Stagflation finally gets hold of Western Europe - German confidence falls as Eurozone growth slows down – buy Eurobonds and sell Japanese bonds?
Peter Oberois
Nov. 14, 2006

The stagflation has spread from US to Western Europe. The expected inflation is much higher than slowing growth in the Eurozone. The $10 trillion euro-area economy expanded 0.5 percent from the previous quarter. The economic growth was 0.9% last quarter.

Germany, France and Italy, the three largest euro-area economies suffered in economic growth. The new planned increase in German sales tax is going to slow down the economies further.

ECB, European central bank now is in big dilemma. On the surface the economies are looking good with moderate inflation. But the forward-looking indicators are now fashing warning signals. The inflation pressure is high while the growth prospects are bad. There is more than sixty percent chance according to some analytical models that EU will dip into a recession in 2007 along with American economy.

Given the strength in Japanese economy and equal weakness in Eurozone economies, it may be fantastic opportunity for a spread position – buy the eurobond and sell the Japanese bond.

Stagflation finally gets hold of Western Europe - German confidence falls as Eurozone growth slows down – buy Eurobonds and sell Japanese bonds?
Peter Oberois
Given the strength in Japanese economy and equal weakness in Eurozone economies, it may be fantastic opportunity for a spread position – buy the eurobond and sell the Japanese bond.
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Japan to raise rates fast as economic growth accelerates – bullish for Yen and bearish for Japanese bonds and Nikkei 225
Peter Oberois
It is definitely bullish for Yen. Technically Yen is in the right position to go higher in the long term. The Japanese bonds yielding very little for decades can take a pounding in coming months as rates go higher.
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President Bush and Democrats plan to work together in helping US automakers manage healthcare cost, energy and trade – time to buy GM and Ford?
Marla Guthrie
It resembles the initiatives that former US President Ronald Reagan took in late eighties. The measures made it necessary for Japanese carmakers start assembling and making cars in US based plants.
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New legislation in 2007 Democratic Congress will bring oversight into hedge funds – positive or negative for stocks, commodities and bonds?
Joe Weinman
The commodity boom can correct big time if hedge funds are asked to operate in a more transparent environment.
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The effect on stock market as Democrats plan to cut taxes and fix the despised Alternative Minimum Tax
Fred Day
The stock market can be a big gainer. It is becoming clear that the Democratic Congress will focus on cutting taxes for the middle class and fix the despised Alternative Minimum Tax (AMT). The effect of these on the financial markets can be immense.
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China's foreign trade rose 24.1 percent year-on-year in the first 10 months of 2006, to $1.425 trillion
Media Release
...putting China's trade surplus at $133.63 billion, China's Commerce Ministry reported Nov. 13.
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Leaked global master plan from Toyota reveal plan for R&D superiority and strategic global concentration in India and China
Ashok Sen
Toyota declined to comment on the leaked report. But the strategy is very clear.
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