So reading the Wall street Journal today i saw some very interesting facts:
First off Timothy Geithner (Treasury Secretary) said that : “Only 17 of the 182 economies followed by the IMF are expected to grow faster this year than they did last year. Some 71 — including 30 of the world’s 34 advanced economies — are expected to shrink. The collapse of world trade is will likely be the worst since the end of World War II.”
giving a pretty good idea of where the global economy is at the moment and what the results of global recession are.
Also on: http://online.wsj.com/public/page/news-economy.html
we see the projected GDP, CPI and unemployment rates for the rest of 2009.
It seems that the greatest amount of fear has past by since GDP is expected to be slightly positive in the 3rd Q of 2009 already and a a whooping 1.9% up in the 4th quarter.
Yes there are still many negative signs in the market place but it seems that the economy is expected to have made the turn around for the year is over. The fact that unemployment is continuing to grow is that it is a laggard to the economy.
Don't be fooled by continuing news of increasing unemployment... the economy is growing again
Wednesday, April 22, 2009
Thursday, April 16, 2009
Random things...
Yes it has been a while since my last post, but i was quite busy traveling and did not have any critical topics to talk about....
To give a little summary of what happened over the past week:
Wall Street Journal had an article talking about a decrease in oil demand, indicating that this summer oil prices might not spike like many fear
Oil prices are also often seen as an indicator for inflation implying that inflation has not yet kicked in.
Consumer Price Index shows the same trend. the index actually decreased also implying that inflation has not yet shown itself despite the incredible government spending.
Also Yesterday taxes where due (yehaa) and all over the country a total of approximately 2000 tea parties were hold protesting the anticipated increase in taxes.
My last point for today is that the national house price decreased by 20% in the last 6 month.
What a BUYERS market... for those who can afford it!
To give a little summary of what happened over the past week:
Wall Street Journal had an article talking about a decrease in oil demand, indicating that this summer oil prices might not spike like many fear
Oil prices are also often seen as an indicator for inflation implying that inflation has not yet kicked in.
Consumer Price Index shows the same trend. the index actually decreased also implying that inflation has not yet shown itself despite the incredible government spending.
Also Yesterday taxes where due (yehaa) and all over the country a total of approximately 2000 tea parties were hold protesting the anticipated increase in taxes.
My last point for today is that the national house price decreased by 20% in the last 6 month.
What a BUYERS market... for those who can afford it!
Wednesday, April 8, 2009
Investing?
Hey thinking about risk and inflation it seems difficult to pick the right investment tools.
With major government spending inflation is only of a question of timing and magnitude.
Increase in Inflation usually immediately kills the bond market especially with these historically low interest rates on treasury notes. So if bonds are kind of risky at the moments should i rather invest in the stock market? Well the stock market increased significantly over the last two weeks but there is still significant uncertainty in the market especially with the government continuing its involvement in the business world.
My last post really made me think and led to the conclusion that buying a house i probably one of the safest high yield investments. Why? the house market is bottoming out, meaning house prices are low, now combine that with mortgage rates of 4.5% for Americans with decent credit and an $8,000 tax reduction. So financing a house is cheap and prices are very likely to go up. Investing in a house looks better than ever...
With major government spending inflation is only of a question of timing and magnitude.
Increase in Inflation usually immediately kills the bond market especially with these historically low interest rates on treasury notes. So if bonds are kind of risky at the moments should i rather invest in the stock market? Well the stock market increased significantly over the last two weeks but there is still significant uncertainty in the market especially with the government continuing its involvement in the business world.
My last post really made me think and led to the conclusion that buying a house i probably one of the safest high yield investments. Why? the house market is bottoming out, meaning house prices are low, now combine that with mortgage rates of 4.5% for Americans with decent credit and an $8,000 tax reduction. So financing a house is cheap and prices are very likely to go up. Investing in a house looks better than ever...
Tuesday, April 7, 2009
Housing Market
Shifting the sight from the stock market to the housing market can be very interesting, i mean most problems started when the housing market crashed and mortgages were defaulted on...
Well there are a number of very positive signs these days.
The latest Business Week's title story: Signs of Life / In some of the hardest-hit housing markets, buyers are starting to stir.
Also a friend of mine in the financial industry mentioned that mortgage applications are on the rise again.
I mean of course eventually people would have to start buying houses again, especially in an environment like this. The market is still flooded with offers and very few buyers. Offers are incredibly good and mortgage rates are at historic lows.
But maybe this is the first sign indicating an increase in consumer spending and a rebounding market. The stock market is strongly related to consumer confidence and spending, if one comes back chances are good that other one will do the same....
Well there are a number of very positive signs these days.
The latest Business Week's title story: Signs of Life / In some of the hardest-hit housing markets, buyers are starting to stir.
Also a friend of mine in the financial industry mentioned that mortgage applications are on the rise again.
I mean of course eventually people would have to start buying houses again, especially in an environment like this. The market is still flooded with offers and very few buyers. Offers are incredibly good and mortgage rates are at historic lows.
But maybe this is the first sign indicating an increase in consumer spending and a rebounding market. The stock market is strongly related to consumer confidence and spending, if one comes back chances are good that other one will do the same....
Monday, April 6, 2009
Currencies
Something a lot of people are talking about the Euro, Dollar and Pound.
The Pound lost most of its value over the last 120 days the Dollar appreciated from about 1$=.57 GBP where now $1 = .67 GBP and was as high as .73 GBP.
Great Britain was in the news a whole lot over the last couple of weeks. Especially the speech of Daniel Hannan was a much talked about topic (for those who missed it: http://www.youtube.com/watch?v=94lW6Y4tBXs)
It seems Great Britain has a very difficult time dealing with this global downturn in the economy. One fact that shows this more than anything else is the depreciation of the GBP to the Euro the exchange rate is almost 1 to 1 (1.05 Euros = 1 GBP).
But what lies in the future? The big question is how will inflation develop in the US. Will the trillion dollar expenditures of the government drive inflation beyond what we experienced summer 2008? will the oil price go back up and prices at the gass station hit 3 or even 4$/gallon?
What will the new government do to stop inflation? will it continue to increase its involvement in the business world?
these are many difficult questions and only one thing seems for sure. History has a track record of a stong increase in inflation when the economy comes back from a recession with excessive government spending.
The Pound lost most of its value over the last 120 days the Dollar appreciated from about 1$=.57 GBP where now $1 = .67 GBP and was as high as .73 GBP.
Great Britain was in the news a whole lot over the last couple of weeks. Especially the speech of Daniel Hannan was a much talked about topic (for those who missed it: http://www.youtube.com/watch?v=94lW6Y4tBXs)
It seems Great Britain has a very difficult time dealing with this global downturn in the economy. One fact that shows this more than anything else is the depreciation of the GBP to the Euro the exchange rate is almost 1 to 1 (1.05 Euros = 1 GBP).
But what lies in the future? The big question is how will inflation develop in the US. Will the trillion dollar expenditures of the government drive inflation beyond what we experienced summer 2008? will the oil price go back up and prices at the gass station hit 3 or even 4$/gallon?
What will the new government do to stop inflation? will it continue to increase its involvement in the business world?
these are many difficult questions and only one thing seems for sure. History has a track record of a stong increase in inflation when the economy comes back from a recession with excessive government spending.
Hello
Hi I am Alex and this is my blog that starts today and will toss you some interesting ideas and insights into the current state of the global economy.
I want to encourage you to sign up and participate, share your ideas and insights making this experience as complete and rich (in information) as possible.
As an average human being i clearly am limited in knowledge and vision, please help me and post your opinion. I only have one demand - if you feel strongly about something, wait 5 minutes and think twice about what you are really wanting to say. Writing down emotions is not going to help anyone become more successful.
thats all,
ENJOY!
I want to encourage you to sign up and participate, share your ideas and insights making this experience as complete and rich (in information) as possible.
As an average human being i clearly am limited in knowledge and vision, please help me and post your opinion. I only have one demand - if you feel strongly about something, wait 5 minutes and think twice about what you are really wanting to say. Writing down emotions is not going to help anyone become more successful.
thats all,
ENJOY!
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