The domino's collapsing is in full effect. What really bothers me once again is ALL the intelligentcia of the WORLD could not see this coming??!?! Come on! It was bound to happen and nobody prepared for it. Or worse they were expecting it. That's pretty sinister if you ask me!
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The Sydney Morning Herald
written by David Watkins
Friday May 7, 2010 at 5:14pm
Eurozone debt fears engulfed Asian markets Friday, after US shares saw a spectacular intraday fall on deepening concerns that Greece's debt crisis would spread through Europe.
In an effort to bolster markets in Tokyo, the Bank of Japan offered to provide over 20 billion US dollars in liquidity to financial institutions as stocks tumbled for a second successive day.
As markets convulsed and the euro hovered near 14-month lows, finance ministers of the Group of Seven industrialised nations were to hold an emergency conference call on the crisis, Japan's Finance Minister Naoto Kan said.
"The reason for today's fall is what everybody knows -- Greece," said Hideaki Higashi, a strategist at SMBC Friend Securities.
"The market is factoring in the possibility that this Greek problem will spread to Spain and Portugal."
Markets have been spooked by violent demonstrations in Athens this week including a bank firebombing that killed three, amid fears a 110-billion-euro (145-billion-dollar) EU-IMF bailout for Greece could prove insufficient.
Concerns are also mounting that the deal will fail to shield Spain and Portugal from crippling market pressures.
Moody's ratings agency on Thursday warned that the fallout from the Greek debt crisis presented a risk of "contagion" for the credit rating of banks in Britain, Ireland, Italy, Portugal and Spain.
Markets in the region were lower, but recovered from earlier sharp falls.
After the Australian market saw heavy losses in early trade, Prime Minister Kevin Rudd said his government was watching developments to restore market confidence with "considerable concern".
"Markets have judged (the Greek bailout) arrangements to be inadequate," Rudd said.
Global shares had earlier tumbled on statements from European Central Bank President Jean-Claude Trichet that offered no sign of intervention to stop the euro's slide.
And Japan's Kan ruled out any joint intervention by the G7 to buy the euro, which has tumbled against major currencies amid fears of contagion from the debt crisis, Dow Jones Newswires reported.
The region's traders took their cue from a stunning sell-off in US shares, which saw a record drop of almost 1,000 points, or about nine percent, before they recouped more than half those losses on Thursday.
Greek Prime Minister George Papandreou on Thursday bulldozed a package of spending cuts and TAX HIKES through parliament with the help of his Socialist party's majority, as police battled hundreds of youth protestors outside.
Warning that "the future of Greece is at stake," he won backing for the plans, demanded by eurozone partners and the International Monetary Fund in return for a 110 billion euro (145 billion dollar) bailout.
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