rather than pick out individual stocks to trade, it can often be worthwhile to trade the indices themselves, especially in times of high volatility.

for those so inclined, i attach below charts for FTSE and FTSE 250, though one might equally be tempted to trade Dow or S&P, which is significantly broader in its coverage, or even NASDAQ

for ease of reading, i have attached 1 year and 3 month charts in each instance

stick to th imf - lol
end of euro easily in sight.....

Hedge funds are taking on the powerful International Monetary Fund over its plan to slash Greece's towering debt burden as time runs out on the talks that could sway the future of Europe's single currency.

The funds have built up such a powerful positions in Greek bonds that they could derail Europe's tactic of getting banks and other bondholders to share the burden of reducing the country's debt on a voluntary basis.

Bondholders need to give up some 100 billion euros ($130 billion) of their investment in the planned bond swap, drawn up in October, but many hedge funds plan to stay out of it.

They either prefer letting the country go under, which would trigger the credit insurance they have bought, or hope to get paid out in full if enough others sign up. That puts them in direct conflict with the IMF, which wants to force Greece's cost of financing down to an affordable level.

"The play is purely 'they'll be forced to pay me'. Greece will want to avoid a wider default. so if it managed to restructure 80 percent of the deal and pay the rest that's still better," said Gabriel Sterne at securities firm Exotix.

Without a deal, the IMF, the European Union and the European Central Bank -- the so-called troika of official lenders -- will not pay out a second bail-out package Greece needs to survive.

EU Economic and Monetary Affairs Commissioner Olli Rehn said on Tuesday that negotiators were "about to finalize shortly". But time is running out.

Without the money, the country is likely to default around March 20, when a 14.5 billion euro bond falls due. A deal needs to come well before that, because the paperwork alone takes at least six weeks.

On Monday German Chancellor Angela Merkel and French President Nicolas Sarkozy, the euro zone's two leading powers, insisted private-sector bondholders must share in reducing Greece's debt burden.

But the hedge funds are resisting, unlike European banks holding Greek bonds, who have been pressured to agree by politicians.

There are other barriers too.

Banks represented by the Institute of International Finance (IIF) agreed last year to write off the notional value of their Greek bondholdings by 50 percent, a deal designed to reduce Greece's debt ratio to 120 percent of its Gross Domestic Product by 2020.

But they have been unable to agree on the fine print of the refinancing - the coupon, maturity and the credit guarantees. These will determine the bonds' Net Present Value (NPV), and thereby the actual hit the banks need to take.

DANGEROUS GAME

There are 206 billion euros of Greek government bonds in private sector hands -- banks, institutional investors, and hedge funds -- and it is likely that hedge funds have been building up their positions in the past months.

They have been snapping up chunks of Greece's next big maturing bond, the March 20, for around 40 cents on the euro. Yields on the bond began to rise sharply in September and it was priced at 41-45.5 cents in the euro on Tuesday.

The bet is that other creditors will sign up to a voluntary deal, and that Greece will pay out in full the hedge funds who do not to avoid a default and trigger pay-out of Credit Default Swaps, a form of credit protection.

"Time is on your side, since investors, until now, have received full repayment on Greek debt obligations," said Kristian Flyvholm at asset manager Jyske Invest.

Sterne, whose firm Exotix specializes in illiquid bond investing and counts hedge funds among its clients, said the bet had already worked for some funds. Greece paid out smaller issues maturing in December and January.

But it is a dangerous strategy.

Europe is increasingly likely to force investors to take a cut on their Greek bondholdings if they do not voluntarily sign up to the deal, Reuters reported in November.

Also, Greece could change its laws, which for the largest part do not contain the so-called Collective Action Clauses (CAC) that force dissenting minorities into line when new conditions are imposed on outstanding bonds.

It is unclear how large hedge fund holdings of Greek debt are. About 20 to 25 percent of Greece's creditors were unidentified, and half of these could be hedge funds, one source close to the creditors told Reuters.

Whatever the scale of the hedge fund threat, the proportion of creditors seen likely to sign up for their haircut has slipped. The hopes are now 60 percent can be convinced by the end of the month, the same source said, far less than the 90 percent take-up the IIF was targeting in June.

At that low a level, it is unclear whether the troika of international lenders will consider the uptake big enough to warrant a pay-out of the second bail-out package.

IIF Managing Director Charles Dallara is due in Athens later this week for troika negotiations, and technical staff from the IMF are expected in the Greek capital from January 16.

IMF'S DOUBTS

The IMF itself seemed to throw doubt on the debt swap in an internal memo cited by German magazine Der Spiegel on Saturday.

According to the report, the IMF believes Greece will still be sinking under the burden of its debts even after a deal is struck, and that further measures may need to be taken if the country is to avoid default. Markets fear this could lead to reopening the October agreement.

In a leaked paper in October, the IMF already acknowledged that its the assumptions may need to be reassessed. That would mean lower interest rate payments by Greece, and an even more bitter hit for the banks.

The NPV loss for creditors could be near 65-70 percent and the coupon around 4.5 percent, bankers have indicated. Reuters reported in November Greece wanted a 75 percent NPV cut, a far higher number than the low 60s the banks had in mind.

($1 = 0.7851 euros)

sorry meant - stick it to the imf!!!!

good to see the uk is now regarded as a safe haven and effectively being paid to look after money :-))) (germany also!)

US unemployment claims 399k v consensus 373k previous 375k

Prelim UoM Consumer Sentiment 74 v consensus 71.2 previous 69.9

Looks like S&P will be downgrading some Eurozone countries imminently - http://uk.reuters.com/article/2012/01/13/uk-eurozone-sp-idUKTRE80C11V20120113

Cheers Jon - I wondered what was going on!

No probs :) Looks grim today but can hardly be unexpected.

Apparently France and Austria have just been downgraded by one notch each (to AA+).

Plenty of shares uncrossed well above the last trades.

Very true Skinny especially BARC, LLOY and RBS,...........I'm pleased to say :>))))
Have a good weekend.

There goes that double click again!

.

france / austria - about time been waiting for a few weeks for that now - kicked off a while back s&p

fitch what do they know lol

PARIS—Fitch Ratings doesn't see France as a country in crisis and won't downgrade it from triple-A so long as its debt isn't pushed up sharply by shocks related to the euro-zone debt crisis, the head of global sovereign ratings at the firm said Thursday.

"France is not a crisis country," David Riley said at a conference in Paris, one of several Fitch is conducting this week in European cities.

France's rating is in sharp focus at present, after Standard & Poor's Ratings Services put the country—along with the bulk of the euro zone—on review for a downgrade on Dec 5. The ratings agency said at the time that it would make a decision as soon as possible after a European Union December summit in Brussels and said it could lower France's rating by as much as two notches, a warning that has left investors on tenterhooks for weeks now. Moody's Investors Service is expected to announce soon the results of its monitoring of the stable outlook on France's triple-A rating.

Mr. Riley said France will keep its triple-A rating—Fitch recently lowered the country's outlook to negative—if its debt stabilizes around 90% of gross domestic product and then begins declining in the time around 2013 to 2014. That is the rating agency's baseline scenario.

However, France wouldn't be in line with triple-A status if its liabilities to the euro-zone bailout are all called on, there is low growth and the government has to provide some support to the financial sector.

Fitch will wait to see the economic data this year and the policies of the next government that emerges from elections in the Spring, Mr. Riley said. And for the moment, it doesn't expect the government to intervene to prop up French banks.

"We don't expect the government to need to provide direct or capital support to banks, but if there is an intensification of the crisis there are exposures that do pose a source of risk," Mr. Riley said.

The analyst also repeated his call for the European Central Bank to step up its involvement in resolving the crisis, especially as Italy has been caught in the market's spotlights.

"Italy also needs a credible financial firewall and ultimately that requires a much more active, explicit action from the ECB," he said. "We believe ECB can expand operations without threatening its inflation target."

I went to a squash game, which probably didn't do my heart any good, came home to find the following in my e-mail inbox, which just about stopped my heart!!!

"NEW YORK

US stocks showed heavy losses in late morning trade, investors fretting over report of potential credit downgrades of several Eurozone countries by Standard & Poor"s. This offset better-than-expected consumer sentiment data.

Approaching the close in London, the Dow Jones Industrial Average was down 900 points at 12,381, the S&P500 dipped 9 points at 1,286 and Nasdaq lost 17 points at 2,707."

900 points!!!!!! You have got to be kidding?!!!

hc yep dont know where they got the 900 from - maybe whoever wrote that should go to spec savers! as should the captain of this iti cruise ship lol!! http://www.bbc.co.uk/news/world-europe-16558910 gunnels under - i knew a captain of a ship once - he was captain of the 'eads!!! LOL

iti cruise ship amusingly is in fact following the iti economy - on the rocks and sinking, on its side first though then....... down to davy jones locker!!

however i did not read the link to the iti ship first - wish i did - this is not funny at all

3 have died ignore post 7742 please - this is serious didnt realise people had passed away - that is tragic

Whilst tragic, it was inevitable. Ironically, the fact the sinking was probably caused by hitting rocks meant proximity to the coast and rescue services. Sooner or later there will be a cruise ship disaster which will result in the death of hundreds.

anyway, dow finished down <50, so it'll be interesting to see how london reacts on monday ..... i could argue "very little" after the knee-jerk first-off, as this s&p news was scarcely unexpected

German ZEW Economic Sentiment (Survey of about 350 German institutional investors and analysts which asks respondents to rate the relative 6-month economic outlook for Germany;)

-21.6 v consensus -49.7 previous -53.8.

DOW futures currently +96, so they don't seem too bothered about the EU zone downgrades.