After a scary 2008 and early part of 2009, the markets got off to the strongest start of any postwar cycle. 2009 saw risky assets outperform safer ones. Itʼs all about leverage. As financial and individuals de-leveraged, governments stepped into the abyss with massive government stimulus programs. Fiscal stimulus programs in the U.S. are about $800 billion and an equal amount or greater in the other economic zones. About an eighth to a quarter has filtered into the economy as of yet. Government balance sheets have expanded at an unprecedented rate.
My oh my, two months in a row! How good does that feel? Although economic news is still grim, the market seems to have sufficiently discounted much of the bad news. It appears to be looking at things as half full versus half empty.
After enduring month after month of bad news, the great recession of 2008 is probably passing its point of maximum strength, and a return to some form of economic stability appears to be in the cards for the second half of the year. We need the reflation trade to work. The biggest challenge going forward is whether policy makers can continue to foster growth with collective stimuli that will stem price deflation and maintain financial stability.
For the month of January, the markets surrendered much of their December return. The S&P 500 was off 8.43%, led by financials (-26.31%) and industrials (12.60%). For the TSX, we registered a 2.96% decline on the index, led by industrials (-7.77%).
Our funds faired somewhat better but still nothing great to write about. After a strong start we posted a -0.1% return for the month.
Frank Mersch - Q4 2009 Commentary
After a scary 2008 and early part of 2009, the markets got off to the strongest start of any postwar cycle. 2009 saw risky assets outperform safer ones. Itʼs all about leverage. As financial and individuals de-leveraged, governments stepped into the abyss with massive government stimulus programs. Fiscal stimulus programs in the U.S. are about $800 billion and an equal amount or greater in the other economic zones. About an eighth to a quarter has filtered into the economy as of yet. Government balance sheets have expanded at an unprecedented rate.
Frank Mersch - Q3 2009 Commentary
Another excellent quarter for capital markets, despite all the doomsayers and economists.
Frank Mersch - Q2 2009 Commentary
A strong quarter, but the month of June shows some potential cracks developing.
Front Street Canadian Hedge - Commentary
My oh my, two months in a row! How good does that feel? Although economic news is still grim, the market seems to have sufficiently discounted much of the bad news. It appears to be looking at things as half full versus half empty.
Frank Mersch - Q1 2009 Commentary
Finally, an up month.
After enduring month after month of bad news, the great recession of 2008 is probably passing its point of maximum strength, and a return to some form of economic stability appears to be in the cards for the second half of the year. We need the reflation trade to work. The biggest challenge going forward is whether policy makers can continue to foster growth with collective stimuli that will stem price deflation and maintain financial stability.
Front Street Canadian Hedge - Monthly Commentary
For the month of January, the markets surrendered much of their December return. The S&P 500 was off 8.43%, led by financials (-26.31%) and industrials (12.60%). For the TSX, we registered a 2.96% decline on the index, led by industrials (-7.77%).
Our funds faired somewhat better but still nothing great to write about. After a strong start we posted a -0.1% return for the month.