Beware Hidden Costs as Banks Eye ‘Grexit’

Berlin (AFP) - The escalating Greek crisis puts the European Central Bank in the eye of the storm, as the only body that can prevent a banking collapse or, in the worst case, manage the consequences of a "Grexit".

Heading into 2014, Michael Pettis at China Financial Markets remains adamant that growth estimates for China are too high and that rebalancing (while necessary), implies lower growth than most expect. Via email ...

(Hammerin Man)

Keeping An Eye On LIBOR - CLO's Beware

Via Scotiabank's Guy Haselmann, Markets need to retreat from dependency on central bank stimulus which they falsely believe provides the magical elixir that fixes all economic and financial market woes. At some point during the past few years, central bank stimulus has gone from a net benefit to a source of financial market ailments.  Investors who have rightly arrived at this conclusion have shifted from dip buyers in risk assets to sellers of up-ticks (see January 6th note ‘Down Side Up’).

Last June, Goldman made a "surprising" finding when it calculated that China real debt load was far higher than it had represented.

Citi chief economist Willem Buiter, the the man who coined the term "Grexit," now thinks Greece leaving the eurozone is the most likely outcome, or Citi's base case, just three months after the bank said an exit was "unlikely."

As reproted previously, the biggest event of the day will be the meeting between Greek PM Tsipras and Germany's Merkel, which - with Greece having only days of access to liquidity left (and a negative solvency position already as confirmed by Tsipras' letter to Merkel saying it will be unable to repay its near-term debts) - means the fate of Greece will be d