US Markets Crash in Panic on Greek Euro Fears

[C. Flower]

DOW fell nearly 1,000 before a rebound. There seems to be hysteria in the US - some people have made enormous money, and there has been massive intervention, it appears.

Market now down only 519 points.

95% of S and P stocks lower

Crude oil below $79

Gold up to 1200.

"The machines broke" there was a massive hiccup in trading and it appears that some people may have made a lot out of the situation. Anyone got a grip on what is going on ?

[Gruffalo]

Americans hysterical? Surely not.

We will need to wait a while before we really know what is going to happen with Greece.

[C. Flower]

Americans hysterical? Surely not.

We will need to wait a while before we really know what is going to happen with Greece.

A years stock exchange gains were lost in a day? Banks hit hardest.
April retail figures poorer than expected.

Greece has become a global problem.

[Lifeisagame]

Now down 338

[Lifeisagame]

Market getting ready to closethe money has been made. Hey, who needs to rob a bank:D

[Lifeisagame]

They told me Ireland is next, I said no problem as the tug boats are currently towing the whole Island to New York. Ehh they got upset:confused:

[Gruffalo]

A years stock exchange gains were lost in a day? Banks hit hardest.
April retail figures poorer than expected.

Greece has become a global problem.

Markets go up and down when these kind of things happen. It is the very nature of specualtion. It appears to have gained a fair bit of the loss back by close.

We will not know how Greece is going to fare for a while yet.

[C. Flower]

I love when they say "the machines broke" on a chaotic day.

[Gruffalo]

It certainly appears to have been chaotic alright.

[Sam Lord]

A years stock exchange gains were lost in a day? Banks hit hardest.
April retail figures poorer than expected.

Greece has become a global problem.

And you think the violent protests were to no good purpose. :) They are driving coffin nails into the EU and capitalism generally.

(I've already stated my position on the bank bty)

[C. Flower]

And you think the violent protests were to no good purpose. :) They are driving coffin nails into the EU and capitalism generally.

(I've already stated my position on the bank bty)


The Greeks are still demonstrating and are going to keep going every day. I don't think the deaths of the three bank workers did anything to help them nor do I think that that is what affected the markets. I posted on this back in January.

http://blogtok.wordpress.com/2010/01/19/strains-on-the-eurozone-centrifugal-forces-in-the-eu/

I'm not sure what your referencing there about your position ?

[ang]

Greece is certainly being blamed for Wall St:-


Wall Street was gripped by a fresh financial panic tonight as fears spread that the Greek debt crisis will trigger a new catastrophe for the fragile global banking system.

Turbulent scenes in New York – reminiscent of the chaos around the fall of Lehman Brothers in September 2008 – followed a weak statement from the European Cental Bank that investors dismissed as a "do nothing" response to fears of wider contagion.



http://www.guardian.co.uk/business/2010/may/06/debt-crisis-ecb-refuses-to-soften

I expect this wouldn't instill confidence in financial stocks:-


May 6 (Bloomberg) -- Freddie Mac, the mortgage company operating under U.S. conservatorship, fell 8 percent in New York trading after requesting $10.6 billion more in Treasury Department aid while reporting a first-quarter loss.



http://www.businessweek.com/news/2010-05-06/freddie-mac-falls-after-seeking-10-6-billion-from-treasury.html

[C. Flower]

This seismic hiccup is now being blamed because a trader put a b instead of an m in front of a Proctor and Gamble trade.

http://www.cnbc.com/id/36999483

The reason for the panic was a high level of jumpiness about Greece, and what comes next.

Sources tell CNBC the firm in question that handled the erroneous trade is Citigroup [C 4.04 http://media.cnbc.com/i/CNBC/CNBC_Images/componentbacks/watchlist_down.gif -0.14 (-3.35%) http://media.cnbc.com/i/CNBC/CNBC_Images/backgrounds/realtime_icon.gif] (http://data.cnbc.com/quotes/c) . The bank said it has no evidence of a bad trade but is investigating the situation
The massive selloff, which began shortly after 2 pm ET, amplified concerns about the spreading European debt crisis as the approval of austerity measures by the Greek Parliament sparked renewed rioting in Athens.
"There is simply a growing recognition that Greece has got to default," banking analyst Dick Bove told CNBC.com. "The riots in the streets showed the decision to repay the debt was not going to be made by the people in Germany, France and Switzerland—it's going to be made by people in Greece and they're not going to repay it." http://media.cnbc.com/i/CNBC/Sections/News_And_Analysis/__Story_Inserts/graphics/__CHARTS_SPECIAL/MISCELLANEOUS/PG_stock_050610_520.gif
CNBC.com




There also is a growing sense that any collapse of Greece could trigger a wave of defaults across Europe and even the world.

"We've seen a crisis start in a country—Greece—become regional, impact the whole of the Euro zone and is on the verge of truly going global," El-Erian, CEO of the world's biggest bond fund, told CNBC shortly before the selloff began. (Click here for story) (http://www.cnbc.com/id/36992469/)

The euro fell further against the dollar, hitting a new 14-month low. The euro has tumbled against the dollar since last fall as faith in Europe's shared currency dwindles. Greece's debt crunch is widely seen as a test of Europe's ability to restore fiscal discipline to the weak economies in its union and keep the decade-old currency viable.
"It's going to drop further," Tim Speiss, chairman of the personal wealth advisers practice at Eisner LLP in New York, said of the euro.


The report suggests that European banks are stopping lending. Talk of default is widespread.

[Gruffalo]

A bit more on that here from CBC Canada:

http://www.cbc.ca/money/story/2010/05/06/tsx-markets.html

The markets are on edge but as I said earlier it will take a while to see exactly what will happen with Greece.

[C. Flower]

A bit more on that here from CBC Canada:

http://www.cbc.ca/money/story/2010/05/06/tsx-markets.html

The markets are on edge but as I said earlier it will take a while to see exactly what will happen with Greece.

Greece will almost certainly default. The only have another week before they have to make another big bond repayment and they don't have the money.

They should be preparing now for an orderly default. So should we. I would be surprised if preparations are not going on behind the scenes. It would be grossly irresponsible if they were not.

[Xray]

I find this frightening, if we have another failure of the system what are we left with? We are literally talking oil tankers not pumping out the oil in the ports as there is no money to pay them. We could see a real collapse of our lives. It may not be likely but it is possible.

[Cassandra Syndrome]

Jaysus that was mad.

Credit markets are freezing up like they did in September 2008. This time they are out of ammo. Stay calm. Creative destruction is on our way for the better.

[C. Flower]

Cassandra Syndrome said what was right, some time ago. There's no use in looking for individual solutions: its got to be solved in communities and through working together.

There may be a few people who need (as in Iceland) to be locked up, before we can do that.

[DCon]

I expect this wouldn't instill confidence in financial stocks:-



http://www.businessweek.com/news/2010-05-06/freddie-mac-falls-after-seeking-10-6-billion-from-treasury.html

Freddie Mac lost 21.5 Billion last year. And FF think NAMA is a good idea

[BrendanGalway]

Time to start getting stuff in the ground. I have 10 different types of Vegetables ready to be planted. I may have to discuss Telecommuting with work. And load up on candles.

[Gruffalo]

Greece will almost certainly default. The only have another week before they have to make another big bond repayment and they don't have the money.

They should be preparing now for an orderly default. So should we. I would be surprised if preparations are not going on behind the scenes. It would be grossly irresponsible if they were not.

I will politely disagree with you. We were told all last year that the IMF would be in Ireland by Christmas but they are already more than 4 months late.

[C. Flower]

I will politely disagree with you. We were told all last year that the IMF would be in Ireland by Christmas but they are already more than 4 months late.

And others were saying we'd be out of the recession by now.

The IMF had a hand in the last budget and in NAMA. The ECB has been "supplying liquidity" to the Irish banking system since well before Christmas.

The last thing I want is to see the IMF run this country. It is not a charitable organisation.

[Gruffalo]

[QUOTE]And others were saying we'd be out of the recession by now.

Very few, if any, and nowhere near the number who were predicting the IMF were on their way.


The IMF had a hand in the last budget and in NAMA. The ECB has been "supplying liquidity" to the Irish banking system since well before Christmas.

I would imagine, though I am yet to see the proof, that a number of agencies 'offered advice' for our last budget. So what? The intention of such 'advice' is to get us to take action so as to avoid further deterioration.


The last thing I want is to see the IMF run this country. It is not a charitable organisation.

I believe you but there are many people in this country who would like to see them just so they can say that they are right.

[Ah Well]

We will need to wait a while before we really know what is going to happen with Greece.

What's going to happen with Greece is easy enough to predict ... basically a not so nice trip into a future of nothingness ...

The monies we've given to Greece where we'll "gain" might as well be waved goodbye to now as well while we're at it ...

This US Markets hysteria reminds me for some reason of the end of "Trading Places" ;) pardon the Twin Towers bit of the Vid

YouTube- Trading Places - Final Scene

[Gruffalo]

What's going to happen with Greece is easy enough to predict


How come the experts dont claim that but you do?

Not saying you are wrong but I dont think it is cast in stone. We certainly would not want to be in a rush to get our money back. Then again I heard that we owe them 0.8 billion so that will be that debt paid.:D

[Ah Well]

How come the experts dont claim that but you do?

Not saying you are wrong but I dont think it is cast in stone. We certainly would not want to be in a rush to get our money back. Then again I heard that we owe them 0.8 billion so that will be that debt paid.:D

Time will tell ;)

I ain't too confident bout Greece anyways - we'll have to wait and see on that one

[Gruffalo]

Time will tell ;)

I ain't too confident bout Greece anyways - we'll have to wait and see on that one

I am not very confident either but it gets kind of annoying when people continue to predict doom. It is uncertain yet.

[Ah Well]

I am not very confident either but it gets kind of annoying when people continue to predict doom. It is uncertain yet.

Ah yep, uncertain is correct.

Still, when one has an EU Member State and a long established one at that going to the wall as we are led to believe ... not good at all in the overall scheme of things and can only lead to undesirable knock ons ...

Wasn't paying much attention myself or knew a huge pile either (prob like most other folk) to things Greek until recent days - but when you hear of alleged rampant corruption and widescale tax evasion being part of their system and this from an established EU State ... it makes you wonder .... meanwhile Brussels takes measures to attempt to shore the breached levee

[Gruffalo]

All correct, Ah Well

[disability student]

And others were saying we'd be out of the recession by now.

The IMF had a hand in the last budget and in NAMA. The ECB has been "supplying liquidity" to the Irish banking system since well before Christmas.

The last thing I want is to see the IMF run this country. It is not a charitable organisation.

Well i am all for IMF as they will ROOT out all the corruption. What they do is 'slash and burn' process.

The QE (Quantitative easing) ceases next July i think not sure. The main banks here are keeping the bailout money as they aren't lending it at all.

In the last half hour heard rumour that the Greek has called in the IMF. Couldn't find it in the news.

[Graham]

Well i am all for IMF as they will ROOT out all the corruption. What they do is 'slash and burn' process.

The QE (Quantitative easing) ceases next July i think not sure. The main banks here are keeping the bailout money as they aren't lending it at all.

In the last half hour heard rumour that the Greek has called in the IMF. Couldn't find it in the news.

IMF Loans To Greece Have Preferred Status--Official (http://online.wsj.com/article/BT-CO-20100506-724903.html?mod=WSJ_World_MIDDLEHeadlinesEurope)


International Monetary Fund loans to the Greek government will be repaid before other creditors if Athens defaults on its loans, including financing from European governments, officials said Thursday.

Financing from European countries will have the same status as existing Greek debt, a European Commission official said.

"Traditionally, IMF debt has been treated as preferred, and secondly, there's no experience of members having losses from their contributions to the IMF," said IMF's Caroline Atkinson.

IMF loans are given senior status partly because they are offered times of crisis, she said.

If European loans are treated the same as existing money borrowed by Athens, and Greece defaults on any portion of the Eurozone's 80-billion-euro bailout package, it may mean that taxpayers from those lending countries may only get a few cents on their euros.

Markets have been worried that Greece will default on its debt, which could then spill over into other EU countries that are also struggling with high deficits. Given that a large portion of Greek bondholders are in Europe, particularly in Germany and France, Greece's economic calamity could exacerbate the Eurozone's ill health if Athens defaults.

I hope you've all stocked up on canned goods.

[Cassandra Syndrome]

How come the experts dont claim that but you do?

Not saying you are wrong but I dont think it is cast in stone. We certainly would not want to be in a rush to get our money back. Then again I heard that we owe them 0.8 billion so that will be that debt paid.:D

Ah well is using common sense and logic. The fancy term is Praxeology. The "experts" are that far up their own arses in complex Harvard bred econometric predictive sequences that they cannot see the woods from the trees.

The Greeks are not a submissive type of people that will accept harsh terms as fluidly as we do. This is the cradlestone of modern day thought, reasoning, debating and fecking proper capitalism.

The austerity program is insanity, The IMF and EU whether through stupidity or design had some sort of cashflow projection based around the Greek public, saying "okey dokey, I'll just completely ruin my life for the sake of the greater good of greedy bankers and politicians and comply..."

Yeah right. This situation is worse than a Greek default. The nation is at a standstill and nothing is happening now. How can they pay back this loan when there is no activity?

Greece is toast. A major contagion that could bring the house of cards down.

[Gruffalo]

Ah well is using common sense and logic. The fancy term is Praxeology. The "experts" are that far up their own arses in complex Harvard bred econometric predictive sequences that they cannot see the woods from the trees.

The Greeks are not a submissive type of people that will accept harsh terms as fluidly as we do. This is the cradlestone of modern day thought, reasoning, debating and fecking proper capitalism.

The austerity program is insanity, The IMF and EU whether through stupidity or design had some sort of cashflow projection based around the Greek public, saying "okey dokey, I'll just completely ruin my life for the sake of the greater good of greedy bankers and politicians and comply..."

Yeah right. This situation is worse than a Greek default. The nation is at a standstill and nothing is happening now. How can they pay back this loan when there is no activity?

Greece is toast. A major contagion that could bring the house of cards down.

We'll see. You'll excuse me if I dont just take your word it.

[C. Flower]

At this stage a significant percentage of experts are calling for a default as the least bad option.

Merkel was saying a couple of days ago that the Greeks shoud prepare for orderly default.

It seems general that US economists accept that Greece won't pay. That's why they were so jittery today.

Default isn't a great option, but its much better done in a well organised and properly negotiated fashion, rather than in social collapse.

[Gruffalo]

It very well may result in default but some people here are trying to present themselves as some sort of expert. It is still uncertain.

[C. Flower]

It very well may result in default but some people here are trying to present themselves as some sort of expert. It is still uncertain.

I agree that the fat lady hasn't sung yet, but she is fast running out of time to do it.

[disability student]

I do think that Ireland must default this time and walk away from propping up BOI, AIB, Anglo Irish, Nationwide et al. That time is now and it's crucial to take advantage.

[Gruffalo]

I agree that the fat lady hasn't sung yet, but she is fast running out of time to do it.

I agree that things are far from ideal and default is a possibility but there are some people who cry wolf at every opportunity.

[Xray]

I will politely disagree with you. We were told all last year that the IMF would be in Ireland by Christmas but they are already more than 4 months late.


The IMF and/or EU is in Ireland. You think we willing agreed to take one a few hundred billion of private debt. We are allowed to pretend we are great and writing our own budgets, the truth is we are not. We are in the mother of all trouble and it is getting worse. We as a country have borrowed way too much money and we have not figured out how to repay it now that we are virtually bankrupt.

The fairy tale keeps being slightly updated, but it is becoming clear that NAMA and massive cuts in spending and state income are going to return us to the second world rather quickly. All this BS about growth and job creation is just hot air.

[Gruffalo]

The IMF and/or EU is in Ireland. You think we willing agreed to take one a few hundred billion of private debt. We are allowed to pretend we are great and writing our own budgets, the truth is we are not. We are in the mother of all trouble and it is getting worse. We as a country have borrowed way too much money and we have not figured out how to repay it now that we are virtually bankrupt.

The fairy tale keeps being slightly updated, but it is becoming clear that NAMA and massive cuts in spending and state income are going to return us to the second world rather quickly. All this BS about growth and job creation is just hot air.

Maybe in an advisory capacity but you have yet to provide evidence that they are running the show. If the IMF were running the show the Public Sector would be decimated as that is there tactic, slash and burn of Public Spending. If they were running the show, the Government would not have been allowed to back down on pension reform.

[Xray]

Maybe in an advisory capacity but you have yet to provide evidence that they are running the show. If the IMF were running the show the Public Sector would be decimated as that is there tactic, slash and burn of Public Spending. If they were running the show, the Government would not have been allowed to back down on pension reform.

Pension reform? The just extended the retirement age to 68 a few weeks ago. They have cancelled any news PS pensions and are going to get rid of douzens of thousands PS works thus quenching their pensions. The is no Irish state pension unless you are already getting it, it is already gone. That goes for employees ones and social welfare ones. They are over.
Read the deals and law, not the BS in the Sindo.


They are being decimated, and best case in the croke park deal another 20,000 must be slashed. We have been told to give money to Banks and default Eurozone counties and not to spend it here. We have not option, the taps at the EBC stop otherwise. There is no way we would have had 50 billion make available to use in Euro bonds for NAMA if the detail of the cuts in puclic spending were not writted in Frankfurt.

Wake up, we are slashing public spending and we are not half way there yet. The cuts we have made so far a greater than what Greece has already announced. The cuts here are Irish in as much as the Greek ones are Greek.

[C. Flower]

Pension reform? The just extended the retirement age to 68 a few weeks ago. They have cancelled any news PS pensions and are going to get rid of douzens of thousands PS works thus quenching their pensions. The is no Irish state pension unless you are already getting it, it is already gone. That goes for employees ones and social welfare ones. They are over.
Read the deals and law, not the BS in the Sindo.


They are being decimated, and best case in the croke park deal another 20,000 must be slashed. We have been told to give money to Banks and default Eurozone counties and not to spend it here. We have not option, the taps at the EBC stop otherwise. There is no way we would have had 50 billion make available to use in Euro bonds for NAMA if the detail of the cuts in public spending were not written in Frankfurt.

Wake up, we are slashing public spending and we are not half way there yet. The cuts we have made so far a greater than what Greece has already announced. The cuts here are Irish in as much as the Greek ones are Greek.

X-ray - you are the only person I'm reading at the moment who is making 100% sense. Would you write something for the blog ? If I had the cash I'd put it on a bill board in O'Connell Street.

[Xray]

Here we go again...

http://www.rte.ie/business/markets/iseq.html

[C. Flower]

Here we go again...

http://www.rte.ie/business/markets/iseq.html

Allied Irish, a guaranteed bank, down 10%.

[Sidewinder]

Allied Irish, a guaranteed bank, down 10%.

I said all along ever since Lenny conjured what seemed to him to be a genius scam altogether - the Guarantee - that eventually even the coked-up hyper-aggressive nutters that drive the world financial markets would eventually figure out he was bluffing....

[ang]

This is not good for BOI they are trying to get their re-structuring off the ground so that they won't have to be nationalised not looking good for us or them.

[Gruffalo]

Pension reform? The just extended the retirement age to 68 a few weeks ago. They have cancelled any news PS pensions and are going to get rid of douzens of thousands PS works thus quenching their pensions. The is no Irish state pension unless you are already getting it, it is already gone. That goes for employees ones and social welfare ones. They are over.
Read the deals and law, not the BS in the Sindo.


They are being decimated, and best case in the croke park deal another 20,000 must be slashed. We have been told to give money to Banks and default Eurozone counties and not to spend it here. We have not option, the taps at the EBC stop otherwise. There is no way we would have had 50 billion make available to use in Euro bonds for NAMA if the detail of the cuts in puclic spending were not writted in Frankfurt.

Wake up, we are slashing public spending and we are not half way there yet. The cuts we have made so far a greater than what Greece has already announced. The cuts here are Irish in as much as the Greek ones are Greek.

Dont worry about backing your claims up with anything other than your own opinion. Really, it is not necessary!

Btw, if you think what is happening with the PS is decimation then you have no idea what the IMF do. Look at Greece, pay cuts of approx 1/3 and thats only a small part of the austerity measures. Keep crying poor PS, nobody is buying it.

[ang]

The problem is leaders are paralysed they just can't react quick enough to stem the crisis.

Everything is linked to the Greek bailout and the dog on the street knows that won't be enough.

They need to act and they need to act now. It's called taking action.


As markets tumbled in the wake of Wall Street’s plunge on Thursday, Olli Rehn, European Union monetary affairs commissioner, warned that the Greek crisis could bring the banking system to a standstill. “Little did authorities of the United States know in September 2008 what the bankruptcy of investment bank Lehman Brothers would lead to,” Mr Rehn said in a Finnish weekly magazine, Reuters reported.

“The consequence was that the world’s financial system was paralysed in a way that led to the biggest global recession since the 1930s.”


http://www.irishtimes.com/newspaper/finance/2010/0508/1224269950342.html

They need to create stability but so far all of the actions they have taken has caused panic.

Laying the blame at the door of Greece is not the answer. The whole of Europe is in crisis and that's what needs fixed.

Who will lead the way ?

[ang]

Further Update:-


Euro zone leaders early this morning opened the door for the immediate creation of a permanent rescue fund for distressed euro countries and for the European Central Bank to buy government bonds.

At a summit last night, they directed the European Commission to produce proposals this weekend which the governments of the 16 euro zone countries hope to endorse at an emergency meeting of finance ministers tomorrow.

“The hour of truth has struck for the euro zone,” French president Nicolas Sarkozy said moments after the four-hour meeting broke up.


http://www.irishtimes.com/newspaper/breaking/2010/0508/breaking5.html

So we can't access money from markets because of spreads so the EU is our knight in shining armour.