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Commentary

Iceland cracks, Mobius likes India, Ted Spread and more

There seems to be news all the time nowadays.

  • Iceland now shuts down stock exchange for two days, and creates a new bank. This is a country in bad shape – its three biggest lenders had to be nationalized or went bankrupt, it’s lost some 24% against the euro in the last few days and it’s looking desperately for about $5 billion. (Why won’t India give this money? I think it’s a far better bet to give it in Krona today, and get it back in Krona a few years later…far better than holding some obscene quantities of dollars, at least)
  • ICICI Bank trades in the US at $16.85, which is equivalent (at Rs. 48 to a dollar) to a rupee price of 400. At 400 I will cut my shorts in my short only strategy.
  • The Ted spread is at 4+. This is the kind of thing you can’t even begin to imagine. It’s like Jurassic Park – you’re ok dealing with this stuff in history books and even have comic characters like Barney the friendly dino (which, incidentally , my son can’t get enough of) but if you ever see real dinosaurs walking around you’re going to be screaming and running like a headless chicken. That’s what the Ted Spread is right now, a chicken without a head. Hey, that even rhymes.
  • The short-selling ban ended today in the US. It was down what – 15% during the ban? Someone please tell the regulators, that kind of crap does NOTHING to stop prices going down, ok? If you had shorts they’d be buying and covering and supporting the market now. Now deal with fresh shorts having to be built today. Stupid, stupid, stupid.
  • Treasury may directly buy capital from banks. Yay. United States, Temporary Socialist Republic. Hey, it’s not a bad thing.
  • Mark Mobius of Templeton will buy India?

    “There are bargains on almost every single market around the world,” Mark Mobius, who manages $30 billion as executive chairman of Templeton Asset Management Ltd., said in a Bloomberg television interview today. Mobius, 72, said he’s looking to buy stocks in the markets that fell the most, including Russia, China, Brazil, Turkey, South Africa and India.

    Watch for a stock market recovery in the emerging space. Russia is now up 17%, after a battering this week.

  • Tanta at Calculated Risk has had a coffee for the first time in a month. (No, the credit crisis is not so bad)

More drama to come. I think it’s time to take a holiday. Too much news never helped anyone.