Thursday, March 18, 2010



         Europe: DJ Euro Stoxx dn 0.5%; FTSE dn 0.2%; Japan dn 1%; China dn 0.1%; Hong Kong dn 0.2%; India flat%; Australia +0.2%; SP futures dn 2.5pt.

         Greece – the country may seek aid from the IMF b/c it is growing increasingly skeptical about the odds of it getting assistance from the EU; "We still want a solution within the European Union, but it doesn't look good," it quoted the official as saying. "If there is no clear support at the EU summit on March 25, we will have to decide where to go next.".  "There are a number of scenarios on the table, but the most prominent one is the IMF.".  The request to the IMF could come Apr 2-4; Greece’s PM says Greece is getting all the pain of IMF involvement but none of the benefits but said it doesn’t need to pursue IMF assistance – DJ/Reuters 

         Germany comments shifting in favor of IMF involvement in Greece situation; potential risk developing between Germany and other European governments over IMF; Greece should turn to the International Monetary Fund if it needs aid, the chief finance spokesman for German Chancellor Angela Merkel’s party said.  “We have to think about who has the instruments to push for Greece to restore its capital-markets access” if ultimately needed, Michael Meister, a lawmaker with Merkel’s Christian Democratic Union, said in an interview in Berlin. “Nobody apart from the IMF has these instruments.”  Bloomberg 

         Greece will not be able to carry out planned deficit cuts to resolve its debt problems if it has to continue borrowing money at high interest rates, Prime Minister George Papandreou said Thursday – Reuters

         Greece - Greece’s Finance Ministry has abandoned plans for a capital gains tax on the trading of shares and now intends to raise the sales tax on share transactions to 0.2 percent from 0.15 percent

         Germany and European sovereigns – Germany’s Merkel continues to push expulsion idea - "We need to have an agreement under which, as a last resort, it's possible to exclude a country from the euro zone if again and again it doesn't fulfill the requirements,"    WSJ  

         Germany and China – the world’s great exporters unit to “impose global deflation” according to an oped from Martin Wolf in the FT published 3/16; both countries can’t call on deficit countries to clean up their finances w/o giving some ground on their exports; “in this battle, the surplus countries are most unlikely to win”.  The NYT has a similar article this morning – “some argue that Berlin is pressing too hard (when it comes to pushing for budget deficit reduction), and that the region’s new fixation on debt has created a “cult of austerity” that could make it harder to recover from the slump”.  The London Telegraph chimes in as well – “German Chancellor Angela Merkel has defied France and the IMF, refusing to modify Germany’s strategy of export reliance or boost growth to help alleviate the deep crisis sweeping Southern Europe”.  The NYT article:; the FT article:; the Telegraph article:     

         Germany plays down talk of early tax cuts - Plans for tax cuts in Germany are not on the agenda of a meeting on Sunday between Chancellor Angela Merkel and leaders of her centre-right coalition parties - Reuters

         G20 preview docs leaked to Canadian press ahead of June meeting in Toronto - Secretive discussions by G20 “sherpas” Thursday will focus on keeping the economic recovery from faltering, and Canada's top priority is ensuring there's no “premature withdrawal” of stimulus spending, The Canadian Press has learned.  Globe and Mail.

         ECB – German and Italian fight to head ECB - Axel Weber, Germany’s Bundesbank president, and Mario Draghi, governor of the Banca d’Italia, are the lead candidates to replace Trichet; both men could take a “harder line” approach when it comes to policing the Eurozone’s monetary policy – FT  

         Europe too optimistic on growth - The European Commission on Wednesday warned the eurozone’s four largest countries – Germany, France, Italy and Spain – that their economic growth forecasts for the next three years were too optimistic – FT  

         Spain pushes for faster bank consolidation – the country wants its weaker banks to consolidate; Spanish finance minister admits that nearly 1/3 of the nation’s banks could face “solvency problems” – FT 

         EU Regulation of HF/PE Firms – Hedge fund and private equity rules haven’t been dealt a lethal blow by delays requested by U.K. PM G. Brown, according to the European Union lawmaker sponsoring the proposals. EU finance ministers earlier this week put off plans to agree to the final wording of the law but that won’t alter the timetable of the European Parliament, said Jean-Paul Gauzes, a French member of the assembly in Brussels, yesterday. [Bloomberg]

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