90 seconds at 9 am: Greek politics riling global markets; Fresh elections more likely after leftist coalition talks fail; Spanish banks stressed; NZ$ weak

Here's my summary of the key news overnight in 90 seconds at 9 am, including news that Greek political turmoil and Spain's debt crisis continued to rile global financial markets.

The leader of Greece's Leftish Syriza party abandoned hopes for a coalition government that would default on Greece's debts and tear up its austerity agreement with its donors.

Fresh elections now look inevitable, along with the growing prospect of an uncontrolled default and possible exit from the Euro, along with all the financial turmoil that would bring.

However, Greece's donors gave them a few more weeks time when they agreed to pay 4.2 billion euros of the previous bailout plan due next Thursday. This was despite talk from some Eurozone partners they may block this payment, starving the Greek government of cash.

The short term relief saw US and European stock markets bounce off their lows. European stocks fell 0.4% and the Dow was down 0.7% in late trade.

The New Zealand dollar was weak overnight, falling to a low of 78.2 USc and was around 78.4 USc in morning trade. It often falls with appetites for risk and expectations about global growth and commodity prices.

Meanwhile, more bad news from Spain also worried markets. The 10 year bond yield in Spain topped the dangerous 6% mark overnight and the government was forced to bail out its fourth biggest bank Bankia. Spain's government also ordered its banks to raise 35 billion euros in capital to make up for losses in its bombed out property sector.

All this Euro-turmoil is keeping the pressure downwards on interest rates globally, and locally.

Last night ANZ and its sister bank National cut their 1 year fixed mortgage rates by 40 basis points to 5.25%, which is significantly below their advertised floating rate of 5.74%. See our article here.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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Thanks Andrew. This is the very best description of our current global situation. This paper should be a high school subject.

Its very succinct I agree...interesting and I can but wonder how many such pieces were written by ppl like this pre-2007, wouldnt be surprised if its zero....

Please go to your local library to read everything you can by Bruce Jesson. Right under our noses we had a visionary 30 years ahead of his time

I generally ignore politicos....left or right blinkers, either is bad news IMHO......but I will have a quick look.
Interesting my not of core interest for me....
Also While Jesson might have predicted this? he isnt really a financial writer at the like so f zero hedge...really its seems many have now got the new religion.....

I am the same as you. All I ask you to do is read the Jesson books

Watched this doc last night and thought of you steven!

However, Greece's donors gave them a few more weeks time when they agreed to pay 4.2 billion euros of the previous bailout plan due next Thursday. This was despite talk from some Eurozone partners they may block this payment, starving the Greek government of cash.
Bernard the foisting of money  into the Greek economy without a clear resolution from the Greek political administration ( in tatters though it is) to abide by the imposed rules of austerity.....speaks more about the panic that has set in regards the stability of the E.U.
The deal brokers have now showed their hand and left themselves exposed.....and needy.....It won't just be the Greeks who spot the reversal in positions of who's now pulling who's strings......
At some early point in time  Merkel and Lagarde(who is pushing  outside interests barrow) will start looking very isolated.....Merkel should really be considering other options sooner than later......Lagarde has no choice but to do or die in the attempt.

I don't know if they showed their hand so much as chose a course (for better or worse) and now are doing their best to stay that course.
Several, including Roubini, arged for an orderly withdrawl of Greece from the Euro.  That line of argument was rejected not because of economic reasons but political considerations.
Now the Greeks run the risk of having a disorderly withdrawl from the Euro, from which the Greek people will bear the brunt of what will be substantial fallout.  The Greek state may collapse and certainly cease to exist in it's current structure.  We may yet live to see the kinds of political extremism we haven't seen in the West for 100 years.

Bernard says:
Headline "Greek politics riling global markets"
Body: "Spain's debt crisis continued to rile global financial markets"
Don't you mean "roiling" ?

Iconolast ....here's something you should read it's a pdf of an email...don't worry about the link being blank...the pdf  will pop up down on the bar..p.s. you'll have to activate it....

Christoff: can you double check that URL .. unable to access it .. doesnt exist

iconolast...copy the link ..paste and go in the search bar....it will come up blank ...but then look down to your bottom bar should have a PDF download..just open it ...it's clean I've already scanned it.
But do it.

O.K. your right they found it ...hooks up to the commerce commission site.....I'll have to break it down to a  text file and get it on to you...wowoweeewa....

OK, got it. Dunno how to say this .. but .. I am fully conversant with Futures, Fowards, Hedging, Market Making, Market Makers, Trading Desks, Currency Fluctuations .. but there is something radically wrong here .. there are some "missing links" .. a lack of information .. it is the lack of information that leads to misunderstandings .. cant believe that something that's $472 million big .. nearly wipes out a years profit and it's simply written off to "currency hedges" .. that's pure BS

Here is another question that keeps puzzling me and I would like (need) to know .. as a working hypothesis I assume that dairy farm milk suppliers are seperate entities in their own right .. so their sales to Fonterra are inclusive of GST .. and Fonterra gets all the GST it pays is clawed back on exports and from what I have seen so far .. a substantial chunk of Fonterra's profitablilty is made up of what that GST clawback amounts to (if my understanding is true) and then they go and chuck it away on some vague unexplained derivative activity .. information required .. but then they're not a public company and dont have to explain and nobody questions it

Iconolast ...have you a copy of the original...? if so I'm going to edit severly for the moment.

Yes I have it. Thanks. I understand what he is saying. I think he is off on a tangent.

Iconolast check out the pedigree of Ian Holland on the site.......he would have to have sanctioned the submission.....tangent...maybe ....maybe just omitting on a need to know basis.

Done that. He was with Fonterra up until 2002. I now understand what you are getting at. It's a pure JohnKey naked forex play.

Here is an excellent explanation of what they are (were) doing in 2001. They are/were playing the forex market and options market naked. The idea being to smooth out the income flows from foreign exchange. How dumb. My thinking was years ahead of what they are actually doing. If they're still doing that. Which I doubt. Thats very 1990's. Dairy Board stuff. So much for Mr Holland.


So Holland in his current position with DIFL is the most likely author of that submission....the name on the sumission is the company gofer and dofer Manager....Holland did not want his name on that submission ...why...?

As JB below this says .. have a look at Fonterra's latest published interim accounts for 6 months Jan 2012 .. they dropped -$472 million, thats where that come from .. made about +$300 last year in 12 months ..

Yes I did n gave him one to boot......should be enough to go on with  but the cats among the pigeons in the Forex sense ....I'm hunting the cat....leftovers, whathave you.

Fonterra's very strange financial results ...Once your past the usual bullshit " Normalised Earnings "  which appears too frequently  and Income Statement  for the masses take a look at:

Page 15   Comprehensive Income   ( $ 336 ) m

Page 18 Cash Flow Statement    ( $ 442 ) m

Compare to previous years.

Either they have taken a big hit on derivatives and/or have funded the payout with borrowings.

Iconolast ...yes , but highlights the level of effect.....early days , watch the NZD..


Thanks, Count for the education!

untill they do not......apt...ostrich