Robert Mcdowell

Preview from Europe: The Horror Show's Alive and Well

Europe feels pretty good. The continentals have had high unemployment rates for a while. Ireland is staring at a 6% recession this years but got its AAA confirmed. UK is ahead of the curve heading for less than 3% GDP drop maybe, but 8% unemployment, while Government is solid in how it'll be making £ billions out of helping out the banks by filling in their 'funding gaps'. The Germans and the French are coming on-message. The Euro Zone economy may revise its GDP in hindsight up, not down and find its got a lag before the full recession hits them by which time USA and UK will be back in positive growth. Sure, trillions of assets have gone south, but underlying net interest income of banks is holding up well, and assets can always come back even if they take 5-6 years to get back up to same cliff-edges where they fell off last year. Short-sellers are staring at postage stamp bank share values and getting real nervous that the great days of bear market profits are now getting harder to pick. Good time while the US$ is high to book your holidays over here - I recommend Scotland for the Edinburgh Festival in August and the Mediterranean for September.