Are we out of the woods yet

Many economists have started to criticise the trillion dollar fiscal stimulus programs by the Obama administration. Hasn’t the American learned from the Subprime crisis when it all started during the 2001-2002 recession, the Americans cut rates and boosted public spending. This brought a bubble in the housing sector which causes serious consequences to the rest of the world.

Now, with the current recession, the Americans is going to pump in trillion of dollars to boost its GDP. And the consequences? More debt and bigger bubble!

The Americans are not alone. Most of the governments around the world are increasing on their fiscal budgets and bailing out troubled banks to help steer their economies out of the wood so as to gain popular votes from the people. “China is back in bubble land,” warned the Financial Times. According to Bill Bonner, in the first six months of this year, Chinese banks lent more than $1 trillion, or about four times the rate of 2007. This loosening of monetary policy by the Chinese Central Bank is bound to add more trouble to the world in the future.

Why? Because no one would like to bite the bullet and let the economy suffers like the 1929 Great Depression. So let’s face the consequences when the next bubble blows up!

Diposting oleh Unknown 00.46 0 komentar

Where Are We Heading To

Where is our KLCI heading to?

Everyone is asking this multimillion dollar question!

In order to answer this question, we must first look at the S&P 500 chart, as that will determine our market in the near term. According to the above chart, we are at the cross road whereby the S&P is below the 50 day moving average but was supported by the 200 day moving average. This spells some uncertainty over the market in the short term. Now we have to observe for the next 2 weeks whether we can stay above both 50 day and 200 day moving average, if yes, it means the bull trend continues. However, it S&P 500 breaks below these two moving averages, it means we have the "death cross", which is bad news for our KLCI as well.

Of course, we must not forget the Greece re-election is around the corner, this Sunday, as all eyes will be on the outcome whether the New Democratic Party (New Democracy, in support of the euro zone) and the radical left-wing coalition (Syriza, left-wing, opposed to rescue) will win?

Happy investing,
Pauline Yong

Diposting oleh Unknown 09.15 0 komentar