Another Quiet Month in the World of Investing, Storms Brewing

Emergency Talks to Solve the Netherlands Political Crisis

April was another quiet month and the world is still humming along nicely: So far so good! There are some cracks on the Euro front as Spain lapsed into a recession, credit got slashed by ratings companies and joblessness is at record high. Could Spain be the next Greece? Will the Euro firewall be able to prevent the contagion from Spain spreading to other countries? These are questions high on our minds but there is no way to find out until the rubber hits the road. The economical upheaval created an uncertainty in the political front too. Netherlands, one of the fiscally stronger Euro countries, gave global markets a scare when the government tendered their resignations as the parliament was unable to agree on the new budget. Many analysts expected that talks among political parties would take weeks before a new budget could be agreed on, but deal makers in Netherlands managed to pull together a deal within two days, much to the relief to the other members of EU.  

Meanwhile, things are quiet on the US and Asia front. Nothing much has changed since last month and it is expected that things will continue to be quiet until the 3rd quarter of the year. 2012 is called the year of elections as 193 countries and about one third of the world's nation will go to polls this year. Leadership changes in major economies like France, US and Russia may result in a new political-economic approach to solving the various economic woes. Meanwhile, China will also have a transition in their leadership and judging from the recent scandals that had been dogging the Chinese authorities, the Chinese government probably will do little to rock the boat and try to ensure a smooth transition. Our neighbor, Malaysia will go to the polls this year too and lots of drama will be expected and I won't be surprised that Singapore might be dragged into the fray as a scapegoat again. Stay tuned to all the excitement in the political front.

There is no strategy change this month. The pummeling of resource funds seems to have eased somewhat and a bottom seems to be reached. Resource funds will pick up once there is confirmation that the US economy is in full recovery and inflation starts to kick back into the US economy. EU will also benefit should US recovery pick up steam as their now much devalued Euro and lower wages will improve their export competitiveness. 

As usual, here is the report card for this month: