News item
17 Jan 12
"Test in Sovereign Bond Trust"
- Nickel market is firmer. Psychological barrier of USD 20,000.00/mt in sight. Technical signals changing to plus. The market has corrected former exaggerations. Fundamental data in the real economy remains unchanged. Banking environment somewhat more critical.
- China remains a growth economy. Quality of statistics must always be scrutinised. But the real economy in the core member states of the Euro zone also robust. Germany is here the main factor.
- The last downgrade of the rating agencies already taken into account because it was expected. Hardly any reaction in the financial markets. Power of habit. Judgements about rating agencies are looked at differentially by investors.
- Politicians call for a European rating agency. Wealth of experience of the present agencies can hardly be economically replicated. If really required, at great expense to the tax payer. Demand therefore somewhat utopian.
- Financial transaction tax a similar populist demand. Professional investors are very flexible with regard to place of transactions. Private investors not quite so. Tax would therefore come more from the normal man in the street. Sanctions against those responsible for the financial crisis or those directing it are not taking place. Argument is put forward partly out of ignorance.
- "Currency war" US-Dollar and Euro. European banks complain about shortages in US-Dollar supplies. No trust of each other in European banks, so why should US banks think otherwise? International complexities restrict competitive restraints.