July 06, 2015

Greece votes no! (maybe), US wins Women’s World Cup, Chinese stocks, Pope in Latam and worst team in sporting history

“The World in a Nutshell”
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IN A NUTSHELL: MUST READ Greeks Vote No: Unsure To What Exactly What happened? Greece overwhelmingly voted “no” in a referendum yesterday that may or may not have been on Euro membership. The referendum was seen differently by almost everyone involved. The Germans (and most other Europeans) saw it as a referendum on the Euro. Greek PM Tsipras and his supporters repeatedly stated that a “no” vote was only a “negotiating tactic” that would allow him to get a better deal. The referendum got ugly in the final hours with Greek Finance Minister Varoufakis accusing the Germans of “terrorism” (presumably another “negotiating tactic”). So basically, the Greeks have voted “no” but they won’t be leaving the Euro anytime soon… a bit like your friend who says bye but keeps talking for another 20 minutes before hanging up. Varoufakis had just resigned from the finance ministry as of this morning because the PM judged his “absence” as being “helpful to reaching an agreement.” Go figure. So what now? This part is tricky. The ball is in Europe’s court, and we don’t expect Europe to be in the world’s best mood (who would be after being called a terrorist). French President Hollande and German Chancellor Merkel are meeting today to discuss what to do. The European Central Bank (ECB) will also meet to decide what support it will give Greek banks (they have been closed for a week). Tsipras says he will meet with parliamentary opposition to come up with a plan. All is not lost. It is still possible that everyone tones down the rhetoric and that they can agree on a new plan. What should you be watching?
  • Bank closures: Depending on the ECB meeting we will know if/ when banks will open. 
  • Deposit “haircuts”: Nice way of saying the government will take your money. Again, depending on the ECB meeting we will find out if banks will need to help themselves to Greek deposits. 
  • Eurozone meeting: For anything to happen, one of these has to be scheduled… they don’t have a great track record of getting stuff done.
  • Salaries: The Greek government will have to pay them next week, and it doesn’t have much money on hand. Private companies have already started issuing private currencies to pay employees. The government might soon follow. 
  • July 20: That’s when the Greeks have to pay back the ECB. If they miss this deadline, the ECB will cut the cord with the Greek banks and, well… it gets ugly.
China Throws Money At Problem To Make It Disappear
The Greeks aren’t the only one causing a headache for the markets. The Chinese stock market has been taking a beating lately, down almost 30 percent since their peak a few weeks ago.The drop has been described as “the biggest risk in the markets today.” China has done everything to slow down the crash. Last week, the Central Bank announced a rate cut, lowering of reserve requirements, lowering of trading fees and banning IPOs. China’s next move is to throw $20 billion at the problem, hoping it will go away by encouraging funds to buy the Shanghai index. The Chinese Central Bank (PBOC) plans on helping other institutions buy even more shares by providing them with cheap financing. China’s move proves the age old adage that although money can’t buy you friends, it can always buy you a lot of overpriced shares. 
NUTS AND BOLTS: SHOULD READ The Pope Boosting Catholicism In Latam… And Being A Legend 
On Sunday, Argentine-born Pope Francis landed in Ecuador (a country where the Guinea pig is considered a delicacy) on the start of a seven-day tour around the region. This is his second visit to Latin America in three years and its nearly 500 million Catholic inhabitants. During his visit, he met with left-wing President Correa and asked to chew coca leaves (the illegal raw ingredient for cocaine). He will visit Paraguay and Bolivia, shunning the major Latin American countries due to his commitment to more “marginal nations.” This visit will be part of an orchestrated push by the Vatican to increase Catholic participation in a region which has seen a steady decline in the last 30 years. In the 1970s, roughly 90 percent of Latin Americas considered themselves Catholic (this number is now around 69 percent). The Pope has taken bold stances on climate change, inequality and helped to broker a normalization of US-Cuba relations. Hopefully the coca leaves will give him the energy he needs to revive Catholicism in the region.

Worst Team In The History Of Sports: Federated States Of Micronesia 
A 38-0 soccer (football) loss…wait..really is that even possible? Fiji unleashed a record-breaking hammering of the Federated States of Micronesia at the 15th annual Pacific Games. It’s like the dad who is a little over-competitive when playing his kids and their friends – he just shouldn’t even try otherwise it’s a little embarrassing. In what must be the most misplaced post-match comment of the decade/century/millennium, Micronesia coach Stan Foster said “we did quite well in the second half.” 
A big congratulations to the US women’s national soccer team for winning the Women’s World Cup for a third time, beating Japan 5-2 this Sunday. A special shout out to midfielder Carli Lloyd who scored three goals within the first 16 minutes (check out the third goal in the highlights video), bringing the US to a 4-0 lead. We could not agree more with Coach Jill Ellis who said of Lloyd, “She’s just a beast man, she’s unbelievable, a rockstar.” 

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