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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: Dennis Roth who wrote (157295)	9/20/2011 9:34:00 AM
From: Dennis Roth	Respond to of 206184

OT: Greece, Italy, French banks? Add Belgium to your list of worries, Belgium has benefited from being in Italy’s shadow, so far ir.citi.com So far, Italy has been the focal point for the market. Figure 4 shows 10yr yields relative to 3 months ago. But things are heating up in Belgium. Things are coming to a head in Belgium The lack of political resolution is nothing new in Belgium after nearly a year and a half of political stalemate. But like everything else in Europe, things are gathering pace and options are running out. The caretaker prime minister’s announcement that he will leave to become the deputy secretary general of the OECD at the end of the year puts significant pressure on the ongoing mediated talks between the eight political parties. As our economists put it, there is a ‘last chance’ meeting scheduled for Wednesday 21 September 2. This may come and go of course, but the looming December deadline is a semi-hard one in that if it passed, general elections would almost certainly be called. And ratings agencies are ever more sensitive to the political dimension frustrating fiscal progress. Any repricing would be exacerbated by current market conditions Although investors have long shunned Belgium because of the political uncertainty, the continued political stalemate could mean another lurch lower. And in current market liquidity conditions (and with no central bank support) that could be unpleasant. Conclusion We fear that this prospect together with reporting of the 21 September talks may push Belgium stumbling forward into the spotlight. For existing longs, we don’t see the risk/reward of remaining long. Whether it is worth shorting depends on your view and knowledge of the politics, and what you think other longs will do. Either way, the risks are growing, and the news focus around 21 September could be the catalyst for a short term correction.