Financial Crisis

[churchill]

Well EVENTUALLY the markets will blow up as you put it , but for monday it's down if the crazy commie guy wins and a relief rally if he doesn't.

I'm not so sure about an EUR rally...

the "crazy commie" did not win. EURUSD >1.27

p.s. unfortunately nobody won

Continued muddle ..

More can kicking ..

[Naam]

Even if the pro-bailout parties win in Greece, Hollande could make everything blow up, because he is in favor of erasing Greece's debt almost for free.

French socialists traditionally have strong affinities with the PIIGS (except Ireland).

Then come Spain and Portugal... Italy...

are you joking Manarak? Hollande will sooner or later be Merkel's poodle as was Sarkozy. Hollande strongly proposes EU-backed bond, which Merkel still opposes without fiscal union, but has never said anything about erasing Greek debt.

[Naam]

Well EVENTUALLY the markets will blow up as you put it , but for monday it's down if the crazy commie guy wins and a relief rally if he doesn't.

I'm not so sure about an EUR rally...

the "crazy commie" did not win. EURUSD >1.27

p.s. unfortunately nobody won

Continued muddle ..

More can kicking ..

YES Prime Minister! more muddling and perhaps again elections. Greek constitution allows unlimited numbers of elections

[Naam]

people who drink their bottle of Chang on the steps of a 7/11 are quite boring. that applies especially to those who claim that they paid for the Chang with nuggets and repeatedly call 99.9% of investors idiots because these idiots invest in "worthless paper" and pay for their wine with "worthless fiat money".

then there are other big mouths who make similar "fiat = idiot" claims, rave about their gold holdings and gold trading and at the same time boast in another TV thread that they have saved a few hundred Baht (LAWD have mercy! ) paying for one "measly" aircon unit by a special credit card, spread over several months because "that sure helps the budget".

and when their attention is drawn to facts they resort to "mummy, mummy bad naam has put me down again!"

yawnnnnnn...

You must be confusing me with someone else Naam.

I don't drink or have any air con. Don't really need it in England. The aircon that is. Drink does help with the weather, but not with the brain. Contributes to memory loss don't you know.

which part of

then there are other big mouths

is it you don't understand?

[manarak]

Even if the pro-bailout parties win in Greece, Hollande could make everything blow up, because he is in favor of erasing Greece's debt almost for free.

French socialists traditionally have strong affinities with the PIIGS (except Ireland).

Then come Spain and Portugal... Italy...

are you joking Manarak? Hollande will sooner or later be Merkel's poodle as was Sarkozy. Hollande strongly proposes EU-backed bond, which Merkel still opposes without fiscal union, but has never said anything about erasing Greek debt.

Not joking... Hollande is not a statesman.

He said several times he opposes austerity measures, and within French socialist ranks, the word about Greece is "solidarity".

He will first push his bonds, spend trillions on bailing out the PIIGS, then when the bailouts barely paid the interest, Hollande will push for erasing the debts and the French taxpayer will bail out French banks from the losses. Problem solved.

[manarak]

Even if the pro-bailout parties win in Greece, Hollande could make everything blow up, because he is in favor of erasing Greece's debt almost for free.

French socialists traditionally have strong affinities with the PIIGS (except Ireland).

Then come Spain and Portugal... Italy...

are you joking Manarak? Hollande will sooner or later be Merkel's poodle as was Sarkozy. Hollande strongly proposes EU-backed bond, which Merkel still opposes without fiscal union, but has never said anything about erasing Greek debt.

Not joking... Hollande is not a statesman.

He said several times he opposes austerity measures, and within French socialist ranks, the word about Greece is "solidarity".

He will first push his bonds, spend trillions on bailing out the PIIGS, then when the bailouts barely paid the interest, Hollande will push for erasing the debts and the French taxpayer will bail out French banks from the losses. Problem solved.

[Naam]

Even if the pro-bailout parties win in Greece, Hollande could make everything blow up, because he is in favor of erasing Greece's debt almost for free.

French socialists traditionally have strong affinities with the PIIGS (except Ireland).

Then come Spain and Portugal... Italy...

are you joking Manarak? Hollande will sooner or later be Merkel's poodle as was Sarkozy. Hollande strongly proposes EU-backed bond, which Merkel still opposes without fiscal union, but has never said anything about erasing Greek debt.

Not joking... Hollande is not a statesman.

He said several times he opposes austerity measures, and within French socialist ranks, the word about Greece is "solidarity".

He will first push his bonds, spend trillions on bailing out the PIIGS, then when the bailouts barely paid the interest, Hollande will push for erasing the debts and the French taxpayer will bail out French banks from the losses. Problem solved.

-opposing austerity measures does not mean erasing debt,

-"his" bonds do not exist. Hollande has neither cash nor credit without Merkel's backing and therefore can't spent trillions. period!

[churchill]

and another important election ..

Egypt military issues decree giving armed forces sweeping powers as early results of presidential vote trickle in

http://www.washingtonpost.com/world/middle_east/egyptians-vote-in-second-day-of-elections-turnout-low/2012/06/17/gJQAHHy0iV_story.html

[manarak]

We can discuss on tews who was right

no rally...

only the JPY caved in for whatever reason

[Naam]

Even if the pro-bailout parties win in Greece, Hollande could make everything blow up, because he is in favor of erasing Greece's debt almost for free.

French socialists traditionally have strong affinities with the PIIGS (except Ireland).

Then come Spain and Portugal... Italy...

are you joking Manarak? Hollande will sooner or later be Merkel's poodle as was Sarkozy. Hollande strongly proposes EU-backed bond, which Merkel still opposes without fiscal union, but has never said anything about erasing Greek debt.

Not joking... Hollande is not a statesman.

He said several times he opposes austerity measures, and within French socialist ranks, the word about Greece is "solidarity".

He will first push his bonds, spend trillions on bailing out the PIIGS, then when the bailouts barely paid the interest, Hollande will push for erasing the debts and the French taxpayer will bail out French banks from the losses. Problem solved.

-opposing austerity measures does not mean erasing debt,

-"his" bonds do not exist. Hollande has neither cash nor credit without Merkel's backing and therefore can't spent trillions. period!

JP Morgan today:

• France’s Hollande is apparently pushing a EU120B pro-growth set of

measures. The French president would like to see the ideas adopted in Europe by

year-end. Hollande apparently has given up on his call for near-term Eurobonds

and instead will agree to study the idea over the next 10 years. London

Telegraph. http://goo.gl/RNJbf

[Naam]

Today’s Top Stories

• For the second consecutive week an ostensibly “game-changing” weekend

development in Europe has been quickly dismissed by investors (Spain’s banks and

now Greece’s elections).

• A Greek crisis gets averted but Europe isn’t out of the woods yet – ND

won the Sunday Greek elections w/29.5% of the vote, coming in ~240bp ahead of

SYRIZA. Assuming ND can form a coalition w/PASOK (talks are underway as of

Monday) the two parties would have ~161 votes in the Greek parliament, enough

for a (small) majority (the parliament has 300 seats). While the Sunday

developments certainly are positive and (temporarily) remove a massive overhang

that has been in place since 5/6, keep in mind markets were starting to price in

an ND victory as of Thurs and Fri (press reports late last week were pointing

towards “secret polls” indicating rising ND support). Meanwhile, even if ND and

PASOK are able to form a government, the country’s bailout package still needs

to be revised (something acknowledged Sunday) and keep in mind Athens will need

to vote in affirmation on the troika terms every Q (so the risk of another gov’t

collapse will remain present for an extended period, esp. given the relatively

precarious nature of this ND/PASOK alliance).

• Spain - Greece may have been the most immediate fire in Europe for

officials to extinguish, but it isn’t the only one. The Greek news failed to

quell Spanish fears - 10yr yields hit fresh euro-era highs Mon (>7%).

Increasingly it is becoming clear that at present levels the country can’t

really sustainably fund itself and unless markets become much more comfortable

w/the bank bailout Madrid could find the whole country having to seek liquidity

assistance. The Bank of Spain Mon said the Spanish banking system’s bad loans

ratio rose from 8.37% in Mar to 8.72% in Apr. Spain has two large catalysts

this week: 1) details on the independent audits presently being conducted on the

Spanish banking system; 2) bond auctions on Thurs.

• European problems aren’t confined simply to Greece or Spain – the IMF

Friday warned that Ireland was at serious risk of requiring a second bailout as

the country’s access to private debt markets appears in doubt later this year.

The IIF late on Sunday published a report warning markets of the shrinking

capacity of Europe to provide liquidity assistance for a large European country

(the IIF noted how the firewalls only have EU250B left, not enough to really

help a country the size of Spain should Madrid seek assistance). The ECB could

cut rates on Jul 5 and may introduce another LTRO (12m?) although neither policy

would really get to the heart of the present problem. Finally in Europe, at

this point investors are anticipating a pretty credible “roadmap” towards fiscal

and banking unity on June 28-29, setting a high bar for politicians. There are

clearly a slew of measures/items being contemplated (Redemption Fund, deposit

guarantees, turning the ECB into the region’s bank regulator, “Eurobond”-like

structures, etc) but the political process will remain a difficult and

non-linear one (there were reports this weekend of Draghi and other top European

officials working towards this “road map”).

• France’s Hollande is apparently pushing a EU120B pro-growth set of

measures. The French president would like to see the ideas adopted in Europe by

year-end. Hollande apparently has given up on his call for near-term Eurobonds

and instead will agree to study the idea over the next 10 years. London

Telegraph. http://goo.gl/RNJbf

• Europe aside, economic growth continues to slow (the Philadelphia Fed

was the first big June eco report and it fell well short of expectations Friday

while Germany’s Bundesbank warned Mon of greater uncertainty) and while the Fed

could do more, it will prob. only extend Twist for now (the bar for QE3 still

seems higher). Preannouncements have been slow so far but we are still a couple

weeks from the heart of the season while analysts may soon start lowering

estimates in response to the sluggish economic environment. Keep in mind that

the US political situation looms as a huge overhang starting later this summer

as we move closer to Nov 6.

• Bottom Line – flat is the new pain trade? Heading into the weekend,

the consensus seemed to be expecting an extremely binary market outcome from

Greece – either a return to the LTRO-driven euphoria from Dec/Jan/Feb or

Armageddon. More likely may be for the market to continue with the same type of

range-bound pattern that has confined trading for the last few weeks (~1270ish

on the downside and ~1340ish on the upside; note the 50day MA is now ~1348 and

is falling). For Monday specifically (June 18) we could be setting up to have

one of the most anti-climatic days of the year.

• India surprises markets and leaves rates unchanged – the RBI surprised

w/a decision to leave rates unchanged Mon morning (the RBI was expected to cut).

The RBI said inflation headwinds drove its decision to leave rates unchanged –

DJ

• CS – the FT says pressure is mounting on CEO Dougan after the bank was

called out by the SNB to strengthen its capital levels. CS maintains it will be

able to bolster capital via retained earnings and has no plans to sell new

stock. FT http://goo.gl/IGljF

• High speed traders – a number of HFT firms are restructuring in

response to falling equity volumes and new competition. Companies are cutting

jobs and other costs while looking to new asset classes, inc. FX and FI – FT

http://goo.gl/i2OFP

• Tech for Mon June 18. Pretty quiet over weekend. Samsung/LG could

cut TV sales goal. INFY slowing hiring. MSFT tablet today? Big week of

earnings - ADBE/JBL Tues, RHT Wed, ORCL Thurs.

• Corp Credit: CDX.IG, HY and LCDX moved by -2.5bp, -7bp (+$0.25) and

-16bp (+$0.63) on Friday. Closing marks were 118bp, 638bp ($94.69) and 327bp

($96.88). Over the week the indices have moved by -2.5bp, -27bp (+$1.0) and

-47bp ($1.81) with IG underperforming the rest. High grade bond spreads

tightened by 2bp on Friday to 224bp. Financials tightened by 5bp to 289bp and

Non Financials tightened by 1bp to 203bp on Friday. Over the week, high grade

bonds spreads are unchanged with Financials tighter by 3bp and Non Financials

unchanged. CDS-BOND BASIS in IG was unchanged on Friday at -15bp. The basis in

HY turned more negative to -34bp on Friday. Over the week, the basis in both IG

and HY have turned more negative as CDS outperformed bonds.

Calendar for wk of 6/18 - the most important week of catalysts so far this yr?

Greece gov’t formation negotiations, Spain banks, G20 Leaders, Health Care

decision?, Fed meeting, June eco #s, EU Leaders, earnings (FDX/JEF/ORCL),

Moody’s global IB decisions?; Spanish auctions.

• JPMorgan conf call scheduled for Mon to discuss Greece (w/Tom Lee and

others); 10amET 800-857-9651 (US); +1-312-470-7357 (outside US); Passcode:

STRATEGY. http://goo.gl/Fd17c

• Spain – phase I of the country’s 3rd party banking audit is expected

to hit by June 21 but press reports have suggested it could hit as early as Mon

June 18, in time for the G20 Leaders Summit. According to Reuters and others,

the audits will reveal a ~EU60-70B capital hole within the Spanish banking

system (recall Madrid has said it might need as much as EU100B). With the audit

results known, Spain could potentially fill in some of the details around the

aid package (according to what has been in the press to date, the FROB will

borrow 15yr money at ~3% initially from the EFSF, thus avoiding the

subordination issue). In addition to the audit results, Spain will conduct a

closely watched bond auction this Thurs.

• G20 Leaders Summit Mon June 18-Tues June 19 in Mexico. This event is

expected to be a relative non-event. Officials will emphasize the need to spur

global growth but investors shouldn’t really expect any specific policy

initiatives. The US will provide verbal support for Europe but a financial

contribution (which would need to come via the IMF) seems extremely unlikely.

• Health Care? The US Supreme Court has said it will decide on the

Affordable Care Act within this term, which ends in June. It has been customary

for the SC to issue decisions on a Monday (there are only two left in June)

although really it could come out on any day. Based on where things stand now

(and this is a rough estimation), there is a ~60% expectation that the entire

bill will be upheld. Most think that whatever the decision is, it will be

complete (i.e. entirely upheld or struck down).

• Fed meeting Wed June 20. This will be an expanded format meeting –

12:30pmET statement, 2pmET forecast update, and 2:15pmET Bernanke press conf.

Right now, there isn’t a clear consensus on what happens although if the Fed

does anything, most think it would just be a (Treasury) Twist extension. A lot

of people think they do nothing officially on the policy front but will

“verbally ease” (i.e. Bernanke hints at further accommodation during the press

conf). Keep in mind also that the 2pmET forecast update will be important (not

only the inflation/growth outlook but also the Fed Fund Forecast “dots”).

• European Redemption Fund (ERF) – Germany’s main political parties will

continue negotiations over the “fiscal pact”, ESM, and ERF on Thurs June 21.

Media reports have suggested Merkel may be more open to the ERF idea although

any actual implementation is prob. a long way off.

• June eco data Thurs June 21 – some of the first big economic data

points for the month of June will hit on Thurs June 21 (in particular, we will

get flash PMIs from China, Europe, and the US on that day). Economic momentum

has def. been cooling of late, esp. on the PMI front – investors will be

watching closely to see if growth weakens further from May or winds up

stabilizing.

• Informal EU Leaders Summit Fri June 22 – Merkel, Hollande, Rajoy, and

Monti will meet Friday to set the groundwork for the full Leaders Summit set to

occur June 28-29. This particular event will prob. not produce a final

communiqué but hopefully all the leaders will get on the same page over Europe’s

critical issues: 1) bank capitalization; 2) fiscal unity; 3) banking unity; 4)

growth. The larger June 28-29 summit prob. won’t produce a major policy

pronouncement but investors are really hoping for a credible “roadmap” that puts

Europe on the road towards greater fiscal sharing.

• Corporate news – the coming week will actually wind up being pretty

important on the corporate front w/the start of the May-end earnings season.

Recall that the Mar-end results back in Apr were pretty strong while the Apr-end

#s (reported in May) were softer. These May-end companies will be reporting

qtrs that encapsulate Mar, Apr, and May, months where economic activity

certainly cooled. Key earnings to watch include: Tues (DFS/FDX/JEF pre-open;

ADBE/JBL after the close); Wed (BBBY/RHT after the close); Thurs (ORCL after the

close). These companies will help set the stage for the CQ2 season, which AA

kicks off on Jul 9.

Economics Calendar : Week Mon June 18th – Daily View

• Monday, June 18th: US (NAHB Housing Market Index)

• Tuesday, June 19th: US (Housing Starts/Building Permits, JOLTs Job

Openings); EuroZone (Eurozone ZEW Survey, UK CPI);Other (BoJ May Minutes)

• Wednesday, June 20th: US (MBA Mortgage Applications, FOMC Rate

Decision); EuroZone (BoE Minutes, UK Unemployment);Other (n/a)

• Thursday, June 21st : US (Initial Jobless Claims, Markit US PMI,

Philly Fed, Existing Home Sales, House Price Index); EuroZone (Eurozone Manf &

Services PMI, Eurozone Consumer Confidence, Swiss Trade Balance, UK Retail

Sales);Other (China Prelim PMIs)

• Friday, June 22nd: US (n/a); EuroZone (n/a);Other (Canadian CPI)

Corporate Events Calendar – Week of Mon June 18

• Mon June 18: analyst meetings (DHR, MAR, TK); earnings after the close

(IHS)

• Tues June 19: earnings before the open (BKS, DFS, FDX, JEF); earnings

after the close (ADBE, JBL); analyst meetings (ADSK, FSL, MCK)

• Wed June 20: earnings before the open (ATU, JKS); earnings after the

close (BBBY, CLC, RHT); analyst meeting (EQIX)

• Thurs June 21: earnings before the open (CAG, KMX, RAD); earnings

after the close (ORCL)

Corporate Events Calendar – Week of Mon June 25

• Mon June 25: earnings after the close (APOL, SNX); analyst meetings

(HSY)

• Tues June 26: earnings before the open (RBN, WAG); earnings after the

close (HRB); analyst meetings (BMO)

• Wed June 27: earnings before the open (CMC, GIS, MKC, MON); earnings

after the close (PAYX, PRGS); trading updates (Standard Chartered)

• Thurs June 28: earnings before the open (AM, FDO, FINL, WOR); earnings

after the close (ACN, RIMM, TIBX)

• Fri June 29: earnings before the open (KBH)

M&A/Strategic Actions

• UK mobile M&A – KKR is exploring a potential bid for the UK JV assets

of Deutsche Telekom and France Telecom. A deal could be worth GBP6B+ - London

Telegraph. http://goo.gl/6kWKx

• European mobile M&A – the NYT discusses how the pace of M&A activity

in the European mobile sector could pick up going forward. The article is

really a recap of recent events and doesn’t contain a ton of “new” news.

http://goo.gl/g9Fft

• Cable & Wireless Worldwide – the co won approval to be taken over by

VOD after its largest shareholder, Orbis, backed the transaction – DJ

• Pinnacle, the Blackstone-backed US foods brands company, is holding

talks w/Iglo Group in the UK about a possible deal. A deal for Iglo could be

worth EU3B. London Telegraph http://goo.gl/0Uv9W

• Xstrata directors are under pressure to water down a “golden handcuff”

deal w/some of the co’s execs or risk compromising the Glencore deal due to

shareholder ire – London Times/DJ http://goo.gl/Cck0E

• BHP continues to pursue the sale of its diamonds business but DeBeers

won’t bid – DJ http://goo.gl/F9VZv

• ELT – Melrose confirmed Mon morning it is in talks to possibly buy

ELT. The London Telegraph over the weekend said Melrose is willing to offer as

much as $20.50/shr while ELT is seeking $22. Bloomberg

• VMED: A consortium led by former Everything Everywhere CEO Tom

Alexander is said to have talked about the possibility of acquiring Virgin

Media; the consortium is also reportedly planning a bid for Everything

Everywhere and a deal could form a larger company that would directly compete

with BSkyB and BT. [PC Pro] http://goo.gl/alrSk

• SIX: The LA Times reports that Six Flags is motivating the possible

sale of Dick Clark Productions in order to realize the profits from its 40%

stake in the company. [LA Times] http://goo.gl/n6aXP

• Echo Entertainment: According to the Australian Financial Review,

Genting has increased its stake in Echo Entertainment to 7.65%. [bloomberg]

Washington

• FT/Brookings Tiger index reveals global economic growth momentum

stalling out in response to policy paralysis. Growth in the US was slowing,

much of Europe is in recession, and China was weakening. Meanwhile, other large

economies are softening too. FT http://goo.gl/018hj

• White House tax deal - Senior White House adviser David Plouffe on

Sunday said there are increasing signs of openness among Republicans to a fiscal

agreement that includes higher tax revenue – The Hill http://goo.gl/TRwy1

• Supreme Court Justice Ginsburg predicts “sharp” disagreements among

justices in decisions due out over the coming two weeks. The Hill

http://goo.gl/EGQNt

Europe

• Greek election results – exit polls have ND winning the Sunday

elections, securing 29.7% of the vote vs. SYRIZA at 27% and PASOK at 12.3%.

According to wire reports, an ND/PASOK coalition would be able to secure ~161

seats in the parliament (the Greek parliament has 300 seats). SYRIZA said it

would not join an ND coalition and would assume the role of lead opposition

party. PASOK said it may provide a vote of confidence to ND but isn’t sure yet

whether it wants minister representation in the new government. A slew of

bodies/organizations/countries (Eurogroup, White House, etc) published

statements late Sun congratulating Greece on the outcome and urging the new

government to stick w/the existing bailout package terms.

• Greece – Germany’s finance minister Sunday hinted Greece could be

granted small concessions from Europe on its bailout package terms but won’t

receive a full renegotiation of the plan – Reuters

• Greek deposit outflows expected to slow following the Sun election

results – Kathimerini http://goo.gl/knBnr

• Central banks globally continue to reassure markets of their ability

to limit the fallout from any Greek election outcome. The Fed/Treasury, ECB,

BOE, SNB, BOJ, etc, have all hinted to markets of their resolve to prevent

market turmoil. Reuters http://goo.gl/tCDux

• Senior European leaders, inc. the head of the ECB, worked Sat on a new

“master plan” for Europe aimed at halting the vicious sovereign/banking crises

that have plagued the region for the last several years. Under the proposal,

the ECB would replace the EBA as the supreme regulator of Europe’s banks, this

time having substantial new powers. A separate deposit insurance scheme would

be created to augment the present national ones. NYT http://goo.gl/Nsbgp

• European officials will be circulating “secret” proposals at next

week’s EU Leaders Summit (June 28-29) in which ideas like banking unions and

eurobonds will be discussed. Treaty changes also are being contemplated to

allow for closer fiscal coordination. London Telegraph. http://goo.gl/TVWIl

• ECB’s Coeure said the ESM should be allowed to capitalize Europe’s

banks directly. He also called for the creation of a pan-European deposit

insurance fund and a pan-European bank resolution framework – Bloomberg

• Europe’s bailout funds, as now structured, can’t bailout a large

European country – according to the IIF, Europe’s bailout funds now have just

EU251B at their disposal, hardly enough to provide full liquidity assistance to

a large European country. WSJ http://goo.gl/XJwUN

• European banks – the EBA said it was happy w/the pace of European bank

capital raises. The region’s banks were tasked w/raising a combined EU115B by

the end of June. The next European bank stress tests are slated for 2013 –

Reuters

• G20 summit likely to be a relative non-event – European leaders are

nervous this June 18 G20 summit will follow the same script as the one in France

back in Nov, which broke up w/o any material progress. FT http://goo.gl/MlvqB

• France’s Hollande is apparently pushing a EU120B pro-growth set of

measures. The French president would like to see the ideas adopted in Europe by

year-end. Hollande apparently has given up on his call for near-term Eurobonds

and instead will agree to study the idea over the next 10 years. London

Telegraph. http://goo.gl/RNJbf

• Europe is considering the introduction of near-term euro bonds.

According to Der Spiegel, the EU may propose the introduction of short-term

common debt instruments for euro-area countries. The common bonds could be

issued by countries up to a certain % of economic output and only if strict

rules were met – Bloomberg

• Germany’s Bundesbank warns that European Redemption Fund concept could

violate the country’s constitution. “Far-reaching joint liability such as the

European redemption fund could only be justified with a comprehensive reform of

the regulatory framework of European Monetary Union toward a fiscal union” –

Bloomberg

• IMF – Mexican president Felipe Calderon said the G20 group of leaders

will agree to boost the $430B firewall announced back in Apr for the IMF –

Bloomberg

• Banks preparing “crisis” measures to respond to the worst case outcome

in Greece. Crisis management teams are on standby at several institutions to

help deal w/any fallout from Europe. http://goo.gl/WDTXt

• Greeks increasingly are emptying their bank accounts but many aren’t

moving the money overseas. Instead, they are storing it at home and in safe

deposit boxes, leading to a spike in burglaries. Der Spiegel

http://goo.gl/2BYTM

• Italy – PM Monti said Italy would make it through the present market

turmoil w/o seeking aid – Bloomberg

• France – Hollande is set to have a majority in the French National

Assembly, taking 322 of 577 seats. That means the French president won’t need

to rely on additional support to pass legislation. WSJ http://goo.gl/jgYs1

• Spain – the Bank of Spain said the Spanish banking system’s bad loans

ratio rose from 8.37% in Mar to 8.72% in Apr. DJ

• Spain – Oliver Wyman and Roland Berger, the two firms conducting an

independent audit of Spain’s banking system, will call for banks to increase

provisioning for residential mortgage exposures. Total provisioning needs may

amount to nearly EU150B. Bloomberg

• Spain – the country’s bank bailout may wind up being funded via the

EFSF according to a report in Die Welt – Bloomberg

• Spain will not immediately implement the International Monetary Fund's

latest recommendations, which include cutting government workers' wages further

(AP)

• Spain – Spain’s Deputy Minister for European Affairs said countries,

inc. Spain, need a liquidity injection from the ECB – Bloomberg

[Naam]

Asia Trading Color – from the JPMorgan trading desk (A Sethia)

• Market Color: The euphoria from the news that the NDP and Pasok

garnered enough votes to form a coalition and block the anti-bailout Syriza

party out of the government was short lived as risk markets in Asia gapped

higher at the open and then drifted steadily lower on weak volumes as investors

remained cognizant of the larger problems still left to be tackled in the

Eurozone. The initial spurt higher was mainly driven by futures led short

covering in the equity markets with little follow through buying. In China,

nationwide property prices continued to drift lower while the sector continues

its recent outperformance on both A/H shares. Finally, NIFTY easily the market

underperforming Asia as the RBI kept rates unchanged versus market expectations

of a -25bp cut; banks and other interest rate sensitives like autos and capital

goods leading the sell off with news just hitting the wires that Fitch has

lowered India’s outlook to negative while keeping its rating a notch above junk.

• China: A shares traded higher in the AM session on the back of the

Greek election results filtering through but trended slower to finally close in

the green by 40bp. Housing price declined in 43/70 cities as the clampdown on

that sector continues; officials from the MOHURD came out and said that local

governments ought to rely less on profits from the sector; regulators continue

stick to the HPR to prevent speculative buying in the space. Autos eked out a

small gain today as it was announced that China will exempt new energy vehicles

from purchase tax while also cutting VAT for auto sellers. Railway names

continue to outperform on noise that the stimulus may be brought forward.

Overall volume still weak at US$20Bn.

• Hong Kong: Order pad was slightly better to buy although very light

overall. HSI opened on day highs and trended steadily lower through the day as

the euphoria from Greece’s election results evaporated fairly quickly. China

property names continued to outperform the market despite home prices continuing

to broadly decline, most single stocks up by 1-2%. HK Exchange traded to -5% on

the back of the successful deal for LME, which our analyst reckons is quite

pricey, we remain N on the name. Mengniu trading higher by 7% after Danish food

company Arla took a 5.9% stake. Volumes still extremely light at HK$48Bn with

short interest at 9.3%.

• Japan: While a positively received Greek election result sent Japanese

markets rallying to a 1-month high, naysayers will point to the disturbingly

light volumes (Y863bn value traded) once again as a sign of a lack of

conviction. Also helping overall sentiment was a WSJ article over the weekend

suggesting lighter Basel III requirements in lieu of the current difficult

economic climate. Beta/cyclical plays drove the gains today (Glass +3.3%,

Non-fer Metals +3.5%, Mining +4.2%) along with exporters with the stronger

USD/JPY in today's "risk-on" environment while defensives on the back foot

(TPELEC along with TPLAND the only sectors in -ve territory). Interestingly S&P

futures only at a 40bps prem at the time of writing - possibly due to a positive

Greek election outcome already partially priced in to Friday night's rally and

also some moderately bearish comments from China's deputy finance minister who

said that China's economy faces "great downside pressure".

Asia/Pac/emerging markets

• China growth – an advisor to the PBOC said Chinese economic growth

would bottom out this Q and rebound in Q3 as government measures designed to

stimulate activity took effect – Bloomberg

• China housing prices – housing prices in China fell at a slower pace

in May, suggesting the rate of decline may be stabilizing. May prices fell

0.12% vs. the Apr decline of 0.25% and 0.29% in Mar – WSJ http://goo.gl/3GqUe

(see JPMorgan takeaways: “house prices continued to decline in May, expect

property tightening to stay in place” http://goo.gl/CXzGw).

• China housing policy – the country’s Ministry of Housing and

Urban-Rural Development said Mon it would stick to property tightening measures

– Reuters

• Japan reaches sales tax deal – PM Noda struck an agreement w/the

country’s two largest opposition parties on Friday for legislation that would

double Japan’s consumption tax. NYT http://goo.gl/hWeYx

• Japan – the country’s opposition party is likely to accept the

government’s latest BOJ candidate proposals – DJ

• Japan – the BOJ raised its assessment on the country’s exports and

output but warned of risks from Europe – Reuters

• South Korea – the S Korean gov’t will cut its economic growth forecast

for this year from an earlier 3.7% to 3.4% - DJ

• India surprises markets and leaves rates unchanged – the RBI surprised

w/a decision to leave rates unchanged Mon morning (the RBI was expected to cut).

The RBI said inflation headwinds drove its decision to leave rates unchanged –

DJ (see JPMorgan takeaway on the RBI decision http://goo.gl/be1xf).

• India – Fitch lowered its outlook on the country to negative from

stable – Bloomberg

MENA

• Saudi Arabia – Crown Prince Nayef bin Abdulaziz al Saud passed away

over the weekend from natural causes. He was heir to the Saudi throne. WSJ

http://goo.gl/keCYb

• Iran – the country’s economy increasingly is under strain due to

Western sanctions but a breakthrough during the upcoming nuclear negotiations

seems unlikely. NYT http://goo.gl/hOjzb (a separate report suggests Iran

may be prepared to halt high-grade uranium enrichment http://goo.gl/JQutr while

a German newspaper claims president Ahmadinejad may leave politics

http://goo.gl/QYeHq).

• Syria – UN peace observers have pulled out of the country citing

rising security risks. Obama and Putin will discuss the situation in Syria on

the sidelines of the upcoming G20 in Mexico. FT http://goo.gl/L7GxJ

• Egypt – the Muslin Brotherhood is claiming victory in the weekend

elections. The MB’s candidate, Mohamed Morsi won at least 52% of the vote.

Sky http://goo.gl/AB6JA

[MrRealDeal]

Well it look like I was dead wrong on my perdiction ...... now lets hope my straddle pays off ! ..... moved 2 percent premarket , 2 or 3 more tomorrow in the same direction and im in the money. Lets hope ben give some dissapointing statement wed ! .....

[MrRealDeal]

We can discuss on tews who was right

no rally...

only the JPY caved in for whatever reason

Yup I was wrong ... thats why I bought a straddle so I could be wrong and still make money ! ..... lets just hope I wasnt double wrong !

[churchill]

'Today’s Top Stories'

What's that all about Naam ...did you hit the wrong button .

[manarak]

We can discuss on tews who was right

no rally...

only the JPY caved in for whatever reason

Yup I was wrong ... thats why I bought a straddle so I could be wrong and still make money ! ..... lets just hope I wasnt double wrong !

I took my 0.4% profit and I'm out already.

I'm a bit bummed to see the AUD is still gaining, missing out on that :-/

I was also toying with the idea of buying USD this morning, but didn't do it.... big and expensive mistake in terms of missed opportunity - it is now 1% higher!

Waiting to see where it's going, but I think we are in for a dollar rally. Maybe up to 10% over the next 6 months.

The Aussie will probably also appreciate against EUR, but not as much as USD in my opinion, maybe 4-5%.

Edited June 18, 2012 by manarak

[lannarebirth]

We can discuss on tews who was right

no rally...

only the JPY caved in for whatever reason

Yup I was wrong ... thats why I bought a straddle so I could be wrong and still make money ! ..... lets just hope I wasnt double wrong !

I took my 0.4% profit and I'm out already.

I'm a bit bummed to see the AUD is still gaining, missing out on that :-/

I was also toying with the idea of buying USD this morning, but didn't do it.... big and expensive mistake in terms of missed opportunity - it is now 1% higher!

Waiting to see where it's going, but I think we are in for a dollar rally. Maybe up to 10% over the next 6 months.

The Aussie will probably also appreciate against EUR, but not as much as USD in my opinion, maybe 4-5%.

The $USD's been wanting to move higher but too many people onboard. Perhaps this recent weakness shook a few off. Makings of a nice reversal today if it holds.

[yoshiwara]

The $USD's been wanting to move higher but too many people onboard. Perhaps this recent weakness shook a few off. Makings of a nice reversal today if it holds.

Trading against the EUR can be treacherous and I'm not going there. I did one play into AUD and it then dived over 8%. So much for the 'positive' interest payments. In at 1.04+ and eventually out at 1.05+. No more the AUD. Too much of a proxy on China and I don't fancy the Aussie PM too much. The hedge against $US (or HKD) IMHO is now the SGD, but softly, softly.

[Naam]

'Today’s Top Stories'

What's that all about Naam ...did you hit the wrong button .

sorry, i forgot this thread is reserved for yewtoob clips. it will not happen again

[lannarebirth]

The $USD's been wanting to move higher but too many people onboard. Perhaps this recent weakness shook a few off. Makings of a nice reversal today if it holds.

Trading against the EUR can be treacherous and I'm not going there. I did one play into AUD and it then dived over 8%. So much for the 'positive' interest payments. In at 1.04+ and eventually out at 1.05+. No more the AUD. Too much of a proxy on China and I don't fancy the Aussie PM too much. The hedge against $US (or HKD) IMHO is now the SGD, but softly, softly.

I don't look at pairs so much but the DXY registered a bullish engulfing reversal pattern yesterday. Maybe it doesn't mean anything but OTOH maybe it does. I offer this insight at no charge.

[churchill]

G-20 to vow all necessary steps to aid EU: reports

http://www.marketwatch.com/story/g-20-to-vow-all-necessary-steps-to-aid-eu-reports-2012-06-18?dist=beforebell

Brilliant ...... In other words they can agree on nothing ..and have NO idea ..

Greece is going to renegotiate .. wants more

so Ireland will want more .

Spain , Italy ... need more

Japan needs more

US needs more

UK needs more

More ..... printing .....

Otherwise who can pay their bills ....

[Naam]

25 hours no posting. the financial crisis can't be that bad...

[yoshiwara]

The $USD's been wanting to move higher but too many people onboard. Perhaps this recent weakness shook a few off. Makings of a nice reversal today if it holds.

Trading against the EUR can be treacherous and I'm not going there. I did one play into AUD and it then dived over 8%. So much for the 'positive' interest payments. In at 1.04+ and eventually out at 1.05+. No more the AUD. Too much of a proxy on China and I don't fancy the Aussie PM too much. The hedge against $US (or HKD) IMHO is now the SGD, but softly, softly.

I don't look at pairs so much but the DXY registered a bullish engulfing reversal pattern yesterday. Maybe it doesn't mean anything but OTOH maybe it does. I offer this insight at no charge.

Its the pairs where all the action is.

[lannarebirth]

The $USD's been wanting to move higher but too many people onboard. Perhaps this recent weakness shook a few off. Makings of a nice reversal today if it holds.

Trading against the EUR can be treacherous and I'm not going there. I did one play into AUD and it then dived over 8%. So much for the 'positive' interest payments. In at 1.04+ and eventually out at 1.05+. No more the AUD. Too much of a proxy on China and I don't fancy the Aussie PM too much. The hedge against $US (or HKD) IMHO is now the SGD, but softly, softly.

I don't look at pairs so much but the DXY registered a bullish engulfing reversal pattern yesterday. Maybe it doesn't mean anything but OTOH maybe it does. I offer this insight at no charge.

Its the pairs where all the action is.

Perhaps, but I'm not really a currency trader except to sometimes make investments in other things where I think the currency I invested in will also go up.

[lannarebirth]

So, I read today that the Fed is extending it's "Operation Twist". An opertion to buy treasuries at the long end of the time spectrum. It's exactly what I'd have wished for all along at these historically low interest rates. Borrow as long as you can at these rates, same like prudent individuals might do. Now, if they'd only take a cue from individuals and not spend more than they take in in revenues. If only, a new Bull Market would be born.

[manarak]

both USD and AUD have no direction today.

seems as if everyone is doing the same as I: wait.

[yoshiwara]

Perhaps, but I'm not really a currency trader except to sometimes make investments in other things where I think the currency I invested in will also go up.

It is a 'hobby' in Hong Kong with (some) savers, who although not currency traders, will shift their savings around different currencies to (hopefully) get an edge even if they have no intention of investing in the countries of those currencies. Recent tops of the pops have been RMB and AUD.

[MJP]

25 hours no posting. the financial crisis can't be that bad...

Dunno.

Call from the boss today. "How much scrap iron is left on the job, the market just collapsed by half in less than a week." This from the Chairman of the UK's third largest demolition firm.

Suddenly feels like 2008/peak crisis again only far more acrid here in the UK. It's more than jitters, it's got that uncertainty about the inevitable feel to it.

Sort of feels like this . . .

[mccw]

http://m.bbc.co.uk/news/business-18561426

I wonder if this is really a computer problem.

Or something more serious.

RBS is in the worst of financial positions , estimated to need roughly another 9 billion to keep on top of things after their recent credit rating down grade.

http://www.investors.rbs.com/ir/rbs/ir.jsp?page=news-item&item=1024407682244472

Edited June 23, 2012 by mccw

[yoshiwara]

25 hours no posting. the financial crisis can't be that bad...

it's got that uncertainty about the inevitable feel to it.

There's 'er something wrong about that statement.