America slows, but who knows? The second estimate of US economic growth was out on Friday night, and the bad news was that it was -0.7% (annual). This is down from the first estimate of 0.2% growth but not as bad as the -0.9% to -1% forecast by the market. Still it was enough to give some in the markets a brief hope of a delay to movement on interest rates. But, on another reading of the economy: Gross Domestic Income showed a rise of 1.4% (annual) from a flat reading in the first estimate. GDP and GDI should be much closer than they were in Friday’s report. And there’s now a widespread belief that the US Bureau of Economic Analysis will produce a whole slew of revisions with its July 30 first estimate for June-quarter growth (the data deluge never stops!), which will produce stronger growth figures for the first quarter, and possibly a whole lot of other quarters. — Glenn Dyer

Will Greece’s balloon go up in June? Or why you shouldn’t worry about Greece until the end of June. The IMF will allow Greece to miss Friday’s payment and bundle it up with others due later in June and with 1.6 billion euros repayable at the end of the month. That’s why you should ignore all the huffing and puffing from various politicians and media this week and probably right up to the end of the month. Greece’s can has been booted well and truly down the road to the end of June. But watch Athens and the Parliament for a possible deal that could involve splitting the Syriza party; with the left-wing hardliners, who oppose any deal, left hanging as the more moderate parts of the government try to do a deal with opposition parties to pass the legislation the IMF and the European Central Bank want passed for a new reform plan. Watch also for the ECB to lift the limits on the amount of money Greek banks can borrow from it (and on lend) to the government and business, if there is any left over. — Glenn Dyer

Greek banks in hock. Driving a settlement deal will be the parlous state of Greek banks. They are being kept alive by money from the rest of the eurozone via the European Central Bank (ECB). Three of Greece’s major banks — Piraeus Bank, National Bank of Greece and Alpha Bank — revealed late last week they are well and truly on the ECB’s money teat. National Bank of Greece (the country’s biggest) said it relied on funding from the monetary authority of the eurozone, Eurosystem, of 23.6 billion euros at the end of March and 25.3 billion at the end of May, up from 14.2 billion euros in the December quarter of last year. Alpha Bank (the fourth biggest) relied on Eurosystem funding of 23.6 billion euros at the end of March, up from 14.8 in the previous quarter. And the second biggest, Piraeus Bank, had been lent 30.3 billion euros from the Eurosystem, compared with 14.1 billion in the fourth quarter of last year. That’s 77.5 billion euros a month now pumping into Greece and keeping the economy and its banks alive. Take that away and there’s no Grexit, there’s an almighty black hole into which the entire Greek economy tumbles, Syriza government, left-wing nutters and all. — Glenn Dyer

Make mine an oily Vienna. At this time of year (and in November), your typical oilman’s fancy turns to the half-yearly OPEC meeting in Vienna (number 167 occurs this Friday) and in their dreams, they picture headlines that scream “OPEC oil cut”. They then awaken in a sweat and realise they have been sniffing that West Texas Intermediate crude again. Last November, the rest of the oil industry was shocked when, thanks to Saudi Arabia, OPEC refused to cut production to adjust to the falling price of oil, This week’s OPEC meeting will produce more of the same. The oil group will maintain its 30-million-barrels-a-day ceiling (which is being breached with production running at a smidge under 31 million barrels a day in April, with Saudi Arabia exceeding its 10 million ceiling as well). But unlike what happened after last November’s “no cut” decision, when oil prices plunged sharply, the week should bring with it a more grown-up reaction, and prices won’t change much. American production rose last week, despite a fall in stocks and rig use. There’s more and more commentary from the US shale mob that they can make money at current prices, so expect no real change for the rest of the year and into 2016. — Glenn Dyer

Peter Fray

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Peter Fray
Editor-in-chief of Crikey