Wednesday, 2 December 2015

A few macro thoughts today...

A few macro thoughts today...

Schengen/Greece ‘the EU has warned Greece that it faces suspension from the Schengen passport-free travel zone unless it overhauls its response to the migration crisis by mid-December’ (FT).  Surely this is easy to solve: link bailout monies with more economic and political reforms…

Talking about Greece I note that the nation's taxpayers must “declare all assets like cash ‘under mattresses’ & jewelry.  Cash ‘under the mattress’ totaling more than 15,000 euro, jewelry and other valuable items such as diamonds and gemstones, should be declared to electronic system of tax authorities, Taxisnet, as of 1. January 2016”  Do we really expect a full set of declarations?  Lots of ‘it is worth c. 14,000 euros’ justifications!

Hard not to conclude this is still true...


(h/t @RANsquawk)

...for sustainability I still believe 2016 needs to see a Greek debt haircut

Ahead of the ECB – good read “ECB Preview: Credibly Promising to Behave Irresponsibly” here.  Totally agree with the observation that ‘the ECB needs governments to enact and enforce fiscal and structural policies to complement its expansionary monetary policy. Without government contributing to growth, overreliance on monetary policy runs the risk of sowing the foundation of the next financial crisis’

Russia/diplomacy – chat that Germany is lobbying for a deal to be cut with Russia on investment/energy matters to help ‘create a more integrated economic area from the Atlantic to the Pacific’. Nothing to do with Germany the biggest beneficiary of such revitalised links of course!

Americas - Puerto Rico barely avoided a default. The US commonwealth made a last-minute bond payment of $354 million using revenue meant for government agencies.  Another $945m payment on 1 January.  Going to be more bond haircut chat over the next year…  Meanwhile after poor GDP numbers, pessimism about Brazil rampant e.g. ‘Brazil downturn prompts warning of depression’. 


(h/t @DavidInglesTV)

US dollar / DXY – if you go back to the ‘80s used to rise more often than not with higher rates…but true last 25 years has not.  Still perceive this as the key macro insight...and a US dollar fade would really help the world.  Here's hoping for the next 3-6 months...


(h/t @divyachowdhury)

Couple of interesting oil charts - shifting geopolitical sands in the first...
 
...and kind of interesting back to flat in real terms century-to-date. 
My view: I think the oil price is forming a base currently and large cap/higher yielding energy shares remaining interesting for investing now and into 2016. 

No comments:

Post a Comment