News & Financial Advice

European shares, which declined during the first hour and a half of transactions, have turned upward Wednesday mid-morning, with the cyclical, in the hope that European leaders would find means to agree on measures to facing the euro debt crisis, despite the "no" of the Slovak Parliament to strengthen the EFSF.

In Paris, around 9:10 GMT, the CAC 40 gained 0.77% to 3177.81 points, after losing more than 1% in early trade. The index has crossed an area of ​​strength identified by analysts graphics around 3130 points.The pan-European Euro Stoxx 50 index is 0.75% and 0.44% Eurofirst 300.

The leaders of the member parties of the Slovak government were to meet Wednesday resigned those of the main opposition party, the Smer to negotiate support for the project to strengthen the European Financial Stability Fund (EFSF), announced a spokesman of the party the majority.

Greece can avoid bankruptcy if itself and the other European countries stick to their agreement to reduce debt, said the President of the European Central Bank (ECB) Jean-Claude Trichet.

The euro hit a high of three weeks vis-à-vis the dollar, the trend had also returned in the hope of a solution to the crisis.Around 11:00, the European currency is trading at 1.3663 / 1.3647 dollars against 66 the previous day in the afternoon.

Cyclical stocks are leading the gains, including mining, driven by the rise in metal prices. The indices of the car gains 2.4%, largest increase sectoral and commodity index 0.7%, while the two indices showed the largest declines in early trading. The bank index is stable.

The Summit of Heads of State and Government of the European Union initially planned Oct. 17 will be postponed to October 23, time to have new findings on the situation of Greece and the recapitalization of banks, said Monday the president European Council Herman Van Rompuy.

This report is also expected to have new conclusions on strengthening the European Financial Stability Fund (EFSF), he added.

"This schedule will allow us to finalize a comprehensive strategy on the crisis of sovereign debt in the euro area covering a number of issues related to it," he said.

Finance ministers of the euro area (Eurogroup) and the European Union (Ecofin) will meet before October 23, he said.

A source explained that the delay was due in part to the fact that the report of the EU and the International Monetary Fund (IMF) on the progress of the sanitation program of Greek public finances is not yet available.

"The leaders want to be able to act on the basis of the results of the report of the troika, which was not ready in time for the original date," said one EU source."We believe that the postponement is due to a request from Paris than in Berlin."

Greece said on Monday it had completed its meetings with the inspectors of the European Union, the International Monetary Fund and the European Central Bank for the release of a tranche of assistance Athens needs to avoid bankruptcy by a month.

Another source said that EU officials in charge of organizing the meetings had begun to make contact with the Member States to set a new date.

"They go around to all delegations to see if anyone is able to postpone the summit," she said.

French President Nicolas Sarkozy and German Chancellor Angela Merkel announced Sunday they will present by the end of a response "lasting and comprehensive peace" to the crisis in the euro area, which should go through a recapitalization of banks in Europe.

Europe wants to impose further cuts in the salaries of the Greeks. Prime Minister refuses a new social massacre. In fact, the daily population is becoming increasingly untenable. Testimonials. One protester surrounded by police at a rally anti-austerity Thessaloniki.

Greece "will not become India." With these words the Greek Prime Minister George Papandreou, said the creditors of the country which call for new cuts in wages in the private sector and lower the minimum wage. The country will not meet its targets for deficit reduction this year, its lenders demanded additional sources of money before granting the payment of a further tranche of 8 billion euros. "We're on the side of workers and we ensure the protection of their collective rights," added the Prime Minister.I must say that since the outbreak of the crisis in Greece, in 2009, the austerity measures have led to a daily population increasingly untenable. Testimonials.

40% pay less

Fotini, 32, is married with two children. It is directly affected by the decline in wages imposed austerity plans. She said in testimony to the world. "40% of my salary in less than 1400 euros gross, 20% in less than the salary of my husband at 1300 euros gross. The increase in all products and services, gasoline, food, transport tickets …" His family is also affected by austerity. "My sister graduated from high school in Athens Polytechnic, is unemployed, my eldest daughter of two and a half years has no place in municipal day care, then you have to pay 500 euros a month to write it in a private nursery. Our rent is 600 euros, it has remained stable.But with all the fixed expenses, we are left with only 300 euros a month to live. "

Pensions reduced by 20%

Anastasia is a former professional dancer. It affects his retirement for six years but has planed for 20% to 1500 euros. It demonstrates the difficulty of daily in an interview with Radio Suisse Romande. "Towards the end I'm really broke. Life has become more expensive in the supermarket, food, energy. It's depressing, we see people losing their jobs. I live with my mother who also has a retirement. People help, otherwise I will not be alone. I have three children 22, 24 and 26 years old and not yet working. It is very unfair to lower the wages of people who have always been correct with the law. It hurts. I'm not allowed to work in conjunction with my retirement, not even a dance school.If I do that I was cutting a big part of my pension. I also very afraid of riots, the country goes bankrupt and can not even touch our retirement. I am very, very worried. "

Unemployment affects 4 out of 10

Greek youth is affected by austerity. Laurane Chytiris is a Greek-Swiss student in French literature at the University of Athens. She said: "I think to leave Greece for one year to get my master elsewhere. If the situation does not improve, I will not. I have a lot of knowledge on the internet looking to live in England or France. They see that it is unbearable here. There are young people of 30 who still live with their parents. They have a job but can not afford to pay rent with what they earn. " And unemployment is not just young people.The government announced an official figure to 16.3%, unions talk instead of 23%.

The hell of job search

Dimitri, 33. He is unemployed computer, converted into a teacher after the bankruptcy of his company at the beginning of the crisis. "I made some replacements as a teacher, but I did not post in September, I hope to have one a few months," he said still with hope. Meanwhile, it still affects 400 euros per month for unemployment benefits, which will stop in four months. For immediate needs, he relies on his savings and his family because his rent is 500 euros per month. Eventually, he too sees no alternative but to leave Greece. He participated in a recruitment drive to emigrate to Australia. "When I think of all that has to have degrees, to be ready.It's not my generation that created the debt, even if we rééchelonnons, it means that people who are not yet born today will still repay the thirty years. "

Small businesses are the key under the door

The "triangle trade" of Athens is not what it was. In this high place of business of central Athens, near Syntagma Square, fashion is the curtain fell. According to the National Confederation of Hellenic Commerce (ESEE), over 20% of small businesses have disappeared since 2010 in Athens. "Nobody gives us a hand," laments Themis Lizardos of Reuters, a jeweler in the neighborhood who has not dropped the curtain. But at this rate it should not delay. "There is only one hand, the one that we press our heads and keeps it on the ground," he adds.Tens of thousands of small businesses have closed across the country after the establishment of the first European aid plan of 110 billion euros, and the promise of stringent austerity measures by the government.

Real estate, next epicenter of the crisis?

Theodore Pelahaidis, is professor of economics at the University of Athens. He said the next crisis will be real estate in Greece. And you can not do much about. He said at Radio Suisse Romande. "When household savings have been spent in the coming months, what will people do? They will sell their home. But if you sell, the properties will lead to lower prices. So the next step that it will undergo a real estate crisis. And it will exacerbate the current crisis. "

The euro rebounded frankly Monday at midday, as equity markets driven by banking stocks after opening sharply lower, thanks to hopes for the European Central Bank cut its interest rates for support the economy.

The ECB is the only one of four 'major' world's central banks to have begun a cycle of rising rates, falling twice since April. The easing of inflationary pressures reinforces those who believe that the ECB will be forced to ease monetary policy because of sluggish growth.

"The ECB does not undertake to advance and rate cuts can not be excluded.It all depends on future developments, "said Ewald Nowotny in the morning, a member of the Governing Council of the ECB.

The euro, which hit a new low in eight months against the dollar and a 10-year low against the yen, is back above $ 1.35 in favor of speculation the ECB and a Ifo business climate in Germany better than expected although declining.

The anticipation of a share of the ECB also feeds a rebound in oil prices.Brent, who had fallen below 102 dollars, is trading around 104.80 dollars a barrel and U.S. crude, which had been reduced to just above 77 dollars, rose above $ 80 a barrel .

The Ifo economist Klaus Abberger Institute said he expected a return of the refinancing rate of the ECB to 1% – against 1.5% now – while stressing that it is difficult to anticipate when the decline could intervene.

This perspective has somewhat overshadowed concerns about the debt crisis in the euro area and the difficulties of European leaders at the curb.

On equity markets, the Paris Bourse takes about 3%, as the Frankfurt Stock Exchange, supported by the values ​​of the insurance and banking, respectively, whose indices resumed about 6% and 4.7% .

The U.S. Treasuries and German Bunds were down in response to buoyant equity markets, but caution is still required and the predominant feeling is that this decline will be only short-term bond markets.

The index futures suggested Wall Street now open sharply higher as they gave a sharp decline in market early in the day.

Eurobond BELIEVED "inevitable"

Asian stock markets were down sharply over yet, as investors once again stung by the fact that the EU leaders' discussions, especially concerning the strengthening of EFSF, have resulted in anything concrete.

Europe has once again been called to beef up Sunday its response to the debt crisis that afflicts him, asking the International Monetary Fund including more action from the European Central Bank.According to the IMF, the ECB is indeed the only player strong enough to "scare" the financial markets.

"As long as political leaders have not developed a long-term solution to address the debt crisis, the short-term outlook for copper and equity markets will remain negative," said Ong Yiling analyst Phillip Futures.

Klaas Knot, Member of the Board of Governors of the European Central Bank (ECB) on Monday called for the creation of an independent budgetary authority to impose sanctions on countries in the euro area with a high deficit.

He also finds "inevitable" the introduction of euro bonds common to the euro area.

Several major partners in the euro area on Wednesday called its leaders to quickly overcome the crisis of sovereign debt worrying about its consequences for the future of the euro and the global economy as finance ministers and central bankers G20 meeting in Washington.

The continuing crisis in the euro area and new signs of slowing global economy led to a sharp correction in equity markets, lower long-term rates and a rising dollar.

Governments and institutions in the euro area must act quickly to resolve the crisis of sovereign debt at the risk of contagion in the global economy, said seven of the leaders of the G20 in a letter to French President Nicolas Sarkozy, France chairing the G7 and G20.

In their letter, the leaders of Australia, Canada, Indonesia, Great Britain, Mexico, South Africa and South Korea are asking the leaders of the euro area to examine "all options to ensure long term stability of the second most widely used international currency in the world."

The U.S. Treasury Secretary Timothy Geithner has also been more urgent considering that it was more important to contain the crisis to support European growth and that it was essential to mobilize sufficient resources to avoid a default of Greece.He expressed confidence that Europe make more bold to resolve the crisis in the weeks and months ahead.

The European Financial Stability Fund (EFSF) will be fully operational and strengthened in the second half of October, said European Commissioner for Economic and Monetary Affairs Olli Rehn.

However, he felt that the Eurobonds, presented by their proponents as a solution to the debt crisis, would become "junk bonds" without better coordination of European economic policies.

The publication of purchasing managers index (PMI) showing a contraction in private sector activity in the euro area and China has fueled the drop in equity markets, the European indices yielding around 5.0 % in closing while the U.S. indices gave up over 3.0% in mid-session.

Finance ministers and central bankers from the G20 meeting in Washington at the annual meetings of the IMF and the World Bank, will discuss the crisis on Thursday night during a dinner but it is not anticipated that 'they publish a statement on the responses they intend to make.

THE EURO IN DANGER, SAYS STUDY OF THE ECB

The single European currency is at risk because of uncontrolled spending of the States of the euro zone and the debt crisis that ensued, warns a study by the European Central Bank (ECB), co-authored by Jürgen Stark, who has since resigned, because he seems to agree with the policy of buying government bonds introduced by the ECB in the fight against debt crisis in the euro area.

"The budgetary imbalances sharp rise in the euro area as a whole and the extreme situation of some individual countries could undermine the stability, growth and employment, as well as the sustainability of economic and monetary union ( EMU) itself, "it said in the study whose publication has plunged the euro fell to a seven-month low against the dollar, less than $ 1.35.

The European Committee of systemic risk (ESRB), new financial regulatory authority of the European Union, for its part warned that the consequences of the crisis of sovereign debt had significantly increased risks of financial instability in Europe.

"The high degree of interconnection within the EU financial system led to a rapid increase in the risk of contagion significantly.This threatens the financial stability within the EU as a whole and has negative consequences on the real economy in Europe and beyond. "

The ESRB, chaired by Jean-Claude Trichet, president of the European Central Bank, called for a "quick and decisive action" of the euro zone leaders whose efforts to contain the crisis is widely perceived as inadequate and too slow.

According to the ESRB, national supervisors "should coordinate their efforts to strengthen bank capital (…) taking into account the need for a transparent and consistent exposure to sovereign issuers."

Executive Director of the IMF, Christine Lagarde, renewed his call for a recapitalization of banks in Europe including the leaders of the institutions concerned and the governments of several countries in the euro area had downplayed the need for highlighting the strength of bank balance sheets in the zone.

Speaking on the eve of the G20 and the IMF, the Canadian Minister of Finance was alarmed by the possibility of credit crunch if the Europeans could not settle the Greek problem, by far the most critical within the euro area.

"The first item on the agenda …is that Europe needs to accelerate, they must resolve the issue of Greece, "said Jim Flaherty, the Canadian Broadcasting Corporation.

"Otherwise the market will prevail and we will have some form of crisis, it will become a banking crisis, affecting banks around the world, and we have a new credit crisis will cause a contraction of the real economy.We need to fix this, "he said.

The lack of solution to the crisis continued to weigh on European banks, the first of which French banks because of their exposure to Greece and Italy.

BNP Paribas has categorically denied being in search of investors for a capital increase and reiterated the line of French banks that it can cope with the debt crisis in the euro area without injection of capital.

A source based in Qatar had told Reuters on Wednesday that the emirate was in talks with BNP and other French banks about possible equity participation.

BNP Paribas finished Thursday's session down 5.7%, while Credit Agricole dropped 9.49% and 9.57% Societe Generale, while the sector index of European banks plunged to 7.26%.

Corporate loans remained strong in July in France, rising 4.7% after rising 4.9% in June, according to figures released Friday by the Bank of France.

These are loans to SMEs that grew the most (5.9% and 8.3% for SMEs in a group), as real estate (+8.0%).

Loans to large companies have found a growth of about 2% (against 1.3% yoy in June) and those granted to holding companies and administrations have slowed (+0.5%).

The funds mobilized slowed to 3.8% from 7.6% in late June, a decline linked to the sharp decline in the volume of mobilized a company that completed an acquisition, said the Bank of France.

In contrast, the funds made available have accelerated 5.0% after 4.1% in late June

Oil prices have closed up nearly 3% Monday in the hope that European leaders will eventually find a solution to the debt crisis.

Black gold has also benefited from the new growth in global stock markets and the decline of the dollar.

On the Nymex, the contract on September U.S. crude (WTI) finished with a gain of 2.50 dollar, or 2.93% to 87.88 dollars a barrel.Meanwhile, Brent advanced to 1.61%, or $ 1.74, to 109.77 dollars.

The price of Brent are still lower by about 15% compared to the highest of the year of 127.02 dollars reached in April.

This level, the highest since the outbreak of the 2008-2009 financial crisis had been reached at the time of the eruption of violence in Libya, which disrupted the supply of crude to Europe.

Since the concerns about the state of the global economy is refluxed in the market.

The U.S. economy has stalled in the first half of 2011, grazing the contraction over the first three quarters, which revived fears of a new entry into recession if the budget crisis is not resolved quickly.

Data released Friday by the Commerce Department show that the economic slowdown began much earlier than previously thought.

"The economy including a pause in the first half of the year," said Ryan Sweet, economist at Moody's Analytics.

"Some temporary factors have had a disastrous effect, but they are disappearing.But this raises some concerns about the sustainability of the recovery. "

Gross domestic product (GDP) of the world's largest economy grew by only 1.3% (annual rate) in the second quarter due to sluggish consumption particularly affected by rising gasoline prices.

Analysts had expected a 1.8% growth of U.S. GDP from April to June

Economists generally believe that it takes a minimum growth of 2.5% for the unemployment experience a boom.He is currently at 9.1%.

Final sales increased 1.1% against 1.8% expected, while consumer spending has almost stagnated, rising 0.1% after 2.1% last quarter.

Consumption, which accounts for about 70% of U.S. economic activity, has seen its growth rate is the lowest since his release from recession two years ago.

WINCE MARKETS

The growth in the first three year was also revised sharply to bring out a limited increase of 0.4% against 1.9% previously announced.

The figures in the fourth quarter of 2010 were also revised down to 2.3% against 3.1% estimated in previous estimates, indicating that the U.S. economy already showing signs of slowing even before the price gas only rising again and that is felt the impact of the earthquake in Japan in March.

These figures also show that the recession between 2007 and 2009 was much worse than shown by the above statistics with such a decline of 5.1% of output instead of 4.1%.

Between 2007 and 2010, the U.S. economy shrank at an annual rate of 0.3%.

The budget impasse in Washington, who posed on the sovereign rating of a U.S. threat reduction, contributes to a climate of uncertainty is not conducive to a strong recovery of the economy. Republicans and Democrats have not yet reached a compromise with a view to increasing the ceiling of U.S. debts, currently set at 14,300 billion.(See

)

But the Treasury said no longer be able to borrow on Tuesday, causing a situation of default by the U.S. State.

"There is no room for error and failure, whatever its duration, could plunge the country into recession," said Joel Naroff of Naroff Economic Advisors.

The White House reacted to the release of growth figures, saying they prove the need to solve the budget crisis and implement measures to support the economy.

"The world economy is experiencing a period of weakness and we can not afford to do anything that would undermine the recovery in these times," he said in a statement Austan Goolsbee, who heads the Council of Economic Advisers in the White House.

European markets have reacted negatively to the announcement of the American Statistical confirming fears of a market slowdown in the U.S. economy.

European shares ended the session down sharply, recording their worst weekly performance since March.

As U.S. markets, they have declined sharply before erasing some of their losses in mid-session, the markets were somewhat reassured by a call to compromise on the budget issue launched by Barack Obama.

The morale of French households is somewhat back in July but remains below its long-term average.

The morale of French households is somewhat back in July after months of stability, with a gain of 3 points in the index that measures at 86 points, according to data released Tuesday by INSEE. This level remains low compared to the long-term average (100 points), especially since the French expect increasingly to a new rise in unemployment, is the National Institute of Statistics and Economic Studies .

Households are more satisfied with their personal situation before last (three points) and are more optimistic about the future (two points). The French are also higher than in June to be considered appropriate to make major purchases (4 points). They believe, moreover, that their ability to save is more important, although they consider the least favorable time to do it.

Cons: The households are much more numerous in July to expect a rise in unemployment (10 points), while their predictions were improving in this area since the beginning of the year. However, their views on the general standard of living improved slightly in France, and households less than previously feared a price hike to come.

Major European banks have managed to limit their losses on Greek debt to 5.4 billion euros, by negotiating a discount of 21% of their assets during the debate on second bailout plan.

This is the French BNP Paribas, which should suffer the greatest losses in the sector, with the evaporation of about 950 million euros of its debt. The French bank is the first European settlement in the most exposed to debt in Athens, Greece out.

The fact that the losses of the banking sector are not heavier relieved investors and calm the fears of contagion from the crisis with Spain and Italy.

"The danger of default (Greek) is spread uncontrollable.This does not mean that all is well, only a disaster was averted, "said Oliver Flade, fund manager at Allianz Global Investors.

"A discount of 40-50% would have made sense economically. But between the banks that want 0% and political leaders who demanded more, 21% consensus was reached.For banks, it's better than what they could expect. "

The cost for European insurers, who held the end of last year 24 billion euros of Greek debt, should be similar to that of banks.

However, exposure of the insurance sector is less clearly defined than the banks, which have revealed many details of their assets in the stress tests last week.

DISCOUNT TO ALLOW A SECOND?

But the fear of increased losses anticipated by the banks remain.Greek bonds are currently trading at a price implying a discount of 45% against 50% last week.

"We believe that long most likely outcome is that the Greek debt holders will have to undergo first a small discount, and a larger later.For that Greece has a chance to succeed, they will probably give up about 65%, "said Gary Jenkins, the analyst firm Evolution.

Four options are available to creditors, including exchange offers of securities and capital (rollover) and a scheme to buy back debt.

These changes in loan terms have led rating agency Fitch to prevent it would put Greece in partial default.

The program based on voluntary activity in order to avoid a complete failure, some institutions may not fully participate.

Greek debt held by the private sector reached about 150 billion euros.A 90% would affect 135 billion euros, of which about 54 billion by mid-2014.

The net contribution of the private sector equivalent to the $ 54 billion, less the cost, borne by Greece, the news service obligations to 30 years.

BNP Paribas has 4.5 billion euros of Greek debt. It is followed by the Franco-Belgian Dexia and Cyprus Marfin, both at 3.4 billion euros.

Both banks could therefore suffer a loss of 700 million euros each.

This is followed by Commerzbank with 3 billion euros of assets, and Societe Generale 2.4 billion.Losses expected to reach 630 million and 500 million euros.

Insurers are the most exposed Italian Generali, with 3 billion euros, French CNP Assurances with 2 billion and Germany's Allianz, with 1.3 billion euros, according to figures from Barclays Capital.