What a year!!! Protests, earthquakes, political turbulences, volatility in
the stock market…
From the Arab spring to the Occupy Wall Street movement, in China, Europe and
Russia, manifestations were so frequent that "The Protesters" won
the title of Person of the Year from Time Magazine.
The European crisis is like a soap opera, one of those that never ends, full
of repetition, empty statements whose sole purpose is to calm the markets. Instead
of the regular villains we usually find in soap operas, there are leaders who
can't lead, decision makers who can't decide. In the USA, the political paralysis
continues to be a threat to the weak economic recovery. We just overcame another
potential shutdown in the government, only to have the extension of the payroll
tax cut rejected by the Republicans in the House. The official end of the Iraq
war leaves the Republicans looking for another war (boy, do they like a war!).
In the debates, only one candidate- Ron Paul- is against wars.
In Brazil, despite having 6 Ministers leaving the Government on corruption
accusations, the economy is doing relatively well. Who would imagine that? However,
upon landing in Rio de Janeiro last Saturday, it took us 3 hours to leave the
airport (pick up luggage, immigration and customs). It seemed difficult for
them to handle the arriving of 3 flights which make me wonder how they will
manage the World Soccer Cup in 2014.
The up and down on Wall Street is the new normal, but there are investors who
still have hopes of a Santa Claus rally. Sometimes it looks like that dream
would come true. The news of the ECB's bank loan program, which contributed
for a successful bond auction in Spain with rates near their lowest of the year,
and the reports that housing starts rose in November gave a boost to the stock
market in the beginning of the week but it faded the next day.
All in all, there were no lack of emotions and dramatic headlines in 2011.
Beyond the wishes of a healthy prosperous 2012, I have one more wish to share
will my friends, family and those who have followed me in 2011: I wish I will
not wake up one day with the news of a major bankruptcy in the financial sector,
in Europe, which would lead to a repeat of 2008 and more destruction of wealth.
In the meantime don't try to beat the market, just try to preserve your capital.