Enzio's Clock

1. Asian stocks started the week in positive territory - have markets

   bottomed out - where do they go from here to year end

·         With it now received wisdom that the Economic Time™ is worsening globally, there is NO way that profits can improve: the excess supply of goods is pressuring turnover and margins.

·         Thus, look for the next downleg, probably around October

2. Cheapest valuations in more than a decade - are investors biting and

   interest coming back to the market

·         This is a valuation rally driven by smart traders

·         Us fundamental guys who work on strategies and cycles are not joining this frenetic party

·         Any blow up in Georgia will send everything reeling south: see question 6

3. Easing commodity prices – how much will that impact corporate earnings

   going forward

·         It won’t, because corporates will have to lower their prices in order to keep market share.

·         Besides, I am not so convinced that commodity prices per se are easing

·         Instead, you have seen a huge re-allocation of asset classes. The dollar gets bought, so up go stock markets and down go commodities

·         However, China and India have not gone away, nor has El Nino or La Nina (-à agricultural prices), nor have oil fights (Muddle East and the next Cold War: see question 6)

4. Where do you see values sector and market wise

·         This not the time to be clever

·         Because of the horrible global Economic Time™, I would avoid stock markets

·         Indeed, we have shorts on the American market, and particularly on the financial sector

5. Any topics you like discussed

·         Recent events in Georgia imply a re-surgence of the cold war. That has HUGE investment implications, which I am happy to discuss

·         Also, now that the Fed is bailing out individual banks, watch its independence wilt, dragging thether dollar down fur