Good morning

The headlines:

  1. John Taylor of FX Concepts (a hedge fund guy) says that Greece will exit the Euro this year. Link: Actually, Taylor reckons that it may be as soon as next month. Well exactly – how often can Greece actually go to the polls and fail to form a government? Given that it needs the next round of the bailout package by next month; I don’t think that any of the old school crew are going to give it to them without there being some balance of power committed to the original terms. That said, the anti-austerity tide is making a general tsunami of itself in almost all of the EU – so maybe the new kids on the block will ignore the old school as being, well, old. But if that doesn’t happen, the newly-unformed Greek Government will approach the IMF. And Christine Lagarde will barely pause in her tanning booth to say “Non, bitches”.  And I reckon that the anti-austerity league will throw their hands up in a huff and leave. This will all be foolish – because it’s going to be bloody chaotic if the Greeks “elect” to leave the Euro (read my original article on this here). But if there are political parties that believe that Greece’s spending is not the core problem; then I’ll bet good money (NOT) on them believing that they can handle a monetary regime change. Like hell.
  2. The big traders are abandoning Wall Street in favour of Hedge Funds. Link: As they should. I’ve written about it here.
  3. Berkshire plans $1.6 billion sale of bonds to replace maturing debt. Link: And that’s how WB rolls. It’s business as usual – there’s some debt coming due; they’re replacing it. 
  4. Syriza (anti-bailout) tells the pro-bailout guys to abandon their aid pledges. If they don’t, then there’s no chance of forming a coalition government in Greece. The definition of “stalemate”. For the record, Alexis Tsipras (the Syriza leader) phrased it this way “I expect Antonis (Samaras) and Evangelos (Venizelos) to send a letter to the EU revoking their pledges to implement austerity measures by the time they meet with me tomorrow”. And that, folks, is the core of diplomacy: self-presumption. Idiot. Link: Next candidate please.
  5. Senate Republicans block Obama’s student loan rate freeze plan. Link: Indeed. I refer back to yesterday: student loans appear to be on the increase, but not for any obvious reason. The suspicion is that it’s just become another form of state welfare, as unemployed Americans return to school (and more debt) while they’re not doing anything else. Higher education is not necessarily productive: there are courses and degrees out there that amount to nothing more than thinly-veiled leisure activities. I’m sorry: but the arts tend to be hobbies that you can sometimes make a career out of; not careers that you can sometimes take up as a hobby. Subsidizing that is just not-at-all-veiled vote-mongering.
  6. French and Portuguese banks lose out on Africa deals. This has given breathing space for other banks with lesser colonial links. Like the British (Standard Chartered and Barclays) and the Americans (Citigroup) and the South Africans (Standard Bank and RMB). It’s a pity – because for those original banks – go where the growth is. Don’t dwell on an economically-obese homeland. Link: In search of growth.
  7. In South Africa, the head of Sanral has stepped down. The rand has dropped on the news. The South African National Roads Agency Ltd recently lost a case in the high court – and has been forced to delay the implementation of its e-tolling system. But for anyone driving the highways of Joburg, all the capital investment has already happened. So the debt obligations are there and someone has to pick it up. If it’s not the taxpayer directly, it’s be the taxpayer indirectly. The SA government will have to pick up the tab – and at that point, lower credit ratings, higher interest costs, higher future taxes. Link: The Scaredy Fat Cat jumps ship.
That’s all for now.
Have a good day.