Stephen Roach, chairman of Morgan Stanley Asia Ltd., talked with Bloomberg's Maryam Nemazee about the U.S. economy and Federal Reserve monetary policy, See:Roach Expects `Very Modest' U.S. Consumer Spending March 4 (Bloomberg)
Bottom line from Roach: don't confuse the bottoming process in a 'new normal' global economy, with hopes for a 'bounce-back' recovery.”
Also Robert Prechter, founder of Elliott Wave International Inc., talked with Bloomberg's Betty Liu about his stock market analysis and investment advice. See:
Robert Prechter Says Equities to Drop, Invest in Cash March 4 (Bloomberg).
And see this March 1, 2010 paper “Where are we now?” by respected Market Technician Dick Arms. (Hat tip The Big Picture Blog) Our market technician Cory Venable has been speaking about similar themes the past couple of months. I find it noteworthy when completely separate (and excellent) analysts use their own unique filter set and arrive at similar conclusions. Dick's paper is even readable for non-technicians—a bonus!
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Economic hurricane
http://theburningplatform.com/economy/the-economic-hurricane
Global Debt time bomb
http://www.marketwatch.com/story/our-debt-time-bomb-is-ready-to-go-ka-boom-2010-02-02?reflink=MW_news_stmp
I think to time the market successfully a person needs only two things: Pure luck and be able to walk the fine line between the efficient market theory and the technical hocus pocus.
With so much government intervention should one still refer to the business cycle? It seems to me governments around the world are determined to not let their economies work properly and by that I mean let things slow down. Instead of doing what is right (reign in government spending as well as encourage people to tighten their belts), they have only exasperated the addiction to easy money/living beyond ones means.
Greece has done this for years, and now the government has been forced to find religion but the people are still not accepting the reality of the situation. The same mentality that got Greece into this problem can be seen in many other nations (i.e. riots about tuition in California). Governments often lack political courage to do what is right and necessary because they are more concerned about winning elections. Even the economic data governments put out I suspect are nothing more than optics /accounting dishonesty as Charles Munger would suggest.
Case in point – Oil surging past $82 and yet this is not inflationary? Not even a slight increase? How is that possible if our economies are indeed growing again? Perhaps I am missing something or as I suspect, the data released by governments is not worth the paper its printed (same could be said about their money).
In the end the real pain of such irresponsibility will be faced by future generations. History will not be kind to us and rightly so and the blame will not just be on our governments because truth be told – we elected them and they are in essence a reflection on us.
Ray T, no government in history has ever been able to prevent the business cycle from winding on. They have intervened to try many times, but the corrective forces cannot be manually held off indefinitely. They are the forces of human behaviour itself. I doubt things will be different this time. Over-supply and over-capacity will reassert themselves on prices again eventually; probably within the next few months.
Hm….It is interesting that the ECRI USFIG started falling last week.
But one week's move is not a trend (yet).