Wednesday, 20 March 2013

Will the Cyprus incident cause a Europe collapse?

Dear Friends,

I know some of you may be concerned with the recent Cyprus incident. So what is this incident about?

Below are some extracts from marketwatch.com:

1) A bailout of Cyprus announced over the weekend — which includes a controversial levy on bank deposits — shook up financial markets on Monday, sending the euro and global equities broadly lower.

2) The latest from Nicosia so far Monday is that the parliament postponed a vote on the deposit tax proposal by a day, according to The Wall Street Journal. Banks will remain closed until Thursday while legislators negotiate, according to the Associated Press.

3) According to Nomura Securities strategist Jens Nordvig, there’s considerable near-term uncertainty over whether the country’s parliament will ratify the plan. ”If parliament rejects the deal … a form of euro exit is once again a risk to consider,” Nordvig said.
That is at the root of why Cyprus, a tiny island nation in the Mediterranean, matters to the global markets.

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My view on this problem:

Dear Friends,

The market will consolidate not because of a tiny island called Cyprus! It will consolidate because the market has gone up too much already! If it is not Cyprus, it will be any other nation. We did predict the market would consolidate either in March or April.

You can see the media is playing its part to blow up this incident. We hope the market drop. If it drops, it is a chance to buy in!

Do not worry about the Europe collapse. It won't happen! Do not forget we have an election in Germany in September this year! Chancellor Merkel will help to solve this issue if Cyprus incident blows up.

Do remember that this wont be TOO BIG incident. Any drop will be fast and swift. It probably wont drag long. I am just scared the market won't consolidate now.

Rgds
Daniel
www.danielloh.com

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