Monday, September 12, 2011

Short term relief?

BERLIN (Dow Jones) 20:54 CET -- The European Union's current treaty doesn't foresee the possibility of an exit by Greece from the euro zone, German Finance Minister Wolfgang Schaeuble said in an interview with the ZDF public broadcaster Monday.

--German Finance Minister Schaeuble says Greek euro exit not possible due to EU treaty
--Schaeuble says contingency plans for a Greek insolvency are not an actual government plan
--Schaeuble comments come as others in government think loudly about Greek insolvency
--Schaeuble criticized such comments as unsettling markets 

How will the financial markets react to that?

Definitely these declarations do not end "the Greek tragedy".

But given the extreme oversold conditions of the European banks, they can initiate at least a short relief rally.

Fig. BNP, DB and SG 1YR performance

This may also help for some time:

FT 2011-09-12 20:20 UK Italy turns to China for help in debt crisis

Italy’s centre-right government is turning to cash-rich China in the hope that Beijing will help rescue it from financial crisis by making “significant” purchases of Italian bonds and investments in strategic companies.

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