Cold Turkey In The Arctic – Market Thoughts

I am back after nearly 2 weeks cold turkey, without the internet and 3G.

It has definitely made me smarter as I spent my time talking to various scientists on their areas of specialty in geology, polar marine geothermalogy ? , marine biology, polar environmental science, ornithology and tundra botany.

Whilst mentally rested, I am slightly worse for wear physically with the 2 daily expeditions into tundra, glaciers and hills. And I should not be complaining after fattening up 3 kgs on a diet of rich French food, desserts, drinks and all.

I can claim I missed the markets sorely, on hindsight, given the mini correction in the stock indices globally, except for China and the sharp spike in the VIX index. It’s Murphy’s jinx for me.

Yet, it was worth the time playing amateur naturalist, running after polar bears and arctic foxes with a too-small-a-zoom lens, attending lectures and living a high life in the highest sea of the world with the northernmost post office and town thrown in. 80 degrees, 20 mins and 11 seconds north to be exact, the highest point we could reach before running into pack ice.

Paying the price now, valiantly reading up about 2 weeks worth of market synopses and on the verge of giving up with the conviction that it is in the past.

2 wk change

We had big developments in the past fortnight mostly on the geopolitical front that is likely to have long term repercussions. Violence in Israel, Iraq and Ukraine along with the African Ebola epidemic and Russian sanctions suggests that all will still be unwell in the near term.

Economic data has been largely on the recovery path but cracks are starting to show with bonds caught up in a tussle between lower risk free yields and credit quality with markets thinning out for high yield names with wide bid offers.

Private investors would be hardest hit this round though still far off from margin calls.

A piece of noteworthy news.
“Times UK – Alarm is growing among investors in Standard Chartered at the swelling category of loans to wealthy Asian clients that have been reclassified as high risk. The bank said it had raised the pool of loans classified at its lowest grade by 205 per cent in six months to $5.1 billion, which City analysts said raised the prospect of new loss provisions that could significantly dent profits. If the loans slip any further, Standard Chartered would likely be obliged to issue its third profit warning in less than a year, piling even further pressure on the chief executive, Peter Sands”

Not to be sour grapes but after a long recharge of the brain and doing my share in cleaning up the arctic seas, I am still far from optimistic about the state of the markets.

IMG_1760Picture of garbage I picked from shores of Wahlbergoya.

The markets appear to have over extended themselves into 2014 and we are seeing pull backs on the excuse of geopolitical tensions and valuations continue to price in over exuberant future earnings and results.

Broad based wealth effect is slowing as real estate markets are being stifled by governments and investors who have flocked to high yielding investments face challenges in unwinding their trades.

I feel that markets will continue to correct going ahead and will look for levels to sell on any relief rally stemming from the easing of geopolitical tensions.

Leaving you all with some animal shots I took with my pitiful camera and I did not take any pictures of the food and drinks we had because I do not need to be reminded I have 2 kgs to lose.

arctic animals1

arctic animals2

arctic animals 3

arctic animals 4(note the white lumps in the water of the last frame are Beluga whales !)