SFP-International launches new product jobCONNECT as answer to massive job losses in City and on Wall Street

Press Release Final

SFP-International launches new product jobCONNECT as answer to massive job losses in City and on Wall Street

jobCONNECT is the ultimate Job Assessment, Training and Job Placement Program for jobseekers who want to improve their chances of landing a job and get back to a top job in the international financial markets.

The bad news: Because of massive job cuts in financial markets firms there are now less opportunities and the competition for entry level and mid level positions is tougher than ever.

The good news: there are always openings and opportunities for the right people.  jobCONNECT can help becoming the right person.

jobCONNECT assesses, trains, reconfigures, gets temporary placements and finally - without guarantee however – full time jobs in finance. 

Says Jacob H Schmidt, creator of jobCONNECT, managing director of SFP-International and CEO of investment advisory firm Schmidt Research Partners: "Staying out of the market after redundancy can lead to fast skill decay and losing touch with new market developments. I have been in financial markets, hedge fund due diligence and talent search for over 20 years and will apply my experience, relationships and unique approach to the new challenges of the difficult fin job market. jobCONNECT addresses these issues and is the answer for people who want to get back into the City and Wall Street. "

For the editor:

For more information please contact:

SFP-International Limited

+44-20-7723-8060 office                        

jobCONNECT@sfp-international.com

Weekly Comment on Financial Markets 3 Sep 2012

Monday 3 September 2012

August was a quiet market for the equity markets,  commodities saw a revival and fixed income due to the European worries volatile.

Greece on track to be the first to be leave the Euro, and to default on its debt (again). As per my comments from 2011 Greece will go through a series of "soft" and "voluntary" restructurings before defaulting and asking for a massive debt write-off. The solution will be a new Brady plan, European style.

Italy and Spain might follow.

While politicians, ECB and EFSF / ESM still want to save these borrowers at any cost, time is running out. According to FT article of 3 Sep 2012 "Germans write off Greece, says poll"a majority of the Germans do not believe that Greece will ever pay its debt back and will change its economic policy. Tough message for the policy makers.

China slow down continues. 

First results from hedge funds indicate a positive month of August.

Weekly Commentary on Financial Markets: 13 Feb 2012

Weekly Commentary on Financial Markets: 13 Feb 2012   Issue: 5/2012     13 Feb 2012   More Money News of the week: Greek parliament approves austerity measures; now awaiting next tranche; Apple shares hitting USD 500 mark; more liquidity by ECB and BoE      Europe - Euro European finance ministers will meet again this week, to discuss the latest austerity measures, but the news is that Brussels / Berlin wants a written commitment that the parties will also stick to the plan and actions after the next elections. In addition they switched from the proposal of an EU budget commissioner to the idea of an escrow account for the servicing of the debt. While conceptually interesting we do not believe that this will fly with the Greeks: they feel that the rest of the EU do not trust them and lack to treat them as equals. The very tough measures combined with other conditions will - in our opinion - lead to a very dangerous socio-political development in Greece. Comparisons to the Weimar Republic and the rise of the far right in the 1920 and 1930 come to mind. We are very concerned. My Grade: C The Euro The ECB will provide more liquidity via the LTRO (another tranche at the end of Feb) and the BoE via a GBP 50 b program announced last week. This liquidity injection is key to keep markets running, but we ask what the central banks will and can do if the situation gets worse, Greece and other peripherals default and banks get into trouble. The answer is even larger balance sheets. The Euro looks overvalued at these levels. My Grade: C Greece Greece took the first hurdle on Sunday when they approved the austerity measures. Now the next step is with the EU which will discuss the plan on Wednesday and should release the funds for the next tranche. Thereafter the restructuring is on the agenda. If all goes well we will not see a default in March and Greece can concentrate on bringing down its debt to GDP level from 160% to 120% by 2020 and go to elections in April. For the local population the outlook is very sad and tough as they will face harshest economic conditions for the foreseeable future. From a macroeconomic POV the austerity plan and the restructuring do not make any sense. Greece cannot service the debt load without growing which they can't under this program. As written above we are concerned that the socio-political situation might turn for the worse, a weakening of the mainstream parties, more poverty and unemployment and civil unrest. We believe that given the tough stance of the EU on austerity, written commitments and escrow account, Greece will be forced to leave the Euro and the EU as they will not be able or allowed to renegotiate. But this might happen only in 2013, as a default and more Euro volatility is not helpful for the upcoming elections in France and Germany does not want a Euro problem either. Greece might choose leaving the Euro sooner than that: very unlikely to be before the elections, but anytime thereafter. My Grade: C- Italy President Obama praised premier Monti's efforts and results at his Washington trip last week. 10 Y BTP yields continue at the sub 6% level, short dated at the 3% level. Root problem of high level of debt is unchanged. My Grade: B Japan Bad news out of Japan, where the Q4 GDP dropped by an annualised 2.3%. A warning sign for Europe and the US. My Grade: B-         US Obama unveiled his budget, a balancing act of cuts and stimulus, to be voted on today. Sentiment in the US continues to be good. My Grade: B+ Companies Swiss banks reported earnings last week, depicting the tough conditions in the markets: investment banking activity is down in all three banks (CS, Julius Baer, UBS), focus on getting more private clients, more on shore and less offshore and of course the higher capital requirements. Barclay's earnings were also lower and showed a similar picture. In light of the facebook IPO other internet and tech companies get the investors' attention. Groupon's results were weak, but they fiddle around with the website and services. Linkedin had good numbers. And Apple, certainly not an internet company but a also trading at a high price and multiples, has hit the magic USD 500. Rumours of dividends could make the stock eligible for income investors. We would not be surprised to see a stock split to make the shares look cheaper. On the M& A front Vodafone is considering a bid for Cable and Wireless. My Grade: A- Markets Overbought conditions continue in the equity markets. Traders and investors took Sunday's vote in Greece as a good sign, despite the worsening situation in the country and many other risks in the markets. We believe that the overbought condition will change when the market realises that no new money will be added at these levels and bad news will hit the wire. While many hedge funds are net long, many long only investors have cut their positions and many traders are net short. My Grade: A- Interest Rates US and German rates at low rates, unchanged, due to QE, operation twist and the increasing fear factor.   My Grade: C Credit Spreads continue at the tighter end. Corporate credit and EM preferred by investors.   My Grade: B- Commodities Gold and Silver range trading. My Grade: C+ Volatility   The VIX has gone up from last week's low of 17.3% to the 19.5% levels. Still looking cheap given the risks in the markets. My Grade: A Hedge Funds Good times for L/S stock picking, relative value and event hedge funds as volatility is high enough to move markets, allowing managers to exploit dislocations without getting whacked by crazy markets. Our preferred strategies for 2012 are event, L/S and credit / distress. My Grade: A Outlook We believe that the markets are dancing on very thin ice, as the Greek situation is getting worse, banks are directly and indirectly exposed to the sovereign risks and geopolitical risks in the Middle East are on the rise. The overbought equity markets might hover at these high levels for some time, and suddenly sell off as e.g. in the summer. Conclusion Caution in the markets is recommended. My grade: B- Grading: A, A-, B+, B, B-, C+, C- D (adapted from American University Grading / Marking System), higher marks for visibility, clear outlook, little risk, lower marks for little visibility, unclear outlook, high risk. Jacob H Schmidt,international financial markets expert, HF expert, Webster Finance Professor. Expert Witness. Anglo- Austrian, multi-lingual,-cultural, critical thinker. CEO of Schmidt Research Partners Ltd, an investment advisory firm and MD of SFP-International Ltd, a consulting and training company. Available for high quality investment advisory, due diligence and consulting projects. Schmidt Research Partners are expert providers of advisory services, due diligence, research, consulting and training in financial markets. This commentary is for information only. Nothing contained herein constitutes investment, legal, tax or other advice nor is it to be solely relied on in making an investment or other decision. It is not an invitation to buy, sell or subscribe and is by way of information only. Watch Jacob H Schmidt latest interview on Bloomberg TV: Feb. 6 (Bloomberg) -- Jacob Schmidt, founder and chief executive officer of Schmidt Research Partners Ltd., discusses Julius Baer Group Ltd., Credit Suisse Group AG and UBS AG. He speaks with Andrea Catherwood on Bloomberg Television's "Last Word." (Source: Bloomberg)

Weekly Commentary on Financial Markets: 6 Feb 2012

Weekly Commentary on Financial Markets: 6 Feb 2012 Issue: 4                                                                            6 Feb 2012 Crunch Time for Greece and Europe       News of the week: Greece bail-out and restructuring still unsolved; facebook IPO prospectus out; Swiss banks reporting 2011 earnings        Europe - Euro News and markets continue to be dominated by the debt story: how to save Greece, the banks and ring fence the other countries from a contagion. Lots of rumours but no real progress. More below. As banks report earnings, the issue of compensation and bonus comes up again. In the UK RBS was in the headline for the boni of the current chairman and CEO of the bank, who were supposed to be paid a bonus despite significant redundancies and no profits. In addition her majesty's government took the opportunity to strip the former CEO Sir Fred Goodwin of his knighthood, demoting him to a commoner. A very rare occasion, but many asked the question where is the action on all the other culprits. In the US the bonus of Goldman Sachs CEO Blankfein and others is top news. Apart from Greece, Hungary is the other - less reported - debt problem in Europe. The situation is very tense there, as companies cannot service their debt. Malev, the national carrier declared bankruptcy on Friday after 66 years of service, as the European Commission ordered the airline to repay state-aid it received from 2007-2010. Not very helpful in times when Hungary feels misunderstood and isolated in Europe. My Grade: B- Greece Rumours over the last few days have been that there is a deal, only to be retracted and postponed. While the media reported that the main reason is the coupon on the restructured debt, we believe that the Greek come more and more to the conclusion - as written before - that the bail-out cum restructuring of debt will not help them at all. As the next bond, the Euro 14 b maturing in March, is coming up, the risk of default has increased. We believe that there is a 50% chance that there is no deal. This means that even if a deal is announced it might be rejected later in Greece or not consumed. Of course, even if there is a deal, the debt load is unsustainable. To put it simply: Greece needs a 80% hair cut plus low coupons, and Germany has to pay for it, like it or not. My Grade: C- Italy Yields are lower again, with 10 Y BTP now at 5.76%. Question is what is the ECB's total holding. Given the LTRO, which offers a great carry trade to banks, Italian BTP are interesting, but vulnerable to any shock, such as a Greece default. My Grade: B     US The better than expected job data propelled the markets on Friday. The cynic view is that the data is manufactured, as less people register for work, the weather was good and it is an election year. Nevertheless the US are definitely doing better than Europe. My Grade: B+ Companies On the corporate front we are seeing three major themes: banks, IPOs and M&A. For the Swiss banks it is earnings week. This morning, Julius Baer, the Swiss private bank reported a 27% drop in earnings (10% adjusted for a German tax settlement). While a highly capitalised bank (22% Basel 2.5) we see a range of issues: scissor effect of fee income and expenses (and FX effect on top), tax issues with the US and the reliance on good performance. Compared to the other two big Swiss banks, Baer is relatively small and needs to grow. They lost out on Banque Sarasin, another smaller Swiss private bank last year, which was acquired by Safra. UBS is in repair mode after last year's Delta One losses, but has made some good progress. They also nominated two younger, highly respected women to the advisory board, namely Beatrice Weder di Mauro, an ex-IMF and World Bank economist, professor of economics and advisor to the German government as well as Isabelle Romy, an international litigation expert, lawyer and associate professor. In our view a very exciting nomination and development at UBS. Credit Suisse, which will report on Wednesday, has the same headwinds as the other banks, higher capital requirements and tough trading environment, but an excellent risk management and top position in prime brokerage. Barclay's will report earnings on Thursday.     The facebook IPO has put a spell on the market: currently the (when and if) market cap for facebook is USD 115 b. After a review of the prospectus / OM we come to the conclusion that despite all the many risks the IPO will be a success as it is manufactured and designed to be one. Whether the company will be worth USD 100 b in 5 years is another matter. We also noticed several hacking incidents in facebook accounts. The third major topic is the rise in M&A, of which the Glencore / Xstrata is the most exciting one. It will create a mining superpower, managed by a team of very skilled executives. My Grade: A- Markets Equity and debt markets continue their rally despite mixed news (many negative earnings surprises) and the European debt problem. It is a combination of low interest rates, liquidity provision via the LTRO (ECB funding) and the IPO / M&A fever. My Grade: A- Interest Rates US rates still low, but on the way up as the macro data are getting better. German bund 10 Y yields almost unchanged at a low of 1.89%. My Grade: C Credit On the back of the LTRO and the positive mood Italy and Spain are trading at lower yields and spreads to German bunds than last week. Italian 10Y BTP at 5.75%, Spain at 4.99%. The bigger risk is with Portuguese and Irish bonds. My Grade: B- Commodities Gold and Silver rallied to 6 week highs, before selling off again. Crude weaker despite the situation in the Middle East. My Grade: C+ Volatility: no surprise that VIX is lower at 17.3%. Looking even cheaper than last week. Hedge Funds Most hedge funds have reported excellent numbers for January 2012, ranging from up 3 to up 7%, depending on strategy and leverage. The traders seem rather wrong footed with short positions in equity indices and other risky assets. The Dow Jones CS Core Hedge Fund Index was up 2.2% in January. Funds of Funds also up between 0.5% and 2.5%. However the good news of positive performance comes with the bad news of more correlation to other markets as observed over the last few years. We still believe that hedge funds can add value to a portfolio in many respects, but investors need to work harder to find the best managers, to monitor them and if necessary change the allocations. And managers need to work harder to generate returns, be transparent and have a clear marketing strategy. Our preferred strategies for 2012 are event, L/S and credit / distress. My Grade: A Outlook As equity markets have risen between 5-10% in January alone, it is unclear how much longer the rally can continue. Volume is quite thin in many markets. Most investors are still at the sidelines, and we doubt that they will get in at these higher levels. On the other hand we see and know of many short positions which are very painful and   provide some support. Conclusion Our concern is with the unresolved debt problems of Europe, Greece, Hungary and the other periphery countries. Political risk in the MENA must not be underestimated. But markets are still in a bull mode. My grade: B+ Grading: A, A-, B+, B, B-, C+, C- D (adapted from American University Grading / Marking System), higher marks for visibility, clear outlook, little risk, lower marks for little visibility, unclear outlook, high risk. Jacob H Schmidt,international financial markets expert, HF expert, Webster Finance Professor. Expert Witness. Anglo- Austrian, multi-lingual,-cultural, critical thinker. CEO of Schmidt Research Partners Ltd, an investment advisory firm and MD of SFP-International Ltd, a consulting and training company. Available for high quality investment advisory, due diligence and consulting projects. Schmidt Research Partners are expert providers of advisory services, due diligence, research, consulting and training in financial markets. This commentary is for information only. Nothing contained herein constitutes investment, legal, tax or other advice nor is it to be solely relied on in making an investment or other decision. It is not an invitation to buy, sell or subscribe and is by way of information only. . SFP School of Finance   We are running the following training courses in Feb 2012:    1. HEDGE FUND PERFORMANCE ANALYSIS (WITH PERTRAC), 6-7 FEBRUARY, CENTRAL LONDON 2. PRIME BROKERAGE, 13-14 FEBRUARY, CENTRAL LONDON 3. EXOTIC DERIVATIVES, 20-21 FEBRUARY, CENTRAL LONDON 4. THE FUTURE OF RISK MANAGEMENT IN HF (WITH PERTRAC)   23-24 Feb 2012, CENTRAL LONDON         To book your place or for questions about the courses please call us on +44-20-7723 8060   or email us at susi.schmidt@sfp-international.com  Europe - Euro - Italy - Greece - Markets - US - Stocks - Interest Rates - Credit - Commodities -  Hedge Funds

Weekly Commentary on Financial Markets: 30 January 2012 Issue: 3                                      30 Jan 2012 Hedge Funds are back      News of the week: World Economic Forum in Davos; Greek restructuring making little progress; RBS boss gives up bonus       Europe - Euro Despite rather mixed news out of Europe and a hardening of positions regarding Greece and Hungary, the bond markets of periphery and the Euro rallied over the last week. European politicians have recognised the risks and importance of the crisis and are working full speed, nevertheless national politics and Brussels are at odds. In Germany the discussion continues to what extent to help Greece and the periphery and to what extent to force the German budgetary, fiscal and monetary constraints on the rest of the union and the countries to be bailed out. France is busy with the upcoming elections. And the financial transactions tax opposed by Britain is work in progress and might be introduced in France as early as August of this year and in other countries thereafter. This will widen the gap between the Anglo Saxon and the continental European approach to a new financial system. My Grade: B- Greece Negotiations for a restructuring and the bail-out package of Euro 135 b continue, with an increasing probability that the deal might not happen. The status quo is that private bond holders will take a 50% hit on the principal amount and accept an interest rate of below 4% for new 30 year bonds. As only 60% of the bonds are in private hands (aka banks and other investors) and 40% held by the ECB and other public lenders the debt reduction will not be enough to make a difference in the short run. The proposed deal will reduce debt to GDP from currently 160% to 120% by 2020 only. The deal is necessary to avoid a default on the bond maturing in March. With a severe recession now in its 4th year and 18% unemployment, Greece might be tempted to refuse the bail-out on the grounds that they are not better off with the arrangements, in particular as Germany and the EU want a budget commissioner, effectively a loss in sovereignty. Greek bonds are trading in the low 20s. We believe that any deal will be short lived as Greece really needs a 80% discount on the face amount plus a low coupon. However this will only happen in stage 2. My Grade: C- Italy Italian BTP yields are lower again after successful debt auctions of 3 year paper. The yield for 10 year BTP is now below the magic 6% (5.89% on Friday 27 Jan 2012). We had a similar drop in BTP yields in November 2011, but they reversed quickly again. The LTRO is working, for the time being at least, but let's not forget the ECB is holding north of Euro 200b in BTPs and Italy has a total of Euro 300b to refinance this year only. My Grade: B     US Both macro as well as micro data coming out in line or better. My Grade: B+ Companies Earnings season has started well with a good number of surprises. Most financials and many other important companies have reported and the focus will now shift to month end trading and the rumoured Facebook IPO, expected to be priced in the USD 100b range. A great company, possibly next to Apple the other great American brand of the 21st century, but at USD 100b somewhat fully priced. My Grade: A- Markets Compensation of CEOs and board members is dominating news, with both the RBS chairman and the CEO giving back their bonus for 2011. We believe that this is a healthy debate, long overdue. The markets continue to climb with vol now at 18.5% for the VIX. US stocks up 20% from their November low. In our view stocks are now fully priced for the short term, but mid to long term have still value. Markets will be vulnerable against any bad news such as Greece, Iran or bad economic data. My Grade: A- Interest Rates US rates continue low, after Bernanke's speech last week in which he indicated that rates will stay at low levels until 2014. German bund 10 Y yields also low at 1.87%. My Grade: C Credit The Jan 13, 2012 downgrade of French and Austrian government bonds has not had any short term effect. My Grade: C+ Commodities Gold and Silver rallied together with other commodities. Crude has upside here due to the situation in the Middle East. My Grade: C+ Volatility: VIX now at 18.5%. Looking quite cheap. Hedge Funds Talking to many equity hedge funds they have a positive exposure and are quite bullish on the market. David Einhorn's fine by the FSA for insider trading / market abuse shows that the regulators are acting much tougher than in the past. We applaud the FSA for being more active than in the past. However it is questionable whether in this case David Einhorn really committed an offense and deserves the fine. In general a very good start for the industry with strong numbers in all strategies except for short bias and managed futures. We prefer relative value and hedge strategies over directional ones. With USD 2 t in assets, low interest rates, a lot of uncertainty and good HF performance we will see more inflows. My Grade: A Outlook While macro and micro data are getting better in the US, there are many risks which could derail the recovery in the US and the positive mood in the stock markets. Greece and Hungary are the immediate risks, followed by Iran and later the elections in France, the US and many other countries. Conclusion For investors the objectives of positive returns and capital protection are key. Hence any exposure should be taken under deep value / long term aspects and / or on a hedge basis only. My grade: B+ Grading: A, A-, B+, B, B-, C+, C- D (adapted from American University Grading / Marking System), higher marks for visibility, clear outlook, little risk, lower marks for little visibility, unclear outlook, high risk. Jacob H Schmidt,international financial markets expert, HF expert, Webster Finance Professor. Expert Witness. Anglo- Austrian, multi-lingual,-cultural, critical thinker. CEO of Schmidt Research Partners Ltd, an investment advisory firm and MD of SFP-International Ltd, a consulting and training company. Available for high quality investment advisory, due diligence and consulting projects. Schmidt Research Partners are expert providers of advisory services, due diligence, research, consulting and training in financial markets. This commentary is for information only. Nothing contained herein constitutes investment, legal, tax or other advice nor is it to be solely relied on in making an investment or other decision. It is not an invitation to buy, sell or subscribe and is by way of information only. . SFP School of Finance   We are running the following training courses in Feb 2012:    1. ANALYSIS OF HEDGE FUND STYLES AND STRATEGIES (WITH PERTRAC), 2-3 FEBRUARY, CENTRAL LONDON 2. HEDGE FUND PERFORMANCE ANALYSIS (WITH PERTRAC), 6-7 FEBRUARY, CENTRAL LONDON 3. PRIME BROKERAGE, 13-14 FEBRUARY, CENTRAL LONDON 4. EXOTIC DERIVATIVES, 20-21 FEBRUARY, CENTRAL LONDON 5. THE FUTURE OF RISK MANAGEMENT IN HF (WITH PERTRAC)   23-24 Feb 2012, CENTRAL LONDON         To book your place or for questions about the courses please call us on +44-20-7723 8060   or email us at susi.schmidt@sfp-international.com  Europe - Euro - Italy - Greece - Markets - US - Stocks - Interest Rates - Credit - Commodities -  Hedge Funds

Weekly Commentary on Financial Markets: 16 January 2012 Europe at Risk

Weekly Commentary on Financial Markets:  

16 January 2012

by Jacob H Schmidt

Europe at Risk               

News of the week: S&P downgrades 9 European countries Friday night; ECB leaves rates unchanged; earnings season has started           

Europe – Euro

The awaited downgrade of AAA rated European countries occurred Friday evening, shortly before market close. While Austria and France lost their important AAA rating, Italy and other EU countries were also downgraded. In Austria the downgrade generated much fear and discussion; however in France the government and public seem more relaxed and blame the rating agency of ill timing. Germany which was rumoured to lose its AAA as well was left unchanged. Whatever opinion one might have of the downgrades and the timing, they are not good for the financial markets and the real economy. Politicians have very little time to act now. Last week the ECB left Euro rates unchanged and provides ample liquidity to the banks. The next issue will be the Greek GGB maturing in 2 months time. It is hard to believe that the rating agencies still have all the power and influence, after all their plunders and mistakes, and the bad opinion politicians and policy makers have of them. An overhaul of the oligopoly of the rating agencies is overdue. My Grade: C-

Greece

Worrying developments in Greece: no progress on the debt problem as some hedge funds want lower discounts (as they are long having bought bonds in the 20-40 price range), but Greece needs a larger discount for the restructuring to make a difference to the current huge burden. Others who are long CDS are waiting for the default to benefit from a potential maximum pay out. Two German politicians mentioned a possible exit of Greece from the Euro (politicians close to Angela Merkel, which might mean that they are preparing the floor for her) without repercussions for the Euro and the markets. We believe that with the current developments an exit becomes very likely, and hopefully later rather than sooner as the disruptions could be massive. We are very concerned about the consequences. A Greek departure might trigger the departure of two or three more countries to follow. It is possible to find a solution within the Euro (a two tiered Euro). My Grade: C- 

Italy

Italian BTP yields lower (6.64% for 10 y BTP) after more successful bond auctions of short and mid term debt. However the situation remains very tense, and the demand for bonds stems from the LTRO (3 year ECB program) and the ECB bond purchasing program. There are also some Italian and high yield buyers in the market. My Grade: B      

US

Fragile recovery in the US: jobless claims were slightly worse than expected, consumer confidence is better. Most market participants agree that the US is in a better shape than Europe. But the trend is still weak and a change in sentiment could derail the positive development over the last few months.  My Grade: B+

Companies

Earnings season started last week. Much awaited JP Morgan reported earnings in line with estimates (0.9 cents for Q4), which the market did not like and sold off (-2%). We thought that JP Morgan would surprise again like in the previous 8 quarters. Nevertheless the reported earning and the numbers are decent enough and better than many other banks. The interesting part in our view is the loss of app. USD 500 mm (before tax) due to the DVA (debt valuation adjustments). As discussed regarding other banks who mark their liabilities, banks can show profits when their debt prices fall in the secondary market, but must also mark up the debt when prices recover. This can be quite costly. This week, many financials, including Wells Fargo, Citi and Goldman Sachs will report earnings.  My Grade: B

Markets

Market were a bit more volatile, but had still a positive spin. We believe that the downgrades will push markets lower, and with much uncertainty regarding Greece and other PIIGS we could see much lower equity prices. Volumes in the major markets have been very low until middle of last week; they increased in the last 3 days to normal levels.My Grade: B+

Interest Rates

Lower yields again on US Notes and Bonds (UST 10 Y at 1.85%, 30Y at 2.91%). German bund 10 Y yields at 1.77%. Yields much too low, but could go lower on flight to safety trades. My Grade: C-

Credit

Downgrade of French and Austrian government bonds probably priced in.  My Grade: C+

Commodities

More range trading in Gold and Silver. Oil very volatile. My Grade: C+

Volatility: VIX still at 20%. Looking quite cheap.  

Hedge Funds

We saw some positive numbers for the first 10 days of trading. Good start of the year. My Grade: B-

Outlook

The downgrade of the 9 European countries was expected, but nevertheless could push sentiment towards negative again.

Conclusion

Due to the massive macro risks we recommend defensive strategies with wealth / capital protection as the foremost objective. 2012 could be a nasty year.   My grade: C-

Grading: A, A-, B+, B, B-, C+, C- D (adapted from American University Grading / Marking System), higher marks for visibility, clear outlook, little risk, lower marks for little visibility, unclear outlook, high risk.

Jacob H Schmidt, international financial markets expert, HF expert, Webster Finance Professor. Expert Witness. Anglo- Austrian, multi-lingual,-cultural, critical thinker. CEO of Schmidt Research Partners Ltd, an investment advisory firm and MD of SFP-International Ltd, a consulting and training company. Available for high quality investment advisory, due diligence and consulting projects.  

Schmidt Research Partners are expert providers of advisory services, due diligence, research, consulting and training in financial markets.

This commentary is for information only. Nothing contained herein constitutes investment, legal, tax or other advice nor is it to be solely relied on in making an investment or other decision. It is not an invitation to buy, sell or subscribe and is by way of information only.