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Strategies & Market Trends : The Residential Real Estate Post-Crash Index-Moderated -- Ignore unavailable to you. Want to Upgrade?

To: Les H who wrote (26085)	6/19/2011 12:03:55 AM
From: Giordano Bruno	Respond to of 119360

Greece debt could trigger a new global financial crisis ...The ECB has $ 116 billion of equity capital against a balance sheet of $ 2.84 trillion of assets consisting of bonds, loans and credits. Of that amount $ 637 billion of debt paper from Portugal, Ireland, Italy, Greece and Spain. Of that total $ 270 billion are Greece’s crumbled paper. Thus 40 to 50 percent cut on Greek debt would come close to wiping out the ECB’s capital base. This would sink the central bank almost overnight. The crisis has assumed a new dimension when the investors discovered that it’s actually the US financial system that may end up as the real weak link in the event of Greek debt default. Big US banks have been lending generously to banks across Europe. While these banks have pulled back considerably as a result of recent turmoil, US banks are widely believed to have $41 billion of direct exposure to Greece. The US financial system link doesn’t end there. US money-market funds have a hefty European exposure, too. Three large banks Moody is threatening to downgrade include BNP Paribas, Credit Agricole SA, and Sociiete Generale SA that get a significant amount of their short-term funding from America’s money markets. Thus the financial crisis in Greece is radiating to European Union and US and ultimately to all countries having financial links with them. It is the inevitable outcome of the globalizing. pakobserver.net

To: Les H who wrote (26085)	6/19/2011 9:45:51 AM
From: Les H	Read Replies (1) \| Respond to of 119360

German Finance Minister Wolfgang Schaeuble intends to propose a compromise to the European Central Bank to permit private sector involvement in a second bailout of Greece, German magazine Der Spiegel said on Sunday. The European Financial Stability Facility, the euro zone's bailout fund, would issue bonds and provide them to Greek commercial banks through the Greek government, Spiegel reported without citing the source of its information. The Greek banks, which are heavily dependent on ECB funding, could then use the bonds as collateral to continue obtaining loans from the ECB in its money market operations. This might remove a major obstacle to a private sector rollover of Greek debt, which the ECB has so far opposed on the grounds that Greek banks would be cut off from funding. Credit rating agencies have warned they would probably classify any rollover scheme as a default, and the ECB has said a default would mean it was no longer able to accept Greek government bonds as collateral in money market operations. reuters.com