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Most global stock markets are now down for the year by 2-6% with the notable exception of Tokyo. The falls were triggered by two events - China's credit tightening of bank credit and President Obama's proposed new rules for banks. In an interview with some journalists yesterday, I was asked whether the Bull rally was over and what was my strategy now. I thought I would share my views in this posting.
The declines of the last week were all driven by policy changes - credit tightening in China is likely to be followed by other countries especially those in the EU and US. President Obama's changes for US banks seems vague and unclear. Both come on the back of clear signs of a Global economic recovery albeit modest and also a real recovery again albeit modest in corporate earnings as evidenced by the guidance for revenue growth in 2010. There are now shortages in components in certain segments of the electronics sector probably from an absence of new capacity and a consolidation of capacity from the crisis of 2009. So a gradual removal of fiscal stimulus and a raising of interest rates from near zero levels is to be expected especially when most economies in Europe have national debts to GDP in excess of 80%. Read more...[caption id="attachment_2585" align="alignright" width="150" caption="Photo by R'eyes"][/caption]
Most global stock markets are now down for the year by 2-6% with the notable exception of Tokyo. The falls were triggered by two events - China's credit tightening of bank credit and President Obama's proposed new rules for banks. In an interview with some journalists yesterday, I was asked whether the Bull rally was over and what was my strategy now. I thought I would share my views in this posting.
The declines of the last week were all driven by policy changes - credit tightening in China is likely to be followed by other countries especially those in the EU and US. President Obama's changes for US banks seems vague and unclear. Both come on the back of clear signs of a Global economic recovery albeit modest and also a real recovery again albeit modest in corporate earnings as evidenced by the guidance for revenue growth in 2010. There are now shortages in components in certain segments of the electronics sector probably from an absence of new capacity and a consolidation of capacity from the crisis of 2009. So a gradual removal of fiscal stimulus and a raising of interest rates from near zero levels is to be expected especially when most economies in Europe have national debts to GDP in excess of 80%. Read more...
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Most global stock markets are now down for the year by 2-6% with the notable exception of Tokyo. The falls were triggered by two events - China's credit tightening of bank credit and President Obama's proposed new rules for banks. In an interview with some journalists yesterday, I was asked whether the Bull rally was over and what was my strategy now. I thought I would share my views in this posting.
The declines of the last week were all driven by policy changes - credit tightening in China is likely to be followed by other countries especially those in the EU and US. President Obama's changes for US banks seems vague and unclear. Both come on the back of clear signs of a Global economic recovery albeit modest and also a real recovery again albeit modest in corporate earnings as evidenced by the guidance for revenue growth in 2010. There are now shortages in components in certain segments of the electronics sector probably from an absence of new capacity and a consolidation of capacity from the crisis of 2009. So a gradual removal of fiscal stimulus and a raising of interest rates from near zero levels is to be expected especially when most economies in Europe have national debts to GDP in excess of 80%. Read more...
