(CNN) - If recent history is anything to go by, the number 7 has good reason to be feared in the European bond markets.
Once yields on Greek, Irish and Portuguese 10-year notes hit that unlucky figure, they didn’t come back down - pricing three eurozone members out of the markets in quick succession and into bailout limbo.
Though it may be arbitrary, 7 could soon become the cut off point for a new two-tier common currency; an area where peripheral members pay the high price for low growth and lack of reform, whilst the more buoyant economies of the north enjoy record-low borrowing rates.
That is unless someone can convince the German Chancellor that so called jointly-issued “eurobonds” really are the panacea. FULL POST
Hong Kong (CNN) - The Angry Birds' red faces have been etched on bras, embellished on T-shirts, turned into stuffed toys and baked into mooncakes. China has a love affair with Angry Birds as both unofficial and official merchandise have boomed in the country.
Rovio, the creators of the blockbuster game, will open game-themed retail stores and activity parks in China. It's the first country to get these parks and stores outside Finland, where the game originally hatched.
The first retail store in China opens in Shanghai on July 3, and the Beijing location opens on July 10, where shoppers can find a bevy of merchandise featuring green pigs and furrow-browed birds.
Athens (CNN) - Greece has voted. New Democracy, its pro-bailout party, prevailed in Sunday’s election and still market reaction has been decidedly muted. Much like last week’s market performance following Spain’s aid request, the euphoria fizzled quickly as traders focused instead on the considerable unknowns looming in the distance.
Among the unanswered questions: Will Greece’s New Democracy party be able to form a government? And how much leeway will it have to soften the terms of its Troika-prescribed austerity package?
Writing to clients today, HSBC economists David Bloom and Janet Henry said Greece’s result may offer temporary relief but warned that “major challenges remain.”
“While a coalition of pro-bailout parties would put the idea of a Greek euro exit on the back burner for now, it would not alter the underlying problems in the euro zone itself,” they added. FULL POST
London (CNN) – For London’s investment community Sundays are more about talking pizzas than politics.
They’re the last chance to unwind before buckling up for the bumpy ride when the markets open on Monday morning.
But across Europe’s financial hub, traders are keeping an uneasy eye on events in Athens and preparing themselves for what many reckon will be a wild week at work.
The 43 year-old Dutchman shot to fame three years ago at the height of the credit crunch as the forthright financier on the BBC’s reality show "Million Dollar Traders."
Van Dam now spends his time running Hampstead Capital, a fund with 500 million euros ($630 million) under management, as well as his new initiative: The Lex van Dam Trading Academy, set up to teach would-be dealers how to manage money.
He took time away from his weekend lunch (and 26,000 followers on twitter) to answer five key questions on what the Greek elections mean for the markets.
1. Will Greece leave the euro?
Yes. They will leave very soon unless the Germans change their tune and throw more money at them. It is slightly unfair though as most of the help Europe gives them is to help the Europeans themselves as opposed to helping the Greek people.
2. Is austerity the right answer?
Austerity is not the answer. The Greek economy is absolutely collapsing and the tax base is going down with it. The American and British solution of printing money is not the answer because it will lead to a total lack of trust in the government because paper money will be worthless. The answer is accepting that people in the West need to work harder and longer.
3. Will the euro survive?
The biggest chance is for a two-speed Europe to emerge with Germany leading the euro pact and Italy in the second group. The German euro will be very strong, the Italian euro very weak though.
4. Eurobonds: The perfect cure or recipe for disaster?
The Germans have done a massive amount of austerity at home with a higher retirement age and lower wage inflation than in the southern European nations. They will not write a blank cheque to the south. Eurobonds mean that the Germans will become responsible for the Greek debt. It will not happen unless countries such as Spain and Italy give up part of their sovereignty.
5. Where are you putting your money now?
My money stays in cash and real assets such as property and gold. Shares are not expensive right now but if interest rates go up even a little they could drop a lot.
Athens (CNN) - Whichever way the Greek people vote in these elections, there are no easy options for the country. It is almost certain no one party will get a majority – even with the top-up seats given to the front runner.
We are facing days of horse-trading.
The best that can be hoped for is that the leaders of New Democracy and PASOK follow through on the noises they are making. That it is time for unity.
They know what that means. That they are going to have to get into coalition with each other. If they do that, Greece carries on.
However, even if these so-called “sensible parties” get into bed with each other, they will still want to renegotiate the deal with Europe.
Europe will not budge on issues such social security, pensions or privatizations. But they might be willing to talk on deficit targets and taxation levels, for example, given the difficulties created by the recession.
There are 1,001 ways that Greece can stay in the euro. But even if the austerity deal is renegotiated, the Greek people face another three to five years of pain.
With a deficit more than 4 times the European Union limit and an economy mired in a deep recession, Greece hurtled towards insolvency.
Then-Prime Minister George Papandreou assured the world Greece was determined to confront its fiscal problem.
“We are making deep changes in our economy, our political system, our society, building the conditions for a stable economic environment, a transparent economy, a viable economy,” he said.
But those promises proved futile. FULL POST
What recession? With BSkyB vastly increasing the price it’s willing to pay to show England's Premier League football matches, the 20 teams that make up the league have ever more money to attract top talent.
But are people like me, who pay near $100 a month for Sky, going to have pay more to watch the matches?
Sky says no. It’s believed the satellite channel, partly owned and controlled by Rubert Murdoch's News Corp., will instead cut costs and services elsewhere in order to keep its overall costs from skyrocketing just to air football.
I say ‘just’, but really Sky has been all about football - it helped create the Premier League 20 years ago, and pubs and many people (like me) pay a subscription to be able to watch sports which have moved from free-to-air to pay TV in that period. FULL POST
Herat, Afghanistan (CNN) - In several Afghan provinces the fight to curb the growing of opium poppies seems to be a losing battle.
In 2011 a United Nations Office on Drugs and Crime survey said opium poppy cultivation rose by 7% overall from the prior year. Opium poppy has been one of the main sources of funding for the Taliban especially since the U.S. invasion of Afghanistan in 2001. Poppy cultivation is expected to grow partly because the opium poppy's prices are rising and because farmers are having a hard time deriving as much profit from alternative crops.
But one Afghan province is showing real progress in doing just that. The alternative crop is the world's most expensive spice, saffron.
Vienna, Austria (CNN) – It is shaping up to be an intriguing two days in Vienna. Ministers with some of the largest oil reserves in the world will gather Thursday to determine if the more than $25 slide in global energy prices requires urgent action. Ahead of the ministerial meeting, they will meet with their counterparts from the private sector and air their views at the OPEC seminar Wednesday at the Hofburg Palace, before an audience of 1,200 energy executives.
Uprisings throughout North Africa - which shut down 90% of Libya's oil production for months - military exercises in the Strait of Hormuz, and rising demand from China kept markets on edge and drove prices higher last year and through the first quarter of 2012.
Madrid (CNN) – Spain: a country home to 47 million people and a $1.4 trillion economy. The Spanish bull has stood proud on Iberian hilltops for years, a symbol of force and a fitting tribute to a country which up until recently was the euro zone's fourth richest.
But step out of the Castilian plain and onto the bustling streets of Madrid – or any other Spanish city for that matter - and the skyline tells a different story.
The horizon is dotted with relics from the country's now burst property bubble.
Empty apartment blocks stand idle in the suburbs, while downtown the glass towers of Spain's financial district cast shadows over the people below and a shadow over their children's future.
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