"Violence among young people is an aspect of their desire to
create. They don't know how to use their energy creatively so they do the
opposite and destroy.'
‑ Anthony Burgess (English,
1917-1993)
Word
for the day
Meritorious (adj)
Deserving praise, reward, esteem, etc.; praiseworthy.
Malice
towards none
An equity analyst's comment
on La La Land's performance at Oscars - "Results below expectation, all
positives priced. Downgrade to Hold."
First random
thought this morning
The latest round of elections is drawing to close. In next two weeks
we would know the broad winners and losers. The local body elections in this
round have mostly gone in favor of BJP. A win for BJP in UP will decimate the
Congress Party, and we may see a fresh round of desertions. Whereas a win for
SP-Cong alliance will keep it alive, though still on life support system.
in the meanwhile the side shows (Punjab, Uttrakhand, Goa and
Manipur) may throw burst some firecrackers, the smoke of which will last for
few weeks.
In the meanwhile an AAP senior leader claimed that they are in
driver's seat in Punjab and Congress is coming third!!!
A visit down memory lane
Global equity markets have been
largely buoyant for past five months. They look distinctly tired now.
There are more words of caution than encouragement for traders and
investors alike. To the trend followers this hint of fear is the only
supporting factor for staying fully invested in the market. Otherwise, it is
hard to find much rationale for sustainability of current market levels.
To the contrary, there are enough indications suggesting that the
markets will have strong reasons to correct sharply in the coming months.
I say this for both domestic as well as global markets.
A quick recap of events since July 2007 will show that the global
markets have corrected sharply at least on four occasions. The triggers were
collapse of a large bank (Lehman Bros), fiscal crisis in some peripheral
European economies (Portugal, Ireland, and Greece), debt ceiling crisis in US
and CNY devaluation by China.
Though, the "whatever it takes" approach adopted by
central banks in US, Europe, and Japan since 2010 provides comfort that the
financial markets may not freeze this time, unlike 2008-09, it is evident that
the central bankers might have already spent all arrows in their quivers.
Moreover, none of them appears keen to continue with the non-conventional
monetary policies in vogue since 2010.
So a less negative outcome of crisis is all that is assured. But
there is little positive in the air.
We dreaded Grexit. But we already have Brexit.
With IMF and ECB crutches, Greece looks only a shade better than
2011. The situation can revert to pre bailout position in no time.
We were jittery when CNY was devalued last year. Since then CNY
has been depreciating. Formal announcement of Trade War with US, may prompt
PoBC to devalue it more, rather dramatically.
We are at the threshold of another debt ceiling debate. March 15
is the date when the previous relaxation expires.
We dreaded a Trump victory, fully aware that an American president
is far less powerful than popularly believed. US as a society is least
nationalist. But that is certainly not true for Germany and France. Imagine a
German Trump and/or French Trump and/or Italian Trump, at a time when UK
formally begins to withdraw from the common European market.
On domestic front, the incumbent government shall complete 3years
in May. From October onwards, we enter a critical election phase (Gujarat, MP,
Chhattisgarh) that will last till next general election.
All said and done, there is little sign of industrial recovery on
the ground. The specter of El Nino revival is already looming large on the
horizon. Services, especially construction, are showing no sign of pick up,
despite elections and higher budgetary allocation.
So what may keep market higher.....to continue tomorrow
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