(GS) Alcatel-Lucent - Strong routing, robust core margin, self-help on track; CL

Strong routing, robust core margin, self-help on track; CL-Buy

* Source of opportunity
ALU’s 4Q14 was strong. While group revenue was in line our est./companycompiled consensus, the higher-quality Core segment saw revenue 1%/2% ahead driven by 20% yoy growth in IP Routing and 5% growth in IP Transport, in line with our view ALU can benefit from fixed-line spend, including from non-telcos. Next-gen. products were 67% of revenues (50% in 2012), while Core margins were 16% in 4Q (beating our est./cons. 14.3%/ 14.4%), chiming with our thesis of mix shift driving margin expansion and leading to a 2% clean EBIT beat. Self help is on track with ALU executing >70% of targeted cost cuts, underpinning our view of positive FCF in 2015.

* Catalyst
We remain constructive on Alcatel’s growth and margin expansion potential and view positively gross margins of 33.9% in 2014 (our est./cons 33.2%), up 3.6 pp, alongside raised 2015 gross margin guidance (>34%). We see 15% organic IP Routing and high-single-digit IP Transport growth in 4Q as evidence of traction in these segments, allowing ALU to beat consensus during 2015. Moreover, ALU indicated recent €/$ movements would provide
a significant tailwind to revenues and a slight benefit to margins. As such, we raise our 2015/16 revenue estimates by 2% and EBIT by 1%/2%, with higher gross margins (34.4%/34.9%, from 34.1%/34.4%) partially offset by
higher opex (due to FX). We will host the CEO of Alcatel at the Goldman Sachs Tech conference in San Francisco on Thursday, February 12.

* Valuation
Our 12-month price targets increase to €4.4 (ADS $5.0) from €4.2 ($4.8) based on our SOTP valuation equivalent to an unchanged 0.8x 2016E EV/sales, higher net cash, and a 1%-2% increase in revenue estimates. We remain CL-Buy given the top-quartile upside vs. EU Technology coverage.

* Key risks
Lack of progress on cost-cutting, execution, failure to gain traction with product cycles, weaker-than-expected Submarine cycle, weaker US capex.

>>> GS Comment on Greece

Tspiras speech last night took a hard tone towards EU bail-out negotiations. Greece will not seek an extension to programme but instead look for a bridging loan til June as they renegotiate the entire programme. EU leaders however have ruled out a bridging loan up til now. Euro lower on this. Greek finance minister puts new proposal in front of Parliament on Wednesday. EU finance ministers meet Wednesday (emergency meeting) with Lagardere and Draghi to discuss this proposal. Greek parliament will hold confidence vote Wednesday also but this will be a formality. Merkel is in US today. Final deadline is 28th when current programme expires. Early March will be when we could get an official default. Banks have the ELA in short-term for funding but without ECB sponsorship this will be short-lived. We think up till now the chance of a Grexit was sub-10% but coming in this morning you have to assume this delta is north of 25% given rhetoric over weekend, the ECB move last week and little compromise from Europeans. Greek banks will be down this morning c.10% and Euro banks will also be lower.

>>> What to look at today (& this week end) - 9th of February 20

Dow-0,27% S&P-0,27% Nasdaq-0,43% Russell-0,27% VIX +2,61% (17,49)
US MArket Closed Lower, S&P managed to gain 3% on the week, Nasdaq 2,4%, Equities climbed on the open on better NFP, the report caused participants to reassess their expectations for the timing of the first fed funds rate hike. On that note, The Wall Street Journal's Jon Hilsenrath said today's jobs report increased the chance that the Fed will alter the language that indicate plans to remain ‘patient' before hiking rates. In addition, this year's FOMC voting member and Atlanta Fed President Dennis Lockhart said liftoff should begin "around mid-year, or a little later." S&P Downgrade of Greecce to B- and Dijsselbloem comments ...Telco & Financials were better performers, Tech underperformed, Volume were above average @ 900mil shares...YTD Perf Dow Unchged, S&P -0,2% Nasdaq+0,2% Russell +0,2%...After last week's surprising contraction in China official manufacturing PMI - the first in 2 years - latest trade figures released over the weekend are showing few signs of improvement. While the headline trade balance saw a record-high surplus, it was primarily the result of the biggest y/y decline in imports in over 5 years, as exports also showed a marginal drop. Shipments to US were up 4.7%, but imports to Europe fell 4.6% and to Japan by a whopping 20%. Slump in demand for raw materials was still the culprit on the imports side, as iron ore arrivals fell 9.5% in volume and 50% in value. Likewise, crude oil imports were down 8% in volume and 42% in value... Effectiveness of weaker Yen in restoring balance of payments remains questionable, as Japan's current account surplus shrank for the 4th straight year to its smallest level on record in 2014. Analysts noted persistent trade deficit contributing to the decline, but also forecasted recovery in 2015 due to much cheaper oil prices. Likewise, BOJ's Morimoto said it was more critical to watch broader trends of prices rather than scrutinize CPI levels, but also added the CPI measurement would begin to rise as base effect of lower oil dissipates...Greek PM Tsipras took a notably more hard line in a weekend speech, stating Greece does not want a debt extension but rather a "bridge program" to get out from the yoke of austerity. In the mean time, Tsipras reiterated plans to return minimum wage to €750/mo from €580/mo by 2016, reopen state media, go after tax dodgers, suspend fire sale of state assets, and grant relief to elderly pensioners. Furthermore, Tsipras renewed talks of going after WW2 "reparations" from Germany, which the party has previously estimated to be over €160B. Syriza's Fin Min Varoufakis was just as blunt, warning the euro zone would likely collapse if Greece was forced out of the union, as borrower states discover "it is impossible to remain inside the straitjacket of austerity." To that end, latest polls from Spain saw support for the anti-austerity Podemos party at 27.7%, well ahead of the ruling centre-right People's Party and the Socialists' at 20.9% and 18.3% respectively.
Nikkei +0.36% Hang Seng -0.44% Shanghai +0.28%

RUB $66.41 WTI $51.93 (+0.46%) EURCHF 1.0505

EUR$ 1.1333 S&P -0.34% EuroStoxx -1.26% Dax-0.80% AMI -0.62%


Macro :
- Further SNB Action Would Be ‘Dramatic,’ ZKB CEO Tells NZZ
- Erasing Greek Debt Isn’t Solution, BNP Paribas CEO Tells JDD

Keep an eye on :
- ALO FP : Toshiba in Talks to Expand Cooperation With GE, Alstom: Sankei
- AIR FP : Airbus Agrees on Royalty Payment Cut With U.K.: Sunday Times
- AF FP : Air France-KLM Says Total January Passengers Rise 1.4% to 6.2m
- AREVA FP : Areva to Weigh Selling More Than EU1b of Assets: JDD
- CS FP : Axa CEO Supports ECB’s Plan to Buy Bonds, Sueddeutsche Says
- BINCK NA : BinckBank Adj. 4Q Adj. Profit EU12.7m vs EU22.7m; Defers Target
- BMPS IM : Paschi Waiting for ECB Decision Before Finalizing Capital Plan
- BNP FP : BNP Paribas Top Executives’ Bonuses Cut After U.S. Fine: FT
- CRG IM : Intesa Not Interested in Carige, Gros-Pietro Says, Carige Foundation Considers Sale of 19% Stake in Bank: Ansa
- CU FP : Caisse des Depots Tenders 5.3% Club Med Stake to Gaillon Offer
- GIL GY : Elliott Says Stake in Mori Seiki AG Remains Above 5%
- HSBA : HSBC List Shows Names From Bowie to Drug Lords Banked on Secrecy
- ENI IM : Eni CEO to Il Sole: Oil Prices Will Rise ‘At a Certain Point’
- FB US : Facebook Plans to Embed WhatsApp in Its Social Network: Bild
- LEG GY : LEG Immobilien does not see itself as takeover candidate - Boersen-Zeitung
- NOVOB DC : Novo Nordisk to Seek IPO of NNIT A/S Unit
- PMI IM : Pop. Milano May Play Role in Consolidation If Opportunities
- RLIA SM : Hispania considers raising offer for Realia - El Confidencial
- RBI AV : Raiffeisen to Post Loss of Almost EU500m, Der Standard Reports
- ROG VX : Roche’s Lucentis Wins Expanded FDA Approval to Treat DR in DME
- SAN SM : Santander Says 6M Shares Transferred to Paloma O’Shea
- SCRG SW : Sunrise Debt Load Cut by 41% After IPO, CEO Tells SZ
- SCMN VX : Swisscom CEO Tells F&W There’s No Reason to Increase Dividend
- SIK NA : Sika Holder SWH Asks Takeover Board to Rule on Saint-Gobain Bid
- VK FP : *VALLOUREC MAY BECOME VULNERABLE TO M&A APPROACH: CREDIT SUISSE
- VOW3 GY : Volkswagen Won’t Close Plants to Save Costs: Automobilwoche
- VOLVB SS : Cevian Becomes Largest Volvo Shareholder, Dagens Industri Says

>>> Brokers Upgrades & Downgrades - 9th of February 2015

>>> Up
*BIM RAISED TO OVERWEIGHT VS EQUALWEIGHT AT BARCLAYS
*BOUYGUES RAISED TO OVERWEIGHT VS EQUALWEIGHT AT BARCLAYS
*CARREFOUR RAISED TO OUTPERFORM VS NEUTRAL AT EXANE
*DELHAIZE RAISED TO NEUTRAL VS UNDERPERFORM AT EXANE
*JULIUS BAER RAISED TO BUY VS NEUTRAL AT UBS
*KAZ MINERALS RAISED TO NEUTRAL VS UNDERPERFORM AT CREDIT SUISSE
*ORANGE RAISED TO OVERWEIGHT VS EQUALWEIGHT AT BARCLAYS
*PGE RAISED TO NEUTRAL VS UNDERWEIGHT AT JPMORGAN
*STATOIL RAISED TO OVERWEIGHT VS EQUALWEIGHT AT MORGAN STANLEY

>>> Down
*BNP PARIBAS CUT TO UNDERWEIGHT AT JPMORGAN
*CASINO CUT TO UNDERPERFORM VS NEUTRAL AT EXANE
*DASSAULT SYSTEMES CUT TO SELL VS NEUTRAL AT UBS
*DANSKE BANK CUT TO NEUTRAL VS BUY AT CITI
*GEA GROUP CUT TO HOLD VS BUY AT BERENBERG
*HALMA CUT TO UNDERWEIGHT AT JPMORGAN
*HELVETIA CUT TO HOLD VS BUY AT BERENBERG
*HEXAGON CUT TO NEUTRAL AT JPMORGAN
*MAYR-MELNHOF KARTON CUT TO HOLD VS BUY AT BERENBERG
*MIGROS CUT TO EQUALWEIGHT VS OVERWEIGHT AT BARCLAYS
*NORDEX CUT TO HOLD VS BUY AT DEUTSCHE BANK
*RALLYE CUT TO UNDERPERFORM VS OUTPERFORM AT EXANE
*ROCHE CUT TO NEUTRAL VS BUY AT CITI
*STATOIL CUT TO SELL VS HOLD AT DNB
*SUBSEA 7 CUT TO SELL VS HOLD AT BERENBERG
*TATE & LYLE CUT TO NEUTRAL VS BUY AT CITI
*TAURON CUT TO NEUTRAL VS OVERWEIGHT AT JPMORGAN
*TECHNIP CUT TO SELL VS HOLD AT BERENBERG
*TIETO CUT TO NEUTRAL VS BUY AT UBS

>>> PT Change


>>> Initiation
*CGG RATED NEW HOLD AT BERENBERG, PT EU5.40
*ESSENTRA RATED NEW BUY AT JEFFERIES, PT 990P
*NUMERICABLE RESUMED EQUALWEIGHT AT BARCLAYS, PT EU47
*PGS RATED NEW BUY AT BERENBERG, PT NOK56
*TGS RATED NEW HOLD AT BERENBERG, PT NOK180
*UBM REINSTATED OUTPERFORM AT CREDIT SUISSE, PT 630P
*WERELDHAVE REINSTATED HOLD AT ING, WAS RESTRICTED; PT EU63.10

>>> Call
>> Stock
*NOVARTIS ADDED TO CITI EU FOCUS LIST
*NOVO NORDISK, ROCHE REMOVED FROM CITI EU FOCUS LIST
>> Sector
*GLOBAL AUTOS SECTOR CUT TO NEUTRAL VS OVERWEIGHT: JPMORGAN
>> Country
*DAX CUT TO NEUTRAL VS OVERWEIGHT: JPMORGAN
*ITALY, SPAIN STOCKS RAISED TO OVERWEIGHT AT JPMORGAN

>>> Asian Update

Asian Mid-session Update: China imports down sharply; Greece PM Tsipras hardens stance

***Economic Data***
- (CN) CHINA JAN TRADE BALANCE: $60.0B V $48.9BE (record high surplus); Exports Y/Y: -3.3% v 9.7% prior; Imports Y/Y: -19.9% (biggest decline since May 2009) v -2.4% prior
- (AU) AUSTRALIA JAN ANZ JOB ADS M/M: 1.3% V 1.8% PRIOR (8th consecutive increase)
- (JP) JAPAN DEC CURRENT ACCOUNT: ¥187B V ¥356BE; ADJ CURRENT ACCOUNT: ¥977B V ¥941BE; TRADE BALANCE: -¥396B V -¥472BE
- (JP) JAPAN JAN BANK LENDING (INCL TRUSTS): 2.5% V 2.6% PRIOR; BANK LENDING (EX- TRUSTS): 2.6% V 2.8%E

***Index Snapshot (as of 03:30 GMT)***
- Nikkei225 +0.4%, S&P/ASX -0.7%, Kospi -0.2%, Shanghai Composite +0.3%, Hang Seng -0.4%, Mar S&P500 -0.4% at 2,044

***Commodities/Fixed Income***
- Apr gold +0.2% at $1,236, Mar crude oil +1.3% at $52.34/brl
- (JP) BOJ offers to buy ¥70B in JGBs with maturity less than 1-yr, ¥400B in 5-10yr JGBs and ¥2.5T in T-bills

***Market Focal Points/FX***
- After last week's surprising contraction in China official manufacturing PMI - the first in 2 years - latest trade figures released over the weekend are showing few signs of improvement. While the headline trade balance saw a record-high surplus, it was primarily the result of the biggest y/y decline in imports in over 5 years, as exports also showed a marginal drop. Shipments to US were up 4.7%, but imports to Europe fell 4.6% and to Japan by a whopping 20%. Slump in demand for raw materials was still the culprit on the imports side, as iron ore arrivals fell 9.5% in volume and 50% in value. Likewise, crude oil imports were down 8% in volume and 42% in value. AUD saw moderate impact from the data, falling over 40pips in early trade below $0.7750. Analysts also speculated on the likelihood of more PBoC easing in the trade data aftermath - BoCom economist anticipates 1-2 more RRR cuts over 2015, while ANZ said trade numbers add to the case that domestic demand remains sluggish.

- Australia PM Abbott survived a leadership challenge from his party but only by a narrow 61 to 39 vote margin. Abbott, who pushed the vote forward by a day, remarked the economy is strong as the govt would focus on improving livelihoods. Conspicuously, he dodged media questions over whether his party leadership was contingent upon any policy changes or given a deadline to improve the standing of the ruling Liberal party. Analyst at RBC said Abbott's authority has still been weakened considerably, as the spill motion defeat does not end uncertainty. Separately, ANZ job ads marked an 8th consecutive month of sequential improvement, potentially boding well for the official employment data due out later this week.

- Effectiveness of weaker Yen in restoring balance of payments remains questionable, as Japan's current account surplus shrank for the 4th straight year to its smallest level on record in 2014. Analysts noted persistent trade deficit contributing to the decline, but also forecasted recovery in 2015 due to much cheaper oil prices. Likewise, BOJ's Morimoto said it was more critical to watch broader trends of prices rather than scrutinize CPI levels, but also added the CPI measurement would begin to rise as base effect of lower oil dissipates. USD/JPY pared some of the steep advance seen in the wake of the much stronger than expected non-farm payrolls on Friday, falling about 40pips below 118.90.

- Greek PM Tsipras took a notably more hard line in a weekend speech, stating Greece does not want a debt extension but rather a "bridge program" to get out from the yoke of austerity. In the mean time, Tsipras reiterated plans to return minimum wage to €750/mo from €580/mo by 2016, reopen state media, go after tax dodgers, suspend fire sale of state assets, and grant relief to elderly pensioners. Furthermore, Tsipras renewed talks of going after WW2 "reparations" from Germany, which the party has previously estimated to be over €160B. Syriza's Fin Min Varoufakis was just as blunt, warning the euro zone would likely collapse if Greece was forced out of the union, as borrower states discover "it is impossible to remain inside the straitjacket of austerity." To that end, latest polls from Spain saw support for the anti-austerity Podemos party at 27.7%, well ahead of the ruling centre-right People's Party and the Socialists' at 20.9% and 18.3% respectively.

***Equities***
US markets:
- MSI: Reportedly Motorola Solutions has hired advisors to consider a possible sale of the company - financial press

Notable movers by sector:
- Consumer Discretionary: Ansell ANN.AU +4.5% (H1 results)
- Consumer staples: Want Want China Holdings 151.HK -4.1% (FY14 guidance)
- Financials: Aveo Group AOG.AU -3.1% (acquisition); Poly Real Estate 600048.CN -1.3% (Jan sales results)
- Materials: Energy Resources of Australia ERA.AU -1.8% (FY14 results); China Fiberglass 600176.CN +2.6%, Beijing New Building Material 000786.CN +2.1% (China National Building Material Company receives approval for mixed-ownership reform trial)
- Industrials: Worley Parsons WOR.AU +1.8% (enters contract); Isuzu Motors 7202.JP +3.3% (9-month results); Kubota Corp 6326.JP +4.9% (9-month results)
- Technology: Asahi Glass 5201.JP +7.1% (FY14 results); Rakuten Inc 4755.JP -1.5% (speculation on FY14 results)
- Telecom: NTT 9432.JP +4.6% (9-month results)

>>> Greece PM Tsipras: Plan to honor all election promises; Not looking for debt

Greece PM Tsipras: Plan to honor all election promises; Not looking for debt extension but a "bridge program"; Greece has moral obligations to claim war reparations from Germany - financial press 
- Optimistic about reaching a new funding agreement with creditors,
- Says: "Greece wants to service its debt. If our peers want so too, they are invited to come to the table of dialogue so we can discuss how to make it viable... The new government is not justified in asking for an extension of the bailout. The Greek people gave us a mandate to cancel the disastrous austerity programme... We want a new deal, a bridge programme which would give us the fiscal space that a sincere negotiation requires." 
- Report noting Syriza party's position is that Germany owes around €162B to Greece in WW2 reparations for 4 years of occupation and a war-time loan to the Third Reich.
- Will not see any further reduction of pensions.
- Suspending "fire sale" of state assets; Government would examine investor proposals but would not "sell out" the country's natural and mineral wealth.
- To reinstate Greek State TV and Radio.
- Looking to reduce some expenses in the public sector and also continue battle against tax evasion.
- To introduce rules that protect workers from mass layoffs.
- Confirms plans to raise minimum wage to €750/mo from €580/mo by 2016. 

(ZH) Alan Greenspan: "Greece Will Leave The Eurozone" And "There Is No Way That

Every two weeks or so on average, we ask ourselves: why do central bankers only tell the truth after they have quit their post (rhetorically, of course). The last time it was the BOE's former head Mervyn King, who said that "more monetary stimulus will not help the world economy return to strong growth." This took place long after the BOE, under his watch, unleashed its own QE back in the early days of the great financial crisis. Another example: back in November, the Fed's own former head, the person who single-handedly unleashed the great moderation and led to the current terminal financial state where the global economy bounces from one bubble to another even bigger bubble or else everything implodes, Alan Greenspan said "Gold Is Currency; No Fiat Currency, Including the Dollar, Can Match It."

It was another statement by the maestro that has caught the world's attention, this time opining on Greece, when he told BBC Radio's the World This Weekend that "Greece will leave the Eurozone. I don't see that it helps Greece to be in the Euro, and I certainly don't see that it helps the rest of the Eurozone. It's just a matter of time before everyone recognizes that parting is the best strategy.... At this stage I don't see any people who are willing to put up the funds for Greece... All the cards are being held by the members of the Eurozone." Naturally, this is just what anyone with a functioning frontal lobe (which immediatley excludes all tenured economists) would have said 5 years ago.

And it wasn't just Greece that the Maestro decided to throw under the revisionist history bus: he took a stabe at the Eurozone itself. "The problem is that there there is no way that I can conceive of the euro of continuing, unless and until all of the members of eurozone become politically integrated - actually even just fiscally integrated won't do it."

"Take a look at the Maastricht treaty. There is no indication of any conceivable way of unwinding the Euro and that was done purposefully but that' doesn't mean that the markets won't pull them apart and indeed I would suspect that what's allowing the big surge to go on, or will go on, in ECB expansion is what Draghi said originally when he came up with the so-called OMT, which meant lending to anybody for any occasion. If that doesn't work: if numbers start to borrow under the OMT facility and something goes wrong, what happens then? And if you're talking about a crisis - that is a crisis. Greece leaving the Eurozone is miniscule compared to that as an issue."

His conclusion: "short of a political Union, I find it very difficult to foresee the Euro holding together in its current form. It probably could get a union of Germany, Austria, Luxembourg, the Netherlands, Finland for example. But not south Europe."

With anti-Europe, anti-austerity, anti-Merkel political parties storming to the forefront in most peripheral European nations, Greenspan is right for once.

Which is not to say he said anything that these pages haven't covered extensively in the past. Recall this exchange at the April 2013 ECB meeting:

Scott Solano, DPA: Mr Draghi, I've got a couple of question from the viewers at Zero Hedge, and one of them goes like this: say the situation in Greece or Spain deteriorates even further, and they want to or are forced to step out of the Eurozone, is there a plan in place so that the markets don't basically collapse? Is there some kind of structural system, structural safety net, especially in the area of derivatives? And the second questions is: you spoke earlier about the Emergency Liquidity Assistance, and what would have happened to the ELA in Cyprus, the approximately €10 billion, if the country had decided to leave the Eurozone?
Mario Draghi, ECB: Well you really are asking questions that are so hypothetical that I don't have an answer to them. Well, I may have a partial answer. These questions are formulated by people who vastly underestimate what the Euro means for the Europeans, for the Euro area. They vastly underestimate the amount of political capital that has been invested in the Euro. And so they keep on asking questions like: "If the Euro breaks down, and if a country leaves the Euro, it's not like a sliding door. It's a very important thing. It's a project in the European Union. That's why you have a very hard time asking people like me "what would happened if." No Plan B.

So much for the European "Union" then? Worse, it looks like Europe's political capital just ran out and Zero Hedge, even if it is filled with people "vastly underestimate the amount of political capital that has been invested in the Euro," can't wait to ask Mario Draghi the logical follow-up question in an upcoming ECB press conference following the Grexit: "what happened?"

WSJ Dish Isn’t Off the Menu for Verizon


Dish Isn’t Off the Menu for Verizon
Bid Could Come Even Amid Buyback Plans, Paying Off Debt

Verizon Communications is narrowing its gaze. But investors shouldn’t assume that pushes Dish Network out of the picture.

The wireless giant said late Thursday it was selling wireline assets in three states to Frontier Communications for $10.54 billion and leasing rights to its cell towers to American Tower for $5 billion. Verizon said it would use $5 billion of the after-tax proceeds to buy back shares and devote the rest, roughly $6.8 billion, to paying off debt related to its spectrum purchases in the government’s recent auction.

The announcement sent Dish shares down slightly on Friday. Verizon is seen as a potential buyer of the satellite-TV operator or its wireless airwaves. Some investors likely interpreted the moves as signs that this won’t happen soon. But the market may be reading them wrong.

Well before the auction, Verizon was paying off debt related to its acquisition of Vodafone ’s stake in Verizon Wireless. The company’s $10.4 billion in auction spending would have pushed its leverage ratio to 2.5 times 2016 earnings before interest, taxes, depreciation and amortization, versus 2.2 times before the auction, according to UBS . Verizon will also likely need to be prepared to buy spectrum in the government’s next auction, slated for next year.

As for the buybacks, they will offset the dilution that would have occurred as a result of the asset sale, according to New Street Research. Verizon also has reason to show equity investors a little love. As of the end of January, before the publication of early news reports on the company’s plans to sell the assets, its stock had fallen nearly 5% versus a year earlier amid mounting wireless competition.

Moreover, this week’s two deals were explicitly aimed at sharpening Verizon’s focus on wireless and allocating resources in that direction. To further bolster its competitive position in that business, the carrier likely still needs to buy more spectrum to bring its capacity per subscriber in line with rivals. And Dish controls one of the largest unused blocks.

Granted, there are ways Verizon could make its network more efficient. It will also have a chance to buy spectrum in the 2016 auction and might even be able to buy it from another carrier such as Sprint . But all such efforts will rely on accommodative capital markets to help fund them. Verizon’s moves don’t mean Dish is off the table.

(ZH) Eurogroup Gives Greece 10 Day Ultimatum: Apply For Bailout Or Grexit

Eurogroup Gives Greece 10 Day Ultimatum: Apply For Bailout Or Grexit

{http://www.zerohedge.com/news/2015-02-06/eurogroup-gives-greece-10-day-ultimatum}

Bank Run Bond Central Banks Creditors default European Union Eurozone Greece None ratings Reuters

Update: And now this: "Moody's places Greece's Caa1 government bond rating on review for downgrade"

The key driver for the review for downgrade is the high level of uncertainty over the outcome of the negotiations between Greece and its official creditors over the terms of Greece's support programmer. The outcome could potentially have negative implications for Greece's ability to meet its funding and liquidity needs and for the probability of default on marketable securities. Moody's government bond rating applies to marketable securities only.
Moody's would consider downgrading Greece's Caa1 government bond ratings were it to conclude, as a result of the review, that (1) an agreement with official creditors is not likely to be reached in time to enable the government to repay its creditors who hold debt on commercial terms; and (2) that the likelihood of a significant deceleration or even reversal in the implementation of the adjustment programmer would further hinder Greece's growth prospects.
Surely Greece must be delighted to be part of the European "Union" at this point.

* * *

Europe has an unpleasant habit of dropping tape bombs at the most inopportune of times, like at 3pm or later a Friday. And while on Wednesday it was the ECB yanking repoable Greek collateral for local banks, today it was first S&P, which downgraded Greece 5 months after upgrading it, and moments ago it was none other than the Cyprus bail-in man himself, the Eurogroup's Dijsselbloem, aka Diesel "Blueprint" BOOM, who just have Greece a 10 day ultimatum to fall into place or risk a terminal bank run and capital controls (both hinted at earlier by the post-DOJ settlement political "rating agency')

GREECE MUST APPLY FOR BAILOUT EXTENSION ON FEB 16 AT THE LATEST TO KEEP EURO ZONE FINANCIAL BACKING -EUROGROUP CHAIRMAN DIJSSELBLOEM
This means that Greece now has 10 days, or until the Monday after next to decide whether it will stay in the Eurozone or Grexit. More from Reuters:

[Yanis Varoufakis] made clear that the new government, which came to power on a wave of anti-austerity anger in elections last month, now wanted to forego remaining bailout money that had austerity strings attached:
"Greece is not asking for the remaining tranches of the current bailout programme - except the 1.9 billion euros that the ECB and the EU member states' central banks must return."
Euro zone finance ministers will discuss how to proceed with financial support for Athens at a special session next Wednesday ahead of the first summit of EU leaders with the new Greek prime minister, Alexis Tsipras, the following day.
However, the chairman of the finance ministers said the following meeting of the Eurogroup on Feb. 16 would be Greece's last chance to apply for a bailout extension because some euro zone countries would need to consult their parliaments.
"Time will become very short if they (Greece) don't ask for an extension (by then)," said Jeroen Dijsselbloem.
The current bailout for Greece expires on Feb 28. Without it the country will not get financing or debt relief from its lenders and has little hope of financing itself in the markets.
* * *
Participants said no progress was made at a preparatory meeting of senior finance officials in Brussels on Thursday because Greece and its euro zone partners were so far apart.
"It was Greece against all others, basically one versus 18," one official said.
Almost sounds like a reverse veto out of the European "Union".

At the end of the day what D-Boom has effectively said is this:


Which is precisely the thing Greece, whose negotiating position already has been crushed with the threat of a wholesale bank run, did not want to hear especially now that the government really has no choice: either it complies with European demands, and can sign its resignation right after having flopped epically, or it pushes on to find out just how badly Europe is bluffing.

Suddenly next week's emergency Eurogroup meeting on Wednesday is looking quite fascinating. We hope the caterers have bulletproof jackets.

And with that we give you... EUROPE!