Velshan

Global Market Performance: Nowhere to Hide

Dear Gentlemen, when I see all this discussion about market, value, correction, bottom, peak, etc I am sad to see the most important word of all - that is "citeras paribus".

I was thought that the words mean - "everything else being equal".
I was told that all economic theories are based on "citeras paribus".

That got me to panic and travel all around the world to see any country where economy was run based on that principle.
Well guess what? Every country has hidden and sometimes not so hidden regulations to ensure that the economy is always "growing".

No country, including the USA has a free market.
Because of this manipulation of market, growth sometimes is artificially boosted. Look at the so called "Tiger" economies of South East Asia. These countries were artificially boosting their economy using borrowed money.

USA has done the same for the last decade by issuing Bank Securities as collateral. The scheme went too far including creating non-existing high priced housing market to attract foreign money into USA.

All this borrowing and artificially increased house value boosted the consumer economy.

Now the time is for all this to collapse as it has happened before in all other countries.

The bottom is yet to come. Because everyone who can afford is still holding on to their positions. The only way American Stock market can improve is to allow foreign takeover of American corporations.

But the US Government will not allow it.

This is exactly what happened in Korea with its Chaebols and Indonesian Conglomerates who refused to give up their ill gotten assets. Korea managed to destroy the power of Chaebols and recover its country. Indonesian could not.

Which model will play out in USA is yet to be seen. Till then don;t bet my friends.