Bond yields, where are we . The 10year yield giving back about 10 basis points, of easily some of the european ones here not yet open. That is really where the action will pick up when europe wakes up to all of this. Expect the spread between the core and periphery to widen dramatically. Angie . Back to you. Angie thanks, david. Greeces negotiating position has been strengthened after a stunning referendum. My colleague guy johnson has had a ringside the as the drama laid out overnight and as the day dawns in athens, guy, this is an historic moment here. Guy yes, greece is opening up to a new day, trying to figure out what will happen next. We thought it would be a close vote, we thought it would be too close to call. It turned out that was exactly wrong. They went with a 60 40 split. The question is, what does that do for the negotiating position . Alexis tsipras says it creates a stronger position for him. Will creditors respond . This is what he said to the greek people last night. Alexis tsipras today we celebrate the victory of democracy, but tomorrow we will continue and we will continue our National Effort of exiting the crisis. This gives us the justification that we are in the right. Guy how will greece exit the crisis . What kind of deal can be done . Yanis varoufakis the finance minister, out with a new blog last night, saying the greferendum needs to bring greece and its creditors together for a mutually beneficial deal. Francois hollande and Angela Merkel will meet later today. We need to see ultimately whether they come out with that kind of view as well. Very clearly, it is time to start kicking the can down the road. Greeks said no to five years of hypocrisy, to the lies that the deficit could be overcome by new, nonviable loans, the day that the poorest greeks were forced to pay with blood, sweat, and tears, as were their children and grandchildren. Guy the consequences are going to be interesting. Mohamed elerian has penned a really interesting place on bloomberg. Com. Worth checking out. He lays out some of the interesting things they will feed through through this result, one of which is the increasing pressure on the greek government maybe two issue i use issue ious. Celebrations last night. You can see the pictures of that year it a long way to go for the greek government and the consequences of this will really be fascinating and will be felt over the next several days. Angie this lastminute vote cost taxpayers more than 20 million money they do not have. It could go northward to up to six times that according to estimates, but the framing of the referendum 72 words, i believe it is, and will creditors see this as a referendum on the agreement or as a yes or no vote on the partnership in europe . Guy i think the creditors wanted to get it to the point where it felt like it was that. They wanted to frame it that way. Alexis tsipras was determined that was not going to be the case. It he was on an almost daily basis on television making it very clear this is not a referendum on eu membership. This is not a referendum on membership to the eurozone. He succeeded in that. He had a great, great ground game, syriza, in the runup to this referendum and they really got the greek people to believe this is about austerity. How will creditors like to see it . I suspect they would like to see it as a in or out referendum that it may be hard to push their lines. Rishaad angie ok, guy johnson, thank you for leaving our coverage throughout the morning and the night in athens. We have been talking to our guests. The chief asia Economist Says that syriza is a gambler and they have one big. You have one more card and the card is finally go with me they will have to buy this or push that out. Remember it will be very hard for the creditors to ban greece out of the eurozone. They did this in a very risky way, but finally with the right results. Angie and billionaire wilbur ross is that greece needs help from its neighbors if it is to deal with its mountain of debt. Guest i think what mr. Sippers can do is to get one big concession what mr. Tsi[prpras can do is get one big concession either outright forgiveness or maturity so it has the same present value of fact, but i do not think he will get much relief from the measures prescribed by the eu. Because those are necessary. Greece cannot compete in the world if the government spends more than it takes in, even without reference to interest or principal payments on the debt. Angie so how much money does greece have left question mark a finance professor crunches the numbers for us. 10 days ago they only had 2 billion left against 139 billion sitting, and naturally you could see the beginning of insolvency of banks in greece before even we talk about greece may have won the battle in the referendum, but greece may lose the war before even the resumption of the renegotiations. Angie and that is the word on greece. You can find extended coverage of the continuing crisis were bringing together the best of bloomberg news, bloomberg businessweek, all in one address bloomberg. Com. Lets get back to the markets. Not so easy there. David is watching china. David . David there are so many storylines. Before i get to the main markets, let me show you it is quite rare we get a drop like this, 700, 800 points for the hang seng. If you want to dig deeper it is the tech stocks. You have 2 on the hang seng index. The no vote, down 10. 5 . And youre looking at . 10 the big chinese online stock. With take a look at the casino. We are now up only 2. 9 . We are well off the highs. It is getting interesting. Were at that point where things get really really interesting. I believe the shenzhen and dekes is just a low bit lower now. We will get to this in a moment, but a lot of these measures are coming through this weekend. Maybe a shortterm rally . Get those profits and get out of there. Hang seng index, there was a big drop i pointed out. There we go. 2. 7 underwater right now. That is a 700 point drop. 25,000. I should note volumes are fairly thin across asia. Its not exactly a mad rush to the exit. Look at that. We are up 8 today. Look at that. Angie, back to you. Angie looking pretty bad out there. Chinese shares are at a new high as they deployed new measures to halt the steepest run on stocks in two decades. What is the government doing to restore comp confidence question mark i think that showing a shanghai has pared back all of those gains . Reporter definitely. They had eight the h shares in hong kong in negative territory. Only the shanghai composite h shares are up now. The latest you can see it right there. Two point 5 , but there is a little bit of a divergence and picking up what david was just saying, the hong kong start market stock market expecting volatility. They are urging investors to remain calm and manage costs prudently. They made a number of new measures to prop up the market or at least put a floor under this selling. This is more than the french economy, more than the paris stockmarket toto. The worst three weeks since 1992. What of the done . A new moratorium on ipos. That is an old standby. 28 ipos have been halted. They had already been approved. They have been halted. Perhaps more importantly, the stabilization side 21 brokerages will invest at least 19. 3 billion u. S. Dollars in a fund and mutual funds executives have pledged to buy shares and hold it for at least one year. A unit of the Sovereign Wealth Fund has also announced they have bought etfs on the secondary market. The finance ministry has approved as well the National Pension fund. The central bank will offer liquidity support as well. This is something that i said earlier on in the morning. We expected the kneejerk reaction upwards. What was it, 5. 5 . It was not kneejerk, but it did not last very long though. Angie regulatory measures and also finding a good scapegoat too . Reporter the old standby. You can always expect them to blame the foreigners. They rhetorically asked if Morgan Stanley had a hidden agenda, among others, but they named Morgan Stanley in particular among the global shortsellers trying to talk down the market. A number of beijing investors putting on a big statement saying short sellers from overseas were robbing Small Chinese investors and ignoring the risk. They did not cite evidence. I have evidence to the contrary because short positions late last week in shanghai total just 314 million, zero point zero 0. 03 of the market and foreign Money Managers only own about 3 of the market. Can that can can they control that much of a downward selling cycle . I dont know. I am just saying. Angie lots more coming up on greece. We will find out what the smart money says about greeces future and whether a euro exit is all but certain. Next we will speak to an economist who says the referendum was handled badly. Stay tuned. You are watching asia edge. Angie checking stories making headlines around the world secretary of state john kerry tempered expectations of an imminent nuclear deal with iran after a ninth straight day of talks. Negotiators a progress is being made and they want a deal by tuesday when the accord is set to expire. It would allow a run back into Global Energy markets of sanctions are lifted. Secretary kerry over the past few days we have in fact made genuine progress. But i want to be absolutely clear with everybody. We are not yet where we need to be. Angie japan and five mequon countries mekong countries have made agreements over territorial claims. Beijing has been the ling on reefs in disputed waters. Japan will also pay for infrastructure. In an unmanned cargo ship successfully docked at the International Space and International Space station ending an anxious wait for the crew. The progress ship carrying fuel, water, and food blasted off friday from kazakhstan. A launch in april was unsuccessful. Last week a resupply Mission Failed after a spacex rocket exploded surely after liftoff. Do you know what else failed . In some of the creditors view anyway, our top story, the greek referendum saw 61 of voters backing a plan of against further as 30 measures. My next guest says it was badly handled. And greek credibility has been damaged. What do you mean damage . They got a resounding no, very resounding very definitive . Guest i think if it had been marginalized one way or the other it would have lacked validity. This way there is at least some validity to the no vote. But the problem is the policies adopted by syriza and the greek government, the process and the path of negotiation will be quite challenging. Angie whose idea was this referendum in the first place . Was it tsipras, or was it something that creditors imply they needed to see . Guest it was floated over the last few months. Syriza voted on the program of renegotiating and this was treated as a way for them to perhaps backtrack on election promises. The way that it was handled, the way it was introduced by the party was definitely not something the creditors were in favor of. Angie even the language was a little bit bizarre. There were so many odd words. Voters were asked to say yes or no on an agreement that was not even the latest agreement. Guest that is right. And it is not even clear of that agreement will be up for grabs in the future. What they are negotiating may not be the thing that was voted for and against in the referendum. Angie but here is the thing they said in the runup to this book a no vote means you are getting out of the eurozone whereas tsipras said, no no, it just gives us a mandate to get the deal we want. Guest he has been quite clever to that extent and pushed back against the idea that this was a vote to leave the euro. On the greek side typically it is a choice between different types of austerity, whichever one they go down, it will be quite tough for them. As far as the creditors, it is a difficult choice, because they want to be seen as keeping the euro together, for unity for the currency, but at the same time they do not want to be soft. Angie stick with us, because we want to ask you and the rest of the gang in the allin if you think that that vote was the right vote especially from your view as an economist. Coming up next, the malaysian Prime Minister says he is not a thief. We have the latest live after this short break. You are watching asia edge. Angie malaysias Prime Minister has denied being a thief after reports suggested hundreds of millions of dollars of public money into it up in his bank account. The allegations are linked to 1mdb the debt ridden state Investment Firm we have been covering here. Sophie joins us from kuala lumpur. This is a story turning a lot of heads. What is the story here . Reporter well, angie, days after fits trading revised its trading rating on the country to stable, Prime Minister najib razak had to go on the offensive after a report from the wall street journal said funds of two 700 million transferred into his personal tank account. On saturday, the attorney general confirmed he had received documents from a special Task Force Raid on three companies linked to these transactions, and the latest related to 1mdb. On saturday the Prime Minister said he is seeking legal advice on action to be taken against the wall street journal. Lawyers may file suit as early as this week. With have to remember, this is the first time he has been directly linked to the controversy surrounding 1mdb. He has gone to the people saying that he is not a liar and he is not a traitor or a thief. Angie sophie, what is at the center of this fund here at the center of the issue . Reporter he directed the Auditor General to investigate 1mdb. It has come under scrutiny for massive debts it has accumulated over the last five years. Report will be presented to the Public Account Committee july 9. A complete report will be put out later this year. That interim report published on thursday is not to be publicly viewable without the attorney general confirming that should be so. Angie all right, how are the markets reacting to these allegations right now, sophie . Sophie concerns are around the wsj allegations alongside the greek referendum fallout is waiting on the bond yields and the market. It has fallen to a level that we have not seen since the 2010 peg was relieved. Angie a lot more coming up. Live from athens, the dawn of a new day. Angie the top stories this hour. Lets go to the view in athens as they have thrown their future in the eurozone into doubt. Voters deliver a resounding no to the austerity measures demanded by creditors. It is a bank holiday today. Tomorrow, will the banks remain closed or open . Over 61 have backed Prime Minister tsipras. They were celebrating in the square overnight. He said that he will return to the negotiating table in a stronger position. Polls suggested a tighter race. The eurogroup president described the results as very regrettable. The german chancellor and french president have called for an emergency summit of euro area leaders. The other big story in asia, chinese stocks have given up much of their early gains. Shanghai is up around 2 after searching around 8 at the open. Hong kongs hang seng index is down 3. 5 . It is the worst day for the hang seng index in more than three years. Lets get to the latest in markets. We are what . 30 minutes to the close up in shanghai. We are still up. Are we seeing the invisible hand get in the market . The afternoon session we see things really fall apart. 3766. We have erased almost all of the gains. This was up. 08 of 1 . Things were worse in hong kong. Down 3 . If it goes like this, this is the worst day for the hang seng index in 3. 5 years. You have to go all the way back to november of 2011 when we saw losses of this magnitude. It is much worse. You look at the small caps on the chinese. This is the hang seng composite. We are down 4. 2 . Just about every single sector group is down about 7 . It is a selloff today. Not surprising given the forces we saw in greece. Angie the greeks have rejected further austerity. We have guy johnson live in athens. You have been spending overnight there as many greeks continue to celebrate over there. Is the hangover about to settle in tomorrow and the day after that . Guy there are some Big Questions that need to be answered. The greeks have answered one of them. How do they feel about austerity . They do not want anymore. They voted about 6040. They voted no in the referendum. The next few days will be quite interesting. How will the greek banks open . We still do not know yet. They told me a couple of days back that it will open come tuesday. How will Civil Servants get paid. How will pensioners get their money . Will we see ious be issued by the greek government. Mr. Tsipras is going to go see them. He will befuddled with enthusiasm for his side of the deal. Will they be enthusiastic for the deal . They are not responding positively. Francois hollande and Angela Merkel will meet. Angie they were so close on so many levels, but so far apart. At the end of the day, the moral hazard of italy and spain and other nations that might want to follow in the road of greece. Guy i am not sure i would use the phrase moral hazard, but i know what you are coming from. Spain is very much pushing the line. The leader changing his twitter picture to one of him with tsipras making that link very clear. The spanish are very unlikely to want to see the line softening for greece. The impact would be felt very much in the ballot box in spain. I suspect he will be taking a very tough line. Others, we will see. We will see how other countries respond. The political story is very much in the front and center and the ripples will be felt across europe. Angie guy johnson, thank you for that. The referendum has raised questions about whether greece can overcome their mountain of debt and their shattered economy. We have diversion viewpoints here. Some are saying that greece will exit the euro. A greek departure from the euro is now the most likely scenario. Others are not so sure. Credit agricole saying that a deal is still possible. It all comes down to whether mondays talks see a diplomatic negotiating tactic or if the gloves come off. It remains to see what kind of mood the europeans are in to negotiate. Among some of the more radical predictions, Eurasia Group saying the ill for keeping greece in the euro is disproportionately higher. They argue that the hawks of the eurogroup would like to pay greece to leave the eurozone. Pay the bill and be done with it. Running out of cash that is a big concern. The ecb will be meeting to discuss that. Ihs Global Insight say that they may run out of cash this week. Ing is saying that asset debt relief default loans, that is clear. Angie to your point, it is very much a fraction of it. It is a victory for tsipras. For merkel and the rest of the eu leaders, this could be a stain on the Eu Partnership and membership. Zeb the vote is no doubt historic. The response by leaders could also be historic. They have to decide about setting a precedent for bowing to a nation that did not meet its obligations. It would show that you too can slouch the rules. Germany sees it as bad economic policy. Germanys economy minister, he also leads the social democrats. He was quoted yesterday as saying that tsipras and his government are leading his people on a path of it or abandonment and hopelessness. He says that they have torn down the last bridges on which greece and europe could move towards a compromise. If they do not, the economy collapses. That could have wider implications for europe. Angie default, you are going to have to give aid where aid is needed. Zeb germany and its neighbors will have to pay either way. The question is, how much will they pay . Will greece be a member of the eurozone or are we in a new era . Angie reaction to the greek referendum on social media. What are people saying about this . We have been hearing from the officials and people outside of these discussions. Lets start with the Prime Minister. Tsipras very vocal about what is going on here. He says that the issue of our debt for now be on the negotiating table. We also heard from peter kaczmarek, the slovakian finance minister. Other economists also weighing in on this discussion. Finally lets end it with the greece finance minister. Of course, talking about the ious there. Angie thanks for tracking for us. Its been fascinating to see this greek drama play out in realtime. China is stepping up in efforts as a recent stock plunge wiped away more than three dollars trillion in value. Companies putting their plans on ice. Nearly 20 billion in the funds. Investors are being asked to remain calm as easing of margin trailing margin trading rules failed to slow the decline. 29 phone numbers were selected for intensive interception including those used talking to a president. The claim comes just a week after she some important sports news to bring you. The United States has won the womens world cup. The game finished 52 in vancouver. The game was never in doubt after america scored four goals in the first 15 minutes. The game was sweet revenge for the u. S. After they lost four years ago. China taking further measures to short stocks. We will talk about the latest market actions as asia edge returns. Angie welcome back, you are watching asia edge. Joining me now is our guest daniel murray. We are almost there. We had a long day, long show. China, lets start there. It has almost been ignored in the shadow of greece. We cannot ignore it. This is a multitrillion dollar route we have seen. China is desperate to find a floor. Is it going to be successful . Daniel china has gone a long way in a very short space of time. They rarely last. There is always a fallout at some point. That is what we are seeing at the moment. Fundamentals are better. It matches the small caps for financials. The small caps have loan out a lot more than the large caps. We call it a discrepancy within the market. The ipo stoppage is perhaps a good thing. Are they almost creating their own financial crisis. Trying to prevent one from taking place. Daniel you can do these things and get away with it. Reading between the lines, they can smooth out the process if it becomes too painful. Much of it is broadbased in an economy like the u. S. Where a fallout of this magnitude will be much more felt. Shortterm ors take up 0. 3 of the market. Daniel it is a domestic problem. It boils down to leverage. There are members of the communist party. Zeb i found it notable over the weekend that announcement. They would all bound together to support the markets. Do you think that was a decision made willingly or a decision made by the powers that be in beijing . It enabled this margin lending and this bubble if some call it that. Daniel if they want to do so, there would not the any pushback. The gains are relatively small relative to market cap. It is more about confidence. These investors who have built up trades on margin. They are probably not looking at the front end of the companies. They are just chasing the market. Yvonne in terms of confidence, we saw a shot up at the start of trade. Will building the confidence be sustainable . Daniel it stops when it stops. I guess its a bit like the financial crisis. The more stuff is thrown at it the more likely something will work. Rishaad daniel, is it a bubble . How do you know youre in a bubble instead of a correction . You only know when you are in a cult when you know you have to commit suicide three minutes before the spacious come. Daniel there is a market story about tech or Something Like that. The eight share is different. There is an interesting story with fallout pieces. They reenlisted in china. As i said at the beginning, it does matter very much what you own, small caps, large caps financials. Angie the opposite of a bubble greece deflating. They could be a contingent for global markets. As an economist, this is something i wanted to ask you before. When you take a look at the liquidity issues, the fact that it is not collecting as much tax revenue as it spends, was voting no a smart idea . Daniel the truth is that greece has already undergone at enormous amount of pain and dislocation. They have undergone quite a huge adjustment. There has been a lot of pain. The other point that is valid is the fact that for anyone who has even scratched the surface of the numbers it is just a matter of how you manage it. They have provided extra validity for that point. David arent they in default because they are in the rears . Is there a difference . Angie maybe you can restructure your debt and make it disappear. Daniel they can miss payment from their privately held that. Debt. It is a technical delineation i think. David when argentine rishaad when argentina does that, it is called a default. Daniel they have renegotiated their debt. The low interest rate. There have been a number of these events already. The immediate concern is the banks and what has happened there. What happens on the 20th of july, whether they pay back the ecb. Angie that seems to be the next critical date. Daniel murray, thank you for joining us. I am sure you are trying to talk down a lot of clients from the ledge. Coming up next, the strength of the no vote in greece surprised many observers. We will hear why when asia edge returns. Angie the polls suggested a tight race in the greek referendum. The no vote came as no surprise to a former college professor. We caught up with him on monday. They are telling people that no means we are getting out of the eurozone, which is completely wrong. They are supporting them all the time. They are terrorizing the people. I have known Alexis Tsipras for about 18 years. He has been a student of mine at the Civil Engineering department. He was a special student. A very intelligent, smart student. The people that are to blame are these people from the European Union and the imf. As you can see, i have been here all day. I think that the no vote i think it will get at least 55 . In one hour, we will see. I just want to tell you in greece you have about 40 of the votes and its 69 no and 31 yes. Angie and here in asia, the first of the markets to respond to that out of greece, it has been a very busy morning across financial markets. David has been tracking all of this from the very start. What is happening now . David we are at just about the worst part of the day. Halftime score, shanghai is up 2 . The rest, small caps. Nikkei is down about 2 . North korea, 2 . This is a regional benchmark. I think we have come back to the levels last march. The hang seng index, the last few minutes of trading has not been very good. 3. 2 underwater. You look in the water. 4. 2 . You closeout these levels, it is just about the worst day for hong kong stock going back to 2011. In shanghai we will be opening up in about an hours time. Look at the blue chips, the large caps. These are the six heaviest weighted stocks. Is this the invisible hand that is propping the markets up . Back to you. Angie that is it from us in asia. Stay with bloomberg as we carry the coverage of the crisis in greece the tingling after this break. We will hand it off to our Global Partners around the world. Our European Headquarters in london as we take a look at the start of the trading day on the europe market. Continuing into the u. S. Trading day, we have a global theme of reporters and anchors monitoring the story around the mark a new day in athens and a new dawn for europe. Voters overwhelmingly rejected further austerity demanded by creditors. Grexit fears, an early flight to safety sees the euro slide. The market moves to moderate as investors wait to see how europes politicians respond. Anna merkel heading to paris. She will meet Francois Hollande to map out a way forward for greece. China supports. The shanghai composite gains on
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