The failure of governments to reach a binding climate deal in Copenhagen has dented the confidence of carbon traders. They are now anticipating a global carbon price of €31 in 2020, compared with the €35 they were predicting last year. The carbon price is key to determining the extent to which carbon markets expand in the future.
Morgan Stanley’s equity team says that it is too early to purchase stocks. It feels that the risks remain too numerous to ride the recent uptrend in stocks. The 1994 and 2004 recoveries suffered through several quarters of range-bound and lower prices. Both years, the market stumbled as investors tried to digest the beginning of the Fed’s tightening. Morgan Stanley believes that the global tightening phase has already started.
Greece holds the record for the developed world’s most crooked economy. Even Germany and Scandinavian countries have huge shadow economies. But only a small portion of EU shadow economies are linked to crime. Most EU black-market workers quickly recycle their earnings into consumption in the official economy, where they generate taxes again.