Tuesday 2 August 2011

US Bill passes into instantaneous tedium

And how quick do the markets move on? It is amazing these days of how much sentiment turns on a dime, one day this will cause a big rally, the next everyone is wisely saying it is all in the price and there are other things to worry about.

It makes the idea of trading a joke as it is so hard to predict anything; better to stick with longer-term investments. I see the banks are this seeing this too with big turndowns in Investment Banking trading profits at HSBC and Barclays announced today.

The world is a volatile place at the moment and the financial stimulus that has been unleashed is going to keep it that way for years to come.


Sean said...

Its a pity the markets were not volatile in the 2000-2006 period, we might have nipped things in the bud much earlier?

Bring it on I say, smaller government, more freedom, more choices for the individual to make, more hard headed business sense (eventually I hope), no more money for the feckless, the end of the EU in its present form, billions of people in asia and maybe africa rising out of poverty. less financial junk. more realism less idealism.

volatile, is maybe the place we should be, You sound a little dispirited, personally I am all for it.

CityUnslicker said...

Sean, thanks for your comment.

The volatility does not reveal market fundamentals though. That is the issue, everything is either bad or great.

If markets too volatile, cash will sit on the sdielines whilst the depserate lose their money trying to make things better. This is happenening now with corporates and money market funds busting with cash they won't invest into such volatility.

We can't have a recovery until the markets are more stable - and this is a vicious cycle.

I also doubt your optimism that capitalism will win out, people will listen to the siren voices of socialism offering them some pain relief at someone elses' expense.

Nor is Asia immune, as the QE fest has sparked off multiple bubbles in China and India where inflation is catching up to make growth only nominal.

Anonymous said...

"Nor is Asia immune, as the QE fest has sparked off multiple bubbles in China and India where inflation is catching up to make growth only nominal"

China is relying on exports to western countries to pick it's self up and develop internally massive construction projects etc., these development projects could come under great strain if the western countries go into a deep recession, a lot of western production has gone east, most of the products have western brand names, I can remember a time when my customers saying "If it's made in China I am not buying it" now they would be hard put to buy any product that was not made in China or had chinese components, China is the largest manufacturer of computers for instance. China for a bit of history was the worlds largest exporter I believe in the early 1800's so what goes around comes around.

CityUnslicker said...

Anon - exactly re China, if the West does not buy their products then their own infrastucture investment ponzi scheme is in trouble (albeit not in the same league as the west).

Given China's % of global population it is only the industrial revolution that has toppled the country from the top of the tables for the last 200 years. Now that China has real industrialisation, things are reverting to the norm.

sewa elf said...

Nice article, thanks for the information.

Electro-Kevin said...

The markets are more capricious than Caprice.