Greek funding and quantitative easing in Europe, an expected rate cut in Australia and the buoyant U.S. labor market are set to be the focus of an economic week dominated by a host of central bank meetings. The European Central Bank's Governing Council convenes in Cyprus on Thursday and may take a decision on whether to accept Greek government bonds as collateral for its direct ECB funding, which it stopped doing at the start of February. If the ECB does not - and it most likely will not - it could be forced to prolong the provision of Emergency Liquidity Assistance (ELA) to the Greek central bank. "The Greek question will be a hot topic," said ING Chief Eurozone Economist Peter Vanden Houte.
The latest episode of Greece's debt crisis has revived doubts about the long-term survival of the euro, nowhere more so than in London, Europe's main financial center and a hotbed of Euroskepticism. The heightened risk of a Greek default and/or exit comes just as there are signs that the euro zone is turning the corner after seven years of financial and economic crisis and that its perilous internal imbalances may be starting to diminish. A last-ditch deal to extend Greece's bailout for four months after much kicking and screaming between Athens and Berlin did little to ease fears that the euro zone's weakest link may end up defaulting on its official European creditors. U.S. economist Milton Friedman's aphorism - "What is unsustainable will not be sustained" - is cited frequently by those who believe market forces will eventually overwhelm the political will that holds the euro together.
In his 50 years at the helm of Berkshire Hathaway Inc, Warren Buffett has transformed a failing textile company into a sprawling conglomerate that has vastly outperformed most of the rest of corporate America. In the 84-year-old's annual shareholder letter released on Saturday, Buffett said Berkshire has grown so large - 751,000 times its original net worth per share - that the future pace of gains "will not come close" to those of the past. "The numbers have become too big," Buffett wrote. Within 10 to 20 years, Buffett said, Berkshire's girth could require whoever then runs the Omaha, Nebraska-based company to consider steps he has resisted, such as paying dividends or conducting "massive" share repurchases.