So, the western stock-markets are back up to fall 08 positions, recovering most of the post-Lehman fall out. We're still down on the 07 highs which feels right considering where unemployment now is and looks set to be. I don't see the Great Depression double dip, as western companies are more flexible and Asian markets will continue to grow. But I only see a tough time ahead for the western markets, and can see another drop within a general up/down year ahead.
The recent upswing has been on lower trading volumes and perhaps based on banking and auto sectors coming off bankruptcy fearing lows. That's fine but just because we're no longer sensing imminent collapse of the financial sector is no cause for a bull market.
Meanwhile the US and UK governments are still heavily invested into banks and their mortgages. The property prices seem to be seeing some small growth now, but in a time of increasing unemployment, I am not sure we have seen the bottom here.
I do think that the private sector is better enabled than it ever has been to weather the storm, both due to the lessons of the past and the realities of today's globalized world. Companies are better able to flex their costs than they have been when they have outsourced divisions in India or Just in Time supply chains working somewhere close to the design. But this is not necessarily a good thing for the western economies in which they are based - the profitable growth might come in other regions. That could benefit the stock markets more than the economies themselves.
Our western governments are going to struggle with their debt for years to come, and while many of their companies will take advantage of growth elsewhere, the fortunes of their national economies will weigh on their stockmarkets.
Meanwhile, the BRIC led world seems in much better shape to grow. I think the big challenge for them will be socio-political as their middle classes grow. I'm hoping for velvet revolutions and leadership for a sustainable global community. Maybe that should be praying.
The recent upswing has been on lower trading volumes and perhaps based on banking and auto sectors coming off bankruptcy fearing lows. That's fine but just because we're no longer sensing imminent collapse of the financial sector is no cause for a bull market.
Meanwhile the US and UK governments are still heavily invested into banks and their mortgages. The property prices seem to be seeing some small growth now, but in a time of increasing unemployment, I am not sure we have seen the bottom here.
I do think that the private sector is better enabled than it ever has been to weather the storm, both due to the lessons of the past and the realities of today's globalized world. Companies are better able to flex their costs than they have been when they have outsourced divisions in India or Just in Time supply chains working somewhere close to the design. But this is not necessarily a good thing for the western economies in which they are based - the profitable growth might come in other regions. That could benefit the stock markets more than the economies themselves.
Our western governments are going to struggle with their debt for years to come, and while many of their companies will take advantage of growth elsewhere, the fortunes of their national economies will weigh on their stockmarkets.
Meanwhile, the BRIC led world seems in much better shape to grow. I think the big challenge for them will be socio-political as their middle classes grow. I'm hoping for velvet revolutions and leadership for a sustainable global community. Maybe that should be praying.
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