Tuesday, 30 June 2015

A few macro and related stories today

Greece – so theoretical payment day with the monies due at 12 midnight Greek time.  It is just not going to happen is it?!  No default immediately though – theoretically this view can be maintained until 20 July.  Meanwhile here is an interesting Greek stat: 'the S&P 500 lost market cap greater than Greek GDP yesterday'.  If only that could mean risks are contained…but all of this is dynamic not static…

Another interesting Greek statistic –

Meanwhile as for the complex and dense Greek referendum question...

Game of credit downgrades - S&P cuts Greece to CCC- with a -ve outlook - one notch below Moody's (Caa2) and Fitch (CCC).  Meanwhile S&P has cut Puerto Rico's credit rating from CCC+ to CCC-, a two-notch downgrade reflecting imminent concern of default on $72bn of debt.  Which of the two CCC-s are worse?

Iceland by contrast as per Fast FT:

'Iceland's ambition to lift the capital controls it was forced to impose as its banking system collapsed in 2008 has won applause from rating agency Moody's.The country's credit rating was lifted to Baa2 from Baa3, with the agency crediting the government with devising a plan to ease capital controls without triggering a flood of capital out of the banking system'.

So should Greece follow the 'Iceland model'?  Nationalise the banks...put people on trial, hunker down to geographic and comparative advantages?  It is a model...but easier for a very small country like Iceland to do I would suggest...

China – more volatility in China: so far just a range of +5% to -5%! Currently to the upside as various open market operations enacted and rumours of further policy loosening abound…I even read here that pension fund share purchasing liberalisation may be enacted and this too:

A note from the Asset Management Association of China, a state-run body, said that the correction has created "valuable buying opportunities for mature and rational investors", echoing articles in state financial media predicting a quick return to a bull market.

Every little helps! 

UK consumer confidence - it doesn't feel like the 1990s to me...

...and a nice chart to put it into historic context via @moved_average: 

Japan – no comment needed!  Ok the index is up for the second quarter this year BUT pull away the weak yen and it is not so rosy in my view: 

A final chart - rising disasters caused by weather.  Another reason why agriculture/related stocks are potentially interesting...

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