32 Responses to World entering ‘Dangerous New Phase’ warns IMF head Lagarde

  1. c/o Luisport

    zerohedge zerohedge
    D-Day For Greece And Another Eurocalypse Report From Goldman Sends Europe Tumbling Once Again http://tinyurl.com/436bfme
    há 4 minutos »

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  2. c/o Luisport
    Early Morning Selloff Gets Worse: Major Bank Stocks Getting Routed
    Joe Weisenthal | Sep. 9, 2011, 4:55 AM | 908 | 1
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    Image: Don Hankins via flickr

    We mentioned this morning, that European markets were moving to the downside in early going.

    Things have accelerated a bit since then.

    Italy is now down about 2%.

    Germany is down about 1.5%.

    And US futures, which had been higher — as investors held out (it seemed) some hope that the Obama jobs bill could get turned into reality — have now gone negative.

    The big losers are French banks. SocGen is off 7.3%. Natixis is off 4.33%.

    As for the story: There’s a ton of moving parts moving in Europe right now. The FT reports on ongoing strains in the bank funding market. There’s a big G7 Weekend coming up, as well as the imminent Greek endgame. Finally, Lagarde is out with (yet) another speech calling on recapitaliszations of European banks.

    Read more: http://www.businessinsider.com/morning-markets-part-ii-august-9-european-stocks-bank-stocks-selling-2011-9#ixzz1XS6neCGG

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  3. c/o Luisport

    New IMF Chief Christine Lagarde pissed off a lot of people recently at Jackson Hole when she said European banks urgently needed to raise capital.

    She repeats this claim in a speech today in London. This time notably she admits that the capital may be needed to settle the markets more than it is needed objectively:

    As this process unfolds, we should see a decline in sovereign risk—which should go a long way in removing some of the uncertainty weighing on European banks. As I have said before, this will take time. In view of the heightened risks and uncertainties—and the need to convince markets—some banks need additional capital. We must not underestimate the risks of a further spread of economic weakness, or even a debilitating liquidity crisis. That is why action is needed so urgently so that banks can return to the business of financing economic activity.

    Lagarde also encourages central banks to remain accommodative, saying that inflation risk has receded:

    Monetary policy also has a role to play in the advanced economies. Broadly speaking, it should remain highly accommodative, as the risk of recession outweighs the risk of inflation. This is particularly true since inflation expectations are well anchored in most economies, and commodity price pressures are waning. So policymakers should stand ready, as needed, to take more action to support the recovery—including through unconventional measures.

    Also she liked Obama’s speech:

    We welcome the proposals announced by President Obama last night, which focus on supporting growth and job creation in the short term. As the President also emphasized, it remains critical for the United States to clarify its medium term plan to put public debt on a more sustainable path, and we look forward to the proposed consolidation plan to be announced in the coming days.

    Read more: http://www.businessinsider.com/christine-lagarde-just-doubled-down-on-warning-that-euro-banks-need-to-raise-capital-2011-9#ixzz1XS9PDLp2

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  4. luisport says:

    zerohedge zerohedge
    Market Chatter Of Greek Default Over The Weekend http://tinyurl.com/3c5hlkt
    há 2 minutos

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  5. luisport says:

    zerohedge zerohedge
    It’s official: ECB SAYS JUERGEN STARK RESIGNS FROM EXECUTIVE BOARD
    há 2 minutos

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  6. Warren says:

    Exclusive: Stark to leave ECB over bond-buying

    (Reuters) – European Central Bank Executive Board member Juergen Stark will step down from his post, because of a conflict over the ECB’s controversial bond-buying program, sources told Reuters on Friday.

    The ECB confirmed Stark would be the second German policymaker to leave the bank this year after Bundesbank chief Axel Weber quit in February — a move also spurred by his opposition to the bond program.

    The bank said Stark had resigned for personal reasons but two sources told Reuters it was related to the bond-buying that has rescued Italy and Spain from crisis over the past month and the euro and European stock markets fell in response.

    “This is remarkable,” said Manfred Neumann, emeritus economics professor at Bonn University and former thesis adviser to Bundesbank President Jens Weidmann.

    “Stark held the same view of the bond-buying as Axel Weber and the current Bundesbank president. It is a position that all the Germans have. This is a sign of huge problems within the central bank. The Germans clearly have a problem with the direction of the ECB.”

    Read More at: http://www.reuters.com/article/2011/09/09/us-ecb-stark-idUSTRE7883DF20110909

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    • Richard says:

      Germany will hold all the cards. The EU will be slaves to the Germans after they secure the failing countries. These bailouts in turn will cause economic strife within Germany which will cause for the cry out of a strongman to bring order to the chaos. Be careful as history is repeating itself in a slightly different way.

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      • Sorry Richard, but this is nonsense.

        Like

      • Dennis E. says:

        Richard: Dennis E. Here: Hold that thought. I don’t know if Germany will enslave everyone but it seems that at some point someone, is going to have to step forward and
        bring monetary order and balance to Europe, at least.

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      • I agree Dennis E. According to my beliefs, this will be the “job” for the Man of Lawlessness or as we call him, The AntiChrist. He will come on the scene to stabilize the economy and promise peace worldwide. Do Not Believe Him. He will be a liar.

        Be blessed and Maranatha

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  7. luisport says:

    zerohedge zerohedge
    2 Year Greek bond above 57% – Bberg
    há 10 minutos

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  8. luisport says:

    zerohedge zerohedge
    Berlusconi : it is all America’s fault: “U.S FUNDS DIVESTED FROM INTALY, SPARKING CRISIS”
    há 5 minutos »
    zerohedge zerohedge
    BERLUSCONI SAYS ECB GAVE ITALY FOUR DAYS TO PREPARE AUSTERITY – BBG
    há 6 minutos

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  9. luisport says:

    Tons of people are chattering about the possibility of a Greek default today, with Germany ready to bail out its banks if that happens.

    There are two reasons that people are speculating on a Greek default this weekend.

    First, private sector participation in the bailout — in which bondholders would have to accept about a 21 percent haircut voluntarily — is not going to be very popular.

    Greece bank managers have said they expect private sector participation in the bond swap to reach about 80%. This is well short of the 90% Greece demanded last month. If Greece were actually to take a hard line on this, it would compromise an $185 billion piece of the bailout agreement.

    This swap technically signals default anyway, so the failure to go through with it means we’d see a hard default rather than the managed, “selective” default outlined in the July 21 agreement.

    The deadline for bondholders to declare interest in the plan is today.

    Second, Greece could learn that it will not receive further aid funding from the ECB/EU/IMF “troika.”

    Superficially, this doesn’t seem like a huge deal. The aid funding at stake is $11 billion, small really in comparison to the size of Greek debt ($644 billion in 2010).

    However, failure to receive this funding would signal that Greece is not meeting its debt and privatization goals, and jeopardize support for the bailout agreement announced on July 21. Parliaments and governments across the eurozone are deciding whether to move forward with that this month.

    Policymakers aren’t supposed to meet again until September 14. In the meantime, Greece is examining its books. If it finds that its numbers will not pass muster, it could go ahead with default at any time.

    Read more: http://www.businessinsider.com/speculation-that-greece-will-default-2011-9#ixzz1XTq3fEFZ

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  10. luisport says:

    The latest news from Germany—that the government is considering a bailout mechanism to shield the domestic banks in the event of a Greek default—is hurting the markets.

    Just before noon, the DOW was off over 300 points.

    Presumably that’s because the news is being treated as the clearest signal yet that a Greek default is likely coming.

    While it’s “good” for markets that Germany is willing to do this for its banks, halting possible contagion effects, Germany is just one government, and really, nobody knows how a Greek default would actually play out and spill over elsewhere.

    Gold, which had been tanking earlier in the day, is now surging.

    Europe got slaughtered today. The DAX ended down 4%.

    Read more: http://www.businessinsider.com/stocks-dive-after-german-bailout-news-2011-9#ixzz1XU2WMCjO

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  11. luisport says:

    Get ready for a stressful weekend!

    But first, the scoreboard:

    Dow: -301.07
    NASDAQ: -60.05
    S&P 500: -30.40

    And now, the top stories:

    The big story: Europe appears to be within days of some kind of breaking point. There have obviously been huge concerns about the next Greek bailout and whether it would happen (and with 2-year yields at 55% on Greek debt, it’s obvious that the market has been skeptical for a while). Pre-market there was chatter about a Greek default as soon as this weekend. Then at around 9:20, it came out that a top hawk was leaving the ECB, further emphasizing the lack of cohesion at this crucial institution. And then worries got even more heightened when, this afternoon, it was reported that Germany was planning a fund of sorts to bail out its own banks, in the event of a Greek default. While it’s good news that Germany is planning on ring-fencing its financial system, the news was taken as a further signal to the market that Greece is on the edge. Click here to see the full explanation of why people are freaking out >
    Let’s go back a bit though: Last night we got the big jobs package from Obama, and initially it was taken as a fairly big “plus.” Not only was it bigger than some had expected, but the GOP didn’t line up to kill it right away, as some presumed they would. So there’s some daylight on that front. Click here to see what economists thing about Obama’s big announcement >
    Initially the futures rallied nicely post-Obama, and they were still higher this morning, but eventually the freakout in Europe dragged down US markets.
    Also at the same time as Obama, reports came out of a terrorist threat (specific and credible) that could coincide with this weekend’s 9/11 anniversary. That never appeared to have a specific market impact, however.
    And mostly that was it: Panic about Europe obviously overwhelmed any presumed additional marginal stimulus from Obama.
    Final tally: Stocks got killed, the euro got crushed, and the dollar went wild, against both the euro and the Swiss Franc. Gold also had a really solid day. And of course, Treasury yields hit a brand new historical low.
    On the corporate front, the big news is that layoffs at Bank of America might reach 40k.
    For a reminder of what you should worry about in Europe, see here

    Read more: http://www.businessinsider.com/closing-bell-september-9-2011-9#ixzz1XUNbfyGP

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  12. luisport says:

    Greece has occupied the center of attention today, as fears of default mount. This apprehension will continue over the weekend.

    It would, however, be surprising to see anything like this happen before Greece meets with IMF/EU/ECB officials to discuss $11 billion in bailout funds next week.

    Of prime importance this weekend is a speech PM George Papandreou will deliver in Thessaloniki Saturday, amid mounting hostility within his own party. While the government publicly reaffirmed Greece’s will to go ahead with the bailout today, his remarks may provide insight into a handful of different issues.

    Here are the four big questions we’ll be looking to answer:

    – How serious is the ECB/EU/IMF troika about actually revoking the next tranche of aid funding ($11 billion) it promised to provide?

    – How long can Greece last without a bailout?

    – How fragile is Papandreou’s position?

    – How close is the Greek government to giving up and throwing in the towel?

    We’re betting that Papandreou will not actually answer any of these questions directly.

    Read more: http://www.businessinsider.com/what-to-look-out-for-in-greece-this-weekend-2011-9#ixzz1XUPemycf

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  13. luisport says:

    Commerzbank -8 %;
    Erste Bank -9 %;
    Societe General -10%
    Raiffeisen Int. -11 %

    In one afternoon ..

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  14. luisport says:

    A Greek default may lead to a default in Italy, Spain and elsewhere, causing massive selling in the euro.

    Jim Rogers says in this likely scenario — which could begin this weekend — you should buy the dip. He told CNBC yesterday (via @_alea):

    If this happens “the euro will go down a far amount. But I would buy all the euro I could at that point because then that would mean that Europe is going to have a very strong, sound currency,” he explained. “People can not lie about their finances anyone, people have to run a tight ship.”

    “It would be a lot of pain between now and then, but boy if that happened in the next month or so, buy all the euros you can,” Rogers said.

    Rogers also says he’s buying the U.S. dollar as a sheer contrarian play: “The only reason I’m long…is because everybody in the world, including me, has been terribly pessimistic. And whenever that happens you should take the other side of the trade.”

    Read more: http://www.businessinsider.com/jim-rogers-buy-all-the-euros-you-can-if-greece-defaults-2011-9#ixzz1XYHygW8t

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  15. luisport says:

    The USA is at a critical juncture in terms of its economic future. This is part of the 8-year Cardinal Climax (2008-2015) as stated both in this column and every annual Forecast Book written since 1994. And the most significant geocosmic signature of that Climax is coming up in 2012-2015: Uranus square Pluto. Either that is when the turn comes, or that is the point at which the USA defaults and loses control of its financial status in the world. Uranus and Pluto have been within one degree of exactness to this square for the past two months, so we are seeing the nature of what lies ahead. In order to turn the corner, a bold new plan with a sense of urgency is needed, and Obama delivered the message. But did he deliver the right path to solution? As I stated back in 2009 when the first stimulus package was announced and again this week, it is a gamble—a big gamble. And this “gamble” fits with the principles of transiting Pluto (debt) in opposition to the USA Jupiter (gamble), which is also one of the classical “bankruptcy aspects” in Financial Astrology. But as Financial Astrologers also understand with this aspect, one does not need to enter into bankruptcy if he simply controls his spending. That is, if he doesn’t spend more than he earns or can afford, there is no need to experience bankruptcy. Under this aspect, one is tempted to either take unwise chances (gamble) or to spend more than he brings in, and succumbing to this temptation is what leads to bankruptcy.

    http://www.stariq.com/pagetemplate/article.asp?PageID=11035

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  16. luisport says:

    It’s that time again when the IMF has just telegraphed something very big and very bad is about to happen. But let’s back up, and paraphrase our post from March: “Back in April 2010, before Waddell and Reed sold a few shares of ES, effectively destroying the market on news that Europe was insolvent, we made the following observation: “The IMF has just announced that it is expanding its New Arrangement to Borrow (NAB) multilateral facility from its existing $50 billion by a whopping $500 billion (SDR333.5 billion), to $550 billion.” Little did we know that our conclusion “something big must be coming” would prove spot on just a month later after Greece, then Ireland, then Portgual, and soon Spain, Italy, Belgium, and pretty much all other European countries would topple like dominoes tethered together by a flawed monetary regime. Well, based on news from Dow Jones we can now safely predict the following: “something bigger must be coming.” The specific reason for this prediction was the following: “the International Monetary Fund is expected to soon activate a special funding pool that will boost the fund’s ability to prevent or resolve economic crises.” Sure enough something bigger came, and then some: Greece received its second bailout package about 4 months later, only to see the entire Eurozone hang by a thread following the political fallout that has since ensued. Well, it is time to shift from the comparative to the superlative: “something biggest must be coming.”

    http://www.zerohedge.com/

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  17. luisport says:

    BreakingNews Breaking News
    Greek police fire tear gas at anti-austerity protesters – AP http://on.msnbc.com/nZ3NTM
    há 5 minutos

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  18. luisport says:

    zerohedge zerohedge
    The Summer Vacation Is Over – As Papanderou Briefs Greece On Its Sorry State, The Riot Police Returns http://tinyurl.com/3kjzqps
    há 6 minutos

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  19. luisport says:

    zerohedge zerohedge
    Thessaloniki Riot Web Cam http://tinyurl.com/3qxwn4j
    há 12 minutos

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  20. luisport says:

    “I am sure the Euro will oblige us to introduce a new set of economic policy instruments. It is politically impossible to propose that now. But some day there will be a crisis and new instruments will be created.”

    – Romano Prodi, EU Commission President, December 2001

    Prodi and the other leaders who forged the euro knew what they were doing. They knew a crisis would develop, as Milton Friedman and many others had predicted. They accepted that as the price of European unity. But now the payment is coming due, and it is far larger than they probably thought.

    This week we turn our eyes first to Europe and then the US, and ask about the possibility of a yet another credit crisis along the lines of late 2008. I then outline a few steps you might want to consider now rather than waiting until the middle of a crisis. It is possible we can avoid one but, as I admit, whether we do (and the extent of such a crisis) depends on the political leaders of the developed world (the US, Europe, and Japan) making the difficult choices and doing what is necessary. And in either case, there are some areas of investing you clearly want to avoid. Finally, I turn to that watering-hole favorite, the weather, and offer you a window into the coming seasons. Can we catch a break here? There is a lot to cover, so we will jump right in.

    Read more: http://www.businessinsider.com/prepare-now-there-is-so-much-that-could-push-us-into-another-2008-crisis-2011-9#ixzz1XdTqSLOW

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  21. luisport says:

    These are the headlines at Spiegel Online, which should hit the markets like a ton of bricks offers on Monday. Looks like Spiegel posted the teaser to the full story to be released on Monday. Not a great way to restore market confidence. Here’s how the post ends: Read the full story on Monday on SPIEGEL ONLINE International.

    And here’s how it begins,

    With doubts growing about Greece’s ability to implement important savings measures and reforms, there are concerns that insolvency may be inevitable. In Germany, officials in Wolfgang Schäuble’s Finance Ministry are exploring what Athens’ financial collapse would mean for the euro zone

    German Finance Minister Wolfgang Schäuble, who is reportedly doubtful that the country can be saved from bankruptcy, is preparing for the possibility of Greek insolvency. Officials in his ministry are currently reviewing scenarios for handling such a situation, exploring what it might mean for the rest of the euro zone. Under the first scenario for a Greek bankruptcy, the country would remain in the euro zone. Under the other, Athens would abandon the common currency and reintroduce the drachma.

    And this,

    One of these key instruments would be credit lines provided to countries like Spain or Italy if investors stop lending them money after a Greek bankruptcy. If banks were forced to write off the billions in Greek government bonds on their books, they could become reliant on billions in rescue fund aid in numerous euro-zone countries. Both developments are to be expected in a Greek insolvency, regardless of whether the country exits the euro or not.

    Volker Bouffier, the governor of the state of Hesse, which is home to Germany’s financial capital Frankfurt, is a member of Chancellor Angela Merkel’s conservative Christian Democratic Union (CDU) party, as is Schäuble. Bouffier is now urging that the possibility for countries to leave the euro zone be created quickly. Current European Union treaties provide no provisions for a country to abandon the currency.

    Read more: http://macromon.wordpress.com/2011/09/11/german-finance-minister-prepares-for-possible-greek-bankruptcy-spiegel/#ixzz1Xe6hXozz

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  22. nickk0 says:

    I am expecting that we will get to see a Black Monday happen soon. 😦

    – Nick

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  23. luisport says:

    zerohedge zerohedge
    REHN SAYS EU STAFF TO RETURN TO ATHENS IN COMING DAYS. Which bailout is this? Anyone keeping track anymore
    há 5 minutos » zerohedge zerohedge
    German Economy Minister: “Greek Default Can’t Be Ruled Out” And “We Need A Bankruptcy Procedure For Countries” http://bit.ly/qziKAc
    há 8 minutos

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    • Thank you luisport. I know I can’t keep up with everything going on now and I certainly do not understand the financial market, except I know it’s not good. I appreciate all the hard work that goes into this site.

      Be blessed and Maranatha

      Like

  24. luisport says:

    Greece isn’t ripping the cord this weekend, but it probably doesn’t matter.

    Everyone’s throwing in the towel.

    Headlines about Germany bracing for a Greek default are pretty telling.

    Says Bloomberg: “Germany May be Ready to Surrender in the Fight to Save Greece.”

    The gist: After two years of step after step to prevent a default, all the smoke signals from Berlin indicate that the fight is over, and that Greece is probably going to default.

    Of course, the market has known this was probably the outcome all summer, with short-term yields hitting cartoonishly high levels.

    The question is: Can banks avoid an immediate hit, and will a Greek default cause a crisis of confidence in Italy, Spain, and elsewhere?

    If there is a ray of optimism, it’s that Greek PM Papandreou certainly didn’t sound like he was throwing in the towel at his speech yesterday.

    Read more: http://www.businessinsider.com/germany-thinks-its-over-for-greece-2011-9#ixzz1XgLh932T

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