Monday, 15 June 2015

A few macro and related stories today...

A few macro and related stories today...

Greece – best line have heard so far: ‘The 11th hour ended in 45 minutes’. 
Greek negotiators walked out of the European Commission’s Brussels headquarters only 45 minutes after the talks began. According to an EU official who has seen the much-anticipated Athens counterproposal, long sought by negotiators representing Greece’s creditors, it fell well short of expectations and was not adequate for a compromise deal' (FT)

Greece #2 – but what are the differences really about? This IMF blog link has all the answers:
'Proposed to lower the medium term primary budget surplus target from 4.5% of GDP to 3.5%, and give Greece two more years to achieve that target… the Greek government has to offer truly credible measures… Why insist on pensions? Pensions and wages account for about 75% of primary spending… We are open to alternative ways for designing both the VAT and the pension reforms… European creditors would have to agree to significant additional financing, and to debt relief sufficient to maintain debt sustainability’

Greece #3 - Greek FM Varoufakis tells BILD he rules out Grexit. says debt restructuring is only way possible for Greece. Would agree with the latter point...but as noted above there has to be a meeting in the middle...

UK pensions: and you thought that only Greece had a pension issue. As this report in The Times notes:

'The bill for private pensions is now greater than Britain’s entire annual output, according to a report. The future cost of paying pensions promised to 11 million people in defined benefit schemes has rocketed in the space of a year from £1.7 trillion to £2.1 trillion, compared with a national annual output of £1.8 trillion'

U.S. junk-bond defaults rose to the highest level since October 2009 as depressed prices plague energy, metal and mining issuers that represent the largest contingent of debt from the riskiest companies. Got to keep watching bonds...

Asia/China thoughts –

$CNY 5.7trl to be locked up due to 25 IPO’s this week while the CSRC limits brokerages' margin trading volume

According to a report from Bloomberg the value of Chinese stocks rose above $10 trillion for the first time last week, adding an astonishing $6.7 trillion to the market capitalisation of Chinese firms compared to levels of a year earlier. To put the gain into perspective, based on calculations by Bloomberg, the 12-month increase is more than the entire market capitalisation of Japanese firms which currently sits around $5 trillion.

Great graphic on this on today's Fast FT:

Cosy audit relationships in the, look at those tenures!

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