Whilst yesterday's S&P did announcement really did not really say anything new, I believe what it did do was say to many in the market, 'Guys, errrr, has anyone noticed, THERE'S AN ELEPHANT IN THE ROOM'.
It will be interesting to see whether the market brushes this off, or whether this now grows in prominence in the markets mind.
This begs the question, where is a safe place for investment over the long-term...
EURO : Still seems like a car crash happening : Greece 2 year yields hit 20% yesterday, Ireland and Portugal are major basket cases. And Spain is everyone's fear. - The ECB are trying to hold it altogether, whilst raising rates, but there is so much uncertainty.
USD : Just had it arse kicked royally by the S&P, and there is much work to do over the next few years on the deficit and it seems little will to do so right now.
JPY : Their deficit is none too hot, after years of sub-par growth, and now with major rebuilding costs.
UK : I live here, I honestly can't imagine why anyone would want to park their money here right now. That may be a touch unfair, we are trying to get the deficit down, but its a very fragile coalition behind it, and a highly indebted nation.
The BRICS would seem the place right now, but then they have been the place for ages, and many are seeing spiraling inflation.
Stocks: are these at unsustainable levels? Oil prices through the roof, government spending being slashed or due to be slashed in many countired, high unemployment. - Technically looks like a possible topping pattern on the SP500.
Commodities, Energy : Gold at almost £1500, for all the reasons above, Gold would seem to be the place still, but I can not help thinking this is crowded trade full of 'Johnny come latelys'. - Oil, I wonder how much further to go.....
Long-term Govy's - See my comment above about World Government No. 1 getting its arse kicked by S&P. Core Europe Govies might be a better bet, though Euro uncertainties weigh.
AUD would still seem a good bet, as long as commodities remain hot, and everywhere else seems questionable. But if commodities turn down and stocks, then watch out below :-( . Also the froth is coming off the economy there.
Cash or Short-term Govvies. Seems like this may be one place to look in coming months. If stocks turn and things get ugly, a lot of the still priced in rate hikes will come off the table, though these have already been pared back of late, but could still have room to go. - Yield may not be great, but if it is safety one is after, perhaps one of the best places.
CHF is the obvious safe-haven bet, which argues very much against my EURCHF bottoming technical call, and it is quite possible this recent range is merely consolidation ahead of further strength.
Thus, bets bet right now, possibly CHF Govy bonds/ or possibly euroswiss futures.
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