Epstein Secrets

going to be a smooth one. The global private sector still inhabits a world more affected by government policy than any other in the last 300 years. Michael Cembalest Chief Investment Officer I The new 5-year plan calls for a 7% growth target. Barry Eichengreen at Berkeley notes that the transition to slower grow

both sides are pretty far apart and will have to compromise to avoid a very negative market reaction to upcoming EU summits. Comments from outgoing Bundesbank President Axel Weber this week are indicative of the challenges here: "Strong German import demand is insufficient to compensate for the structural

ank. • PMIdata are index levet Housingprice to income. cementpiodudion and steel productional.° as of Dec.2011. All theother dataareas of Feb.2012. Michael Cembalest Chief Investment Officer "What a dirrenee a day makes", Dinah Washington, 1959, Mercury Records "Banks Deleveraging and Real Estate", Morgan Stanl

Unfortunately, the ECB can't create jobs Employment percent change, O0O, saar 3% .3% 2005 2006 2007 2008 2009 2010 2011 Source: EurostaL Bundesbank. After four years that challenge some of the basic assumptions of efficient markets and laissez-faire capitalism, there is a pent-up demand for nor

rn to the mundane topic of investments. Next week, a detailed look at opportunistic US commercial real estate investing in the current environment. Michael Cembalest Chief Investment Officer 1991 1994 1997 2000 2003 2006 2009 1985 1988 Source: European Commission. Postscript: As a reminder, the Institute o

o fiscal transfers through joint and severally guaranteed Eurobonds. Will Germany cave in on this as well? Who knows. I spoke last fall to a former Bundesbank member and professor of economics at Bonn University who organized the petition of 150 German economists in 1998 arguing for a postponement of the E

™ undexd -05 875 90 -0.6 775 -0.7 675 -3% 2008 2009 2010 2011 2012 2005 2006 2007 2008 2009 2010 2011 Source: Citigroup, Bloomberg. Source: Eurostat, Bundesbank. After four years that challenge some of the basic assumptions of efficient markets and laissez-faire capitalism, there is a pent-up demand for norm

* PMI data areindexlevel. Housingprice toincome, cement production and steel productionare as of Dec. 2011. All the other data are as of Feb. 2012. Michael Cembalest Chief Investment Officer “What a diffrence a day makes’, Dinah Washington, 1959, Mercury Records “Banks Deleveraging and Real Estate”, Morgan Stanle

ain & Portugal 16% 105. 14% 100 17% i 10% od B% 85 G% Germany ad Ao, a aa 2007 2008 2009 2010 2011 0% aa ae ; Source: INE, CSO, ISTAT, NSS, Eurostat, Bundesbank, J.P. Morgan Ve7O gf TOG 188 TO 1D ZO aT Securities LLC, J.P. Morgan Private Bank. Periphery =Portugal, Ireland, lialy, Source: J.P. Morgan Private B

rings, measuring 2.5 inches square. The material contained herein is intended as a general market commentary. Opinions expressed herein are those of Michael Cembalest and may differ from those of other J.P. Morgan employees and affiliates. This information in no way constitutes J.P. Morgan research and should not b

me to fail. Industrial production Index, 100 = January 2007 110 105 100 95 90 85 80 15 2007 2009 2010 2011 Source: INE, CSO, ISTAT, NSS, Eurostat, Bundesbank, J.P. Morgan Securities LLC, J.P. Morgan Private Bank. Periphery = Portugal, Ireland, Italy, Greece, Spain. 2008 * The current EFSF lending capacit

cap growth stocks Post-dividend free cash flow margin ‘71 ‘74 ‘77 '80 '83 ‘86 '89 '92 '95 '98 ‘01 '04 ‘07 '10 Source: Empirical Research Partners. Michael Cembalest Chief Investment Officer CBO Congressional Budget Office OMB Office of Management and Budget EFSF European Financial Stability Facility FICA Federa

re eventually shut down after the ECB (for now) rejected being the buyer of last resort for Italian government bonds, as the markets were hoping. The Bundesbank apparently has objections to the idea. This is a problem: Italy has issued around as much public debt as Germany, but is a considerably smaller count

y among multinationals with strong balance sheets, high dividends and which trade at very low multiples, something we reviewed earlier in the week.” Michael Cembalest Chief Investment Officer The material contained herein is intended as a general market commentary. Opinions expressed herein are those of Michael Ce

re eventually shut down after the ECB (for now) rejected being the buyer of last resort for Italian government bonds, as the markets were hoping. The Bundesbank apparently has objections to the idea. This is a problem: Italy has issued around as much public debt as Germany, but is a considerably smaller count

y among multinationals with strong balance sheets, high dividends and which trade at very low multiples, something we reviewed earlier in the week.” Michael Cembalest Chief Investment Officer The material contained herein is intended as a general market commentary. Opinions expressed herein are those of Michael Ce

re eventually shut down after the ECB (for now) rejected being the buyer of last resort for Italian government bonds, as the markets were hoping. The Bundesbank apparently has objections to the idea. This is a problem: Italy has issued around as much public debt as Germany, but is a considerably smaller count

ly among multinationals with strong balance sheets, high dividends and which trade at very low multiples, something we reviewed earlier in the week." Michael Cembalest Chief Investment Officer The material contained herein is intended as a general market commentary. Opinions expressed herein are those of Michael Cem

or parties are unflinching supporters of the European project, and will do whatever it takes to prevent a break-up. The objections from members of he Bundesbank are described as lonely voices of opposition that carry no weight [a]. But how large are the costs goin‹ to be? German politicians and voters may see

s been below consensus, which would be consistent with the recent batch of reports indicating a slowdown in manufacturing and service sector surveys. Michael Cembalest Chief Investment Officer Notes [a] Bundesbank President Weidmann, in response to last week's package: "By transferring significant risks to the suppo