Asia markets' Grexit bloodbath: Latest on stocks, FX, commodities
Source: CNBC
The shock results from Greece's referendum on Sunday sent markets into a tailspin during Asian trade on Monday, with U.S. crude suffering the biggest declines.
Athens has denied that the 'no' vote could lead to an exit from the euro zone, but experts remain unconvinced.
The increased probability of a 'Grexit' has moved above 50 percent for the first time and that could see a risk-off mood prevail, according to ING.
Wolfgang Piccoli, managing director at Teneo Intelligence, told CNBC in Athens that the likelihood of a Grexit stood at 75 percent, from 15 percent previously. "We're running short of time. We have bank flows, capital controls, the Prime Minister stronger than ever who will go to Brussels asking for more concessions....meanwhile, the other side thinks he has zero credibility, even less now that he won the referendum."
Read more: http://www.cnbc.com/id/102810558
Nikkei down 2.55%
Hang Seng down 3.18%
geek tragedy
(68,868 posts)The contagion risk has largely been contained. This is classic market nerves.
Aerows
(39,961 posts)are watching that scene in Jurassic Park where the water is trembling, a T-Rex is coming, and they are all sweating in the car.
Except, the only thing that is making the water tremble is that somebody restarted the car, and it went on driving.
I love the bugaboos people create.
roamer65
(36,747 posts)The euro is a death match between countries who want fiscal austerity (Germany, Austria, Finland) and those who desperately need liquidity (France, Greece, Italy and Spain.)
Too bad those two don't realize the truth.
This crisis is just warming up.
jonno99
(2,620 posts)that we can print more currency - Greece can't...
Travis_0004
(5,417 posts)Public debt as a percent of GDP is the figure I used.
geek tragedy
(68,868 posts)holdings.
Travis_0004
(5,417 posts)That debt is owed to somebody. The vast majority of intergovernmental debt is the social security trust fund, and medicare trust fund. This is money that me and you have paid in, and expect to receive one day. Defaulting on it would mean they would be unable to pay social security and medicare.
geek tragedy
(68,868 posts)Travis_0004
(5,417 posts)leveymg
(36,418 posts)We are actually as fragile as any of the other over-leveraged economies of the West. Our middle-class consumer economy is a bubble based on false expectations of another bailout -- Krugman calls it Pangloss Value -- and it is highly exposed to contagion effects from both the Eurozone and China. The US financial system still hasn't fully recovered from '08, or '00 for that matter. Japan never recovered from its own collapse twenty-five years ago.
jonno99
(2,620 posts)geek tragedy
(68,868 posts)Also, Greece owes almost all of its money to foreign investors while holding no one else's.
jonno99
(2,620 posts)Adrahil
(13,340 posts)Right now, U.S. debt is fairly cheap to maintain, with bond yields REALLY low. RIGHT NOW, we essentially replacing older, higher cost debt with debt that is essentially free, or even a profit maker with the yields below inflation. The Greeks don't have that.
Yo_Mama
(8,303 posts)The US has about the same level of debt to GDP as France (100%). France, may I point out, does not have its own currency, but no one is charging them 14% interest for money. In fact, 10 year French government bonds are currently yielding about 1.25% (125 bps), while the US is yielding 2.29%.
Greece has over 175% debt to GDP. While Greece had debt to GDP ratios of about 100% in the 2000s, no one was charging them much either. It was when creditors found out that the original numbers were wrong and debt suddenly jumped up that panic hit.
Japan, now, has 230% debt to GDP. But Japan has traditionally had a positive current account balance, which has a lot more to do with their economy than their ability to inflate the yen. In other words, trade and foreign investment bring Japan a great deal of extra money, so their society has been able to support higher debt levels.
Greece doesn't have much in the way of trade going for it.
There's a whole lot of variables that come into play in government interest rates, and having your own currency hasn't saved most countries who've experienced hyperinflation.
MannyGoldstein
(34,589 posts)Like Bear Stearns.
geek tragedy
(68,868 posts)Greece could have wreaked huge havoc in 2010.
European central bankers have spent the past five years working to contain the fallout from a Grexit. Their priority was containing Greece's problems, not solving them.
At some point, investors will realize the sky isn't falling.
Turbineguy
(37,365 posts)kite that debt into the trillions. Wall street needs all our retirements.
delrem
(9,688 posts)About how he can make fat personal profits from the Greek economic crisis, and not have to produce anything more than proof that he's made the right transfers of his investment capital.
Yes, geek tragedy, when I read your posts I think "democratic socialist to the bone!".
geek tragedy
(68,868 posts)Equities markets involve three types of decision:
Buy
Sell
Hold
Sorry if people discussing the subject matter of a thread gives you the vapors. I was not aware one had to not only take a vow of poverty, but also refrain from talking about making money in order to support him.
Thanks for filling the role of self-appointed Pharisee.
delrem
(9,688 posts)Didn't you read my post?
geek tragedy
(68,868 posts)own ego above trying to help Bernie win.
Because, you know, fuck it-most people are just not good enough to vote for Bernie. The impure should be purged and told they should vote for Hillary.
That won't help Bernie accomplish anything, but that's not the priority--self-gratification is.
delrem
(9,688 posts)How is that?
riderinthestorm
(23,272 posts)since there's a silver (cough) lining here for investment wizards
geek tragedy
(68,868 posts)But it seems that taking advantage of people dumping stocks out of panic is generally a solid approach.
tomm2thumbs
(13,297 posts)and possibly up to the election in 2016 -- for those hunting for homes or in the process
___
link to WaPo article
bluestateguy
(44,173 posts)and lower oil prices can only mean a few cents cheaper gas
muriel_volestrangler
(101,361 posts)In London, the FTSE 100 slipped 0.9%.
http://www.bbc.co.uk/news/business-33405583
Sunlei
(22,651 posts)Savings at the gas pump this past year or so added up to a very significant amount of money.
you hold significant amount of bonds from any of the big giants in the oil industry. Most of these companies are highly leveraged because it takes an enormous amount of capital to extract, refine and transport energy commodities. With oil prices falling these companies liabilities climb higher as a percentage of their outstanding stock value, which is falling due to drops in the value of their reserve assets. If any of these companies cannot maintain their cash flow then they (and those of us that hold their bonds and dividend paying stocks) are in deep trouble. Their only recourse in a cash flow pinch would be to borrow more money (unlikely if they have no assets to borrow against) or find a buyer who has deeper pockets. It's surprising how little this is talked about, but I'm a firm believer in "black swans" (as described by Nassim Nicholas Taleb)
leveymg
(36,418 posts)Along with China, the Saudis will end up owning most of the world's non-state owned petroleum reserves.
Sunlei
(22,651 posts)Corps and investors, had a good run and made trillions!
Yo_Mama
(8,303 posts)in the damned room. China's ongoing equity meltdown is shaking people.
The impending Grexit is shaking things up, but US crude fell partly on sentiment but more on rising output and now a rising rig count being reported. With the Euro not being that favored, hedging the dollar in crude doesn't work very well for anyone. But the Euro/USD is roughly stable - what's moving WTI are production that was reported at 9,600,000 last week (when US production was predicted to peak at 9,200,000), plus news that US rigs were now rising:
http://economictimes.indiatimes.com/markets/commodities/oil-prices-drop-on-rising-us-rig-count-china-stock-market-probe/articleshow/47919592.cms
So it's a losing trade.
If China is in trouble, and it most certainly is, then hopes for a large rise in demand must dim, and that means that increases in US oil production will bring crude prices down.
Also, it should be obvious that if US producers are able to continue raising production with prices below $65, their production costs have fallen significantly, and it is estimated that a lot of these producers can now make decent money at $45-50.
Art_from_Ark
(27,247 posts)The Nikkei has already regained most of what it lost yesterday.