 76-cent intraday range. U.S. crude dropped 21 cents to $100.38.”

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