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Greece ATM
June 29, 2015, 8:05pm
S&P has downgraded Greece's credit rating from CCC to CCC-, and says there is a 50 per cent chance it will leave the Euro.
 
 
It made the change because it feels that, unless circumstances change, Athens will probably default on its commercial debt in the near future.
 
Absent unanticipated favourable changes in Greece's circumstances, a commercial default is inevitable within the next six months.
 
Commercial debt is not the money it owes to international creditors such as the ECB or IMF, but to banks and insurance groups. 
 
 
The credit rating agency said the closure of banks while capital controls are put in place will further weight on Greece's economy, which it predicts will contract by three per cent this year. 
 
S&P said the Greek government's decision to hold a referendum on creditors' proposals rather tan accept them reflected “a further deterioration since June 10 of liquidity conditions in Greece’s banking system, which depends heavily on official financing.”
 
On Sunday, the ECB said it would no longer increase emergency loan support for Greek banks, intensifying fears of insolvency and ultimately an exit from the Euro.
 
If Greece does leave the single currency, S&P says it will revise the country's transfer and convertibility assessment from AAA to CCC.
Alexis Tsipras
June 29, 2015, 6:38pm

Greece will not pay the €1.6bn (£1.14bn) it owes to the IMF tomorrow, Athens has confirmed

Read more: How Twitter became Alexis Tsipras’ secret weapon in Greek negotiations

The beleaguered country is required to make the repayment to its creditor by 11pm on 30 June, after saying it would bundle all its payments for the month into one transaction. 
 
The IMF has Confirmed that Greece will immediately be in arrears if it defaults, raising fears of a Greek exit from the Eurozone. 
 
The news is what markets have been waiting for – stocks are currently down across the world, from Hong Kong to London. Analysts at Barclays said it was “almost certain the Greek government will be unable to make the 30 June IMF payment”.

Tsipras's surprise

Greek banks have been closed for the duration of Monday as the government imposes capital controls and tries to prevent insolvency.
 
 
On Saturday, Greek Prime Minister Alexis Tsipras called for a surprise referendum on whether to accept the creditors' proposals for a deal, which will be held on 5 July. This prompted the ECB to stop increasing emergency funding for Greek banks, which have been reliant on its support. 
 
From Tuesday, Greece will have to survive without rescue loans for the first time in five years. 
 
European leaders have urged the Greek people to vote "yes", highlighting Greece's exit from the Euro as a real possibility. 
 
“You shouldn’t commit suicide because you’re afraid of dying,” Jean-Claude Juncker, the president of the European Commission, said in a speech, arguing that the budget cuts are good for their country. 
 
“You should say ‘yes’ regardless of what the question is,” he said. A “no” vote, however, “will mean that Greece is saying ‘no’ to Europe.”
Clocks
June 29, 2015, 6:10pm
Tomorrow, clocks around the world will have a “leap second” added to the end of the day.
 
 
It's a necessity resulting from the introduction of atomic clocks in the 1970's – entirely man-made time keeping can never be exactly in tune with the Earth's rotation, so every now and again a slight adjustment must be made. 
 
It isn't normally an issue – it tends to take place at the weekend, when trade deals aren't going ahead.
 
But this year, for the first time, the extra second will be added to a day in the middle of the week, which could cause chaos for traders across the world.
 
 
With transactions now so fast they can be completed in a fraction of a second, trades amounting to £2.9m can take place in a single second.
 
So, here's what could go wrong, and how everyone's trying to prevent it from having too much of an impact.

One in 10 computer systems will have problems

When an extra second is added, all of the world’s computer systems must adjust to align themselves with Universal Time (UTC). 
 
In 2012, despite the change going ahead at a weekend, it caused the systems of a number of major businesses to freeze, including those of Qantas and Linkedin. The problem was traced to an issue within Red Hat/Linux servers, which are often used by the finance industry. 
 
Once again businesses are nervous about their servers going down, even after taking all possible precautions to avoid it. 
 
Geoff Chester, public affairs officer for the US Naval Observatory in Washington, told Bloomberg an estimated 10 per cent of large-scale computer networks would end up encountering problems.
 
"With the leap second, you count 61 seconds in a minute, and that’s where the problems lie,” he said. 

Trades will be disrupted – so everyone's changing their trading times

When the second is added, it will be 8pm in New York. To avoid any trades coinciding with the leap, the New York Stock Exchange and Nasdaq are closing late trading early.
 
Markets in Japan, South Korea and Australia will start trading one second after the leap. About $3.7bn will change hands at the bell on the countries’ stock markets, according to calculations by Bloomberg.
 
Sydney and Tokyo are therefore recalibrating their clocks. Japan will make the change hours before, while Australia and Korea will make up the time afterwards. Singapore's exchange SGX will delay the change by 24 hours. 
 
But while all countries are doing what they can to prevent their stock market's being burnt by this necessary addition to time, it's not certain no problems will arise. 
 
“As systems continue to be more and more connected, it’s becoming harder and harder to predict just what the impact could be and how big,” said Hiroki Kawai, the head of trading systems at the Japan Exchange Group.

The end of the leap second? 

For those fretting about the impacts of the leap second, they'll be pleased to hear it might not continue for much longer. Members of the International Telecommunication Union when they meet in November to discuss whether to scrap the change once and for all. 
 
Osborne says he is keeping the situation under close review
June 29, 2015, 5:42pm

George Osborne has reiterated Britain’s attitude is to “hope for the best, but plan for the worst,” in a speech to the House of Commons.

The chancellor told MPs no-one should understate "impact a Greek exit from euro would have on the European economy and the knock-on effects on us."

This is seen a referendum on whether Greece leaves the Euro, and there are very serious consequences to that, but that is for the people of Greece to decide, he said.

The chancellor also said Eurozone authorities have made clear they stand ready to do whatever is necessary to ensure financial stability.

Talking specifically about Britain, five years ago, the UK was much less prepared to deal with shocks from abroad. The country is in a stronger position now, the chancellor added:

We've dramatically reduced exposure to Greece, as a country and as a banking system.

Osborne also pledging to help UK citizens in Greece, including pensioners who will have their pensions paid as normal. “The situation is uncertain and we will keep it under review,” he said

Read more: Greek debt crisis: Should UK tourists take cash to Greece? Government imposes ATM limit on citizens as banks close

Osborne further stated the Greek situation shows the importance of financial stability, which he maintains the Conservatives have provided in government, and which he will outline in more detail in the July Budget. Osborne added he did not want Britain to join the Euro, citing Greece as an example of the problems of the common currency.

While some credit and debit cards are accepted, Osborne told MPs that this was at the discretion of vendors and cash could run out at ATMs, and so encourages the 140,000 holidaymakers per week to take a sufficient amount of cash with them.

June 29, 2015, 4:50pm

Greece has a rather large bill to pay.

As the country approaches the deadline for repaying loans to its creditors - €1.6bn of which is due to the International Monetary Fund (IMF) tomorrow - it's the kind of cash that a country doesn't just find hiding down the back of the sofa.

Where that money will come from is, of course, the subject of protracted negotiations with Europe's lenders, but perhaps there's a source of funding that hasn't yet crossed the Greek Prime Minister's mind?

There's one Londoner at least who thinks that crowdfunding is the solution to Greece's woes, even if it is mainly down to complete Gretigue (that's the new lingo for Greece debt crisis fatigue), or as they put it "all this dithering over Greece is getting boring".

Tom Feeney, a marketing manager from London decided to set up a crowdfunding campaign on Indiegogo, seeking to raise a bailout fund for Greece of €1.6bn.

Read more: How Twitter became Greece’s secret weapon

"The European Union is home to 503m people, if we all just chip in a few euro then we can get Greece sorted and hopefully get them back on track soon. Easy," says the campaign page.

The 29-year-old from Bethnal Green told City A.M:  "It seems like politicians, Prime Ministers and chancellors are forgetting who is really affected by this crisis and that's the Greek people. If governments won't help the Greeks, perhaps people around Europe can.

"It would only take everyone in the EU to buy a feta and olive salad for lunch to raise enough for this bailout. And that certainly doesn't seem like a hardship."

Rewards up for grabs include a postcard of the Greek PM Alexis Tsipras for €3 donations, a classic Greek salad of feta and olives for €6, and a bottle of Ouzo or Greek wine with a donation of €10 or €25 respectively. 

There is another top tier for any heavy hitter willing to stump up the cash in full (an option for some of the world's richest perhaps?).

"If you provide all the cash needed, then we'll find you a Greek Island. There's an estimated 1,200 to 6,000 in Greece and one will belong to you. This one has yet to be ratified with the Greek Prime Minister himself but it's pretty much in the bag."

Clearly fans of doing things the alternative (some may say awkward) way, perhaps Syriza will embrace alternative financing to fund the future of the country as it hangs in the balance.

It's not the first time the crowdfunding concept has been called upon as the solution to Greece's woes.

Read more: Here's the government's advice for holidaymakers in Greece

In 2012 an Australian woman set up a similar campaign while earlier this year a group of French intellectuals raised €117,000 from 1442 people, but that was only around 40 per cent of its 300,000 target, meaning it was unsuccessful.

So far the new effort has picked up €124 from four funders in less than 24 hours. There's a way to go, but still plenty of time to get it to that billion-euro target.

"European ministers flexing their muscles and posturing over whether they can help the Greek people of not. Why don't we the people just sort it instead?" the funding pledge says.

Maybe it's the Gretigue talking, but that's a refreshing can-do attitude.

June 29, 2015, 4:45pm

Transport for London (TfL) has announced a shortlist of four train operators to run London Overground services from next year.

Arriva Rail, LoKeGo (the snappily-titled joint venture between Keolis and Go-Ahead), Metroline and MTR are all in the running to take over the routes, which includes routes between Liverpool Street and Enfield Town, Cheshunt and Chingford, as well as between Romford and Upminster, which TfL has taken over in preparation for the arrival of Crossrail in 2018.

And Liverpool Street revellers will be pleased to hear the contract will include "options" to introduce all-night services at weekends from 2017.

The routes are currently run by TfL's own London Overground Rail Operations (another snappy name), and currently carry more than 176m passengers a year - that's about 585,000 a day. 

TfL said frequency on the northern section of the line will be increased by 25 per cent next year, from eight to 10 trains. 

June 29, 2015, 4:10pm

Two executives of the controversial taxi app Uber have been questioned by French police as the startup faces a government crackdown following violent protests

Simphal Thibault and Pierre-Dimitri Gore-Coty, general managers for France and Western Europe respectively, are being questioned over the US company's activities, a French prosecutor said, amid tighter restrictions on the ride-sharing app in the country.

"Our general managers for France and Western Europe today attended a hearing with the French police," Uber said in a statement to City A.M.

"We are always happy to answer questions the authorities have about our service -- and look forward to resolving these issues. Those discussions are ongoing.  In the meantime, we’re continuing to ensure the safety of our riders and drivers in France given last week's disturbances."

French President Francois Hollande has demanded Uber be banned in the country following violent scenes of rioting by Paris taxi drivers against the service last week.

France's interior minister Bernard Cazeneuve enforced a ban on Uber on Friday, calling the company "cynical" and "arrogant" and ordering Paris police to seize any cars defying the ban.

He also said the action was "wide enough to cover the statements of Uber Pop managers" and that inciting people to defy the ban was a "criminal offence".

Uber France general manager Thibaud Simphal said the ban "changed nothing" and demand for the service would continue, Reuters reports.

Uber has started a petition of support for the service in France, where it said it had more than 200,000 passengers last month.

Jay Z and friends launching Tidal
June 29, 2015, 4:05pm
Don’t we just love a media-fuelled battle for supremacy, the winner in the ‘big race’, Goliaths all lining up for the 100 metre Dad’s dash? 
 
The truth is, in the mega-subscriber streaming market the gun went off years ago. The battle for streaming kingship is, as they say, a marathon not a sprint and there are many runners that have highly enviable services, technology and of course user bases.
 
Lke many of you, I was brought up on a musical diet informed by Our Price, the Woolworths 7” section, taping the hit-parade and - luckily for me - a cousin who had more taste than Radio One could offer.
 
To me, streaming and open source access to music is akin to a Pandora’s box – a never ending vortex to satiate every musical desire. 
 
Recent headlines have been littered with the power brands of Google & Apple slugging it out for column inches and of course subscriptions and making some loose claims to artists rights and ethics; chipping in from the sidelines the media friendly Jay Z has thrown his cap into the ring with Tidal. 
 
Then of course there are the established players, predominantly Spotify.
 
This all begs the question; how will the new players in the streaming market match up, who will be the future winners and how might they get there?
 
Classic marketing would ask: what business are all these brands in? Simple: entertainment, exploration and the satiation of musical curiosity. The technology is merely a means to massage this emotional desire. 
 
Arguably very little has been done to build emotional equity into many of the streaming brands, the focus being on the technical and functional aspects. 
 
The sites that offer parallels to radio one could argue provide a parallel to more classic entertainment language and intuitively feel like more human-friendly brands – there is though an evident opportunity gap to be filled.
 
With crystal ball in hand I’d proffer that the big players will hold firm, such is their scale and reach through their wider brand ecosystems and of course cash reserves.
 
But with little or no entry or exit barriers for users streaming promiscuity will continue to be rife and as the classic music industry sales models shift; vinyl grows, downloads shrink and the streaming market growth takes a ‘chill-pill’ sliding from 50 per cent-plus growth in 2013 to a still outstanding 29 per cent growth in 2014 – the power shift is what interests me the most. 
 
The ultimate winner will be us, the users, the music lovers for whom access to an almost limitless source of music and converged entertainment will be part free, part paid-for. Consumer driven innovations will rule the day. 
 
What this means for the creative industry is another argument but as we shift further into an empowered state - taking what we want, soaking up suggestions and living in a borderless world where entertainment will be intuitive and always on – this emotional space is wide open as our music curiosity will continue to need satisfying like never before.
Alexis Tsipras
June 29, 2015, 3:59pm
Late on Saturday evening, as Europe was still reeling from Greece’s decision to walk away from the negotiating table to hold a referendum on a reform package proposed by its creditors, the country’s Prime Minister, Alexis Tsipras, started tweeting.
 
 
Minutes later, he followed it up with another proclamation: 
 
 
Then there was another another: 
 
 
In all on Saturday night, Tsipras tweeted 22 times. By the time he’d finished, not only had he accused his creditors of playing a “game” with Greek people’s lives, he’d also suggested “threats and blackmail” had been used during negotiations, and had outlined the reform proposals in detail. Such ferocity was enough to leave a nasty taste in anyone’s mouth.  
 
It was strong stuff, but Tsipras and his leftist party, Syriza, promised transparency before they were elected in January - and so far, they’ve delivered it in spades. As relations between Greece and its creditors became more strained, the ensuing crisis played out not only in the rooms and corridors of the European Commission building in Brussels, but also across social media. 
 
 
This is politics, millennial style: while creditors remained tight-lipped about what was going on behind closed doors, only providing hints during carefully-choreographed press conferences; Tsipras and his team spent the past few weeks merrily leaking crucial documents, publishing “private” speeches and even tweeting straight from the negotiating table. 
 
Inside sources have admitted at several points during talks that tweets by prominent Greeks - not least Tsipras and his finance minister, Yanis Varoufakis - have completely thrown off the process, baffling both their creditors and those on their own side. On Saturday, Bloomberg even reported that Greek negotiators in Brussels had only learned of their government’s decision to hold a referendum via Twitter.
 
“It was the first they’d heard about it,” it wrote. “They soon left the room, their attempts to thrash out a compromise in tatters.” 
 
Does this mean the delicate world of international diplomacy will from now on be divided into 140 character chunks? 
 


Twitter addict? Varoufakis takes to his phone during negotiations (Source: Getty)

 
“It’s definitely a different approach,” suggests Vincenzo Scarpetta, policy analyst at think tank Open Europe.
 
“Tsipras’ rants in general - and I’m not just talking about Twitter, but his speeches and accusations at the institutions - have triggered a reaction. Greece’s counterparts were attached to a more traditional approach to negotiations, so they aren’t happy about this. It’s got personal.”
 
The problem for traditionalists is that it may also have put Tsipras in a stronger negotiating position than George Papandreou, Greece’s leader during the previous Greek crisis in 2011, suggests Michael Hewson, chief market analyst at CMC Markets. 
 
“A lot of his rants are done with a purpose - it’s a PR exercise,” he says. 
 
“The EU does have previous with respect to referendums. What happened in 2011 when Papandreou threatened to call a referendum? He was shot down. So by putting it out there the story has got away from EU politicians. They can’t stop it now it’s out there. He’s almost daring them to prevent him from holding [a referendum].”
 
Still - if you can’t beat ‘em, join ‘em. This afternoon, tired and emotional, European President Jean-Claude Juncker had his own moment of candour.
 
“I feel betrayed,” he complained during a press conference, before urging Greeks to in favour of adopting the reform agreement next Sunday. 
 
“We will never let the Greek people down. And we know the Greek people don’t want to let down the European Union,” he added. Not  quite Tsipras-level emotion - but it was close. 
 
Five twitter accounts with the inside track on the Greek crisis

1. Alexis Tsipras, Greek PM - @tsipras_eu

Sample tweet: "The proposal presented to me by EU President @JunckerEU on behalf of the institutions came as an unpleasant surprise"

2. Yanis Varoufakis, Greek finance minister - @yanisvaroufakis

Sample tweet: "Capital controls within a monetary union are a contradiction in terms. The Greek government opposes the very concept"

3. Jean-Claude Juncker, EU Commission president - @JunckerEU

Sample tweet: "We need to remain ambitious, in our partnership and in facing global challenges"

4. Margaritis Schinas, chief spokesman for the EU Commission - @MargSchinas

Sample tweet: "#TeamJunckerEU today presents Action Plan for #fairtaxation, creates Support Group for Structural #Reform"

5. The Greek Analyst - @GreekAnalyst

Sample tweet: "I don't like Samaras at all. I find him a terrible former PM. Also, a populist of the highest level."

 

Afghanistan
June 29, 2015, 3:55pm
Afghanistan isn't known for its appeal to foreign investors, but one London-based private equity firm has seen its potential and poured money into a pharmaceutical company there.
 
 
InFrontier, which was set up specifically to look for investment opportunities in pre-emerging markets, has paid several hundred thousand pounds for a 40 per cent stake in 786 Pharmacy, a pharmaceutical chain which currently has eight stores in the capital Kabul. 
 
According to the FT, the investors hope to increase this to 50 stores across the country by 2020, and turn it into the first western-style Afghan pharmacy chain offering high-quality medicines. 
 
 
With a population of around 30m, Afghanistan has an estimated annual medicine consumption of £254m, but only two per cent of its medicines are produces domestically, with the majority being imported from India, China, and Korea. 
 
InFrontier's decision to invest indicates the country's pharmaceutical industry could be on the brink of opening up more broadly for foreign investment after years of of economic decline and violence. 
 
The firm's two founders, Felix von Schubert and Benj Conway, say this is possible because most of the violence we hear about is aimed at political targets and armed forces, rarely affecting the day to day life of ordinary citizens and business-owners. 
 
They believe Afghanistan's market as “fertile” for foreign investment, with lots of young local entrepreneurs ready to take on tasks, and that this has been obscured by political unrest in the country.
 
“We want to show that Afghanistan is not a basket case,” said Von Schubert. “We’re aiming for a return on investment but we also want to make a social impact.” 
 
It is the pair's second investment in the country, and comes after years of travelling to Afghanistan and holding discussions with entrepreneurs. 786 Pharmacy was founded by Zabu Ullah Hidayat, who is 29 with a family background in pharmaceuticals. 

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