Today's winner - American Economy - A place to be finally
Market had close to 7 distribution days this past month and very few accumulation days to count on.. There are couple of things that are rattling investor sentiments. Here are some to quote
1, Fed interest Rate decision pending September
2, Falling Oil prices due to Iran Nuclear Deal
3, China Market crashes.
4, China Devaluation of Currency.
5. Upcoming US selections. (seriously )
6, Greece Economy.
7, Crash of Euro as a Stable currency.
8. Mammoth Rise of US dollar and US stock market making new highs.
Lets analyse each one of them briefly ,so that you don't have to pour through tons of freakonomic predictions placed in the media and guys screaming on their lungs in CNBC.
Fed interest Rate decision pending September.
Meetings after Meetings with Yellen and Company yielded all but one confusion for the Banks and institutions sensitive to interest rates. We are debating and panicking over 0,25 bp rise, give us a break feds. That's enough thinking over past 1 year, go ahead and raise rates as Markets have already priced in 0.25 BP July 2015. This will send a clear message to world that U.S economy is not tanking and printing Dollars to cover its financial mess. In fact looking at the Job number and Manufacturing indexes we have actually grown in GDP from 2008 when we lowered the interest rates to pump cheap money into Banks. Any Delay in this will cause Global investors to panic and kick up a massive deflation of Dollar based assets.
Falling Oil prices due to Iran Nuclear Deal
Ok now...Kerry wins the Nobel peace prize for Middle East coffee talks, OOh lah we got ourselves a deal. Iran is no longer a threat, (israel and Saudis never thinks so ) . We made new friends and scared away our allies.. Well who is benefited from all this ? of course Iran and its Middle East allies. Russia gets to openly ship weapons and countries like India can go back to cheap oil days of last decade. Good for them.. What did we get in the process ? Cheap oil and Good bye to all the progress made in the Carbon emissions control measures. In the process we also killed the Fracking Oil industry from ever making any profits Note: U.S Oil production actually fell in the last quarter due to the Oil industry paralyzed by the fall of oil. But all is good for the world's largest consumer of Natural resources.
China Market crashes
What is happening to China. The so called Red giant, 8 trillion economy is in shambles from when 2015 . How can i economy so strong , so powerful and its influences reaching across the Globe can look so much in trouble. Well answer lies in half baked Capitalism that China has followed for many decades. It work as long as they keep producing cheap goods and the rest of the world keeps buying. It made lots of sense in 90's when Developed economies where looking to offset the high labor costs and ever increasing consumer demand. China became the single shop for buying finished goods and mass production factory for rest of the world. This killed smaller economies like Korea, Taiwan, Thailand and Malaysia as manufacturing basis for Finished goods and offshore production facilities.
But the rise of new economies like Indonesia, India, Brazil quickly became self sufficient by balancing their domestic consumption with Global demand. China began to lose its sheen after US and European financial crisis crippled the consumer demand ,making them take adverse steps to curtail imports and increase domestic production. This was not apparent until 2014 when the US external deficit narrowed its fastest pace in a decade.. Thanks to Obama of course for his socialistic approach to failing capitalism.
(To be continued)
Market had close to 7 distribution days this past month and very few accumulation days to count on.. There are couple of things that are rattling investor sentiments. Here are some to quote
1, Fed interest Rate decision pending September
2, Falling Oil prices due to Iran Nuclear Deal
3, China Market crashes.
4, China Devaluation of Currency.
5. Upcoming US selections. (seriously )
6, Greece Economy.
7, Crash of Euro as a Stable currency.
8. Mammoth Rise of US dollar and US stock market making new highs.
Lets analyse each one of them briefly ,so that you don't have to pour through tons of freakonomic predictions placed in the media and guys screaming on their lungs in CNBC.
Fed interest Rate decision pending September.
Meetings after Meetings with Yellen and Company yielded all but one confusion for the Banks and institutions sensitive to interest rates. We are debating and panicking over 0,25 bp rise, give us a break feds. That's enough thinking over past 1 year, go ahead and raise rates as Markets have already priced in 0.25 BP July 2015. This will send a clear message to world that U.S economy is not tanking and printing Dollars to cover its financial mess. In fact looking at the Job number and Manufacturing indexes we have actually grown in GDP from 2008 when we lowered the interest rates to pump cheap money into Banks. Any Delay in this will cause Global investors to panic and kick up a massive deflation of Dollar based assets.
Falling Oil prices due to Iran Nuclear Deal
Ok now...Kerry wins the Nobel peace prize for Middle East coffee talks, OOh lah we got ourselves a deal. Iran is no longer a threat, (israel and Saudis never thinks so ) . We made new friends and scared away our allies.. Well who is benefited from all this ? of course Iran and its Middle East allies. Russia gets to openly ship weapons and countries like India can go back to cheap oil days of last decade. Good for them.. What did we get in the process ? Cheap oil and Good bye to all the progress made in the Carbon emissions control measures. In the process we also killed the Fracking Oil industry from ever making any profits Note: U.S Oil production actually fell in the last quarter due to the Oil industry paralyzed by the fall of oil. But all is good for the world's largest consumer of Natural resources.
China Market crashes
What is happening to China. The so called Red giant, 8 trillion economy is in shambles from when 2015 . How can i economy so strong , so powerful and its influences reaching across the Globe can look so much in trouble. Well answer lies in half baked Capitalism that China has followed for many decades. It work as long as they keep producing cheap goods and the rest of the world keeps buying. It made lots of sense in 90's when Developed economies where looking to offset the high labor costs and ever increasing consumer demand. China became the single shop for buying finished goods and mass production factory for rest of the world. This killed smaller economies like Korea, Taiwan, Thailand and Malaysia as manufacturing basis for Finished goods and offshore production facilities.
But the rise of new economies like Indonesia, India, Brazil quickly became self sufficient by balancing their domestic consumption with Global demand. China began to lose its sheen after US and European financial crisis crippled the consumer demand ,making them take adverse steps to curtail imports and increase domestic production. This was not apparent until 2014 when the US external deficit narrowed its fastest pace in a decade.. Thanks to Obama of course for his socialistic approach to failing capitalism.
(To be continued)
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