Moving on ...

I have not been posting too much lately as I have been involved in other activities among them planning to begin in an asset management organisation together with some old friends. I begin there today and from that platform, I expect to a have new blog up and running shortly. I end for now here with the chart of S&P this year, not a pretty picture as we most likely are moving into a short term bottom here within the next two weeks around the 650 level.

Don't really know what the driver will be, but a list of positive factors are:

• Broad realization that we are in a crisis


• More fair valuations after the move in Q1 leading close to many the old S&P targets of many bearish investors


• Credit market is working better allowing at least high creditworthy companies to issues debt (It can surely be argued is this is the real situation)


• Strong bank lending growth in China ... Does stimulus work there to the benefit of the global economy?


• "Just-in-Time" manufacturing behind the dramatic slowdown in world GDP in Q4/Q1 leading to fast reduction in inventories and better economic data in late spring


• Policies are implemented more aggressively learning from history


• Buy & Hold for the long run is in intensive care

On the other hand the negative factors for not reaching a short term bottom or at least that it ONLY will be a short term bottom would be:

• Financial sector insolvent and the rescue packages are behind the curve


• Earnings and dividends are getting cut/hit in historical numbers


• Strong government involvement not positive in medium term


• 20 year of ever expanding leverage and over-spending in US/EU takes time to adjust and more of the same is not the answer


• Monetary and fiscal policies will not work in a Balance Sheet crisis until people are solvent again (The Japanese learning?)


• Break-down risk (Eastern Europe, EURO area, US-EU vs. US-China relationship)


• The current crisis is the worst since the last depression so in that perspective the bottom should be somewhere between -49% (tech crash) to -89% (the great depression)