Greece Update: Creditors asked to accept longer maturities

A Greek default appears likely soon as Greece Dispatches Officials to US Over Default Fears. Greece sent senior officials to Washington on Monday for meetings with the International Monetary Fund as it raced against the clock to break a deadlock in debt swap talks that has raised fears of an unruly default.

Euro-zone governments have reached a tentative deal on a new financing package for Greece that will seek roughly €30 billion in contributions from the country's private-sector creditors, senior euro-zone officials said Saturday.

Euro-zone governments have reached a tentative deal on a new financing package for Greece that will seek roughly €30 billion in contributions from the country's private-sector creditors, senior euro-zone officials said Saturday.

Outside of wartime, serious governments don't default. And if they do, it's a seismic market event. That's why the European authorities will do everything to prevent Greece from going down that path. But there are plenty of ways to lower a country's debt burden which stop short of a formal default. The question is whether the more benign, voluntary approaches to restructuring can be done quickly enough, or deliver enough relief to the hard-pressed Greeks.

We expected to see a series of weak economic reports last week - falling house prices, weak auto sales, lower ISM manufacturing index, and a weak labor report - and unfortunately that is exactly what happened.The employment situation report was very disappointing. There were few jobs created (only 54,000 total and 83,000 private sector), and the unemployment rate increased from 9.0% to 9.1%, even though the participation rate was unchanged at 64.2%.

Note: Apparently the graph server had a problem this morning. It appears to be working now (all the links were OK). Here is the employment graph gallery. Sorry for the inconvenience. This was a very disappointing report.

Initial Reaction The establishment survey showed a gain of 165,000 a reasonably good but not spectacular print. In contrast, the household survey showed a huge gain of 293,000 jobs. Once again we see a huge surge in involuntary part-time employment of 278,000. Voluntary part-time employment rose by another 163,000. Voluntary plus involuntary part-time employment rose by a whopping 441,000 jobs. Take away part-time jobs and there is not all that much to brag about. Indeed, full-time employment fell once again, this month by 148,000. 

Initial Reaction The establishment survey reports of +236,000 job. For the first time in four months the establishment survey was accompanied by a healthy +170,000 surge in the household survey. Let's dig deeper. The economy added a whopping 446,000 part-time jobs. Thus, the economy shed 276,000 full-time jobs. Those part-time jobs were supposedly "on purpose". It's fair to point out the volatile nature of part-time statistics, but the 446,000 increase is unusually large.