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UBS Answers "What Could Go Wrong"
While certainly a revision is pending after today's latest, disastrous Eurogroup meeting after which the two sides are further apart from reaching a deal than a week earlier, here is the latest set of questions asked by UBS clients on the topic of "what could go wrong" with the biggest Swiss bank's mutedly optimistic outlook on the "global recovery" (aided no doubt by the biggest intervention of central banks in history) which is characterizes as "uneven", especially when one considered that even UBS itself admitted last week that a "dislocation" in the market (which is "underestimating Grexit Risks") is necessary in order to overcome the Greek impasses.
From UBS:
Question: What could go wrong?
As we have highlighted many times before, markets respond well to moderate growth, low inflation and supportive monetary conditions, as is now the case. But the global recovery also remains fragile and hence vulnerable to shocks. Here's what could go wrong:
Renewed political uncertainty. Fragile growth, particularly in the Eurozone, remains at risk to bouts of political uncertainty. Last year’s midyear slowdown mostly stemmed from unease over the growing conflict in the eastern Ukraine. With no solution to the latest re-escalation of the conflict in sight (at the time of writing) and with the impasse between Greece, the troika and virtually all other Eurozone member governments threatening to usher in a new chapter in the Eurozone crisis, Europe’s ‘green shoots’ of recovery could quickly wilt again. And note that, as Europe goes, so go global growth impulses. The Eurozone is the world's largest economic aggregation and biggest export destination for many emerging economies, which are increasingly reliant on (net) exports for growth.
Rapid and disruptive Fed tightening. As noted above, we expect a faster pace of Fed tightening than is now priced into markets. Typically, 'carry' positions are most vulnerable when the Fed initiates unexpected rate hikes. In macroeconomic and market terms, those most exposed to the unwinding of 'carry' include countries financing external deficits via short-term portfolio inflows, such as Brazil, South Africa or Turkey. Credit fixed income markets are also potentially vulnerable, particularly given their susceptibility to illiquid trading conditions.
Excessive dollar strength. Thus far, broad-based dollar appreciation has not been particularly problematic. But further gains might become disruptive. At some point, political pressure against dollar strength may build in Washington, particularly as the 2016 elections approach. But vulnerability to dollar strength is arguably greater outside the US, including in commodity-producing industries and countries, where a strong dollar tends to depress output prices. Countries and corporates reliant on dollar financing, but with revenues derived in weaker currencies (e.g., in many emerging economies) could also feel the pinch in a stronger US dollar environment.
And a bonus point from UBS on rates:
when looking further over the horizon and assuming that major policy, political and currency shocks can be avoided, investors may have to consider the next iteration of the 'new-normal'—low discount rates. One by-product of the ECB's QE is its impact on global bond yields, including US Treasuries. If, as seems likely, the ECB pursues QE for longer, Fed rate hikes may not lift US and global yields by as much as in past such cycles. The by-product would be much flatter yield curves and lower long-term interest rates than in prior episodes of US full employment, non-inflationary growth. Accordingly, at some point style shifts could dominate equity returns, with investors taking advantage of unusually low discount rates to bid up the prices of assets with annuity-like and attractive long-term cash flows.
This supposedly excludes the #Ref! P/E Nasdaq, which is on pace to surpass its dot com 1.0 nominal record in a few weeks at most.
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I'm too busy buying stawks to worry bout this nonsense
The Eurozone situation is now akin to the story about the king walking around without clothing. Who will be the first to say the King is stark naked? Or that the Eurozone is run by crooks and banksters. The Greeks are now shouting to the world that the Eurozone as currently implemented is a Mafia bust out operation, where goombahs in Germany and Goldman Sachs are busy looting the second tier euro countries: Greece, Spain, Ireland and Italy. Tony Soprano would be proud of Mario Draghi.
BULLISH!
..for nailgun manufacturers.
Exactly how many companies in the SnP are going to be adversely impacted by a Greek default?
Precious damn few.
So what's the SnP going to do then?
Well ya see here Bobby... if Greece defaults do you think that Spain is going to get some ideas..? Then how about Italy..? The "austerity" packages in thoise countries are going to be looked at again. That certainly could impact companies in the Stalingard and Poosky 500 ... no ?
Ok.. I unnerstand... the Fed could just keep printing and buying stawks ... sure ... but once known that becomes a CONfidence game very quickly. Clear ?
Clowns, don't forget that the float is shrinking with the Corp Bond Issuance to buy back stock, Probably the only Priciple of Economics that is in play, Supply and Demand curve. Supply is shrinking.
suckers
Don't hold your breath waiting for somebody to say ' credit event ' in German.
Thank you for your indulgences, Germany, it's time now to 'pony-up' for War reperations (so says Mr. Panos....& I believe him) https://www.youtube.com/watch?v=Zvl9N9GdraQ
Ve haff veys ov making you PAY.
Don't worry. Everyone learned their lesson in 2008. They'll all sell out of the market just before it crashes this time.
They'll all be sold out of the market just before it crashes this time.
fixed for you
They all have already sold out of the market!
There, fixed the fix for ya!
No worries, FEMA will have some temporary markets set up on the outskirts of town. Climb aboard.
toot toot, all aboard
hey, check out all those kool dozers and backhoes
nice irrigation trenches too, what ya growin'?
Their selling will trigger the collapse.
I hope the HFT's fall all over themselves.
"They'll all be sold out of the market just before it crashes this time.
fixed for you"
A "market" is a pricing mechanism so in effect anyone buying into this charade has no idea what the true value of the stawks they are buying until the day that it becomes a "market" again. Then there will be wailing and nashing of teeth for the goy. Typically the Jews just rip their clothes, throw dust up into the air and cover their hairy ass with sack cloth and ashes but they hate that shit so they just buy congress instead.
I wouldn't plug that bank into the side of my computer.
UBS says the world is flat, and I believe them.
Phil Gramm and his wife Wendy said so.
Baltic Dry Index bitchezzzz! It be real dry...what little is being shipped is anchored of Kalifornication!
None of the cargoes anchored off California's ports are reflected in the Baltic Dry Index (BDI). The BDI only reflects shipping costs for bulk "dry" commodities (iron ore, coal, cement, raw forest products, etc.). Not oil or manufactured goods. The BDI has crashed due to a combination of two factors:
1) overzealous bulk ship production to support an expected vigorous global economic recovery (didn't happen, isn't happening, ain't gonna happen)
2) decreased demand for raw "dry" commodities due to contracting global economy (did happen, is happening, will continue to happen)
Never said the stuff achored was part of BDI...my point stands.
I take this as bullish. Carry on.
UMB? Utter bull shit.
aaaahhh ....
.
http://www.zerohedge.com/news/2015-02-12/american-neocon-fck-eu
Hey, being a full time banking criminal is tough. Ok, not that tough when you have so much cash to bribe with. Give accountants immunity and watch the banks burn.