Overnight Markets-Leading News

 Greeks Cutoff from Private Investors

Why would you lend money to these people? The EU gave the all sorts of money to develop their agriculture sector, to grow high quality and more grapes, to grow more cotton, to improve their dairy industry. Greek agriculture output declined as the Greeks took the money and went to the beach. Giving money to Greeks is like giving money to a drunk. This is not Ireland, or Iceland, or the USA where the money went to bailout corrupt banks derivative scams, the average Greek has been scamming Europe for quite sometime. Even their fishing industry is run by Egyptians and Arabs now.  The Greeks should do like Cyprus, cut a fair deal with Americans and drill, baby drill.  Nothing like a trillion dollars of oil to get creditors to line up again.

http://www.washingtonpost.com/business/economy/greek-plan-could-mean-exile-from-investors/2012/02/21/gIQACDcPTR_story.html

Smirkel Lets Feckless Greeks Know German Banker Are Watching Them

German Chancellor Angela Merkel indicated she will maintain pressure on Greece to meet debt- cutting pledges required for its second financial rescue, saying fiscal discipline is needed to hold the euro area together.

“If you have a single currency you naturally have to be able to trust each other,” she told members of her Christian Democratic Union party in Demmin, Germany, today. While “it is right” to bail out Greece, Portugal and Ireland, “we have to say again and again that everyone must do their homework because otherwise this Europe can’t hold together.”

Merkel’s renewed backing for European unity in the face of the debt crisis marked her first public comments since euro-area finance ministers signed off yesterday on a 130 billion-euro ($172 billion) rescue for Greece aimed at averting the first sovereign default in the currency union’s 13-year history.

Addressing the crowd at an Ash Wednesday rally in Mecklenburg-Western Pomerania, the eastern state where she has her electoral district, Merkel said austerity measures imposed by Greek leaders as conditions for the country’s two bailouts mean “we are asking a lot” of average Greeks. Greece must turn into a “properly functioning state,” she said.

Merkel, who has said in recent weeks she wants Greece to remain in the 17-nation euro area, said Germany is too small “to stand alone” in Europe.

“But it has to be a Europe in which we all pull in the same direction, by standing together, by following solid economic policies, by everyone doing their homework,” she said. “Then we can promote our interests together.”

http://www.bloomberg.com/news/2012-02-22/merkel-signals-she-ll-keep-pressure-on-greece.html

 

Greek Deal Bleeding EU Banks Red

Reuters) – Greece’s debt problems drove a slew of heavy losses across the European banking sector on Thursday, and bosses warned the euro zone crisis would continue to threaten earnings.

From France to Germany, Britain to Belgium, some of the region’s biggest banks lined up to reveal billions of euros lost through writedowns on Greek loans.

“We are in the worst economic crisis since 1929,” Credit Agricole (CAGR.PA) chief executive Jean-Paul Chifflet said.

Credit Agricole reported a record quarterly net loss of 3.07 billion euros ($4.06 billion), performing worse than expected from the cost of shrinking its balance sheet and after a 220 million euro charge on its Greek debt.

“We think 2012 is going to still be a tense period,” Chifflet said, adding: “We’re hoping that our results will be largely better than in 2011.

Europe’s banks have already written down billions of euros from losses on Greek government bonds and loans, and a deal agreed this week with its creditors will inflict losses of 74 percent on bondholders.

“We can’t say that the writedowns are over,” said Franklin Pichard, director at Barclays France. “Even if some can say that the worst is over, we are only at a new stage in terms of provisioning and not necessarily at the end.”

That is because, despite the bond swap deal, bondholders could suffer further hits if Greece’s economy fails to recover.

Britain’s Royal Bank of Scotland (RBS.L) has marked its Greek bonds at a 79 percent loss — or 1.1 billion pounds — for 2011. The state-owned bank posted a fourth quarter loss of nearly 2 billion pounds on Thursday.

FAR WIDER THAN GREECE

Problems in Europe’s banking sector are far wider than Greece, however.

“We have reduced the balance sheet of RBS by over 700 billion pounds of assets. That is roughly twice the size of the entire national debt of Greece,” said RBS boss Stephen Hester.

The region’s banks are still repairing the damage of the financial crisis and shrinking their assets. They must also find 115 billion euros by the middle of this year to shore up their balance sheets against future shocks. But any weakening in the economy will hit earnings and make that harder to achieve.

Germany’s Commerzbank (CBKG.DE), whose fourth-quarter earnings were spoiled by a 700 million euro hit on Greek sovereign debt, needs to find 5.3 billion euros to meet the stringent new capital requirements set by Europe’s banking regulator. It has now lost more than 2 billion euros on its Greek bonds.

Commerzbank said it could reduce some of its shortfall by shedding risky assets, though the debt crisis still had the potential to disrupt earnings.

“The high degree of uncertainty associated with the European sovereign debt crisis will … continue to pose challenges for us,” Chief Executive Martin Blessing said…..

http://www.reuters.com/article/2012/02/23/us-europe-banks-idUSTRE81M0LT20120223

Wen Seen Targeting Slower Growth In China

http://www.bloomberg.com/news/2012-02-22/wen-seen-paring-china-growth-goal-in-state-of-the-union-on-inequality-rise.html

Asian and Other Emerging Markets Drop on HP  Miss

http://www.bloomberg.com/news/2012-02-23/emerging-market-stocks-decline-most-in-a-week-on-economic-growth-concerns.html

In Germany Limp Economy Stifled by Smirkels

http://www.nytimes.com/2012/02/23/business/global/in-germany-a-limp-domestic-economy-stifled-by-regulation.html?_r=2&ref=business

 EU Says Economy to Contract

Europe’s economy will shrink in 2012, with Italy and Spain facing sudden crunches as they battle to escape the debt crisis, the European Commission said.

The 17-nation euro economy will contract 0.3 percent, the commission said, abandoning a November forecast of 0.5 percent growth. The downgrade was mainly due to projected contractions of 1.3 percent in Italy and 1 percent in Spain.

“The euro area has entered into a mild recession,” European Union Economic and Monetary Commissioner Olli Rehn told reporters in Brussels today after releasing the forecasts. “Prospects have worsened and risks to the growth outlook do remain, but there are signs of stabilization.”

Two days after Greece clinched a second bailout, the forecasts showed an economy pockmarked by the two-year-old fiscal crisis and looked set to stiffen resistance in southern Europe to further doses of German-demanded austerity.

The full-year Europe-wide contraction would be the first since 2009, when a 4.3 percent drop in the wake of the U.S.-led banking crisis exposed the overborrowing and imbalances that plunged Europe into its sovereign debt troubles.

Financial markets “remain still rather fragile, but there arre also signs of stabilization,” Rehn said.

The euro pulled off its high against the dollar after the forecasts were published, trading at $1.3313 at 10:16 a.m. in London, up 0.5 percent on the day, after reaching $1.3343 earlier….

http://www.bloomberg.com/news/2012-02-23/euro-region-economy-will-shrink-this-year-as-italy-spain-tumble-eu-says.html

Brent Rises to 9 Month High On German Boom

Brent crude rose to its highest price in more than nine months in London after German business confidence surpassed forecasts, reflecting optimism that steps to resolve Europe’s debt crisis will be successful.

Brent futures advanced as much as 1.3 percent to their strongest since May 3. The Munich-based Ifo institute’s business climate index climbed for a fourth month to its highest level since July. U.S. initial jobless claims held at a four-year low last week, adding to evidence the world’s biggest economy is recovering. Crude in New York rose as much as 0.5 percent to its highest since May 4.

“With European policymakers now on a clearer path to protect global markets from any potential spillover from a disorderly Greek default scenario, downside risks from a complete macroeconomic meltdown are receding fast,” said Amrita Sen, an analyst at Barclays Plc in London.

Brent oil for April settlement rose as much as $1.60 to $124.50 a barrel on the ICE Futures Europe exchange in London and was at $124.32 at 1:58 p.m. local time. The European benchmark contract’s premium to New York-traded West Texas Intermediate widened to $17.67 a barrel from $16.62 yesterday.

On the New York Mercantile Exchange, crude for April delivery was at $106.65, up 37 cents, after rising as much as 52 cents to $106.80. New York futures have risen 3.3 percent this week on speculation that tensions with Iran over its nuclear program will threaten supplies. Prices have gained 8.7 percent in the past year.

Economic Signals

The Ifo institute’s German business climate index, based on a survey of 7,000 executives, climbed to 109.6 from 108.3. Economists had predicted a reading of 108.8, according to the median of 38 estimates in a Bloomberg News survey.

Applications for jobless benefits in the U.S. were unchanged in the week ended Feb. 18 at 351,000, the fewest since March 2008, Labor Department figures showed today. The median projection in a Bloomberg News survey called for 355,000 claims.

“We saw a sharp decline in the U.S. jobless claim s last week, showing there is a strong improvement in the U.S. employment conditions,” Myrto Sokou, an analyst at Sucden Financial Ltd. in London, said by e-mail. “Today’s data were fairly in line with expectations, verifying the optimistic employment picture.”

Iran Tensions

Prices advanced yesterday after officials from the International Atomic Energy Agency were denied access to an Iranian military base. The U.S. and Israel haven’t ruled out air strikes against Iran’s nuclear facilities, escalating tensions in a region that’s home to 54 percent of global oil reserves.

Iran’s refusal to allow access to sites where Western intelligence agencies have reported suspected nuclear weapons work is “another demonstration of Iran’s refusal to abide by its international obligations,” White House spokesman Jay Carney said yesterday.

Turkey’s sole refining company said today it won’t be able to use Turkiye Halk Bankasi AS, the bank that handles Iranian crude purchases, to pay for oil imports from the Gulf state once U.S. sanctions come into force.

Tupras Turkiye Petrol Rafinerileri AS, which has a contract to buy 9 million metric tons of crude a year from Iran, can’t use the bank after the end of June without a waiver from the U.S., a Tupras official said today. Turkey government is asking for an exemption for the refiner’s Iranian business via Halk bank from the U.S. sanctions, the official said…

http://www.bloomberg.com/news/2012-02-23/brent-rises-to-9-month-high-as-german-business-confidence-beats-forecasts.html

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