Market Update – June 20

Here are some of the numbers that I found most interesting today…

Pulling money from Spanish banks.  The Bank of Spain said April bank deposits had fallen by 2.5% from March, and by 5% compared with a year ago.

More troubled loans in Spain.  Spanish banks’ percentage of troubled loans jumped to 8.72% in April, from 8.37% in March, the highest in 18 years.

Greece needs an extension until “the 12^th of Never”.  Under Greece’s current bailout plan, the country must achieve a budget surplus of approximately 4.5% of gross domestic product from 2014 onward.  Greece wants an extension until 2016 to reach this goal.  Who thinks that Greece will come anywhere close to meeting this goal?

Are we helping them or us?  Boris Johnson wrote in The Telegraph about the suffering in Greece: “Every day we read of fresh horrors: of once proud bourgeois families queuing for bread, of people in agony because the government has run out of money to pay for cancer drugs. Pensions are being cut, living standards are falling, unemployment is rising, and the suicide rate is now the highest in the EU – having been one of the lowest.”  He was asking whether we are keeping Greece as part of the euro to help them or to help us?

Swiss franc.  The Swiss National Bank is fighting to keep the franc no stronger than 1.20 per euro.  Investors see the franc as a safe haven.  The Swiss fear that sharp appreciation will make it difficult to export.

Wow!  Derivatives expert Paul Wilmott says that the notional value of derivatives is approximately $1.2 quadrillion.  As a point of reference, world GDP is probably somewhere near $60 trillion.

Give me the smaller amount (sooner).  Nearly a third of all Americans turning 62 in 2010 opted for early Social Security.

State pensions.  The funding gap for U.S. state public employee retirement benefits climbed by $120 billion to $1.38 trillion in fiscal 2010.  Public pensions in 34 states were funded at less than 80%.  Compare that to 2000 when more than half of the states’ pension plans were 100% funded.

Changing demographics.  For the first time ever, there were more Asian immigrants (36%) to the US than Hispanic immigrants (31%).

We need to skip a lunch.  The average global body weight is 137 pounds.  But, in North America, the average is 178 pounds.

Bye-bye Best Buy?  Sales at physical electronics stores have decreased an average of 2.6 percent a year in the last five years.  Sales of electronics online have risen an average of 14.7 percent a year in that period.

Have a great week.

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