Greece, China, Grexit, Brexit – is there no end to all this? We sent our intrepid reporter, David Cowell of Yorkshire-based  Myddleton Croft Investment Managers, to check out one of the further outposts of the euro situation – well, all right, Portugal. Go easy with the expenses claim, David.

I have pleasure in informing you that: a) The  Algarve is still beautiful; b) Alantejo wines are even better, and c) plantar fasciitis is extremely painful hence the requirement for (b).

The latest Greek negotiating strategy is to demand a ransom to desist threatening suicide. Greece is just pointing a gun at its own head. Why does Europe need to care very much if it pulls the trigger? Because it’s politics, not reason or finance.


The Financial Conduct Authority (FCA) has warned that consumers face ‘information overload’ in their communications with financial services groups. As a result, the regulator has issued a discussion paper to encourage smarter and more effective communications from firms. How about taking their own medicine? Most of the claptrap is of their own making.

mc joke June 27



On the bond side, matters are somewhat serious due to a marked lack of liquidity. 24AM tried to execute a few small trades earlier in the week but in many cases dealers were short – not just light – on stock so buying bonds proved to be very challenging. “On Monday we walked into the office with a glimmer of Greek optimism and immediately bond prices jumped higher, so trading at levels that we thought were fair turned out to be virtually impossible. Monday’s move higher was a big one, but this price adjustment was one that occurred with very little traded volume behind it.”

All this tells us that should a successful conclusion be reached between Greece and its creditors over the coming days then we could see a significant squeeze in credit markets based on value, fundamentals and an incredibly powerful technical position. “Should there be no solution with Greece and we walk in on Monday faced with the prospect of capital controls and likely default, then the power of Monday’s rally gives us an insight to the type of short term drop we can expect.” You have been warned.

China’s Shanghai Composite index is on the verge of bear market territory. The index’s intra-day moves have been extremely volatile in recent days, but an 8% fall overnight confirms a downward trend which has seen stocks move sharply lower since their near-term peak on 12 June.The tumble sent the index almost 20% below the 5,122 mark reached earlier this month.


China: The land of opportunities, or not, according to Blackfriars:

  • In the space of 12 months, the combined market cap of Chinese equities has risen by US$6 trillion—an increase of 112%. To help quantify that figure, $6trn would buy you 3.1 German stock markets, 3.2 Indian GDPs or, if you like travel, 14,500 A380 aircraft.
  • (Anecdotally) over 50% of all new lending this year has been margin lending.
  • Cement demand was down 3% in 1Q.
  • Steel demand was down 6% in 1Q.
  • Housing sales growth was down 10% in 1Q and new starts were down 21%.
  • According to Andrew Hunt of Hunt Economics, Industrial Production is running at around 0.9% which means GDP, in his view, is running at around 3 to 3.5%, not the 7-7.5% they would have you believe

Whish is what I’ve been saying for a wee while.

US housing revives:


Housing, like wages and personal savings, has reflected ‘post-crisis blues’ but all three are reviving now, and the blues may finally be banished this summer however other spending remains weak and the Fed may still delay until year-end the coming rate increase until the year-end.

Reprising my Irish visit, the following story came to mind:

A man and his wife  moved back home to Cork , from London . The wife had a wooden leg and to insure it in Britain was £2000.00 a year. When they arrived in Cork, they went to an insurance agency to see how much it would cost to insure the wooden leg. The agent looked it up on the computer and said to the couple, “€39.00.” The husband was shocked and asked why it was so cheap here in Ireland to insure, as it cost him £2000.00 in England.


The agent turned his computer screen to the couple and said, “Well, here it is on the screen, so it is. It says: Any wooden structure, with a sprinkler system over it, is €39.00.”

Have a good week!



David Cowell


For and on behalf of Myddleton Croft Investment Managers

1 Woodside Mews

Clayton Wood Close


LS16 6QE

Tel:        0113 274 7700

Fax:       0113 274 7711

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