What Year is this Again??

US equities fall post the European close on Friday. The weekend press is now talking about double dip recession. Risk aversion is up. The market’s going down today…right?! Surely? Can the Indian market’s 17% catapulting be helping us here? Possibly although clearly it’s country specific. Whatever it is, risk is being put back on, with cable testing year highs. The $ is taking a good lick from everywhere really although GBP is putting in a strong performance against EUR too…for the third day in a row. I’ve been bearish EURGBP for a long time, and even without looking at a chart, you’ll know this has been a bad trade. Even if you live in a cave with no media access (but assuming you have travelled to Euroland at some stage in the last year), you’ll know this had been a really baaaad trade. No matter, my basic thesis has been that Europe is going to get a lot worse than people are expecting, Germany is a big exporter (we know how the export led economies have faired) and Ireland, Spain etc clearly in the cr@p and with the everlong hawk Trichet and co at the ECB sticking their head in the sand and not cutting rates quickly enough, these cuts would necessarily have to follow and the reality of the situation would ultimately hit the Euro hard. Whereas in the UK, everyone was so bearish anyway, and had been for a long time, how much worse could it really get? Anyway, I stand by this, despite being wrong for a long time, but I do think this is starting to play out now.

On Friday I posted a link to a Telegraph article calling the bailouts a sham. It was the opinion of Mark Patterson, Chairman of PE firm and TARP beneficiary Matlin Patterson. Cleary someone like that saying something like that doesn’t go down so well. I mentioned last month how it seemed like there was an Animal Farm -like treatment of leverage by the Administration. Leverage had been a taboo word, and the users of leverage, chastised by the powers that be. Then came the PPIP where one of the selling points to investors would be the 6-1 leverage they could get on their investments. Seemed odd to me at the time. Well, now we change book, but the theme is still very much Orwellian. On Friday, ZeroHedge pointed out that this article in the Telegraph had been removed. It’s true! Check it out… and today Macro Man draws attention to the fact the ONS in the UK admitted it has been exaggerating the retail sales figures since this crisis began! I’ve lost my calendar, what year is this again??