Enzio's Clock

-- Q2 markets outlook

·        With the continued "excess supply of money", markets will continue performing well

·        In particular, expect the Asian markets to outperform, now that America is motoring

·        Europe should, literally, remain under a cloud as the volcanic mess will keep slowing the economy - exacerbating Europe's "excess supply of goods"

§        Earnings: seems to me as if the bulk of the earnings improvements stem from

·        terrible "year agos"

·        inventory re-building

§        Thus, I wonder just how sustainable earnings and thus earnings valuations are

§        The Goldman problems are merely the tip of the iceberg; expect many banks to be "named" now that the genie has been let out of the bottle

·        The Goldman "impact" will be felt globally

 -- Where are the opportunities at this juncture? What are you buying / recommending in Q2?

 ·       It seems as if the big theme will be the switch from bonds to equities

·        The other big switch is from America back to Asia, and

·        The final switch is out of currencies back into the US dollar and yen (see next)

--  Anything else you wish to add?

·        If I am remotely right that earnings momentum will slow down, the further into this year that we get, then expect market volatility to rise

·        If market volatility rises, expect "the great unwind" of carry trades

·        This would suggest that those currencies financing the carry trade, particularly the yen, but also the dollar, have to rise