Disclaimer

Disclaimer. After nearly 40 years managing money for some of the largest life offices and investment managers in the world, I think I have something to offer. These days I'm retired, and I can't by law give you advice. I do make mistakes, but I try hard to do my analysis thoroughly, and to make sure my data are correct. Remember: the unexpected sometimes happens. The expected does too, but all too often it takes longer than you thought it would.

The Goddess of Markets punishes (eventually) greed, folly, laziness and arrogance. No matter how many years you've served Her. Take care. Be humble. And don't blame me.

BTW, clicking on most charts will produce the original-sized, i.e., bigger version.

Wednesday, May 5, 2010

So.....


I haven't posted here for a year. Why not? A couple of reasons, but the main one is that I couldn't work out how to paste charts into a blog. All the suggested solutions were inefficient. Well, that's changed. If you're interested, here's what I do. I copy the chart from Excel or my APL program suite into Paint.net, a reaaaaaally good free graphics program, save it as a jpeg or png,and there you go!

Anyway, it turns out that I was right in my last blog post (a) that it was the bottom of the market and (b) that the world economy would recover. See for yourself.

The chart shows the change in world IP, divided into the OECD (developed world) and BRIC (Brazil, Russia, India, China). Happy days are here again? Not quite. As a result of the big debt swap, excessive private debt was replaced with excessive government debt, and markets have been spattered with a bit of melting Greece. Growth was always going to be lethargic coming out of the GFC lows, because of all the debt, and actually I've been pleasantly surprised by just how strong the recovery in Asia, and North and South America has been. Just Europe is sluggish.

Longer term, something will have to be done about debts. But I suspect we'll muddle through for now. Which doesn't mean markets won't correct. But it doesn't imply a new major bear market. Not yet, anyway.