Monday, 29 June 2015

A few macro and related thoughts this morning

Easy to make this all about Greece…for starters please read by initial write-up on Stories to be thinking about out at 6pm BST on Sunday (link here) with some great links/charts. 

"Greferendum" – announced for next Sunday.  Liked this line in today’s FT: "The referendum will be about a proposal that no longer exists for a programme that will have expired. Out of a drama rises a farce."  Greeks highlighting need for democratic choice as Syriza did not win a majority of the vote in the Greek election...

Referendum of farce? - KKE Communist Party in Greece up early - handing out flyers telling people NOT to vote in referendum via CNBC.  Getting messy...

Bonds – highly volatile, especially the periphery, no surprise there (and see the Puerto Rico story later...) 

(above h/t @jsblokland)

El-Erian giving an 85% probability of Grexit in this article here. I like Mo but I think he is wrong/too high a %.  Also includes comment from guy who coined the ‘Grexit’ term…who does not see one now!

Thoughts – don’t rule out anything.  Still potential for a compromise deal as everyone loses due to Grexit (disaster for Greece, contagion etc. risk elsewhere).  Markets (e.g. DAX) moving back to c. 11k level which equals ‘glass half full’ stockpicking scope.  Don’t be scared to make initial purchases of stocks with themes you like today

Other big stories today –

Check out the round trip on the Shanghai bourse!  Amazing.  You can cut rates but it may not have the impact you want but as this analysis from Fast FT

Puerto Rico also warning maybe cannot pay their debts in this article here!  Spot the theme…liked the penultimate paragraph in this report

As the island is a US territory, not a state, it cannot seek Chapter 9 bankruptcy protection as Detroit did, and since it is not a sovereign country, Puerto Rico cannot ask the IMF for help or loans to tide it over while it restructures its debts and its economy.

And back in the real world…the AIIB.  Kind of important list...

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