It`a all Greek to them!

The Greek tragi-comedy continues: an early agreement to secure an 130 billion euro rescue package from the Troika (the European Commission, the IMF and the European Central Bank) is getting less and probable. The officials failed to reach common ground on the sensitive issue of job cuts, lowering pensions and reducing the statutory minimum wage. IMF requests, or let`s say recommends Papadendreou to sack approximately 15,000 government employees and reduce primary pensions by nearly 20% in order to cut the budgetary deficit by 3 billion euro in 2012.

Precious metals leap forward as contagion spreads to Italy

  

Now that the waters have cleared for a bit in Greece, where Prime-minister Papandreou is going to form an unprecedented national unity government to push further budget cuts, the European bond vigilantes apparently have started to target the next weakest chain: Italy. The yields on 10 year Italian sovereign debt surged to 6.56% after reaching a record 6.68%. The Italian Prime Minister Silvio Berlusconi will be under-fire tomorrow as the parliament will vote on a state financing bill. His majority within the parliament is weaker by the day and rumors that he would resign hit today's news, only to cause a prompt dismissal.Who is going to bail-out Italy in case it fails? EFSF which receives 140 billion euro in guarantees from Italy ?

Gold soars, as the European bailout is back on track

Investors were reminded once again today that there are no golden pennies lying on the sidewalk, as gold shed all concerns and manged to pull itself up to the 1763 level. Not very nice for me since I exited all my gold positions at 1755. Silver went pretty much through the same lines as the other precious metals, rising today from $34.02 to $34.50, in what seems to be a rather anemic movement. The main drivers today was ECB's rate cut and (again) turmoil on the Greek political scene as Papandreou succesfully bluffed most of media with his resignation story.

European circus continues as Papandreou is rumored to resign

The farce is underway as the newest juicy rumor that hit the press is that the Greek Prime Minister will offer to resign in the next 30 minutes. According to BBC, Pap "will meet the Greek President Karolos Papoulios after the emergency cabinet meting finishes". The new coalition government will supposedly have "former Greek central banker Lucas Papademos at the helm". This comes after the surprising decision of Papandreou to call a referendum on the European Bailout Plan.

Greece, wadup? Problems ?

It took a while for the financial markets to cool of from the Greek debt concerns (especially as the credibility of the European Rescue Fund is close to zero without IMF, Chinese, Russian and Brasilian support). I hope you enjoyed the brief silence, cause last night George Papandrou decided on the 31st of October (coincidentally on Halloween) to stirr things up a bit one more time and call for a referendum on the Greek debt deal and restructure the defence ministry.  As his power over the parliament is schrinking, the confidence vote may turn into a desaster if he doesn't manage to shore up enough support. Meenwhile stock markets around the world take a hit, with the S&P down to $1230 and the FTSE down to 5410.