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Markets hate uncertainty "Greece to hold new elections next Month"

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May 15, 2012 – Comments (3) | RELATED TICKERS: RUSS , EDZ , EUM

That means weeks of uncertainty which makes the market unstable. Investors do not invest in a market in which they have no clue what the near term future will look like in Europe. Especially a domino effect of Spain, Portugal, Ireland, Italy and even France.

 

 

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#1) On May 15, 2012 at 10:22 AM, IBDvalueinvestin (99.66) wrote:

Venizelos: Greece talks fail

 May 15, 9:25 AM EDT

 

ATHENS, Greece (AP) -- Greek socialist leader Evangelos Venizelos says that Greece is going to new elections after talks produced no deal.

He says "unfortunately, the country is heading again toward elections."

Venizelos met on Tuesday with party leaders convened by the country's president in a last-ditch attempt to broker a deal.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

Seeking to end a nine-day deadlock, Greece's president met Tuesday with five political party leaders in an effort to form a new government after inconclusive elections plunged the crisis-hit country into further disarray.

The meeting will examine a new proposal brought by President Karolos Papoulias for a government of technocrats or respected personalities, after repeated negotiations for a coalition government collapsed. If no deal is reached, Greece will have to call new elections.

The protracted political certainty has left Greeks frustrated and worried about whether a government of non-elected individuals would work.

"The solution is provided by democracy and democratic procedures. This means that there should be another election and they should stop intimidating the people and engaging in tactics of terror," said Athens resident Yannis Ekaterinaris.

No party won an outright majority in Greece's May 6 election, leading to an impasse that has shaken financial markets and led to questions about Greece's ability to stay in the eurozone. Power-sharing efforts have failed so far after the left-wing Syriza party, which came second in the vote, insisted that the draconian terms of Greece's financial rescue agreements be scrapped or rewritten.

The Communist Party declined to attend Tuesday's talks and the extreme right Golden Dawn party was not invited.

European markets took a break from Greece-related concerns Tuesday, while shares on the Athens Stock Exchange recovered slightly from days of heavy losses, gaining 0.48 percent at 586.84 after European Union finance ministers voiced strong support for Greece's continued membership of the eurozone.

New growth figures released Tuesday revealed the extent of Greece's ongoing crisis, adding urgency to the coalition talks as an extended deadlock would trigger fresh elections.

The country's economic output slowed by 6.2 percent in the first quarter of 2012, compared with the first three months of 2011, according to the Greek Statistical Authority.

The lack of government has also caused concern about how Greece would decide to handle an outstanding (EURO)435 million ($558.67 million) bond that matures May 15. The bond's investors had held out against a massive debt restructuring Greece had agreed with private creditors in March, which saw holders of Greek debt swap their bonds for new ones with later maturity dates and lower interest rates.

A Greek official said the country will pay the outstanding bond due Tuesday, thereby avoiding a default. The official spoke on condition of anonymity pending an official announcement.

The conservative New Democracy party won the May 6 election, but only received 18.9 percent of the vote as angry voters scattered to smaller parties. Second-placed Syriza, which received 16.8 percent in the election, is currently leading opinion polls.

Tuesday's talks were joined by the leaders of New Democracy, Syriza, the Socialist PASOK, the Democratic Left and right-wing splinter party Independent Greeks.

The president's office released transcripts of an earlier leaders' meeting on Sunday, during which Syriza leader Alexis Tsipras said he saw no sign of sufficient common ground with other parties. "It would be irresponsible to say one thing before the elections and something else afterward," Tsipras was quoted as saying.

Referring to possible repeat elections, he added: "We believe that a popular vote does not harbor the danger of catastrophe. How things are handled harbors the danger of catastrophe."

Separately, the country saw interest rates rise slightly in the auction of 13-week Treasury bills. Greece raised (EURO)1.3 billion in Tuesday's sale, which saw interest rates rise slightly to 4.34 percent, compared to 4.2 percent in a similar auction in April. Demand also dropped slightly, with the sale 2.32 times oversubscribed, compared to 2.46 times in the April 17 auction, the Public Debt Management Agency said.

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Nicholas Paphitis in Athens contributed

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#2) On May 15, 2012 at 12:24 PM, edwjm (99.87) wrote:

The danger this poses for our stock market is underappreciated.  This could result in a serious decline in US stocks.

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#3) On May 15, 2012 at 12:36 PM, SantosVernon (< 20) wrote:

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