But the rescue package worth €130 billion is contingent on a historic debt reduction agreement with private sector investors that must be approved before any bailout money can be released.

Assuming private sector investors sign off, Greece should be able to secure the funds it needs to make a €14.5 billion bond payment in March.

The terms of the private sector agreement include a write down of 53% on the face value of Greek government bonds, steeper than the previous 50% reduction agreed to in October.

The proposal will now be presented to members of the Institute of International Finance, which represents the private sector. The IIF’s full committee will review the details and make a decision “in accordance with their own individual processes,” according to a statement.

Eurozone approves new $173B bailout for Greece

IIF director Charles Dallara said in an interview with CNN’s Richard Quest that he expects a high participation rate, but he acknowledged that each investor has the right to make their own decision.

Under the terms of the agreement, Greece’s debt load will be cut by about €107 billion, equal to 50% of the nation’s estimated economic output for the year. It will also reduce the amount of debt Greece needs to refinance over the coming years by roughly €150 billion, according to the IIF.

In addition to the write down, investors would exchange existing bonds for securities with lower interest rates. At the same time, investors would receive securities that could increase in value as the Greek economy improves, and EU officials would kick in a €30 billion “sweetener.”

According to the IIF, the agreement represents the largest sovereign debt restructuring in history.

Euro economy shrinks, is recession next?

Overall, the deal will result in losses of 74% for the private sector, according to Marc Chandler, head of global currency strategy at Brown Brothers Harriman.

Given the onerous terms, he said reaching the targeted 95% participation rate “seems unlikely.” He also suggested that an official endorsement by the IIF may not mean that all private sector investors are on board.

“It is not clear how much the IIF really represents the private sector,” said Chandler, in a note to clients.

The concern is that a large number of investors will balk at the deal, forcing the terms to be renegotiated. That could delay the just-approved bailout and put Greece back at risk of a disorderly default.

The Greek government is expected to pass legislation this week that would force investors who reject the agreement to take losses on Greek bonds issued under domestic law, which make up the majority of the nation’s debt load.

The presence of so-called collective action clauses would not qualify as a “credit event,” according to the International Swaps and Derivatives Association. But the association suggested that activating the clauses could trigger credit default swaps, a form of insurance that investors use to protect against a default.

Credit default swaps, or CDS, were a major contributor to the 2008 financial crisis, when declines in the U.S. housing market caused banks to suffer major losses on mortgage-backed securities.

But analysts say the Greek CDS market is small and such a credit event would probably not shock the global financial system.

“The net Greek CDS positions of systemically-relevant financial institutions appear to be relatively limited,” said Tobias Blattner, euro area economist at Daiwa Capital Markets.

– CNN’s Richard Quest contributed to this report. 

Article source: http://rss.cnn.com/~r/rss/money_markets/~3/bun5ZvPmXl4/index.htm

Greece’s Finance Minister Evangelos Venizelos at a press conference following a meeting of euro area finance ministers on the nation’s 130 billion euro bailout.

NEW YORK (CNNMoney) — Once again, Greece appears to have been snatched back from the brink of default with the promise of more bailout money.

The €130 billion rescue package, which was backed by European finance ministers early Tuesday, should enable Greece to make a €14.5 billion bond payment next month, assuming a crucial agreement with private sector investors is approved.

But many experts say the second bailout will not resolve Greece’s long-term debt problems and the nation will eventually need more support. They argue that focusing on austerity and debt reduction does more harm than good by further stunting the already shrinking Greek economy.

“The European authorities seem more intent on punishing Greece than helping the economy recover,” said Mark Weisbrot, economist and co-director of the Center for Economic and Policy Research. “For two years now they have been pushing the Greek economy into recession, and there’s still no light at the end of the tunnel.”

To qualify for the bailout, the Greek government passed a deeply unpopular package of austerity reforms and agreed to increased oversight by officials from the European Union, International Monetary Fund and European Central Bank, known as the troika.

In what some see as a compromise of national sovereignty, Greece will be required to amend its constitution by introducing a provision that gives priority to “debt servicing payments” ahead of other national obligations.

Europe: Out of ICU but still ill

Greece also agreed to set aside enough money to pay off three months worth of debt in a “segregated” account that will be overseen by the troika.

The stringent terms demanded by the EU, IMF and ECB stem from the lack of progress made on the structural reforms that are a condition of Greece’s first bailout. As a result, some of the eurozone’s strongest members, including Germany, have been reluctant to provide more bailout money without additional assurances.

“It is undeniable that the country needs to go though structural reforms to achieve sustainable growth rates in the long term,” said IHS Global Insight economist Diego Iscaro. “However, structural reforms will take time to bear fruit and it is increasingly clear that, without a growth strategy in the short term, the economy will remain in the doldrums for a significant period.”

The Greek economy, which has been in recession for years, shrank 6.8% in 2011. Looking ahead, economist expect the recession to deepen as austerity measures take their toll.

Reforms have already sparked violent protests in Athens, and will likely dominate the political debate in Greece as the nation prepares to elect a new government later this year.

The challenges facing Greece were spelled out in a “debt sustainability analysis” prepared by troika officials. It shows that, under a worst case scenario, Greece’s debt load could remain at 160% of gross domestic product by 2020.

That’s in stark contrast to the target set out in the bailout program, which seeks to reduce Greece’s debts to 120.5% of GDP.

Under the “tailored downside scenario,” Greece would fail to make the reforms necessary to revive its economy, resulting in higher unemployment and a deeper recession, according to the analysis. The scenario also assumes that Greece would backtrack on its austerity program and further postpone the sale of state assets.

This would prevent Greece from returning to the private credit market and make the nation more dependent on bailout funds.

“Given the risks, the Greek program may thus remain accident-prone, with questions about sustainability hanging over it,” the analysis states.

Meanwhile, the overall program is contingent on banks and investors agreeing to a historic restructuring of Greece’s private sector debts.

Europe stock rally faces a perilous road

The writedown, which would result in losses of 75% for the private sector, would erase €107 billion of Greek debt, according to the Institute of International Finance.

In addition, eurozone governments agreed to lower the interest rates on Greece’s existing bailout loans. And some eurozone central banks have agreed to transfer future profits on their Greek bonds to Athens.

While these measures should help address the nation’s immediate debt problems, Greece will ultimately need more support, said Carl Weinberg, chief economist at High Frequency Economics.

“We have a new band-aid on an old wound,” said Weinberg. “But we are sure the saga is not yet over.”  

Article source: http://rss.cnn.com/~r/rss/money_markets/~3/0t5qB_MdCTA/index.htm

Click chart for more markets data.

NEW YORK (CNNMoney) — U.S. stocks stumbled into the close Tuesday, shaking off a modest morning rally ignited by news of that eurozone deal to help Greece avoid defaulting on its debt.

The Dow Jones industrial average (INDU) briefly topped 13,000 — a level not seen since mid-May 2008 — but fell back to roughly 12,966, jumping 16 points for the day, or 0.1%.

The SP 500 (SPX) added 1 point, or 0.1%. The Nasdaq (COMP) shed 3 points, or 0.1%.

It’s been a good year for stocks so far. The Dow is up more than 6% from the start of the year. The SP 500 and the Nasdaq are up 8% and 13%, respectively.

Traders said Tuesday was a particularly quiet day on trading floors with few shares changing hands.

Greece gets a reprieve, but crisis not over

Initial gains were driven by progress made in Greece, which has been mired in a recession for years and desperately needs more bailout funds to stave off default.

After weeks of negotiations and market speculation, eurozone finance ministers completed a deal early Tuesday that will provide Greece with the €130 billion in funding it needs.

“Greece was already priced in, which is why we’re not getting a big reaction,” said Doug Cote, chief market strategist at ING Investment Management.

The euro surged immediately after the deal was announced, rising to nearly $1.33 before retreating. That level hasn’t been hit since early December.

In the United States, several retailers, including Dow component Wal-Mart Stores (WMT, Fortune 500), released their quarterly results ahead of the bell. While Wal-Mart missed expectations, causing the big box retailer’s shares to drop nearly 4%, most of its competitors fared better — offering some signs of an economic recovery.

Financial stocks continue to move higher with Goldman Sachs (GS, Fortune 500), Morgan Stanley (MS, Fortune 500), Credit Suisse (CS), JPMorgan Chase (JPM, Fortune 500) and Citigroup (C, Fortune 500) up between 1% and 3%.

U.S. markets were closed Monday for Presidents Day. Shares finished mixed Friday with the Greek situation still unresolved.

World markets: European stocks ended lower. Britain’s FTSE 100 (UKX) dropped 0.2%, the DAX (DAX) in Germany dipped 0.5% and France’s CAC 40 (CAC40) shed 0.2%.

Asian markets ended mixed. The Shanghai Composite (SHCOMP) gained 0.8% and the Hang Seng (HSI) in Hong Kong ticked up 0.3%, but Japan’s Nikkei (N225) lost 0.2%.

Companies: Shares of J.C. Penney (JCP, Fortune 500) fell 3%, after Fitch cut the retailers’ rating to junk status.

Perilous road for European stocks

Shares of Netflix (NFLX) fell 3%, after cable company Comcast (CMCSA, Fortune 500) announced a new instant video streaming service.

Home Depot (HD, Fortune 500) reported fiscal fourth-quarter earnings and revenue that topped analysts’ expectations. The home improvement retailer cited favorable weather, saying sales at U.S. stores open a year or more climbed 6.1%.

Macy’s (M, Fortune 500) shares rose slightly after the retailer reported better-than-expected earnings and sales that were in line with forecasts.

Shares of Dell (DELL, Fortune 500) dropped nearly 3% in after hours trading, after the computer maker reported earnings that beat revenues expectations but missed on profits. Competitor Hewlett-Packard (HPQ, Fortune 500) is scheduled to report earnings Wednesday.

Wynn Resorts (WYNN) shares climbed 6%, after reports claimed that the company will buy out Japanese gambling tycoon Kazuo Okada’s 20% stake at a big discount.

Shares of Kraft Foods (KFT, Fortune 500) rose after the company reported earnings in line with forecasts and predicted earnings’ growth of 9% in 2012.

Currencies and commodities: The dollar was little changed against the British pound, but rose versus the Japanese yen.

Oil for March delivery, in its final day of trading, rose $2.64 to $105.88 a barrel. The more active April contract gained $2.65 to $106.25 a barrel.

Gold futures for April delivery climbed $32.60 to $1,758.50 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury ended the day at a yield of 2.01% near its yield late Friday.  

Article source: http://rss.cnn.com/~r/rss/money_markets/~3/eiAEiJC09bM/index.htm

Despite continuing euro-zone uncertainty and less than cheery U.S. economic data, domestic stock markets posted weekly gains with the Dow Jones finishing strong at its 52-week high. Although some investors remain tentative, euro-zone concerns subsided after European leaders signaled progress towards an agreement on a bailout for Greece. On the home front, U.S. economic data showed that consumer prices rose 0.2% in the month of January. The increase is for the most part attributed to the rise in gasoline prices, giving proof to the belief that high energy costs could slow down the economic recovery. Although the statistic came in slightly lower than expected, investors are still keeping a close eye on core inflation, a measure that excludes food and energy costs, which was reported to be at 2.3% for the last 12 months. On a more cheerful note, investors will be able to relax a bit more next week with the U.S. markets closed on Monday for Presidents Day.

February might just be another record-breaking month for the ETF industry as issuers continue to roll out a slew of new launches this week. First Trust introduced 9 new funds to their AlphaDEX line up, while iShares kept up with the rapid pace of the industry with their debut of 7 new bond products.

Below, we outline three of the best ETF stories from around the web this past week:

Best And Worse ETF Tickers at IndexUniverse: 

With the ETF industry expanding at an astonishing and rapid pace, issuers have been scrambling to keep up with the new brilliant and clever ticker trend. Although the trend is quite entertaining, many stress the importance of tickers, arguing that they help funds get noticed quicker and attract a higher volume of potential investors. In this article, author Dennis Hudachek explains this phenomena and lists the 10 silliest and 10 best tickers.

The New Bond Market at The Wall Street Journal:

As investors continue to experience rock bottom interest rate environments, many are turning to an asset class  that is considered to have both relatively low risk and the potential to provide juicy high yields; the corporate bond market. Although corporate bonds have proven to be far more stable than equities during the market turmoil of the past few years, many believe that these investments are not as safe as they are assumed to be. This article, by Ben Levisohn, explains how the change in the way corporate bonds are traded results in higher levels of risk and volatility.

Five ETFs For Doomsday Capitalism at ETF Database: 

According to some people, the world is coming to an end. Even investors, economists, and financial experts are getting on board the apocalyptic bandwagon, theorizing what would happen if our economy were to simply fall off a cliff, resulting in mass chaos and financial pandemonium. Although this theory holds little to no credibility, some financial experts have proposed several investment strategies that are poised to profit from a deterioration of our political and financial systems. In this article, author Michael Johnston outlines five ETFs that doomsday capitalists’ ought to consider for their portfolios.

Disclaimer: No positions at time of writing.

Click here to read the original article on ETFdb.com.

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Article source: http://finance.yahoo.com/news/week-etfs-february-19th-edition-120017588.html

After a strong close to last week–the Dow jumped by more than 150 points in the last two sessions–U.S. stock markets will have to wait until Tuesday to try to continue the positive momentum. Major exchanges are closed on Monday in observance of President’s Day, which this year falls two days before the anniversary of George Washington’s birthday. In a tribute to our first president, below we examine five ETFs that may have been appealing to the founding father [for more ETF ideas, sign up for the free ETFdb newsletter]: 

PowerShares DB USD Index Bullish (UUP)

This ETF offers exposure to the U.S. dollar, allowing investors to bet on an increase in the greenback relative to a basket of developed market currencies. UUP is linked to an index comprised of USDX futures contracts, meaning that UUP essentially is a bet against the euro, yen, British pound, Canadian dollar, Swedish krona, and Swiss franc. Given the dollar’s safe haven appeal, this ETF generally performs well in turbulent environments.

Though UUP offers exposure to a basket of securities, the underlying index is dominated by the euro. PowerShares also offers the DB 3x Long U.S. Dollar Futures ETN (UUPT), which delivers amplified exposure to the same basket of currencies.

PowerShares Build America Bond ETF (BAB)

BAB is one of three Build America Bond ETFs, offering exposure to a type of fixed income security that was introduced as part of the effort to accelerate the recovery in the wake of the recent recession. Interest on Build America Bonds is essentially subsidized by the Treasury, allowing municipalities to borrow at reasonable rates to pursue various initiatives. Though the Build America Bond program was not renewed, the securities issued under this program continue to trade; there is nearly $1 billion in assets in the various Build America Bond ETFs. With a 12-month yield of more than 5%, BAB offers a pretty intriguing return opportunity–especially in the current low rate environment.

Guggenheim Timber ETF (CUT)

Most Americans probably can’t give many details of Washington’s time in office, but almost all are aware of his cherry tree-related exploits as a young boy. After chopping down his father’s tree, Washington reportedly confessed to the deed upon questioning, uttering that he could not tell a lit. Given Washington’s propensity to bring down fruit-bearing trees, it seems likely that he would be intrigued by the investment thesis behind CUT.

This Guggenheim ETF offers exposure to the global timber industry, investing in stocks of companies that own and lease forested land and harvest timber for commercial use. The timber industry is cyclical, meaning that CUT will tend to perform well when demand for construction products and other raw materials is strong.

Another legend surrounding our first president relates to the state of his teeth. Washington suffered from teeth problems throughout his life, and eventually started wearing false teeth. Though the urban legend was that Washington’s false teeth were made out of wood, that probably wasn’t the case.

SPDR Nuveen Barclays Capital New York Municipal Bond ETF (INY)

Our nation’s capital is now named for Washington, but during his presidency Washington D.C.  was not yet home to the White House. Instead, the capital was in New York City, and Washington lived there for several years during his two terms. This ETF offers targeted exposure to the muni bond market, focusing exclusively on securities from New York issuers. Given the state’s ongoing budget problems, some see INY and the other New York muni ETFs as risky plays. But that also means a potentially appealing yield profile; INY has a tax equivalent yield of about 4% (assuming a top tax rate of 35%).

iShares MSCI United Kingdom Index Fund (EWU)

Though the concept of short-selling wasn’t around in Washington’s day, it seems like a fairly safe assumption that he would short EWU in a heartbeat if given the chance. Before he was president, Washington was one of the leaders of the American Revolution, scoring several key victories against the British that ultimately led to independence.

Though the United Kingdom is now one of the strongest allies of the U.S., we suspect that Washington would have continued to hold a grudge against the country that tried to put an end to his rebellion (and his life). EWU focuses primarily on large British companies; the top holdings in this ETF include HSBC, Vodafone, and BP. iShares also recently launched a small cap complement to EWU; EWUS focuses on smaller British companies.

Disclosure: The above is meant for entertainment purposes only – Happy Presidents’ Day From All Of Us At ETFdb!

No positions at time of writing.

Click here to read the original article on ETFdb.com.

Related Posts:

• ETF Insider: Take Profits In A Sideways Market
• ETF Insider: Beware Of Earnings Volatility
• Coming Soon To An ETF Near You: Finland, Small Cap UK Funds From iShares
• September’s ETF Studs: Five Funds That Thrived During A Wild Month
• ETF Insider: Greece Flirts With Default

Article source: http://finance.yahoo.com/news/five-etfs-george-washington-probably-120038332.html

During earnings season, BullMarket.com publishes a comprehensive 20- to 30-page Earnings Preview report for the week ahead each Friday.

Over the past year, BullMarket.com used the data it has collected to correctly predict investor reactions for nearly two-third of the stocks it’s previewed.

In its latest earnings preview, BullMarket.com looks at several popular stocks, including Salesforce.com (NYSE: CRM – News), Dell (Nasdaq: DELL – News), Intuit (Nasdaq: INTU – News), Monster Beverage (Nasdaq: MNST – News), Hewlett-Packard (NYSE: HPQ – News), First Solar (Nasdaq: FSLR – News), Skullcandy (Nasdaq: SKUL – News), Deckers Outdoor (Nasdaq: DECK – News), Target (NYSE: TGT – News) and Wal-Mart (NYSE: WMT – News).

Here is just a tiny sample of what BullMarket.com wrote about Target:

“Target has surpassed the earnings consensus five of the last eight quarters, missing once and meeting estimates twice. During that time, the stock has risen the next session four of eight quarters. Seasonally, the stock has risen two of the last four years. …

“Outside of earnings, an improved job market is really the key for Target’s stock to get moving, given that it’s typically a mid-cycle stock that often benefits from the trade-up effect when the employment picture improves.

“All in all, we continue to think Target looks attractive moving forward, as we like its move into Canada, initiatives like putting boutique stores within its stores and limited time designer collaborations (including Jason Wu in February), its move to adjust its pricing strategy with its vendors, as well as an attractive valuation (about 12x current year estimates, that are constrained by the added costs to

move into Canada).”

The full BullMarket.com earnings analysis includes a look at historical earnings data and EPS trends for the companies above and more; examines past investor reactions to earnings in various contexts; gives options activity analysis; reviews previous-quarter earnings; and gives an opinion on both what earnings will look like and how investors will react based on the aforementioned data points.

Just a few of the correct calls BullMarket.com has made for Q4 so far were:

to be bearish on Google (Nasdaq: GOOG – News) ahead of earnings.

to be bullish on Apple (Nasdaq: AAPL – News) ahead of earnings.

to be bearish on Amazon.com (Nasdaq: AMZN – News) ahead of earnings.

to be bullish on Green Mountain (Nasdaq: GMCR – News) ahead of earnings.

to be bullish on NetApp (Nasdaq: NTAP – News) ahead of earnings.

A daily investment service that is committed to creating long-term wealth for its members, BullMarket.com’s Recommended List of stocks is up 33.3% from 2008-2011 versus a -14.4% return for the SP, topping the benchmark each year since the start of the Great Recession. Subscribers receive actionable market commentary, access to 40+ stock ideas on the Recommended List, and real-time trade alerts. Plus, sign up for a free trial today to view Bull Market’s in-depth Special Reports – including its annual High Yield and MLP reports – and its timely Earnings Previews, which are published every Friday during the heart of earnings season. Get a Risk-Free Trial to Bull Market Today! (Please note returns are unaudited.)

Article source: http://finance.yahoo.com/news/stocks-look-ready-pop-drop-132207332.html

Click on chart to track commodities

NEW YORK (CNNMoney) — Oil prices rose Monday after Iran cut exports to Britain and France, raising worries that higher gas prices may follow suit.

Iran’s oil ministry said Sunday that it would stop exporting oil to French and British companies. The announcement came just days after Iran threatened to cut supplies to some European Union countries in retaliation for sanctions put in place by the EU and United States.

U.S. crude for April delivery jumped nearly 2% to $105.08 per barrel. Brent crude, Europe’s benchmark, rose about 0.5% to $120.18 per barrel.

Prices for Brent haven’t been above $120 for more than a year, and that could prove worrisome for U.S. drivers since many U.S. refineries use imported oil to produce gas, especially on the East Coast.

Prices are already up nearly 9% from the start of the year. According to motorist group AAA, the national average price of $3.56 a gallon marks the 13th consecutive increase.

Gas prices may hit $5

The price of unleaded gasoline in the U.S. will likely hit a nationwide average of $4 by this summer, said Dan Dicker, oil trader and author of “Oil’s Endless Bid.” The last time prices topped $4 was 2008 and Dicker said there’s a one in three chance that gas could reach $5 a gallon.

If gas prices do head to those lofty levels, that could put a crimp in the economic recovery as consumers will likely cut down on spending if they have to pay more to fill up their cars.

Just last month, higher gas prices were to blame for an uptick in inflation. And it’s not just consumers who will suffer. Companies facing higher shipping costs may reel in their hiring plans, slowing job growth and putting a crimp into the overall economic recovery.

“This price juggernaut has taken on a life of its own since the Iran/Israeli threat flinging began and [the] boycott/sanctions war continues to ratchet upwards, and it’s been made worse by the big run in stocks since the start of the year,” said Dicker.

Capital Economics analyst Julian Jessop said the stock market rebound has contributed at least $5 worth of gains to the price of oil.

Israel has contributed to the market mayhem by openly considering an attack on Tehran’s nuclear infrastructure.

Iran exports 2.2 million barrels of oil per day, a sliver of the 89 million barrels that is consumed worldwide on a daily basis. Less than one-fifth of Iran’s exports are sent to Europe.

The move by Iran is “essentially an empty gesture, as the UK and France buy hardly any oil,” said Jessop in a client note.

Check gas prices in your state

But it doesn’t take much to trigger a fluctuation in prices, and even a bit player like Iran can wreck havoc on international markets.

“The supply is tethered so tightly to demand, that if you do lose even a small percentage of supply, it could have a big effect on the price,” said Dicker.

– CNNWires staff contributed to this report 

Article source: http://rss.cnn.com/~r/rss/money_markets/~3/r4Rk2BKyZWM/index.htm

European stocks have had a nice run but the road ahead is fraught with risk. Click photo for latest world market data.

NEW YORK (CNNMoney) — European stocks have rallied this year on hopes that a full-blown contagion can be avoided, but the outlook remains fraught with risks, not the least of which is what might happen with Greece.

The Euronext 100 (N100), which tracks European blue chip stocks, is up 6.5% so far this year. Germany’s (DAX) benchmark index has jumped nearly 15%, while the U.K. market (UKX) has gained 6% and France’s CAC40 (CAC40) has risen about 7%.

Despite those gains, European stocks have yet to fully recover from last year’s punishing losses, suggesting there may still be more upside.

Stocks plunged across Europe last August on fears the banking system could collapse as the debt crisis appeared to be spreading from Greece to larger economies such as Italy and Spain.

Those contagion concerns have eased somewhat, largely due to aggressive moves by the European Central Bank.

The ECB has flooded the European banking system with cheap, long-term loans and relaxed its collateral standards in an effort to prevent a credit crunch. Investors have also welcomed steps eurozone governments have taken to form a so-called fiscal compact, designed to prevent a future crisis by strengthening budget discipline.

In addition, newly appointed governments in Rome and Madrid have made progress on key economic and fiscal reforms. As a result, borrowing costs for both governments have eased as investors have become more willing to buy Italian and Spanish bonds.

“We have seen signs that Europe is making painstakingly slow progress on the political and institutional front, and every step forward has resulted in positive market performance across Europe,” said John Velis, head of capital markets for Russell Europe.

“[But] this progress will encounter setbacks from time to time,” he cautioned.

Greek bailout: The pressure is on

For one, Greece needs to secure additional bailout money to avoid a default next month, and negotiations have not been going well.

After weeks of delays, eurozone finance ministers are expected to make a decision Monday on a second bailout worth €130 billion from the European Union, International Monetary Fund and European Central Bank.

Greece is also widely expected to announce a deal with its creditors in the private sector to write down a large portion of its debts.

A Greek government official told CNN Sunday that Greece expected to launch a debt swap on March 8 that would be completed by March 11. A spokesman for the Institute for International Finance, which represents the interests of bondholders, said he could not confirm any such deal was in place.

Resolving those issues could help European stocks, but Greece will probably need additional support and may not be able to avoid a default, said Eric Lascelles, chief economist at RBC Global Asset Management.

“Its debt load will likely remain too high, its economy remains uncompetitive, and the public and political will to enact the necessary reforms is precarious,” Lascelles said.

Lascelles acknowledged that the ECB has helped mitigate the risk of a major banking crisis through its long-term loan program. And stocks could move even higher when the ECB offers a second round of loans later this month.

But the effectiveness of such programs “seems to wane with time,” he warned. “The bottom line is that the ECB program has been enormously successful, but as much due to psychology as due to the reality of the program.”

Europe: Out of ICU, but still ill

Meanwhile, there is also concern that plans to strengthen fiscal discipline will be watered down following elections in several eurozone nations later this year.

In particular, investors will closely monitor upcoming presidential elections in France, where incumbent Nicolas Sarkozy is facing a tough race against socialist frontrunner François Hollande.

“This could bring about a new government wanting to renegotiate the fiscal compact,” said Andrew Milligan, head of global strategy at Standard Life Investments in Edinburgh. “Other elections could turn into referenda on whether the new rules are acceptable to different populations.”

Milligan points out that many European companies are well positioned to compete in the global market, but it will still be precarious.

“Against the backdrop of weak to negative domestic economic activity, varying from country to country, an overall decline in profits looks likely,” he said. “This remains a stock picking environment across the European equity universe.”

– CNN’s Elinda Labropoulou contributed reporting from Athens and CNNMoney’s Catherine Tymkiw contributed from New York 

Article source: http://rss.cnn.com/~r/rss/money_markets/~3/o8JEEPK3iM4/index.htm

Click the chart to track other global markets.

NEW YORK (CNNMoney) — China’s move to keep its economy going lifted stock markets around the world Monday, as investors wait to see if Greece will secure a second bailout.

Over the weekend, China’s central bank said it would cut the amount banks must hold in reserve by 0.5% to boost lending and sustain strong economic growth. China’s decision comes as the fast-growing country tries to keep inflation under control without thwarting economic growth.

The Shanghai Composite (SHCOMP) edged up 0.3%, and Japan’s Nikkei (N225) rose more than 1% to close at its highest level since August. The Hang Seng (HSI) slipped 0.3%.

China’s central bank may still be concerned about inflation, but “the last thing it wants is to be blamed for keeping policy too tight and causing growth to slow unnecessarily in a leadership-transition year when China still faces the threats of a global slowdown and a property sector downturn at home,” said Mark Williams, chief Asia economist at Capital Economics, in a research note.

European stocks also benefited from China’s move. Britain’s FTSE 100 (UKX) added 0.7%, the DAX (DAX) in Germany rose 1.5% and France’s CAC 40 (CAC40) gained 1%.

U.S. markets are closed Monday for Presidents’ Day.

Europe stock rally faces a perilous road

Beyond China, there is growing hope that Greece will make progress on a second bailout when finance ministers meet Monday, said Kathy Lien, director of currency research at Global Forex Trading.

After weeks of delays, eurozone finance ministers meeting in Brussels are expected to make a decision on a €130 billion bailout from the European Union, International Monetary Fund and European Central Bank.

Expectations are high, as “there have promises from high level officials that ‘decisions’ will be made,” said Lien.

Greek Finance Minister Evangelos Venizelos was also optimistic heading into Monday’s meeting, saying that Greece is “coming in today’s crucial meeting of the Eurogroup having fulfilled all the conditions had been approved to the new program,” including an agreement its creditors in the private sector to write down a large portion of its debts.

But investors from the private sector have not confirmed a deal.

Greece needs the money to avoid defaulting on a €14.5 billion bond payment due March 20.

Meanwhile, Wal-Mart (WMT, Fortune 500) said it is increasing its investment in Yihaodian, a Chinese e-commerce website, bring its stake in the company to 51%.

Japan posted a record ¥1.475 trillion trade deficit in January as the strong yen pressured exports.  

Article source: http://rss.cnn.com/~r/rss/money_markets/~3/xjR0QH2t-_0/index.htm

Record $6 Trillion of Fake U.S. Bonds Seized

Bloomberg

Italian anti-mafia prosecutors said they seized a record $6 trillion of allegedly fake U.S. Treasury bonds, an amount that’s almost half of theU.S.’s public debt.

The bonds were found hidden in makeshift compartments of three safety deposit boxes in Zurich, the prosecutors from the southern city of Potenza said in an e-mailed statement. The Italian authorities arrested eight people in connection with the probe, dubbed “Operation Vulcanica,” the prosecutors said.

The U.S. embassy in Rome has examined the securities dated 1934, which had a nominal value of $1 billion apiece, they said in the statement. “Thanks to Italian authorities for the seizure of fictitious bonds for $6 trillion,” the embassy said in a message on Twitter.

The financial fraud uncovered by the Italian prosecutors in Potenza includes two checks issued through HSBC Holdings Plc (HSBA) in London for 205,000 pounds ($325,000), checks that weren’t backed by available funds, the prosecutors said. As part of the probe, fake bonds for $2 billion were also seized in Rome. The individuals involved were planning to buy plutonium from Nigerian sources, according to phone conversations monitored by the police.

The fraud posed “severe threats” to international financial stability, the prosecutors said in the statement. HSBC spokesman Patrick Humphris in London declined to comment when contacted by telephone. The U.S. Secret Service assisted the Italian authorities, spokesman Edwin Donovan said.

Money Laundering

Creating fake Treasuries is a “common scam, especially in Italy,” he said. The tipoff was the “astronomical” face value of each bond, he said. Fake bonds in high denominations are more common in Europe, where people are less familiar with the face value of U.S. Treasury bonds than in the U.S., he said.

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Article source: http://www.thefinancialphysician.com/blog/?p=8967