So says the team of equity analysts at Barclays. Although policymakers helped avoid the second Great Depression, Barclays believes we have simply kicked the can down the road. As their head of U.S. equity strategy said in November, the likelihood of Japanese style de-leveraging stagnation remains very high.
sell DJIA DIAMONDS (DIA)
sell S&P 500 SPDR (SPY)
The sustainability of sovereign debt hangs heavily over bond markets, and the prospects for economic and financial stability. Since 2007, OECD government deficits have risen by 7 per cent of GDP to just over 8 per cent, and debt, excluding contingent liabilities, has risen by about 25 per cent of GDP to just over 100 per cent.
Spain is at least nominally responsible for leading the trading bloc out of the current financial crisis. However, the economic outlook for 2010 is bleak: Spain has become “the sick man of Europe” after six or seven consecutive quarters of negative growth and galloping unemployment that is nearly double the European average. In 2007, Spain’s unemployment rate was 8.3%. By the end of November, the rate reached 19.4%. That compares with an average rate of 10% among the 16 euro zone
China, Disappointing Earnings Hit Equities
Stocks, commodities fall after China bank move
Asia markets fall as China moves to curb credit – inSing.com
As banks start releasing fourth-quarter earnings this week, the losses and reserves tied to commercial real-estate loans could spike even higher than some analysts think. Regional banks could get hit hardest, given typically greater exposure to commercial property than their bigger brethren.
CLSA’s Mike Mayo Discusses A Financial Industry On Steroids, Lays Out The 10 Main Problems With Banks
Mike Mayo lays out the ten main problems with the financial industry:
The average rating of the 39 countries that make up the benchmark emerging market sovereign bond index has moved up one notch from junk, or high yield, to the lowest rung of investment grade, according to Moody’s.
Weekly US energy inventory data release on Wednesday confirmed the unbelievable. US petroleum stocks rose in the week despite especially cold weather in the region during the period. Meanwhile, Dennis Gartman of the Gartman Letter draws attention to the fact that aggregate inventory rose by 8.9m barrels, amongst the largest weekly aggregate increase ever.
Germany’s support for solar power is becoming ever harder to afford