Monday, 13 July 2015

A few macro and related thoughts today

A few macro and related thoughts today

**breaking news - there is some kind of deal for Greece just out...we await details. The below written in the hours before this **

Greece – at the time of writing the Eurogroup is still talking.  Talk that compromise close to being reached in Greece but the sticking points are IMF involvement after 2016 and €50bn privatisation fund.  Bit disappointing the Greeks are agitating about the IMF given the latter offered a pro debt restructuring olive branch…


Greece #2 – lots of angst over night with French president Fran├žois Hollande pledging to get an agreement and warned that at stake was not just whether Greece stayed in Europe but “our conception of Europe”, whilst Luxembourg has warned Germany that pressing for Grexit would bring “a profound conflict” with France and “catastrophe for Europe”.  #ThisIsACoup trending heavily on Twitter with provocative graphics like the one below…


 Great chart via @SoberLook on a different kind of Greek exit...





Greece #3 – Paul Krugman writing on the Greek debate: “The European project — a project I have always praised and supported — has just been dealt a terrible, perhaps fatal blow. And whatever you think of Syriza, or Greece, it wasn’t the Greeks who did it"

I don’t often agree with Krugman but he is quite close to the money here in my view. Not a fatal blow yet but the longer the prevarication goes on for the bigger the bill to help Greece and the greater the general single currency zone sustainability scepticism. 



China - ‘Only’ about one-third of Chinese shares not trading today!  CSI 500, an index of small cap stocks in Shanghai and Shenzhen, is up 7.1%, on track for its biggest daily climb since November 2008. June trade data better with exports up and import decline not as large.  Still not a headline cheap market but a stock picking one undoubtedly...if you are brave enough. 


Who friendly to whom?  China still has to work the foreign relations angles...


 Japan – demographics are poor...

 

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