As attached from MS.. I have to say up front that disagree with the basic premise that stimulus is coming to an end. We have negative interest rates and imo these will widen as inflation rises. Direct QE may not be needed should credit growth expand as the fed, boe, ecb desire but on any threat to global asset prices and (debt expansion) the central banks will act. Fiscal stimulus wll continue though possibly diminish in % terms, again as inflation climbs.
Note the discount to issue price of say spanish performing consumer loans.. 50% discount for the paper.. Or even Dutch performing consumer loans at 36% discount. What euro bank exec in their right mind would would want to lend lend to consumers in this environment? These assets are not classed as investment grade so consequently they cannot be used for ECB swap loans etc. The ECB has thus created a two tier lending environment that in fact produces a penalty for lending to the euro consumer.
Enjoy..
Rich
p.s. some useful charts here:
Picking out a couple here.. The mobile traffic playing into the telcos that imo are still relatively cheap and a good defensive sector offering some growth so long as governments stay out of the way.
And US construction to GDP playing into a housing and infrastructure bounce that could be coming to US shores.
p.p.s
Another view from the taking heads this time from Switzerland
(4 votes, average: 5.00 out of 5)
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