David Kotok of Cumberland Advisors, one of the few advisors who got all his calls correctly have this to say about the recent Cyprus situation on the ground.
We have not reached this painful conclusion without careful research. We have had a series of meetings in Paris with money managers, central bankers, investors, and academics. All of our meetings here were private. In the candor of those private discussions, we come away with the most troubled view we have had of the Eurozone, the experiment in this single-currency block, and the market structures in Europe. This is a place in trouble. Courses of action that evidence more flailing than forethought are not making things any better.
We will soon leave for Dubai for the Global Interdependence Center event, the latest in the GIC Banking Series, this time focused on challenges and opportunities in the Middle East. Our comments on March 26, 2013, will subsequently be posted on Cumberland’s website along with our slides. Interested readers will be able to track this at www.cumber.com.
For investors, we would strongly recommend that careful consideration be given to exposures in the Eurozone, the Eurosystem, the European Economic Community, and the European Union. Things have changed. Watch closely for bank runs. Also watch use of Emergency Liquidity Assistance (ELA), and watch how the European Central Bank (ECB) reviews value of collateral. Lastly, watch out for new capital controls in Cyprus. They will signal a death knell for cross-border money flows.
Not so much a call to sell but what to look in detail.
The Big Picture | Report from Paris | Read full article here