Maltastar
Conflicting evidence continues to
emerge regarding whether the US
No other economy has been as pre-emptive as theUS Japan Germany
The Federal Reserve has been aggressively pushing down interest rates from the 6.5% where they were at the beginning of 2001 to their current level of 1.25%. It is widely believed that this week the Federal Reserve will take out a further insurance against deflation and will knock interest rates down a further 50 basis point to a record low of 0.75%.
Fiscally the US has quickly spent its way out of the surpluses bequeathed by the Clinton administration and has approved a package of $350 billion stimulus even though the federal budget has swung deep into the red as slow revenue growth was compounded by additional defence expenditure.
Yet the consumer, excluding housing starts financed by cheap mortgages, continues to move cautiously and is not coming up with the expected increased demand normally associated with periods of feel-good economic growth. The consumer is still worried that the risk of recession or depression could threaten his job and is not giving the economy the kick-start that loose fiscal and monetary policy are inviting him to give.
Which proves that economically speaking as well, you take the horse to the water but you cannot make it drink.
This uncertain scenario where we continue to receive conflicting evidence of increased confidence and increased job losses, seems to have taken the momentum out of the rise of Stock Markets from the substantial advance they registered since mid-March 2003.
I meet strongly divergent views. On one hand there is the pessimistic view about the real risk of deflation expecting stock markets to plunge back to reflect pessimism on future economic growth. On the other there are optimists who predict a scenario where it is expected that as the economy grows payroll hirings would increase to strengthen the consumers’ confidence about the future, opening a period of non-inflationary growth which would boost stock market prices as they take account of enhanced corporate profitability.
It is too early to be confident as to which scenario will prevail. Stock dealers can probably forget about a summer holiday as up or down I expect sharp movements in Stock market prices in the summer months.
Loss Of
Sovereignty
There is no way that an EU of 25 and planning to increase to 27 than 28 and eventually to 30 and more, can work on the basis of the current Treaties. It is clear that for the EU to function at this enlarged level, veto decision making will have to be abolished, and important decisions will be taken by qualified majority.
It is also clear that countries like Malta will have little or no say in what is decided and we will also miss our place in the sun formerly expected once every 13 years by being denied the rotation of EU presidency. The presence of a permanent Maltese commissioner has been watered down substantially as well.
Malta
This was made clear in a book I published on this matter way back in 1999 and although europhiles initially criticised me for being too negative in my expectations, time unfolds to bring hard reality out of soft dreams.
Once we were not disciplined enough to do what we need to do outside membership we can hardly complain that they are changing the EU we thought we were joining and it increasingly looks unfit for our size.
Portfolio Performance
Strategy 1 No Risk Lm1001.712
Strategy 2 Medium Risk 1002.410 (after Lm40 charges)
Strategy 3 High Risk Lm 969.210 (after Lm20 charges)
Strategy 4 High Risk For Curr. 998.067 (after Lm40charges)
All quotes are net of withholding tax on profit or interest where applicable, and use latest available price quotes and rates on Saturday 21st June.
Strategy 4 lost from stalling of Stock Market march and drop in Biotech shares as there was disappointment from a drug thought to be promising a cure for Alzheimer. The loss was mitigated by strengthening of the USD vs the Euro. Strategy 2 kept steady as it is a balanced portfolio with shares and bonds.
Strategy 3 also retreated as Maltacom shares lost 3c0 to close the week at 89c0.. Strategy 1 accumulates interest at 3.5%.
No changes were made to the portfolio.
Conflicting evidence continues to
emerge regarding whether the No other economy has been as pre-emptive as the
The Federal Reserve has been aggressively pushing down interest rates from the 6.5% where they were at the beginning of 2001 to their current level of 1.25%. It is widely believed that this week the Federal Reserve will take out a further insurance against deflation and will knock interest rates down a further 50 basis point to a record low of 0.75%.
Fiscally the US has quickly spent its way out of the surpluses bequeathed by the Clinton administration and has approved a package of $350 billion stimulus even though the federal budget has swung deep into the red as slow revenue growth was compounded by additional defence expenditure.
Yet the consumer, excluding housing starts financed by cheap mortgages, continues to move cautiously and is not coming up with the expected increased demand normally associated with periods of feel-good economic growth. The consumer is still worried that the risk of recession or depression could threaten his job and is not giving the economy the kick-start that loose fiscal and monetary policy are inviting him to give.
Which proves that economically speaking as well, you take the horse to the water but you cannot make it drink.
This uncertain scenario where we continue to receive conflicting evidence of increased confidence and increased job losses, seems to have taken the momentum out of the rise of Stock Markets from the substantial advance they registered since mid-March 2003.
I meet strongly divergent views. On one hand there is the pessimistic view about the real risk of deflation expecting stock markets to plunge back to reflect pessimism on future economic growth. On the other there are optimists who predict a scenario where it is expected that as the economy grows payroll hirings would increase to strengthen the consumers’ confidence about the future, opening a period of non-inflationary growth which would boost stock market prices as they take account of enhanced corporate profitability.
It is too early to be confident as to which scenario will prevail. Stock dealers can probably forget about a summer holiday as up or down I expect sharp movements in Stock market prices in the summer months.
There is no way that an EU of 25 and planning to increase to 27 than 28 and eventually to 30 and more, can work on the basis of the current Treaties. It is clear that for the EU to function at this enlarged level, veto decision making will have to be abolished, and important decisions will be taken by qualified majority.
It is also clear that countries like Malta will have little or no say in what is decided and we will also miss our place in the sun formerly expected once every 13 years by being denied the rotation of EU presidency. The presence of a permanent Maltese commissioner has been watered down substantially as well.
This was made clear in a book I published on this matter way back in 1999 and although europhiles initially criticised me for being too negative in my expectations, time unfolds to bring hard reality out of soft dreams.
Once we were not disciplined enough to do what we need to do outside membership we can hardly complain that they are changing the EU we thought we were joining and it increasingly looks unfit for our size.
Portfolio Performance
Strategy 1 No Risk Lm1001.712
Strategy 2 Medium Risk 1002.410 (after Lm40 charges)
Strategy 3 High Risk Lm 969.210 (after Lm20 charges)
Strategy 4 High Risk For Curr. 998.067 (after Lm40charges)
All quotes are net of withholding tax on profit or interest where applicable, and use latest available price quotes and rates on Saturday 21st June.
Strategy 4 lost from stalling of Stock Market march and drop in Biotech shares as there was disappointment from a drug thought to be promising a cure for Alzheimer. The loss was mitigated by strengthening of the USD vs the Euro. Strategy 2 kept steady as it is a balanced portfolio with shares and bonds.
Strategy 3 also retreated as Maltacom shares lost 3c0 to close the week at 89c0.. Strategy 1 accumulates interest at 3.5%.
No changes were made to the portfolio.
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