Philly Jim

Wednesday Outlook: Commodities, Emerging Markets

Anything can happen at any moment and the world economy seems to be a hair away from a global depression. Though the ECB, FED and BOE seem to be scratching each other's back at the moment, we can expect some commodities (oil & gold) to "decouple" from their presupposed levels and possibly get a mind of their own or rather a mind created by frustrated traders with little faith in the murky global financial system. I'd like to think China is doing wonderful and no longer needs the "West" to move forward; reality is, these emerging markets are running on vapors from the drunken buying binge westerners have been on for the past 10 years and those checks are gonna start bouncing from skyscrapers to the rice fields. Reality is hitting home and banks are waking-up with a severe hangover and serious lessons to be learned. I just really hope the U.S. gov't catches up and begins monitoring financial conditions in realtime rather than waiting for something bad to happen then making a move. A lot of lessons can be learned from the past decade that can "fine tune" the U.S. economy and get all cylinders firing again. The eastern allure has been demystified, the information age ushered in and now it's time for professionalism to reign and exceed expectations in the West. The states will need to sacrifice some welfare expenditures and expect a period of stagflation in order to balance their budgets and weather this credit storm.