So bank’s had moved from 0.5x PBV to now near 0.9x, its done, next move is tougher, though with higher rates, their NIMs may surprise.

The supply chain destruction play is still in full-on mode, look at energy/agri/shipping.

The extinction event of SMEs – that’s ongoing as well, look at the bad debt buyers and the continued growth of non-bank finco’s.

General positive note – Over the weekend my favourite coffee shops and restaurants were packed! Granted this is a small subset, but it goes into my thesis that the strongest best brands/players in each industry survive, capture the market, operate on lower costs, will have pricing power etc etc and when things open up completely, without these stupid draconian government instituted directives, they’ll soar. But you and I, as the consumer, will pay in the form of higher costs across the board. (I couldn’t be too positive…)

  1. peter satrapa-binder

    well, with higher interest rates the extinction event of the SME’s may well continue and the economy might not show a the forecast plus of over 2.5 %.

    so, even if all over the world inflation is feared, because of the bounce back of the economy after covid – won’t there be a grave danger that higher interest rates would at least delay the economic recovery considerably? I’d say it’s to early to raise rates …

    • Rates are going up, property developers (even listed ones) that are not getting support are issuing BE’s for 2-3 year periods at 6-8% yields. These are just not shown publicly, but the rationing of capital has started already.

      • peter satrapa-binder

        Thx for that info, Pon. yes, in other developing countries (brazil or indonesia for example) it seems to start too…

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