The President of the Italian Republic Giorgio Napolitano charged Sunday the former European Commissioner Mario Monti to form a new government is responsible for putting in order the finances to reassure financial markets and European partners in Rome.

After the resignation of Silvio Berlusconi, left under the jeers of thousands of Romans, the head of state has mandated that as planned economics professor aged 68 to lead a cabinet should be composed mainly of technocrats.

In a brief speech a few minutes after the announcement of his appointment by the Quirinal Palace, Mario Monti has promised to conduct "with a sense of urgency but with care" consultations to establish the composition of his government.

ONE YEAR AND A HALF FOR REDRESS OF ITALY

The uncertainty of recent weeks Italy has strongly penalized in the bond markets, and Rome hopes that the arrival of Mario Monti will reassure the financial community.

"The country must become a pillar of strength, not a weak link in the European Union that we were among the founders," said the former European Commissioner for Competition.

The objective of the new government will be "to improve the financial situation and resume the path of growth in a context of increased attention to social justice," he added, saying that Italy could "overcome difficulties by a joint effort. "

"We owe it to our children," said the economist.

The term fast cash does not refer to money that falls from the sky. It refers to the money obtained through a cash advance.

Wall Street fell more than 2% Friday, signing the third quarter of its worst quarterly performance in three years, the macroeconomic indicators from China and the debt crisis in Europe continues to fuel concerns about the global economy.

The Dow Jones Industrial 30 yielded 2.16%, or 240.60 points at 10,913.83. The S & P-500, wider, lost 28.98 points, or 2.50%, to 1131.42.The Nasdaq Composite fell on its side of 65.36 points (-2.63%) to 2415.40.

The U.S. equity market and accuses his fifth consecutive month of decline and its worst performance in three months since the fourth quarter of 2008, which was the heart of the financial crisis of 2007-2009.

On the whole week, the Dow is up 1.3% while the S & P and Nasdaq, respectively, yielded 0.4% and 2.7%.

On September, the Dow lost 6%, however, the S & P 500 7.2% and the Nasdaq 6.4%.In the third quarter, the three indices were down 12.1%, 14.3% and 12.9%.

Financial stocks fell with Morgan Stanley, which plunged 10.54% to 13.50 dollars due to concerns about the exposure of the bank's European debt.

"Everyone fears that growth will slow down or it will not be as strong as expected.In general, there is a crisis of confidence, "said Adam Krejcik, an analyst with Roth Capital.

The CBOE volatility index, known as the "fear index," rose 10.61% to 42.96, suggesting that investors expect that volatility will continue.

In China, China's manufacturing sector continued to decline in September for the third consecutive month.

Inflation in the euro area in September rose abruptly and unexpectedly to 3.0%, its highest level in nearly three years, greatly undermining the chances of the European Central Bank cut rates in October .

Market players have also not responded to U.S. macroeconomic indicators better than expected.

Fraud within UBS is eerily similar to a tarnished Societe Generale in 2008. The similarities of the two cases in seven points.

Two traders on the same table market

Jerome Kerviel and Kweku Adoboli worked on the same type of position, the Delta One desk. A table where one does not exchange single stocks or bonds but derivatives. The operations are relatively simple and often reserved for novice traders. They also specialize in ETFs (exchange traded funds), financial products that mimic the performance of an index, upward or downward. Easy to use, they can diversify their portfolio by buying such contracts backed by a stock index or industry (eg commodities). The ETF market is booming, the stock reached 300 billion euros in Europe, according to Aurel BGC.Moreover, the two traders were very familiar control procedures. They made a passage through the back office, the administrative body of the bank that controls the regularity of operations, before moving to trading.

Adoboli / Kerviel: profiles of "good friends"

Friends, neighbors, co-workers paint a Kweku Adoboli, 31, "very nice, very polite." Like most young traders of his age, he earned a very good living (300,000 pounds per year) and took the opportunity to do great celebrations in her apartment. Jerome Kerviel was considered "quite normal, no gambler," by his former colleague Valérie Rolland, as shown by his remarks during the trial of former trader. He lived comfortably but did not have an extravagant lifestyle. The financial police who investigated him about a man with "no extravagance of any kind."He earned 48,000 euros per year in 2007, a year before the outbreak of the scandal.

The concealment of large-scale risky operations

For Kerviel, 50 billion euros of positions (or 25,000 times the average risk that a trader takes …), Adoboli for "only" $ 10 billion (7.2 billion euros), "in various futures indices – S & P 500, DAX and EuroStoxx – over the last three months, "the statement said UBS. The principle of hiding two traders was the same. The internal control system did not see anything because the positions were "in our systems offset by fictitious positions on ETF cash settlement futures, allegedly executed by the broker," according to UBS.Clearly, the screens showed the supervisors of the total amount of exposure much lower than was the actual exposure of the two "rogue traders".

Moreover – as Kerviel – the "unauthorized trading" of Kweku Adoboli does date back a long way. The trader UBS would have made some operations since October 2008. In 2005 and 2006, Kerviel had "led" by taking 100 to 150 million euros in positions on the action Solarworld listed in Germany, according to the report of the Inspector General of Societe Generale.

The unwinding told in a hurry to star trader

Upon discovery of the scandal UBS warned regulators in Switzerland and Britain, and launched in parallel to his cell house, "the bronze project" designed to perform the operations of unwinding.This difficult task was assigned to one of the best traders of the bank's derivative, Jason Barron. At Societe Generale, the unwinding took place January 21, 2008 after the discovery of the fraud, by Maxime Kahn, 39, an experienced trader in the bank. Management has told the Financial Markets Authority and the Governor of the Bank of France, but she preferred to keep out of the palace secret. In the recent book "Sarko kill me," Daniel Bouton said he did not call the Elysee Bercy or because "the ability of a cabinet to hold confidential information is very limited in all cases long. It's structural. And if I notify the department, I'll have to deal with the Minister (Christine Lagarde) while I have other things to do. " The Ministry of Finance was informed two days after the first operations of unwinding.A secret which has not failed to Nicolas Sarkozy in a rage before claiming the head of the CEO …

A boss in the hot seat?

The CEO of Societe Generale, Daniel Bouton, was forced to leave office in April 2009, under pressure from President Sarkozy, despite the support of major shareholders and employees. "The goal was to physically pay button" recently said the former CEO in "Sarko kill me." At UBS, the boss seems so far spared even though it is very weak. In an interview with Swiss newspaper Der Sonntag Gruebele Oswald said he was "responsible but not guilty." He even said that when someone decides to act criminal, "you can not do anything." The boss of UBS feels may be spared a major shareholder of the bank.The Swiss weekly NZZ am Sonntag quoted a member of the Board of Directors of UBS who says Oswald Gruebele still has the support of the Singapore investment fund GIC.

A scandal comes at a very wrong time

UBS has revised this weekend losses from fraud of $ 2.3 billion, against 2 billion originally announced. The profit of about one billion Swiss francs which the bank expected the third quarter could turn into a loss of 500 million francs. And while the group hoped to finally settle its costly setbacks resulting from the subprime crisis and conflict on the banking secrecy with the United States. He had announced in August a new savings plan that provides 3,500 job cuts and savings of 2 billion Swiss francs (1.8 billion euros). And he was preparing, according to the Swiss press, cutting heavily in its investment bank.

A Société Générale scandal happened in the subprime crisis, while the bank was about to announce 2.6 billion loss because of its exposure. The bank then red and black then launched a capital increase of EUR 5.5 billion, and managed to save many takeover rumors that hovered above his head.

Banks that do not listen to warnings

The many similarities between the two cases raise questions about banks' ability to truly control their traders. Yet they have spared no efforts in security after the Kerviel affair. "For the Societe Generale, one can even the number in the hundreds of millions of euros," said the Liboux and Tangi, an analyst at Aurel BGC. This did not prevent the inspection bodies to point out the dangers of risky products.The Serious Fraud Office (SFO) British recalled at the outbreak of the UBS case, have warned against the dangers inherent in the ETF. According to the Office of fight against financial crime in the UK, the risk of major accidents was high mainly because of their lack of transparency. But this is not a systemic problem as Manoj Ladwa, an analyst at ETX Capital in London. Those responsible for risk control at UBS "did not realize quite quickly that this trader had taken huge positions in a very short period." The problem, according to Frederic Boulier, an expert on financial fraud in Nice Actimize is that banks are primarily focused on the safety of other financial products."It is true that as these traders are working on relatively simple products, some banks have chosen to focus their efforts on control tables are traded market where more complex products." From there to imagine that a fraud on banks ETF splash soon again? "It is impossible to say today that a similar accident could not happen again one day," said Liboux The Tangi, an analyst at Aurel BGC.

Regions have less and less leeway to increase their resources and reduce costs. Result: debt continues to grow, according to a study released Tuesday by the rating agency Fitch. Debt regions would experience an increase of 8.4% in 2010, and 35% by 2013, according to the rating agency Fitch. It now stands at 17 billion euros.

The repayment ability of the regions is deteriorating. Analysis of the Fitch rating agency, published on Tuesday shows that debt amounts to 17 billion euros, against about 15.6 in 2009. And is progressing at an astonishing pace: 8.4% increase in 2010 and 35% by 2013. According to Les Echos, the assumption that the regions will devote all their resources now and stop any investment, they would put about four years to repay.In short: the regions are difficult to vary the amount.

Increased margins on spending

In addition, dependent on market conditions CVAE companies. Fitch situation which is far from expect miracles: "We expect that this resource is very dynamic in the future."

But the study is not as black dots. Regions seem to have more margin on expenditures than revenues. And they would have "sound fiscal fundamentals" .. If they can not easily reduce their operating expenses, according to the study, the recent land reform gives them a little breath of fresh air. She questioned the principle of "general competence" of regions and departments, allowing them, legally, to take care of almost everything.Because of this, according to the rating agency, the regions will be able to focus on their "skills required": transport, vocational training and college. And reduce their expenses.

German Chancellor Angela Merkel reiterated Friday his opposition to the Eurobonds as a solution to the crisis of sovereign debt in the euro area.

"We would be on a slippery slope and in the best case, this would put us on a European way, but more likely, we would be much worse," she said."And that we do not want."

Speaking at a rally held in the Christian Democratic Hamelin, in western Germany, Angela Merkel added: "If the debt was put into a pot, I would never be able to determine from where it comes from, let alone how to improve my situation. "

"And Eurobonds would give no right to intervene to compel others to fiscal discipline."

Also Friday, the head of the French government François Fillon rejected the creation of European bonds, saying it would increase the cost of public debt of France and could affect its rating, in an article published by Le Figaro.

The U.S. Secretary of State, Hillary Clinton, announced Sunday the full support of U.S. efforts to Greece to overcome its financial crisis, saying that Athens was taking difficult but necessary measures to restore growth.

"The United States fully support the government (Prime Minister George) Papandreou's efforts to adopt the reforms necessary for re-railing of Greece, financially, and to make the Greek economy more competitive," she said.

"Greece has inspired the world in the past and I have every confidence in the fact that you will do it again," said Hillary Clinton after a meeting with Greek Foreign Minister, Stavros Lambrinidis to Athens.

The leaders of the euro zone must hold a special summit in Brussels Thursday to discuss how to set up a second plan for financial assistance to Greece, the background risk of contagion from the debt crisis in countries like Spain and Italy and a risk of leaving the euro area for some members of the European Union.

For Clinton, the austerity plan adopted by the Greek Parliament, politically painful, is like a "chemotherapy", but it will eventually bear fruit.

"I'm not here to minimize the challenges that stand because they are real. But I am here to say that we believe strongly that this (the austerity plan) will give Greece a very strong economy, for move forward, "said Clinton.

More will be expected to declare Greece in default of payment, as long as investors, mostly refrain from even considering to buy Greek assets.

The second aid plan for Greece, whose pregnancy is at best difficult, is considered as a way to save time for banks in the euro area can be provisioned for losses and contagion to save economies in the bloc.

As for the reforms demanded in exchange for this aid, they will not go down with a high population rise.

"We will buy if the economy manages to reform itself and if the banking system self-financing but do not count, at least in the next five years," said Russell Silberston (Investec Asset Management)."In our view, it is also that there is a fault before it."

The Greek Finance Minister Evangelos Venizelos told Reuters on Monday that he intended to return to Greece on the market in mid-2014.

The vast majority of investors do not believe it possible without a major restructuring that makes the debt manageable and avoids multiply the austerity measures affecting the economic recovery.

"For Greece, the only solution is to start from scratch," said Kommer van Trigt (Robeco Group).

Silberston for a "first failure" is hatching, even though the French proposal for debt restructuring Greek seems to rally a lot of support, but it seems to solve the solvency problem of Greece.

"The big problem …"

To the extent that the debt should reach 1.6 times the GDP this year, Greece would have released a primary budget surplus of about 5% of GDP, say economists, while in 2010 it experienced a primary deficit of the same order, just to stabilize debt at current levels.

Assuming that the ratio of debt to GDP rises to 166%, calculations show that Evolution Securities should be a discount of about 64% to bring the report to 60% under the Maastricht Treaty.

The yield curve yields the Greek debt implies a discount of 50% on average, according to UniCredit.But impose losses on holders of sovereign bonds Greek before returning credibility may be a sword in the water.

"The big problem … a big discount is that you still give a very high premium for those who purchase the Greek debt after that because a discount was not enough, usually," said Jack Kelly (Standard Life Investments).

An immediate failure was avoided by an agreement to release a new tranche of aid of 12 billion euros, with the fiscal austerity measures, which had the effect of tumbling more than 200 basis points yields of some of the Greek bonds.

However, 27% on two years and 16% over the 10 years they are still prohibitive.The rally of Greek bonds were looked after by investors in the short term and its extent has been exaggerated by low volumes.

Kelly points out for example that the insurer Standard Life, which sold its last holdings in Greek bond in June 2010, no buyer would return only if the Greek debt recovered status of investment or if it was integrated into a common debt to the Union European solution that Berlin does not.

Ireland and Portugal, other countries bailed out in the euro area, are also banned from the portfolios of long-term investors because of the risk of being drawn into the vortex of the crisis in Greece.Risk materialized Tuesday by the downgrading of debt Portuguese four notches by Moody's.

However both countries have a chance to fix the situation faster than Greece, and especially Ireland, more competitive exports and labor market more flexible.

"Right now, we do not really differentiate between Greece, Ireland and Portugal.Subsequently, a country like Ireland seems better party, "said Van Trigt.

"HOT MONEY"

The timing and magnitude of a discount debt remaining two unknowns basic Greek, it is difficult to assess at what price investors would return to Greece.

Was used for comparison to the debt restructuring of Uruguay in 2003, which saw the price of its 2012 loan up to forty cents to 60 cents on the dollar just after.

Currently, the loan in June 2020 in Greece is trading at 55 cent per euro.

"At a price of less than 50, we find at one time or another value in bonds to eight or nine years," said Ciaran O'Hagan (Societe Generale)."But only when we have cleaned up the accounts, such a restructuring."

All this only works if Greece prevents unilateral and disorderly default like Argentina in 2002. She had organized large debt swaps in 2005 and 2010 but the market remains closed.

The "pricing" of the market, before any discount, could be an opportunity to buy based on the assumption that the Greek debt holders would have been too pessimistic about the extent of the said discount.This would not help at all Greece for those who would buy would emerge immediately after the relevant transactions and would not be very important.

"It would be the 'hot money' incredible," said Robert Talbut (Royal London Asset Management), adding that he would not take such a risk.

The big banks and international insurance companies meet again Wednesday in Paris to discuss the modalities for participation of the private sector to a second support plan for Greece but an agreement appears unlikely at this stage because of the complexity the subject.

The Institute of International Finance (IIF), the umbrella organization of major international banks, said Tuesday that he would chair the meeting to be attended by policy makers and private creditors in Greece.

The Ifi adds that the Paris meeting is not isolated and that it followed the technical discussions have already taken place during the past week.

"Tomorrow is a decisive day.It's a whole process, "he told Reuters, however, a French source involved in discussions.

"The new economy minister (Baroin, Ed) said today it would take weeks, beyond the summer. It is a complex subject. It can not be solved overnight "she added.

Other sources familiar with the matter, international banks were already there on Tuesday in Paris at the headquarters of BNP Paribas French plan to discuss the contribution of private sector rescue of Greece.

"There was a meeting this morning in Paris.Only banks with the Ifi, "Reuters reported one of the sources.

Through the IFIs, major international banks have explained study a limited number of options as part of aid to Greece, and they tried to define the terms.

French banks, which are foreign banks most exposed to Greek sovereign debt, have in turn proposed the voluntary extension of Greek bonds maturing, but on terms different.

According to the French plan, the bondholders could include share Greek debt against the Greek 30-year bonds at rates equivalent to those of EU support loan, or 5.5%, issued at a premium indexed economic growth of Greece, a maximum rate of 2.5%.

PARIS AGAINST DEFECTS

Policies and bankers last week expressed hope that the French proposal does not result in a default.

However, the rating agency Standard & Poor's warned Monday that the solutions proposed by Paris to reschedule the Greek debt through the exchange of securities likely would return to place Athens in default selective.

Since the S & P warning, the leaders of French banks and the French Banking Federation Murano is silent.

Interviewed on the sidelines of a conference organized by Paris Europlace or Pébereau, the chairman of BNP Paribas or Oudéa Frederick, CEO of Societe Generale, or Jean-Paul Chifflet, the CEO of Credit Agricole SA are required comment on the Greek debt crisis.

"We do not want and we do not want and we will not default, that is to say, clear a debt restructuring," insisted Baroin at the session of questions to the government the National Assembly.

"The appointment is at the end of summer, it is in the month of September," he said the economy minister.

According to a European source, the S & P news was a "message that we need to rework the plan (French, Ed), and not abandon it."

"The French plan will not be abandoned for obvious political reasons, because the member states want to have something to give national parliaments," said this source.

Greece faces severe limitations of its sovereignty and to privatize as much as was done for firms to East Germany in the 1990s after the fall of communism, said President of the Eurogroup Jean -Claude Juncker.

In an interview published the day after acceptance by the Eurogroup (the finance minister in the euro area) the release of a tranche of aid of 12 billion euros for Greece, Jean-Claude Juncker said that He is confident that the measures agreed with Athens will help to solve the country's problems.

"The sovereignty of Greece will be greatly restricted," said he in German magazine Focus, in an interview published Sunday, adding that teams of experts from throughout the euro area would travel to Greece.

"For the coming wave of privatization, they (the Greeks) will, for example, a solution that is based on the model of the 'Treuhand' German ', Juncker said, referring to the agency that had sold 14,000 firms East Germany from 1990 to 1994.

The Greek Parliament voted Thursday to create a privatization agency under an austerity program agreed with the European Union and the International Monetary Fund (IMF) which led to violent demonstrations in the streets of Athens.

The Greeks are very sensitive to any interference in their business or to any idea of ​​running the country by "commissioners" foreigners."It is unacceptable to insult the Greeks, but they need help, they said they were willing to accept the expertise of the euro area," observes Jean-Claude Juncker, also Prime Minister of Luxembourg.

Wage increase of 106.6%

Greece must sell this year alone for five billion euros of public assets or it may miss the targets set in the program agreed with the EU and the IMF.

A new experience Treuhand might be bitter for the Greeks, who already suffer from high unemployment in the context of a recession that has lasted three years.

The Treuhand was supposed to sell public assets at a profit, but it closed its books on a huge deficit of 270 billion marks ($ 172 billion, 118.4 billion euros), a very unpleasant memory for thousands of Germans who lost their jobs.

Four million Germans were company employees spent in the lap of the Treuhand in 1990.Only 1.5 million jobs remain when the agency closed in 1994.

Juncker suggested the idea of ​​a Treuhand in Greece in May and had said that he believed Greece could raise far more than EUR 50 billion by privatizing.

"The package of measures agreed that Athens will provide a solution to the Greek question," he said, adding that the Greek tax system "is not fully functional."

Jean-Claude Juncker, Greece is in large part responsible for its crisis. "From 1999 to 2010, wages increased by 106.6%, while the economy grew at different rates.Incomes policy was totally out of control and not based in any of (gains) productivity. "

This austerity imposed on Greece is far from unanimous within the European Union. Polish Finance Minister Jacek Rostowski and believes that too much emphasis on austerity and not enough on growth.

"It is clear that everyone has made mistakes in the past 18 months," he told reporters. "We were all overwhelmed.Greece must be the consolidation and growth, "he added, explaining that he had to deal with two members of the debt / GDP ratio and not just debt.

Poland Friday took the rotating presidency of the European Union for six months.

BERLIN Arrange

The Eurogroup also discussed Saturday the outline of a second aid package to Greece.The financial sector, through the voice of the Institute of International Finance (IIF), said he was ready to engage in an effort "voluntary, cooperative, transparent and wide" to support Greece, via a "rollover" of the Greek debt.

Michael Diekmann, the CEO of the German insurer Allianz, said in an interview to Spiegel, that he would commit to 300 million euros for Greece.

The German financial institutions, banks and insurers, had already announced Thursday that they would contribute up to 3.2 billion euros.

Christian Noyer, a member of the Board of Governors of the European Central Bank (ECB), said he is confident that Greece implements its program of austerity and rally in the second bank rescue plan.

"I'm optimistic because the plan which was submitted to make the rescue of Greece more credible," he told the weekly Greek Proto Thema, referring to the French proposal to "rollover" of the Greek debt.

"Almost all banks and other financial entities that could participate in the bailout of Greece would benefit," added he, again excluding any restructuring of the Greek debt.

As for the German Finance Minister Wolfgang Schäuble, he said to Spiegel that Berlin is taking steps in the event of a failure to Greece even if the government does not believe in such a case.

The two main figures of the Belgian government of current affairs are to meet Monday with investors to encourage them not to put the country in the same category as members "peripheral" in the euro area.

Belgium is in a sort of between the two countries in the euro area, such as Greece, Ireland and Portugal which have received international support and the six countries of the euro zone, led by Germany, receiving Note 'AAA', the best possible.

The country's debt represents just under 100% of its gross domestic product (GDP) and n 'is still no new government corresponding to the results of parliamentary elections held in June 2010.

Prime Minister Yves Leterme and Finance Minister Didier Reynders will then Sunday in London to showcase the country's finances to investors.

"We have to show the difference with other countries," said a spokesman for Leterme.

A source said it was essential that issuers forged close ties with investors in the current market conditions, marked by high volatility.

Belgium anticipates a GDP growth of 2.6% this year, well above the average retention for the euro area as a whole, which varies between 1.5% and 2.3%, according to figures from the bank Central Belgium.

In addition to fears of contagion from a defect in Greek throughout the euro area, the cost of borrowing for Belgium has increased because of questions about the country's debt, which is expected to be 96 , 1% of GDP at end 2011, according to the Belgian central bank.

The yield spread between sovereign debt Belgian 10-year German Bunds and equivalent – reference in the bond market – rose to almost 150 basis points in November, its highest since the inception of the euro area.

Since it fell below 130 basis points and the spread remains significantly lower than that between Bunds and debt securities Italian and Spanish.

Fitch and Standard & Poor's both said they may downgrade the rating of AA + from Belgium if there was no establishment of a full government better able to them to achieve the deficit reduction targets.

S & P, however, said last month that he could not decide anything in this field by the end of next year.