torsdag den 5. februar 2009

The secret of politics? Make a good treaty with Russia.” Otto Von Bismack

Just back from minus 20 degrees celcius in Russia and an quick 24 hrs on the ground. There is no way 24 hrs can do any justice to such a large and complicated country, but I must say I was impressed by the investors and journalists I met on the ground, the bad news being I got strong feeling Russia is going to get a serious dose of almost hyper inflation through the weak Ruble, but the Russians are used to boom-and-bust cycles so do not count them out, so here Jim Roger and I will have to disagree

It is clear, also in Russia, that defending the Ruble @ 41 in the basket vs EUR & USD is not going to be the end game, but one has to remember the devaluation in Russia is no bigger than what we have seen in the UK.

Don't count on me as your new Russia expert, but writing off whole nations in an environment which is hostile to one and everyone due to credit constraints and general downsizing is a mistake in my opinion. When we move into to the reflationary side of this business cycle (not likely before 2011-ish) countries like Russia, India, China will do well.

Back in the "land of hope" the freight rates has been rising and created a lot of noise about market having turned, growth is coming back... but I'm sorry to be carrier of bad news, but using Baltic exchanges as gauge/indicator is simply wrong.

1. You need to look at individual routes

2. The supply/demand function of the pricing is skewed in favor of demand, as it takes very small additional demand to move the markets. There is fixed supply (the amount of ships) where as demand is ORDER DRIVEN. Hence making long-term conclusions based on small "bleeps on the radar" is clearly a hazardous policy.. but as always be my guest to live dangerously.

Strategy wise some investment ideas starting to formualte themselves medium term:

The GBP is now oversold and the EUR is the most overvalued currency around, Eastern Europe is slowly indicating more pain in Europe(due to the high investments by core European countries) than most people of willing to accept for now including it seems Mr. Trichet....

(Link: Fitch sees more E.Europe downgrades after Russia John Hardy my expert chartist agrees short w. stop above .9050 for now.

(click on chart for larger version)

On the stock market we have been caught in 800-850 range for quite some time - for now there is hope of break to upside despite the continued erosion of capital in the banking sector across the world, but.. I will leave it to the market going into the Non-farm tomorrow, but will maintain the overall target of 600-690 for the S&P...

Still keeping an eye of 3.00 in 10y US notes - there continues to be issuance and noise about potential "buying stop" from overseas investors but ..........I like to be in opposition.

Going on winter holiday from tomorrow night will do one more post tomorrow....

Safe trading,


0 kommentarer: