playboy: recOvery@2012 (2)
Merkozy rides again
Jan 9th 2012, 18:20 by B.U. | BERLIN
ANGELA MERKEL and Nicolas Sarkozy kicked off the 2012 season of the euro soap opera with a summit meeting in Berlin today. Neither said anything startling; certainly nothing that would betoken a swift and happy conclusion to the long-running saga.
The German chancellor and the French president muted their differences over such issues as how quickly to introduce a tax on financial transactions and what the role of the European Central Bank (ECB) should be in supporting shaky members of the euro zone. “Our analysis is the same,” said Mr Sarkozy at the post-summit press conference.
This did not calm markets’ nerves. The euro dropped to its lowest level against the dollar since September 2010 ($1.266) before the summit and recovered marginally as the two leaders met. Currency traders’ biggest worry is Greece’s failure to meet its fiscal targets, which means it may not get the fresh money it needs to avoid defaulting on its debt.
At the opposite end of the confidence spectrum, investors are so eager to finance Germany that they accepted a negative interest rate on an auction of six-month paper, in effect paying Germany’s government for the privilege of lending to it. Germans will see this as vindication of their prudent policies, but it also serves to underline the dangerous economic divergences within the euro zone.
The main significance of the Merkozy summit is that it seemed to signal a shift in emphasis. True, the austerity agenda—promoted by the Germans and grudgingly accepted by the French—is still there. Indeed, Mr Sarkozy boasted that France’s fiscal deficit was smaller than expected in 2011. Europe is making swift progress towards a “fiscal pact” to limit deficits, proclaimed Mrs Merkel, including German-style “debt brakes”. A new treaty should be signed by March.
But fiscal self-denial will now be supplemented by what Mrs Merkel called a “second leg”, meaning economic growth and job creation. This is partly meant to help Mr Sarkozy, who faces a tough re-election fight this spring.
All euro-zone countries, including Germany, are “prepared to do their homework” in this area, the chancellor promised, but it is not clear that much new is on offer. A big German stimulus package to boost growth in neighbouring countries is not in prospect (that would nobble the fiscal leg).
Mrs Merkel spoke of spreading best practice in labour-market regulation across the euro zone (which is German practice, Mr Sarkozy admits) and spending existing European funds more quickly and effectively. Both ideas make sense; neither will prevent further financial turmoil, or a European recession. In the latest sign of fragility, German industrial production dropped 1% in November.
The leaders tried to seem anything but complacent. Mr Sarkozy called the situation “very tense” and Mrs Merkel said they had “understood the needs of the hour.” The intention is to keep Greece from dropping out of the euro zone, but whatever happens Greece is an exceptional case, the leaders said (perhaps fearing that a Greek default or even an exit from the euro could not be avoided). As always, the chancellor dampened expectations of a quick “one-dimensional” solution to the crisis. The problem would be solved, she said, “step by step.”
The next steps involve Italy, an indebted giant that poses a far greater threat to the euro than Greece. Mrs Merkel will meet Italy’s unelected prime minister, Mario Monti, in Berlin on Wednesday; she and Mr Sarkozy will hold a three-way summit with him in Rome on January 20th. European heads of government are to gather, probably on January 30th, to put the finishing touches to the fiscal pact.
Also on the agenda, no doubt, will be a proposed financial-transactions tax. Britain is threatening a veto; Mr Sarkozy has said France will go it alone at first, if need be. Mrs Merkel wants the tax but her junior coalition partner, the Free Democrats, do not unless the British get on board. As the crisis sharpens, disagreements are likely to re-emerge over the role of the ECB and how to strengthen the euro zone’s bail-out funds. The soap opera has a long way to run.
bloomberg:
Following is a table of bond and bill redemptions and interest payments in 2012 for the Group of Seven countries, Brazil, China, India and Russia, in dollars, using data calculated by Bloomberg as of Dec. 29:
Country 2012 Bond, Bill Redemptions ($) Coupon Payments Japan 3,000 billion 117 billion U.S. 2,783 billion 212 billion Italy 428 billion 72 billion France 367 billion 54 billion Germany 285 billion 45 billion Canada 221 billion 14 billion Brazil 169 billion 31 billion U.K. 165 billion 67 billion China 121 billion 41 billion India 57 billion 39 billion Russia 13 billion 9 billion
Dow Climbs to Highest Since July, Oil Surges
By Stephen Kirkland and Ksenia Galouchko – Jan 3, 2012
bloomberg
Stocks (MXWD) surged, driving the Dow Jones Industrial Average to the highest level since July, and commodities rallied on signs of increasing manufacturing output around the world. The dollar weakened and U.S. Treasuries fell.
The Dow increased 179.82 points, or 1.5 percent, to 12,397.38 and the S&P 500 jumped 1.6 percent to 1,277.06, the highest close since Oct. 28, at 4 p.m. in New York. The Stoxx Europe 600 Index (SXXP) added 1.6 percent and closed at a five-month high. The dollar slipped versus all 16 major peers, while 10- year Treasury yields increased seven basis points to 1.95 percent. Oil settled at an almost eight-month high near $103 a barrel as 23 of 24 commodities in the S&P GSCI Index rose.
Financial, industrial and commodity shares led the S&P 500’s gain as the Institute for Supply Management’s factory index expanded at the fastest pace in six months and government data showed construction spending grew at more than twice the forecast rate. Factory output (AIGPMI) in Australia grew for the first time in six months and reports in the past two days showed a pickup in Chinese and Indian manufacturing.
“You’re starting to see people want to take more risks,” Frank Ingarra, who helps manage the Can Slim Select Growth Fund at Greenwich, Connecticut-based NorthCoast Asset Management LLC, said in a telephone interview. His firm oversees $1.4 billion. “Manufacturing data has been pretty decent.”
New Year Rally
All 10 of the main industry groups (SPXL1)in the S&P 500 advanced today except for utilities, which climbed 15 percent last year for the biggest gain. Financials, the worst-performing group in 2011 with an 18 percent drop, climbed 2.8 percent as a group today to help lead gains. Alcoa Inc., JPMorgan Chase & Co., Bank of America Corp., Chevron Corp. and Caterpillar Inc. rallied at least 3.7 percent as the Dow extend its 5.5 percent 2011 advance.
The ISM’s manufacturing index rose to 53.9 in December from 52.7 a month before, above the reading of 50 that signals growth and topping the 53.5 median projection of economists in a survey. Construction spending climbed 1.2 percent in November, Commerce Department data showed.
Forecasters at securities firms are more conservative on U.S. stocks (MXWD) than any time in seven years, predicting the S&P 500 will rise 6.4 percent to 1,338 in 2012 as budget deficits around the world limit gains. That’s the smallest predicted return since 2005. Adam Parker of Morgan Stanley, whose estimate for 2011 proved the most accurate among current analysts, forecast a loss of 7.2 percent as Europe’s debt crisis will keep volatility above historical levels.
Federal Reserve officials will for the first time make public their own forecasts for the federal funds rate (FDTR) at their Jan. 24-25 meeting, minutes from the December 13 Federal Open Market Committee said today. FOMC “participants decided to incorporate information about their projections of appropriate monetary policy” into their Summary of Economic Projections starting with their next meeting, the minutes said.
European Shares
The Stoxx 600 (SPX) climbed to the highest level since August as the U.K.’s FTSE 100 Index and the Swiss Market Index, both of which were closed yesterday for a holiday, climbed more than 1.9 percent to lead gains in the region.
Rio Tinto Group led a rally in mining companies, gaining 6.4 percent. Afren Plc jumped 20 percent as the U.K. energy explorer focused on Africa said production topped its forecasts.
The MSCI All-Country World Index (MXWD) sank 9.4 percent last year, the most since 2008, as Europe’s debt crisis hurt global growth. The S&P 500 Index closed the year almost unchanged, slipping less than 0.1 percent, to beat benchmark indexes in all 24 developed markets except for Ireland, where the ISEQ Overall Index increased 0.6 percent.
Default Swaps Drop
A benchmark gauge of U.S. company credit risk dropped to the lowest level in two months. The Markit CDX North America Investment Grade Index of credit-default swaps, which investors use to hedge against losses on corporate debt or to speculate on creditworthiness, decreased 2.2 basis points to a mid-price of 118.09 basis points. The index fell as low as 117.6, the least since Oct. 31. Contracts on Bank of America Corp. and Goldman Sachs Group Inc. also fell.
The dollar weakened 0.9 percent today to $1.3051 per euro, which appreciated 0.6 percent against the yen after falling to an 11-year low yesterday. The yen weakened against 13 of its 16 most-traded peers monitored by Bloomberg, while the New Zealand dollar strengthened versus all but two of its major counterparts.
Moves by the Fed to flood the world with dollars are doing little to dent the currency’s value, bolstering the appeal of U.S. assets at a time when the government needs the support of foreign investors the most.
Dollar’s Share
The U.S. Dollar Index (DXY) appreciated 13 percent from a record low in March 2008 through the end of 2011 even as the Fed kept interest rates at about zero and printed cash to buy $2.3 trillion of Treasury and mortgage-related bonds, and is little changed since 1991. The International Monetary Fund said Dec. 30 that the dollar’s share of global foreign-exchange reserves rose in the third quarter by the most since 2008.
The 30-year Treasury yield rose eight basis points to 2.98 percent today as improving economic data damped demand for the relative safety of U.S. government debt.
Governments of the world’s leading economies have more than $7.6 trillion of debt maturing this year, with most facing a rise in borrowing costs. Led by Japan’s $3 trillion and the U.S.’s $2.8 trillion, the amount coming due for the Group of Seven nations and Brazil, Russia, India and China is up from $7.4 trillion at this time last year, according to data compiled by Bloomberg. Ten-year bond yields will be higher by year-end for at least seven of the countries, forecasts show.
European Bonds
The German 10-year bund yield slipped less than one basis point to 1.899 percent. Italian 10-year bond yields were little changed at at 6.92. Austrian bonds slid, driving the difference in yield (.AUSTGER) with bunds nine basis points higher to 123 basis points. The French-German spread widened six basis points to 139 as France auctioned debt.
German unemployment fell more than forecast in December as exports of cars and machinery boomed and one of the mildest winters on record helped support jobs in construction. The number of people out of work fell by a seasonally adjusted 22,000 to 2.89 million and the adjusted jobless rate dropped to 6.8 percent.
Bank funding costs declined with the three-month cross- currency basis swap, the rate lenders pay to convert euro interest payments into dollars, slipping 10.5 basis points to 103.5 basis points below the euro interbank offered rate. That’s the lowest cost for dollar funding since Nov. 8, data compiled by Bloomberg show.
Oil Surges
Oil in New York jumped 4.2 percent to $102.96 a barrel, the highest settlement since May 11, as Iran’s Deputy Navy Commander Rear Admiral Mahmoud Mousavi told Press TV that any effort to harm the nation’s interests will lead to “reciprocal measures.” Copper advanced 2.7 percent to $3.5285 a pound in New York, a three-week high. All 24 commodities tracked by the S&P GSCI Index advanced except for Kansas wheat, sending the gauge up 3.4 percent for its biggest advance on a closing basis since May.
Speculators increased wagers on rising commodity prices by the most since August 2010 on signs that sustained economic growth will drive a rebound in raw materials from their first annual slump since the recession. Hedge funds and other money managers increased combined net-long positions across 18 U.S. futures and options by 18 percent to 536,907 contracts in the week ended Dec. 27, Commodity Futures Trading Commission data show.
The MSCI Emerging Markets Index (MXEF) rose 2.6 percent, the biggest advance in a month. The Hang Seng China Enterprises Index (HSCEI) jumped 3 percent as trading resumed in Hong Kong. Benchmark indexes gained more than 2.4 percent in Brazil, Argentina, Russia, India and South Korea.
The false predictions of 2011 unmasked
by Costas Papachlimintzos 1 Jan 2012
Believe none of what you hear and half of what you see,” Benjamin Franklin, one of the founding fathers of the United States, is thought to have said. This statement couldn’t be more fitting to what has been said and written for Greece this past year.
A quick overview of 2011 brings up the so-called predictions and grandiose statements made on crucial issues regarding the Greek crisis that later on proved to be hugely contradictory.
Since the beginning of the year, a great number of analysts, bankers and academics have stated that a Greek bankruptcy is inevitable and imminent, but the Greek state has not yet defaulted on its debt.
An even greater number have spoken against debt restructuring, while several top members of the Greek government denied that such an issue was even being discussed. Nevertheless, the July 21 EU summit concluded that, for the first time in the eurozone, a haircut would be imposed on the sovereign bonds of a member state.
Greek politicians have made several other major assertions that have never materialised. The most notable examples are the commitment of Prime Minister George Papandreou that national elections would be held in 2013, as well as his call for a referendum on the new bailout deal.
Impressive u-turns were also made by the European Central Bank, which did not cut the lifeline to Greece, and by the country’s creditors, who are about to accept far greater losses as part of the so-called private sector involvement (PSI) in the Greek rescue plan.
If there is one lesson to be learnt from 2011, it is that the political and economic landscape in Greece and the eurozone is changing so rapidly that any prediction on future developments will most likely be overturned, sometimes as soon as the very next day.
Bankruptcy now!
GREECE’s imminent bankruptcy was one of the favoured prophecies of pundits and financial institutions alike throughout 2011.
In September, the Royal Bank of Scotland (RBS) predicted that Greece will experience a hard default in December, a move it said would trigger “violent contagion” in global markets.
In a note to clients, RBS European rates strategist Harvinder Sian said Greece will default on, or around, the IMF’s December 11 review of its fiscal reforms. As reported by Investment Week, the note pointed to the country’s inability to implement reforms, over-ambitious austerity targets, an absence of further compromise from the IMF and EU, as well as the growing difficulty of Greece’s parliament passing laws. Sian called the December 11 review “a pivotal one”.
Privatisations galore
On March 11, eurozone leaders extended Greece’s EU loan maturity from 3 to 7½ years and reduced the interest rate by 100 basis points. In return, Papandreou pledged a renewed privatisation programme worth 50 billion euros, an amount to be raised by 2015, in order to write down part of the massive public debt. The aim for 2011 was to collect the little matter of at least 5 billion by year-end.
Delays in setting up the privatisation fund and the plunging stock market values on the Athens bourse soon forced the government to reduce the target to 4 billion euros. And by the end of December, Greece had collected only a paltry 392 million euros – the proceeds of selling off a 10 percent stake in Hellenic Telecommunications (OTE) to Germany’s Deutsche Telekom.
Truth be told, it came as no surprise to the European Commission, which conceded in its fifth review of the economic adjustment programme for this country that the targets for privatisation proceeds would be missed.
Echoing similar sentiments, the IMF’s Greek debt sustainability analysis of October 21 estimated that by 2020 total privatisation proceeds would amount to 46 billion euros, instead of the 66 billion assumed in the programme – ie the original 50bn target, plus an additional 16bn raised from the sale of additional assets created by bank recapitalisation.
Read my lips: No restructuring
Statements by Greek and EU officials against the restructuring of Greece’s public debt proved way off the mark. On April 28, Servaz Deruz, the European Union’s voice within the so-called troika, argued that restructuring would have dire consequences. He added that such a move wouldn’t offer much by way of easing the country’s debt burden. Nor was he short of support in this assertion. Antonio Borges, the head of the IMF’s European department, and Greek central banker Yiorgos Provopoulos also said that a restructuring could have catastrophic results.
On May 2, Finance Minister Yiorgos Papakonstantinou categorically ruled out debt restructuring, adding that he just “expressed the hope” that the EU and IMF would agree to extending bailout loan repayments. A few weeks later, Prime Minister George Papandreou and senior ECB officials added that Greece must avoid debt restructuring and push on with budget cuts and privatisations to overcome its debt crisis.
Most emphatic of all was European Central Bank (ECB) president Jean-Claude Trichet, who said that Greece must avoid any form of restructuring in tackling its debt crisis.
“We are not in favour of restructuring,” he said. On being pushed by reporters, he added: “I am not embarking on a dialogue with a particular minister here … No credit event, no selective default.”
Trichet added on July 14 that the ECB would have to intervene if Greece was given a default investment rating. “If a country defaults, we will no longer be able to accept its defaulted government bonds as normal eligible collateral,” he said in an interview with Financial Times Deutschland.
On July 21, the restructuring of the Greek debt was signed, sealed and delivered by eurozone leaders.
Poll dancing
“National elections will be held in 2013 as scheduled” was the refrain of the Papandreou government for many months, as the opposition parties and much of the press were pushing for snap elections.
Papandreou himself was emphatic on May 27, ahead of a meeting of party leaders chaired by President Karolos Papoulias, stressing: “I will state categorically that national elections will be held in 2013.” He added: “That is when we will be judged, when we will all be judged.”
On October 31, in a bid to stifle tacit calls for snap elections, Papandreou said his government intended to use the two remaining years of its mandate to implement its commitments.
So rapidly did events unfold that not only was Lucas Papademos sworn in as the head of an interim three-party government on November 11, but a deal was also struck between Pasok and New Democracy that national elections would be held on 19 February 2012 or soon thereafter.
The referendum that never was
“We trust citizens, we believe in their judgement, we believe in their decision” was how Papandreou presented to Pasok MPs, on October 31, his now infamous decision to call a national referendum on the latest EU bailout package. Papandreou also explained that he was calling a vote of confidence to secure the support for his policies for the remainder of his four-year term.
Speaking to his parliamentary group, Papandreou said it was the time for citizens “to reply responsibly: Do they want us to implement it or reject it?” He added that he had faith in people to make the right decision. “Let each person decide for his country and for himself,” he declared, adding confidently that the referendum would be held in a few weeks’ time.
What followed was an outpouring of anger and consternation both at home and abroad, with people fearful that a ‘no’ vote would send the country spinning into a whirlpool of disorderly default. Two days later, he called off the referendum and agreed to step down as prime minister.
‘Just a 21 percent trim’
In eurospeak, the EU leaders’ statement after the July 21 summit went something like this: “The financial sector has indicated its willingness to support Greece on a voluntary basis through a menu of options further strengthening overall sustainability. The net contribution of the private sector is estimated at 37 billion euros.”
In simple terms, it meant that the process for a 21 percent haircut of Greek debt had been started.
However, on October 3, Eurogroup chairman Jean-Claude Juncker said that the EU was now reassessing the extent of the private sector’s role in the planned second package for Greece. “As far as the PSI [private sector initiative] is concerned, we have to take into account the fact that we have experienced changes since the decisions we took on the July 21, so we are considering technical revisions,” he told reporters.
The idea gathered pace a month later, when French Finance Minister Francois Baroin said the extent of private sector involvement in bailing out Greece may need to be re-examined after the volatility on financial markets over the summer. The comments marked a public acknowledgment from France – which up until then had argued that an agreement by eurozone heads of state on July 21 should be applied in full – that further participation from private sector creditors may be required as Greece‘s financial crisis deepens. “Given what’s happened over the last three months, we should perhaps look at the extent of the private sector involvement,” Baroin said on French radio station RTL.
Under the new deal struck at the eurozone summit of October 28, the writedown to be suffered by private holders of Greek debt was set at 50 percent.
What football cleanup?
More than 80 people were named on June 24 in connection with alleged football match-fixing. They included two Super League club presidents, club owners, players, referees and a chief of police who were charged with a variety of offences, including illegal gambling, fraud, extortion, money laundering and unlawful possession of firearms.
Culture Minister Pavlos Yeroulanos, also in charge of sports, told parliament: “There will be no more state funding for football, no access for teams to state-owned stadiums and no coverage of matches by state television unless the game is cleaned up.”
The deputy culture minister, Yiorgos Nikitiadis, described the alleged scandal as “the darkest page in the history of Greek football”. He promised the investigation to clean up the sport would go “as deep and as high as necessary”.
Six months later, the Super League is running as if nothing happened, teams are using state-owned stadiums, Makis Psomiadis (one of the accused club presidents) has fled to Fyrom and – needless to say – there is no cleanup in sight.
Data Jerman Picu Bursa Eropa Menguat
Oleh: Wahid Ma’ruf
Pasar Modal – Senin, 2 Januari 2012 | 21:58 WIB
INILAH.COM, London – Bursa Eropa menguat pada perdagangan Senin (2/1/2012) siang setelah manufaktur Jerman naik dan diperkiraan mengalahkan China.
Indeks DAX Jerman naik 2,2% saat indeks FTSE, London dan Wall Street AS masih libur tahun baru 2012. Bursa Asia juga tergelincir 0,3% dengan masih liburnya bursa China, Jepang dan Australia.
Sementara lelang obligasi Prancis untuk 10 tahun turun sehingga menaikkan imbal hasil hingga enam basis poin menjadi 3,2%. Prancis akan melelang obligasi hingga 16,9 miliar euro atau senilai US$21,9 miliar pada pekan ini.
Untuk data indeks pembelian manajer Jerman naik 48,4 pada bulan Desember 2011. Hal ini mendekati data manufaktur China yang naik 50,3. Demikian mengutip bloomberg.com.
“Pada perdagangan hari pertama tahun ini, banyak investor telah membersihkan portofolio mereka sehingga memiliki likuiditas untuk berinvestasi. Jerman dapat dilihat sebagai tempat yang aman dengan pertumbuhan yang kuat dibandingkan negara Eropa lainnya. Orang-orang berinvestasi di industri dengan banyak visibilitas seperti utilitas,” kata Arnoud Scarpaci, analis dari Agilis Gertion SA di Paris.
Untuk lelang obligasi Prancis yang jatuh tempo dua tahun naik tiga basis poin menajdi 0,83%. Prancis menyiapkan akan melelang threasury 8,9 miliar euro besok dan 8 miliar euro dari obligasi yang akan jatuh tempo pada 2021, 2023, 2035 dan 2041 pada 5 Januari mendatang.
Sedangkan Obligasi Jerman menurun untuk pertama kalinya dalam lima hari sehingga mendorong imbal hasil obligasi 10 tahun naik enam basis poin menjadi 1,89%. Jerman akan melelang 5 miliar euro yang jatuh tempo pada 2022 pada 4 Januari besok. Sedangkan imbal hasil obligasi Italia untuk 10 tahun turun 15 basis poin menjadi 6,96%.
Sementara kurs euro jatuh terhadap 11 dari 16 mata uang utama dunia. Euro turun 0,15 terhadap yen dari 98,66 yen per euro. Sebab utang milik Uni Eropa senilai 157 miliar euro akan jatuh tempo pada kuartal I 2012.
Dec. 28, 2011, 3:53 p.m. EST
Look for 2012 to be the year of the dollar
Commentary: Currency wars favor the greenback
By David Callaway, MarketWatch
SAN FRANCISCO (MarketWatch) — At a meeting in London last month I listened with mild amusement as a senior sales executive discussed the rollout of a banking campaign to promote the rise of China’s renminbi as a global currency.
Advertising in the U.S. would make little sense, as Americans aren’t ready to believe in — much less prepare for — the inevitable day when the Chinese currency overtakes the U.S. dollar as a major reserve currency, ran the strategy, detailed by the executive with the requisite cultural dig.
It’s certainly just coincidence that the U.S. Dollar Index (NYE:DXY) is up more than 4% since that meeting, while the China story line has degenerated into a series of ominous collapse scenarios for 2012, much like the Europe and emerging-markets stories.
Indeed, if the crises of the past several months have taught us anything, it’s that despite the allure of a new Asian currency champion, despite the potential for the European project to be saved, despite the weakness of the dollar and the gains in gold over the last decade, when large institutional investors truly get scared, they buy U.S. dollars.
They buy dollars when European banks look weak. They buy them when U.S. banks look weak. They even buy them when the U.S. loses its triple-A credit rating at Standard & Poor’s, because, after all, what else are they going to buy? The dollar index is up more than 6% since that early-August rating reduction, which provoked such anxiety at the time.
And this week, as investors bide time until the markets come back to life in January, the dollar is the only game in town. The thing to watch for is whether the dollar maintains its strength when the scary, end-of-year headlines are gone and Europe and China begin a fresh effort in 2012 to confront their economic challenges.
Whether Europe’s leaders save the single currency for another year — or two, or three — is important to large banks and global markets. But the idea of the euro’s emergence from the crisis as a strong reserve currency is now indefensibly out the window. As for the renminbi, it’s time may come, but not before China stops manipulating it and allows it to truly trade against its monetary brethren. So don’t hold your breath.
What we are witnessing is instead a trend shift back into U.S. dollars as investors look out on the 2012 investment horizon and see no other credible global story out there to put their money on. While the crisis in Europe and China’s slowdown might hold the U.S. economic recovery back or even pull the U.S. economy back into recession next year, the data at the moment suggest it’s the U.S. that will pull everybody out of the economic abyss this time, whenever it happens. Bullish for the dollar.
Reuters
The quadrupling of the price of gold — shown here in bar form at a jeweler’s shop in Hong Kong — is evidence that the biggest moves are often slow-developing ones.
When following financial markets day to day, week to week, or even just a few times a month, it’s easy to get caught up in the flavor of the moment, be it tech stocks or emerging-markets ETFs or even solar energy. But often the biggest moves in securities happen over a longer period of time, with gold’s quadrupling in the last decade as the best example.
A trend shift in the dollar is long overdue, and when it happens it will happen despite which cast of characters is presiding in Washington or whether it’s an election year or not. Our politicians simply react to global asset migrations. They don’t manage them.
The era of financial engineering and the global investment banker was poor for the dollar because there were so many sexier things to buy. Now that, one by one, those have all blown apart or had their underlying fragility exposed, investors are returning to the comfort zone of the greenback.
Not as fun as waiting for Santa Claus to declare another bull market in stocks this week, I know. But perhaps a sign that the days of financial magic may finally be behind us.
BRIC Decade Ends as Growth Peaked: Goldman
By Michael Patterson and Shiyin Chen – Dec 28, 2011 3:35 PM GMT+0700
Dec. 27 (Bloomberg) — Mary Ann Bartels, head of technical and market analysis at Bank of America Merrill Lynch, discusses the outlook for the stock market, currencies, gold prices and investment strategy. Bartels speaks with Sara Eisen and Scarlet Fu on Bloomberg Television’s “InsideTrack.” (Source: Bloomberg)
Korea Stocks, Asia, Latin America, Emerging Markets
Play Video
Dec. 23 (Bloomberg) — Mark Mobius, executive chairman of Franklin Templeton Investments’ Emerging Markets Group, talks about the outlook for China’s economic growth and stock market. Mobius also discusses Korea stocks following the death of North Korean leader Kim Jong Il, and Argentina stocks. He speaks with John Dawson on Bloomberg Television’s “Fist Up.” (Source: Bloomberg)
Central Banks Can `Do More QE,’ Blanchflower Says
Play Video
Dec. 28 (Bloomberg) — David Blanchflower, a professor at Dartmouth College and a Bloomberg Television contributing editor, talks about the need for more quantitative easing by central banks and the outlook for emerging-market economies. Blanchflower speaks with Sara Eisen and Scarlet Fu on Bloomberg Television’s “InsideTrack.” (Source: Bloomberg)
In the past decade, mutual funds poured almost $70 billion into Brazil, Russia, India and China, stocks more than quadrupled gains in the Standard & Poor’s 500 Index and the economies grew four times faster than America’s.
Now Goldman Sachs Group Inc. (GS), which coined the term BRIC, says the best is over for the largest emerging markets.
BRIC funds recorded $15 billion of outflows this year as the MSCI BRIC Index sank 24 percent, EPFR Global data show. The gauge, which beat the S&P 500 by 390 percentage points from November 2001 through September 2010, has trailed the measure for five straight quarters, the longest stretch since Goldman Sachs forecast the countries would join the U.S. and Japan as the top economies by 2050.
“In emerging markets, we’re waiting for things to get worse before they get better,” said Michael Shaoul, the chairman of Marketfield Asset Management in New York who predicted in February that developing-nation stocks would fall this year. The $845 million Marketfield Fund (VONEMBI) has topped 97 percent of peers in 2011, data compiled by Bloomberg show.
BRIC indexes may fall another 20 percent next year, buffeted by the liquidity squeeze stemming from Europe’s sovereign debt crisis, Arjuna Mahendran, the Singapore-based head of Asia investment strategy at HSBC Private Bank, which oversees about $499 billion, said in an interview. Nations such as Indonesia, Nigeria and Turkey may overshadow the BRICS in the next five years as they expand from lower levels of growth, he said.
BRICs Slowdown
“The slowdown we’re seeing in the BRICs will continue for most of the first half,” Mahendran said. “Compared to the U.S., corporate profits haven’t been that good as companies face higher wages, higher interest rates and currency volatility, and at best, we’ll only start to see the effects of monetary policy loosening in the second half of 2012.”
Gross domestic product in the four countries rose at the slowest pace in almost two years last quarter and Goldman Sachs said this month that their potential economic growth rates have probably peaked because of a smaller supply of new workers. Even as Brazilian and Russian policy makers start to lower borrowing costs, profit growth in the MSCI index will slow to 5 percent next year from 19 percent in 2011, trailing the S&P 500 by five percentage points, according to more than 12,000 analyst estimates compiled by Bloomberg.
Average economic growth in the BRIC countries will decelerate to 6.1 percent next year from a high of 9.7 percent in 2007, according to September estimates by the International Monetary Fund. That would narrow the gap over America’s expansion to 4.3 percentage points, the smallest since 2004, the IMF data show. Global GDP may increase 4 percent next year, restrained by 1.1 percent growth in the euro area, the Washington-based fund said.
‘Meaningfully Slower’
Slowing exports to Europe and government restrictions on real-estate investment are curbing the expansion in China, the biggest emerging economy. India’s growth has been hampered by the fastest interest-rate increases since 1935 and the rupee’s decline to a record low, which fueled inflation and deterred foreign investment. Brazil and Russia, whose growth during the past decade was spurred by surging commodity demand, have been hurt by falling metals prices and the slowdown in China.
“In emerging markets across the board, all the numbers are pointing toward meaningfully slower growth” next year, Rajiv Jain, who oversees about $15 billion as a money manager at Vontobel Asset Management Inc. in New York, said in a Dec. 5 phone interview.
Jain’s emerging-market equity fund beat 98 percent of peers this year, buoyed by holdings of beverage and tobacco companies whose profits are resilient to economic slowdowns.
2011 Losses
The BSE India Sensitive Index led declines among BRIC equity gauges this year, falling 23 percent. China’s Shanghai Composite Index also dropped 23 percent, while Russia’s Micex retreated 18 percent and Brazil’s Bovespa sank 16 percent. The 21-country MSCI Emerging Markets Index (MXEF) lost 20 percent, while the S&P 500 gained 0.6 percent.
The MSCI BRIC Index slid 0.8 percent as of 8:30 a.m. in London and the MSCI Emerging Markets Index dipped 0.6 percent, set for the lowest close in a week. The Shanghai Composite gained 0.2 percent, the Sensex dropped 1.1 percent, while the Micex was little changed.
Egypt’s EGX30 Index (EGX30) tumbled 49 percent this year, the biggest decline in emerging markets, as political turmoil stifled tourism and deterred foreign investment following the popular uprising that ousted President Hosni Mubarak. The Philippine Stock Exchange Index posted this year’s largest gain, advancing 3.2 percent after higher consumer spending countered the global economic slowdown.
Peak Expansions
Longer-term economic growth rates in the BRIC nations are poised to drop as their working-age populations increase more slowly and then eventually shrink, according to a Goldman Sachs report on Dec. 7 titled “The BRICs 10 Years On: Halfway Through The Great Transformation.”
“We have likely seen the peak in potential growth for the BRICs as a group,” Dominic Wilson, an economist at Goldman Sachs, wrote in the report. Wilson made the New York-based firm’s first detailed long-term forecasts for the BRIC nations in 2003, two years after Jim O’Neill, then head of economic research, coined the term.
O’Neill, now chairman of Goldman Sachs’s asset-management unit, declined an interview request for this story. His latest book, “The Growth Map,” talks of “rosy prospects” for the BRICs as well as the potential of the “Next Eleven” most populous emerging economies.
Fund Flows
Goldman Sachs’s bullish outlook for the BRIC nations proved prescient as the economies expanded at an average pace of 6.6 percent during the past decade, more than four times faster than America, according to IMF data. Investors poured about $67 billion into Brazil, Russia, India, China and BRIC mutual funds from 2001 to 2010, data compiled by Cambridge, Massachusetts- based EPFR Global show.
This year’s fund outflows were the biggest on an annual basis since at least 1996, according to EPFR Global. India equity funds recorded about $4 billion of net withdrawals, while China funds lost $3.6 billion. Investors pulled $2.2 billion from Brazil, $326 million from Russia and $5.3 billion from funds that invest in all four of the BRIC countries. All emerging-market funds tracked by EPFR Global had about $47 billion of outflows, leaving assets under management at $605 billion.
Rate Cuts
Large fund outflows are a contrarian indicator because they may signal pessimistic investors have already sold, setting the stage for a trough in share prices, according to Jonathan Garner, the chief Asia and emerging-market strategist at Morgan Stanley in Hong Kong. Emerging-market funds recorded about $48 billion of outflows in the five months ended October 2008, when developing-nation stocks began a rally that sent the MSCI emerging-market index up 108 percent in 12 months.
Emerging-market stocks will probably outperform U.S. equities next year as central banks in developing countries cut interest rates to stimulate economic growth, said James Paulsen, the chief investment strategist at Wells Capital Management in Minneapolis. The MSCI emerging-markets gauge (MXBRIC) rose an average 35 percent after the BRIC nations began cutting interest rates in 2003, 2005 and 2008.
Brazil has reduced its benchmark Selic interest rate by 1.5 percentage points since August to 11 percent. China lowered banks’ reserve requirements in November for the first time since 2008, while forwards contracts in Russia and India show that traders are betting on interest-rate cuts in the next 12 months.
In the U.S., the Federal Reserve has pledged to hold interest rates near zero until at least mid-2013.
Easing Policies
“I like the emerging markets better than anything right now,” Paulsen said in a Dec. 7 interview on Bloomberg Television. “Most of these emerging-market policy officials are turning to easing policies.”
While the MSCI BRIC index has dropped to 8.4 times estimated profit from 13 times at the start of the year, valuations are still higher than they were a decade ago. The MSCI India Index trades for 15 times profit, up from 13 times in 2001, according to data compiled by MSCI Inc.
India’s price-earnings ratios have climbed to an 8 percent premium over U.S. stocks from a 63 percent discount 10 years ago, data compiled by MSCI show. The discount on Chinese shares narrowed to 35 percent from 59 percent, while it shrank to 29 percent from 76 percent in Brazil and dropped to 60 percent from 87 percent in Russia, based on MSCI indexes.
Relative Valuations
Compared to the U.S., valuations for BRIC markets don’t look cheap enough, said Ok Hye Eun, a Seoul-based fund manager at Woori Asset Management Co., which oversees the equivalent of $15 billion.
“BRIC markets won’t be an attractive destination for a while because there are still ongoing risks,” said Ok, citing the prospects of a potential collapse in China’s real estate market and the outlook for economic reforms in India. “I see more opportunities in the U.S.”
ICICI Bank Ltd. (ICICIBC), India’s biggest private lender, trades for 14 times profits, a 42 percent premium over San Francisco-based Wells Fargo & Co., even as analysts predict slower earnings growth at the Mumbai-based bank, according to data compiled by Bloomberg. ICICI Bank profits will increase 10 percent in the current fiscal year, compared with 28 percent at Wells Fargo, the biggest U.S. bank by market value, the estimates show.
Want Want, Redecard
Want Want China Holdings Ltd. (151), a Shanghai-based maker of food and beverages, is valued at 36 times profits and analysts project earnings will increase 7.7 percent this year. The Hong Kong-listed shares are twice as expensive as Northfield, Illinois-based Kraft Foods Inc., which trades for 17 times earnings and may boost profits 13 percent, analyst estimates compiled by Bloomberg show.
Redecard SA (RDCD3), Brazil’s second-biggest card-payment processor, trades for 15 times profits, versus 12 times for New York-based American Express Co. Sao Paulo-based Redecard’s earnings will probably slip 3.8 percent this year while American Express posts a 19 percent gain, analyst projections compiled by Bloomberg show.
Outflows from emerging-market funds may continue next year as economic growth and company results disappoint investors, according to John-Paul Smith, the London-based emerging-market strategist at Deutsche Bank AG. Money managers surveyed by Bank of America Corp. from Dec. 2 to Dec. 8 said their emerging- market holdings are still 23 percent higher than benchmark weightings even after they cut positions from last month.
‘Structural Weaknesses’
“There will be a lot of volatility, but as people realize the underlying structural weaknesses of the BRIC economies, you’ll see money coming out,” Deutsche Bank’s Smith said in a telephone interview on Dec. 19.
China’s economic data have trailed estimates for the past two months, based on Citigroup Inc.’s Economic Surprise Index, a gauge of how much reports are missing economist projections in Bloomberg News surveys. Chinese manufacturing contracted by the most since 2009 in November, while new home prices declined in 49 of 70 cities tracked by the government the same month.
By contrast, U.S. data is beating analyst expectations by the most in nine months, according to the country’s Citigroup surprise index. Manufacturing in America expanded at the fastest pace in five months in November, the Institute for Supply Management said. Initial jobless claims fell to the lowest level since 2008 in the week ended Dec. 10, while U.S. housing starts in November climbed the most in 19 months, government data show.
Per-share earnings in the MSCI BRIC index trailed analysts’ estimates by 13 percent last quarter, according to data compiled by Bloomberg. S&P 500 profits beat projections by 4.4 percent, the data show.
Labor Supply
While Goldman Sachs still expects the BRICs to join the U.S. and Japan as the world’s biggest economies by 2050, the bank predicted this month that the four nations’ contribution to the global expansion will diminish during the next few decades. Economic growth in the BRICs may fall to about 4 percent by 2050 as working-age populations dwindle, Goldman Sachs said.
The number of people aged 15 to 64 in Russia has already started to drop, while Chinese workers may peak at around 1 billion and begin falling by 2020, according to estimates by the United Nations. Brazil’s peak may come by 2040, with India’s topping out by 2060, the New York-based United Nations said. The U.S. will keep adding workers through 2100, the forecasts show.
“In the last decade, simply recognizing that the BRICs were the story was largely enough to propel outsized investment returns,” Goldman’s Wilson wrote in this month’s outlook report. “It is much harder to accept that simply believing in their long-term growth dynamics can be a sufficient investment thesis now, if it ever was.”
JAKARTA – Sekira dua minggu lalu, Indonesia telah mengantongi peringkat Investment Grade dari lembaga pemeringkat Fitch di Hong Kong. Meskipun begitu, dua lembaga pemeringkat lain belum menyematkannya pada Indonesia. Hal ini disinyalir terkendala kebijakan pemerintah terkait BBM subsidi.
“Mereka (S&P 500 dan Moodys) masih melihat subsidi BBM yang tinggi. Menurut mereka itu tidak efisien, makanya pemerintah harus melihat lagi keefektifan program ini, karena tahun ini kuotanya juga jebol lagi,” ujar ekonom Center For Information and Development Studies (Cides) Umar Juoro, dalam diskusi tentang Prediksi Pertumbuhan Ekonomi 2012, di Hotel Ambhara, Jalan Iskandarsyah, Jakarta, Selasa (27/12/2011).
Dalam APBN-P 2011, pemerintah memang menganggarkan kuota BBM subsidi sebesar 40,49 juta kiloliter (kl) atau sekira lebih dari Rp100 triliun. Nyatanya, kuota ini jebol juga di akhir tahun sehingga pemerintah perlu menambah Rp30 triliun lagi untuk subsidi BBM ini.
“Subsidi BBM masih cukup tinggi, dan pemerintah melihat itu. Ke depan kouta subsidi BBM akan dibatasi, atau dengan rendahnya inflasi harusnya ini menjadi momentum pemerintah untuk penyesuaian harga BBM,” lanjut Umar.
Di tahun depan, jika pemerintah melakukan salah satu di antara opsi ini, rentang angka inflasi masih bergerak stabil di angka lima persen. “Tahun depan kalau ada kenaikan ataupun pembatasan BBM, inflasi masih akan terjaga di angka 5,1-5,2 persen,” tambah dia lagi.
Meskipun begitu, dengan melihat kondisi makro Indonesia, rasio GDP terhadap utang, dan standar keamanan berinvestasi, Umar yakin bahwa peringkat investment grade dari dua lembaga pemeringkat tersebut hanya tinggal menunggu waktu.
“Kalau pemerintah semakin efisien, saya pikir triwulan pertama tahun depan mereka akan memberikan peringkat investment untuk Indonesia,” pungkasnya.
http://www.sindonews.com/read/2011/12/27/20/547755/investment-grade-dari-moodys-s-p-terhalang-bbm-subsidi
Sumber : SINDONEWS.COM
TOKYO, Dec 21, 2011 (AFP)
Exports tumbled in November, data showed Wednesday, leaving Japan with a trade deficit for a second straight month, with exports to the key European market floundering as the debt crisis grips.
Flooding in Thailand and a stronger yen also weighed on Asia’s second-largest economy, which is still running to catch up from the effects of the March 11 quake and tsunami disaster, a government official said.
Exports fell 4.5 percent in the month from a year earlier, increasing the trade deficit to 684.73 billion yen ($8.79 billion), the largest trade loss ever for the month of November, the finance ministry said.
Japan’s trade surplus with Europe fell to 27.59 billion yen, with exports down 4.6 percent, the lowest figure for the month of November since January 1979 when records began, a finance ministry official said.
The smallest trade surplus ever with Europe was 26.8 billion yen posted in January 2009, he added.
“Factors behind the latest trade readings are the sovereign debt crisis in Europe and a surging yen, which has forced Japanese manufacturers to move production plants overseas,” he said.
Japanese exports stood at 5.20 trillion yen in November, down for the second straight month.
Electronics, notably computer chips and video equipment were particularly hard hit in the month, the finance ministry said.
“It is not a seasonal trend to see such a deficit for this time of the year,” said the finance ministry official.
“One other factor is the flooding in Thailand, which stopped electronic parts supply to Japan and hindered the export of finished products from here,” he said.
Imports rose 11.4 percent to 5.88 trillion yen in the month, as a result of higher fuel costs, the finance ministry said.
Japan, which is still grappling with the world’s worst nuclear accident since Chernobyl, has shut down most of its atomic reactors as concerns over the safety of the technology grip the nation.
Power companies have instead been forced to ramp up the use — and therefore the imports to resource-poor Japan — of fossil fuels to supply the country’s electricity-hungry industries and households.
The reading for the November trade deficit was worse than the 440 billion yen deficit expected by economists surveyed by Dow Jones Newswires and the Nikkei newspaper.
Japan’s exports to Asia also tumbled 8.0 percent in November from a year ago, the data showed.
In October, the balance of Japan’s trade in goods stood at a revised 280.17 billion yen in the red.
“At the bottom line is the economic slowdown, especially in Europe… in addition to a high yen,” said Taro Saito, senior economist at NLI Research Institute.
“Flooding in Thailand came on top of that,” he said.
“I think the European economy is already in a state of recession, and it will continue to face a very tough time into next year.”
New York- Jika Anda menganggap perekonomian Amerika masih sehat, ubahlah persepsi Anda. Opini inilah yang ingin disampaikan pengelola blog ekonomi The Economy Collapse (TEC) kemarin.
Berdasarkan survei yang mereka lakukan, TEC mengatakan sebagian besar penduduk Amerika tidak memahami betapa buruknya perekonomian negara mereka saat ini. Demi mengubah pandangan itu TEC pun melansir 10 fakta mengejutkan tentang ekonomi Amerika.
Beberapa dari fakta itu terbilang mengerikan. Mau tahu apa saja hal-hal buruk itu? Ini dia:
1. Total utang Amerika Serikat saat ini mencapai 15 triliun dolar, naik 4,4 triliun dari besaran utang ketika Presiden Obama pertama kali menjabat.
2. Seluruh kekayaan Bill Gates hanya mampu membiayai defisit anggaran Amerika selama 15 hari.
3. Saat ini 48 persen penduduk Amerika dinyatakan hidup dalam kemiskinan.
4. Ada 33 persen lebih banyak anak gelandangan dibandingkan pada 2007
5. Penduduk Amerika rata-rata menganggur atau menunggu panggilan kerja lebih dari 40 minggu
6. Saat ini lebih dari 40 persen pekerjaan di Amerika masuk kategori pekerjaan berpenghasilan rendah. Padahal pada era 1980-an pekerjaan bergaji rendah hanya kurang dari 30 persen.
7. Satu dari 3 orang Amerika kemungkinan tidak dapat membayar sewa rumah di bulan berikutnya jika ia kehilangan pekerjaan, begitu disebutkan dalam suatu survei.
8. Perusahaan Pos Amerika mengalami kerugian 5 miliar dolar di tahun ini
9. Satu dari tujuh penduduk Amerika memiliki lebih dari 10 kartu kredit.
10. Sebuah survei menunjukkan bahwa 77 persen bisnis skala kecil di Amerika tidak berencana menambah karyawan.
http://www.tempo.co/read/news/2011/12/20/090372699/10-Fakta-Bobroknya-Perekonomian-Amerika
Sumber : TEMPO.CO
Uni Eropa Ajak Dunia Bantu Zona Euro
| Tri Wahono | Selasa, 20 Desember 2011 | 05:58 WIB
BRUSSEL, KOMPAS.com – Uni Eropa mendesak negara-negara G20 dan negara besar lainnya di seluruh dunia untuk membantu upaya penyelamatan zona euro melalui Dana Moneter Internasional atau IMF. Demikian Kepala Zona Euro Jean-Claude Juncker mengatakan, Senin (19/12/2011), setelah gagal mencapai target tambahan dana talangan yang dibutuhkan sebesar 200 miliar euro.
“Uni Eropa akan menyambut anggota G20 dan anggota IMF kuat lainnya untuk mendukung upaya menjaga stabilitas keuangan global dengan berkontribusi pada peningkatan sumber daya IMF sehingga bisa mengisi kesenjangan pembiayaan global,” kata Juncker dalam sebuah pernyataan setelah pembicaraan jarak jauh selama 3,5 jam.
Para menteri keuangan zona euro baru berhasil mengumpulkan pinjaman baru sebesar 150 miliar euro atau setara 195 miliar dolar AS untuk digunakan IMF menstabilkan mata uang. Inggris yang diharapkan bisa menyumbang 30 miliar euro menolak memberikan pinjaman. IMF sendiri saat ini memiliki sekitar 250 miliar euro untuk dipinjamkan kepada negara-negara yang menjalankan program reformasi keuangan.
Sumber :
ANT, AFP
Investors prepare for more volatility in 2012
Dec 15, 2011 10:50 EST
reuters
Whether or not Europe resolves its banking crisis, the United States its deficit or China its cooling economy, U.S. investors should be prepared for more volatility in 2012.
This year’s roller coaster sent billions of dollars to the sidelines but also rewarded many investors who stuck with bonds and dividend-producing funds. These are some of the key issues fund managers, such as Dan Fuss of Loomis Sayles and David Giroux of T. Rowe Price (TROW.O), will examine during the 2012 Reuters’ Global Investment Summit Outlook taking place next week in New York, London and Hong Kong.
THE BIG PICTURE
The U.S. fund business saw net outflows of $62.9 billion through November 30, according to Lipper, a Thomson Reuters unit that tracks mutual fund data. While equity funds were down by almost $21 billion, taxable fixed-income funds took in almost $167 billion, says Tom Roseen, a senior analyst at Lipper.
“There was a tale of two cities in the equity universe,” Roseen says. “Open-end funds witnessed outflows of $51.35 billion, while their ETF counterparts saw net inflows of almost $30.5 billion.” Why? ETFs appeal to investors — especially institutional investors — because unlike mutual funds, they can be traded all day. “They could be in and out in a matter of moments,” he says.
Cost and availability also make ETFs appealing, especially to institutional and large investors, says Fran Kinniry, a principal in Vanguard’s Investment Strategy Group.
EQUITY WINNERS
With interest rates low and volatility high, investors sought returns from bonds and dividend-producing equities. Winners include commodity and precious metals funds, which top the list with gains of 5.56 percent through mid-November. Other winners: traditional income payers such as utility funds with 5.24 percent gains and real estate funds, which rose 2.26 percent. “People are now saying we are looking for growth, but we also want to get paid,” says Roseen. “We want dividends.”
James Swanson, chief investment strategist, MFS Investment, says many companies have great balance sheets and likely will continue “to keep paying those dividends or even increase them,” Swanson says. He especially likes the tech sector, which has little debt and a worldwide market.
One loser: world equity funds, which posted the worst performance of the equity macro groups. This category fell 14 percent through mid-November, even though it attracted $24.9 billion in new money, according to Lipper. The category was dragged down by the financial crisis in Europe as well as growing concerns about China, says Roseen.
FIXED-INCOME FUND
In 2011, fund winners were with the ones with the word “Treasury,” says Roseen. General U.S. Treasury funds returned 15.67 percent as of mid-November. Treasury inflation-protected securities (TIPS) posted an almost 11 percent gain. Global income funds with 3.47 percent growth in assets gained $20.6 billion, the largest amount of net new money.
TAX-EXEMPT FIXED-INCOME
Even though investors got frightened by the headlines of massive defaults and naysayers pulled out, these funds had positive returns. In some instances, the gains were quite significant, says Roseen. For example, California municipal debt funds gained 9.31 percent through mid-November. He says there wasn’t the massive melt down of the muni bond market that analyst Meredith Whitney had predicted, and returns were fairly strong.
Analysts agree one thing is for certain: 2012 will likely be another volatile year. That, says Kinniry, makes diversification and long-term planning even more important. “If investors are going to get this right,” he says. “They need to develop an asset allocation plan and really try not to get the short-term market to run their emotions.”
