FAZ and FAS are the triple leveraged Financial ETF. The long one (FAS) has taken off this week like a rocket.
It is clear that this rally is going too fast even if all rumors about up tick rules and mark-to-market adjustments are true.
Attention: not that much has changed in the real economy. We continue to see an unprecedented plunge in household wealth while the consumer deleveraging continues. Most sources of borrowing are drying up but retail is no longer falling off a cliff. The total pool of unemployment surges en sentiment is at a multidecade low.
And than there are the insurance companies. They are the next shoe to drop if we’re looking to the CDS-markets. The cost of protection for names as Aviva, Aegon and Swiss Re doubled roughly since the start of this month.
It is clear that this rally is going too fast even if all rumors about up tick rules and mark-to-market adjustments are true.
Attention: not that much has changed in the real economy. We continue to see an unprecedented plunge in household wealth while the consumer deleveraging continues. Most sources of borrowing are drying up but retail is no longer falling off a cliff. The total pool of unemployment surges en sentiment is at a multidecade low.
And than there are the insurance companies. They are the next shoe to drop if we’re looking to the CDS-markets. The cost of protection for names as Aviva, Aegon and Swiss Re doubled roughly since the start of this month.
Knock -knock - knock...
Who's that
A professor.
Philip Lane, Professor of Economics at Trinity College Dublin, is quoted in the IHT saying, "If a country were to need help, it's not clear if they should go to the European Union, the IMF or the ECB [European Central Bank]. The answer seems to change day to day."
Our advice: Call Bertie. Let him buy dollars, peg the Irish currency to the dollar and quit the euro.
There are the other guys. Time to go to the pub for a Guinness.
Have a good weekend.
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