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Mar 19, 2013

Gerald Celente - Alex Jones Radio on March 18, 2013. Gerald Celente discusess the looting of Cypriot bank accounts...

Cyprus Looting is Only The Beginning for Global Elite. Alex JOnes invites Gerald Celente to discuss the looting of Cypriot bank accounts, and what the future holds for Italy, which may be the next nation to be similarly plundered.

Official Gerald Celente channels: "Gcelente" & "TrendsJournal".

©2012 TrendsResearchInstitute. Gerald Celente™.

NYT | Today's Economist March 19, 2013: Politics of the 14th Amendment and the Debt Limit; by Bruce Bartlett

Today's Economist

The Politics of the 14th Amendment and the Debt Limit

The reasoning behind the 14th Amendment provision that addressed Civil War debt should be applied today.

To Reassure Investors, Fed Stresses It Will Not End Stimulus

Concerns about the effects of the Federal Reserve’s stimulus policy can dilute the policy’s impact by causing investors to doubt that rates will remain low.

White House Urged to Fire a Housing Regulator

Edward J. DeMarco, acting director of the Federal Housing Finance Agency, has been at odds with the White House over a proposal to reduce the principal on underwater mortgages.

Cyprus Rejects Bank Deposit Tax, Scuttling Bailout Deal: NYT | Global Update March 19, 2013

The New York Times International Herald Tribune
March 19, 2013
Compiled 20:45 GMT

Global Update


Cyprus Rejects Bank Deposit Tax, Scuttling Bailout Deal

President Nicos Anastasiades of Cyprus was set to return to the negotiating table with lenders after lawmakers rejected a package that had sought to tax depositors to help pay for a bailout.

Many Israelis Wary of Obama, but Are Ready to Listen

During a visit to Israel, President Obama will confront a public still smarting from perceived slights in years past.

British Newspapers Challenge New Press Rules

An array of newspapers protested on Tuesday against the attempt to impose stricter curbs on this country's scoop-driven dailies, calling potential fines a "crippling burden."

Op-Ed Contributor

International Justice and Diplomacy

Peace and justice are two sides of the same coin. The road to peace should be seen as running via justice.

Video: Bringing Back the Dead

A Stanford professor discusses the science and ethics of resurrecting extinct species.

Scores Killed on Eve of Iraq Invasion's 10th Anniversary

Eighteen bombs and an assassination on Tuesday served as a reminder of the violence that regularly afflicts Iraq a decade after the American-led invasion.
Baghdad Journal

10 Years Later, an Anniversary Many Iraqis Would Prefer to Ignore

As historians, pundits and officials elsewhere mark 10 years since the invasion of Iraq, Iraqis are more attuned to the bombings, protests and political strife of the present.

Syrian Rebels Pick U.S. Citizen to Lead Interim Government

Coalition representatives meeting in Istanbul chose Ghassan Hitto, 50, who emigrated from Syria and until recently lived in Texas, to head a planned interim government.

U.S. Said to Look Into Microsoft Bribery Allegations

The S.E.C. and Justice Department are investigating allegations involving the company in China, Italy and Romania, a person briefed on the matter said.

Supreme Court Eases Import and Sale of Copyrighted Products

The court ruled that imported copyrighted goods are subject to the same rules as goods bought in the United States: owners of particular copies can do what they like with them.

U.S. Treasury Secretary and Chinese President Meet

A meeting between Secretary Jacob J. Lew and Xi Jinping was the first high-level encounter between U.S. and Chinese officials in Mr. Xi's presidency.

Electronic Arts Chief Resigns

John Riccitiello, who became chief executive in 2007, fell victim to internal errors and falling sales of traditional video games as consumer tastes changed.
Bits Blog

Samsung Speaks Up First About a Smart Watch

Samsung Electronics has made it clear that it is making a wristwatch, even as Apple is rumored to be working on a smart watch itself. It is a rare for a big tech company to voluntarily reveal a future product.

Unwanted Electronic Gear Rising in Toxic Piles

Advances in flat-screen technology have made older monitors and televisions obsolete, decimating demand for tube glass used in them and creating vast stockpiles of useless material.

Power of Papacy Meets the Sway of Soccer

Pope Francis is a well-established fan of soccer, a sport that has a long history with religious institutions.

Ranked No. 1, Lewis Keeps Expectations in Check

Stacy Lewis became the seventh woman to ascend to No. 1 in the world rankings and the second American. Pressures aside, Lewis said she planned to continue to have fun.

United States Facing Two Qualifying Games With Thin Roster

Coach Jurgen Klinsmann has had to piece together a roster light on experience for two World Cup qualifiers after his team was hit hard by injuries.

Activists at Colleges Network to Fight Sexual Assault

Campaigns against sexual assault on campuses have connected people who, while sometimes seeking advice elsewhere, have learned largely from one another.

7 Marines Killed in Nevada Training Exercise

A mortar explosion during a training exercise at a weapons depot used to train troops for Afghanistan left at least seven Marines dead and several injured, the military said Tuesday.

In South Carolina Primary, Some Good Theater

Voting in Tuesday's Congressional primary serves as a test to see if former governor Mark Sanford can make his way back into politics.
Op-Ed Columnist

The Progressive Shift

Liberalism in the United States seems to have moved to believing that government is the first and final engine of all progress.
Op-Ed Contributor

Does China Have a Foreign Policy?

Chinese leaders use strong rhetoric and fan nationalist flames to compensate for the absence of a clear, well-developed strategy for participating in the international order.

Stock indexes fall with Cyprus in mind; by Kate Gibson, MarketWatch: Wall Street at Close Report March 19, 2013.

By Kate Gibson, MarketWatch 
NEW YORK (MarketWatch)U.S. stock indexes finished mixed on Tuesday, with the S&P 500 extending its longest losing streak since late December, as investors considered developments in Cyprus that placed a financial bailout at risk. 

“We would legitimately expect brushfires to emerge out of Europe on occasion in 2013; the difference this year is we wouldn’t expect prolonged crisis,” said Jim Russell, senior equity strategist for U.S. Bank Wealth Management.

Bloomberg News/Landov Enlarge Image
A stream of reports on Cyprus’s controversial bank bailout made for choppy markets Tuesday.
On Tuesday, the Dow Jones Industrial Average fell as much as 69 points and climbed up to 62, and ended up 3.76 points at 14,455.82, with Caterpillar Inc. CAT -1.22%  pacing losses that included 14 of its 30 components. 

Down for a third session, its longest losing run this year, the S&P 500 shed 3.76 points, or 0.2%, to 1,548.34, with energy the worst performing and consumer staples the best of the 10 major sectors. 

The Nasdaq Composite index COMP -0.26%  fell 8.5 points, or 0.3%, to 3,229.09. 

For every two stocks rising three fell on the New York Stock Exchange, where 731 million shares traded as of 1:50 p.m. Eastern. 

Composite volume surpassed 3.7 billion 

Reports about a controversial rescue plan in Cyprus, where banks are closed until Thursday, dominated much of the choppy trading session. Follow streaming coverage of Cyprus bank bailout.
The parliament in Cyprus rejected on Tuesday a proposed tax on bank deposits. The plan, required for by international lenders under the terms of a roughly $13 billion bailout, placed a one-time tax on depositors.

Legislators rejected an updated version of the bill, which avoided taxing the smallest depositors but still slapped a 6.75% tax on those with over 20,000 euros ($26,000) on deposit. Large depositors, or those with over 100,000 euros, faced a 9.9% tax rate.

Cyprus parliament rejects tax
Cyprus's parliament Tuesday rejected a controversial bank deposit levy—a precondition for receiving a €10 billion bailout—effectively tearing up the four-day old loan deal the country had negotiated with European and international creditors that it needed to stave off default and a looming meltdown in its financial sector. Matina Stevis reports.

“This does smack of breaking some sort of emotional pact that depositors have with their banking system, if overnight they can swoop in and swipe deposits in the name of needing tax revenue. You’ve just changed the terms of the deal. And the last thing the European banking system needs is a flight of trust,” said Russell. 

But simple profit-taking was also likely at play. 

“The market was poised for a breather. We’ve been awfully strong on a year-to-date basis,” he added, referring to the 8.6% rise by the S&P 500 index SPX -0.24%

That gain, which had the Dow Jones Industrial Average DJIA +0.03%   rising to a record close last week, is attributed by many, including Russell, to the ongoing bond purchases by the Federal Reserve, which on Wednesday concludes a two-day policy-setting session. 

“At some point the Fed is going to take its foot off the accelerator, and we may get a preview tomorrow. But we think it will be at the next meeting that comes into sharper focus,” Russell said.

Fed ahead 

The Federal Open Market Committee on Tuesday started a two-day gathering after agreeing in December to tie record-low interest rates to the labor market and inflation. 

“Don’t expect the Fed to introduce any changes, they’ll keep their current programs in place, and there won’t be any indication of when they are going to start withdrawing quantitative easing,” said Gus Faucher, senior economist at PNC Financial Group. 

“There’s a little concern, but the general consensus is Cyprus is not going to be a major factor for the U.S. economy going forward,” he added of a controversial proposal to tax bank deposits in Cyprus. 

Ahead of the open, the Commerce Department reported builders broke ground on 917,000 homes on an annualized basis, with housing starts up 0.8% in February, slightly better than expected. 

“The housing market recovery continues,” said PNC’s Faucher. 

Kate Gibson is a reporter for MarketWatch, based in New York.


DealBook P.M. Edition March 19, 2013.: The Trade: JPMorgan Chase Inquiry Reveals Status Quo After Financial Crisis Home |Business Day| Video The New York Times

Tuesday, March 19, 2013
Senator Carl Levin, Democrat of Michigan, questions JPMorgan executives on a trading loss.
The Trade: JPMorgan Chase Inquiry Reveals Status Quo After Financial Crisis Jesse Eisinger of ProPublica says that the investigation into JPMorgan Chase's multibillion-dollar trading loss shows that bankers are not acting cautious and regulators remain docile.

Liberty to Buy 27% Stake in Charter for $2.6 Billion Liberty Media agreed on Tuesday to buy a 27.3 percent stake in the cable services provider Charter Communications for $2.6 billion, in the latest deal by the billionaire John C. Malone.
In Charter, Malone Returns to His Roots As The New York Times wrote in 1997, "a day without a deal is like a day without sunshine," to Mr. Malone. Here is a look at some of his memorable moves.
Breakingviews: Malone's Minority Report Jeffrey Goldfarb says that cable pioneer John C. Malone has a history of parlaying minority stakes in companies into advantageous deals for himself.
Debevoise & Plimpton's Trusts and Estates Group Finds a New Home Loeb & Loeb has hired the group of trusts and estates lawyers from Debevoise & Plimpton, which had decided last year to eliminate the practice.
Judge Approves Sale of Rights to Hostess Brands, Including Twinkies A bankruptcy judge has approved the sales of several major Hostess Brands product lines, including Twinkies, fetching about $800 million for the bankrupt baker.
Senate Panel Advances White's S.E.C. Nomination Mary Jo White has cleared an important hurdle on her path to becoming a top Wall Street regulator, as the Senate Banking Committee cast a 21-1 vote in her favor.
Buzz Tracker
Prelude to an AmerisourceBergen Deal As part of a broader distribution deal, Walgreen and Alliance Boots will have the right to purchase a 7 percent stake in AmerisourceBergen on the open market, plus an additional 16 percent through warrants.
Corporate Earnings Companies scheduled to release quarterly earnings statements on Wednesday include FedEx, General Mills, Lennar and Oracle.
In the United States On Wednesday, the Federal Open Market Committee will announce its statement and economic projections, followed by a news conference by Ben S. Bernanke, the Fed chairman; the House Small Business Committee will conduct a hearing about inefficiencies and duplication across federal government programs; the Senate Commerce Committee will conduct a hearing about the Federal Aviation Administration's progress on safety initiatives; and Hewlett-Packard will conduct its annual meeting in Mountain View, Calif.

Quotation of the Day
"I do question Washington's long-held bias toward Wall Street and its inability to find watchdogs outside of the very industry that they are meant to police."
Senator Sherrod Brown, an Ohio Democrat who opposed Mary Jo White's nomination to the S.E.C.

ADVFN III Evening Euro Markets bulletin March 19, 2013.

ADVFN III Evening Euro Markets Bulletin
Daily world financial news Tuesday, 19 March 2013

London Market Report
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London close: Cypriot vote on deposit tax sinks stocks late on
Market Movers
  • techMARK 2,396.60 +0.36%
  • FTSE 100 6,441.32 -0.26%
  • FTSE 250 14,035.92 -0.38%
After a brief spell in positive territory at lunchtime, UK stocks sunk back into the red by the close of trade on Tuesday as leaders in Cyprus gathered to vote on the deposit tax, a controversial measure deemed necessary to save the country from default.

Traders were also nervous ahead of tomorrow's Budget Statement from UK Chancellor George Osborne, in which he is expected to announce further spending cuts worth £2.5bn.

Meanwhile, markets were looking ahead to the two-day Federal Open Market Committee (FOMC) meeting in Washington which kicks off this evening.
All eyes on Cypriot parliament
The proposed levy, widely criticised by the public and politicians abroad, is part of a plan to raise €5.8bn so that Cyprus can secure its €10bn bailout from the Troika. It is thought to be key to preventing Cyprus from defaulting on its debts, which would inevitably lead to its exit from the Eurozone.

Rumours surrounding the vote, which kicked off in parliament just before markets closed today, sparked a volatile finish for London's FTSE 100 as traders digested market chatter: there were unconfirmed rumours that Cyprus's finance minister had resigned; while Prime Minister Nicos Anastasiadesis is thought to be preparing a 'Plan B' in case the vote fails.

Meanwhile, according to the British Ministry of Defence, an RAF plane has flown €1.0m over to Cyprus to give military personnel emergency loans in case ATMs or debit cards stop working.
Current Cypriot plan won't achieve target

A draft proposal on the one-off deposit tax would fail to meet the €5.75bn revenue target agreed with international lenders, according to Cypriot central bank governor Panicos Demetriades.

With leaders desperately scrambling to come up with plans to ease the impact of a potential levy on low-income families, Demetriades has warned that the shortfall in revenues from the smaller savings would not be covered by taxes on larger deposits.

While Demetriades told the Cypriot parliament's finance committee that the current bill wouldn't achieve the Troika target, he also warned that “if the draft bill passes, we would see deposit outflows of 10%, or maybe more, in the first few days”.
FTSE 100: Miners tank; Sainsbury gains after update
Mining stocks were dominating the fallers list on the FTSE 100 this morning as risk appetite waned, with Rio Tinto and BHP Billiton both hit by a downgrade by Goldman. Citi was also pressuring stocks lower after cutting its estimates for iron ore prices on concerns of over-supply.
Precious metals group Fresnillo dropped after Deutsche Bank cut its rating from 'hold' to 'sell', saying that the current share price is pricing in a near-perfect delivery of their medium-term growth prospects and a recovery in metals prices.
Supermarket giant Sainsbury was edging higher after beating forecasts with its fourth-quarter sales as the firm saw customer transactions grow to a record 22.9m per week.
Chip designer ARM Holdings was in the red after its CEO Warren East called it quits after nearly 12 years as frontman. He will be replaced by ARM's current President Simon Segars.
Defence giant BAE Systems was in the top spot after having released its annual report, in which it revealed plans to freeze the salary of its Chief Executive and two other senior management members after the group's earnings per share came in below expectations.
Lloyds was lower on reports that it is considering the sale of Irish real estate loans in an effort to pull itself out of Europe’s property slump. Sector peer RBS was also down despite Investec upgrading the stock from 'sell' to 'hold'.
FTSE 250: Bumi drops after delaying results
Coal miner Bumi, which has made headlines on numerous occasions over the past few months, plunged in afternoon trade after delaying the publication of its full-year results.

Mining peer Kazakhmys, which was recently demoted from the top-tier index, was hit after Canaccord Genuity slashed its target price by 30% after increasing its cost forecasts and cutting estimates of by-product output rates.

Fibre and foam products provider Filtrona rose after it was announced its subsidiary, FIL International, has signed an agreement for the acquisition of Contego Healthcare.

FTSE 100 - Risers
BAE Systems (BA.) 393.40p +2.47%
Severn Trent (SVT) 1,673.00p +1.70%
Sainsbury (J) (SBRY) 371.40p +1.70%
United Utilities Group (UU.) 695.50p +1.68%
National Grid (NG.) 746.50p +1.56%
GlaxoSmithKline (GSK) 1,513.50p +1.51%
Diageo (DGE) 2,042.50p +1.47%
SSE (SSE) 1,480.00p +1.44%
Vodafone Group (VOD) 187.60p +1.43%
Centrica (CNA) 355.00p +1.43%

FTSE 100 - Fallers
Rio Tinto (RIO) 3,107.00p -5.19%
Evraz (EVR) 233.40p -4.54%
Weir Group (WEIR) 2,325.00p -4.36%
BHP Billiton (BLT) 1,981.50p -3.53%
Fresnillo (FRES) 1,406.00p -3.43%
Standard Life (SL.) 367.70p -3.24%
Anglo American (AAL) 1,820.00p -2.86%
Eurasian Natural Resources Corp. (ENRC) 312.70p -2.86%
Barclays (BARC) 297.50p -2.76%
Petrofac Ltd. (PFC) 1,521.00p -2.69%

FTSE 250 - Risers
Filtrona PLC (FLTR) 690.50p +4.23%
Hansteen Holdings (HSTN) 88.00p +3.71%
Senior (SNR) 251.80p +3.66%
Carpetright (CPR) 679.50p +3.50%
Computacenter (CCC) 543.50p +2.94%
Cobham (COB) 247.30p +2.91%
Berkeley Group Holdings (The) (BKG) 2,093.00p +2.80%
Brown (N.) Group (BWNG) 429.30p +2.73%
Petropavlovsk (POG) 246.70p +2.28%
William Hill (WMH) 385.70p +2.07%

FTSE 250 - Fallers
Ferrexpo (FXPO) 181.60p -8.14%
Bumi (BUMI) 308.10p -7.62%
Domino Printing Sciences (DNO) 655.00p -6.43%
Kazakhmys (KAZ) 473.90p -6.25%
Ocado Group (OCDO) 153.30p -5.95%
Thomas Cook Group (TCG) 105.40p -5.47%
Essar Energy (ESSR) 145.70p -4.96%
Balfour Beatty (BBY) 259.50p -4.42%
BlackRock World Mining Trust (BRWM) 535.50p -3.95%
Cairn Energy (CNE) 278.40p -3.73%

Europe Market Report
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Europe midday: Cyprus vote may be delayed, reports say
- Cyprus vote on depositor 'bail-in' to be delayed
- 'In-line' reading on German economic confidence
- Periphery debt yields still slightly higher
- Apparently successful Spanish bill auction

FTSE-100: 0.05%
Dax-30: -0.24%
Cac-40: -0.55%
FTSE Mibtel 30: -0.68%
Ibex 35: -0.88%
Stoxx 600: -0.04%

The main European equity benchmarks are still registering mixed readings, following an earlier start moderately lower, but have moved up a tad from their lows. That comes on the back of concerns regarding the situation in Cyprus and whether or not that sets a precedent for other countries, which could see financial stocks – in particular – come under pressure and weigh on Eurozone periphery debt markets.

For some the situation faced by European authorities is more nuanced. For these observers what must be avoided is a 'bail-in' of depositors with less than €100,000 in their accounts, the same level of guarantees as is offered in other nations.

Not coincidentally, that is precisely what the European Union is now asking of the Mediterranean nation.

Speaking of which, according to Cypriot broadcaster CYBC this evening´s parliamentary vote on whether to accept the European Union´s modified demands has been postponed until tomorrow.

Spain´s Treasury has this morning auctioned €4bn in 3 and 9 month bills, with mixed bid-to-cover ratios versus the last time around, although before the sale Unicredit was pointing out how the shortest part of the Spanish interest rate curve was relatively expensive now versus Italy.
Companies still in defensive mode
Leading car-marker Volkswagen now sees lower growth in Brazil this year, according to company executives cited by Reuters.

German steel maker Thyssen Krupp is preparing to carry out a capital increase, Handelsblatt reports.

From a sector stand-point the worst performance is now to be seen in the following sectors: Basic resources (-1.95%), Automobiles (-0.69%) and Banks (-0.66%).
'In-line' economic confidence in Germany
The German ZEW institute´s economic confidence index for the month of March has come in at 48.2 points, up by 16.7 points (Consensus: 47.5).
Other asset classes move lower
The euro/dollar is nudging higher by 0.02% to 1.2946.

Front month Brent crude future are now falling by 0.275 dollars to the 109.21 dollar mark on the ICE.

US Market Report
Stocks Experience Choppy Trading Amid Focus On Cyprus
After failing to sustain an early upward move, stocks have wavered over the course of the trading day on Tuesday. Uncertainty about the situation in Cyprus is contributing to the choppy trading.
The major averages have moved to the downside in recent trading and are currently posting modest losses. The Dow is down 18.05 points or 0.1 percent at 14,434.01, the Nasdaq is down 11.12 points or 0.3 percent at 3,226.47 and the S&P 500 is down 6.15 points or 0.4 percent at 1,545.95.
The choppy trading on Wall Street comes as traders are keeping a close eye on developments in Cyprus, where the parliament is expected to vote on a proposed bailout that would tax bank deposits.
In response to the turmoil that erupted in Cyprus in response to the proposed taxation of depositors, Eurozone finance ministers agreed that smaller depositors should be given more protection, signaling some flexibility on the proposed bank tax.
At the same time, the ministers maintained that the nation should still raise 5.8 billion euros from the banking system.
Uncertainty ahead of the Federal Reserve meeting may also be contributing the volatility, with the central bank due to announce its latest monetary policy decision Wednesday afternoon.
Earlier in the day, some positive sentiment was generated by the Commerce Department's upbeat report on new residential construction in February.
The report showed that housing starts edged up by 0.8 percent to a seasonally adjusted annual rate of 917,000 in February from the revised January estimate of 910,000. Economists had expected housing starts to climb to an annual rate of 915,000.
Building permits, an indicator of future housing demand, jumped 4.6 percent to an annual rate of 946,000 in February from the revised January rate of 904,000.
Sector News
While many of the major sectors are showing only modest moves, steel stocks are seeing considerable weakness in mid-day trading. The NYSE Arca Steel Index is down by 2.4 percent after hitting its lowest intraday level in over three months.
Cliffs Natural Resources and Mechel are turning in two of the steel sector's worst performances, falling by 7 percent and 6.1 percent, respectively.
Oil service stocks have also come under pressure, adding to the steep losses posted in the previous session. After ending Monday's trading down by 2.4 percent, the Philadelphia Oil Service Index is down by 2.4 percent.
Meanwhile, airline stocks are seeing continued strength, with the NYSE Arca Airline Index up by 1.1 percent. The index reached a six-year intraday high earlier in the session but has given back some ground since then.
Other Markets
In overseas trading, stock across the Asia-Pacific region turned in a mixed performance on Tuesday following yesterday's sell-off. While Japan's Nikkei 225 Index rebounded by 2 percent, Hong Kong's Hang Seng Index edged down by 0.2 percent.
Meanwhile, the major European markets have all moved to the downside. The U.K.'s FTSE 100 Index has edged down by 0.1 percent, while the German DAX Index has fallen by 0.7 percent, and the French CAC 40 Index has tumbled by 1.3 percent.
In the bond market, treasuries have climbed firmly into positive territory, extending the upward move seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 4.5 basis points at 1.911 percent.

Broker Tips
Broker tips: Fresnillo, RBS, Kazakhmys
Deutsche Bank has cut its rating for precious metals giant Fresnillo from 'hold' to 'sell', saying that the current share price is pricing in a near-perfect delivery of their medium-term growth prospects and a recovery in metals prices.

They said that the stock's premium against the sector could shrink due to the "near-term headwinds" of flat production, a Mexican royalty tax and an equity issuance to meet free-float requirements.

Investec has upgraded its rating for Royal Bank of Scotland (RBS) from 'sell' to 'hold', saying it sees a "speck of light in the gloom".

"Given the risk of a potentially horrific and dilutive outcome for shareholders after today's Financial Policy Committee meeting, despite a c.20% two-month correction, we are still not yet brave enough to call the bottom. That said, at the risk of sounding crass, 'the passing of time' genuinely supports the RBS valuation – i.e. the discount factor that we apply to a (still distant) recovery in group profitability and returns erodes over time."

Canaccord Genuity has slashed its target for copper-focused mining giant Kazakhmys by 30% from 810p to 570p after updating its estimates for group's pre-close trading update for 2012. A 'hold' rating was kept.

The broker has increased its cost forecasts and cut by-product output rates for the company, which leads to a reduction in short- and medium-term cash inflows. As such, net debt is expected to peak at $4.0bn by 2015.

Cyprus bailout vote keeps Europe investors on edge; by Sara Sjolin, MarketWatch: European Markets at Close Report March 19, 2013.

By Sara Sjolin, MarketWatch 
LONDON (MarketWatch) European stock markets dropped for a third straight day on Tuesday, as news reports said the ruling party in Cyprus would abstain from voting on a key decision on the country’s bailout conditions. 

The Stoxx Europe 600 index XX:SXXP -0.42%  fell 0.4% to close at 295.55, adding to a 0.2% loss from Monday.

Trading was suspended on the Cyprus Stock Exchange to avoid any potential risks to the financial systems, as the country’s banks took center stage in an unprecedented deposit-tax drama related to a 10 billion euro ($13 billion) bailout agreement. See: Cyprus uncertainty rises amid new bank bill. Shares in neighboring 

Greece, which has received two bailouts, plummeted, and the benchmark index in financially stressed Spain also dropped sharply. 

Investors in Europe were spooked by the Cypriot agreement, but Richard Hunter, head of equities at Hargreaves Lansdown in London, said there was no reason to flee the broader European equity market at the moment. 
“Obviously this is just a small part of the global jigsaw; we also have China, the recovery in the U.S., generally good corporate results and indeed some progress in the euro zone. The positive building blocs remain in place, but we will have noise like the Cyprus news,” he said.

S&P: Brighter outlook for China property market
Despite rising property prices in China, ratings firm Standard & Poor’s upgraded its outlook on residential property in the country. Christopher Lee, managing director of S&P, tells us why things may be looking up for Chinese developers. 

The parliament in Nicosia had been scheduled to vote on the bank-levy legislation some time on Tuesday, but media reports suggested it’s unclear whether a vote will take place and whether such controversial legislation can pass. Cyprus’s ruling party Disy reportedly said it would abstain from the bailout vote, while a private television station said all other parties would do the same. 

Additionally, Cypriot Finance Minister Michalis Sarris offered to resign according to media reports, but it’s uncertain if President Nicos Anastasiades will accept his resignation.
The euro EURUSD -0.71%  fell below $1.29 after the reports.

Controversial bank levy

At the heart of the discussions in Cyprus was the bank-deposit tax, which would force depositors to take losses for the first time during the euro-zone debt crisis. Eurogroup President Jeroen Dijsselbloem emphasized in a statement on Monday that the levy was a “one-off measure”, while repeating that small and large depositors should be treated differently. 

Bank of Cyprus in Nicosia.
The original proposal put a 9.9% tax on savings above €100,000, while all savings below that amount would be taxed at 6.75%. However, a new proposal from Cyprus reportedly suggested that deposits up to €20,000 were kept levy-free. 

“There is a danger that depositors outside the Mediterranean island begin to question the attitudes of their own governments and international lenders to their own guarantees if the climate of greater optimism in the euro crisis were to turn for the worse again,” said Philip Shaw, chief economist at Investec Securities in a note. 

“And of course faith in the international banking system could fall apart were the Cypriot parliament to reject the bailout and international lenders carried out their threat to allow the banks to collapse,” he added.
Read: Here’s what the markets are underestimating about Cyprus

Greek stocks reopen to sharp losses

Closed for a public holiday on Monday, Greece’s Athex Composite index GR:GD -3.85%  reopened to a loss of 3.9% to 923.43, catching up with the rest of Europe’s broad-based losses on Tuesday. Shares of National Bank of Greece SA GR:ETE -14.57%  sank 15%. 

Elsewhere, France’s CAC 40 index FR:PX1 -1.30%  shaved off 1.3% to 3,775.75, while Spain’s IBEX 35 index XX:IBEX -2.20%  slumped 2.2% to 8,321.00. 

Germany’s DAX 30 index DX:DAX -0.79%  closed 0.8% lower at 7,947.79.
Among economic data, Germany’s ZEW Indicator of Economic Sentiment rose 0.3 points in March to 48.5 points, broadly in line with expectations. 

“The political situation in Italy and the rescue package for Cyprus have increased the risk that the euro-zone debt crisis will worsen again. This may have contributed to the fact that the indicator has not increased substantially this month,” the ZEW institute said in a statement. 

In the U.S. stocks traded lower, shrugging off housing data showing construction on new homes rose 0.8% in February, with longer-term trends signaling that the housing market continued to strengthen.
The U.K.’s FTSE 100 index UK:UKX -0.26%  dropped 0.3% to 6,441.32, with mining firms falling alongside weaker metals prices. 

Rio Tinto PLC UK:RIO -5.19%   RIO -5.30%   AU:RIO -1.49%  gave up 5.2% as Greg Lilleyman, president of the firm’s Pilbara iron-ore operations said he sees downward pressure on iron ore prices in the second half of the year. Additionally, Goldman Sachs cut the miner to sell from neutral. 

Anglo American PLC UK:AAL -2.86%  fell 2.9% and BHP Billiton PLC UK:BLT -3.53%   BHP -3.47%   AU:BHP -0.40%  eased 3.5%. 

Outside the major indexes, shares of Metro AG DE:MEO +3.11%  rose 5.4%, after UBS lifted the German retailer to buy from neutral. 

Shares of Iliad SA FR:ILD +5.21%  jumped 5.2%, as the low-cost telecom operator posted 2012 income above market expectations. 

Sara Sjolin is a MarketWatch reporter based in London. Follow her on Twitter @sarasjolin.