Blikopdebeurs.comNederlands eerste weblog voor beleggers2010-03-09T18:14:35-05:00Redactiehttp://www.blikopdebeurs.com/weblog1/index.phpblikopdebeurs@planet.nltag:blikopdebeurscom,2010:blikopdebeurscomPivotCopyright (c) 2010, Authors of Blikopdebeurs.comGoud is bubbel, zegt SEC manager2010-03-09T18:14:00-05:002010-03-10T00:08:00-05:00tag:blikopdebeurscom,2010:blikopdebeurscom.566'We all know gold is in a bubble', stelt Rick Bookstaber op zijn weblog. Op zich geen nieuws, echter oud Morgan Stanley man Bookstaber is werkzaam bij de Securities and Exchange Commission (SEC) als senior adviseur risk management.'We all know gold is in a bubble', stelt Rick Bookstaber op zijn weblog. Op zich geen nieuws, echter oud Morgan Stanley man Bookstaber is werkzaam bij de Securities and Exchange Commission (SEC) als senior adviseur risk management.
Reden genoeg om zijn visie onder de aandacht te brengen.
The Gold Bubble
This represents my personal opinion, not the views of the SEC or its staff.
I am not going to spend time here talking about how the price of gold is off-the-wall, that it is not just a bubble in the making, but a bubble waiting to burst. I don’t want to waste your time on that point.We all know it is a bubble.
George Soros has said “The ultimate asset bubble is gold”. Many of the top asset managers, such as Tudor and Paulson, are piling on; Paul Tudor Jones recently said gold “has its time and place, and now is that time.” The banks are echoing this view with their research. Goldman has a research piece that looks for gold to approach $1,400 in the next year. The more ebullient Charles Morris of HSBC has said, “I absolutely believe it’s heading into a bubble, but that’s why you buy it. ” He, along with a number of other professional and otherwise rational managers, looks for gold to move as high as $5,000 an ounce.
More interesting than this almost universal agreement is what that agreement tells us about the dynamics of the market.
The Naked Bubble
Usually the markets have the courtesy of giving cover for bubbles. We adorn the bubbles with some justification. Even if a guy is just after sex, he at least has the decency to act like there is some substance behind his interest. For the Internet bubble, it was that fundamental analysis based on the brick and mortar world did not bear relevance in the New Paradigm. For the Nikkei bubble, it was that the crazy P/E ratios were not considering one subtlety or another in the Japanese accounting system.
But with gold, no one seems even to care about giving a justification, other than “gold has been a store of value throughout 5,000 years of monetary history”. Which is fine as far as it goes, but that doesn’t say anything about what the price of that store of value should be.
Pump and Dump
Given that “hedge fund” and “highly secretive” are usually said in the same breath, don’t you get suspicious when so many of the top managers are so vocally out there about their gold investments? And when their positions are structured in a way that make them open to view? Paulson and Soros have huge positions in gold ETFs. We know that, because if you buy ETFs, they show up in your 13-F filing. Granted, with an equity investment you can’t help putting that information out into the market, but with an asset there are plenty of ways to take the position without signaling it.
That they are taking a highly visible route to their positions suggests the game that is being played is one of leading the herd. The 13-F reports positions with a big lag, so no one will notice if they quietly slip out the side door while the party is still hopping. And how about when the view is backed up by none other than Goldman Sachs? Will they let everyone know when they think it has gone too far before they get out. Or before they go short? Maybe they already have.
Herds, crowds, mobs, and the Top Ten
And yet, we follow the herd, as we have countless times in the past. Herding is a timeless and universal market behavior, but one that seems less than rational. It is broader than markets; think of the Top Ten phenomenon. We feel better if a lot of other people think that our favorite artist or actor is The Best. We like a song better if we know a lot of other people are liking it as well. Thus our love affair with lists. Magazines featuring the Ten Sexiest, the Five Best, the 100 Whatever are all best sellers, even if the list is the product of a story meeting between an editor and five reporters.
Herding can be explained as an artifact of what was rational behavior in earlier times, when we were running around as hunter gatherers. Back then, mob and herding behavior made sense. Mob behavior if attacking a competitive group or killing a large animal; herding behavior if protecting against predators or uprooting to a new location. Whatever it was that got started, you could be pretty sure there was safety in having a crowd on hand to finish it.
The very notion of mobs and herds evokes a certain spontaneity. But with the gold bubble, we are moving on to a concept of herding by appointment. Everyone seems to be happy in agreeing that this is a bubble, and we are all going to participate in this bubble in a rational, genteel way. We have all decided that this is going to be a number one hit, a Top Ten. Though we might want to ask who is leading this herd, because my bet is they will be stepping aside and cheering us over the cliff.
De e-mail van de Griekse ambassade werd gestuurd vanwege het bezoek van premier Papandreou aan de VS op dinsdag 9 maart. Behalve een ‘facts and figures’ over de Griekse economie en een profiel van Papandreou bevatte het bericht ook een niet eerder gepubliceerd essay van Richard Parker. De Harvard econoom is een prominent economisch adviseur van de Griekse premier.
Inktzwart scenario
In het artikel (word), getiteld 'Will Greece spark global meltdown', schetst Parker een inktzwart scenario, indien Griekenland niet tijdig hulp krijgt van de Europese Unie:
"The situation has the makings of an Aeschylean tragedy. If help isn’t forthcoming, little Greece--just 2% of Europe’s GDP—could, against its will, set off a chain reaction that pulls down Portugal, Ireland, Spain, perhaps even Italy—and thereby throws Europe’s, and then America’s and rest of the world’s, fragile recoveries into reverse."
Bear Stearns
De regeringsadviseur trekt een opmerkelijke parallel met Bear Stearns. De hoogte van de Griekse staatsschuld benaderd volgens Parker dat van de gevallen voormalige zakenbank. Indien de EU blijft aarzelen met hulp dan zou dat wel eens tot een ‘golf van paniek’ kunnen leiden.
“That’s what so worrisome now. Greece’s outstanding debt today is close to Bear Stearn’s $400 billion exposure was three years ago—but there the analogy ends. It’s a sovereign nation, not a company, and isn’t going bankrupt, not least because its currency is the Euro, shared by 500 million Europeans and backed by an economy larger than America’s. But if forced into debt rescheduling, and renegotiation of its terms, Greece could well spark a panicky stampede.”
Global financial crisis 2.0
Parker waarschuwt verder voor een “global financial crisis 2.0” en wijst er op dat een zwakke euro ook negatieve gevolgen heeft voor de Amerikaanse exportpositie.
“The price of not acting now is far greater—and not just for Greece. For Europe, it means a fiscal and credit domino effect among weakened EU economies, driving up borrowing costs even higher for all, the prudent and profligate alike. For America, a weakened Euro—which has already fallen more than 10% against the dollar over the past three months-- means a rising dollar. That, in turn, means a rising US trade deficit—not the best strategy for helping America escape its own crisis, let alone meet President Obama’s dreamy goal of doubling US exports in the next five years.”
Het essay van Parker is nergens gepubliceerd, met uitzondering van de site Zerohedge.
Na het bankroet van de IJslandse internetbank Icesave hebben Groot-Brittannië en Nederland respectievelijk 2,5 en 1,3 miljard euro voorgeschoten aan gedupeerde spaarders. Sinds 2008 wordt er met IJsland onderhandeld om het bedrag dat valt onder het depositogarantie stelsel terug te krijgen. Het laatste akkoord werd door de IJslandse president afgewezen, waarop een referendum volgde.
Recordkrimp
Kredietbeoordelaar Fitch verlaagde dit weekeinde direct de rating van het land naar ‘junk’, een stap die volgende week waarschijnlijk gevolgd zal worden door Moody's and S&P. Het IJslandse nee kan ook gevolgen hebben voor leningen van het IMF en toetreding tot de EU. De economie van IJsland liet in 2009 een recordkrimp zien met 6,5 procent. Bedrijfsinvesteringen kelderden zelfs met 42 procent.
Toch wordt verwacht dat er na nieuwe onderhandelingen uiteindelijk een akkoord wordt gesloten over terugbetaling. Uit geheime stukken die zijn gepubliceerd door Wikileaks blijkt dat Nederland en Groot-Brittannië aanboden de rente flexibel te maken (i.p.v. 5,5%) en deze over 2009 en 2010 kwijt te schelden. Alleen al dat laatste kost de Nederlandse belastingbetaler ruim 150 miljoen euro.
Geheime stukken, gepubliceerd door Wikileaks: Brief, ondertekend door Wouter Bos, met nieuw voorstel Afwijzende reactie van IJslandse regering
]]>adminFaber ziet correctie 20 procent2010-03-06T06:08:00-05:002010-03-06T11:55:00-05:00tag:blikopdebeurscom,2010:blikopdebeurscom.560De Zwitserse beursgoeroe en auteur van de bekende nieuwsbrief ‘The Gloom Boom & Doom Report’ Marc Faber waarschuwde deze week voor een forse beurscorrectie. Faber ziet de S&P nog even stijgen, maar daarna is het feest over.De Zwitserse beursgoeroe en auteur van de bekende nieuwsbrief ‘The Gloom Boom & Doom Report’ Marc Faber waarschuwde deze week voor een forse beurscorrectie. Faber ziet de S&P nog even stijgen, maar daarna is het feest over.
Faber sluit niet uit dat de S&P 500 index korte tijd nog iets verder stijgt, om een top te zetten op 1.150 tot 1.200 punten. Dan volgt een fikse correctie voor aandelen. “Ik ben er niet zo zeker van dat de S&P 500 een nieuw hoogtepunt zal bereiken, maar als dat gebeurt, dan verwacht ik een neerwaartse correctie van minstens 20 procent”, aldus Faber tegenover Bloomberg TV.
Dollar en euro zijn ziek
“zowel dollar als euro zijn ziek en beide kunnen nog verder dalen”, stelt Faber verder. De Zwitser verwacht een korte rebound van de euro naar 1,40, om vervolgens verder te zakken. Maar ook de dollar blijft zijns inziens zwak, door de aanhoudend hoge staatsschuld en een dreigend bankroet van Amerikaanse staten. Aziatische valuta en edelmetalen zullen daarvan profiteren.
Faber kan bogen op een mooi trackrecord de afgelopen jaren. Hij voorspelde de huidige financiële crisis, maar als één van de weinige bears adviseerde Faber een jaar geleden weer in aandelen te stappen. Zijn nieuwsbrief wordt, net als die van John Mauldin, wereldwijd gelezen.
AEX: perfecte TA-stappen sinds bodem
Elke keer als een index een weerstand van betekenis nadert, volgt er aarzeling en eventueel winstname. Dat is een van de principes van technische analyse (TA). Het is dan altijd komisch om te zien welke reden(en) de markt ‘verzint’ om die aarzeling en eventuele daling te verklaren. Dit zijn niet zelden redenen die al weken of maanden bekend zijn en dan ‘ineens’ belangrijk zijn geworden omdat de mainstream-media ze oppikken. Na de door mij eind 2008 aangegeven bodem rond 220 (werd 200) gaf ik tevens aan dat de AEX op zou veren tot 270; een belangrijke zone van weerstand. Een dergelijke tijdelijke winstname trad inderdaad op rond AEX 270; weet u de ‘reden’ daarvoor nog ? Eenmaal daarboven kon de AEX wat mij betreft verder naar 340 als bovenkant van de dalende magenta crisis trend; het werd 327. U zult zich de ‘reden’ voor de eveneens tijdelijke stagnatie eind 2009 vast nog wel herinneren: ‘Dubai’.
AEX: brak eind ‘09 BOVEN de trend van de kredietcrisis
En zou de AEX opwaarts uitbreken boven deze trend (dat gebeurde eind 2009), dan kon zij in mijn analyse verder naar 380-400; na een geslaagde terugtest. Waar zo’n terugtest optreedt is amper te voorspellen; dat werd dus afwachten. In januari stokte de opmars boven de dalende magenta crisistrend bij 343, en een langzame daling zette in. De ‘reden’ die werd gevonden voor deze daling heet ‘Griekenland’ en was wederom aanleiding voor allerlei soorten van paniek. Tot op de dag van vandaag zijn er diverse analisten die koersdoelen ruim onder 300 (en soms zelfs 250 of [weer] 200 !) hebben genoemd door de ‘paniek van Griekenland’. Maar technisch gezien zijn dergelijke (in mijn ogen belachelijke) koersdoelen hélemaal niet mogelijk. Dit omdat de AEX in de herfst van 2009 boven de zeer belangrijke horizontale weerstand op 310 klom en kort daarna dus boven de dalende magenta crisistrend. In technische analyse worden weerstanden tot steunen verklaard als ze eenmaal overschreden zijn. Om dergelijke koersdoelen ook maar enigszins mogelijk te maken zou de AEX zowel ónder 315 (magenta toplijn en zeer zware steun !) als ónder 310 (horizontale blauwe zeer zware steun !) moeten zakken. Nu ben ik de laatste om te zeggen dat dit onmogelijk is, maar ik durf wel maar 99% zekerheid te zeggen dat dit écht niet gebeurt.
AEX: ‘Griekse paniek’ is gewone succesvolle terugtest!
Zoals gezegd diende er bij een opwaartse uitbraak boven de dalende magenta trend van de kredietcrisis op enig moment een terugtest te volgen. De AEX zit momenteel in de laatstefase van deze terugtest; niets meer. Want op 315 is een dubbele bodem ontstaan en dat is een omkeerpatroon, zodat de koers de komende weken opnieuw naar 343 zal gaan stijgen. Dat is ook te zien aan de opwaarts uitgebroken RSI en de sterk afgenomen spanning op de DMI. Kortom: technisch gezien lijkt er niets aan de hand en is de huidige terugtest juist een perfecte afronding van een opwaartse uitbraak boven de dalende magenta crisistrend. En voor diegene die hun historie niet kennen: eind 2003 en begin 2004 speelde zich exact dezelfde situatie af en daarna steeg de AEX van 310 (daar is die cruciale steun weer) naar 560. Maar gebeurtenissen uit het verleden zijn geen absolute garantie voor de toekomst al zit AEX 380-400 er wél aan te komen...
Zoals beloofd: Nasdaq
In december zag u de grafieken van de Nasdaq-100 en de SOX op deze website. Daarin werden zeer belangrijke opwaartse uitbraken van deze indices getoond. Gezien de reacties toen werd de impact van die uitbraken onderschat en soms zelfs genegeerd. Dat is niet verstandig want het ging in dat geval om signalen, die niet veel vaker dan één keer per 10 jaar optreden ! Tegelijkertijd beloofde ik toen op de Nasdaq terug te komen, omdat deze met een soortgelijk verschijnsel bezig was. Het is nu zover omdat de Nasdaq zówel boven de dalende trend sinds 2000 ! uit is gebroken als deze waarschijnlijk succesvol terugtest. De koers veert namelijk uitstekend op van de dalende groene weerstand (nu steun), die de koers op de Nasdaq de laatste jaren in elkaar drukte. De RSI signaleert een bodem terwijl de DMI zijn spanningen rondom deze terugtest geheel kwijt is geraakt. Mocht u (op zich terecht) een parallel trekken met de AEX, dan gaat dit maar gedeeltelijk op. Want de AEX brak uit boven een 2-jarig dalende trend (van de kredietcrisis) …
Nasdaq brak uit boven 10-jarige dalende weerstand!
… terwijl de Nasdaq hier uitbreekt boven een 10-jarig dalende trend ! Daarom doet de Nasdaq het de laatste tijd ook stukken beter dan de Dow en S&P-500. Lange termijnbeleggers zoals pensioenfondsen en hedge-fondsen zijn knettergek op dit soort zéér positieve signalen omdat ze zo ontzettend zeldzaam zijn en potentieel enorme stijgingen vertegenwoordigen. Het is dan ook te verwachten dat zij op basis van dit signaal hun bewegingen in de tech-sector (verder) zullen opschroeven en ik vind, dat u dit ook hoort te weten. Want mijn koersdoel voor 2010 op deze index is inmiddels opgeschroefd naar 2800 en het koersdoel voor 2011 zelfs naar 3200. Om nog maar te zwijgen van een mogelijke terugkeer naar de voormalige top op 5000 rond 2013 of 2014. Maar daar kom ik bóven 2800 wel op terug, want dan wordt de kans op een dergelijke koers waarschijnlijk ...
Dhr. Aslander is directeur en hoofd technische analyse van WAvisie. Hij schrijft bovenstaande artikel / column / analyse op eigen titel. Conclusies hierin zijn vrijblijvend en niet bedoeld als (professioneel) advies. Aan meningen danwel conclusies kan dan ook geen enkel recht of plicht worden ontleend. Aslander belegt al meer dan 20 jaar met TA als leidraad. In ‘06 werd hij ‘Beste analist van Nederland’ bij Guruwatch.nl en in ‘06 én ‘07 hij werd 2 keer 2e bij de verkiezing tot “Beursgoeroe” (Blikopdebeurs.com). In 2007 werd hij tevens genomineerd bij de ‘25 beste beleggingsexperts van Nederland’ van Goudenstier.nl. In ‘08 en ’09 werd hij 4e resp. 2e ‘beursgoeroe’ bij Blikopdebeurs.com; de jury noemt zijn werk ‘realistisch en veelzijdig’. Ook weet hij de ‘flop-guru’s’ (Guruwatch.nl) structureel te vermijden ! Aslander geeft selectief lezingen over financieel-economisch gerelateerde onderwerpen.
]]>wesselHedge funds diner: short de euro2010-03-02T14:50:00-05:002010-03-02T20:00:00-05:00tag:blikopdebeurscom,2010:blikopdebeurscom.557De euro noteert op het laagste peil tegenover de dollar in negen maanden. Proberen grote hedge funds de euro kapot te shorten? Een kortje van John Mauldin, hij gelooft niet in ‘conspiracies’, maar ziet de euro op termijn wel verder verzwakken.De euro noteert op het laagste peil tegenover de dollar in negen maanden. Proberen grote hedge funds de euro kapot te shorten? Een kortje van John Mauldin, hij gelooft niet in ‘conspiracies’, maar ziet de euro op termijn wel verder verzwakken.
Blikopdebeurs.com publiceert met toestemming het volgende artikel uit Mauldin’s nieuwsbrief van zaterdag 27 februari.
The Euro and a Conspiracy of Hedge Funds
The lead story in this morning's Wall Street Journal is that hedge funds are holding "idea meetings" and deciding that shorting the euro is a good bet. Der Spiegel called them "secret meetings," as if somehow a cabal of hedge funds is conspiring to push the euro down. A few points for the writers of Der Spiegel:
1. There is no secret about the problems with the euro. Let's see, when the head of Germany's leading debt-management agency warned this week that the euro would collapse if any member defaulted on its debt, was he part of a secret conspiracy? If he is right, do you want to bet that Greece will behave, and go long the euro?
2. The currency market is a $2 trillion dollar a DAY market. That's over $50 trillion a month. Even with 20:1 leverage, $50 billion in hedge funds shorting the euro is a drop in the bucket, and I seriously doubt anywhere close to that much is at risk. George Soros won his bet against the pound sterling because the pound was fundamentally flawed and overvalued, and he put his money where his mouth was.
3. If a hedge fund is betting against the euro, someone has to be on the other side of that trade. Are those guys (on the other side) conspiring in secret to drive the euro up and the dollar down? Are they in "secret" meetings to take advantage of the poor, dumb, misinformed hedge funds? Who are they? The world needs to know who is conspiring against the dollar and other currencies! Whatever. One side will be wrong. Fundamentals will out.
4. I get invited to "idea dinners" from time to time. They are indeed private, but they don't rise to the level of "secret." I do very little trading, but these meetings help to hone my ideas, and I hope that helps make this letter a better source for you.
The Journal wrote that these hedge-fund managers expect the euro to go to parity with the dollar, as if that is some novel idea. I made that prediction in 2002 when the euro was at $.88, suggesting that it would rise to $1.50 and then fall back to parity by the middle of the next decade. Maybe it will get there a little faster than I thought. Stay tuned, and I do NOT suggest making 20:1 bets on currency moves. A lot of those hedge funds will lose a lot of money if the market moves against them.
John Mauldin, Best-Selling author and recognized financial expert, is also editor of the free Thoughts From the Frontline that goes to over 1 million readers each week. For more information on John or his FREE weekly economic letter go to: http://www.frontlinethoughts.com/learnmore
]]>adminPolitieke strijd bailout Griekenland2010-02-28T14:02:00-05:002010-02-28T19:46:00-05:00tag:blikopdebeurscom,2010:blikopdebeurscom.556Duitsland en Frankrijk bereiden een reddingsplan voor Griekenland voor, nu zorgen toenemen dat de crisis een reële bedreiging van de euro vormt. Dat melden zowel FT als WSJ dit weekeinde. Maandag is EU spoedberaad in Athene gepland.Duitsland en Frankrijk bereiden een reddingsplan voor Griekenland voor, nu zorgen toenemen dat de crisis een reële bedreiging van de euro vormt. Dat melden zowel FT als WSJ dit weekeinde. Maandag is EU spoedberaad in Athene gepland.
Kern van het geheime reddingsplan is dat Duitsland en Frankrijk met mogelijk andere EU lidstaten Griekse staatsobligaties opkopen. Volgens The Wall Street Journal zou het gaan om 30 miljard euro. De Financial Times schrijft dat de Duitse staatsbank KfW en het Franse Caisse des Depots mogelijk Grieks schuldpapier opkopen, met een miljardengarantie van de Duitse en Franse overheid.
Investeerders houden boot af
Griekenland, dat kampt met een begrotingstekort van zeker 13 procent, moet dit jaar ruim 50 miljard euro aan overheidsschuld financieren. Tot nu is slechts 13 miljard opgehaald. In maart en april vervalt er voor 20 miljard aan obligaties, wat geherfinancierd moet worden. Tot nu houden investeerders echter de boot af, het land heeft een nieuwe financieringsronde al twee maal moeten uitstellen.
De bailout van Griekenland is zeker nog geen uitgemaakte zaak. Europese ministers benadrukken zondag dat Griekenland eerst zelf veel harder zal moeten ingrijpen in haar overheidsfinanciën. Vooral in Duitsland is veel publieke weerstand. Duitse politici verklaarden in Handelsblatt dat Griekenland maar naar het Internationaal Monetair Fonds (IMF) moet stappen om een bankroet te voorkomen. Eurocommissaris Olli Rehn van monetaire zaken zou zondagavond naar Athene vliegen voor spoedberaad met de Griekse regering.
'Ook Nederland benaderd'
Demissionair minister van Financiën Jan Kees de Jager zei zondag in het tv-programma Buitenhof weinig te voelen voor een Europees reddingsplan. Mocht dat noodzakelijk zijn, dan doen we het alleen voor de euro, aldus De Jager. De bewindsman wees nog eens op het ‘jokken’ over begrotingscijfers. Toch gaan er hardnekkige geruchten dat ook Nederland is benaderd om te participeren in de bailout.
Ondertussen lopen de irritaties tussen Griekenland en Duitsland op. De Griekse vice-premier Pangalos verwees naar de goudroof van de nazi's in de jaren 40-45 waar ‘nooit enige financiële compensatie voor is gekomen’. De Griekse consumentenbond roept op tot een boycot van Duitse producten, na een ‘onacceptabele’ afbeelding van Venus van Milo op de cover van het Duitse weekblad Focus.
Het merendeel van de mainstream media beschouwen Griekenland nog altijd als een geïsoleerd geval. De feiten indiceren iets anders. Moody's en S&P dreigen de kredietwaardigheid van het land verder te verlagen. De afgelopen 3 maanden is een kwart van alle spaartegoeden opgenomen of weggesluisd. En Eurostat komt binnenkort met een bijgesteld staatsschuldcijfer, exclusief gesjoemel.
Default
De Grieken koersen af op een default zoals als de Titanic, die de bekende ijsberg wel zag maar niet meer kon ontwijken. Met alle gevolgen voor het vertrouwen in de euro en de financiële huishouding van andere EU-lidstaten. En dan hebben we het niet alleen over de ‘PIIGS’. Ook een economische grootmacht als Groot-Brittannië dreigt af te stevenen op een begrotingstekort van 12 procent.
En dan het macronieuws uit de VS van de afgelopen weken. Banencijfers, huizenmarkt, consumentenvertrouwen. Ze vallen allemaal tegen. Overheden in Europa en de VS moeten de komende jaren draconisch bezuinigen en consumenten weten dat. Die houden dus de hand op de knip, waardoor een broos herstel snel kan omslaan in een nieuwe dip. ‘De markten zijn vooruitgelopen op economisch herstel’, zegt Aegon CEO Wynaendts donderdag tegenover Dow Jones.
Ingrijpen
Als de Griekse begrotingscrisis overslaat naar Spanje, Portugal of Italië, dan zal Europa waarschijnlijk toch willen ingrijpen. Maar met meer leningen en schulden los je de fundamentele schuldenproblematiek nartuurlijk niet op. “Do not assume that we have weathered the storm. We may just be getting ready for the next one", waarschuwt John Mauldin. Riemen vast, die storm geldt ook voor uw aandelen.
De afgelopen 3 maanden is 8 miljard euro opgenomen of weggesluisd. Een substantieel bedrag, aangezien er in totaal slechts 30 miljard aan spaargeld bij Griekse banken stond geparkeerd. ‘Er is veel onzekerheid en veel klanten boeken geld over naar rekeningen in Cyprus, Luxemburg en Zwitserland’, aldus een anonieme private banker tegenover persbureau Dow Jones.
Geldvlucht
Griekse spaarders zouden vooral bezorgd zijn over de gevolgen als Griekenland bij het IMF aan moet kloppen om een ‘default’ te voorkomen. Ook zijn er berichten dat spoedig een vermogensbelasting van 5 procent wordt ingevoerd. De Griekse minister van Financiën George Papaconstantinou probeert de geldvlucht te stoppen door houders van buitenlandse bankrekeningen een extra hoog belastingtarief van minimaal 8 procent in het vooruitzicht te stellen.
Uit het artikel (niet meer online), overgenomen door Zerohedge.com:
"Some of our clients are concerned about a run on the banks if the IMF gets involved," said another private banker, this one from a foreign bank. "They believe the situation in Greece will get worse before it gets better. There is also very little clarity from the government about its intentions on new tax measures. We estimate that €8 billion has moved out of Greece to accounts abroad since December. It's money from bank accounts, stock sales, property sales and other sources. This is pretty substantial considering that there is only €30 billion under management in private banks here," he added.
Downgrade
Juist vandaag kwam kredietbeoordelaar Fitch met downgrade voor de vijf grootste Griekse banken naar BBB. Fitch vreest dat noodzakelijke bezuinigingen de vermogenspositie verder zal aantasten.
“The rating actions reflect Fitch's view that the banks' already weakening asset quality and profitability will come under further pressure due to anticipated considerable fiscal adjustments in Greece. In particular, Fitch believes the required fiscal tightening that needs to be made by the Greek government will have a significant effect on the real economy, affecting loan demand and putting additional pressure on asset quality. The latter could result in higher credit costs, ultimately weakening underlying profitability.”
Blikopdebeurs.com publiceert met toestemming het volgende artikel uit Mauldin’s nieuwsbrief van zaterdag 20 februari.
The Pain in Spain
That of course brings us to the elephant in the room – Spain. While the eurozone can survive a Greek default or a serious Greek depression, Spain is another story. Spain is a very large country whose deficits, if not brought under control, could in fact tank the euro.
Spanish leaders have been all over Europe, loudly proclaiming that they are not Greece. However, their current fiscal deficit is in the same league (9%), and they have other problems. And just as Dennis and David disagree, this week I had two reports on Spain hit my inbox the same day, from two of the groups I respect the most. And they do not agree abut the future of Spanish debt.
The first was from the European team of the Bank Credit Analyst. I have been reading BCA for decades, and they have a real knack for being right. I pay attention when they write something. They are a serious research firm, and consult with the biggest firms in the world. It is not an exaggeration to say the central bankers pay attention to them.
And they think Spain is going to work out. Let's look at a few paragraphs from their latest report:
"Listen to the current market commentary and you might be forgiven for thinking that history is repeating itself. We don't want to minimize the country's woes. Unemployment has after all just breached the psychologically brutal level of 4 million.
"But much of the analysis is backward looking. What the markets fear has already happened. A rerun of the Greek debt crisis is not inevitable, Spanish bonds are cheap relative to Bunds and many of the cyclical imbalances are on the mend. Spain has already undergone 18 months of painful economic adjustment. The current account deficit in relation to GDP has more than halved to 4.6% from its peak in 2008, when in absolute terms it was the second highest in the world after the US.
"The budget shortfall is beginning to roll over, a reduction plan is in place and the public debt-to-GDP ratio is 60%, barely more than half the Greek ratio. Most importantly, the inflation rate has converged with the euro zone average, one of many indicators confirming the decade-long adjustment to membership of the currency club is complete.
"Spain does not fit well into the caricature of a two speed Europe, with the south on a slow, unsustainable growth path. Its demographic profile is far more propitious to economic growth than Germany or France, never mind Greece and Portugal, and its policy makers are in many instances more vehement about the need for financial discipline. After all, it was Spain which recently attempted to get the EC to agree to penalties for countries that did not hit their economic targets, only to be blocked by Germany. If there is to be a euro crisis, it is not going to be Spain that causes it.
"... The shakeout in the labor market will bring a sharp short term jump in productivity, with policy changes providing additional help thereafter. Immigration creates the potential for Spain to grow its way back."
It was just a few months ago that I published a report from Variant Perception on the serious problems of Spanish banks. Spain has almost 20% unemployment and the government deficit is almost 9%. They have a trade deficit of 4%. Real GDP is down by 5%. Getting back to growth and a less severe government deficit is going to take some serious willpower from a socialist government. So I was glad to read that someone I respect as much as BCA thinks things will work out.
Then I read a short report by Ray Dalio and the team at Bridgewater. It is hard to get their work, but every now and then someone gets me a copy. I don't know Ray, but I have serious respect for his work. I am a huge fan. He is one of those men about whom the word brilliant can be used without risk of exaggeration. Bridgewater manages $80 billion or so for some of the largest institutions in the world. ( www.bwater.com)
So what do they write about Spain? They are not as optimistic.
"[because of the recession] ... the Spanish government decided to run big budget deficits that have been funded with big borrowings, but the more the debt increases, the closer this approach is to coming to an end. As of now, conditions are tenuous but acceptable because most investors a) are used to thinking of Spain as being safe and not having wide credit spreads and b) have been inclined to pick up yield by holding debt that was generally considered safe, so they funded these deficits with narrow credit spreads.
"We do a lot of work estimating what a country's credit spreads should be in light of its cash flows and asset values and have made more than a few bucks doing this. Based on these criteria, we judge Spain's actual credit spread to be just about the narrowest relative to what it should be on the basis of its fundamentals -- i.e., the spread is 1.4%, and we would assess the fundamentals to warrant it to be 6.5%, on the basis of fundamentals alone.
"We judge Spanish sovereign credit to be much riskier than is discounted because it seems to us that there is a high risk that Spain won't be able to sell the debt that it needs to fund its deficits, and there is virtually no chance that the government can cut spending (nor does it want to). That is because a lot of debt is coming due; the Zapatero government is weak, very socialist and supported by a collection of factions (e.g., those in states seeking independence); and the Spanish people are now politically fragmented and only care about what money the government is going to give them. Also, the private sector debt problems have largely been kept under the rug rather than dealt with via restructurings.
"In other words, 1) Spain has big debt/deficit problems; 2) it is not dealing with these problems by doing the tough, forthright things to alleviate them; 3) it doesn't have the printing press to avoid the risk of default (unless the ECB helps them); and 4) it has a narrow credit spread. Situations like this, in the past, have been associated with both debt rollover and capital flight problems.
"... Spain's external debts, have exploded without a significant offset of external assets. On net, Spain owes the world about 80% of GDP more than it has external assets. As a frame of reference, the degree of net external debt Spain has piled up in a currency it cannot print has few historical precedents among significant countries and is akin to the level of reparations imposed on Germany after World War I. We don't know of precedents for these types of external imbalances being paid back in real terms.
"On top of the debt that needs to be rolled, Spain's cash flows (current account and budget deficit) are extremely bad. Spain's current living standards are reliant not just on the roll of old debt, but also on significant further external lending.
"For these reasons, we don't want to hold Spanish debt at these spreads."
And this, gentle reader, brings us to the heart of the problem. These are two very smart research houses with opposite conclusions. Having disagreements is not all that unusual. Disagreements are what makes for horse races and markets.
But the difference is in essence the same disagreement that David and Dennis have. It is one of political nuance. BCA thinks Spain will get its act together, and Bridgewater does not, or at least not until its hand is forced by the markets (my assumption, not theirs).
The amount of pain that Spain must endure to get it fiscal house in order should not be underestimated. Wages are going to have to fall relative to northern Europe for them to be competitive. The dependence on government is going to have to be reduced. This is not going to be easy for a socialist government with a very thin coalition.
And that brings us back to Greece. While Greece can be readily bailed out (assuming they accept large budget cuts) because it is small, Spain is too big to save. The European Union cannot set the precedent that countries that do not set their fiscal houses in order will be bailed out by countries that do.
This is the nature of the End Game I have been writing about. The decisions are now political. How do we unwind the debts and the leverage? How much pain do we postpone and how much do we take on today? It is the same question for much of Europe, Great Britain (serious problems there), Japan (which is a bug in search of a windshield), and the US. We now have a limited number of path-dependent options. By that I mean the political paths chosen by the various governments will dictate the economic path we go down.
John Mauldin, Best-Selling author and recognized financial expert, is also editor of the free Thoughts From the Frontline that goes to over 1 million readers each week. For more information on John or his FREE weekly economic letter go to: http://www.frontlinethoughts.com/learnmore
]]>adminVechtkabinet ruziënd ten onder2010-02-20T09:25:00-05:002010-02-20T12:23:00-05:00tag:blikopdebeurscom,2010:blikopdebeurscom.549Ook het vierde kabinet-Balkenende haalt de eindstreep niet. Directe aanleiding is de missie in Uruzgan, maar het onderlinge wantrouwen gaf de doorslag. En zo wint politiek provincialisme het van landsbelang en internationale reputatie.Ook het vierde kabinet-Balkenende haalt de eindstreep niet. Directe aanleiding is de missie in Uruzgan, maar het onderlinge wantrouwen gaf de doorslag. En zo wint politiek provincialisme het van landsbelang en internationale reputatie.
“Waar vertrouwen ontbreekt, is een poging om het over de inhoud eens te worden bij voorbaat tot mislukken gedoemd”, aldus Balkenende na afloop van 16 uur crisisberaad. Een juiste analyse van een premier die wederom een stuitend gebrek aan regie tentoonspreidde. Nederland slaat internationaal een modderfiguur in een tijd waarin juist grote behoefte is aan leiderschap, stabiliteit en daadkracht.
Alleen maar verliezers
Dit is een politieke breuk met alleen maar verliezers. Burgers en bedrijven hebben te maken met de grootste economische crisis sinds de Tweede Wereldoorlog. Exploderende overheidstekorten en onrust over de financiële stabiliteit binnen de Eurozone vragen om politici die de juiste prioriteiten stellen. Essentiële financieel-economische en budgettaire hervormingen blijven nu een jaar op de plank liggen.
Belangrijke dossiers die voorlopig achter de horizon verdwijnen: miljardenbezuinigingen op de rijksbegroting, de verhoging van de AOW-leeftijd naar 67 jaar en de invoering van de crisis- en herstelwet. Ook kan Nederland binnen de EU nu niet meer met gezag meepraten over de beheersing van de crisis in Griekenland en het voorkomen van ‘besmetting’ naar andere Europese landen.
Grote verantwoordelijkheid
“Labor, which has been dropping in the polls, appeared determined to take a stand with next month's scheduled local elections in mind”, schrijft The Wall Street Journal zaterdag. Zowel de PvdA als het CDA dragen een grote verantwoordelijkheid voor deze onnodige prestigestrijd. Nederland, van ‘lead nation’ tot de risee van Europa. En premier Jan Peter Balkenende? Die is nu vier keer gewogen en te licht bevonden.
“We recommend selling risky assets into strength over the near term. The road to repair will be a long, painful journey buffeted by tremendous uncertainty—not typically a great environment for risk-taking. While the announcement details will garner the headlines, the real medium/longer term issue for the markets is not whether troubled sovereigns get the needed aid/liquidity, but rather, whether the aid and the accompanying necessary fiscal retrenchment leads to an unexpectedly soft mid-cycle economic slowdown—or, worse, a double dip—for the developed world.”
Opvallend is de visie dat financiële markten de Griekse problemen ten onrechte beschouwen als een geïsoleerde crisis. Morgan Stanley wijst op serieus ‘besmettingsgevaar’, mede door de grote onderlinge verbondenheid van het Europese bancaire systeem.
Contagion effects “What the markets are missing. CDS spreads on Greek sovereign debt, yield-curve steepness, and earnings expectations implicit in equities are all too sanguine given the severity of the crisis. The market is underestimating the tough domestic fiscal reform needed, without which ECB liquidity support is unlikely to be forthcoming. And because of the close interrelationships between the European banking system and sovereign credit, the contagion effects are much greater than the market perceives.”
De zakenbank was, in tegenstelling tot Goldman Sachs, zo wie zo al behoorlijk bearish over 2010. En de kans is volgens MS dus groot dat de ‘knoflookgrens’ richting het noorden zal opschuiven.
In november 2009 kwam BAM ook al met een winstwaarschuwing, de prognose werd toen bijgesteld naar 100 miljoen, i.p.v. een eerdere bandbreedte van 100 tot 120 miljoen euro. Dat het bedrijf twee weken voor de publicatie van de jaarcijfers de winstcijfers nog een keer met 70 procent (!) moet verlagen is niet minder dan een aanfluiting. Hoe staat het daar met de financiële planning & control?
Uitermate teleurstellend
Het persbericht meldt “additionele waardeverminderingen en voorzieningen voor vastgoedprojecten in Nederland getroffen als gevolg van de aanhoudende slechte vastgoedmarkt”. Vermoedelijk heeft dit voornamelijk betrekking op commercieel onroerend goed. ”Uitermate teleurstellend”, aldus Van Oosten. Een understatement, gezien het opgebouwde trackrecord van winstwaarschuwingen.
De vraag is in hoeverre de grenzen van het bankenconvenant in zicht komen, nu winst en dus ook cashflow dermate verdampt. Het management van BAM “verliest geloofwaardigheid”, schrijft Petercam analist Bart van den Wijngaard. Topman Van Oosten verwacht geen verdere afschrijvingen. Dat komt ons erg bekend voor. De positie van CFO Jan Ruis lijkt me na dit debacle moeilijk houdbaar.
Blikopdebeurs.com publiceert met toestemming het volgende artikel uit Mauldin’s nieuwsbrief van zaterdag 13 februari.
Between Dire and Disastrous
While German Chancellor Merkel has indicated a willingness to help, the German finance minister and other politicians are suggesting German cooperation will either not be forthcoming or only be there at a very high price; and the price is a severe round of "austerity measures," otherwise known as budget cuts. Greece is being told that it must cut its budget to an 8.7% deficit this year and down to 3% within three years.
For my American readers, let's put that into perspective. That is the equivalent of a $560-billion-dollar US budget cut this year and another such cut next year. That would mean huge cuts in entitlements, Social Security, defense, education, wages, subsidies, and on and on. And repealing the Bush tax cuts? That would just be for starters. No "let's freeze the budget" and try and grow our way out of it, as we effectively did in the '90s, or gradually cutting the budget a few hundred billion a year while raising taxes. That combination of tax increases and budget cuts would guarantee a US recession. Unemployment, already high, would climb higher.
And yet, that is what the Greek government is being asked to do as the price for a bailout.
A few facts about Greece. Some 30% of its economy is underground, meaning it is not taxed. In a country of 10 million people, only 6 (!!!!) people filed tax returns showing in excess of €1 million in income. Yet over 50% of GDP is government spending, and Greece has one of the highest public employee levels as a percentage of population in Europe. And its unions are very powerful. Nearly all of them have gone on strike over this proposal.
A National Suicide Pact
Now, here is where it actually gets worse. If Greece bites the bullet and makes the budget cuts, that means that nominal GDP will decline by (at least) 4-5% over the next 3 years. And tax revenues will also decline, even with tax increases, meaning that it will take even further cuts, over and above the ones contemplated to get to that magic 3% fiscal deficit to GDP that is required by the Maastricht Treaty. Anyone care to vote for depression?
And add into the equation that borrowing another €100 billion (at a minimum) over the next few years, while in the midst of that recession, will only add to the already huge debt and interest costs. It all amounts to what my friend Marshall Auerback calls a "national suicide pact."
Normally, a country in such a situation would allow its currency to devalue, which would make its relative labor costs go down. But Greece is in a currency union, and can't devalue. Or it would restructure its debt (think Brady bonds) to try and resolve the problem.
The dire predicament is the one where Greece cuts its budgets and more or less willingly enters into a rather long and deep recession/depression. The disastrous predicament is where they do not make the cuts and are allowed to default. That means the government is plunged into a situation where it has to cut the entire deficit to what it can get in the form of taxes and fees, immediately. As in right now. And defaulting on the interest on the current bonds wouldn't be enough, although it would help.
Why not just let Greece go under? Part of the argument has to do with moral hazard. If Germany bails out Greece, Ireland, which is actually making such cuts to its budget, can legitimately ask, "Why not us?" And will Portugal be next? And Spain is too big for even Germany to bail out. At almost 20% unemployment, Spain has severe problems. Its banks are in bad shape, with large amounts of overvalued real estate on their books (sound familiar?) and a government fiscal deficit of almost 10%. While Spanish authorities say they can work this out, deficits will remain high.
The fear is one of contagion. Some argue that Greece is only 2.7% of European GDP. But Bear Stearns held less than 2% of US banking assets, and look what happened.
I have been trading emails with Lisa Hintz of Moody's, and she sent me the following note:
"It turns out from the BIS [Bank of International Settlements] numbers, that the largest holders of Greek debt are French, followed by the Swiss, although my guess is that a lot of that is hedged, and I don't know that the BIS picks that up, and then the Germans. The numbers as of last June were France €86 billion, Switzerland €60bn, and Germany €44 billion. I have seen more recent numbers of France €73b, Switzerland €59b, and Germany €39b. In terms of GDP, for Germany it is minimal - just over 1%. Of more concern, for France it is nearly 3%, and for Belgium 2.5%. For Germany, the debts of Ireland, Portugal and Spain are much bigger problems. They may, however, worry that if there is a contagion, they will have to take marks on that debt. That would be a real problem - nearly 15x the size of the Greek issue."
The recent credit crisis was over a few trillion in bad, mostly US, mortgage debts, with most of that at US banks. Greek debt is $350 billion, with about $270 billion of that spread among just three European countries and their banks. Make no mistake, a Greek default is another potential credit crisis in the making. As noted above, it is not just the writedown of Greek debt; it is the mark-to-market of other sovereign debt.
That would bankrupt the bulk of the European banking system, which is why it is unlikely to be allowed to happen. Just as the Fed (under Volker!) allowed US banks to mark up Latin American debt that had defaulted to its original loan value (and only slowly did they write it down; it took many years), I think the same thing will happen in Europe. Or the ECB will provide liquidity. Or there may be any of several other measures to keep things moving along. But real mark-to-market? Unlikely.
The entire EU is faced with no good choices. It is coming down to that moment of crisis predicted by Milton Friedman so many years ago. And there is no agreement on what to do.
"The 27 leaders never even discussed how they might shore up Greece or the rest of Club Med. German Chancellor Angela Merkel said she was not willing to broach the subject at all. The only relevant topic was whether Greece was complying with Treaty obligations, and how the country would slash its budget deficit from 12.7pc to 8.7pc this year - in a slump.
"'They offered nothing,' said Jochen Felsenheimer, a credit expert at Assenagon in Frankfurt. 'It was just words without any concrete measures, hoping to buy time.'
"Whether the EU has time is an open question. Credit Suisse says Greece must raise €30bn in debt by mid-year, mostly in April and May. Greek banks have been shut out of Europe's inter-dealer markets, forcing them to raise money at killer rates. They are suffering an erosion of deposits as rich Greeks shift money abroad. This could come to a head long before April.
"'Economically, we are in a very risky situation. Greece is close to default. We face systemic risk like the Lehman collapse and unless there is a bail-out for Greece, there will have to be a bail-out for the whole European banking system within two or three months,' he said.
"Yet they are damned if they don't, and damned if they do. 'A Greek bail-out increases the risk of EMU break-up, because monetary union can only work if everybody sticks to the rules,' Mr Felsenheimer said."
There is talk among some in Europe of a more centralized control of some countries that do not stay within guidelines, which means that Greece might be asked to give up some of its sovereign freedoms in exchange for bailout funds. French President Sarkozy emphatically stated that no member of the EU would be allowed to default. But he did not bring a checkbook to the press conference. Selling this to a variety of national parliaments will not be easy, when they have their own problems.
And Merkel has problems on the home front. There are reports she is putting the brakes on a bailout, as she is getting pushback from her constituency. The Frankfurter Allgemeine Zeitung warned the chancellor yesterday that offering Greece any kind of bailout would be a betrayal of the trust of the Germans who so reluctantly traded in their marks for the euro. "If the no-bailout clause of the Maastricht Treaty is going to be abandoned, then the last anchor of a stable euro will be destroyed," warned the front-page editorial in the conservative newspaper. "Chancellor Merkel has to be hard now so that the euro doesn't become soft."
Ultimately, this is a political decision for the Greek people. They have roughly four options. They can accept the austerity measures and sink into a depression for a few years. This would mean the total amount of debt would go up rather significantly, putting a very large crimp on future budgets. Debt is a constraint on growth. Debt-to-GDP is already over 100%. A recent paper by Reinhart and Rogoff (authors of the book This Time It's Different) shows that when government debt-to-GDP goes over 90%, it reduces future potential GDP by over 1%. That locks in a slow-growth, high-unemployment future in an economy already saddled with government spending at 50% of GDP, which is by definition a drag on GDP growth.
The second option is that they can simply default and go into a depression for more than a few years. This would have the advantage of reducing the debt burden, depending on what terms the government settled on. Would bond holders get 50 cents on the euro? 25 cents? Stay tuned. But it would also most assuredly mean they would not be able to get new debt for some time to come, forcing, as noted above, severe cuts in government spending. From one perspective, it has the potential advantage of reducing government's share of the economy, which is a long-term good but a short-term nightmare. But it also keeps Greece in the euro zone, which does have advantages. However, it does little to deal with the labor-cost differentials.
The third option is that they could vote to leave the European Union. While this is unthinkable to most Europeans, it is an option that may appeal to some Greeks. They could create their own currency and effectively devalue their debt. It would make their labor and exports cheaper. They would still be shut out of debt markets for some time. Any savings left in Greece would be devalued overnight. Those on pensions would find their buying power cut by a great deal. It is likely that inflation would become an issue. And it would be a full-employment act for legions of attorneys.
Most people scoff at this notion, but money is flying out of Greek banks into non-Greek ones, and to my way of thinking that is a suggestion that some Greeks think secession might be a possibility. It is also causing severe stress at Greek banks.
The final option is to promise to make the budget cuts, get some form of guarantee on their bonds, and borrow enough to make it another year - but not actually cut as much as promised; just make some cuts and then promise more next year if you will just bail us out some more. That just kicks the problem down the road for another year or two, until European voters (mostly German) get tired of taking on Greek debt.
The market is not going to let Greece continue to borrow without showing some serious efforts at cutting their deficit, and probably not even then without some external guarantees. The history of Greek debt is not a good one. They have been in default 105 years out of the last 200.
There are some optimists, however. Good friend and fishing buddy David Kotok thinks that this will all turn out OK. Writing this week, he said, "Lastly, it is important to understand the territory of this issue. The 27 members of the EU and the 16 of them that are in the euro zone, and most of the other 11 that want to be in the euro zone, will coalesce and deal with Greek debt in the fiscal policy arena. Budget deficits will decline, although they may not decline as fast as projections. Economic growth will occur, although it may not be as fast as projected. Taxes will rise. Public sector employment benefits and compensation will be pressured to compress, and the workers will resist but eventually compromise. By the way, that will also happen at the federal level in the United States and with the 50 sovereign state debtors that make up our country. Think of us as a US dollar zone, just as we think of them as a euro zone. They are new at it. We have had a century of practice and need only another few hundred years to get it right."
My objection to that is, US states generally have a mandate to balance their budgets, so that the "debt-to-GDP" of a state is comparatively rather small. And a US citizen is ten times more likely to move from one state to another to find a job than a European will move to another country. As one person I read commented about unemployed Spanish workers in Madrid, "They won't even move to Barcelona!"
It's More than Just Greece
The lesson here? This is not just a Greek problem. Debt and out of control deficits are a problem all over the developed world. The Greeks are just the first. As Niall Ferguson wrote this week in the Financial Times, the contagion is headed to US shores unless we get our budget house in order. You cannot spend your way out of a fiscal crisis. The current path is simply unsustainable. At some point, we can become Greece. Yes, we have the advantage of having our debt denominated in dollars, but that is only an advantage up to a certain point.
The Nobel Prize economists (who will go nameless here) who say the US cannot default because our debt is in dollars miss the point. Being the world's reserve currency just means we can run up bigger bills, but if we go the route of printing money to pay those bills, that is devaluation and fraud, as the value of a dollar will diminish; and that is tantamount to default.
Whether it is Japan or Portugal or the US or (pick a country), the body of evidence clearly shows that there is a limit to the amount of debt a sovereign country can handle without a crisis developing. That limit is different for each country, but there is a limit that the bond market will impose. And there are many countries in the developed world that are approaching that limit.
We are in the fullness of time approaching the End Game. In country after country, the choices that have been made over the last decades will yield a Greek situation, where there are no good choices. And the longer the hard choices are put off, the more difficult they will become.
For some countries it could mean deflation. For others, it will look like inflation on steroids. Countries with sensible budgets and policies will thrive.
For most of the last two decades, investors have ignored country risk in the developed world. That is no longer a safe option. We will explore the consequences in later letters.
John Mauldin, Best-Selling author and recognized financial expert, is also editor of the free Thoughts From the Frontline that goes to over 1 million readers each week. For more information on John or his FREE weekly economic letter go to: http://www.frontlinethoughts.com/learnmore
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