The Banking and Strategy Initiative

The Global downward spiral for markets

EUROPEAN SOVEREIGN DEBT CRISIS (and 90% correlation in market movements globally)
 
With the G20 post past, the EFSF fill will exclude large scale participation by China or others and will likely have to resort to Eurobonds and printing of banknotes sooner than later. US has yet to come out of the after shock of the 2008 event chronology. The crisis has moved to Europe and stayed on there necessitating the step up of the Euro into a central coordinated fiscal and monetary mechanism lauded by many US economists incl Nobel laureates Sargent and Sims ( announced Oct 11) French Banks need more than $350 bln in asset sales in the Top 3 banks and Greece is demanding a more than 60% haircut on its debt even as the "day of the referendum" in Greece tricked stability into a fast relapse after two downgrades of Spain and Italy and continuing Eurozone pressure of default now as a region and France's default starts affecting Financial stability in Germany and Netherlands, probably the last frontier
 
TRACKING BANKS AND RETAIL LIFESTYLE SUPERTRENDS
 
In Financial results elsewhere the US recovery bodes well despite twists and turns as retail consumption is up 5% year on year without bloated consumer credit. Morgan Stanley and the Big 4 banks in the US will miss even revised estimates but Goldman Sachs will still make a profit Luxury goods keep finding customers in China as retail sales in the USA stay up while Jobs do not give that much hope
 
CHINA's COMING OF AGE
 
After resisting overtures from Europe looking for larger chunk of investment, China has still been receiving attention for its potential destabilising domestic economy suffering from Power Cuts, Local LSFs (LGFVs) overruns and managing to grow at above 9% , its manufacturing sector improving from its bottom in August and September of 2011
 
EMERGING MARKETS BATTLE INFLATION
 
Contrary to initial 2008 analysis, Emerging markets in Brazil, South Africa, and India have been unable to battle inflation with inflation outrunning bank rates in Brazil But porfolios have been adding India risk with markets providing value opportunities and Oil and gold are out of one hyper inflationary run and the second may not see much rise in Oil. Trade growth in emerging markets are starting to grow for non resource economies notably India but minerals and metals are back in play as China starts buying.