The Banking and Strategy Initiative

Chillin' out till it needs to be funded

A sunny bite from around the globe: Recovery mid week

CHICAGO - JUNE 04:  Job seekers wait in line f...

Image by Getty Images via @daylife

The near flawless German vote and jobless claims below 400k underlined US Q2 GDP growth of 1.3% as consumption spending leads the portends of recovery into another week without the banks getting displaced from the “perch” at the end of the line. Greek collateral is almost worthless with 2 year yields at 135% and 5 year yields at 68% , the squeeze in credit markets and deal making has given way to a mini revival in number of deals being signed yet, the German IFO sentiment hardly fell to 118 and the Chicago PMI could well stay at 56 for the month of September according to early reports, keeping the candlelight vigil for an US recovery. Markets with a low unhealthy VIX continue to show large volatile swings, with equity flows also rising to nearly $10 bln ( Global allocations have risen from 63% to 64% – Reuters insider – Axel T. )

Earlier, the Philly index came up 15 points more than a week ago, showing the bottom has already passed but 6 months later and now the recovery laced with a twist. Mortgages continue to be uninspiring even at rates at their lowest in 20 years. Want to see a good spend ,watch Apple and the luxury stores Brazil’s inflation indexed wages and China’s growing inflation tick and unending appreciation of the Yuan remain constants with India and Turkey waiting for a market bottom, even as the commodities cycle now favors them

A mix unlike any other, except that no one is hiring and banks that have to lead the real recovery are well nigh at the bottom in terms of fiscal largesse from them and any chances of profits receding from the super regulation, Financial Transaction taxes and bankrupted retail banks throwing higher charges at existing customers. None of it helped by financial sleight of hand  by UBS or Chinese brokerages and accounting fraud all through.

Also, even with unemployment a national crisis and 45% of unemployed lasting out of payroll for more than a half year, there is no t much to push around and most corporates are ploughing company cash into buybacks, incl the great investor Warren Buffet And as other Experts agree, Coffee not Starbucks is going down and despite the seeming correlation to SBUX as coffee (JO) falls globally, the SBUX are ready to  be cashed. Coffee rose nearly 50% in the first half of th e year and Folgers was able to pass on most of it while the cuppa from the Starbucks family  remained a $1.25




Image by SS&SS via Flickr

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