We now know that growth will be slow, slowing, slower or slowed. What strikes me as ironic is that EM and BRICs appear more ready to admit that they are slowing, making easings on their front more palatable. And a weaker currency in the process (currency war ?). Is it me or does it feel like China is doing a “Poison Pill” defense ?
Bailouts have reached epic proportions. EM outflows are inevitable. No one wants to be the tall poppy Hercules hero to save the world. There is no place left to flaunt your wealth in the world except in the EM and that is proving to be unpopular with all the Occupy Movements around the world.
Bernanke threw down the gauntlet with QE. Now the rest are following suit. Even dear old Switzerland pegged last year and now Brazil is cutting rates. What a Catch 22 situation where The Age of The Dollar is About To End, EUR lost in the woods and JPY stuck in a rut, will actually lead to slower growth for export driven EMs.
Ball is back on the side of Bernanke’s court. He can’t really afford to play with wrong; the weak US has led to better balance of payments and the re-industralisation of America and yet it looks like the markets are inflating ahead of the economy.
Mauldin’s latest report A Random Walk Through Data Minefields here.
Yet prolonged USD weakness is bad for confidence. Forbes has this to say 2 days ago
|Stable Dollar Needed For Economic Growth : Forbes|
Good news galore takes some heat off this month.
|Fed : Net Income $77.38 bio in 2011 vs $81.74 bio in 2010, 2nd highest on record : DJ 20 Mar|
|WaMu exists bankruptcy, on heels of Lehman : Reuters 20 Mar|
|AIG Repays USD1.5 bio in US Bailout Funds : WSJ 23 Mar|
But check out what Bernanke latest speech says as a word map.
I am not qualified in the field of psychological decryption. But there seems be an element of Uncertainty here.
From personal experience in markets, Uncertainty usually leads to Fear. And Fear leads to Panic or Hysteria. (On the other hand, Certainty leads to Delusion which leads to Over Exuberence ?)
I mean, every 1 out of 10 Wall Street employee is a PSYCHOPATH. http://www.huffingtonpost.com/2012/02/28/wall-street-psychopaths_n_1307168.html
Guess where are most of the Central Bankers, finance ministers and now, some European Prime Ministers, from ?
You are right. GOLDMAN SACHS.
Toss a coin or maybe its time to buy some GOLD in the coming months ?