Wednesday, 30 November 2011
JKSE Upside Potential
Friday, 18 November 2011
(BN) Economy Growing at Fastest Pace of ’11 in Fourth Quarter in U.S. Forecasts
Bloomberg News, sent from my iPad.
Economy Growing at Fastest Pace of '11 in U.S. Quarter Forecasts
Nov. 18 (Bloomberg) -- The U.S. economy may end 2011 growing at its fastest clip in 18 months as analysts increase their forecasts for the fourth quarter just a few months after a slowdown raised concern among investors.
Economists at JPMorgan Chase & Co. in New York now see gross domestic product rising 3 percent in the final quarter, up from a previous prediction of 2.5 percent. Macroeconomic Advisers in St. Louis increased its forecast to 3.2 percent from 2.9 percent at the start of November, while New York-based Morgan Stanley & Co. boosted its outlook to 3.5 percent from 3 percent.
"The incoming data on consumption, business spending and residential investment all point to GDP growth in the fourth quarter tracking 3.3 percent," said John Herrmann, senior fixed-income strategist at State Street Global Markets in Boston.
Herrmann, who is the second most-accurate forecaster of GDP based on Bloomberg data, had been looking for fourth quarter growth of 2.4 percent at the start of this month. The economy expanded at an annualized pace of 2.5 percent in the third quarter.
Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities in New York, said he wouldn't be surprised to see fourth-quarter growth of 4 percent, though for now he is sticking with his forecast of 3 percent.
The strengthening economy will help lift U.S. stock prices, which have been depressed by the sovereign debt crisis in Europe, LaVorgna said.
'Too Much Pessimism'
"There's too much pessimism built into the market," he said, adding that the Standard & Poor's 500 Index could break 1,300 by year's end. The stock gauge closed at 1,216.13 yesterday.
The economic pick-up also may push up yields on Treasury securities, Herrmann said. The yield on the 10-year note could rise to 2.25 percent or higher in the first quarter of next year, he said, assuming Europe avoids a financial catastrophe akin to the 2008 bankruptcy of Lehman Brothers Holdings Inc. The 10-year yield stood at 1.96 percent at 5 p.m. New York time yesterday, according to Bloomberg Bond Trader prices.
Behind the revised fourth quarter forecasts: Consumers have not cut back on spending even with the turmoil in world financial markets, putting pressure on companies to rebuild inventories they ran down because of concerns about Europe.
Helped by the biggest jump in electronics purchases in two years, retail sales rose 0.5 percent in October, after a 1.1 percent increase the month before, according to the Commerce Department.
'Spectacular Christmas'
"We feel confident that the momentum we have heading into the fourth quarter, combined with our holiday strategies, bode well for that quarter," said Karen Hoguet, chief financial officer for Cincinnati-based Macy's Inc., the second-biggest U.S. department-store chain. "We'll have a spectacular Christmas," she added on a Nov. 9 conference call with analysts.
Companies, meanwhile, held their inventories little changed in September as sales climbed, the Commerce Department reported on Nov. 15. Businesses had enough goods on hand to last 1.27 months at September's sales pace, near the record low of 1.24 months reached earlier this year.
Retailers "continue to manage their inventories very carefully," Harlan Kent, chief executive officer of Yankee Candle Co. Inc., which sells its products to retailers like Macy's and Target Corp., said on a Nov. 10 call with investors. "We are in good shape to quickly respond to replenishment orders and capitalize on any uptick in consumer demand."
Boost From Restocking
Restocking will boost growth by 0.8 percentage points in the fourth quarter, according to JPMorgan Chase. In the third quarter, inventory changes reduced GDP by 1.1 percentage points. The economic outlook beyond the fourth quarter rests heavily on what policy makers do, both in Europe and the U.S., said Michael Feroli, JPMorgan Chase's chief U.S. economist.
The U.S. would not be able to "escape the consequences of a blowup in Europe," Federal Reserve Chairman Ben S. Bernanke said in El Paso, Texas on Nov. 10. "The world's financial markets are highly interconnected."
Federal Reserve Bank of New York President William C. Dudley said in a speech yesterday that while recent economic reports have shown improvement, that shouldn't be a signal for the Fed to relax its efforts to boost the economy. Growth next year may be around 2.75 percent after somewhat more than 2.5 percent in the fourth quarter, he said.
Consumers Cut Debt
"Although the latest news on the U.S. economy is somewhat more encouraging than that from earlier in the year, we should not take much solace from that," he said. "The U.S. economy continues to face several obstacles," including consumers cutting debt and caution by businesses.
"We also continue to face significant downside risks, mostly related to the stress in the euro zone," Dudley said.
Euro-region policy makers are struggling to contain a financial crisis that started two years ago in Greece and which has now spread to Italy, the region's third-biggest economy with a debt of 1.9 trillion euros ($2.6 trillion).
In Washington, the focus has been on the deliberations of the Congressional supercommittee, which faces a Nov. 23 deadline to come up with measures to reduce the budget deficit by $1.2 trillion over 10 years.
What's more important for the economy in 2012 though is the fate of a number of stimulus measures, including a 2 percent cut in employee payroll taxes and extended unemployment benefits, that are due to expire at end year, Feroli said.
Fiscal Drag
If Congress doesn't continue them, "the drag from tightening fiscal policy could subtract 1.5 to 2 percentage points from GDP growth next year," the former Fed economist added in Nov. 10 note to clients.
Households would be particularly hit, as the payroll tax cut and extended unemployment benefits boosted their income by about $150 billion this year, according to Feroli.
For now, consumer spending has been holding up as the crucial end-of-year holiday selling season gets underway.
The rise in retail sales last month prompted economists David Greenlaw and Ted Wieseman at Morgan Stanley to bump up their forecast for growth of household outlays in the fourth quarter to 2.7 percent from 2.2 percent. Personal consumption expenditures rose at an annualized rate of 2.4 percent in the third quarter, the fastest pace so far this year.
Economists are divided over what's behind the buoyancy of spending. David Rosenberg, chief economist at Gluskin Sheff & Associates in Toronto, ties it to a fall in the savings rate that they argue can't last. That rate dropped to 3.6 percent in September, the lowest level since the start of the last recession in December 2007.
Often Revised
Others like LaVorgna play down the significance of the drop in the savings rate, noting that it is a statistic that is frequently revised.
Feroli, too, cautioned against reading too much into the savings numbers and pointed to other reasons for the resilience of consumer expenditures.
Ebbing inflation is giving households more spending power. Consumer prices fell in October for the first time in four months, dropping 0.1 percent after a 0.3 percent rise in September, the Labor Department said on Nov. 16. Contributing to the fall was a 3.1 percent decline in gasoline prices.
Lower borrowing costs, courtesy of a flight into Treasury securities by investors fearful of developments in Europe and the Fed's continued easy monetary policy, are also helping households. The average rate for a 30-year fixed rate mortgage was 4 percent in the week ended Nov. 17, barely above the 3.94 percent record low hit last month, according to Freddie Mac.
Construction Permits
Housing construction permits climbed last month to their highest level since March 2010, according to Commerce Department data, as the near record-low mortgage rates lured some buyers into the market.
The future pace of consumer spending ultimately will be decided by the growth of household income, which in turn is tied to the health of the job market.
And there, Herrmann saw some reason to be optimistic. He forecast that private-sector payrolls would rise an average 160,000 per month for the rest of this year and by 200,000 per month in the first four months of 2012. Private payrolls increased 104,000 in October.
In a sign that the job market may be improving, claims for unemployment benefits dropped to their lowest level in seven months in the week ended Nov. 12, to 388,000, Labor Department figures released yesterday showed.
"With Europe an albatross around our necks, the fact that the economy is firming and performing better than expected is really encouraging," said Omair Sharif, an economist at RBS Securities Inc. in Stamford, Connecticut.
To contact the reporter on this story: Richard Miller in Washington at rmiller28@bloomberg.net
To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net
Find out more about Bloomberg for iPad: http://m.bloomberg.com/ipad/Best Regards,
Christopher Tahir
Tuesday, 8 November 2011
WikiLeaks Exposes Germany’s Euro Exit, Gold, Diamonds, Oil to Soar
WikiLeaks Exposes Germany's Euro Exit, Gold, Diamonds, Oil to Soar
Posted by Dominique de Kevelioc de Bailleul on Nov 07, 2011
U.S. ambassador to Germany, Philip Murphy (Goldman Sachs alumnus), issued cable 10BERLIN181 to Washington on Feb. 12, 2010, which essentially states that Germany leadership's reluctance to backstop the PIIGS's profligate spending of the past centers upon its sense that, in the end, Germany's political and economic survival would be placed in jeopardy.
It appears Germany has no intentions of running a U.S.-style print-and-spend economy, nor does it want to hand over decades of productively earned savings to a bunch of layabouts from Club Med, either, especially those in Greece, where a Greek civil servant is able to retire at age 50, and, while employed, can take 14 months pay for 12 months work, for, presumably, spending-money during vacations.
Approximately 40% of the population of Greece works for the public sector. In comparison, nearly 20% of U.S. jobs come from U.S. tax dollars—a bloated number even by U.S. standards.
Gross inequity. That's the predominate mood in Germany, according to German news organization Die Welt (translated to English), which published a poll revealing that 71% of Germans insist upon a referendum on further steps taken regarding German's obligations under the euro currency block. Sixty-three percent of Germans want Greece to leave the euro.
One can only wonder about the rational of the other 29% and 37%, respectively, who agree to pay for early retirements and lucrative government jobs for so many Greeks.
Moreover, it's no secret that Greeks don't even want to pay for their own government's spending habits.
CNN reported, "Greece is renowned for its history of tax evasion, estimated last year as worth 4% of GDP—$11 billion." That amount equals to approximately $560 billion to the U.S. Treasury derived from a $14 trillion economy—per year. But the UK Telegraph suggests the amount of tax payments evaded is much higher. Greece loses €15bn ($20.5bn) a year to tax evasion, is the headline by the Telegraph. Now, we're talking nearly 7% of Greece's $304 billion GDP (World Bank statistic).
And the New Yorker Magazine writes, "Greeks . . . see fraud and corruption as ubiquitous in business, in the tax system, and even in sports."
So Germans, who've prided themselves as the most productive workers of the most extraordinary products for centuries, are now asked to pay into a broken system that the Greek people, themselves, don't have confidence in?
In all, the WikiLeak'ed cable doesn't add much new to what is already known, but it's an interesting note that Washington has been bantering around the German question for some time, and has probably added fuel to the fire in Europe, too, in the hopes Treasury can skate a little while longer with its dollar debasement program of scare tactics, herding fund managers into the 'safety trade' of the U.S. dollar—another grotesque excuse for a currency.
Little attention by the U.S. media has been paid to the U.S. dollar's noticeably weak response to the circus-like atmosphere in Europe—with no qualms, either, from the rumor mill of the Financial Times of London, as the Anglo-American tag team place center stage each and every sideshow act, as well, though Berlusconi's narcissistic behavior can be quite amusing and compelling to report.
If the outrageous situation between the Germans and Greeks isn't enough to crash the euro experiment in a heap with the Ford Edsel, the best tidbit within the Murphy cable briefly outlines the most difficult bolder to roll in the effort to force Germany to bailout Europe (which it mathematically cannot anyway): the legal one.
"In 1990, Germany's Constitutional Court ruled that the country could withdraw from the Euro if: 1) the currency union became an 'inflationary zone,' or 2) the German taxpayer became the Eurozone's 'de facto bailout provider,'" Murphy stated in the cable to Washington. "Mayer [Thomas Mayer is Chief Economist of Deutsche Bank Group] proposes a 'Chapter 11 for Eurozone countries,' which would place troubled members under economic supervision until they put their house in order."
Under these bizarre circumstances, a blog entry by Pippa Malmgren, former economic adviser to President George Bush (George II), has been given some traction since her post about her thoughts on the euro, in September.
She believes that the Greeks will default, the euro will fall, the Germans will walk, and gold, oil as well as other commodities will soar.
She writes, "Greece defaults. . . The Germans announce they are re-introducing the Deutschmark. They have already ordered the new currency and asked that the printers hurry up."
As a result, she add, "Gold, diamonds, agricultural assets, energy prices and mined asset prices will rise. Default reduces the debt burden and allows growth and inflation to return. If central banks (other than the ECB) throw huge liquidity out into the market because of this event then the liquidity is going to lean away from paper financial assets other than the most trusted and liquid (U.S. Treasuries), and lean toward hard assets."
Anyone wondering how the U.S. Treasury intends to come up with $628 billion by Mar. 31, 2012, to keep the illusion of the U.S. dollar alive without herculean efforts by the Fed's balance sheet may see the crisis in Europe as possible or partial answer. As German protects itself from another Weimar, the U.S. needs a solution to its own reichsmark. So far, the dying PIIGS have provided Treasury a temporary one.
http://www.beaconequity.com/wikileaks-exposes-germanys-euro-exit-gold-diamonds-oil-to-soar-2011-11-07
Related Cable -
http://wikileaks.org/cable/2010/02/10BERLIN181.html#
Posted by Dominique de Kevelioc de Bailleul on Nov 07, 2011
U.S. ambassador to Germany, Philip Murphy (Goldman Sachs alumnus), issued cable 10BERLIN181 to Washington on Feb. 12, 2010, which essentially states that Germany leadership's reluctance to backstop the PIIGS's profligate spending of the past centers upon its sense that, in the end, Germany's political and economic survival would be placed in jeopardy.
It appears Germany has no intentions of running a U.S.-style print-and-spend economy, nor does it want to hand over decades of productively earned savings to a bunch of layabouts from Club Med, either, especially those in Greece, where a Greek civil servant is able to retire at age 50, and, while employed, can take 14 months pay for 12 months work, for, presumably, spending-money during vacations.
Approximately 40% of the population of Greece works for the public sector. In comparison, nearly 20% of U.S. jobs come from U.S. tax dollars—a bloated number even by U.S. standards.
Gross inequity. That's the predominate mood in Germany, according to German news organization Die Welt (translated to English), which published a poll revealing that 71% of Germans insist upon a referendum on further steps taken regarding German's obligations under the euro currency block. Sixty-three percent of Germans want Greece to leave the euro.
One can only wonder about the rational of the other 29% and 37%, respectively, who agree to pay for early retirements and lucrative government jobs for so many Greeks.
Moreover, it's no secret that Greeks don't even want to pay for their own government's spending habits.
CNN reported, "Greece is renowned for its history of tax evasion, estimated last year as worth 4% of GDP—$11 billion." That amount equals to approximately $560 billion to the U.S. Treasury derived from a $14 trillion economy—per year. But the UK Telegraph suggests the amount of tax payments evaded is much higher. Greece loses €15bn ($20.5bn) a year to tax evasion, is the headline by the Telegraph. Now, we're talking nearly 7% of Greece's $304 billion GDP (World Bank statistic).
And the New Yorker Magazine writes, "Greeks . . . see fraud and corruption as ubiquitous in business, in the tax system, and even in sports."
So Germans, who've prided themselves as the most productive workers of the most extraordinary products for centuries, are now asked to pay into a broken system that the Greek people, themselves, don't have confidence in?
In all, the WikiLeak'ed cable doesn't add much new to what is already known, but it's an interesting note that Washington has been bantering around the German question for some time, and has probably added fuel to the fire in Europe, too, in the hopes Treasury can skate a little while longer with its dollar debasement program of scare tactics, herding fund managers into the 'safety trade' of the U.S. dollar—another grotesque excuse for a currency.
Little attention by the U.S. media has been paid to the U.S. dollar's noticeably weak response to the circus-like atmosphere in Europe—with no qualms, either, from the rumor mill of the Financial Times of London, as the Anglo-American tag team place center stage each and every sideshow act, as well, though Berlusconi's narcissistic behavior can be quite amusing and compelling to report.
If the outrageous situation between the Germans and Greeks isn't enough to crash the euro experiment in a heap with the Ford Edsel, the best tidbit within the Murphy cable briefly outlines the most difficult bolder to roll in the effort to force Germany to bailout Europe (which it mathematically cannot anyway): the legal one.
"In 1990, Germany's Constitutional Court ruled that the country could withdraw from the Euro if: 1) the currency union became an 'inflationary zone,' or 2) the German taxpayer became the Eurozone's 'de facto bailout provider,'" Murphy stated in the cable to Washington. "Mayer [Thomas Mayer is Chief Economist of Deutsche Bank Group] proposes a 'Chapter 11 for Eurozone countries,' which would place troubled members under economic supervision until they put their house in order."
Under these bizarre circumstances, a blog entry by Pippa Malmgren, former economic adviser to President George Bush (George II), has been given some traction since her post about her thoughts on the euro, in September.
She believes that the Greeks will default, the euro will fall, the Germans will walk, and gold, oil as well as other commodities will soar.
She writes, "Greece defaults. . . The Germans announce they are re-introducing the Deutschmark. They have already ordered the new currency and asked that the printers hurry up."
As a result, she add, "Gold, diamonds, agricultural assets, energy prices and mined asset prices will rise. Default reduces the debt burden and allows growth and inflation to return. If central banks (other than the ECB) throw huge liquidity out into the market because of this event then the liquidity is going to lean away from paper financial assets other than the most trusted and liquid (U.S. Treasuries), and lean toward hard assets."
Anyone wondering how the U.S. Treasury intends to come up with $628 billion by Mar. 31, 2012, to keep the illusion of the U.S. dollar alive without herculean efforts by the Fed's balance sheet may see the crisis in Europe as possible or partial answer. As German protects itself from another Weimar, the U.S. needs a solution to its own reichsmark. So far, the dying PIIGS have provided Treasury a temporary one.
http://www.beaconequity.com/wikileaks-exposes-germanys-euro-exit-gold-diamonds-oil-to-soar-2011-11-07
Related Cable -
http://wikileaks.org/cable/2010/02/10BERLIN181.html#
« Last Edit: Yesterday at 09:41:41 PM by Fanyajuu »
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Christopher Tahir
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Monday, 7 November 2011
(BN) Europe’s Bailout Fund Said to Revive 3 Billion-Euro Sale of 10-Year Bonds
Bloomberg News, sent from my iPad.
EFSF Rescue Fund Said to Revive Bond Sale as Crisis Deepens
Nov. 7 (Bloomberg) -- The European Financial Stability Facility revived the 3 billion-euro ($4.1 billion) bond sale it pulled last week even as the region's sovereign crisis deepened.
The bailout fund will price the bonds due February 2022 to yield 104 basis points more than the benchmark swap rate, according to two people with knowledge of the transaction. The proceeds will be used to help finance the rescue of Ireland.
The EFSF postponed the bond sale on Nov. 2 amid market turmoil prompted by Greek Prime Minister George Papandreou's call for a referendum on the rescue pact for his country. The euro-region's woes have deepened since then, with Papandreou signalling he'll step down in favor of a national unity government, while concerns about Italy's creditworthiness sent its bond yields soaring to records.
"The EFSF is paying the price for being a relatively new issuer, and for the increasing concerns about a sustainable solution for the peripheral economies," said Ivan Comerma, head of treasury and capital markets at Banc Internacional d'Andorra.
EFSF spokesman Christof Roche said order taking for the transaction has closed, without providing further details. He earlier said orders for the new issue exceeded 2 billion euros after an hour.
The Luxembourg-based fund, which was established in June 2010, has already raised 13 billion euros from three bond issues this year, according to data compiled by Bloomberg. Barclays Capital, Credit Agricole CIB and JPMorgan Chase & Co. are managing today's sale.
Underperforming
The EFSF's existing notes have underperformed European benchmark debt, with the extra yield over governments on its 3.375 percent bonds due in 2021 widening to 166 basis points, the most since the notes were sold in June, Bloomberg Bond Trader prices show. Those bonds were initially priced to yield 17 basis points, or 0.17 percentage point, more than the swap rate.
The relatively high spread on the new issue "is a complete level-changer, a completely new world for the EFSF," said David Schnautz, a fixed-income strategist at Commerzbank AG in London. "This will be the new reference point" for any future 10-year deal, he said.
The EFSF is selling the notes as European finance ministers prepare to meet in Brussels today to discuss bulking up the fund, amid uncertainty as to how they'll boost its spending power to 1 trillion euros.
"We still don't have the details as to what the EFSF mechanism will look like," said Richard McGuire, a senior fixed-income strategist at Rabobank International in London. "You're being asked to invest in something that could change shape relatively radically."
To contact the reporters on this story: Ben Martin in London at bmartin38@bloomberg.net Esteban Duarte in Madrid at eduarterubia@bloomberg.net
To contact the editor responsible for this story: Paul Armstrong at Parmstrong10@bloomberg.net
Find out more about Bloomberg for iPad: http://m.bloomberg.com/ipad/Best Regards,
Christopher Tahir
(BN) Greece Will Form National Unity Government to Secure EU Emergency Payment
Bloomberg News, sent from my iPad.
Papandreou to Step Down in Accord on Greek Unity Government
Nov. 7 (Bloomberg) -- Greek Prime Minister George Papandreou agreed to step down to allow the creation of a national unity government that will secure international financing and avert a collapse of the country's economy.
Papandreou met with Antonis Samaras, leader of the main opposition party, and agreed to form a government intended to lead Greece "to elections immediately after the implementation of European Council decisions on October 26," according to an e-mailed statement yesterday from the office of President Karolos Papoulias in Athens. Papandreou already stated he won't lead the new government, the statement said.
"A lot is already being asked of the yet-to-be-formed coalition and markets could be wary of any splits that appear, especially over the tougher decisions yet to be taken," Thomas Costerg, an economist at Standard Chartered Bank, said in comments made before yesterday's announcement. "Greece is still not out of the woods."
Both sides will meet again today to decide who will be the head of the new government with a separate meeting to discuss the time frame and the government's mandate, the statement said. Papoulias will also host talks with all political party leaders today as well. Feb. 19 is the "most appropriate" date to hold new elections, according to a statement yesterday from the finance ministry.
International Aid
Trying to preserve international aid before the nation runs out of money next month, Papandreou raced over the past 48 hours to clinch an agreement with the main opposition party before markets open today, healing divisions to secure an aid agreement. Samaras, 60, who previously demanded elections and balked at joining forces with Papandreou's socialist Pasok party, said he was "determined to help" reach an agreement as long as the premier stepped down first.
The euro traded little changed as of 9:39 a.m. in Tokyo today after sliding 2.5 percent last week.
Finance Minister Evangelos Venizelos has said he wants a unity government agreed on before euro-area finance ministers meet in Brussels today. Lucas Papademos, former European Central Bank vice president, will head a Greek national unity government, To Vima newspaper reported, without citing anyone.
The premier's capitulation caps a tumultuous 10 days that started with him securing a second bailout from the European Union, then roiling markets by unilaterally deciding to put the terms of that rescue to the Greek people in a vote, a plan he then dropped. Bowing to pressure from his party and the opposition, Papandreou pledged to stand aside for a government with wider support.
'Positive Development'
Dora Bakoyannis, a former foreign minister who counts on the support of another four lawmakers in parliament as part of her Democratic Alliance group, said the decision is a "positive development," necessary to the country's "survival" and that decisive action must now be taken to quickly form the new government.
"A Greek unity government will give markets confidence," Spyros Economides, a senior lecturer at the London School of Economics, said in telephone interview.
Papandreou, 59, met with Papoulias as pressure mounted on him to step down after he was forced to cancel the referendum that might have led to Greece being ejected from the euro. The premier won a confidence motion early on Nov. 5 after pledging to disaffected members of his ruling Pasok party that he would not stay on.
More than one EU government is teetering on the brink. Italian Prime Minister Silvio Berlusconi also faces mounting pressure to step down as 10-year borrowing costs for the region's third-biggest economy approach the 7 percent level that forced Greece, Ireland and Portugal to seek bailouts. The premier reiterated today that he won't resign.
Pressure on Berlusconi
"With Papandreou's decision, the focus will perhaps shift to Italy, where Prime Minister Berlusconi is facing intense pressure, and may well follow Papandreou's footsteps should tension increase further, " Standard Chartered Bank's Costerg said.
Officials from the Greek ruling party and New Democracy met to discuss details of the Oct. 26 bailout accord late in Athens, before Venizelos attends the Brussels meeting, government spokesman Elias Mosialos told reporters.
The main goal of a unity government is securing approval of the Oct. 26 agreement with international lenders, Papandreou told reporters in Athens on Nov. 5. Last month's accord "is a prerequisite for our remaining in the euro," he said, referring to the second financing package of 130 billion euros ($179.7 billion) agreed by EU leaders on that date.
Stocks Decline
European stocks declined for the first week in six last week, while Greek two-year bond yields climbed above 100 percent for the first time, German 10-year bonds posted their biggest weekly advance on record and Italian borrowing costs surged to euro-era records after European leaders said that Greece may have to exit the euro following Papandreou's referendum decision.
The government will need the backing of 180 lawmakers to secure approval for Greece's second aid package. Disbursement of funds was halted after Papandreou's call for a referendum was opposed by German Chancellor Angela Merkel and French President Nicolas Sarkozy.
Austerity Measures
Papandreou, a graduate of the London School of Economics and former foreign minister, had survived a confidence vote in June called to rally support for austerity measures demanded by international lenders in return for a continuation of a 2010 bailout, the first for an EU nation. The EU and the IMF agreed to provide 110 billion euros in May last year in return for cuts in government spending and public sector jobs.
His referendum plan triggered a suspension in assistance by EU leaders less than a week after they'd approved the second rescue package and wrote down the value of Greek debt by 50 percent.
The surprise referendum announcement triggered the biggest two-day slide in the MSCI World Index in almost three years and sent spreads on French, Greek and Italian bonds over bunds to euro-era records. France now pays 123 basis points more than Germany to borrow for 10 years.
To contact the reporters on this story: Marcus Bensasson in Athens at mbensasson@bloomberg.net Maria Petrakis in Athens at mpetrakis@bloomberg.net
To contact the editor responsible for this story: John Fraher at jfraher@bloomberg.net
Find out more about Bloomberg for iPad: http://m.bloomberg.com/ipad/Best Regards,
Christopher Tahir
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