The risk of sovereign government default is rising, says Eric Roseman. Several EU outliers have already had their credit rating downgraded. And emerging markets look even more vulnerable, with many currencies under pressure. Eric says investors should steer clear of the high-yielding emerging market debt for the time being.
Sound the alarm bells! A collision with reality is dead ahead!
The elephant in the room blasted out a mighty honk last weekend in a report by Access Economics, as reported in today’s Australian. “Batten the hatches,” Access says. “This is not just a recession. This is the sharpest deceleration Australia’s economy has ever seen.” Access adds that the federal budget is “buggered.”
“Leading economic forecaster Access Economics warns in its quarterly Business Outlook, released today, that the nation’s economic boom will ‘unwind scarily fast’, halving corporate profits, costing more than 300,000 people their jobs and blowing out the current account deficit to more than $100 billion.”
Dire stuff indeed. But the question from last week remains, is this massive dose of negative…
Look no further than Singapore if you want forecast the economic health of emerging markets in Asia. And based on newly revised numbers from one the region’s crown jewels, investors won’t see much profits coming out of Asia any time soon.
Hope and expectation is high as Obama becomes president. But Justice Litle says saving the US dollar is one miracle he cannot perform. America has spent and borrowed itself into a hole that it cannot get out of. And that’s why the writing is on the wall for dollar hegemony.
The world economy is experiencing the severe consequences of decades of monetary abuse, says Russel McDougal. And government stimulus plans, combined with the Fed’s unlimited ability to print fiat money, will just lead us towards an “epic disaster”.
New labor laws in China have forced the manufacturing sector into an ever-tightening vice, giving investors further pause for any significant rebound in the world’s fastest growing economy.
International industrial giant ABB Ltd. (ADR:ABB) is set to generate big business as governments around the world implement economic stimulus packages. Horacio Marquez says the company’s bullet-proof balance sheet, strong margins and solid cash flow will mitigate the fallout from the global credit crisis. And its strong long-term prospects make it a great buy today.
Fears of deflation are overblown, says Ed Bugos. He refutes the use of the ‘velocity of money’ theory as a reason why prices are ‘destined’ to fall. While a bout of deflation is possible, we know that the Fed will do what it takes to re-inflate. And the real worry should be that it will probably succeed.
Like much of the world, China is going through a rough patch. But Louis Basenese says there are many reasons why now is the perfect time to invest. He recommends four companies for big gains when the market gets back to winning ways.
No one really knows how long the global recession will last, but based on a recent article it may persist longer than predicted. The message to investors, therefore, is that bonds and gold may be the best way to ride out the storm instead of trying to cherry pick winners.