Greece's stock market just suffered its worst
collapse ever - (www.marketwatch.com) Now
this is Greek tragedy. Greece’s Athex Composite GD, -12.78% tanked almost 13%
Tuesday — the biggest drop for the index on record, according to FactSet. The
renewed jitters came after the government, in a surprise move late Monday, said it would bring
forward presidential elections to Dec. 17, potentially, setting the scene for
snap elections in early 2015. Here’s why that’s important: Far-left party
Syriza currently is leading the early polls and it seems likely they would win
a snap election. This is how to think about Syriza:
·
The party has been calling
for an end to austerity in Greece
·
Has been campaigning for
market-unfriendly measures
·
Is firmly against the
international bailout program that helped the country avoid a default during
the depths of its financial crisis.
How bad is Greece’s Tuesday collapse? It’s worse than the 9.7%
drop the market saw Oct. 24, 2010, at the peak of Greek debt worries. The drop
also eclipses the 10% fall Greek markets saw in 1989 during a bout of political
turmoil.
No
Escape From Pension Math in Pennsylvania - (www.bloomberg.com) Pennsylvania Governor-elect Tom Wolf earned a historic
victory in ousting the state’s incumbent chief executive last month. Now budget
woes and mounting retirement expenses threaten to undermine his campaign
pledges. The 66-year-old Democrat will assume control of a government that has
trailed all U.S. states in job growth since 2011. He has to balance promises,
including more money for schools, with a $2 billion revenue shortfall for the
year that begins July 1. Only New Jersey and Virginia are struggling more than
Pennsylvania to fully fund retirement costs, according to Moody’s Investors
Service. Pennsylvania’s credit has been cut this year by each of the three
biggest rating companies, to two steps below the average for U.S. states. The
grade may fall further if Wolf can’t plug revenue misses, said Bill Delahunty,
the head of municipal research in Boston at Eaton Vance Management. Borrowing
costs for the sixth-most-populous state may rise should the new governor fail
to address the pension burden, said Paul Brennan, a money manager at Nuveen Asset
Management, which oversees about $110 billion in munis.
Greece
Post Mortem: Worst Day Since 1987 Crash, Banks Destroyed, Bond Yields At
Post-Bailout Highs - (www.zerohedge.com)
As the sun sets in Athens, we thought a moment
of reflection was worthwhile. Greek stocks are now down 13% - the
biggest single-day drop since (drum roll please) the crash of 1987... led
by total carnage in Greek banks (down 15-25% on the day). Greek bond
yields exploded, 3YR +183bps to a new post-bailout high at 8.32% (and
inverted to 10Y). Worst day since the 1987 crash for Greek stocks... As every
smart money hedge fund traders best trade of the year - Greek Banks are
destroyed...
Banks’
U.S. Debt Holdings Top $2 Trillion as Treasuries Rally - (www.bloomberg.com) American
banks increased U.S. government debt holdings
to a record $2 trillion as global regulators implement post-2008
financial-crisis rules requiring financial institutions to own the
highest-quality assets while trimming risk-taking activities. U.S. debt has
returned 5.3 percent this year as commercial lenders increased their net holdings of
Treasuries to $615.6 billion this year as of Nov. 26, little changed from the
highest ever, data from the Federal Reserve show. Banks have been net buyers of
Treasuries and other agency debt for 14 straight months, equaling the longest
streak of gains since June 2003. “Banks have been under tremendous pressure to
shore up their balance sheets and that’s manifested in very large Treasury
holdings,” said Aaron Kohli, an interest-rate strategist in New York at BNP
Paribas SA, one of 22 primary dealers that trade with the Federal Reserve. “In
the near-term, it will be difficult for Treasuries (BUSY) to engineer a sell-off because of the
demand.”
Venezuelan
Bonds Crash To Lowest Price Since 1998 - (www.zerohedge.com) Bond
prices in Venezuela have totally collapsed this morning - at 45c on the
dollar, they are the lowest since 1998 - as the realization of the "abyss" they are staring
into sparks an exodus from
all credit positions in the country. VENZ 5Y CDS rallied 130bps which signals
hedgers unwinding and the simultaneous sale of the underlying bonds implies
broad-based capital flight (and profit taking) as 1Y CDS surges to record
highs at 4830bps. VENZ Bond prices collapse to 1998 lows...
Greek government brings forward key presidential vote to
this month - (www.reuters.com)
International lending to China soars in 2014: BIS - (www.reuters.com)
International lending to China soars in 2014: BIS - (www.reuters.com)
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