Who's the new Kerviel?

UBS coming out with a potential shocker this morning  before European markets open. A rogue trader has entered into unauthorized trades leading to an estimated $2bn loss. While a similar story at SocGen lead to some serious panick in financial markets, the future happily continues it's rally. Obviously the newsflow might lead to a Q3 loss.

UBS opened down as much as 10%, but joins the recovery trading only 6% lower

Greece stays in.. for now

A Greek government spokesman has leaked out that Greece remains in the Euro. Apparently Merkel and Sarkozy in accordance with Papandreou have decided to not throw Greece out yet, most likely has bank recapitalization plans have not been completed yet in the Eurozone core.

The official statement:
"Greece is an integral part of the Euro area and recent decisions to meet budget targets will help shield the economy" It is getting pathetic

China to rule the world

After buying massive amounts of US treasury debt, buying Greece infrastructure and buing all availabe natural resources across Africa, China has decided to buy bonds of Eurozone-troubled nations, read Italy.
let the party continue! Any crisis or possible headwinds ahead in the global economy will just be solved by China providing unlimited support to the global ponzi scheme

3 Reasons to rally 3%

1. Moody's is downgrading Credit Agricole and Societe Generale this morning as French lenders have Eur 57bn exposure to Greece. Additionally the banks have also own subsidiaries in Greece which have been reporting losses
2. ECB lends about USD600mn to two unidentified European banks for a week at 1.1% as the banks couldn't access the USD market anymore
3. Depositors are massively withdrawing savings with European banks. It is not just Greece (19%) and Ireland (40%) which saw massive deposit outflows, France and Germany saw deposits shrinking rapidly as well.

RollerCoaster Continuous

French bans opened down sharply this morning again after renewed concerns about access to funding after Moody's threat to downgrade the French financial sector.
SocGen traded 14.5 euro this morning down 7% but completely reversed the losses to a 10% gain, trading around 17 euros in Paris after CEO Frederic Oudea told the exposure to periphery euro zone bonds is low and SocGen's liquidity situaiton is comfortable

Despite today's massive intra-day rally SocGen lost over 60% of its market cap as of the first of July when it closed around 42 euro.

Meanwhile in Europe

Italy somehow managed to sell EUR 4bn in 5-year bonds at a 5.6% yield amidst renewed concerns that Greece is boing bankrupt any time. Despite that Italy has already covered for about 70% of its 2011 financing needs it still needs to issue over 60bn in the remainder of 2011 to cover its budget deficit it meed bond redemptions.

In the meanwhile Italian officials are in talks with Chinese counterparts about potential investments in Italian bonds and strategic companies

The market is not happy. 10-year yields rising 17bps at the moment to 5.7%

Here we go again

SocGen and all other French banks falling again by some 10% today after losing more than halve of their value already during this calendar year.
The company's reaction? The usual program of job cuts and selling of non-core assets is being pulled out. Write-downs own questionable governemnt debt? Nah, lets trust the internal calculations over market prices

Read more on
http://www.bloomberg.com/news/2011-09-12/societe-generale-to-sell-eu4-billion-in-assets-by-2013.html