Herewith my letter. There is much more I could have added but letters have to be brief. Of the UK bank lending to business, over 80% is for construction with over 80% of that construction being in London and over [...]
News and Views: Cypriot cash concerns – what will the markets do next?
How are the markets reacting after the Cypriots are having their savings taxed by their government with a 7-10% levy depending on the amount on deposit to help fund an EU bail out? Is it a short term sell off or the start of something more serious? It’s certainly quite an alarming development in the Euro zone as other nations including Germany, Finland and Holland required that Cypriot deposit holders make the cash injection to reduce the Euros 16 billion approximate bail out. I add some prescient comment from a fellow investor in a recent conversation…
Hope all’s good with you – Can’t quite get over the market – It feels like a bubble but with some more QE in the air I reckon the view is to keep piling into equities. The pound at 1.28 against the Euro felt to strong but at Euros/£ 1.14 I think that UK is probably the best value at present!
Say hello to all in Auld Reekie & mind how you go.
Hi Mustard Man-
It’s amazing how much you can be amazed by markets -they go way up and
way down. More than most even the best can stomach so watch it and
take profits especially if you find a reason/need. QE has its effect for
sure here and in the US. The dollar is may well strengthen from here so your
Shell or other dollar earners are okay. Maybe that’s why GSK is up too. But
threats emerge too- perennially N. Korea and Iran etc & now Syria but also little
things that go bang like ethanol RIN’s and US environmental policy effects
that suddenly from nowhere effect gas prices and then push inflation and
then interest rates just when thing start to look okay and FOMC begins to think
about the cycle needing to change anyway. Of course then the weather is
always too wet or too dry and prices then inflation pressure start building
there too. Not to mention China’s bubble- has it or hasn’t it?
I think the Euro crisis has some way to run. The Cypriots need a bail
out, the Frugal Dutch government can’t even hit the numbers on their
budget deficit. Mass unemployment – It is an old adage (plus twist) If
Germany sneezes then the whole of Europe will catch a cold. Not too
sure that the Germans can or want to keep bank rolling the rest of Europe for ever!
Speak to you soon,
Now if you can work out the market goes from here 2013 could be good for you? – a strong US performance against the Euro zone or is it time for treasuries and dollars again?
Got any thoughts anyone?
PS. Please remember- the above are personal views and not a recommendation to do anything in the markets at all.