aldous

Is Dubai's Default a Black Swan Event?

Dubai World is but one of many to follow--2006 saw the warning bells for the real black swan of 2008. This artificial bandaging of markets will eventually all come crashing down. Name any countries private sector or consumers to step up to the plate at this stage?? This is 12 months after 10 trillion has been "pumped" into world economies--12 trillion of paper money that is--most of it still sitting in banks and being played on the stock market/commodities et al. Governments and central banks were hoping that the private sector would eventually catch up to this ludicrous "stimulus". Look out boys, the stimulus will die a natural death before consumers and the private sector get any where near stepping up to the plate. Deflation will not be conquered.

Is This the Long Awaited Correction?

Long term fundamentals always win out. The market however "can stay irrational longer than you can stay solvent" as Mr Keynes used to say. Europe and USA are on the canvas for the next 5 years and the "China story" will eventually be xposed for wat it is-puny {at present} 4 trillion dollar economy which has been pumped up on steroids of easy credit {About a trillion at last count}, stockpiling of commodities which surely has reached its peak and a govt stimulus program of close to 700 billion dollars. Meanwhile, this exporting economy continues to see its exports down 25%--gee, why arent the de-leveraging Europeans and Americans buying? How does China with a middle class averaging $2000 per capita lead the world to recovery?? The old model of consumption fuelled growth emanating from USA and Europe is broken--its over. Its uncanny how this 2009 rally is fast mirroring the rally of 1932!

Analysts Forget That Markets Always Climb a Wall of Worry

Hyper -Inflation??? Get real, deflation has not yet run its course and when it finally does, stagflation will be the end result. The US and Europe are on the canvas for the next 5 years. Recovery indeed!! If You live long enough you get to see just about everything.

Bearish Sentiment and Market in Denial Phase

Europe and USA are in the tank for the next 5 years--there will be NO recovery here {a few quarters of minimal growth coming of a huge downside is all we can expect}. And China {grew at 7.9% at end June 2009???!!!!}. Come on, very massaged figures here on top of MASSIVE stockpiling and govt stimulus as well as easy lending by the banks. China is creating its own bubble--the majority of this stimulus has gone into stockpiling and speculation. Until we see REAL upticks in consumption and trade then this recovery is a pipe-dream. And where is that increase in consumption going to come from??? The USA or Europe--dont hold your breath, the consumers there are dead on their feet for the next 5 years.

Forget Green Shoots: These Are the Brown Shoots Turning Black

Just a simple analogy as to where the global economy is right now ; 6 months back {and still now} world leaders were calling this the GREATEST financial/credit/bubbl... crisis in 75 years. Is it any surprise that we are still mired in this crisis with a world economy practically dead? I mean really, talk of "green shoots", a "less bad" series of economic data etc--what are we gonna come outa this in 6 months?? Its really a race to see if the Govt and the Fed can hold up the roof long enuff for all their printed money and debt creation to stave off deflation. Guess what ; Deflation will NOT be defeated, the roof WILL cave in, not if but when.