28 May 2010

Posted at 15:47h in The Friday Brief by
Events of the past few weeks have rattled the confidence of even the most stalwart of optimists and caused more than a few to question fundamental tenets of the economy. How can millions of gallons of oil flood the Gulf and not permanently ruin that ecosystem and the livelihoods of millions of people who depend upon it? How can markets be called efficient when an aberration can cause the loss of a trillion dollars in mere minutes? How can the Euro survive a potential default by Greece and survive?

21 May 2010

Posted at 15:57h in The Friday Brief by
Yesterday represented the seventh down day in a row for the S&P 500’s, putting the average just 6 points above the low it reached during the technical panic of May 6th. It is 10.2% off its recent high of April 23rd and 3.9% down for the year. Long term US Treasuries on the other hand are up 9.5% since the high and 11% so far this year. Selling over the past three days was amplified when German Chancellor Angela Merkel banned some types of speculation against government bonds and financial institutions. The move was ill-received by investors in general but particularly in Europe as traders there drove the Stoxx Europe 600 Index down 7.2% in just three days. Other governments have not followed suit with the ban.

14 May 2010

Posted at 16:08h in The Friday Brief by
As Europe wrestles with its own version of ‘too big to fail,’ speculation is rising that the Euro might not survive the sovereign debt crisis. Greece may not be able to repay its debt in full, but the problems of fiscal irresponsibility are broader and may take more than the almost $1 trillion already pledged.

07 May 2010

Posted at 16:12h in The Friday Brief by
Fears of a debt contagion in Europe got the attention of US investors this week. As of Friday morning the NASDAQ is off 7.2% the S&P 500 is down 6.2% and the FTSE All US Index is down 6.5%. The S&P Europe 350 is down 11.6% for the week and 16% over the past 30 days. Worried Bond investors flocked to the relative safety of US Treasuries driving intermediate and long-term bond indices up 2.2% and 5.6%, respectively, for the week. Concerns that severe fiscal problems in Greece, and growing pressures in Portugal, Spain, Ireland, and Italy might cripple the European recovery along with reports a few forecasts that China is months away from a burnout started a selling wave that grew throughout the week.