Sunday, 26 July 2015

Stories we should be thinking about

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

Macro matters:

'Talks between Greece and its international creditors over a new bailout package will be delayed by a couple of days because of organizational issues, a finance ministry official said on Saturday'. Link here. Not the first delay to do with sure it does not mean anything(!)

Talking about Greece, Joseph Stiglitz pretty cutting in his New York Times editorial write-up here:

'For now, the Greek government has capitulated. Perhaps, as the lost half decade becomes the lost decade, as the politics get uglier, as the evidence mounts that these policies have failed, the troika will come to its senses. Greece needs debt restructuring, better structural reforms and more reasonable primary budget surplus targets. More likely than not, though, the troika will do what it has done for the last five years: Blame the victim'.

I like this on the emerging markets (link here) and why to spot a good general buying opportunity the key may be to watch real money supply growth in Russia and Brazil...

But there are still challenges, both technical as noted by @RaoulGMI here '$EEM has broken the key trend line. Just the last support at $36 and its all over...'

 ...and fundamentally as noted here:

'Emerging market currencies crash on Fed fears and China slump Brazil faces a 'perfect storm' as the country as the country slides deeper into recession, the politics go haywire and the Fed prepares to raise rates (link here)'

Of course commodities are naturally inter-linked with the emerging markets given they are big buyers at the margin and shares in resource-facing sectors are a large component of emerging market indices. So with the Bloomberg Commodity Index not a great signal...
 ...but maybe it depends on what index you use.  Compare the CRB Raw Materials Index with the above.  Clearly a bad last few years but how bad depends on what index you use...

Excellent oil centred posting by SoberLook on the energy markets...and continued challenges within them (link here). 

Fascinating post here on 'late inning' signals from the debt and potential pre-listings market. Meanwhile longer-term issuance has risen over the last few years...

Very good/interesting on the reasons for the rise in obesity (link here): 

'First is the increase in restaurants per capita, which explains 12%, 14%, and 23% of the increases in BMI, obesity, and severe obesity, respectively. Increased availability of restaurant food would likely encourage substitution away from home-cooked meals to relatively unhealthy restaurant meals. Furthermore, fast food is not the lone culprit. When we split the restaurant variable into fast-food and full-service restaurants, we find similar effects for each type.  The second major contributor is the increase in superstores and warehouse clubs per capita, which accounts for 17%, 16%, and 24% of the growth in body mass index, obesity, and severe obesity. The superstore variable combines Walmart Supercenters with the warehouse club chains Costco, Sam’s Club, and BJ’s Wholesale Club'.

Interesting on the Trans Pacific Partnership:

'The second flaw is who the TPP leaves out. China, India and Indonesia, among others, are not party to the TPP nor will they be able to join anytime soon. The hurdles to membership are unreasonably high for non-advanced countries, who will pay a cost from being left out with strict rules designed to divert trade from them...The third major flaw is that even in the win-win trade enhancing areas, the TPP will either entrench protection in some areas — chiefly agriculture — or, where it succeeds in liberalising, will do so at the expense of non-members'

Surprising on digital wallets: "Only 4% of these trusting smartphone users say they are extremely likely to start using a digital wallet in the next 12 months. Conversely, 53% of them say they are extremely unlikely to start using a digital wallet." (link here).

Meanwhile watch out for the summer as @ukarlewitz reminds us:

Company-related observations:

As per The Financial Times 'Deutsche Börse is buying Germany-based foreign exchange trading platform 360T for €725m, the Frankfurt-based stock market operator said on Sunday. 360T is one of a handful of multi-bank, multi-user platforms which have revolutionised foreign exchange trading over the past decade and Deutsche Börse beat US commodities and currency exchange operator CME Group in the auction, according to sources familiar with the deal'.

Meanwhile lots of chat about gold. You can see why given the positioning of funds...

...and the modern day rolling lows in gold sector performances (link here): 

You get a real feel for the extent of the Anglo American job cuts in this chart:

Disney's 1957 strategy chart.  Hasn't changed that much really...

And finally...

Fantastic Greece and related quiz here (paywall however) from the Financial Times.  See if you can pass!

Could this be the new gumtree or eBay? 'Wallapop: the virtual flea market app for Android'.  Link here(h/t @MarkBrant1KM)

Have a good week

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