Germans resist Eurozone debt fund

Billionaire investor George Soros called on Europe to start a fund to buy Italian and Spanish bonds, warning that a failure by leaders meeting this week to produce drastic measures could spell the demise of the currency.
http://www.bloomberg.com/news/2012-06-24/soros-pushes-eu-to-start-joint-debt-fund-or-risk-summit-fiasco.html

Chancellor Angela Merkel hardened her resistance to euro-area debt sharing to resolve the region’s financial crisis, setting Germany on a collision course with its allies at a summit of European leaders this week.


http://www.bloomberg.com/news/2012-06-25/merkel-rejects-joint-euro-bonds-bills-with-all-eyes-on-germany.html

(Reuters) - The German government and opposition reached a deal on Thursday on growth that will allow parliament to approve the euro zone's permanent bailout scheme next week, but Germany's top court may delay the rescue fund's start date.
http://www.reuters.com/article/2012/06/21/us-eurozone-germany-esm-idUSBRE85K0LU20120621

Operation Twist Extended by Fed

The Federal Reserve will expand its program to replace short-term bonds with longer-term debt by $267 billion through the end of the year in a bid to reduce unemployment and protect the expansion.

The continuation of Operation Twist “should put downward pressure on longer-term interest rates and help to make broader financial conditions more accommodative,” the Federal Open Market Committee said today in a statement at the conclusion of a two-day meeting in Washington.

http://www.bloomberg.com/news/2012-06-20/fed-expands-operation-twist-by-267-billion-through-year-end.html

What is "Operation Twist" :

Operation Twist (2011)

The Federal Open Market Committee concluded its September 21, 2011 Meeting at about 2:15PM EDT by announcing the implementation of Operation Twist. This is a plan to purchase $400 billion of bonds with maturities of 6 to 30 years and to sell bonds with maturities less than 3 years, thereby extending the average maturity of the Fed's own portfolio.^[4] This is an attempt to do what Quantitative Easing (QE) tries to do, without printing more money and without expanding the Fed's balance sheet, therefore hopefully avoiding the inflationary pressure associated with QE.^[5] This announcement brought a bout of risk aversion in the equity markets and strengthened the US Dollar, whereas QE I had weakened the USD and supported the equity markets.

http://en.wikipedia.org/wiki/History_of_Federal_Open_Market_Committee_actions

Jamie Dimon testifies

http://www.businessinsider.com/jamie-dimon-house-financial-services-committee-testimony-2012-6

Live blog: WSJ http://blogs.wsj.com/deals/2012/06/19/live-blog-jamie-dimon-goes-back-to-congress/

http://www.marketwatch.com/story/day-two-for-jp-morgans-dimon-on-the-hill-2012-06-19?link=MW_latest_news

Watch live on EFB http://eliteeservices.blogspot.com/p/bloomberg-tv.html

EES: Is it time to sell the Euro?

While markets have relief that the mainstream, pro-bailout party has won the Greek elections, the European crisis is far from over.

http://seekingalpha.com/article/666471-is-it-time-to-sell-the-euro

Oanda closes for Greek election

The street corners are stocked with waiting riot police. One of the few global currency trading platforms which operates at the weekend, Oanda, is closing today for the first time in its history.
http://www.telegraph.co.uk/news/worldnews/europe/greece/9336240/Greek-election-despatch-no-panic-no-fear-no-hope.html

Pro-bailout party wins Greek election

WASHINGTON (AP) -- A slim victory for the main conservative party in an election in Greece should relax fears that a country will stop using the euro for the first time and possibly unleash global financial turmoil.

But when it comes to Greek politics - and European economic policy - it's never that easy. So the bumpy ride for financial markets isn't over yet.

http://hosted.ap.org/dynamic/stories/U/US_GREECE_MARKETS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2012-06-17-21-46-56

Although the Greek poll result eased imminent fears of a Greek exit from the euro, concerns over Spain's sovereign debt problems prompted a rise in the country's 10-year bond yields, which spiked over 7pc. Italy's 10-year yield breached 6pc.

Political parties, led by New Democracy leader, Antonis Samaras, began forging a government on Monday. David Cameron, who is in Mexico for the G20 summit, said the outcome of the Greek election looked clear, but warned a delay in forming a government "could be very dangerous".

"The outcome of the Greek election looks clear in terms of a commitment to stay in the eurozone and to accept the terms of the memorandum," the prime minister said. "But I think those parties that want that to happen can't afford to delay and position themselves. If you are a Greek political party and want to stay in the eurozone and accept the consequences that follow you have got to get on with it and help form a government. A delay could be very dangerous."

http://www.telegraph.co.uk/finance/financialcrisis/9338227/Debt-crisis-Market-rally-falters-following-Greek-vote-as-concerns-over-Spain-persist.html

Krugman, and then what? http://krugman.blogs.nytimes.com/2012/06/17/and-then-what/ 

Bank of England Osborne unveils 140 Billion Pound plan

“We are not powerless in the face of the euro-zone debt storm,” Mr Osborne said. “We can deploy new firepower to defend our economy from the crisis on our doorstep. Funding for lending to the family aspiring to own their home and the business that wants to expand…The Government - with the help of the Bank of England – will not stand on the sidelines and do nothing as the storm gathers.”


http://www.telegraph.co.uk/finance/financialcrisis/9332570/Osborne-unveils-140bn-scheme-to-kick-start-stagnant-economy.html

Central Banks pledge liquidity after Greek vote

http://www.reuters.com/article/2012/06/15/eurozone-idUSL5E8HE4H320120615

WASHINGTON/BRUSSELS, June 15 (Reuters) - Central banks from major economies stand ready to take steps, including coordinated action, to stabilise markets as world economies prepare for a possible financial storm or public panic after cliffhanger elections in Greece this weekend.


http://www.cnbc.com/id/47828696 Stocks opened higher Friday, lifted by reports that major central banks are preparing coordinated action to provide liquidity after the Greek elections over the weekend.

EES: The Fallacy of State Backed Deposits

There is a perception in Europe during the current crisis that Germany should somehow guarantee all deposits, similar to what is done in the U.S. with the FDIC.


http://seekingalpha.com/article/657971-the-fallacy-of-state-backed-deposits

EES: Strangle The Euro

The European crisis is a major market driving factor for the last several months. Instead of guessing the outcome, why not bet on something that is almost a certainty: volatility.

Read full article on Seeking Alpha: http://seekingalpha.com/article/657361-strangle-the-euro

Euro Break Up Plan - Capital, People controls

BRUSSELS (AP) — The European Commission has been providing legal advice to others who are considering possible scenarios should Greece leave the euro, a European Union spokesman said.

Olivier Bailly said Tuesday that, legally, limits could be imposed on movement of people and money across national borders within the EU if it's necessary to protect public order or public security — but not on economic grounds.

"Some people are working on scenarios," he said, but refused to confirm or identify which organizations and people were working on them.

http://news.yahoo.com/eu-movement-money-people-limited-144836122--finance.html;_ylt=A2KJ3CV.WNdPN10AzDzQtDMD

A single regulator to oversee banks across all 27 European Union states could be in place as early as 2013 according to the European Commission...    http://www.bbc.co.uk/news/business-18409175


Spain's borrowing costs have risen to the highest rate since the launch of the euro in 1999.

The benchmark 10-year bond yield hit 6.81%, as optimism about the weekend's Spanish bank bailout continued to evaporate...   http://www.bbc.co.uk/news/business-18405729

European finance officials have discussed limiting the size of withdrawals from ATM machines, imposing border checks and introducing euro zone capital controls as a worst-case scenario should Athens decide to leave the euro.

EU officials said the ideas are part of a range of contingency plans. They emphasised that the discussions were merely about being prepared for any eventuality rather than planning for something they expect to happen.

But with increased political uncertainty in Greece following the inconclusive election on May 6th and ahead of a second election on June 17th, there is now an increased need to have contingencies in place, the EU sources said.

http://www.irishtimes.com/newspaper/breaking/2012/0612/breaking24.html

Italian Bank BNI blocks withdrawals, payments

Thursday, June 7, 2012

BNI depositors unable to make withdrawals / payments, payments of utility bills, mortgage payments, taxes

Peter Giordano, Adiconsum: "Grave of the Bank of Italy's attitude that takes action without considering the impact on depositors, and especially on single-income families and pensioners"

Adiconsum Bank of Italy asks for an urgent meeting and the lifting of the

The Bank of Italy authorized the suspension of payments by Bank Network Investments SpA (BNI) without communicating anything to the depositors.

Very serious and unacceptable - says Peter Jordan, Secretary General Adiconsum - the attitude of the Bank of Italy SpA in each BNI, because highly prejudicial to the interests of customers.

Bank of Italy, in fact, after extending the receivership of the bank, thus giving the impression of an imminent rescue, then gave the green light for compulsory winding up, without giving any prior notice to the depositors, leaving them in no condition to perform any type of operation, even basic ones for daily survival, such as withdrawals / payments, utilities payments, rates, taxes.

We must unfortunately note that offensive measures as those adopted to customers BNI - Giordano complaint - not an isolated case. Decisions without taking into account the heavy impact, particularly on savers in possession of a single bank account on which accrediting salary or pension, are not new to Bank of Italy, and also affected depositors of Banca MB.

The attitude of the Bank of Italy - Jordan continues - is bureaucratic and deed and as Adiconsum we asked in a letter sent to the Bank of Italy and the lifting of the BNI and an urgent meeting to define the way in which customers, especially Fixed-income families and pensioners, can perform normal daily operations.

http://translate.google.com/translate?hl=en&sl=auto&tl=en&u=http%3A%2F%2Fwww.adiconsum.it%2FPages%2FNews.aspx%3Fn%3D1675%26AspxAutoDetectCookieSupport%3D1

http://www.bloomberg.com/news/2012-06-10/italy-moves-into-debt-crisis-crosshairs-after-spain-bank-rescue.html

(Reuters) - Euro zone finance ministers agreed on Saturday to lend Spain up to 100 billion euros ($125 billion) to shore up its teetering banks and Madrid said it would specify precisely how much it needs once independent audits report in just over a week.

http://www.reuters.com/article/2012/06/10/us-eurozone-idUSBRE8530RL20120610

EES: How to Trade the Collapse of the Eurozone

How to Trade the Collapse of the Eurozone

ECB warns Euro survival at risk - money flies out of Spain

BRUSSELS — The European Central Bank stepped up pressure on Thursday for a joint guarantee for bank deposits across the euro zone, saying Europe needed new tools to fight bank runs as the bloc's debt crisis drives investors to flee risk.

The European Commission's top economic official, Olli Rehn, warned that the single currency area could disintegrate without stronger crisis-fighting mechanisms and tough fiscal discipline.

The twin warnings came as worries about Spain's banks and Greece's survival in the euro area pushed the euro to a two-year low against the dollar and hastened a rush into safe-haven assets such as Austrian and French bonds, whose 10-year yields hit a euro-era low.

Spaniards alarmed by the dire state of their banks moved more money abroad in March faster than at any time since records began in 1990, official figures showed.

The 66.2 billion euros ($82.0 billion) net capital flight occurred before the nationalisation of Spain's fourth biggest lender, Bankia <B KIA.M>, in May due to massive losses from a burst property bubble.

http://www.msnbc.msn.com/id/47630518/ns/business-world_business/#.T8ez60VYtIm

MADRID (Reuters) - Spaniards alarmed by the dire state of their banks are squirreling money abroad at the fastest rate since records began, figures showed on Thursday, and the credit ratings of eight regions were cut.

Spain is the next country in the firing line of the euro zone's debt crisis, with spendthrift regions and shaky banks threatening to blow a hole in state finances and pushing funding costs towards levels that signal the need for a bailout.

The European Commission gave new help on Wednesday, offering direct aid from a euro zone rescue fund to recapitalize Spanish banks and more time for Madrid to reduce its budget deficit.

That helped lower the risk premium investors demand to hold Spanish 10-year debt rather than the German benchmark on Thursday, but it remained close to the euro-era record, at 520 basis points.

Bank of Spain data showed a net 66.2 billion euros ($82.0 billion) was sent abroad last month, the most since records began in 1990. The figure compares to a 5.4 billion net entry of funds during the same month one year ago.

http://www.cnbc.com/id/47629742

Euro in free fall - breaks 1.24

http://www.reuters.com/article/2012/05/30/markets-forex-idUSL1E8GU26H20120530

* Euro heads towards low $1.20s on Spain worries
    * Spanish debt yields near dangerous levels, risk of bailout
growing
    * Italian borrowing costs soar at bond sale

http://www.bloomberg.com/news/2012-05-29/euro-slides-toward-2-year-low-amid-concern-over-spanish-banks.html

The euro fell to the lowest in almost two years against the dollar as Spain struggled to rescue its troubled banks, adding to signs the European debt crisis is spreading to the region’s larger economies.

The 17-nation currency slid for a seventh day versus the yen, the longest losing streak in four months, after Italy sold less than its maximum target at a debt auction. The yen and dollar strengthened as investors sought safer assets after a European report showed economic confidence dropped more than economists estimated in May. Asian currencies weakened, pushing the Bloomberg-JPMorgan Asia Dollar Index to the lowest level since September 2010.