Riskelia’s Radar as of 28 June 2010

Posted on 29. Jun, 2010 by Jean Jacques Ohana in Weekly Focus

Trends remain slightly negative on risky asset classes, the weakest links are markets related to Chinese growth: Shanghai Composite, Oil and Base Metals. Several sovereign bonds, such as Spanish and Greek debts, remain in a clear downtrend, a worrying sign for the monetary and political stability of the Eurozone as a whole.
Financial bubbles are present [...]

Is the 2010 crisis over?

Posted on 22. Jun, 2010 by Jean Jacques Ohana in Weekly Focus

The MSCI World, a gauge of equities in 24 developed markets, increased 0.2 percent for an eighth straight gain, the EUR/USD increased from 1.20 to 1.24, Spanish 10 years bonds yield tightened 40 bps to 4.6%. Similarly, an index of European banks sharply rose 8% from the start of the month.
As a matter of fact, [...]

All Equities are equal but some are more equal than others

Posted on 14. Jun, 2010 by Jean Jacques Ohana in Weekly Focus

As we have commented upon in our previous posts, all risky asset classes have been subject to a global deleveraging process since May 2010. Riskelia’s global trend indicator (which watches equities, corporate debt, hedge funds, depletable commodities and emerging currencies) has switched from highly positive to slightly negative in only a few weeks :

In our [...]

When will the Commodities Indices myths collapse?

Posted on 09. Jun, 2010 by Jean Jacques Ohana in Weekly Focus

Two Commodities Indices have been designed to play a role in enhancing and diversifying global diversified portfolio returns: the GSCI and the DJ UBS (ex DJ AIG).
Both arguments are contradicted by the new financial reality.
Myth 1: diversification
Commodities are not any more a diversifier as the new zero rate paradigm makes them more similar to other [...]

The global asset deleveraging: is there any “safe haven” left?

Posted on 04. Jun, 2010 by Jean Jacques Ohana in Weekly Focus

Despite the recent risky assets’ rebound, assets linked to the Chinese growth have remained very weak in the recent days: in particular, the Chinese stock market and base metals are now in a bearish trend. What is more worrying is the synchronization of the trend indicators across different asset classes as demonstrated by the [...]

The future of the current deleveraging: soft landing or depression?

Posted on 01. Jun, 2010 by Steve Ohana in Weekly Focus

We had signaled the expansion of massive financial bubbles on multiple risky asset classes since 2009: equities, corporate credit, depletable commodities, emerging debt and carry trades. Unsurprisingly, these dangerous patterns unfolded into a global deleveraging, as demonstrated by the chart below:

The last four instances we experienced such a deleveraging were in 2000, 2004, 2006 and [...]