The ghost of markets past
Remember 2011? First two months saw stellar performance with many equity indices pushing towards double digit returns and interest rates going up. Then reality struck and markets came tumbling down with 10-year German bond yields ending down almost a full percentage lower than at the beginning of the year and equities down more than 10%.
Fast forward to 2012. Just when you thought it was safe to step into the financial waters again after the ECB had sprinkled the magic that is LTRO over the market place and once again reality rears its ugly head. And if this is to be a return of 2011, more negative news is to come.
Mark Twain said “History doesn’t repeat itself, but it does rhyme”. With one more Euro-zone country moving towards the edge of the abyss, Greece looking at an uncertain outcome at the upcoming general elections with incumbents looking to be swept away by fringe parties and the extreme left and right garnering a combined third of the votes at the Frence presidential elections, markets could see another visit of the ghost of markets past.
Keep your powder dry at least for now.Steen The views expressed in this blog are those of the writer and do not necessarily reflect official views of Nordea.