Thursday, October 14, 2010

2008 Redux....A Walk In The Park

The more things change the more they stay the same.

Step into my Time Machine and lets transport us back to 2008.

In 2008

The Dollar was very weak. It had dropped from 92 at the end of 2005 all the way down to 72 in Mid 2008.
The Euro was rallying from 1.20 all the way to 1.60.
Asia was decoupling from the rest of the world.
The US was in a massive easing cycle
The Euro was in a tightening cycle.
Bank Issues were being put on the back burner because the Fed was accommodating.

Lets take it to the present in 2010

The Dollar is extremely weak. A 15 year low vs the Yen.
The Euro has rallied from 1.18 to over 1.40
Asian markets ex Japan are all hitting highs. Can we say decoupling?
The US is in the middle of a massive easing cycle (QE2)
Euro overnight rates are rising as many in Europe are anticipating higher rates.
Foreclosure gate is not in the minds of equity investors as the Fed is accommodating.

We all know how 2008 ended up.
2010-2011 will make the events of 2008 seem like a walk in the park.

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