Stocks and euro plunge on Greek default

[scandal 951]

Stocks and euro plunge on Greek default

(Reuters) - World stocks fell to a 15-month low and the euro tumbled to its weakest level against the yen in more than a decade on Monday as growing expectation of a Greek default increased fears of another global recession.

An admission by Athens that it will miss its deficit target of 7.6 percent this year reignited worries about a Greek default. The price of U.S. crude oil tumbled 2 percent, while a bid for safety stoked demand for U.S. Treasury debt.

Major U.S. stock indexes fell more than 2 percent, with financial shares hard hit on a new round of concerns over Greek debt, eclipsing an early boost from better-than-expected U.S. manufacturing data.

Bank shares were also battered in Europe as investors feared they may have to make further write-downs on Greek debt holdings. French-Belgian financial group Dexia (DEXI.BR) shares slumped 10 percent as its capital position looked increasingly stretched by its exposure to Greece.

Athens, in a draft budget sent to parliament on Monday, forecast a deficit of 8.5 percent of gross domestic product for 2011.

"This news isn't surprising, but if Greece continues to have problems, that could really drag Europe into recession, and possibly the U.S. as well," said Randall Warren, chief investment officer of Warren Financial Service in Exton, Pennsylvania.

European policymakers appeared no nearer to agreeing on a definitive solution to the crisis. Officials meeting on Monday were discussing ways to leverage the bloc's rescue fund and pressure Greece to implement agreed structural reforms.

"Ultimately, Greece would need to see its debt written down by more and with that you need probably some kind of shoring up of the banking sector," said Alec Letchfield, chief investment officer at HSBC Asset Management.

U.S. stocks extended losses in the afternoon, with the S&P 500 falling to a 13-month low. The KBW bank index .BKX fell 4.78 percent, with Morgan Stanley (MS.N) shares down 7.6 percent and Bank of America (BAC.N) down 9.6 percent. On Friday, stocks closed their worst quarter since 2008.

The Dow Jones industrial average .DJI closed down 258.08 points, or 2.36 percent, at 10,655.30, while the Standard & Poor's 500 Index .SPX fell 32.19 points, or 2.85 percent, to 1,099.23. The Nasdaq Composite Index .IXIC lost 79.57 points, or 3.29 percent, to 2,335.83.

The MSCI All-Country World index .MIWD00000PUS fell 2.9 percent to its lowest level since July 2010. The FTSEurofirst 300 .FTEU3 of top European shares ended 1.2 percent lower.

The October-December period is, traditionally, the best quarter for equities. Reuters data shows that since 1971, world stocks have on average risen 3.7 percent in the fourth quarter.

[웃 910]

The price of U.S. crude oil tumbled 2 percent,

I'm not happy with financial chaos. But currently I have no ties to the stock market casino.

I've been very pleased at the pump in the last couple months though. Should be back to high $2s a gallon shortly.

Again, not rooting for a collapse (that would be terrible/catastrophic), just pointing out that the only direct attachment I have right now (unless all hell breaks loose) is reflected at the pump.

Edited October 4, 2011 by Lord Infamous

[SuperDuper! 230]

I'm not happy with financial chaos. But currently I have no ties to the stock market casino.

I've been very pleased at the pump in the last couple months though. Should be back to high $2s a gallon shortly.

Again, not rooting for a collapse (that would be terrible/catastrophic), just pointing out that the only direct attachment I have right now (unless all hell breaks loose) is reflected at the pump.

No 401(K), 529, or retirement acct, or nothing?

[TBoneTX 46,129]

What's a Grecian urn?

Oh, about $2.50/hour.

[slim 1,533]

I've been very pleased at the pump in the last couple months though. Should be back to high $2s a gallon shortly.

O-BA-MA! O-BA-MA!

No 401(K), 529, or retirement acct, or nothing?

Why waste money like that?

[MyLittlePony 340]

Guess i cant retire early.

[Danno 1,228]

I'm not happy with financial chaos. But currently I have no ties to the stock market casino.

I've been very pleased at the pump in the last couple months though. Should be back to high $2s a gallon shortly.

Again, not rooting for a collapse (that would be terrible/catastrophic), just pointing out that the only direct attachment I have right now (unless all hell breaks loose) is reflected at the pump.

Unfortunately excluding ones self from the market does not insulate ones self from the effects of the market.

I doubt many people realized the socialist experiment in Europe would touch us.... but apparently it will.

I am still stuck in the market as I hate to pull out because I just know if I do, it will recover and then I took my funds out for what... to sit in a savings account at .5% ?

[mawilson 2,133]

Why waste money like that?

Why pay taxes on your cap gains?

[I AM NOT THAT GUY 5,715]

Thanks Europe!

[I AM NOT THAT GUY 5,715]

Israel Benchmark Bond Rises to Six-Month High on Greek Debt Woes

Oct. 4 (Bloomberg) -- Israel’s benchmark bond rose to the highest in six months and stocks fell as investors sought the relative safety of government debt after European leaders signaled they may renegotiate terms of Greece’s bailout.

The yield on the 5.5 percent Mimshal Shilkit government notes due January 2022 slid six basis points, or 0.06 percentage point, to 4.54 percent at 3:09 p.m. in Tel Aviv. The rate on the 10-year bonds was at the lowest since January, according to generic-yield data compiled by Bloomberg. The TA-25 benchmark stock index slid 3.2 percent to 1,027.60, the lowest intraday level since Sept. 14.

“People are lowering their risk in shares and turning to government shekel bonds,” said Effi Cohen, a Tel Aviv-based trader at Leader Capital Markets Ltd. “As long as the crisis in Europe continues, it appears we will see a lowering of interest rates here in Israel and this will cause yields to fall.”

http://www.businessweek.com/news/2011-10-04/israel-benchmark-bond-rises-to-six-month-high-on-greek-debt-woes.html

[mawilson 2,133]

Israel Benchmark Bond Rises to Six-Month High on Greek Debt Woes

Amazing. Even Israel is considered safer than Europe.

[SMOKE 1,426]

Why waste money like that?

i'm not wasting money. i'm saving for my wife & her new bf she's gonna have when i drop.

[Captain Oates 911]

The Chermans can buy and sell lil 'ole Greece out of their midweek beer money

The new york boys are just trying to shake us out of our stocks and it will be all hunky dory in a month or two

After all, Germany has a right wing chancellor - so what can possibly go wrong ?

Anyway my PUT options (shorting the market) are doing great so I don't know why all the doom and gloom when it comes to 'investments'

I remember the little old lady calling her broker to ask why her stocks had gone down - the broker said "The Turks have crossed the Bosphorus"

Next day her stocks shot back up

She called her broker and said "Have the Turks gone back ?"

The lesson is - the 'boys' move the market and then dream up the reason afterwards

[slim 1,533]

Why pay taxes on your cap gains?

What capital gains?

i'm not wasting money. i'm saving for my wife & her new bf she's gonna have when i drop.

Are you sure your money's going to be worth something?

[mawilson 2,133]

What capital gains?

Capital gains from bear market funds that go up when the market goes down. For example.

Edited October 4, 2011 by mawilson