Warren Buffet: Efforts to stimulate recovery may lead to a larger inflation than in the 1970s

·         A miracle or just another mirage : DJ -1.2%, S&P500 -1.0%, NASDAQ -2.0%, NIKKEI -0.4% et EUROSTOXX -0.4% and up by 1.0% right now.

·         S&P now at lowest level since Sept 96. Asian markets a bit firmer. Recent declines seen as excessive.

·         MERCK drops 7.7% after agreeing to buy Schering-Plough for $41.1 bio

·         Warren Buffet keeps on talking! Says that the economy has "fallen off a cliff" and that efforts to stimulate recovery may lead to higher inflation than in the 1970s.

·         Crude oil trades at $47. Saudi Arabia to continue with supply cuts next month.

·         Gold price weakens ($914) on the back of stronger equity prices in Asia > demand for a safe haven asset drops.

·         € firmer vs $ (1.2714) and Yen. Speculation that European investors will repatriate overseas earnings before the end of the financial quarter in March.

·         10-2 yrs spread stable @ 133bps. 5 yr CMS @ 2.71%, 3 yr CMS @ 2.27%.

·         VIX is edging up at 49.6. Gold is down at 911.7 USD per oz and the oil price (BRENT CRUDE SPOT) is stable at 44.6 USD. The USD is somewhat down against the EUR at 1.271. CMS 10-2 years spread is at 1.31. The 5y CMS stands at 2.696 and the 3y at 2.261.

 

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