- 'Grexit' Is Back: A Greek Exit From the Euro Raises Fears of Fiscal Contagion. (video) Mario Draghi’s July 2012 pledge to do “whatever it takes” to keep the euro intact has kept speculators at bay for almost three years. Bond yields fell from Dublin to Athens, giving governments room to cut budgets and start revamping their economies. While it’s not been a period of robust growth, the talk of crisis has abated and even Greece’s six-year recession ended. What’s not changed is the risk entailed by Greece’s potential departure from the 19-nation currency bloc. What Citigroup Inc.’s Ebrahim Rahbari termed “Grexit” is back in play and it remains the worst possible outcome in the view of economists at Berenberg Bank and ING-DiBa AG.
- Samaras Faces Greeks Skeptical of His Euro-Exit Warnings. “It’s all propaganda meant to scare people,” Moschou said on Jan. 2 as she served Greek wine and brandy to customers at Vrettos, a 106-year-old distillery tucked away in the old town of Athens below the Acropolis. “I don’t believe it.”
- Ruble Starts New Year With Plunge as Oil Declines to 2009 Low. The ruble picked up right where it left off last year, weakening as oil prices extended declines. Russia’s currency slid 7.2 percent to 60.37 per dollar at 8:06 p.m. in Moscow, in its first day of trading of 2015 after a 46 percent decline last year. Government bonds fell, with the five-year yield climbing 16 basis points to 15.63 percent.
- EU’s Fractured Politics Is Biggest 2015 Risk, Eurasia Group Says. The success of anti-European Union parties and fraying bonds among EU nations are the biggest risks facing investors in 2015, Eurasia Group said. The stand-off over Ukraine between Russia and the U.S. and its European allies, China’s slowing economy and Islamic State’s designs outside of its Iraqi and Syrian bases are among the New York-based Eurasia Group’s leading threats for this year, according to its annual Top Risks report released today.
- German Inflation, Weakest Since 2009, Raises Pressure on ECB. German consumer prices are close to stagnating, adding to signs that euro-area inflation is turning negative and potentially bolstering the case for more European Central Bank stimulus. Inflation in the region’s largest economy slowed to 0.1 percent in December, the Federal Statistics office said today. That’s the lowest rate since October 2009 and below the median forecast of 0.2 percent in a Bloomberg survey of economists.
- Get Used to Higher Stock Volatility, Deutsche Bank Says: Options. While unanimity is the buzzword for strategists forecasting gains in the U.S. stock market this year, another consensus is developing among options analysts. Deutsche Bank AG became at least the third major bank telling equity derivatives clients to prepare for more frequent bouts of turbulence in 2015 as the Standard & Poor’s 500 Index (VIX)’s bull market approaches its seventh year. The opinion came before the benchmark gauge plunged as much as 1.9 percent today and the Chicago Board Options Volatility Index increased for the fifth time in six days.
- Aurelius Pushes Petrobras Debt Claim as Default Odds Soar. Aurelius Capital Management LP’s bid to declare Petroleo Brasileiro SA (PETR4) in default underscores just how far the state-controlled oil producer has fallen in the eyes of bond investors. The cost to protect against a Petrobras non-payment for one year has soared to the highest since the aftermath of the financial crisis, after the New York-based hedge fund said in a letter obtained by Bloomberg News last week that the company had violated debt contracts by failing to report third-quarter results.
- Emerging Stocks Decline With Currencies on Greece; Ruble Weakens. Emerging-market stocks fell for a third day and currencies weakened as speculation that Greece may drop the euro reduced demand for riskier assets. A gauge of 20 developing-nation currencies slid 0.6 percent to a 12-year low. Sasol Ltd. (SOL), world’s biggest maker of motor fuel-from-coal, dropped the most in a month in Johanesberg. Petroleo Brasileiro SA paced a slump in Brazilian stocks. Dubai’s DFM General Index led losses in the Gulf region as Brent crude touched the lowest level since May 2009. The ruble tumbled 6.2 percent. Turkish bonds and stocks climbed after a report showed the nation’s inflation rate dropped more than economists forecast. The MSCI Emerging Market Index slid 1.3 percent to 941.35 at 11:05 a.m. in New York.
- Europe Stocks Slide Most in More Than Three Years on Oil, Greece. A slump in energy shares and concern that Greece may leave the European currency union sent euro-area stocks to their biggest slump in more than three years. The Euro Stoxx 50 Index slid 3.7 percent to 3,023.14, and the Stoxx Europe 600 Index dropped 2.2 percent to 333.99 at the close of trading. Greek lenders posted some of the biggest losses on the Stoxx 600, as the ASE slid 5.6 percent to its lowest close since November 2012. Piraeus Bank SA slumped 5.2 percent, National Bank of Greece SA dropped 7.4 percent, Alpha Bank AE slid 5.7 percent and Eurobank Ergasias SA declined 6.9 percent.
- WTI Falls Below $50 a Barrel First Time in 5 1/2 Years. WTI slid as much as 5.2 percent in New York. Brent fell below $55 in London for the first time since May 2009. Russia’s output rose to a post-Soviet high while Iraq, the second-largest producer in OPEC, plans to boost crude exports to a record this month.
- Copper Extends Drop to Lowest in Four Years Amid Greece Concern. Copper futures for March delivery declined 1.8 percent to settle at $2.766 a pound at 1:23 p.m. on the Comex in New York, the biggest drop for a most-active contract since Dec. 15. Earlier, prices reached $2.744, the lowest since June 2010.
- Bears go missing in S&P 500 forecasts. Two years of stocks going straight up have chased just about every skeptic from the U.S. market. Among professional forecasters on Wall Street, none tracked by Bloomberg sees a retreat in 2015, with the average estimate calling for an 8.1 percent advance. At the same time, buyers of exchange-traded funds ended an obsession with bonds last quarter, sending four times as much cash to U.S. shares. Pessimism, the constant companion of a bull market poised to become the second-longest since the Kennedy administration, is suddenly nowhere to be found after the Standard & Poor’s 500 Index climbed 44 percent since 2012. While strategists are predicting a rally that would rank as the smallest in four years, the threat of higher interest rates and weakening prospects for global growth aren’t creating any full-blown bears after the U.S. beat all but four of the largest developed markets in 2014.
- France and Germany Push Athens on Bailout Commitments. French President Francois Hollande Raises Possibility of Greece Leaving Eurozone. France and Germany on Monday stepped up pressure on Greece to meet the terms of its two international bailouts, returning to the brinkmanship of the eurozone debt crisis as the shared currency dropped to a nine-year low.
CNBC:
ZeroHedge:
Business Insider:
- The American Dream Is Dying. (graph)
- China's reaction to oil prices may be hidden factor behind oil price plunge. Plunging oil price and cyber attacks are the two big risks to global security according to security consultancy Control Risks.
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