Thursday, March 8, 2012

Somethings leave you speechless.

Eurozone unemployment 10.7% up from 9.5% a year ago
Greek unemployment 19.9% up from 14.1% a year ago
Eurozone youth unemployment ( 16-24 years old ) 21.6%

Youth unemployment in Germany : 7.8%
Youth unemployment in Austria : 8.9%
Youth unemployment in the Netherlands : 9.0%
Youth unemploymemnt in Spain : 49.9%
Youth unemployment in Greece : 48.1%

Tuesday, March 6, 2012

The rise of geopolitics in portfolio construction.

Geopolitics. The markets new driving force .

A new worry is entering the investment landscape. Alongside the possibilities of a slowdown in China and a disorderly Greek default ( and the knock-on effect on Portugal, Spain and Italy ) concerns about the oil price are now beginning to impact the market. Just as 13.000 on the Dow seemed assured along came the real possibility that Israel and Iran might actually engage in a shooting war. This raises a number of questions . All of them pertaining to the longevity of the current recovery and the possibility of a sustained downturn.

Will Israel drag America into a war with Iran before the Presidential elections ?
Will Iran act first ?
Will events in the mid-East benefit Obama or Romney ?
What can the EU and other interested parties do to prevent conflict ?
What will Russia and China do ? A high oil price benefits one, harms the other .
What will happen to the price of crude if the Straits of Hormuz are closed ?
What will happen if the Saudi oil fields in the Eastern Province are subjected to bombardment ?
Can Bahrain contain unrest ?
What effect would an Israeli strike on Iran have on the evolution of the Arab Spring ?

If Gaza explodes can Egypt remain on the sidelines ?
Could Afghanistan erupt in an orgy of violence ?
Can the fledgling recovery survive the hike in gasoline prices ?
If India stops buying Iranian crude will the oil price hit $180 ?
What happens to the Spanish and Italian deficits with oil at these levels ?
Is Tehran happy to develop , but not build , a bomb ?
Are the Iranians rational ?
What will Pakistan do ?
Even if Nantaz, and Arak are destroyed , what else remains undiscovered?
Would the Fed embark on a new round of QE if the economy was to slow ?

The centre of uncertainty in markets is slowly drifting away from its obsessive concern over Greece and the Euro . An oil based slowdown in the world eceonomy is a parallel new wall of worry that markets must climb. Oil and gold still play a part in anyones portfolio.