Scary World, Calm Markets
Eurasia Group President Ian Bremmer says the world is facing “the most dangerous geopolitical environment” he’s ever encountered. But tell that to investors as stock markets rise across the world - even South Korea’s benchmark KOSPI index is up 19 percent this year. Despite a series of missile launches and detonating the most powerful bomb ever by the Hermit Kingdom, the southern neighbour and the world markets didn’t wither much. The silver lining though is that trade to major destinations through the first 20 days of the month is on a tear, including a 40% jump in the value of shipments to the European Union, and a 36% increase in those to the U.S as pointed out by Bloomberg's James Mayger. One of the big themes of the year has been synchronized global growth: the notion that, basically for the first time since the crisis, all the big economic regions are showing solid expansion. I know it’s boring to bring to notice the most obvious yet ignored. But are the current investors primed psychologically for a major decline in the stock market or are they likely to keep bidding up stocks for some more time to come? Those’re the critical questions. The only way to skip out of this mass psychology is through sticking to one’s investment philosophy particularly when the peer pressure is at its peak. A campaign ad released this week shows the chancellor as a young East German girl along with the slogan “For a Germany where anyone can realize their dreams.” The picture is a reminder of how Merkel remains her party’s central asset even after 12 years in power. In the wake of protectionism across the world and especially in the Euro region, Merkel’s re-election would infuse a fresh lease of life. 
Godspeed,  | 
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