Tuesday, April 07, 2009
The Indian and Global equity markets are flying ....up, up and away; Equity markets are supposed to anticipate economic performance which translates into earnings.
Below is a potpourri of articles illuminating the state of the global economy:
Corporate Default Rates...
Less Awful Economy= Good Markets...
Mark to Make Believe...
FASB and Zombie Banks...
Generation of Denial..
I take the view of the Appropriation Bill from Congress which says:
Be Prepared for extraordinary crcumstances
While this rally seems to have firm buying I cannot see the light at the end of the tunnel..those that do, please make sure it is not an on-coming train before you proceed.
The charts are no longer friendly...
Tuesday, March 31, 2009
The World Bank said its latest projections show the global economy shrinking by 1.7 per cent in 2009. "This would be the first decline in world output since World War II," the bank said.World Bank: Slower Growth in India
As the global economy deteriorates sharply, the World Bank has projected a slower 4 per cent growth for India in 2009
India and China Bond Markets: almost 10 to1 size difference.
India Bond Market size : USD 450 billion
China Bond Market size: USD 2.18 trillion
Wall Street- Washington Nexus:
"We want to be everybody's friend and we want to be India's friend and with friends like us why does India need enemies"
Cramer calls a bottom (again) --what a clown...this is CNBC
- January 10, 2008 - Financials have hit rock bottom.
- August 12, 2008 - The bear market is dead.
- October 15, 2008 - This is the beginning of the end of the crisis.
A potpourri of news articles...No Good news forthcoming.
OECD Country GDP (4.3%) in 2009
Economic activity is expected to plummet by an average 4.3 percent in the OECD area in 2009 while by the end of 2010 unemployment rates in many countries will reach double figures for the first time since the early 1990s, according to the OECD’s Economic Outlook Interim Report.India growth 5% in 2009: ADB
In the large emerging economies activity is slowing as access to international credit dries up, commodity prices fall and export demand weakens. Brazil’s GDP is expected to decline by 0.3 percent in 2009 while Russia’s is projected to fall 5.6 percent. Growth in India will ease back to 4.3 percent this year and in China to 6.3 percent.
"Expansionary fiscal policies could impair the confidence of investors unless clear signals are given that the present large deficits are truly temporary," he said.Indian Banks Strong: RBI
ADB urged the Indian government to review tax policy, the quality of public spending and the effectiveness of public programmes to ensure that it has room for the infrastructure and social sector spending that is necessary for achieving rapid, longer-term inclusive growth.
The high-level committee on financial sector assessment headed by RBI deputy governor Rakesh Mohan also forecast economic growth of 8% in the medium term.Why are Indian Policy makers seeing rosy futures compared to their global counter-parts: No one believes the 8% growth forecast...and if 36% of the banking system was under-capitalized in a further downturn I would be worried and not talking about stability.
"The capital-to-risk-weighted assets (CRAR) would reduce from 13% to 10.9% for a 244-basis point shock," it said, adding that only in case of 20 banks, which account for 36% of total assets, would the CRAR slip below the regulatory 9%.
But hey, that's me...
I have not seen any evidence yet that the economy is bottoming....anywhere...and the theory of De-Coupling is now firmly placed in the trash bin.
So what are we witnessing?
A technical, selling exhaustion rally...which will be followed by increasing volatility and then the inevitable thud. The rally is past...the volatility is upon us...the thud is coming.
Seven Uncomfortable Predictions
Is China Today the U.S. of 1929?