“We believe that overall, the [bank stress] tests will be positive.”
- Unnamed banker in London, as reported in the FT.
“The stress test idea is a shambles. The whole thing is a complete joke.”
- Unnamed analyst in London, as reported in the FT.
This last week we have been presenting
investment seminars across the country. In this note I would like to highlight
the presentation given by one of our guest speakers, strategist James Ferguson
of Arbuthnot Securities, and a fellow Money Week contributor.
One
of the difficulties with investment strategy when the authorities are trying to
resolve banking crises is knowing who to trust. Many banks in the
industrialised world are insolvent, but the authorities are unlikely to admit
the fact since that has the unfortunate tendency of triggering runs on them. So
instead we all participate in something akin to a phoney war. The more
enlightened – or distrustful – keep at a wary distance from anything
approximating to a bank investment, while the more daring – or credulous –
flirt uncertainly with a sector still in intensive care.
To read more,
Download Enduring the 'Phoney War'
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