Macro Roundup: Oil Hits Another All-Time High
Apologies. Yesterday, I wrote that oil had hit an all-time high in euros on Wednesday and was close to its high in sterling. In fact, it was the opposite. In any event, oil ended up hitting an all-time in euros yesterday (Euro denominated oil hits high, FT.) This video does a good job of explaining the factors driving current oil prices.
European creditor countries are demanding that Greece fulfill a laundry list of conditions to receive its second bailout. The list is specific and very ambitious in terms of the deadlines that must be met, or as one analyst put it:
“The programme is much, much more ambitious than economic reform. This is state building, as typically understood in traditional low-income contexts.”
I wonder how realistic it is to expect Greece to meet these goals? There is no doubt this solution would lead Greece down a path of genuine modernization and liberalization of the economy. In that regard, it would be much healthier than simply leaving the eurozone and devaluing the drachma. Do Greek politicians, civil servants and unions have the stomach for these reforms? Does the Greek population? I still think it more likely that Greece will ultimately leave the eurozone, but it would certainly be a show of will if the Greek people can see this through (Athens told to change spending and taxes, FT)
Enjoy your weekend.
***Should investors expect a 10%-11% return on stocks? The answer is 'no'. To understand why, read my commentary in the latest issue of The Real Returns Report.***