Friday, January 23, 2009

Denial is the new black....


I'm in Paris, Zurich and Geneva and there is one common theme: Denial.... financial crisis does not happen here, its somebody elses problem.... shopping is good, no pain.......

Meanwhile in Washington Geithner is also in denial.... I am so sorry I "forgot" to pay tax for 5 years........

The outgoing President Bush also claims..... He did a few mistakes but he left the US a better and safer place...

I must be from the moon...... I have travelled pretty much the whole world in the last three month and the only two places where denial is prevalent is Paris & Geneva/Zurich....

Another theme I found again and again was the morale hazard many company CEOs have created for themselves..... annoucing 2008 was a great year, no incoming crisis in sight...and now they are forced to not only cut marketing spending, expansion plan but most importantly making serious lay-offs..... the world is in the "winter phase", globalisation works, and it's time to face reality and move away from everything being based on hope....... (ands the non-change Obama stands for)


Position wise.. I still keep 75% in cash/bonds.... 25% applied negatively.....net short dax, s&p and eurusd mainly.... 650-690 the goal......both from technical perspective but also from bottom up analysis.... ( 50 US Dollar expected earnings in the S&P ...13 P/E (recession lows) equals.....650....)

I look forward to the market moving to more realisme as it would indicate conditions should be improving.. for now my key indicator remains unemployment as long as the velocity of lay-offs are accelerating.. I wil remain short.......

Safe trading,

Steen

4 comments:

Anonymous said...

Steen, thanks for a much appreciated voice of reason in a rising sea of madness. Isn't 50 a bit optimistic?

Your demand for politicians to stop meddling with the banks was spot on: The bail-out efforts are diverted in the US: http://online.wsj.com/article/SB123258284337504295.html or disintegrating like in Germany: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aGRbvyh_X_qQ

I fear the next step to be an international bad bank with the IMF which will blow the problems up further.

ld said...

Steen - are you in effect implying that the seeds of hope cannot come from anywhere but the US or which unemployment are you keeping in mind?

How's the employment globally based on your travels?

  said...

Re. Unemployment - not its not a US problem only--- its the point ...unemployment will rise faster than most people perceive possible.....more in leverage countries....but the negativ employment growth will create lower disposable income, lower sentiment, excess capacity and further write off on debt...

When this "stabilise" we will start moving forward to "Spring"..

ld said...

Understand and agree. I've linked to your blog.