Jew World Order

14.12 Time for a markets update:

FTSE 100 +1.3pc

CAC +0.4pc

DAX +0.6pc

IBEX +1.8pc

MIB +2.4pc

13.59 Meanwhile, Tim Worstall, senior fellow at the Adam Smith
Institute, believes the minimum
wage causes youth unemployment:

If you raise the price of something then people will buy less of it. Raise
the price of labour and fewer people will be employed. This was all pointed
out when the NMW was introduced but as has been said since, the promised
wave of mass unemployment didn’t happen. Why not?

Simply put it depends upon what the minimum wage is. If it’s less than 45pc
or so of the average wage then the effects will be very small. Some tens of
thousands of people perhaps and we’ll not really notice that given that the
economy as a whole creates and destroys 2m to 3m jobs a year. However, once
that wage starts to get over 50pc of the average wage, then we start to see
the effects. As a percentage of youth wages, what is the youth minimum wage?
Answer: for 18-21-year-olds, 65pc; for 16-18 year-olds, 76pc. So, in that
18-21 year group, we’ve a minimum wage which is 65pc of the mean wage. Well
into our territory where we expect to see substantial employment effects.
For 16-18 year olds, the minimum wage it’s £3.68……76pc.

Ooops!

13.54 Ambrose Evans-Pritchard has decried that Europe’s
crisis has nothing to do with the US:

As for the EU itself, the organisation toppled the elected governments of
Italy and Greece last year, replacing them with EU technocrats.

It ignored the NO votes to the European Constitution in France and The
Netherlands, ramming through the slightly-altered text as the Lisbon Treaty
without referendums – except in Ireland. When the Irish voted NO to that as
well, they too were ignored.

That was the moment when the EU crossed the line altogether and lost
fundamental legitimacy (at least for me). Lisbon is a rogue Treaty. Mr
Barroso – charming though he may be – is a rogue president of a rogue
Commission.

The whole construct has become authoritarian and will become autocratic if
this crisis is exploited to force through fiscal union.

13.27 Marc Ostwald of Monument Securities writes that this
morning’s Spanish bond auction, where borrowing costs almost doubled, could
highlight the need for an outright bailout:

The key point is that if Spanish Banks are demanding such a huge concession
(the post auction rally highlights how harsh the concession was) at Bill
(and one presumes also at Thursday’s Bono) sales, Spain needs not only an
ESM package to recapitalize its banks, it also needs an outright bail-out
package, and it is becoming very difficult to see how it can manage without
that beyond the end of Q3, unless yields fall dramatically!

As suggested in our preview: The issue is in fact about the breadth of
estimates (official and market) about how much is needed to recapitalize
Spain’s banks (EUR 40 to 279 Bln) and as my (German) father used to say: “wer
soll das bezahlen?” (who is going to pay for that?), and on the follow
when will Spain be forced into requesting a full bail-out (one estimate just
published suggests EUR 300 Bln would be needed), which should or would be
the cue for Germany to say auf wiedersehen to the Euro.

A final point is the fact that this Spanish banking system collapse comes
less than 20 years after the last one – the compare and contrast with Sweden
and Scandinavia is poignant!

12.41 Back in the UK, and FSA chief executive Hector
Sants has donated his £143,750 bonus to charity The Art Room.
He received a total £835,731 remuneration package for the year to the end of
March.

12.27 Democratic Left MP Odysseas Voudouris says Samaras should
not be PM. Fellow Democratic Left MP colleague Nikos Tsoukalis says
question of who will be PM in new government “remains open”.

Linda Yueh at Bloomberg:

Nick Malkoutzis, deputy editor of Greece’s Kathimerini:

12.15 Time for an update on the markets:

FTSE 100 +0.9pc

CAC flat

DAX +0.3pc

IBEX +1.3pc

MIB +1.2pc

Ishaq Siddiqi, market strategist at ETX Capital Market:

Despite the uptick, uncertainties over the health of Spain and Italy hamper
the markets’ enthusiasm to build risk. Elevated Spanish bond yields – though
slightly easing from previous session highs – continues to sound off alarm
bells. A delay in the deadline for a group of auditors who will compile full
reports on the capital needs of Spain’s toxic banking system further
underpinned the rumblings in the country’s financial sector. The attention
will now be on Spain’s government bond sale on Thursday.

11.49 Eurogroup chief Jean-Claude Juncker has admitted that the
Greek austerity programme could be stretched over a longer period, according
to Austrian state radio ORF.

11.43 ING says Spain may need a €250bn bailout, which would be “too
large” for the EFSF.

11.41 The head of Milan’s Scala opera house and the world famous
conductor Daniel Barenboim have taken
a 10pc salary cut to help slash the company’s debt.

After several years of culture budget cuts, imposed as a debt-laden Italy
struggles to fend off the eurozone crisis, 11 department heads, including
the choral and ballet directors, have also agreed to take the cut.

“This will not resolve the economic situation but it sends a clear
message: we want to find every solution possible to support the theatre, in
this moment of uncertain financial stability,” Scala head Stephane
Lissner said.

The opera house‘s debt this year is forecast to drop from €7m to €4.5m
thanks to sponsors, savings and the rise in takings.

11.26 The EU Commission says it is not talking about any new
memorandum of understanding for Greece and wants to ensure the
country makes its reforms.

11.10 Quick bit of corporate news. US giant Walgreens
is paying $6.7bn for a 45pc stake in Alliance Boots. Walgreens has
an option to buy outright in three years, at a total cost of $16.2bn.

Meanwhile, RBS is cutting 618 branch-based financial advisers.

10.52 European shares rising now. Here’s Ilya Spivak, currency
strategist at DailyFX:

European shares are on the upswing after an unexpected drop in UK CPI boosted
expectations that the Bank of England would offer further stimulus as well
as amid reports that Greek politicians were close to forming a ruling
pro-bailout coalition.

A government comprised primarily of the mainstream New Democracy and Pasok
parties will then seek to ease austerity measures tied to the second EU/IMF
bailout. Early bits of draft language from the G20 summit communiqué due to
emerge after the sit-down in Mexico concludes today sees European leaders
pledging to “take all necessary policy measures” to contain the crisis and
avoid contagion, which is likely adding to the chipper mood on signs that
international leaders are stepping up pressure on the EU to get its house in
order.

Traders appear to be overlooking a sharp drop in the ZEW gauge of German
investor confidence, which is not unreasonable considering anything but a
slump in June as Greek election jitters gripped financial markets would have
been somewhat perplexing.

10.38 The Telegraph’s Jeremy Warner on the UK’s inflation
figures:

Economist Nouriel Roubini on the eurozone:

10.36 German Savings Banks Association rejects using savings to rescue
foreign banks.

10.17 Alex Spillius, the Telegraph’s Greece correspondent, on how the
new government should be formed:

Plenty of commentators in Athens are arguing that the new government should
include some technocrats as well as politicians. The argument is that
Greece’s politicians can’t be trusted to put politics aside, even in this
national emergency.

“Even if the Europeans dropped money all over Athens from helicopters it
wouldn’t matter if the people on the ground weren’t up to the job,” writes
Alexis Papaxelas in Kathimerini.

The caretaker administration that stewarded the country during the two
elections showed Greece had talented, determined people, he said, without
holding out much hope that his wish would be fulfilled.

10.02 Unnamed EU official says union expects to revise bailout
terms with Greece.

Meanwhile, German economic sentiment plunges 27.7 to -16.9. Figures
blamed on worsening Spanish bank sector and insecurity over Greek elections.

10.00 Update on the markets.

FTSE 100 +0.6pc

CAC -0.1pc

DAX +0.2pc

IBEX -0.1pc

MIB -0.3pc

09.52 Greek Democratic Left chief Fotis Kouvelis says there will
be a government but it may not be formed today.

Still some outstanding issues between political leaders.

09.40 BREAKING NEWS…

Spain
sells €2.4bn of 12-month bills versus €2.19bn at
previous auction. Yield of 5.074pc versus 2.985pc. Bid to cover 2.2 versus
1.8.

Sells €640m of 18-month bills versus €710m at previous auction.
Yield of 5.107 versus 3.302pc. Bid to cover 4.4 versus 3.2.

Meanwhile, Denmark has sold two-year note at a negative yield for the
first time.

09.38 Nomura says the Spanish solvency risks, and not Greece, is
the primary focus for the eurozone.

Spain now saying that only the detailed audit of it banks will be
delayed until September. Its initial report is still out in July.

09.30 BREAKING NEWS…

UK inflation slows to 2.8pc in May from 3pc in April. Analysts expected
3pc. 30-month low.

Chris Adams at the FT:

Jeremy Cook, chief economist at currency brokers World First:

While oil prices were rising, news channels went bananas for a ‘petrol
crisis’, but there has been virtually no coverage of the 26pc fall in the
price of Brent crude since March, as it has been drowned out by the on-going
crisis in the eurozone.

This, alongside the continuing lack of demand due to fears over the global
economy, has meant that inflation has continued to fall closer to target
through the coming months.

2.8pc is the lowest level since December 2009 and will trigger a sigh of
relief from Threadneedle St. as it gives the Bank of England further leeway
with possible further expansionary monetary policy, such as interest rate
cuts or additional asset purchases.

09.21 Irish finance minister Michael Noonan believes the 2012
8.6pc deficit target is “easily realisable”.

09.11 German Constitutional Court says government did not inform
Parliament sufficiently about configuration of ESM. Upholds lawsuit
against ESM. Euro falls to $1.2585.

09.03 Meeting between New Democracy leader Antonis Samaras and
Democratic Left chief Fotis Kouvelis has ended.

Kouvelis says the country needs a government and renegotiation on
certain aspects of [bailout] memorandum, “we have conditions”. He
adds that a government is possible if there is an agreement on policy
platform and “trustworthiness of personalities”. Process of
forming government “moving forward at a pace”. Will would meet Samaras
again later today.

Alex Spillius, the Telegraph’s Greece correspondent, said:

The presence of Kouvelis in an ND-led coalition would give not only an
additional 17 members of parliament but anti-bailout credibility with the
Greek people. The veteran Kouvelis wants to do the right thing – his
pre-election speeches stressed the need for ‘national stability’.

But many in his own party don’t want to join on any terms. They fear that
associating themselves with the bailout could lead to electoral oblivion
next time, as it did for L.A.O.S, a right-wing Orthodox party that supported
the international deal in March and now has precisely zero seats.

Evangelos Venizelos, PASOK leader: “Our premise remains that the
country should get a government with a specific programme, both for the
internal affairs but also for the political renegotiation of the memorandum.

“We are proposing a framework. I have raised the issue of the reliability
of individuals. I expect very specific answers from Mr Samaras. The process
must be speeded up. The country must have a government soon. In the next few
hours, it could be possible to move ahead if there is convergence on these
points.”

08.50 Nick Malkoutzis, deputy editor of Greek newspaper Kathimerini:

08.42 Peter Spiegel from the FT is at the G20 Summit:

08.26 Cyprus’ Finance Minister Vassos Shiarly has said financing
to recapitalise the country’s banks is a priority, and the issue is urgent.

Options still open on funding, including bilateral loan or help from EFSF.

08.23 In a new
blog today, the BBC’s Robert Peston looks at the possibility
of British banks being downgraded and Bank of England support:

First, some time in the coming days – and the banks think probably this week –
Moody’s will announce downgrades of most of them. For the European banks,
Moody’s and the other credit rating agencies are seen as grim reapers, going
from country to country pronouncing in more-or-less all of them that the
banks are less strong than they once were.

Bankers concede to me that – in these more anxious times – they can’t be
certain that the downgrades will have zero effect on their ability to
borrow. Which gives a clue as to why the Bank of England has launched the
insurance scheme of the ECTR at this juncture and in a bit of a hurry.

08.20 New Democracy leader Antonis Samaras is meeting Democratic
Left chief Fotis Kouvelis now.

Samaras has made it clear that he will seek a renegotiation of the
second memorandum of understanding with the EU and IMF. The
devil will be in the details, but speaking late last night after meetings on
forming a coalition he suggested the revisions would not be minor.

He said: “We will simultaneously have to make some necessary amendments
to the bailout agreement, in order to relieve the people of crippling
unemployment and huge hardships.”

08.19 Fitch has released a statement on the Bank of England‘s
plan to start offering cheap cash loans to banks next week as part of a
package of measures to ease the flow of credit to the economy.

A Bank of England liquidity facility should strengthen confidence in the UK
banking sector by providing a more explicit promise of short-term liquidity
support during any future market-wide shortage. The impact of a separate “funding-for-lending”
plan from the government and the BoE will depend on the final details, but
is likely to be broadly neutral for banks if they pass on lower funding
costs to their borrowers.

Under the liquidity plan, the BoE will activate the extended collateral
term repo facility that it first announced in December. By offering to lend
against a wide range of collateral, we believe the BoE is sending a clear
signal that it is ready to continue to offer large-scale support if a
further deterioration of the eurozone crisis were to disrupt liquidity. The
facility is broadly similar to the SLS facility, now repaid, offered during
the 2008-2009 market turbulence.

The details of the “funding-for-lending” programme are yet to be
decided, but it will provide funding to banks over several years at rates
below current market ones, passing on the UK sovereign’s lower cost of funds
to banks. While lower funding costs would normally help boost bank margins,
the package is intended as a stimulus for the wider economy and we therefore
expect it to be structured to try to ensure banks pass on the lower costs to
customers.

Such a programme could help increase lending to small and medium-sized
enterprises that have previously baulked at the current cost of borrowing,
but would be broadly neutral for the banks themselves. Both plans were
announced by BoE governor Mervyn King and chancellor of the exchequer George
Osborne last week.

08.00 European markets are open. FTSE 100 rises 0.1pc, CAC up
0.5pc, IBEX up 0.3pc, MIB up 0.3pc, DAX up 0.2pc.

07.52 All eyes will be on Greece today. Can New Democracy,
which won Sunday’s election, form a coalition? The entire world seems to be
urging them to do it as soon as possible, including David Cameron: “I
think a delay could be very dangerous.”

In his daily
email, the Telegraph’s Head of Business, Damian Reece, said:

In Greece today the efforts of Antonis Samaras, leader of the New Democracy
party, will continue to form as wide a coalition government as possible. But
as we report this morning, the country is going to have to renegotiate the
€130bn (£104bn) bailout agreed earlier this year, in effect asking for a
third bailout. Samaras is hoping to announce a new government by the end of
today.

The G20 in Mexico is also continuing today. UK Chancellor George
Osborne will be giving a briefing at 3pm (UK time), followed by the
summit’s communique and a press conference with IMF chief Christine
Lagarde at 11.30pm (Uk time).

07.50 France’s business confidence indicator has fallen to 92 in
June from 93 in May.

07.40 The Bank of Spain asked the four auditors examining the
balance sheets of Spanish lenders to delay their reports to conduct a more
thorough study.

The auditors’ reports on Spain’s 14 main banking groups
will now be published in September instead of by July 31.

This is very bad news, just adds to nervousness over country’s financial
health.

07.38 Foreign ownership of Japanese debt jumped to record 76
trillion yen (£614bn) in 2011.

07.26 Spanish 10-year bond yields have fallen slightly this morning to
just above 7pc, Italy‘s just above 6pc.

ING and BNP both believe that the ECB will buy sovereign bonds again if
Spain hits 7.5pc.

07.20 Spanish police are now patrolling farmland after the economic
crisis saw a spike in people stealing crops.

In villages near farming areas, several thousand paramilitary Civil Guards,
regional and local police are even setting up checkpoints to sniff out
stolen fruit or farming equipment such as copper wire used in irrigation
systems. The Civil Guard says sometimes its officers mount “cage
operations” – sealing off whole villages to check cars and trucks.

“This has emerged because of social alarm. Because of the crisis, crime
is up,” said the local police chief Ernesto Banos. “And
when cherry season comes around, people say, ‘what now, cherries? OK, let’s
go get them.”

06.45 Asian stock markets have mostly fallen this morning, as
relief from Greece’s election results evaporated amid worries that the
financial crisis in the 17 nations that use the euro was far from over.

Japan’s Nikkei index has fallen 0.8pc, Hong Kong’s Hang Seng Index has
lost 0.5pc and South Korea’s Kospi is 0.1pc down.

06.43 The Seychelles has postponed the planned introduction of VAT
on July 15 because of the global economic crisis, President James Michel has
said.

06.40 Spain is likely to pay record prices to borrow at debt auctions
today.

The yield on Spanish 10-year bonds hit a fresh high of above 7pc on
Monday as initial relief over the victory of pro-bailout parties in Greece
gave way to ongoing fears of deeper problems facing the bloc.

Spain’s Treasury will issue between €2bn and €3bn of 12- and 18-month
debt today.

06.34 IMF chief Christine Lagarde has revealed that member
states have promised a total of $456bn
for its new crisis fund, $26bn more than a target set in April. The UK
has pledged $15bn.

China will contribute $43bn, state news agency Xinhua confirmed on
Tuesday morning. Lagarde said:

Countries large and small have rallied to our call for action, and more may
join. I salute them and their commitment to multilateralism. As a result,
total pledges have risen to $456bn, almost doubling our lending capacity.

06.30 While Jeremy Warner writes that we shouldn’t expect
any solutions from the international junketing in Mexico:

Few G20 meetings are anything other than a waste of space, but this one
more so than most, for the latest slowdown in the world economy is something
that can only be convincingly dealt with by Europe. And as we already know,
Europe is seemingly quite incapable of sorting out the hopeless muddle it
has inflicted on itself.

Angela Merkel, the German Chancellor, has welcomed the outcome of the Greek
election, but it must have been through gritted teeth. In fact, New
Democracy’s narrow victory is the worst possible outcome for Berlin. What a
relief that Greece has voted to remain in the euro, German policymakers
profess in public. Not, they mutter as an aside.

06.20 7,300 miles away in Athens, things aren’t much better. Louise
Armitstead and Alex Spillius report that
Greece could be knocking on Brussels’ door for a third bail-out as
soon as a government is formed:

While
Antonis Samaras, leader of Greece’s New Democracy party, scrambled to forge
a coalition with Pasok, his officials admitted their first task would be to
renegotiate the €130bn (£104.4bn) bail-out agreed in May.

Dimitrios Tsmocos, a senior economic adviser, said Mr Samaras intends to “honour
Greece’s contractual obligations but will actively and aggressively
renegotiate the memorandum”. Another senior aide warned of a “social
explosion” in Greece if the bail-outs terms were not relaxed.

Athens has to reduce its budget deficit to below 3pc of GDP by 2014 and
find a further €11bn in public spending cuts from 2014 to 2016. But
spiralling economic woes have already driven Greece off course.

However, experts warned Greece will need another cash injection if the
terms are relaxed. Joerg Asmussen, executive board member of the European
Central Bank, said: “If one is pressing to shift fiscal targets, one
should be so honest to also say that as long as a country is running a
primary deficit, extending the fiscal targets will automatically mean that
there will be an additional external financing need.

06.15 The leaders of the world’s 20 most powerful economies may have
been soaking up the sun in Mexico yesterday, but the focus remained 6,000
miles away in Madrid, as Spain pleaded for the European
Central Bank to step in and stop the country’s economy from spiralling out
of control. Ambrose Evans-Pritchard reports:

Cristobal Montoro, the economy minister, warned that Spain is now in a “critical”
condition and pleaded with the European Central Bank to act with “full
force” to defeat markets hostile to the euro project.

Bank of America said Spain may need a second rescue to tide it through the
next three years, pushing the total loan package towards €450bn – a sum that
would test the EU bail-out machinery and cause serious knock-on effects for
Italy. A draft communique from the summit of G20 leaders in Mexico said
Europe will take “all necessary measures” to hold the eurozone
together and break the “feedback loop” between sovereign states
and banks.

A separate text for next week’s EU summit vowed to “mobilise all
levers and instruments”, though details were thin. Italy said it would
push for a “semi-automatic mechanism” – probably involving the ECB
– to cap the bond yields of states in trouble.

06.00 Good morning and welcome to our coverage of the European debt
crisis.

Debt crisis
live: archive