tag:blogger.com,1999:blog-80041522829311096682012-02-10T14:57:30.149ZMarkets and Beyond - An Independent Viewfinancial markets,thematic investments, market analysisPascal Morinnoreply@blogger.comBlogger1711100tag:blogger.com,1999:blog-8004152282931109668.post-8540031959078645102012-02-04T15:18:00.000Z2012-02-10T14:57:30.190ZGreece 2011 Budget execution and the (bleak) future
A year ago, European politicians were hailing the progress
made by Greece
stating that the nadir of the crisis was behind and difficulties ahead would be
dealt with forcefully. As my readers may recollect, I did warn that the plan
will fail and the Greek situation would worsen, the country being bankrupt.
Let’s see what happened in 2011 in the Greek Budget:
Note that the last column Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-59475292392914525802012-01-10T12:32:00.001Z2012-01-10T20:10:04.018ZThe magnificent 7 and equity markets - Review 11
Since I last wrote about the magnificent 7 in February 2011,
a lot has happened and it is rather appropriate to review where do we stand at
the beginning of 2012.
Despite all discussions about recession/double dip in the US
for most of 2011, it did not occur and growth looks to carry on, whilst at a
moderate pace; this is strikingly different from what we have been witnessing
in Europe sincePascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-43302067368181540402011-12-16T09:13:00.000Z2011-12-16T09:13:40.428ZA week in Europe – 20 years after the Maastricht Treaty
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<![endif]Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-30323735867956700352011-11-08T20:34:00.000Z2011-11-08T20:42:59.194ZEuropean rescue package: truth and fallacy
It occurred to me that the EUR100 bn private sector participation
to the latest Greek rescue might no be as large as trumpeted by European
leaders on 27th October.
The statement:
“…we
invite Greece,
private investors and all parties concerned to develop a voluntary bond
exchange with a nominal discount of 50% on notional Greek debt held by private
investors.”
The facts:
1. Greek’s Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-78056000883488088712011-11-03T17:21:00.000Z2011-11-03T18:00:39.149ZEurozone as we have known it: end of story
1. Greece
Tuesday’s announcement by the Greek Prime Minister, Giorgios
Papandreou, of an impeding referendum on the second rescue package concluded a
few days before sent market rolling and policy makers tangling in despair and
frustration.
It was doubtful that this rescue package would work, but at
least it was buying (wasting) a bit more time.
Interesting enough Wednesday’s Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-75308275756227315282011-10-28T23:45:00.000+01:002011-10-28T23:45:04.957+01:00Euro summit: kicking the can down the road once more
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Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-80834270500059930002011-10-26T16:22:00.001+01:002011-10-26T16:23:13.221+01:00European banks’ recapitalization
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mso-padding-alt:0cm Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-36926750970947945172011-10-09T19:18:00.001+01:002011-10-09T19:18:50.587+01:00Who should be single A rated: Italy or France?
I am amazed that France
rating has not been downgraded as yet: it does
not deserve a AAA by a long margin.
First, have a look at current rating for European countries (please
note that since this table was published, Moody’s downgraded Italy 3 notch to A2 from Aa2, i.e. the same as Poland or Cyprus). This downgrade is probably
justified in itself, but I am questioning how France can retain Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-73443341759373361182011-10-05T15:00:00.000+01:002011-10-31T17:30:34.615ZDexia in 2 slides and a few words
I warned about Dexia weeks ago, and during private discussions
over the summer I discussed with a top official in Luxembourg about its demise and breakdown.
Leverage core equity / total assets: 75 x! (36x if using the
Basle II Tier 1 capital definition): so, doomed in a recessionary environment
where nearly 50% of loans are with local authorities that have Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-67095980200176996222011-09-20T11:09:00.000+01:002011-09-20T11:22:06.408+01:00Greece: this is THE week
As reporter by Bloomberg: “European Union and International Monetary Fund
inspectors hold a teleconference call today with Finance Minister Evangelos
Venizelos, to judge whether the government is eligible for its next aid payment
due next month and on track for a second rescue package approved by EU leaders
July 21.”
So, here we are, finally, decision have to be taken after
months of Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-40781740447022059592011-09-14T10:22:00.000+01:002011-09-14T20:47:24.824+01:00Greece’s race to default and European Banks’ recapitalization
What I wrote 18 moths ago is unfolding and Greece is racing toward default and policy makers must decide who will bear the
burden: taxpayers by continuing
extending credit lines and the ECB buying sovereign debt in the secondary
market to artificially maintain low interest rates and allow banks to offload
their junk assets, or the private sector
by recapitalizing banks - bondholders taking Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-73901352477724592262011-09-01T08:35:00.000+01:002011-09-07T09:58:28.985+01:00What is needed to clean-up the eurozone house? Clean-up the banks and restructure PIGS debt!
I have a number of times discussed the necessary
restructuring (default) of PIGS debt and the need for banks (and any other
holder of PIGS debt) to take their losses. Governments cannot and should not
maintain mismanaged banks (either directly or via the ECB or any other vehicle)
under life support, shareholders should take their responsibilities (either
inject equity or face huge losses) and Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-78973461914256776222011-08-18T21:13:00.001+01:002011-08-18T21:30:41.464+01:00Europe is cracking
An article published in the Greek newspaper Ekathimerini reports a bi-lateral deal between Finland and Greece; this is of course not widely spread in the media: take a sip, read and have fun!“Austria kicks up fuss about Finnish collateral deal
Austrian minister suggests his country might ask for same agreement with Greece.Austria opposes Finland's deal with Greece on collateral for loans and Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-87293084666012416552011-08-04T17:33:00.004+01:002011-09-26T10:52:36.576+01:00Open letter to the President of the Eurogroup
In a follow-up of a letter written in March 2010 about the Greek rescue and following articles in the ensuing months, I wrote a new letter to Jean-Claude Juncker, the President of the Eurogroup and Prime Minister of Luxembourg, regarding the new rescue package for Greece and published in the Luxembourger Wort; for my English reader I will prepare an article in English in the coming days.
Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-7851121012707874282011-07-31T12:40:00.000+01:002011-07-31T12:40:22.940+01:00US deficit and debt ceilingAn interesting chart showing payments to be made by the US Government after Tuesday 2 August deadline when the debt ceiling will be reached and the US no longer able to borrow: on July 28th the US debt stood at USD 14,293.275 billion extremely close to the statutory limit of USD 14,294 billion.The Bipartisan Policy Center calculated that August 10 is the date when the US will run out of cash and Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-10886898249440373502011-07-05T08:31:00.000+01:002011-07-05T08:31:07.796+01:00Greece has defaulted: The French plan, the ECB and rating agenciesThis is the best analysis I have read so far on Greece’s salvation, since Greece has de facto defaulted, however European (and other) official are disguising it. Since I do not see the point of reinventing the wheel, I post this analysis in-extenso without any comment.
Making Sense of the French Rollover Plan
Confusion continues to reign supreme over what the French rollover plan does for the Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-90014106138437525942011-06-17T12:07:00.001+01:002011-10-03T22:08:50.522+01:00Greece, eurozone and the euro: the body is really getting rotten
1. The EU wobbling around the Greek ongoing crisis
Since early May, a succession of events and a flurry of declarations coming from all corners of Europe, often antagonistic, have again put the eurozone to the forefront of the news (Greece's fable continues to unravel). Greece is moving closer to political chaos and the impotency of European leaders is not discontinued.
The rift between Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-46915800041593971762011-05-15T16:58:00.002+01:002011-10-03T22:07:19.010+01:00Greece’s fable continues to unravel
It could have been the scenario of a TV series, but it will not last over as many years as to Dallas or The Experts did.
The past two weeks have been rather rich with events:
3rd May: Portugal agrees to a 3 yr EUR 78 billion funding from the IMF and Europe.
6th May: An article published in Der Spiegel magazine says Greece may leave the eurozone.
Unscheduled meeting in LuxembourgPascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-19934935513796097022011-04-17T08:58:00.004+01:002011-05-10T09:29:48.147+01:00Banks’ exposure to PIGS countries
© Markets & Beyond
Every quarter, the BIS publishes with a 6 months lag, banks exposure country by country. I drew a table to compare the evolution from June to September 2010; banks in main creditor’s countries continued to cut (sell to the ECB) their exposure in the tune of well over EUR 100 billion, and there is no reason that this trend has abated since:However, Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-85304746054884426272011-04-16T20:30:00.002+01:002011-04-18T17:42:28.426+01:00Greece: State Budget Execution Jan-March 2011 - Not looking goodAs my readers know, I closely follow Greece’s budget execution. The situation is not improving:
Revenues continue to lag forecasts and the fiscal position is deteriorating: -9.8% during Jan-Feb 2011, -11.0% during Q1 2011.
Expenditures seem to have reached a point where it is very difficult to significantly cut further.
The PIB item was actively “managed” in February (seePascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-79957331524608538622011-04-13T21:24:00.002+01:002011-04-14T15:33:31.353+01:00The French mint issues a limited series of gold and silver coins: a rip-off!
The French mint (“Monnaie de Paris”) is issuing 10,000 gold EUR 1,000 face value (weight 20 g or 0.71 oz @ 999.99/1000 title) and 50,000 silver EUR 100 face value (weight 50 g or 1.76 oz @ 900/1000 title). They will be delivered from mid-June to end July and a 30% deposit is required to reserve them. Do not rush!First, Gold coins were already sold out within 48 hours with people queuing in the Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-7883656225460613412011-03-29T10:02:00.000+01:002011-03-29T10:02:47.130+01:00Portugal, Greece and the EURO crisis: What the news are?<!--[if !mso]>
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<![endif]-Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-13024975246943072902011-03-13T15:53:00.000Z2011-03-13T15:53:20.653ZChart of the Day: Family Home Price/GoldAn interesting chart showing US median family home price in gold: today it takes 120ounces of gold to buy the median single-family home vs. 601 ounces in 2001, 80% down from the peak and near it previous trough in 1980. Markets tend to overshoot however and I expect this ratio to significantly decrease. We probably are in for a 35-40 years cycle before it rebounds. Source:Chart of the Day: MedianPascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-70045703281055016022011-03-09T10:29:00.003Z2011-03-13T15:41:47.639ZThe Seven Immutable Laws of Investing
A down to earth paper on investing from James Montier of GMO, full of common sense, far away from all the mathematical/statistical models that failed so badly during the financial crisis.
GMO is a top notch value investor.
Source:Grantham, Mayo, Van Otterloo & Co (GMO): The Seven Immuable Laws of Investing – James Montier, March 2011http://www.gmo.com/
Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-39088109448535325942011-02-28T17:27:00.006Z2011-10-03T22:10:49.152+01:00The magnificent 7 and equity markets - Review 10
I have not written about the magnificent 7 for a couple of months and it is rather appropriate to review them following the strong performance displayed by equity markets around the world since then.
In September I wrote: “I have not changed my view of no double dip and the FED QE2 (USD 1 trillion dollar additional liquidity) if confirmed will fuel asset prices. […]The S&P500 … has yet to Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-66853260026021763692011-02-09T17:06:00.006Z2011-02-10T16:36:44.634ZUS economy outlookI follow US tax receipts which give a rather accurate picture of the state of the real economy. Whilst tax receipts from individuals have turned around in November 2009, they started to be positive in May 2010 and have substantially increased for the sixth month in a row to January 2011.
On the corporate front, the turnaround was in September 2009 and numbers became positive in February 2010.
Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-14316968894614189962011-02-07T18:24:00.003Z2011-02-09T11:21:43.375ZThe case for uraniumThe spot market price for uranium ended 2010 at its highest level for over two years, reversing a declining trend in a year that also saw record spot market activity.SummaryNuclear power generation is today the only viable and credible route to match growing electricity demand in fast expanding economies but also in the West to meet CO2 emission reduction targets.
A large portion of uranium minesPascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-73715032259520744662011-02-01T20:27:00.000Z2011-02-01T20:27:58.696ZMonet exhibition in Paris: December 2010- January 2011For once, nothing about finance or the economy, just a link for a wonderful digital journey into Monet's work during his long painting life:
http://www.monet2010.com/en#/home/
These paintings were in display at at the Paris "Grand Palais" exhibition center.
Enjoy!Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-2747447098145357562011-01-27T12:14:00.004Z2011-01-27T12:42:52.330ZEurope and the euro zone at the forefront againIn Europe, the beginning of the year started at full speed from day one.First, the EU earmarked Estonia joining the euro zone as a proof of the continuing success and attractiveness of the euro as if this event would fool any sensible investor.At the same time tensions reappeared with spread widening again for PIGS countries debt ahead of Portugal and Spain financings. These debt auctions howeverPascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-77056622446293671232010-12-21T15:27:00.000Z2010-12-21T15:27:35.629ZWinners & Losers in 2010
Source:Bloomberg via Saxo BankPascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-77876680439116795702010-12-15T11:02:00.002Z2010-12-15T11:05:47.635ZDetailed exposure of banks to PIGS countrieshe BIS latest publication provides interesting details which are usually kept away from public eyes; I talked to the BIS which confirms that they were able to publish these detailed data following an authorization from Central Banks in Europe. I guess this disclosure had only one objective: to show that Spanish banks gross commitment to banks and public sector in Portugal, Greece and Ireland is Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-72176856934431022152010-12-08T09:06:00.003Z2010-12-14T09:15:40.045ZTracking the Global Economy: United StatesThe latest release by the FED of St Louis confirms that the economic situation of the US continues to (slowly) improve.
Source:Federal Reserve Bank of St Louis: Economic Researchhttp://research.stlouisfed.org/economy/us/gdpdata.htmlPascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-2921407019024963702010-12-07T08:49:00.002Z2011-01-30T11:03:05.536ZWhat did the financial crisis did teach us about the Eurozone?
© Markets & Beyond
In any crisis, one can become depressed and see the glass always half empty and not learn lessons, continuing the same mistakes or inventing new ones, even worse. One can also learn from past mistakes and improve. The financial crisis taught us a few things which were hidden deep within its foundation due to a flush of liquidity, low interest rates, Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-34729627259269132402010-12-06T19:24:00.001Z2010-12-06T19:24:56.307ZA E-bond: a good idea? Certainly not!Jacques Attali, the former advisor to French President, François Mitterand, has been a strong advocate of E-bond issuance for some time, in particular in his book “Tous ruinés dans dix ans? Dette publique: la dernière chance”. This idea was repeated at the Luxembourg for Finance conference in June 2010 attended by Jacques Attali and Jean-Claude Junker, Prime Minister of Luxembourg and President Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-34152879154129179572010-12-03T09:49:00.001Z2010-12-03T09:50:07.341ZThe Eurozone crisis and competitivenessSeveral times, I wrote on this blog and in articles that the premises of the construction of the Euro were flawed from the beginning, mixing countries displaying stages of economic development too far apart, increasing debt and artificially low cost of financing creating a smokescreen. I also wrote that, in the absence of a two tier Eurozone (strong countries/weak countries), only a fiscal and Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-65490202863500667532010-11-30T15:38:00.001Z2010-11-30T15:46:16.177ZIreland rescue package: some more detailsFurther to yesterday’s information contained in the EU press release, I found some additional details that may be of interest to readers:The EUR 10 billion capital injection will raise core tier 1 ratios to at least 12%.
The Irish National Pension Reserve Fund will provide EUR 12.5 billion.
Any banks whose core tier 1 is seen falling below 10.5% will receive additional Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-47188220248419973282010-11-29T14:54:00.005Z2011-02-09T11:01:25.750ZIreland bailout: what’s next?1.
Ireland bailout
The 12% of GDP Irish budget deficit (32% including a banking rescue) was unsustainable and a few details emerged about the bailout agreed Sunday: The contribution from Ireland will come from the cash pile the Irish Treasury has accumulated and the National Pension Reserve Fund - a disgrace; the fund, which holds EUR 24 billion of assets, was set up in 2001 Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-35627908878759667722010-11-26T20:31:00.001Z2010-11-26T20:39:14.058ZIreland, PIGS and the Eurozone: Here we are…1. Bailout, bailout and bailoutA few numbers on loans provided by the IMF and the EU:Greece: EUR 29 billion (+ EUR 9 billion to be paid in January)Ireland: EUR85 billion (will see during the WE what the final number is)In January, Greece will get EUR 9 billion for its third installment (I have no doubt that even if they are dissent countries, arm-twisting will do the job), representing a total ofPascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-47099295544143994482010-11-26T08:38:00.000Z2010-11-26T08:38:20.522ZQuantitative Easing explained...... with a touch of humor, but sadly true.
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Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-69104986001146547842010-11-19T17:47:00.000Z2010-11-19T17:47:10.921ZIreland, PIGS, QE2, the Euro and the melting potToday, I am going to reflect on the continuing crisis within the eurozone and the usefulness QE to spur the economy, a nice melting pot.Greece is back behind the curtains and Ireland is on the stage under the spotlights for the continuing show of the eurozone crisis.Summary of the previous actsPolicy makers did not want to face the harsh consequences of 20 years of easy money that led to Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-65006376906017249202010-11-07T21:52:00.000Z2010-11-07T21:52:29.015ZChart of the Day: Stock market rallies since 1900Chart of the Day had an interesting chart showing the length of bull markets; as they commented:the current Dow rally (hollow blue dot labeled you are here) is still somewhat short in duration and below average in magnitude when compared to all the stock market rallies that occurred since 1900Chart of the Day adds:Most major rallies (73%) resulted in a gain of between 30% and 150% and lasted Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-65889171863794675862010-10-29T07:52:00.009+01:002010-10-31T11:37:27.107ZGreece’s Budget Execution Program: Jan-Sep 2010As readers of Markets & Beyond know, I am closely following the implementation of the Greek budget. Its most recent release (20 October) leads me to conclude that the Economic Policy Program (“EPP”), which takes into account stability measures decided in March and May and implemented since, will not be met.At the end of September, cumulated revenues were running behind schedule at EUR 36.5 Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-53358364627069467272010-10-21T11:27:00.002+01:002011-02-09T11:10:09.709ZThe US economy: no double dip! Long equitiesWhilst the double-dip theory is waning these days, I thought it would be good to review a few economic indicators that cry that no double-dip is to be expected (but for economic/monetary mistake or exogenous shock).First, the output gap turned around and whilst still negative is not pointing to a downward tipping point. The graph below clearly shows that employment is lagging the output gap Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-49709046786130929282010-09-29T09:44:00.000+01:002010-09-29T09:44:49.900+01:00The magnificent 7 and equity markets - Review 9In my previous review (10th August), I concluded: “The 15% correction seems to have just been a pause in a bull market ... I stick to my no tightening by the FED expectation … and the ECB any time soon despite the rhetoric. This will be supportive to equity markets and a major tailwind.”I have not changed my view of no double dip and the FED QE2 (USD 1 trillion dollar additional liquidity) if Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-26175844075833764482010-09-14T19:00:00.000+01:002010-09-14T19:00:28.729+01:00BIS and new capital rules: God bless you!The world’s top bank regulators agreed Sunday on new rules intended to make the global banking industry safer and protect international economies from future financial disasters.The centerpiece of the agreement is a measure that requires banks to raise the amount of common equity they hold from 2% to 4.5%. In addition, banks will be required to hold a capital conservation buffer of 2.5% to Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-79541864631471096902010-09-13T18:15:00.000+01:002010-09-13T18:15:44.106+01:00Greece - January-August budget analysisThis week the Greek Government is undertaking a roashow through Europe's financial centers to explain how great the implementation of austerity measures is going in order to convince investors that they shouldn't have to pay ruinous interest rates on their sovereign debt (11.6% on Friday on the 10 years bonds, over 5 times what Germany pays).Markets & Beyond spent hours going through the details Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-30586624290509267652010-09-09T17:37:00.000+01:002010-09-09T17:37:20.172+01:00Europe’s bank stress tests: Follow-upOn September 7, the WSJ published an article which outlined why the criteria used for the 91 European banks stress tests minimized the debt risk in their portfolios. In particular it pinpointed discrepancies between data published by the BIS and the stress tests. The CEBS did respond to the article, unconvincingly however. If transparency was real one should be able to reconcile the numbers or atPascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-11020880993142832010-08-31T14:47:00.003+01:002010-08-31T18:17:13.088+01:00Summary US economic indicatorsI found the tables below good summaries of US economic indicators.As well publicized, including in this blog, the weakest point is the employment situation and consumption its corollary; for the rest the situation is not as disastrous as often related in medias, in particular on the investment front. All these graphs and indicators are posted without any further comment.
Source:
Federal Reserve Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-4292312780268347842010-08-22T22:11:00.003+01:002010-08-24T14:39:32.108+01:00Greece: no news, good news? Not really...After the Q2 2010 turmoil in debt markets across the euro-zone following Greek debt problem, everything went quiet from mid-July onwards: the euro dramatically jumped, CDS spreads shrunk and sovereign debt yields followed and media went quiet, like a remake of the Phoney war on the western front at the beginning of WWII.We had however a few announcements and markets anticipations/reactions: Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-39171249348793320632010-08-10T12:16:00.001+01:002010-08-10T12:17:07.636+01:00The magnificent 7 and equity markets - Review 8The S&P 500 has recovered 2/3 of its 15% April/June correction and is just trading above its 200 days moving average, itself in a flattish slope (the 1000 level held well). Economic news from the US are pointing towards a slower GDP growth and still high unemployment, but no double dip; Europe has showed recent signs of better growth, mainly due to German exports that are reaching growth rates Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-64444435765691890642010-08-02T17:08:00.000+01:002010-08-02T17:08:37.077+01:00Europe’s banks stress test: not really stressful…Whilst the ECB was first and foremost to react to the hedge fund collapse of Bear Stearns and BNP Paribas during August 2007, Europe has been running behind events ever since. Within the EU, the recent June decision to screen the main EU banks risk/capital adequacy and publish the findings was taken on the back of a unilateral decision by Spain following the seizure of its banking sector in Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-36122856043914123872010-07-21T18:32:00.004+01:002010-07-21T18:49:54.202+01:00Jeremy Grantham: Summer EssaysJeremy Grantham quarterly letter is always enjoyable thanks to the deep analysis it contains. The July one is a must read. Many times, Jeremy expressed his deep disbelief about the size the banking industry reached in the West and the lack of benefit for the economy as a whole but the few taking advantage of it via insane bonuses. His mea culpa is just a few words but worth their weigh.Here is anPascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-71616152643890648422010-07-16T07:10:00.001+01:002010-07-16T07:10:53.769+01:00China is not only making cheap goods: it produces sovereign ratingsDagong Global Credit Rating Co. has just released its first comprehensive sovereign rating table which presents some notable difference from the US based S&P's, Moody's and Fitch. The table below is borrowed from FT Alphaville:Interesting enough, during the June G20 meeting held in Toronto, Hu Jintao, the Chinese Prime Minister, called for uniform methodologies and standards for sovereign credit Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-88658774659136196122010-07-11T07:34:00.001+01:002010-07-11T07:34:44.993+01:00Europe: The State of the Banking SystemI publish in extenso an interesting analysis from STRATFOR concerning the European banking and sovereign crisis. I am in agreement with everything written.Stratfor is a deep, far and well-thought strategic intelligence and analysis service on topics ranging from geopolitics to economics. You can sign up for their free email list to receive weekly reports and special offers: http://Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-78859814146019693862010-06-25T17:12:00.010+01:002010-07-07T17:54:15.098+01:00Euro-zone bank's stress test: stressfull for Europe?1. Euro zone banks in stress Last week European Union’s decision to publish the results of stress tests on the region’s banks was more or less imposed by the Spanish government that unexpectedly pledged to publish results on Spanish individual banks, becoming the first European government to do so.I welcome more transparency and it is the only way to fend off rumors that markets are prone to Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-29169832968490035492010-06-16T23:20:00.224+01:002010-06-25T09:23:43.897+01:00Eurozone economy: the long and painful squeezeFor my subscribers, this article was sent by mistake very late yesterday: fat finger!
17th June 2010
1. Austerity measures across Europe
The Seoul G20 agreement on nothing exemplified the rift between the Keynesian economic policies followed by the Obama administration since early 2009 and the post-keneysian policies i.e. austerity packages followed in Europe for the past few weeks. As Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-20449203216544242162010-06-08T16:48:00.002+01:002010-06-09T15:51:36.707+01:00Why Governments Cannot Contain the CrisisI am just posting an excerpt from the Ludwig von Mises Institute which I felt very relevant about the Greek bailout.
Can this €110 billion bailout of Greece, combined with the €750 billion of additional promised support, stop the sovereign-debt crisis, or have we crossed the point of no return? There are several reasons why political solutions may be incapable of stopping the spread of the Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-45424919488825334742010-06-08T08:34:00.001+01:002010-06-08T08:43:57.221+01:00US economy is OK and Europe is in a deep messLatest data from the US economy points towards a weakening growth and the employment numbers were particularly weak: 411,000 out of 431,000 new jobs were temporary ones for the 2010 census. I view this report as non-significant and it does not change much the fundamentals (I don't care whether the numbers were much worse thane expected by economists - Goldman's ones in particular who were at +Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-48410610169347809632010-05-25T10:50:00.002+01:002010-06-02T09:11:37.436+01:00Funny video on the eurozone bailoutClark and Dawes on the European Bailout
Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-14501029268227627252010-05-20T16:52:00.004+01:002010-05-20T17:14:12.579+01:00Why you should not be long European banksI have indicated for a couple of months that I would not be long financial stocks despite the fact that banks borrow at close to nil cost and invest in sovereign bonds which provided a nice "riskless" spread. Holding Government debt is also advantageous with respect to regulatory capital ratios, allowing more leverage.
Well, riskless? No, risky instead!
The graph below explains a lot about the Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-27564660334116468162010-05-20T16:12:00.003+01:002010-05-20T17:31:04.764+01:00Euro-zone, macro-economic imbalances and bailoutAs I wrote in an article published in French in the Luxembourger Wort Thursday May 20, the construction of Europe, and even more so the euro-zone, has for many years become dogmatic and not pragmatic: momentum became the sake of the EU objective, and short-term fixes the rule of law as evidence with the Maastricht Treaty criteria and the Stability Pact which have repeatedly been trampled Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-75325112139733101572010-05-19T11:47:00.007+01:002010-05-22T07:51:07.975+01:00Are European lawmakers panicking?Since Monday, we have had a series of announcements and water-testing:
Last night, Germany's financial regulator decided to ban naked short-selling of certain euro-zone debt offerings, certain credit default swaps and 10 financial stocks (some discussion this morning about a European wide ban on shorting bank stocks)
May 18th EU finance ministers passed the draft text of a new Alternative Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-4717053931330815602010-05-16T08:56:00.002+01:002010-06-02T09:10:57.541+01:00Funny cartoon about the euro!Schneider Kapp Cartoons - 15/05/10
Source:RTL - Sonndeszeitung - Karikatourhttp://news.rtl.lu/sonndes/fotoen/4200/photo/9/
Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-44231125304065481842010-05-14T19:11:00.007+01:002010-05-18T15:48:39.193+01:00Is the euro a currency of the past as yet?Let’s start by remembering that the creation of the euro, in 1999 based, was based as much, if not more, on politics than on economics. This resulted in an acceleration of a dogmatic construction of Europe for too long where momentum has become an objective in itself. As repeated again and again in this blog, the common currency was flawed from the beginning: Germans wanted the ECB to fight Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-71531246284164517052010-05-12T16:23:00.002+01:002010-05-12T16:57:49.677+01:00Greece, Europe and the future after the EUR 750 billion eurozone bailoutMy apologies for my English readers, but this is an updated version of last week's article I wrote and which takes into account the dramatic EUR 750 billion eurozone bailout that took place during the weekend. I will soon post articles in English again!
Il pourrait s’agir du titre d’une fable de La Fontaine, mais il n’en est rien, cet article n’ayant pas pour objet de finir par une morale, bien Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-11869446843832471702010-05-05T11:23:00.000+01:002010-05-05T11:23:06.157+01:00Greece: the final chapter … at last?During the Weekend, with the help of the IMF, eurozone Finance Ministers agreed to a EUR 110 billion rescue package spread over 3 years and Greece came with additional austerity measures amounting to EUR 30 billion also spread over 3 years. Greece also obtained 2 years grace period to come back to a budget deficit/GDP of 3% in 2014.Will it be enough? The short and straight answer is no.In my viewPascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-44330896341104972122010-04-26T10:09:00.008+01:002010-04-26T11:22:16.894+01:00Greece will not be saved from a default on its debt (chapter 3)1. Greece budget assumptions and projectionsGreece Stability and Growth Program is based on the following assumptions:I note that all discussions are centered around the baseline scenario, which is overly optimistic. As the SGP plan dated January 2010 outlines (emphasis mine):“For more than ten years the Greek economy experienced high GDP growth rates... was however largely based on increases in Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-25349217322141955562010-04-23T14:18:00.000+01:002010-04-23T14:18:35.831+01:00Greece: call on the international funding package (end of chapter 2)At last Greece recognized that they would not be able to refinance the 10 yr bond maturing 19yh May. As reported by Bloomberg, spreads immediately shrunk, so not dramatically however, with credit-default swaps on Greek government bonds falling 54 basis points to 591 today, after rising to a record 650 basis points yesterday, according to CMA DataVision prices. Greece is at parity with India and Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-36185827819641312632010-04-23T11:29:00.005+01:002010-04-23T11:53:00.098+01:00Greece: the end is close (chapter two)Yesterday’s Eurostat release of provisional 2009 budget deficits across Europe outlined that Greece will not survive this crisis without a very rapid lifeline: the Greek deficit it now stands at 13.9% of GDP vs the latest revised number of 12.9%! But this is not the end of it: Eurostat has reservation on the quality of Greek data and both the deficit and the debt/GDP ratio could be revised Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-73466521427219899922010-04-20T17:10:00.004+01:002010-04-20T18:45:58.792+01:00Greece: successful 13w T-Bills auctionGreece sold EUR 1.95 billion 13-week Treasury bills today yielding 3.65 percent, more than twice the level of the previous sale in January (1.67%). The country still needs to EUR 10 + billion by end of May to finance maturing bonds and the deficit. This seems to confirm my reasoning: investors are ready to finance Greece short term for a good yield. I doubt they will finance Greece long term, Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-21638083648168504532010-04-20T12:51:00.005+01:002010-04-20T16:17:00.220+01:00Greece: end of chapter one but the fraud continues1. The rescue
As indicated in a recent article on my blog Thursday April 8th, the end of the game was to be decided within a week. On April 11th, after spreads on Greek debt had soared and the first signs emerged of a possible run on its banks, the panic mode button was on within the Euro-zone.
Sunday's announcement of details of a Greek bailout by Euro-zone finance ministers calmed markets: Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-36099911624855736292010-04-17T21:07:00.000+01:002010-04-17T21:07:04.923+01:00Chart of the dayToday's chart illustrates rallies that followed massive bear markets. For today's chart, a 'massive' bear market is defined as a decline of greater than 50%. Since the Dow's inception in 1896, there have been only three bear markets whereby the Dow declined more than 50% (early 1930s, late 1930s until early 1940s, and during the very recent financial crisis). Today's chart also adds the rally Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-5847844183933092282010-04-08T20:52:00.004+01:002010-04-08T21:04:49.963+01:00Greece and poker time: last callAfter the (absence of serious) decision taken at the Eurogroup meeting in Brussels where disagreements between Germany and France appeared wide opened despite all the rhetoric contained in the press release, it is time for countries of the eurozone to show their hand, and it is weak.10 year yield on Greek Government bonds surged above 7%, 1 year CDS above 650 bp (175 bp more than Wednesday or +Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-1610436042956289292010-04-03T18:45:00.000+01:002010-04-03T18:45:19.694+01:00US real estate housing market: a case for reasonable optimism or is it just noise?Many times, I outlined that the crisis started with the imploding housing bubble and will end with it. We are no entering into the 3 rd year of implosion according to the Case-Shiller Index. So, where are we now? Are data for the past 6 months showing the beginning of a real improvement or are they just noise?
1. The Housing market in perspective
It is during the summer 2006 that prices started Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-73963911226640501902010-03-28T16:46:00.004+01:002011-09-26T10:54:28.303+01:00Open letter to the President of the Eurogroup about the Greek Crisis
For my French speaking readers (but not exclusively!), I post a copy of an open letter about Greece I wrote Wednesday to Jean-Claude Juncker, Prime Minister of Luxembourg and President of the Eurogroup, before Thursday's summit in Brussels. It was published in the "Luxemburger Wort" (the Local New York Time or Daily Telegraph) on Saturday.
"Lettre ouverte au Président de l’Eurogroupe à Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-88060449465133080362010-03-23T16:21:00.031Z2010-03-25T09:21:38.675ZEconomy and equity markets: are they disconnected?saSince July 2009 I have been ambivalent with equity markets after their strong recovery from March low and continued weak economic data. The magnificent 7 indicators are all favorable and therefore tell us that there is nothing to panic about equity markets. But is this disconnected from the economic reality? So, let’s review a number of economic indicators. More than the numbers themselves, I Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-34650464631465095382010-03-21T17:25:00.000Z2010-03-21T17:25:34.244ZChart of the Day: Stock market ralliesChart Of The Day The published an interesting chart providing some historical perspective to stock market rallies.
The current Dow rally that began just over one year ago can be classified as both short in duration and below average in magnitude: most major rallies (73%) resulted in a gain of between 30% and 150% and lasted between 200 and 800 trading days has entered the low range of a "typical"Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-20934411997844945062010-03-16T21:24:00.004Z2010-08-10T08:28:29.567+01:00The magnificent 7 and equity markets - Review 7The S&P 500 has fully recovered its January/February correction and continues trading above its 200 days moving average, itself in a positive slope. We are now a year after the through reached on 9th March last year with a 68% gain. The magnificent 7 are telling us that equity market are resilient with no sign to become negative. Most markets are positive and among the BRIC countries, Brazil is Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-82632452086753305632010-03-09T13:57:00.007Z2010-04-20T16:23:53.344+01:00Greek crisis and the evil speculators: the scapegoats againIn February, George Papandreou, the Greek Prime Minister, started the chorus by pointing the finger at hedge funds and other so-called speculators for the troubles of Greece. Nicolas Sarkozy, the French President, Jean-Claude Junker, Luxembourg Prime Minister and Head of the Eurogroup, Angela Merkel, the German Chancellor, and Barak Obama, the US President (Obama by demanding that certain hedge Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-88884253443418980642010-03-07T19:01:00.002Z2010-03-07T19:16:06.615ZGreece's EUR 5 billion issueFinally, Thursday Greece sold EUR5 billion of ten years bonds yielding 6.37%, below the top seen on its debt in the past few weeks at nearly 7%, but still twice the level of German bunds. It was reportedly oversubscribed 3 times, investors being attracted by the yield and the implicit backing of Germany and France. This was again outlined today by Nicolas Sarkozy, the French President, who Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-5833150941821158192010-03-02T13:28:00.007Z2011-02-09T11:19:52.509ZGreek crisis: an update1. The news
On Friday, Reuters and the WSJ reported that France, Germany and possibly the Netherlands would directly or indirectly bailout Greece. 48h later, Mrs Merkel, the German Prime Minister, denied this.
What is clear is that we have entered a period of marketing/smoke screen/market testing campaign to assess a market response to Greece issuing a couple of billion EUR part of the EUR 23 Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-38239958674288216352010-02-26T17:39:00.000Z2010-02-26T17:39:28.001ZGMO 7-Year Asset Class Return Forecasts
Source:
GMO Research & Commentaryhttp://www.gmo.com/Europe/Research/Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-66195649459424773982010-02-19T18:26:00.002Z2010-02-20T10:53:09.586ZFED quantitative easing exit: has it started?The FED 0.25% discount rate hike yesterday evening came as a surprise. Banks are now borrowing at 0.75% instead of 0.5%, not a big deal: there is still plenty of space for banks to play the yield curve.
Two days ago I wrote that I did not see a hike in interest rates any time soon, so this move is a surprise regarding the timing. First, its significance is rather minor since it is applied to Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-25446198142385821732010-02-18T10:44:00.001Z2010-02-18T12:00:23.116ZForeign bank's exposure to PIGS debtThis graph is posted without further comment.
Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-78081056863775648732010-02-17T12:04:00.000Z2010-02-17T12:04:34.112ZThe magnificent 7 and equity markets - Review 6After a 10% decline between 20th January and 5th February, the S&P 500 is recovering and is still above its 200 days moving average, itself in a positive slope. We are now 10 month up after the trough reached on 9th March 2009. The magnificent 7 are telling us that there is no reason to become negative on equity (I recommend the reader to go to the GTI web site for their monthly newsletter, one Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-5331061115889347472010-02-15T09:40:00.003Z2010-02-15T10:07:09.803ZBank's CEOs compensationAs expected, Americans first and surprisingly Spanish second. It seems that the more CEOs put their banks in trouble the more they are paid (probably with the exception of JP Morgan). I have difficulties to understand how Spanish CEOs can get these amounts with all the bad mortgage loans they got on their balance sheets or maybe Spain is not in trouble with the real estate market...
Source:
Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-19565647860106409312010-02-14T18:34:00.003Z2010-02-23T10:26:26.430ZSovereign risk is back with a vengeanceConcerning Greek’s crisis, Thursday’s declaration of European Union leaders at a summit in Brussels stated that Countries belonging to the euro "will take determined and coordinated action, if needed, to safeguard financial stability in the euro area as a whole”. Once more, words, hot air, waffle but nothing concrete. Sarkozy says that Europe will not let one of his members default? Where is the Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-51433061832197078942010-02-05T08:56:00.000Z2010-02-05T08:56:27.413ZOn sovereign debt risk - EuropeYesterday, I posted a comment on US unemployment data (I am most interested in today’s release to see were the U6 is heading to) and since I found an interesting chart on short selling for sovereign debt via Business Insider. It tells that Greece is by far not the only country where sovereign risk is rapidly increasing.
Since November the SovX Western Europe index doubled to over 90 bp (via Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-39073785499743950002010-02-04T20:50:00.004Z2010-02-05T07:31:57.669ZFirst-time jobless claims rise and CDS spreads widenMore U.S. workers unexpectedly filed for jobless benefits last week. Initial claims for state unemployment benefits increased 8,000 (28,000 unadjusted) to a seasonally adjusted 480,000 in the week ended Jan. 30, the Labor Department said on Thursday. That was above market consensus of 460,000.As for productivity, it kept surging during the fourth quarter at 6.2% annual rate and 7.2% in the third Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-55372265210083392822010-01-31T23:01:00.008Z2010-01-31T23:33:38.111ZThe recovery is here! Or is it? Real recovery or statistical recovery?1. The statistical landscapeUS growth accelerated during 4th quarter expanding at a 5.7% yearly rate over the previous quarter, its fastest pace since the third quarter of 2003, when the economy grew at a rate of 6.9 %. This was a rather pleasant surprise. Sounds nice, but looking at more closely at the numbers, all is not so nice: the evil is in the details.3.7% of the growth came from inventoryPascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-37261136263006989912010-01-28T14:42:00.007Z2010-01-28T15:49:15.090ZAIG Bailout and taxpayer rip-offA lot of controversy is surrounding the $62.1 billion handover to bank counterparties to close out trades on credit default swaps (CDO) and collateralized debt obligations (CDO) at 100 cents on the dollar made before and after AIG was rescued .Professor Linus Wilson of the University of Louisiana has put together this helpful chart showing exactly how the bailout went down, complete with which Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-20489271351346592942010-01-28T09:09:00.005Z2010-01-28T09:19:24.698ZThe Ring of FireBill Gross is always providing interesting readings. In the PIMCO February issue, Bill discusses the deleveraging we are witnessing and its consequences for a number of countries going forward.I am very much in accordance with it conclusions which I have long advocated all along this blog and for nearly 10 years at P&C Global Wealth Managers:Invest in emerging economies and themes linked to its Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-55995909223479122082010-01-16T14:55:00.004Z2010-01-28T08:34:06.055ZLehman Liquidator Wins Court Approval to Spend $1.4 Billion to Buy Loans!I love this one. I did not see this Boomberg article reproduced or commented anywhere.The liquidator (the firm Alvarez & Marsal) is entitled to a bonus depending on the value realized from the sale of assets:(emphasis mine) “The more money Marsal brings in to Lehman’s bankrupt estate, the more its creditors can recover -- and the more his New York-based restructuring firm will make in bonuses.ThePascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-76362113648430312472010-01-11T17:30:00.019Z2010-01-11T20:30:30.149ZUS unemployment: a few must see chartsFriday, I commented on non-farm payrolls weak numbers. Today, I am providing several charts from various sources that put these in perspective together with additional comments.1. Employment and the 2000s: the lost decadethe number of jobs at the end of a decade has been anywhere from 20% to 38% greater than 10 years prior. This sub-par job growth is particularly noteworthy due to the fact that Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-31412845459257600422010-01-08T14:04:00.008Z2010-01-08T17:19:31.717ZPoor US unemployment numbersChange in nonfarm payroll came in worse than expected at -85,000 jobs vs. a consensus of a flat number (range +40.000/-50.000). Revisions showed payrolls increased the prior month for the first time in almost two years at +4.000 and decrease 127,000 in October. Both the number of unemployed persons, at 15.3 million, and the unemployment rate, at 10%, remained unchanged.Looking at in more details,Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-83435895672226543042010-01-05T17:48:00.009Z2010-01-16T15:26:49.691ZWhat’s in it for 2010?Where were we in 2009?After a disastrous 2008 that witnessed a global financial and economic meltdown not seen since the 1929 crisis, the trough was finally reached on 9 March 2010 in the West (China bottomed out late 2008) with an additional 35% decline in the US stock market from 1 January when the market finally realized that Armageddon will not concretized with central banks all around the Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-51065492186611102432010-01-01T15:49:00.005Z2010-01-08T11:15:06.603ZHAPPY NEW YEAR!HAPPY NEW YEARJOYEUSE ANNEEPascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-47251684615057768652009-12-30T15:55:00.013Z2009-12-30T18:20:56.876ZThe magnificent 7 and equity markets - Review 5 (end of the year)We are now 10 month up after the trough reached on 9th March 2009. Following extremely oversold conditions in March, the marked forged ahead with a vengeance the MSCI World Free index having surged 76% (less in the Western world and more in the developing world). The magnificent 7 are telling us that there is no reason for the markets to pause beyond short term overstretched valuations (I Pascal Morinnoreply@blogger.comtag:blogger.com,1999:blog-8004152282931109668.post-25521446428128533412009-12-29T20:52:00.008Z2010-01-08T11:14:04.945ZUS housing market: still mixed signalsAccording to data released by the US Census Bureau on 23rd December, New home sales dropped by 11.3 per cent in November to an adjusted annual rate of 355,000. That was the lowest level in seven months. The good number for existing home sales last month seem to have cannibalized new home sales, as well as the tax break extension into next year announced by the Obama Administration.The Pascal Morinnoreply@blogger.com