.According to Moshe Silver, Hedgeye: Three predictions: The
first because we know how the money business works – though we do not have
proof to hand. The second we are certain
will happen – because it has long been the obvious step, and because those most
directly affected by it, and who stand to benefit most from it, have been
howling loudest at the mere suggestion. The third, because we would certainly
consider doing it if we were in charge.
1. More money laundering: First, we predict that major U.S.
banks will be accused of extensive money laundering activities. Banks on U.S.
soil swim in the same polluted waters as their global counterparts, and money
laundering is part of the environment. We predict there will soon be serious
charges of money laundering brought against major U.S. financial institutions..
2. Bank break-ups: Our second prediction is that the banks
will break up. Not that they will be broken up. The banks will move
strategically to divest, spin off and slice and dice their business – it is by
now an overdue business decision, and firms such as Goldman Sachs (GS) have
already made steps in that direction....
3. Dividend cuts: Finally, our third prediction is that
major corporations will cut their dividends. The Financial Times says equities
are edging out bonds: A "survey of 52 institutional investors showed a
shift towards high-yield bonds and high-dividend equities, together with real
estate and infrastructure, alongside investment grade corporate credit in both
developed and emerging markets."
This contrasts with PIMCO's Bill Gross, who proclaimed the Death of
Equities – a phrase that resonates on Wall Street ever since the famous August
1979 Business Week cover story of that title which came on the eve of the
greatest prolonged bull market of the century…
These stories are competing for head space in the press –
and while logic dictates that equities can't be both dead and in favor at the
same time, that is also, as our dear departed Dad used to say, what makes horse
racing…
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