European debt crisis

spread global panic

October is living up to its reputation as the worst performing month in financial markets. Monday’s steep falls

in Asia were followed by Wall Street. Dow Jones dropped 2,4 % to 10 655 with the magic 10 000 limit in sight. Futures for Europe and USA are down after Asia fall for the consecutive day. Oil prices plunge with NYMEX tipping below

USD 76 and Brent fighting to stay beyond 100 barrel.

EURO/USD is at 1.3200. The EU-finance ministers failed to give any signals to calm markets after meeting in Luxembourg. This

has added to the pressure on the Euro. A Greek default is seem to be taken for granted. The visiting TROIKA (representative from the European Central Bank, IMF and EU-commission) has once again stated that Greek austerity measures are lagging behind. The final decision to release the next debt tranche to Greece is postponed to the 17th October meeting with heads of state.

In the meantime there is no money left in the Greek state coffers and the massive protests against the austerity measures and greedy bankers are continuing in the streets. Protests against bail outs and greedy bankers are not limited to Europe. Wall street witnessed over the week end that 700 protesters were arrested.

Big US banks as JP Morgan and Bank of America are as heavy debt loaded as its European counterparts. One of the few messages given by EU-ministers of finance, is that creditors must be prepared for taking increased Greek losses. Greek treasury bills are trading on 46 % of face value indicating creditor losses up to 50 %.

In an atmosphere of volatility and uncertainty Gold is springing back to life up to1671. Another precious metal, silver, is also been given a boost. Among the currencies British pound is under increased pressure GBP/USD at 1,5465.