World Stocks Fall Lower On Rising Greece Credit Default Swaps And The Exhaustion Of Quantitative Eeasing … The rise of Neoauthoritarianism is terminating Greek socialism and the state worker job.

Financial market report for June 8, 2011

1) … Open Europe reports The European Commission yesterday released its first review of member states’ economic policies under the so-called ‘European semester’.
El País reports that the Commission has recommended that Spain raise the VAT rate and energy taxes in order to reduce the Spanish businesses’ contribution to social security and make them more competitive.

Le Soir reports that Belgium has been told to put wage increases better in line with productivity rather than inflation. Belgian daily De Standard notes that the Commission’s suggestions risk further complicating negotiations for the creation of a new coalition government in Belgium, as French-speaking Socialist leader Elio Di Rupo – who has been tasked with forming the new government – is opposed to reforming the country’s wage indexation system, while the Flemish nationalist N-VA party is in favour of doing it.

No specific recommendations were issued for Greece, Ireland and Portugal, other than they need to stick to the conditions attached to their bail-out packages.

Telegraph BBC La Stampa Il Sole 24 Ore Le Figaro La Tribune Le Soir FT FT 2 El Pais FT 3 El Pais 2 Euractiv Standard

2) … Tyler Durden reports Troica Report: Next Aid Disbursement Can Not Take Place Until Greece Corrects Underfinancing In Adjustment Program

3) … ETFs falling lower included
URA -4.7
GEX -3.0
XSD -2.0
IGN -2.7
FONE -2.6
SIL -3.3
GDXJ, -3.1
GDX -2.3
COPX -2.1
PSCD, -2.0
SEA -2.7
EUFN -2.0 Mike Mish Shedlock Excluding default risk, 33 European banks need additional $347 billlon

4) … Countries falling lower included
EWD -3.1
NORW -2.8
KROO -2.8
CNDA -2.2
THD -3.0
SKOR -1.8
VSS -1.8
EWX -1.2
VGK -1.7
EWO -2.0
YAO -1.8
CAF -2.3
LATM -2.0
GERJ -3.0
EWU The Telegraph reports  UK Warned Credit Rating Could Be At Risk. Britain’s top-notch credit rating could be slashed if growth stays weak and the Government does not stick to its austerity plans, one of the world’s top credit rating agencies warned.

5) … The Swedish Krona, FXS, The Canadian Dollar, FXC, and The Australian Dollar, FXA, have been competitive currency deflation loss leaders since May 1, 2011
as seen in this Finviz Screener. Arising Yen, FXY, and a rising Swiss Franc, FXF, have resulted in unwinding carry trades globally,  as is seen in turn lower in the optimized carry ETN, ICI.

The Euro, FXE

6) … World Stocks, ACWI, and VT fell lower today
Where as the seigniorage (moneyness) of  Neoliberalism was based upon the floating currency regime of Milton Friedman and carry trade investing; the seigniorage of Neoauthoritarianism is based upon Leaders Framework Agreements which wave national sovereignty and effect corporatism as well as regional economic governance and Regional Trade Pacts not based upon the dollar, but upon regional currencies.
World Stocks ACWI

7) … Emergency Fiscal Management of the Greece economy by appointed stakeholder is likely to complement accelerated austerity measures … The soon coming end of state employment and socialism draws thousands of protesters into the streets  
Elena Becatoros, of the Associated Press, Greek joblessness at record as new austerity looms. Greek unemployment rate hits 16.2 percent as government seeks deal on new austerity.

Stefan Steinberg of reports European Union officials demand brutal austerity in Greece.  Papandreou announced on Tuesday further tax increases and spending cuts aimed at slashing an additional €6.4 billion from the state budget.

Papandreou had already announced plans to raise €50 billion by 2015 by selling off more than 30 fully and partially government-owned businesses, including water companies, the ports of Piraeus and Thessaloniki, the Athens racecourse, the Postbank, a casino and the OPAP lottery company. The government is also seeking an investor for the state owned rail transport system.

According to the EU bureaucracy in Brussels, however, Papandreou’s plans are completely inadequate. The main condition laid down by the EU for a possible new loan to Greece is the rapid implementation of a much more drastic program of privatisation, including the sell-off of the country’s most valuable and socially necessary assets.

A number of leading Eurozone countries back the setting up of a special trust to organise a much more rigorous fire sale of Greek public assets. According to a report in Tuesday’s Süddeutsche Zeitung, the proposed trust would assume responsibility for the sale of additional state-owned enterprises, including hospitals and bus companies. The article notes that the total worth of Greek state assets is estimated at around €300 billion―much more than the €50 billion Papandreou has proposed to raise.

The article also details an initiative to issue shares in the trust that could be immediately sold to interested parties. This is regarded as a means of putting additional pressure on the Greek government to privatise as quickly and drastically as possible.

The latest proposals from EU officials and Eurozone governments will award quasi-dictatorial powers to non-elected bodies to sell off socially necessary institutions and services such as hospitals, power companies and telecommunications to the highest bidder. The result will be higher consumer prices for essential services and the complete abolition of any sort of safety net for the needy and the working population―already plagued by mass unemployment.

Following a succession of toothless protests and demonstrations organised by the trade unions, which attracted a dwindling number of participants, a new wave of protests has commenced in Greece. On Sunday, more than 70,000 crammed into Athens’ Syntagma Square to protest outside the parliament building. The demonstration followed a series of 12 nightly rallies and is largely inspired by the Indignant Citizens movement in Spain and Italy.

One banner prominent on Sunday’s protest read “Thieves―hustlers― bankers”. Thousands more demonstrated in other Greek cities. According to one social commentator, the developing social crisis in Greece is impelling new social layers to join the protests. “The prospect of losing the security of a state job at a time of sharply rising unemployment has brought many people onto the street for the first time, whatever their political affiliation”, said Taki Michas.

8) … In Today’s News
Reuters reports Solar Price Drop to Weigh on SPWRA and LDK. Steep declines in prices for solar products will shrink profit margins for SunPower Corp and LDK Solar Co Ltd this year, the companies said on Tuesday. Germany and Italy, the world’s two largest solar markets, both have cut subsidies for the renewable energy source in recent months, though manufacturers have ramped up output of the modules that turn sunlight into electricity. SunPower Chief Executive Tom Werner said the industry was seeing intense competition for sales that could drive prices for solar modules down 20 percent this year. “You are seeing points where it’s not economically viable for some (of our) competition to produce product,” he told Reuters. Hat Tip to Between The Hedges

Financial Times Video reports Greek Restructuring Is Almost Inevitable. George Magnus, senior economic adviser to UBS, the investment bank, tells John Plender that the size of Greece’s public sector debt is simply too big for ongoing austerity measures to fix and that its economy is uncompetitive and in need of fiscal reform.

Mike Mish Shedlock relates China Plows Into Absurd Bet on Long-Term Japanese Debt  as Bloomberg reports China’s Net Purchases of Japan’s Long-Term Debt Rises to Record in April.

Casey Seiler of CapitolConfidential relates that more than 1 million people in our state are protected by New York’s rent regulation program. However, this program is set to expire next week on June 15th. That would be a crisis for our state.

Tyler Durden reports Greek CDS Surges To All Time Record On Talk Accord For Greek Bailout Faces Major Obstacles and reports Greek Economy Grinding To A Halt As Daily Protests Cripple Industrial Production.

Mike Mish Shedlock reports German Finance Minister Seeks 7-Year Greek Extension in Clash with Trichet; Fitch Says Proposal Constitutes a Default; Spain the “Big Kahuna”

CNBC reports Abercrombie & Fitch (ANF) Shares on Weak Sales Outlook. Teen apparel retailer Abercrombie & Fitch reiterated its second-quarter forecast, but said sales during the quarter will not be as good as those in the first, according to CFO Jonathan Ramsden, who was speaking at a conference in New York.



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