The Banking and Strategy Initiative

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Global Mid-Day Report: Sorry, Monday had nothing to report

Or more like no stamina left to defend the Euro, no one left shorting it and no Economic reports on Monday in the US, any which way we did not type in that report and as i have not been a student for 20 years now give or take a few, I did not feel like doing much without understanding the seminal changes at work

Within the recovery till last week, it seemed a continuing saga for the Euro and the Euro fortunes led global markets but something has snapped in the markets since Draghi’s promise of liquidity engendered such a wide misunderstanding and the zone is close to being a free for all with italy fearing a return to 1978 when it had to leave the ERM , a precursor of the EMU as Germany pulled the rug from under. Spanish housing debt apart Europe’s bout of deleveraging at banks still means unlikely credit in the business witneesed by Services PMIs also dragging at the end of last wek yet the equity outlook at the week open is buoyant on base of new liquidity coming to support mariane Rajoy’s Spanish boat and Greece being on its way out scaring a fewer in the decision making sample set

India’s new FM in the meantime has tried to kick off a cooperative fix for a Fiscal and Monetary bandage that will carry India Inc out of expectations of reduced subsidies and fast reform to another alternative path of long standing growth and nothing has changed politics. The new crop of leaders in China is probably older than the current polit burio, the decisions of new selections at the leadership conclave already a done deal. The olympics have thrown in a surprise Great Britain showing and i must say the perfromance from India is probably 4 times better than the last time so the doubters and naysayers aside, apart from bidders in Chicago Singapre and Johannes burg, after the 2016 rio Olympics there may be other such events in new town, nations like India, Mexico and others spending on the Olympics hile the bruised OECD goes into long time rehab set up

US apparently has read the recovery signals well even as threats of a longstanding recession now come from study of garbage put out in the US over the last few years, ‘output’ having reached a three year low. But even the ECRI leading indicators have receded to a smaller negative score of just 1.6% and Gasoline spending is intact with refineries chugging extra stocks depending on that reading.

Knight Capital’s face saving plan is nothing short of miraculous though it seems almost the entire Breakfast club was pitching in to add to the $400 mln kitty even as market making in Knight Getco;’s over 600 scrips on the big board has been handed around.  Healthcare M&A might disturb a few more in Europe as Asian M&A volume on strength of domestic China deals is caiught up in volumes and value with the European market thought he US market is far ahead yet specially in Value of fees earned per deal outside Europe and Asia

US’ own fiscal cliff is likely come to a nought without a fundamental recovery in place and after the US citizens choose Obama for a second term they would have chosen to live gridlocked till 2014 so spending cuts will again hurt the medium sized hope bags being unloaded from the Jobs report truck of Friday. Rest, the EU mechanism has not thrown up any new Economic successes and no return of the Bradys’ as Geithner Bonds or the Geithener/Bernanke agreeements seems likely either, leaving Europe to chug along to a slow but sure muddling and tenuous but positive recovery fueled even after more delays by Eurobonds and a bank called ECB/ESM Dollar is weaker and Oil prices firming up as the Euro opens in another week above 1.22 belying hopes of receding to a 1.15 target put out by BAML and neutral ratings by Barclays/Deutsche and many others even as it trends back from 1.2268 close last week to below 1.22 on a final look at the Economic Data for the last month/quarter. Th enew spending plans seem unlikely to kick in before September, probably even December otherwise there was no reason for the Italian PM to be so restive since last week.


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This entry was posted on August 6, 2012 by in Amitonomics, Global, US.


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