Friday, 27 March 2009

blue eyes?

L: 12% S:54% G: 66% N: -42% ~ $D -30% $G 15% $V 0% $P 3%

Brazillian President Lula looks like a bit of a fool after his comments, apparently the whole crisis was caused by "white skinned, blue eyed bankers" in the West, who thought they knew everything, but have shown the world they know nothing. It'd be funny if it wasn't coming from a Brazillian premiere, they've just got to thank their lucky stars they've got lots of cheap iron ore that China wants. Ironic that South America has lots of dollar denominated debt. Not that the Raven is at all suprised by the cool headed rationality of politicians.

The Raven hasn't had too much to trade, he's been caught a little short and wrong, he's not prepared to cover as he thinks most of the other shorts have been knocked out. On the other hand its a large macro bet to be making given the economic data has been slightly better than forecast (in reality just not as bad, rather than good) and perhaps this will come through in the next quarters earnings. It does seem odd that the market focussed on the Feb numbers and forgot that Jan had massive revisions down, it really does indicate the sentiment at the moment. It would be odd not to have a retest.

The G20 meeting next week could be a real negative for the banking industry. Each country seems to be coming up with new ideas for regulation, this heterogeneity of regulation is an appauling idea. The unintended consequences of having poorly thought up regulation will sow the seeds of the next crisis or shackle economic growth in the long term. After all there is a guaranteed way to stop busts, and that is stop all growth and economic activity.

The Raven has an eye on Vodafone, it looks cheap and defensive and just hasn't participated at all with this rally, he's put on a small position but would like to really increase it if it starts to move.

Oh and the buzz is that Barclays "passed" their stress test and won't need more capital. Perhaps, thats still going to be dependant on the actual path of asset prices. The Raven is playing around with it at the moment and the valuation range is huge.

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