Sunday, 25 January 2015

Stories we should be thinking about

A few finance and related stories we need to be thinking about before Monday morning:

Macro matters:

The big news of Monday morning is going to be the Greek elections.  This will develop in the next twelve hours but the current most striking headlines are:


Independent Greeks to cross the 3% threshold, Papandreou close but just under. If he makes it, SYRIZA full majority gets much more unlikely.

It is going to be an interesting next few hours before Asian trading...

Here's a good point about the challenges of just believing reintroducing the drachma solves everything in Greece: 

In trying to de-euroize, Greece would find itself in the exact same shoes as Latin American countries trying to de-dollarize. Greeks have been using the euro for 15 years now to price goods; how likely are they to rapidly switch to drachmas, especially in light of the terrible performance of the drachma relative to other currencies through most of its history?

Away from Greece...

The old simple '60/40' (equity/bond split) has mapped up pretty well over the last decade:

Thoughts from Davos?  Arguably the most interesting insight is the US$43 hot dog...

...and the headline in this article may be all about Mark Carney worrying about QE/risk-taking but I would say the more interesting quote came from Kuroda of the BoJ:

Kuroda made a similar call on his own government to make “necessary structural reforms as quickly as possible.”

Talking about QE this write-up contains an excellent table showing the respective sizes of QE stimuli. 

A survey by insurer Standard Life shows 76% of people (in the UK) are prepared to moderate their spending now to prioritise long-term saving.  Not a normal recovery... (link here).

Some different news from Russia (link here):

According to the World Health Organization’s most recent survey, conducted in 2010, 32.2 percent of Russians had not consumed any alcohol at all in the past 12 months — up from 20.8 percent in 2003, and precisely double that of my home country of Australia, for example.

I also see they are cutting back their US Treasury holdings in favour of gold:

A really nice Fortune write-up on seven interesting markets with positive population demographics

Company-related observations:

So according to this report profit warnings amongst UK larger cap companies are at a 6 year high.  That doesn't sound like a normal economic recovery to me...

Despite Britain’s economic revival, 27 companies in the FTSE 100 had to alert investors that they were likely to miss earnings targets. Between them, the 27 issued 38 profit warnings — far more than the 26 seen in 2008 at the height of the financial crisis.

Are financials in Europe a good place to invest?  GaveKal Capital suggest that at more than x1.2 price: book much is priced in...

Interesting China and Apple sales statistic via The Financial Times:

Analysts at UBS estimate that China accounted for 36 per cent of iPhone shipments in the most recent quarter, compared with 24 per cent for the US. During the same period last year, 29 per cent of units were sold in the US and 22 per cent were in China, UBS said.

And finally...

This made me laugh - because it is so close to the truth:

What Management SayWhat They Mean
There were some timing issues around the quarter endWe weren’t able to rush the sale through before the quarter end
We take a long term viewI’m already wondering if we’ll make next quarter’s numbers

The full list is here.  

And finally...hard to pick a favourite of these ten Churchill quotes as they are all so good. 

Have a good week

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