Tuesday, February 16, 2010

Top Headlines

Top Headlines
· Mon trading recap - European stocks eked out small gains in a quiet trading session; the DJ Euro
Stoxx 50 gained 0.35% while the FTSE rose 0.49%. Europe was led higher by banks (Barclays, ING,
Unicredit, AXA, Santander were all among the top best performing stocks) ahead of a big week of
earnings for that sector (Barclays, ING, others, will all be reporting earnings). Mining/resource
stocks also were strong (Rio Tinto, Anglo American, and MT all rallied). The Euro dipped 0.23%
and hit another multi-month low. In Asia, the Nikkei fell 0.78%, Australia dipped 0.36%, and
China/Hong Kong were closed for the Chinese New Year. Brazil was shut for that country’s
Carnival. Japan’s Q4 GDP data was the only major global eco release – it came in better than
expected although the details weren’t as strong; the Nikkei fell ~0.78% on the day despite the
stronger report.

· Greece Update - Greek government bonds fell after Finance Minister George Papaconstantinou said
his country is in a “terrible mess” and compared fixing the nation’s deficit to changing “the course of
the Titanic.”.
Papaconstantinou said his country’s public sector “is out of control” as unions planned
more strikes. European finance ministers are meeting Mon and Tues and will probably spend a lot of
time discussing Greece although they aren’t expected to make specific announcements on precise aid
mechanisms and procedures (similar to the EU Summit statement from last week). ECB president
Trichet said promises made last week by Greece and the 26 other European Union governments on
finances and the stability of the euro area are “enough” for the time being. The NYT had a big pg 1
article this weekend discussing how “Wall Street”, inc. Goldman, helped Greece to hid the true extent
of its debt accumulation w/currency swaps and other techniques; in response to the article, the
European Commission says it wants Greece to explain how it used complex financial deals that
allegedly made its debt limits look lower. EU spokesman Amadeu Altafaj Tardio says the EU
executive has given Greece an end-of-February deadline to give details on how deals called currency
swaps affected government accounts since 2001.

· Dubai – speculation of a proposed offering to creditors of Dubai World have spooked global
markets and caused Dubai CDS spreads to blow out last week; according to speculation, Dubai
World will offer creditors either 60 percent repayment over seven years and a government guarantee,
or full repayment with a debt for equity swap for property assets of Nakheel and no guarantee. Dubai
said on Sunday it had made no formal restructuring proposals and nothing was expected until
March or April. CNBC

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