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 Strategies & Market Trends : Value Investing

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To: Spekulatius who wrote (47190)4/25/2012 11:52:27 PM
From: Spekulatius of 51567
 
re DL.AS, somehow this stock is cursed for me. Stock starts to drop as soon as I buy it. I decided to sell at a sell at a very small loss.

I believe my thesis that the rising tide of liquidity from the ECB lifts all boats is probably wrong. Apparently what is happening is that the PIG banks are borrowing at the ECB bank at Libor (~1%) and buying sovereign bonds of their home nations.

I guess they figure that if their home nation defaults, they are toast anyways, so they can as well load on their own sovereign debt and collect a 5% spread if it works out. Probably not more risky than lending to small business in their respective home countries and more liquid too. Of course this does zilch for the local economy.

Even funnier, the French and German banks are selling the sovereign debt, while the banks located in Pig countries that are already up to their eyeballs are buying more.

bloomberg.com 

For now I am keeping my small position in CC.PA, that mid size mutual French business bank.
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