Are We Facing An Economic Disaster?

Bottom Line: I strongly believe that central bankers’ actions have put the global economy today in a very dangerous position.

Interest rates are too low. As a result, we’re seeing a replay of the mid-2000s – when interest rates were too low given economic growth, and as a result, the bubble in US subprime property was inflated. And when it blew up, it triggered the global financial crisis.

I am afraid a similar thing is happening today. Even though the US economy is growing, interest rates are lower than they’ve ever been. It’s hard to argue that current conditions justify that level of emergency intervention.

For More: http://ziadabdelnourauthor.com/are-we-facing-an-economic-disaster/

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The Perils of Inattention

In many sports, players are advised always to “keep your eye on the ball.” In 2008, we took our eye off the ball; as a result, we chose a president, and an administration, that did the same.

In the 2008 election cycle, voters were fed up with George W. Bush – and certainly not without some justification. They were ready to vote “not Bush” and “not Republican.” However, in a time fraught with enormous economic difficulty and peril, we elected a president whose background showed no particular familiarity with or interest in economics, and whose record revealed that he was likely to pursue, and to prioritize, the very sorts of policies he has in fact pursued.

For a man who has been president of the United States for nearly a full term, there is much that is not known about Barack Obama. What we do know,however, and can say with some certainty, is that Obama sees himself as a transformative figure in American history. His deepest and most abiding concerns are with his perception that the economic system is unfair and demands reform, particularly in the form of more social benefits to those he sees as in some way underprivileged, a larger government role in the regulation of business, and higher tax rates for high earners.

For More: http://www.financialpolicycouncil.org/fpcnew/articledetails.aspx?id=31/The-Perils-of-Inattention

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Navigating the Emerging Markets Of Today

Over the past decade, growth in emerging markets has in fact outpaced growth in developed markets by more than double.  Growth in gross domestic product (GDP) looks like it will continue to outperform that of developed markets for at least the
next five years, according to estimates by the International Monetary Fund.

We are often asked why Economic growth and stock market performance don’t always directly correlate in a given year, and if that’s the case, does a nation’s GDP growth matter at all when it comes to investing in companies? While it’s true that growth and stock market performance can be divergent at times, there is no question that growth matters since company earnings depend on general economic growth.

If you carefully analyze the breakdown of growth in emerging versus developed markets, you can see emerging markets have grown faster than developed markets for many years. In general, strong growth rates are regarded as a key characteristic of
emerging markets. In the past 20 years, there was only one year, 1998, when growth in emerging markets lagged developed markets.

For More: http://www.blackhawkpartners.com/navigating-emerging-markets-today/

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