2012 First Quarter Commentary
ByFranco Seguso
April 2012

ECB jumps on the monetization bandwagon

Asset markets took an extensive vacation from economic reality in the first quarter, posting one of their best quarterly performances since the mighty 1998, although lacking in trading volumes. Never before has economic stagnation and festering credit problems felt so good with P/E expanding into an earning contraction.

The quarter modest and strangely solitary upswing in US economic activity was skewed by extremely favorable seasonal adjustments due to the warmest winter in recorded history (since 1895) as average temperatures have been running 20% above normal seasonal patterns. While official unemployment is back to 8.2%, people are falling off like flies from the labor participation pool (the denominator) to join the ranks of discourage workers or to collect disability benefits (at record high). This weather/seasonal adjustment anomaly seems to have caused several US data contradictions. Something clearly does not add up, or seems at least unsustainable, in this star and stripes recovery story. (more)

Commentary: Second quarter
by Franco Seguso,

June 2012

Eurozone front and center an incredibly complex crisis

First we were served an alphabet soup of acronyms (TARP, QE, SMP, ELA, TARGET-2, LTRO, EFSF, ESM) whereas now we are treated to verbal contortions: Eurobond stands for Eurobund, austerity in French means “spending a lesser amount of of other people money”, structural reform in Italian stands for ‘tomorrow’, growth in southern Europe means ‘Angela treat’, voluntary restructuring in Greek means ‘subordination of private investors’  while in Spanish ‘cooking bank books’ is called dynamic provisioning and limited financial support for banks stands in lieu and place of ‘country bailout’. All this would be farcical if not for the dreadful economic reality. (more)

Commentary: third quarter
by Franco Seguso,

September 2012

Recession fuels monetary reflation

The third quarter perfectly epitomizes a growing disconnect between financial markets and underlying economies, between policy-makers and society at large or the famed divide between Wall Street and Main Street; could it be that Monsieur Market and Madame Economy are divorcing, the former bubbled-up by central bank perfusions, the latter depressed by revenue and productivity leakages? (more)


Annual commentary 2012:
by Franco Seguso,

December 2012

Muddle through year…

2012 will go into the annals as a good year for investors with almost all asset classes logging fairly decent gains despite sharply lower growth than anticipated. Annals will also record one of the most turbulent macro-economic year since the crisis of 2008, a year of deepening recession in Europe and Japan, stagnation in the US and low growth in the rest of the world. Global macro-economic conditions remain extremely fragile in a context of a world buried under a pyramid of debt.