What Happened This Week?

Global markets have started strong– trying to make up for a somber 2011.

U.S.: The S&P 500 was up 3% on the week. Year to date it is up 4.6%.

China: The Chinese market (Shanghai Index) was up 3.3% on the week. Year to date it is up 5.4%

Europe: Europe was up about 3.4% on the week. They are up 4.7% on the year.

All is Quiet on the Western Front (Europe)

We still have not heard much out of Europe. The LTRO (Long Term Refinancing Operations) has taken some pressure off of the European Banking system—which was a huge risk to markets as Greece and Italy floundered. With some of this bank concern alleviated, European bank stocks rallied 8% on the week.

So is it all good? While this LTRO facility has good implications for the banks– the European Central Bank (ECB) now has the largest balance sheet in the G4 (US, Europe, The UK, Japan). And it’s still growing. The ECB is conducting a stealthier, but very potent, version of Quantitative Easing. This is not good for the Euro long term.

All is Good on the Eastern Front (China)

China’s GDP rose 8.9%. While this is the weakest reading since 2009, it does illustrate how fast the Emerging Markets are growing relative to the developed markets—which are growing closer to 0%-2%.

What Exactly is the Chinese New Year?

Happy Chinese New Year! This holiday is the longest and most important in the Chinese calendar.

According to Chinese legend, a long time ago, God called a race for all animals. The first 12 finishers would be included in a very special list. The rabbit, the tiger, the dragon, the rat were all included among finishers. All of these 12 finishers made up the signs of the Zodiac.

We are, as of today, in the year of the Dragon. This is considered to be the luckiest of all signs. In fact, there is expected to be an uptick in the Chinese birthrate this year as couples are expected to rush to make ‘dragon babies’.

Here Chinese Feng Shui Masters make their predictions for the year: Yahoo: 2012 Predictions from Chinese Masters.

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