I've been so excited about markets recently, I wore a fur vest (totally tasteful) Friday and everyone teased I was dressing bling, bull market (it’s HK you can wear fur). Anyway spendaholic Americans are back (at least for now, hopefully forever)– we saw a super strong January export number from China (means China's shipping out lots and lots of Superbowl T-shirts and iPads). Now if you get trapped in some sort of China debate (a fate I wouldn't wish upon anyone but happened to my friend on a match.com date) they could argue imports were weak (not as many Chinese kids buying Yao Ming, now Jeremy Lin, basketball jerseys). They’ll use this to argue the Chinese economy is weak and not spending – to which you smugly rebut it was Chinese New Year (DUH!!) and EVERYTHING shuts down during that time. If they want to debate it further – (a) roll your eyes and walk away – so BORING (b) escape to the bathroom and avoid them the rest of the evening.
Weekend was all about Greece. If you notice, being compared to 'Greece' has become a pretty nasty insult recently (every European country saying 'we're not Greece'). However Greeks are acting pretty naughty right now. They need money so the European Union is telling them, 'Fine, we’ll bail you out, but you better get your act together and don't do it again' - basically austerity measures. And Greeks are pretty pissed off about it. Some of it is kind of funny – I mean everybody hates paying taxes but Greeks are kind of extreme/awesome/funny about it. Great example - more Porsche Cayennes registered in Greece than taxpayers who can afford them. Now while German luxury car makers are delighted the Greeks enjoy ‘pimping their ride’ unfortunately the Greek government is bankrupt. This means Europe (Euro-zone) countries, who are bound together by a common currency but culturally very different, are pretty unhappy about bailing them out (Like how annoying if we had to bail out Oklahoma or West Virginia). And unfortunately it’s not just Greece – which is why you always hear about PIIGS/Eurozone contagion (Portugal, Italy, Ireland Greece and Spain) with even my beloved France in trouble. Basically it’s now only Germany who truly has its house in order. Yes..it is all a slow moving train-wreck (basically been going on since 2009) but it really kicked off as penniless Greece has EUR14.5b to pay back by Mar 20.
Just this morning, Greece finally, with lots of rioting, agreed to the terms (austerity measures). Now nobody likes a good party to end, but Greece has been misbehaving Lindsay Lohan style, as the country runs out of options and risk getting kicked out of the Euro-Zone. Basically it’s all a gigantic disaster and this movie isn’t over. Still, I don't think Greece or Europe implodes – Everyone regrets letting Lehman implode, doubt we’ll experiment with Europe. However it is a bumpy bumpy ride and getting Greeks to accept their medicine (austerity measures) will be a painful and drawn out process. I mean I would riot too if you upped my 35 hour work week and extended my retirement age (Greece's age is 50 – HOW AWESOME!).
Confession here – im a Europhile – and I have yet to hit a European destination i didn't enjoy. However I don't see anyone writing books praising the success of European economic policy. I do believe it will all work out in the end with everyone just having to suck it up. In the meantime it is promised to be a very noisy ride. That’s why I prefer to keep my money in the US for now and Asia (Korea/Taiwan/China). Workaholic /fast growing/efficient countries are not as charming to visit, but right now it’s a less scary place to make money.
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