Similiarities Between 2010 & 2012

<p>We’ve already pointed out back in March the similarities between April/May 2010, April/May 2011 and how they could translate into fresh selling in April/May 2012. […]</p>

We’ve already pointed out back in March the similarities between April/May 2010, April/May 2011 and how they could translate into fresh selling in April/May 2012.

Other things:

2010

MAY: Euro sell-off & Eurozone Problems
JUNE: World Cup
JULY: Poor US data opens door for Fed QE2
NOV: US Mid-Term Elections
NOV: Ireland bailed out

* Goldman Sachs under fire after Fabrice Toure misled clients.
* BRICs were strong enough to lift US & Eurozone into recovery.
* BRICs were in fact raising rates.

2012

MAY: Euro sell-off & Eurozone Problems
JUNE: Euro Cup
JULY: Current Data Already Suggests QE3
NOV: US Presidential Elections
NOV: Italy & France? Already mentioned for needing further “assistance”

* JP Morgan CEO testified after “London Whale” lost $2 bn in “Bad Hedging”
* BRICs weakness is deepening, cannot help US/EUrozone
* BRICS slashing rates (Brazil rates at all time lows) (China 1st cut since ’08)

Hope solely lies with Central Banks’ QE, LTRO, Currency Swaps.

* Effectiveness of Fed’s QE3 in shoring up liquidity will not be as effective as QE1-2 because:

1. Offsetting nature of Operation Twist & use of MBS irrelevant in creating/maintaining extra liqudity.
2. QE3 is no different from LTRO; aimed at liquidity and not solvency (Euro) or Macro (US/Eurozone)
3. Ineffectiveness of Operation Twist (Sep 2011) shown by need for ECB & Fed to intervene in Dec 2011 via LTRO/FXSwaps

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