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Thursday, November 03, 2011 4:57 AM

Greek PM is History says Governing Socialist Lawmaker; Papandreou has Single Vote Majority in 300 Seat Parliament; Emergency Cabinet Meeting Called

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Will Prime Minister George Papandreou last long enough to even get a vote on the referendum he wants?

We will not find out the wording on the referendum if the Prime Minister does not last long enough for the vote. As defections mount, Papandreou is down to a single vote majority and Yahoo! Finance reports a Greek governing Socialist party lawmaker says Prime Minister Papandreou is 'history'

A Greek governing Socialist lawmaker says Prime Minister George Papandreou is "history," as lawmakers revolt against a planned referendum on the country's hard-won international bailout package.

Dimitris Lintzeris said in a statement Thursday that Papandreou must convene an emergency meeting of party lawmakers.

Papandreou' has already summoned a cabinet meeting at noon, after Finance Minister Evangelos Venizelos broke ranks with him on the referendum proposal.

Earlier Thursday, Socialist lawmaker Eva Kaili also said she would not support the government in Friday's confidence vote, and urged Papandreou to reverse his decision to call a referendum .

Without Kaili's support, the governing Socialists hold a one-seat majority in the 300-member parliament.
In the course of about 2 hours S&P futures rallied nearly 20 points erasing a pre-market decline.

S&P 500 Futures 15 Minute Chart

Yo-Yo on Steroids

Although the equity markets act like a yo-yo on steroids, the more important bond market saw no benefit to the potential ouster of Papandreou.

A quick check shows the charts in my previous post are still valid. Here they are again for convenience.

Italy 2-Year Government Bond Yield

Italy 10-Year Government Bond Yield

Spain 2-Year Government Bond Yield

Spain 10-Year Government Bond Yield

2-Year Government Bond Yield

10-Year Government Bond Yield

Unless something changes in a hurry, yield on Italian 10-year bond will be North of 7% and perhaps even 8% by the time the referendum is held. However, there may be no referendum if Papandreou is ousted.

Mike "Mish" Shedlock
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