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CHINESE HARD LANDING
For decades, experts have been predicting a crash in China.
They warned that the centrally planned, export-dependent economy, could not sustain itself year after year. But through multiple crises, China has motored along, lifting hundreds of millions of people out of poverty in the process. But things appear to be different this time. Corporate profits are tanking, and the Shanghai Composite is at the same levels it was during the depths [...] There’s still a 100 percent chance the world heads into recession, Marc Faber, publisher of “The Gloom, Boom & Doom Report,” told CNBC’s “Closing Bell” on Thursday, echoing a call he made in May. … “Europe is already in recession,” he said.“Germany is still growing very, very slightly, but is likely to go into recession soon.” … Faber also doesn’t expect much change in the U.S.’s finances regardless of who wins the election in November. “The deficit is [...] Lately, stocks have exhibited extraordinarily low volume as they have grinded higher. Meanwhile, the volatility index (VIX) has fallen to five-year lows, which has left analysts wondering if complacency has set in. Perhaps all of this means September will be more interesting. Citi’s Tobias Levkovich writes that historically September is an underperformer. And there are some reasons why. From his latest note to clients: September historically has not been kind to the stock market. [...] THE past four years have been bad for workers and savers but good for the corporate sector. Profit margins in America are higher than at any time in the past 65 years. That helps explain why the equity market has rebounded so strongly despite a lacklustre economy. Margins have been boosted by firms’ tight control of labour costs and by a reduction in interest expenses caused by the policies of central [...] kingworldnews.com With so much fear and uncertainty in markets around the world, today King World News interviewed Ben Davies, CEO of Hinde Capital. Davies alerted KWN that his firm is seeing crash signals similar to those of 2008. When asked about these signals, Davies responded, “We’re seeing that lending spreads are widening. Certain rates are starting to look stressed. Clearly there’s a funding issue brewing within the banking sector with what’s [...] Image: NASA Grim commentary from Morgan Stanley’s economics team lead by Joachin Fels.The outlook for growth is slashed everywhere around the world: We cut our global GDP growth forecasts to 3.9% in 2011 and 3.8% in 2012, from 4.2% and 4.5%, respectively. DM growth looks set to average only 1.5% this year and next (down from 1.9% and 2.4% previously), making the BBB recovery even more bumpy, below-par and [...] QEII has boosted reserves but banks continue to reduce credit, while broad money has contracted. There is material downside risk to equity valuations. In his latest Market Outlook, CLSA’s Russell Napier: “Whether equities will fall further depends on how flexible and successful the Fed’s next monetary package will be. Given the risk, investors are better off watching from the sidelines.” This should not come as a [...] http://english.caing.com/2011-01-19/100218740.html The numbers still blow me away. In the wake of the crisis, there are observable divergences in the types of responses by developed economies. The challenge is to bring down leverage. A good measurement for national indebtedness is the ratio of the total debt level of the real economy-government, non-financial companies and households relative to GDP. For example, the U.S. government debt is US$ 14 trillion, [...] by Sunny All Zombie Banks and Insurers are in the same boat but for accounting gimmicks, extend & pretend policies+ delay and pray tactics of the Govts all over in the Western world. The value of ALL those MBSs (assets) aka Toxic assets at Banks’ and Fed’s balance sheet have also LOST VALUE, but ‘miraculously STILL valued’ at prices before 2008 – M to fantasy! How long [...] |
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