PORTUGAL and GREECE ratings cut by S&P

Really2

ruggedtoast wrote: »

House prices are well going down because of this. You lot are going to be crying. Some of you anyway, not the ones who want them to. You'll be well happy.

Sorry I read that and thought it had to be.....

Generali

reduceditem wrote: »

The Greek stock exchange has announced a ban on short-selling this morning.

Short selling is virtually non-existent in the Greek market IME and is incredibly efficiently policed. Penalties for short selling or breaking one of a myriad of specialised rules are expensive and instantly applied.

To sell short you need a special licence. Goldman Sachs had one but the 4 other investment banks I worked for did not, nor did Deutsche Bank (I know because they used to sell short by accident and get really upset by the huge cost they would have to pay every time).

Of the several hundred hedge funds I have had a connection with in my time, one had a licence to sell short and that was through a connection of the owner I think.

There are loads of things going on in Greece right now. This is peripheral at best.

chucky

Generali wrote: »

There are loads of things going on in Greece right now. This is peripheral at best.

and a very good source of a conspiracy theory even though not true for those that revel in them...

michaels

As any politician knows it is all the fault of the locust hedge funds short selling Greek debt and its banks and nothing to do with the fundamentals that a shrinking economy can not service a debt of >100% of GDP

Generali wrote: »

There are loads of things going on in Greece right now. This is peripheral at best.

Edit: Anyone else with more than 50k in a Spanish owned bank starting to get nervous?

Generali

michaels wrote: »

Anyone else with more than 50k in a Spanish owned bank starting to get nervous?

There used to be a truism that no company in a country could have a higher credit rating than the Government as the Government could resort to printing money to pay back its debt.

Now AIUI, Santander is in pretty decent shape. Strong reserves, geographically diversified, bad debts ok, profitable. The Spanish Government? Meh. Most notably, can't print money as they can't print Euro and (again AIUI) there isn't a mechanism to pull out of the Euro.

So would you lend money to Santander or the Spanish Government right now?

Degenerate

michaels wrote: »

Edit: Anyone else with more than 50k in a Spanish owned bank starting to get nervous?

You should be fine with money in a UK subsidiary of a Spanish bank (I'm thinking Santander here). These are still separate UK operations regulated by UK authorities and merely under foreign ownership. Even in the event of insolvency of the parent, they couldn't just raid the subsidiary for cash, rather they would be an asset to be sold off (so might even end up back in British hands).

The Icelandic bank situation was brought about by use of the "passport scheme", an ill-advised treaty provision that allowed foreign banks to operate branches, rather than subsidiaries, in other countries. These were answerable only to their home nation and beyond the reach of the host nation's regulator. It was a sort of diplomatic immunity for banks that was far too easy to abuse.

inspector_monkfish

13:42 28Apr10 -IMF, EU TO INCREASE AID PACKAGE FOR GREECE THIS YEAR - GERMAN TV CITING GOVT SOURCES
13:52 28Apr10 -EU, IMF to increase aid for Greece-German TV
FRANKFURT, April 28 - Greece will receive more aid from the European Union and the International Monetary Fund this year than originally planned, German television station N24 reported on Wednesday, citing German government sources.

N24 wrote on its website that an increase "in the double digits" -- i.e. 10 billion euros or more -- from the expected 45 billion euros this year would be necessary.

Degenerate

inspector_monkfish wrote: »

13:42 28Apr10 -IMF, EU TO INCREASE AID PACKAGE FOR GREECE THIS YEAR - GERMAN TV CITING GOVT SOURCES
13:52 28Apr10 -EU, IMF to increase aid for Greece-German TV
FRANKFURT, April 28 - Greece will receive more aid from the European Union and the International Monetary Fund this year than originally planned, German television station N24 reported on Wednesday, citing German government sources.

N24 wrote on its website that an increase "in the double digits" -- i.e. 10 billion euros or more -- from the expected 45 billion euros this year would be necessary.

How many bailout-on-bailouts will there be before they recognize a sinking ship? Throwing money at a problem does nothing if you refuse to address the underlying structural failure.

inspector_monkfish

inspector_monkfish wrote: »

08:05 28Apr10 -EUROPE: Risk update - Greece, Portugal, where next?

07:05 GMT - [RISK WATCH] With Portugal now joining Greece on 'default row' fears
of contagion have really gripped markets, and without wishing to add more
fuel to the fire the whole debt/credit malaise that appears to be fraying
Euroland at the margins appears to be almost unstoppable, at least in the
current internally combustible environment. Unless a 'final' solution is
quickly put in place for Greece, it seems almost inevitable that other EMU
peripherals will suffer at the hands of speculative predators looking for
the next potential prey. Spain could fall into this category, and the
task of keeping the country solvent would obviously be that much tougher
than keeping either/both Greece and Portugal afloat altogether. Turning
to the markets, deep risk aversion is clear in the form of a sharp
downturn in stocks, the Euro and softer oil, while Govt bonds and Gold
benefits from increased safe-haven demand.

Spain just been downgraded.....

lemonjelly

inspector_monkfish wrote: »

Spain just been downgraded.....

Was Spain thought to be in trouble? I wondered if Italy might have been next. Reading through this, most didn't reckon on Spain did they?

Is there a domino effect going on?