by Calculated Risk on 2/16/2015 07:11:00 PM

From the WSJ: Greek Financing Talks Break Down Amid Wide Gulf Over Bailout

“The general feeling [among ministers] is still that the best way forward would be for the Greek authorities to seek an extension of the current program,” said Jeroen Dijsselbloem, the Dutch minister who presides over the regular meetings with his counterparts. “We simply need more time,” he added.

After the meeting, Mr. Varoufakis said he had been ready to request a four-month extension to the existing bailout, but not under the conditions that Mr. Dijsselbloem and the other ministers were offering. “Our only condition for doing this was that we should not be asked to impose measures that are clearly recessionary and clearly uncalled for in the state of humanitarian crisis we have in Greece,” he said.

I've read the proposed draft statement for an extension - and it was absurd - there is no way the Greeks will sign it.

Tuesday:
• At 8:30 AM ET, the NY Fed Empire State Manufacturing Survey for February. The consensus is for a reading of 9.0, down from 10.0 last month (above zero is expansion).

• At 10:00 AM, the February NAHB homebuilder survey. The consensus is for a reading of 58, up from 57 in January. Any number above 50 indicates that more builders view sales conditions as good than poor.

Weekend:
• Schedule for Week of February 15, 2015

From CNBC: Pre-Market Data and Bloomberg futures: currently S&P futures are down 9 and DOW futures are down 65 (fair value).

Oil prices were up over the last week with WTI futures at $52.72 per barrel and Brent at $61.40 per barrel.  A year ago, WTI was at $100, and Brent was at $109 - so prices are down about 45% year-over-year.

Below is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are around $2.25 per gallon (down about $1.10 per gallon from a year ago).  If you click on "show crude oil prices", the graph displays oil prices for WTI, not Brent; gasoline prices in most of the U.S. are impacted more by Brent prices.

Orange County Historical Gas Price Charts Provided by GasBuddy.com

by Calculated Risk on 2/16/2015 03:54:00 PM

From the LA Times: Line of ships waiting off coast grows as ports shut down for holiday

On Monday, there were 33 vessels anchored off the Los Angeles and Long Beach ports, unable to dock, according to the Marine Exchange of Southern California. That was three more than Sunday.
...
The White House is sending Labor Secretary Tom Perez to jump-start stalled contract talks between the employer group, Pacific Maritime Assn., and the International Longshore and Warehouse Union. Perez is scheduled to meet with both sides Tuesday, according to a Department of Labor spokeswoman.

by Calculated Risk on 2/16/2015 01:16:00 PM

The Financial Times has the draft text: Eurozone's Greek talks collapse early

The draft text, obtained by the Financial Times, states that Greece would agree to a six-month "technical extension" of its current bailout ... "This would bridge the time for Greece authorites and the Eurogroup to work on a follow-up arrangement," ... Athens would "successfully conclude the programme, taking into accounts the new government's plans" and promised the "best use of the existing flexibility in the current programme".

Greece rejected this statement.

Press conference here.

by Calculated Risk on 2/16/2015 10:37:00 AM

Parts of the east coast are suffering with record snow fall, but in California, the drought continues ... last week in SoCal was like summer with temperature in the 80s!

This is the fourth year in a row with little rain or snow in the mountains (the statewide snowpack is about 27% of normal for this date). California is the largest agricultural state, and an ongoing drought could have an impact on food prices - and on the economy.


This graphic shows the National Weather Service 7 day precipitation forecast for the U.S.

California will be dry for at least another week - and the East Coast is getting too much precipitation.

by Calculated Risk on 2/15/2015 08:06:00 PM

From the WSJ: Deadline for Greek Bailout Agreement Looms

Any changes to the content or expiration date of Greece’s existing €240 billion ($273 billion) bailout have to be decided by Friday, to give national parliaments in Germany, Finland and the Netherlands enough time to approve them before the end of the month. Without such a deal, Greece will be on its own on March 1, cut loose from the rescue loans from the eurozone and the International Monetary Fund that have sustained it for almost five years.

Although Greece mostly lived up to the terms of the bailout, the promised growth never materialized (see tables below). As Greek Prime Minister recently said: "We are not negotiating the bailout; it was cancelled by its own failure.”

 The only choices are to allow Greece to run a smaller primary surplus or for Greece to leave the Eurozone and default on all their debt. The first choice seems likely, but not without some drama.

Note: Greece would have left the Eurozone in 2010 if the actual numbers below had been the plan.  No politician would have signed up for that economic devastation!

Greece: Annual GDP, Forecast and Actual1
Year	Promised	Actual
2009	-2	-4.4
2010	-4	-5.4
2011	-2.6	-8.9
2012	1.1	-6.6
2013	2.1	-3.9
2014	2.1
2015	2.7
1IMF Forecasts and Eurostat Actual

Greece: Annual Unemployment Rate, Forecast and Actual1
Year	Promised	Actual
2009	9.4	9.6
2010	11.8	12.7
2011	14.6	17.9
2012	14.8	24.5
2013	14.3	27.5
2014	14.1	26.82
2015	13.4
1IMF Forecasts and Eurostat Actual 22014 is Q1, Q2, Q3 average