Skip to main content

Europe and Banks: What a mess?

It's becoming too predictable - first 3 to 4 months of new year economy start looking up and along the way stock markets across the world go up. Then comes April and economic recovery starts faltering and investors start following "Sell in May and walk away" advise. Then comes "same old same old" stories from Europe. Somewhere in the middle some bank loses couple of billion dollars in few days. It happened in 2010 and 2011 and it's again happening in 2012. When are we going to get out of this pattern?
Last week was interesting week across multiple fronts. Let's look at them and see if we can predict how events would turn out next week:

  • French election results were predictable - so no real reaction
  • Election results from Greece were un-predictable. Could this be catalyst for finally Greece leaving Europe. If Greeks are hell-bent in electing radical left, they better start preparing life without Euro. Left leader Tsipras is playing dangerous game of calling European leaders bluff on not providing further bailout money. This could be very dangerous for Greece (who would be out of Euro), Europe as well as world. It has potential for President Obama losing his election bid just because there would be economic shock across the world if this really happened.
  • One of the best managed (supposedly) bank JP Morgan lost $2 Billion. Looks like banks have not learned anything from 2008 economic crisis and they are back at their old game. Just six months back, MF Global went bust in few days on out sized bets and lost confidence. Are there other skeletons in closets of other banks? Are regulators sleeping at the wheel again?
So what's in store for next week?
  • Facebook's most awaited IPO - stock should open above $40 and could close near $50. I I would stop there since there are so many articles written about this, it's almost creating FB fatigue.
  • Greece would be heading towards new elections in mid-Jun
  • France would start preparing for parliamentary elections around same time
  • Stock markets would have roller-coaster ride - similar to last few week
So as investor, be careful since next few weeks could be very volatile. 
After all there is real possibility of "Black Swan" event happening
Have a great week
/Shyam

Comments

Post a Comment

Popular posts from this blog

Clicks to Tokens: Will 2026 Echo 1998's Boom or 2000's Bust?

My "blogging" was in hibernation last 8 months due to my self-imposed restraint given the environment as well as built-in inertia to get started despite so many interesting events and markets reaching all time highs after taking a big dump around "Liberation Day" in Apr...Around that time I had the blog ready that it would be repeat of Mar/Apr 2020 panic and recovery during onset of Covid Pandemic. The hunch happened to be correct and I was glad that I could keep and take some positions which I am still holding especially around AI theme. But that was then...as 2025 is about to wrap up in 10+ weeks, let's look at what's in store for rest of 2025 and 2026. And what's better time than to start writing again just before one of the most important week on the calendar with multiple key events coming up next week... Fed meeting to decide the course of interest rates - it's almost guaranteed that Fed will cut rates by 25 basis points (2nd time in 2025) and...
Post a Comment
Read more

2026: The Year of Convergence – Melt-up, Moonshots, or Mid-cycle Correction?

Happy New Year! After another period of self-imposed hibernation from the blog—partly due to the festivals, travel, intertia and partly to watch the dust settle on a chaotic 2025—I decided to use the quiet of this New Year’s morning to finally reboot.  Looking back at my October post,  “Clicks to Tokens,”  the hunch about the AI theme held firm. We spent much of 2025 debating whether we were in 1998 or 2000. As we enter 2026, the answer seems to be "neither and both." We have the roaring optimism of the 1920s fueled by "Silicon Spirits," but with the high-speed volatility of the 2020s. So, as the calendar flips, what is in store for 2026? Markets may experience melt-up (S&P touching 8000),  with some moonshots (like SpaceX and OpenAI) IPOs or even see mid-cycle correction bringing down S&P to 6000. That's a wide range and will be decided by Four R's... Here are my thoughts on the " Four R’s ":  Rates, Robots, Rotations, and Real Assets. 1. ...
Post a Comment
Read more

And the Oscar goes to...

It's Oscar Sunday and time for predictions for few categories - before I digress into talking about drama in DC or markets.  First of all, I want to recognize the damage LA fires have done to the beloved areas of Los Angeles and impacted families across all spectrums. My heart goes out to them and wish them recovery and rebuilding of their lives... This year's Oscar nominees and post nomination period had been interesting to say the least. Due to this, the field is wide open in almost all categories and that's what makes prediction game so interesting. Just to set expectations, I would consider a win if I get even 50% predictions correct given the dynamics of nominees this year. So here are my predictions - "And the Oscar goes to..." Best Picture - Anora (surprise could be "The Brutalist") Best Director - Sean Baker for "Anora" (Surprise could be Brady Corbet for "The Brutalist") Best Actor - Adrien Brody for "The Brutalist"...
Post a Comment
Read more