Don’t Bank on Banks

We all know that particularly US and European banks have been battered of late. So are they set for a rebound? We have our doubts. The quest for profits is unrelenting, and you always will find groups wanting to squeeze the stone just one more time.

In our sister piece we delve more deeply into what has caused banks to seize up - and why this will stay for some time. We also then suggest ways to earn off this worsening of the G-3's Economic Time. What we can say is that with The Economic Time™ worsening in Japan , America and Europe, this is one sector that you definitely want to be extremely leery of! Caveat emptor!

By "submerging" markets, of course, we mean the G-3: USA, Japan and the EU. Readers know that we have had "sells" on all three for a goodly while. There are two basic reasons for our market skepticism:

  • First, The Economic Time™ is not good in any of these markets, and

  • secondly, profits, therefore, must worsen.

More thinking has made us target the banking sector in particular. Because I have been in banking and finance all of my professional life, I know a little of how the game works - and I don't like what I see looming.

Just now we have changed our view on Malaysia's Economic Time. For the past few months, the Central Bank has created an excess supply of money, and that is because inflationary pressures are receding.

Yes, there are political issues ahead of the General Election that is expected by next March. But we think that the government is in charge, and thus are not looking at protests "catching fire".

Finally, when compared to our recent "buy" on India, we are much more comfortable with our "buy" on Malaysia. When compared to India, Malaysia's inflationary pressures are less pronounced. Besides, India's industrial production is slowing more markedly than Malaysia's is.

For answers to these concerns, go to .