There's a lot of news out, but this is mainly about Greece where the situation is as fluid as the Colorado river during Spring time.
Here's a recap:
Greek Finance Minister, "Venizelos had no idea about the referendum. All he knew about was the vote of confidence," a government official told Reuters on condition of anonymity. "He told Papandreou he should inform foreign partners and a letter was drafted in the early morning hours."
Ex-Greek Minister Manos Says Vote May Trigger Default, Euro Exit
Greek opposition leader might ask his entire Parliamentary group to resign, which would lead to elections
GREEK MP'S MOVE REDUCES PM PAPANDREOU'S MAJORITY TO 152 OUT OF 300 DEPUTIES - RTRS (151 votes are needed to pass a vote.)
Greek Ruling Pasok Party Majority Falls to 151, Kerdos Reports - BBG
Greek Health Minister Says Referendum Won’t Happen: Proto Thema
All of the sudden, the Greek craziness is contagious:
Senior member of Italian opposition says party has asked president Giorgio Napolitano to form new government before G20 summit in Cannes
ITALY 2-YR BOND YIELD SPREAD VS GERMANY HITS NEW EURO LIFETIME HIGH ABOVE 500 BPS
ECB tries to interviene to halt slide in Italian Bonds, apparently gives up on effort and Larry Kudlow is proven dead wrong about the importance of Italian bonds, whether investors have seen one or not. I never saw the offices of Lehman Brothers, but that didn't make any difference.
10Y Bund Yield Drops 5 Standard Deviations, Most Ever. The largest single-day move in Bund yields ever.
Italy’s FTSEMIB index down 5.3%
DAX down 4.4%
CAC down 4.3%
Spain’s Ibex down 4.1%
FTSE down 2.9%
And those worthless CDS (Credit Default Swaps)?
Italy CDS Rise 45.5 bps to 491; update +53 495/505
France CDSs rise 14 bps to 190; update + 17 191/196
Spain CDSs rise 33.5 bps to 374.5; update + 41 375/385
Portugal CDSs rise 57 bps to 1,028; update + 71 1015/1055
Italy to leave the Euro?
Peter Tchir, of TF Market Advisors: "Everything I have read over the past couple of weeks coming out of Italy, tells me that if there was one country prepared to "screw" the Euro and go it alone, it would be Italy. They don't like Merkozy treating them like children, and they have a big enough economy that a dirt cheap Lire would make exports possible"
I would be very careful buying Italian CDS as they could redenominate their bonds in LIRE and it wouldn't be a Credit Event (our reading of the doc is that G-8 nations have that right - but trying to confirm)
Germany may regret wasting the last 18 months trying to save the Euro and not doing enough to save themselves."
Furthermore Peter's comments on Greece:
The ECB and their paid in full demands. The EU and their austerity and controls and demands over which Greek assets can be sold to whom? Debt to GDP of 120% by 2020.
How about debt to GDP of 10% by year end? How about some nice asset sales to China at premium prices not only to get some immediate funds but to develop a nice long term relationships with deep pockets and a great trade partner.
He holds the cards. He is putting his people and national interest above Europe. Merkozy must be in a panic.
This may just be a ploy to get a better deal, but I think it is great for Greece. It's horrible for the bailout as every other nation in trouble may take similar steps.
In Russia:
UPDATE on GREECE:
There will be an emergency meeting in minutes, at 4 pm local. Dow Jones reports that early elections, and the referendum, will be discussed by the Greek cabinet, according to a government official. Supposedly G-Pap is trying to control the revolt in the socialist party. We fail to see how this is remotely good news, as early elections are merely another form of popular referendum which will simply delay the final outcome of the prevailing hatred toward the bailout, only with it it risks esclating the country closer to outright civil conflict.
ANOTHER GREEK RULING PARTY LAWMAKER CALLS FOR ELECTIONS, NATIONAL UNITY GOVT - GREEK MEDIA
There is no more ruling majority with this last defection.
As you can see, the news is breaking faster then one can link to it. Like I said, it feels like Lehman 2008 all over again.
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