Archive - Jun 15, 2011 - Story

• Fed Officials Discuss Explicit Inflation Target (Bloomberg)
• No Fed Shift Seen at June Gathering (Jon Hilsenrath)
• China Developers’ Outlook Lowered to ‘Negative’ by S&P as Credit Tightens (Bloomberg)
• SEC probes Merrill CDO sale (FT), Is Andrew Ross Sorkin already drafting explanation how Merrill was not, repeat NOT short anything? Or is Bank of America just not a Dealbook sponsor?
• The Economy Is Now Immune to Keynesian Crack (Peter Schiff)
• Rosenberg '99%' sure of U.S. recession (Forbes)
• China Inflation Heading for 6% Shows Danger for Wen Extending Rate Pause (Bloomberg)
• White House wants business to aid in debt cap fight (Reuters)

• Enhanced uncertainty surrounding Greek debt situation promoted risk-averse trade today
• Moody’s placed France’s top three banks, BNP Paribas, Societe Generale, and Credit Agricole, on review for a possible downgrade
• It is expected that UK’s Chancellor Osborne will endorse plans to “ring fence” retail banking businesses of UK banks today in his Mansion House speech
• ECB’s Stark and Liikanen supported private sector involvement in Greek debt, as long as it is voluntary.
• However, Fitch said an announcement of Vienna type initiative would likely trigger Greek ratings downgrade to 'C'

CPI, Industrial production, more Chinese Treasury outflows, and a few surveys.

S&P lowered its long-term credit ratings to 'CCC' from 'B' on four Greek banks--National Bank of Greece S.A. (NBG), EFG Eurobank Ergasias S.A. (EFG), Alpha Bank A.E. (Alpha), and Piraeus Bank S.A. (Piraeus). "In our view, outflows of domestic deposits could conceivably continue to intensify depending on the public's view of the impact that Greece's deteriorating creditworthiness may have on the banking system. The downgrade also reflects the significant risks to the Greek banks' capital bases that we believe may arise should the government restructure some, or all, of its debt."

The euro has fallen on international markets as the European sovereign debt crisis is deepening and appears to be reaching a dangerous denouement. European stock markets are also weaker due to serious divisions in Greece and in the EU as to how to resolve the Eurozone debt crisis and prevent contagion. Moody's has placed three large French banks on negative review based on their exposure to Greece. The problem looks increasingly intractable meaning that contagion appears more likely every day. Gold is higher against the euro, pound and Swiss franc and lower against the U.S. dollar, the yen, Kiwi and Aussie dollar. Demand continues to be very strong especially from China and India where the World Gold Council said that there is a “tidal wave” of “gold demand coming”. The dollar is firmer despite yesterday’s stern warning from Bernanke that America’s credit rating is at risk. Bernanke urged policy makers to again increase the debt ceiling – this time to over $14.3 trillion – in the hope that this will prevent a U.S. downgrade.

Greece's D-Day has arrived: June 15 may soon be the 2011 equivalent of May 6, 2010 when the reaction to the realization that Greece was insolvent hit the population, together with a peak in hostilities, not to mention the US market flash crashing. In addition to a general strike, thousands are already packing the central Syntagma square in Athens, where MPa have started congregating to commence deliberations on the Troica's mid-term fiscal proposal. Already there has been tear gas fired at protesters who are gradually shifting away from their peaceful posture and slowly becoming unruly. Below is a live feed of the square as well as a link to an English live blog following up to the minute events.

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