Dow slumped 112, decliners over advancers 4-1 & NAZ dropped 19. Banks were not hit with much selling, the Financial Index fell 1+ to the 196s.
The MLP index fell 3 to 396 & the REIT index was down almost 3 to the 247s. Junk bond funds were flattish & Treasuries found buyers with growing uncertainties coming from Europe. Oil dropped from a 3 week high as euro-area finance ministers refused to approve a rescue package for Greece, boosting concern that the European debt crisis will reduce fuel demand. Gold also saw selling.
Photo: Yahoo
Photo: Bloomberg
The photos above are getting ugly! Violence erupted on the streets of Athens & politicians resigned from the gov after European leaders demanded that they deliver even deeper austerity. A day after Greece claimed it had reached an agreement among its squabbling party leaders on new cutbacks, European officials dashed any hopes that the country is out of danger. Finance ministers said more needs to be done & set a deadline for the middle of next week. If those demands are not met, it faces a chaotic debt default next month that would send shockwaves around the world economy. If it delivers on those demands, Europe has committed to give it a €130B ($172B) lifeline that would at least postpone Greece's day of reckoning. "No disbursement without implementation," Jean-Claude Juncker, the Luxembourg premier who also chairs the finance ministers' meetings, said after they declined to fully back the deal Greek leaders had agreed. The finance ministers want Greece to find another €325M ($432M) in savings & Parliament must vote the austerity thru. Worried that political leaders could later renege on the austerity promises, they also requested that the party heads commit to the measures even after general elections in Apr. The fallout from the eurozone's demands was immediate in Athens. Thousands of protesters marched in the streets to protest cuts including a 22% reduction in the minimum wage This has all the makings of a rescue package coming unglued.
Greece Pushes Back on Demand for More Cuts
Photo: Bloomberg
ECB President Draghi lashed out at bankers who said tapping the ECB’s 3 year-loan program carries a stigma, after executives said they shunned the loans. “There is no stigma whatsoever on these facilities,” Draghi said. “Some have made some sort of statements that I would call statements of virility, namely it would be undignified for a bank, a serious bank, to access these facilities. Now let me say that the very same banks that made these statements access facilities of different kinds -- but still government facilities.” The statements by Draghi came a week after Deutsche Bank CEO Ackermann said Germany's biggest lender didn’t tap the ECB in Dec because it could damage its reputation with customers. The ECB awarded €489B ($650B) in loans to 523 banks on Dec 21 to keep credit flowing to the economy as Europe’s debt crisis drove up banks’ borrowing costs. The ECB will offer a 2nd batch of the loans this month. ING Groep CEO Hommen said yesterday that the biggest Dutch financial-services company didn’t take the loans in Dec, partly because of reputational risk. It’s discussing internally whether to take loans in the 2nd program, he said. Just throwing money at the problems can get complicated, not a helpful sign while Greece is on the ropes.
Draghi Slams Bankers Shunning Loans From Three-Year ECB Financing Program
Photo: Bloomberg
Confidence among US consumers declined more than forecast in Feb from the highest level in almost a year as rising gas prices began to stress household budgets. The Thomson Reuters/University of Michigan index of consumer sentiment dropped to 72.5 from 75 in Jan & also came in below the median estimate of 74.8. The gauge averaged 89 in the 5 years leading to the 18 month recession that ended in Jun 2009. A 22¢ increase in the price of a gallon of gasoline this year & concern over the extension of payroll tax cuts may be limiting confidence. At the same time, the biggest employment gain in almost a year last month, fewer job cuts & a rally in equities are underpinning sentiment & the spending that accounts for about 70% of the economy. The recovery is back to getting more of a mediocre rating.
U.S. Michigan Consumer Sentiment Index Falls
Dow is down about 100 this week because the Greek debt package is not working out. The news today ignores the other meeting about bondholders accepting a major haircuts on their Greek debt.. At the same time there is plenty of turmoil in DC as politicos are being distracted from economic matters (like extending tax cuts,etc.). I have a feeling that even with more negotiations over the weekend, there will be no agreement about refinancing. And who know what's really going on in DC? This chaos is not good for the markets, but Dow has been hanging in there fairly well.
The MLP index fell 3 to 396 & the REIT index was down almost 3 to the 247s. Junk bond funds were flattish & Treasuries found buyers with growing uncertainties coming from Europe. Oil dropped from a 3 week high as euro-area finance ministers refused to approve a rescue package for Greece, boosting concern that the European debt crisis will reduce fuel demand. Gold also saw selling.
JPMorgan Chase Capital XVI (AMJ)
Treasury yields:
U.S. 3-month | 0.081% | |
U.S. 2-year | 0.270% | |
U.S. 10-year | 1.991% |
| CLH12.NYM | ...Crude Oil Mar 12 | ...98.33 | ....... 1.51 | (1.5%) |
| GCG12.CMX | ...Gold Feb 12 | ......1,717.40 | 21.60 | (1.2%) |
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The photos above are getting ugly! Violence erupted on the streets of Athens & politicians resigned from the gov after European leaders demanded that they deliver even deeper austerity. A day after Greece claimed it had reached an agreement among its squabbling party leaders on new cutbacks, European officials dashed any hopes that the country is out of danger. Finance ministers said more needs to be done & set a deadline for the middle of next week. If those demands are not met, it faces a chaotic debt default next month that would send shockwaves around the world economy. If it delivers on those demands, Europe has committed to give it a €130B ($172B) lifeline that would at least postpone Greece's day of reckoning. "No disbursement without implementation," Jean-Claude Juncker, the Luxembourg premier who also chairs the finance ministers' meetings, said after they declined to fully back the deal Greek leaders had agreed. The finance ministers want Greece to find another €325M ($432M) in savings & Parliament must vote the austerity thru. Worried that political leaders could later renege on the austerity promises, they also requested that the party heads commit to the measures even after general elections in Apr. The fallout from the eurozone's demands was immediate in Athens. Thousands of protesters marched in the streets to protest cuts including a 22% reduction in the minimum wage This has all the makings of a rescue package coming unglued.
Greece Pushes Back on Demand for More Cuts
ECB President Draghi lashed out at bankers who said tapping the ECB’s 3 year-loan program carries a stigma, after executives said they shunned the loans. “There is no stigma whatsoever on these facilities,” Draghi said. “Some have made some sort of statements that I would call statements of virility, namely it would be undignified for a bank, a serious bank, to access these facilities. Now let me say that the very same banks that made these statements access facilities of different kinds -- but still government facilities.” The statements by Draghi came a week after Deutsche Bank CEO Ackermann said Germany's biggest lender didn’t tap the ECB in Dec because it could damage its reputation with customers. The ECB awarded €489B ($650B) in loans to 523 banks on Dec 21 to keep credit flowing to the economy as Europe’s debt crisis drove up banks’ borrowing costs. The ECB will offer a 2nd batch of the loans this month. ING Groep CEO Hommen said yesterday that the biggest Dutch financial-services company didn’t take the loans in Dec, partly because of reputational risk. It’s discussing internally whether to take loans in the 2nd program, he said. Just throwing money at the problems can get complicated, not a helpful sign while Greece is on the ropes.
Draghi Slams Bankers Shunning Loans From Three-Year ECB Financing Program
Confidence among US consumers declined more than forecast in Feb from the highest level in almost a year as rising gas prices began to stress household budgets. The Thomson Reuters/University of Michigan index of consumer sentiment dropped to 72.5 from 75 in Jan & also came in below the median estimate of 74.8. The gauge averaged 89 in the 5 years leading to the 18 month recession that ended in Jun 2009. A 22¢ increase in the price of a gallon of gasoline this year & concern over the extension of payroll tax cuts may be limiting confidence. At the same time, the biggest employment gain in almost a year last month, fewer job cuts & a rally in equities are underpinning sentiment & the spending that accounts for about 70% of the economy. The recovery is back to getting more of a mediocre rating.
U.S. Michigan Consumer Sentiment Index Falls
Dow is down about 100 this week because the Greek debt package is not working out. The news today ignores the other meeting about bondholders accepting a major haircuts on their Greek debt.. At the same time there is plenty of turmoil in DC as politicos are being distracted from economic matters (like extending tax cuts,etc.). I have a feeling that even with more negotiations over the weekend, there will be no agreement about refinancing. And who know what's really going on in DC? This chaos is not good for the markets, but Dow has been hanging in there fairly well.
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