damienhaas

Global Trade Remains Strong Even After Stimulus Ends

You talk about trading imbalance being address by this crisis but the deficits seems to widen since May as you have indicated. Furthermore the deficits overall drop from 2007 is because US is importing LESS and not exporting MORE.

So bottom line is a lot of economies like Japan, BRIC and Emerging nation still need to export to US. It is the stimulus money that temporary let the US consumers to tie over this period. So once the stimulus end, which will put our consumption, 70 percent of GDP under pressure and where is the growth going to come from?

As for Japan, they just pumped another stimulus. If the export of auto is so good and an indication of the economy recovery, they would be no need for another stimulus.

Bona Fide Recovery Seems in Order

bona fide recovery you say.

Tell that to massive number of unemployed, underemployed and the people who have to work in the service sector instead of the professional sectors.

Hope you can tell us what will happen when the government take away the stimulus, raise interest rates to prevent inflation and raised tax to balance the budget in the near future.

Global Markets 2010 Predictions (Part I): Judgment Day Unlikely to be Deferred

"If job growth can come quickly enough, with concomitant improvements in spending, credit risk, and confidence, the next leg down could be far more minor than we suspect."

This statements contradict what you say in the whole articles....

Obubblomics: Prepare for Markets to Get Worse

hock

Actually that is what happen to Japan. The people there have become frugal but the government keep on spending. Even now the Japanese government just come out with a new stimulus, almost 20 years after the first.

The Flat Line Market: Lessons from Japan

After the bubble year, the Japanese still have relative high salary as World standard but their product prices also increase due to weak yen(like now the weak US dollars). So that is the reason the Japanese is saving more locally and spending oversea instead(you see a lot of Japanese tourists during the 90's).

The strong GDP growth is based on weaker Yen and their superior product at that time. Now as a lot of countries (think BRIC) catch up with advance product development techniques and even Cheaper price(e.g China), Japanese is starting to lost that edge.

US now trying to increase their export with weaker US dollars. However now they faced more competition now and historically US products are expensive. So there are a lot of difference in the comparison but I think the outcome is still the same, people are saving more (deflationary) but commodities prices increase due to weaker dollar (inflationary).

Up 12.53% in 2010?

When the market hit a high, they will adjust it higher, when the market fall, they will adjust it lower. What kind of strategists are them? They are wrong in the 1st place at S&P 1056. It is the massive government stimulus and easy money that support the rally, not real fundamental. So in 2010 they set the target higher but once the stimulus end, and they have to because the economy is "growing better and better statistically". The FED cannot justify continue easy money in the face of the thread of inflation.

Earning growth however may not justify that kind of S&P target without any government support.

Is the Market Overvalued?

You assumed that PE will reduce, that is growth for the equities to be attractive. At current PE of 20, it is consider overvalued. So far the profits has been increase but the revenue is falling. Unemployment is high. Retail sales is dismal and consumption tumble. Even there is growth next year, it will be likely to be tepid. Unless they start to retrench more employees in the coming months(hence to reduce cost and boost profit), the PE will remain high and the company still overvalued.

Furthermore you are assuming that Zero interest rates and low bond yield are here to stay, how long can that last before interest rates start to raise?

Economic Indicators Suggest Investing Caution

"The equities market is a forward indicator of expected economic performance. ".

They say that in Oct 2007 high too. Look what happen after that....

Unemployment Falls to 10%, But Obscures Negative Trends

What kind of jobs are you talking about? Professional that pay well or low pay service staffs?


On Dec 06 04:33 PM Tomcat101 wrote:

> Some companies are beginning to hire again. It's for real. My company
> is hiring again. Full-time, permanent positions- not just seasonal
> workers at dept. stores.

Our Current Economic Illusions

GDP number now consist of huge chunk of Government spending and of course it look good.

However What the stimulus do is created more government job, aka big government. It created a lot of duplicate jobs in the government and make it more ineffective. We need more private sector job, not government jobs. The money will be much better to put in infrastructure project that hired private sector jobs.

As for productivity, it may be even higher next year as more jobs may be cut after the stimulus effect is over.

Waiting for the Next Economic Shoe to Drop

What you expect to happen won't happen, Everyone now believed all sovereign debts will be bail out by the respective governments. It will be something that is unexpected that will cause the market to fall big time.

New York Fed Treasury Spread Model: Zero Chance of a Double-Dip Recession

Are they going to bet on their life saving that double dip will not happen?

'December Effect' Bodes Well for Hedge Funds, Equities

"experienced additional gains in December 70% of the time. In comparison"

How about the other 30 percent? How about last year? It will be much better to at the current stock trend and chart.

Are Markets on the Verge of a Breakout or Meltdown?

Soon, not only Vietnam, Thailand, Indonesia, Malaysia and maybe Singapore will have to devalue their currency so that they can fight among themselves who has most competitive export market.

Saut: Expect More Upside, Driven by Underinvested Institutional Investors

Hope the retail investor will not believe this hype. Let the institutional investors take money from each other pockets. With equities this level, the probability of equities falling is higher than the probability of equities rising.