Tuesday, April 20, 2010

• Germany warns of “Lehman-like crisis” if Greece is permitted to default $spy #greece


         Europe: DJ Euro Stoxx +0.3%; FTSE +0.4%; Japan flat; China flat; Hong Kong +1%; India flat; Australia +0.2%; SP futures dn 0.8pt.
         Greek 10yr Yield Premium to German Bunds Climbs to New Record. Out another 17bps to 471bps. Bloomberg
         Greece sells 13-week paper....bid/cover strong, but yield very high - Greece sold 1.95 billion euros ($2.6 billion) of 13-week bills to yield 3.65 percent (up from 1.67 percent in a previous Jan 19 sale).  Greece says the deal helps cut its May borrowing needs, which are now under EU10B.  Reuters/Bloomberg.  In most countries these types of sales are non-events and are more cash management securities; however, w/the obvious focus on Greece and the country's finances, they are a bigger deal.  On the whole though, this sale is really meaningless in the bigger picture of solving Greece's budget and maturity problems.  The IMF/EU mission talks are expected to kick-off later today or early Wed.  The bigger Greece stories today: 1) the FT says that the IMF will discuss a debt restructuring w/Greece; 2)Germany's Axel Weber says that Greece may need aid sig. beyond what has been agreed to by the EU and IMF.
         Germany warns of "Lehman-like crisis" if Greece is permitted to default – Germany's finance minister is urging his country to back the Greek rescue package.  "We cannot allow the bankruptcy of a euro member state like Greece to turn into a second Lehman Brothers," he told Der Spiegel.  London Telegraph.  http://www.telegraph.co.uk/finance/financetopics/financialcrisis/7608361/Germany-warns-of-Lehman-crisis-if-Greece-defaults.html  
         Greece – IMF will discuss a debt restructuring w/Greece - The IMF is expected to raise the question of debt restructuring at imminent meetings with the Greek finance ministry, according to one person with knowledge of the agenda. It is not likely to be a detailed discussion "just a pointed reminder of the debt forecast"…Greece finance ministers have not officially addressed the possibility of a debt restructuring, although some kind of "liability management", such as extending maturities (swapping short-dated bonds for longer-dated ones), is expected – FT   http://www.ft.com/cms/s/0/4c7c6d3e-4bdc-11df-a217-00144feab49a.html?ftcamp=rss  
         Greece – this headline hit mid-day during US trading on Mon – Germany's Axel Weber apparently has said that Greece may require financial assistance of as much as EU80B; his comment suggests a rescue of the country could come in stages and extend beyond '10 – WSJ   http://online.wsj.com/article/SB10001424052748704671904575193492072402292.html?mod=WSJ_hps_LEFTWhatsNews  
         Greece - German Deputy Finance Minister Joerg Asmussen said any aid for Greece would come via pooled loans from euro-zone countries and not the purchase of Greek bonds; also said Greece would be a topic of discussion a the meetings of finance ministers and central bankers this weekend in Washington.  DJ 
         Greece - Greek Finance Minister George Papaconstantinou will present a plan to restore credibility of Greek statistical data to the next meeting of European Union finance ministers.  Bloomberg 
         Greece's unemployment rate rose to 11.3% in January compared with 10.2% in December, the Athens-based Hellenic Statistical Authority said in an e- mailed statement today.
         Russia - Most indicators of economic activity showed improvements in March. After deep declines in the start of the year, which apparently was mainly due to cold weather, investment, construction and freight transport turnover rose in March (but not leaped as might have been expected).  Anatoliy A Shal   https://mm.jpmorgan.com/servlet/UserDocsHelperServlet?action=openpdf&docId=GPS-400087-0 
         German ZEW for April better than expected. 53 vs. St. 45.1. Bloomberg
         UK March Inflation Accelerates More Than Forecast. Consumer prices climbed 3.4 percent from a year earlier vs. St. +3.1%. Bloomberg
         Italy - S&P Trims 2010 GDP Growth Forecast For Slow-Growing Italy - We have trimmed our 2010 GDP growth forecast for Italy to 0.5% from 0.7%. In 2011, we expect Italian GDP growth at 1.0%, or just half that of the Eurozone as a whole.
         Icelandic Ash Cloud Update - The Icelandic volcanic eruption has strengthened and the ash cloud "spreading south and east" toward the U.K, the National Air Traffic Services said.
         GS - FSA to Start Enforcement Investigation Into Goldman Sachs. Bloomberg

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