Wall Street Took a Dive While Greek Protesters Rebel Against the Austerity Program Designed by the EU

Wall  Street took a dive on Tuesday after fears of economic crisis that is plaguing Greece is heading west to Span and Portugal. From Bloomberg News.

U.S. equities tumbled the most since February and European stocks erased their 2010 gain, while the euro slid to a one-year low, amid concern a government debt crisis is spreading. Oil, copper and gold sank on a slowdown in Chinese manufacturing. Treasuries rallied.

The Standard & Poor’s 500 Index slid 2.4 percent at 4 p.m. in New York and the Stoxx Europe 600 Index plunged 2.9 percent, leaving it down 0.4 percent this year. The euro weakened below $1.30 for the first time since April 2009. Copper fell to the lowest since February, while oil sank the most in three months as the dollar rose against 14 of 16 major counterparts. The 10- year Treasury yield slid 8 basis points to 3.6 percent.

Like denial is a river in Egypt the Spanish Government believes their economy is not as bad as Greece and does not need bailout.

Spanish Prime Minister Jose Luis Rodriguez Zapatero said speculation of a bailout for Spain is “complete madness” and the nation has “strong solvency.” His remarks came as a 110 billion-euro ($143 billion) rescue package to help Greece avoid default fails to ease concern that swelling sovereign debt will derail the economic recovery.

Critics say Spain and Portugal is lying to their people and themselves they are in very, very hot water.

“Spain and Portugal are both endangered species,” said Stanley Nabi, New York-based vice chairman of Silvercrest Asset Management Group, which manages $9 billion. “The attention could shift to one of those countries. In the U.S., it’s no longer news that earnings are better than expected. The stock market has had a great run. I’ve got a feeling that May is going to be a month of consolidation or even of backing down a little bit.”

Spain’s IBEX 35 equities index tumbled 5.4 percent to a 10- month low as Banco Santander SA, the nation’s biggest lender, fell 7.1 percent in Madrid.

The extra yield investors demand to hold Spanish debt rather than German equivalents has risen this week as the European Union’s rescue plan for Greece failed to insulate other euro-area nations from the crisis. Even as Spain’s debt burden, at 53 percent of output, is lower than the EU average, its budget deficit is the euro region’s third-largest.

While the markets are concerned about the Iberian Peninsula countries. The International Monetary Fund tried reassure the markets that Spain does not need a bailout:

International Monetary Fund spokesman Bill Murray, in a statement released in Washington today, said there’s “no truth” to rumors about Spain.

The Spanish Prime Minister states his case:

“These rumors can increase the interest-rate differential compared with German bonds and damage our national interests,” Zapatero told a news conference in Brussels today. “This is simply intolerable and I can tell you that we will certainly combat it.”

“The biggest concern today remains the European peripheral countries and Spain is the big one because there’s fear of another downgrade,” said Sal Catrini, a managing director for equities at Cantor Fitzgerald & Co. in New York. “That’s shaking things up today.”

Yields on Spain’s 10-year debt climbed 8 basis points to 4.11 percent, near the highest since February. Credit-default swaps on Spain rose 50 basis points to 207.8, while Portugal added 71 to 346.6, CMA DataVision data showed.

On the other hand Greece protests continue with unions protesting the austerity program that the European Union wants enforced before receiving  the bailout money:  Also from Bloomberg News

Greek government workers shut down schools and hospitals and disrupted flights as demonstrators occupied the Acropolis in an escalation of protests against 30 billion euros ($40 billion) of additional wage cuts and tax increases unveiled this week.

The ADEDY union federation, which represents more than 500,000 civil servants having their pensions and pay slashed under measures announced May 2 by Prime Minister George Papandreou, will hold a rally at midday joined by striking teachers. A general strike, the third this year, is planned for tomorrow, with private-sector workers due to participate.

“Protests will increase,” said Spyros Papaspyros, the head of ADEDY. “Opting for the easy path of cutting wages and pensions can’t be accepted.”

Greek President George Papandreou  is calling his people to make the sacrifices needed to up-right the country:

Papandreou has called on Greeks to endure more sacrifices in return for an unprecedented 110 billion-euro bailout from the European Union and the International Monetary Fund. The austerity measures, called “savage” by union groups, include a second set of wage cuts for public workers, a three-year freeze on pensions and a second increase this year in sales taxes and the price of fuel, alcohol and tobacco.

Protesters from the Communist Party of Greece draped banners over the walls of the ancient Acropolis citadel in Athens today that said “Peoples of Europe Rise Up” in Greek and English, as tourists took photographs. Unemployed teachers yesterday disrupted the evening news show on state-run NET TV.

Government officials are angry  the Unions are scaring  the tourists away:

Government spokesman George Petalotis condemned the occupation of the Acropolis, saying on NET TV that such protests “aimed to destroy tourism to Greece by terrorizing foreign visitors.”

“My trip is complete,” said Roger Smith from the U.S. as he took photos of the protests below the Acropolis. Smith, on his first visit to Greece with his wife, Diane, said rich Greeks, like rich Americans, needed to pay their taxes.

Greeks are divided about the bailouts:

Fifty-one percent of Greeks say they won’t accept new austerity measures and would join protests against them, according to a poll of 1,000 people by ALCO for Proto Thema newspaper. That compared with 33 percent who would accept them. No margin of error was given for the poll, which was conducted from April 27 to April 29.

Most Greeks feel anger and dismay rather than relief over Papandreou’s decision to request emergency loans, a separate survey showed. Just 14.8 percent of the 1,256 people polled by Kappa Research April 28-29 for To Vima newspaper felt relief or hope after the move, compared with 31 percent who answered “anger,” 30.6 percent “disappointment or fear” and 22.8 percent who said they felt “shame.” The margin of error for the poll was 2.6 percentage points.

Bloomberg News has the rest of the story.

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