Dear Reader,
The stock market is down over 4% in 2010 and investors are wondering whether this will be a profitable year or not? Could this be a repeat of 2008? We can guarantee it won’t be, but it will be a difficult year to make money anywhere. Property prices are struggling and cash returns are nothing short of dismal and don’t cover inflation after tax is paid. In fact, in cash in the bank is definitely a losing proposition. So, where can you make money in 2010?
We believe the stock market. We do however, expect the stock market to make moderate gains over the year with the rally resuming in mid March, but we think the volatility will ensure most average investors lose money. The “trick” to the stock market in 2010 is two-fold.
1. You must pick the fundamentally best stocks in the market today. Stocks with good balance sheets, strong cash flows and good management. They should also fit into “investment themes” we believe will play out in 2010 and 2011 as recovery takes hold, albeit slowly.
2. You should also have a disciplined trading approach that ensures your capital is protected and ensures also that you buy stocks at the cheapest prices possible. Following a proven set of rules is the only way you can make money at the moment.
At Trident Confidential we focus on these two aspects of stock market investment. The results shown are from this week’s issue of Trident Confidential and prove that if you follow our rules and buy the stocks we recommend you do, you will make money regardless of the market.
Stock bought a week ago 10.50%
Stock bought 2 weeks ago 7.89%
Stock bought 2 weeks ago 15.38%
Stock bought 2 weeks ago 6.67%
Stock bought 2 weeks ago 11.40%
Stock bought 2 weeks ago 7.36%
Stock bought 2 weeks ago 21.39%
Stock bought 3 weeks ago 1.88%
Stock bought 3 weeks ago 16.75%
Stock bought 3 weeks ago 2.41%
Stock bought a month ago 13.72%
Stock bought a month ago -2.75%
Stock bought a month ago 14.39%
Stock bought a month ago 5.29%
Stock bought a month ago 6.75%
Stock bought a month ago 32.20%
Stock bought a month ago 8.56%
Average Return for Trident Confidential stocks bought in 2010 13.41%
Oh, sure we have losses from time to time, but if you follow our rules, those losses will be limited and will be far outweighed by our profits. For example, sold stocks (losses and profits) in 2010 resulted in an average result of 19% profit per trade being realised - and in a down market too. That’s where picking the fundamentally best stocks comes into play.
Picking the right stocks in the first place will ensure when the market does begin to behave itself, the stocks you hold will rise the most.
Today's New Stock in Trident Confidential
This small Australian company is on the cutting edge of new technology that will dominate several industries in coming years. While the company is only "young", it already has some pretty big clients including some of America's biggest companies and the support of the Australian Government. Also, one of it's biggest shareholders is an "icon" in the investment world with one of the savviest investment management teams in Australia.
At the moment no-one is talking about this tiny company, but they will be soon when one of the largest contracts in history is awarded to it's business partners. The flow on to our small Australian stock pick will be enormous.
To Join Trident Confidential, Receive the "Best Stocks for 2010 Report" and read about our Latest Stock Tips, The Hidden Gems Portfolio, Receive all Lance's Books on CD and Have Access to our Full Archive - Click Here
Until next time.
Kind Regards
Lance Spicer
Editor, Trident Confidential - Still...The World's Highest Returning Newsletter since 2005.
Lance Spicer is qualified and licensed to provide investment advice on Managed Investments, Equities and Derivatives.
Trident Investment Management Pty Ltd is an authorised representative (No 339798) of The International Securities and Derivatives Group Pty Limited (ABN 22 103 552 683) holder of Australian Financial Services License (AFSL 227544)
If you no longer wish to receive these emails, please reply to this message with "Unsubscribe" in the subject line or simply click on the following link: Unsubscribe
Trident Investment Management Pty Limited
ACN 136 841 426
Po Box 3068
Bangor NSW 2234
Phone +61 2 95430406
Fax: +61 2 95430216
www.tridentinvestment.com.au
2010/02/24
2010/02/12
The Stock Market Strategy You Need To Know if You Want To Make Money
Amateur investors like to think that by paying close attention to the
economic news, they can invest at the right time and place. However, a
careful analysis of the past reveals otherwise. Because the savviest
(and therefore biggest) investors are always looking six to nine
months ahead, and because their money is what really moves individual
stocks, the action of certain stocks tend to reflect the news that
you’ll read six to nine months from now. For example, just think back
to March 2009, when the market blasted off with a 70% rise from
multi-year lows. What were the headlines telling you last March? That
the US financial system was in danger of falling apart! The world was
facing depression and that the collapse of the world economy was
imminent! Ah, but smart investors were buying, and if you followed
their lead, as we did, you did pretty well in 2009. In fact, we made
113% for the whole of last year including the nasty bit at the front.
The recent correction has everyone worried again. Most importantly,
the long bull market remains intact regardless of how you look at it.
So, while the world is worried about the headlines, “Greek Debt” –
“Chinese Growth Possibly Slowing” – “US Unemployment at Record
Levels”, the fact remains, companies are still reporting great
results, 80% of US companies have beaten analyst’s “optimistic”
estimates. What’s more, most companies are telling us business is
improving – particularly, Technology.
As for the current “correction”? Well, regardless of what journalists,
market pessimists and doom and gloomers will tell you, this is a
“garden variety” standard 10% correction we are having. It will end
very soon when enough amateur investors dump their stocks in total
despair. Markets turn when people stop selling, not when people start
buying. You have to wait until enough pessimism has been passed around
and people give up on the market. We are close to that point now.
Back in March 2009, when the market bounced, a lot of the people
talking now were saying things like, “don’t trust this rally”,
“sucker’s rally”, “the problems will get worse” and the end result was
they were 100% wrong. It was without a doubt probably one of the best
stock buying opportunities you’ll ever see. The headlines are again
trying to frighten you out of the stock market, and they’ll probably
succeed, and the professional investors will once again swoop down and
buy your shares. You’ll be happy they did too, until the market
bounces and you have that Homer Simpson “Doh!” moment, much like the
one so many people who sold back in February and March 2009 when they
watched the market just climb and climb in 2009. Back then I stopped
“shorting the market” with my Switch Strategy on February 21 and the
next week started aggressively buying stocks, for example Lynas for
$0.13 which is now $0.53 and Intuitive Surgical for $93.00 which is
now $322.00. You see I knew that the market would turn, and told my
subscribers it would, and it did. Regardless of “end of the world”
headlines, the selloff just didn’t make sense to me. On reflection, it
didn’t to anybody else either.
So, when will the current “correction” end? I can’t say, but it could
be a couple of days, a week, or two weeks, but it will end and today’s
prices will seem bargains and you’ll be kicking yourself. But hey,
that’s normal for human beings, our fear will always get in the way of
our common sense.
The secret to stock market success is not reading today’s headlines,
but jumping 6 months ahead in time and imagining what the “state of
play” will be then. And how do we know that? Listen to the guys
“running” the economy, not the idiot politicians (and boy, aren’t some
of them goons?), the guys running the “real economy” are the business
owners and CEOs of big companies and they are all telling us one thing
– Profits are growing and the outlook for business is good. Share
prices will eventually follow the company earnings. Stock prices will
be higher in a year from now and this current correction is an
opportunity to buy shares in companies whose profits and sales are
growing much faster than even the analysts expected, which is why the
Trident Confidential is investing in them. That’s all you need to
know.
Click to view this email in a browser
http://hosted.verticalresponse.com/230163/88737a713e/513000276/77647ad340/
economic news, they can invest at the right time and place. However, a
careful analysis of the past reveals otherwise. Because the savviest
(and therefore biggest) investors are always looking six to nine
months ahead, and because their money is what really moves individual
stocks, the action of certain stocks tend to reflect the news that
you’ll read six to nine months from now. For example, just think back
to March 2009, when the market blasted off with a 70% rise from
multi-year lows. What were the headlines telling you last March? That
the US financial system was in danger of falling apart! The world was
facing depression and that the collapse of the world economy was
imminent! Ah, but smart investors were buying, and if you followed
their lead, as we did, you did pretty well in 2009. In fact, we made
113% for the whole of last year including the nasty bit at the front.
The recent correction has everyone worried again. Most importantly,
the long bull market remains intact regardless of how you look at it.
So, while the world is worried about the headlines, “Greek Debt” –
“Chinese Growth Possibly Slowing” – “US Unemployment at Record
Levels”, the fact remains, companies are still reporting great
results, 80% of US companies have beaten analyst’s “optimistic”
estimates. What’s more, most companies are telling us business is
improving – particularly, Technology.
As for the current “correction”? Well, regardless of what journalists,
market pessimists and doom and gloomers will tell you, this is a
“garden variety” standard 10% correction we are having. It will end
very soon when enough amateur investors dump their stocks in total
despair. Markets turn when people stop selling, not when people start
buying. You have to wait until enough pessimism has been passed around
and people give up on the market. We are close to that point now.
Back in March 2009, when the market bounced, a lot of the people
talking now were saying things like, “don’t trust this rally”,
“sucker’s rally”, “the problems will get worse” and the end result was
they were 100% wrong. It was without a doubt probably one of the best
stock buying opportunities you’ll ever see. The headlines are again
trying to frighten you out of the stock market, and they’ll probably
succeed, and the professional investors will once again swoop down and
buy your shares. You’ll be happy they did too, until the market
bounces and you have that Homer Simpson “Doh!” moment, much like the
one so many people who sold back in February and March 2009 when they
watched the market just climb and climb in 2009. Back then I stopped
“shorting the market” with my Switch Strategy on February 21 and the
next week started aggressively buying stocks, for example Lynas for
$0.13 which is now $0.53 and Intuitive Surgical for $93.00 which is
now $322.00. You see I knew that the market would turn, and told my
subscribers it would, and it did. Regardless of “end of the world”
headlines, the selloff just didn’t make sense to me. On reflection, it
didn’t to anybody else either.
So, when will the current “correction” end? I can’t say, but it could
be a couple of days, a week, or two weeks, but it will end and today’s
prices will seem bargains and you’ll be kicking yourself. But hey,
that’s normal for human beings, our fear will always get in the way of
our common sense.
The secret to stock market success is not reading today’s headlines,
but jumping 6 months ahead in time and imagining what the “state of
play” will be then. And how do we know that? Listen to the guys
“running” the economy, not the idiot politicians (and boy, aren’t some
of them goons?), the guys running the “real economy” are the business
owners and CEOs of big companies and they are all telling us one thing
– Profits are growing and the outlook for business is good. Share
prices will eventually follow the company earnings. Stock prices will
be higher in a year from now and this current correction is an
opportunity to buy shares in companies whose profits and sales are
growing much faster than even the analysts expected, which is why the
Trident Confidential is investing in them. That’s all you need to
know.
Click to view this email in a browser
http://hosted.verticalresponse.com/230163/88737a713e/513000276/77647ad340/
2010/01/28
President Sarkozy calls for a “new Bretton Woods”
Adrian Monck, Head of Communications and Media, Tel.: +41 (0)22 869 1210 E-mail: adrian.monck@weforum.org
• French President Sarkozy calls for “a new Bretton Woods” and a re-examination of the fairness of globalization and capitalism
• The world must move from rhetoric to reality and take concrete action to address priorities such as the economic crisis and climate change, said President Doris Leuthard of the Swiss Confederation
• If long-term global problems are ignored, the economic crisis could lead to a social crisis
• For all information about the Annual Meeting, visit www.weforum.org/annualmeeting
Davos-Klosters, Switzerland, 27 January 2010 − In his opening address at the World Economic Forum Annual Meeting, President Nicolas Sarkozy of France said that it will not be possible to emerge from the global economic crisis and protect against future crises if the economic imbalances that are at the root of the problem are not addressed. “Countries with trade surpluses must consume more and improve the living standards and social protection of their citizens,” he remarked. “Countries with deficits must make an effort to consume a little less and repay their debts.” The world’s currency regime is central to the issue, Sarkozy argued. Exchange rate instability and the under-valuation of certain currencies lead to unfair trade and competition, he said. “The prosperity of the post-war era owed a great deal to Bretton Woods, to its rules and its institutions. That is exactly what we need today; we need a new Bretton Woods.” Sarkozy said that France would place the reform of the international monetary system on the agenda when it chairs the G8 and G20 next year.
In his address, Sarkozy also called for an examination of the nature of globalization and capitalism. “This is not a crisis in globalization; this is a crisis of globalization,” he said. “Finance, free trade and competition are only means and not ends in themselves.” Sarkozy added that banks should stick to analysing credit risk, assessing the capacity of borrowers to repay loans and finance economic growth. “The role of the bank is not to speculate.” He also questioned the rewarding of high compensation and bonuses for CEOs whose companies lose money. Capitalism should not be replaced but it has to be changed, the French president declared. “We will only save capitalism by reforming it, by making it more moral.”
Speaking before Sarkozy, Doris Leuthard, President of the Swiss Confederation and Federal Councillor of Economic Affairs, told participants that the international community has to bridge the gap between rhetoric and reality as it tackles major challenges such as the global economic crisis, climate change and the Doha Round of multilateral trade negotiations. “We must all sit down together in a responsible manner, bring our part of the solution to the table and allow a conclusion to be reached that benefits us all.” While “rhetoric and reality all too often diverge by large margins,” Leuthard said, the bottom line is that “people need jobs and a salary.” She concluded: “We have talked enough. It is now time to get moving.”
Earlier, World Economic Forum Founder and Executive Chairman Klaus Schwab warned of the consequences if countries are too preoccupied by domestic problems and ignore long-term challenges such as global warming. “We hope that governments don’t become overwhelmed by internal issues and constraints to the detriment of exercising the necessary global stewardship.” Added Schwab: “We run the risk that 2010 becomes the year of the social crisis following the financial crisis of 2008 and the economic crisis of 2009.” He noted that one of the top priorities for this Annual Meeting is to encourage entrepreneurship and job creation.
Notes to Editors
More information about the Annual Meeting 2010 at http://www.weforum.org/annualmeeting
Programme of the Annual Meeting at http://www.weforum.org/annualmeeting/programme
Connect with the Forum on other social networks http://www.weforum.org/socialmedia
Press Releases at http://www.weforum.org/pressreleases
For updates about the activities of the World Economic Forum, subscribe to RSS feed
___________________________________________
• French President Sarkozy calls for “a new Bretton Woods” and a re-examination of the fairness of globalization and capitalism
• The world must move from rhetoric to reality and take concrete action to address priorities such as the economic crisis and climate change, said President Doris Leuthard of the Swiss Confederation
• If long-term global problems are ignored, the economic crisis could lead to a social crisis
• For all information about the Annual Meeting, visit www.weforum.org/annualmeeting
Davos-Klosters, Switzerland, 27 January 2010 − In his opening address at the World Economic Forum Annual Meeting, President Nicolas Sarkozy of France said that it will not be possible to emerge from the global economic crisis and protect against future crises if the economic imbalances that are at the root of the problem are not addressed. “Countries with trade surpluses must consume more and improve the living standards and social protection of their citizens,” he remarked. “Countries with deficits must make an effort to consume a little less and repay their debts.” The world’s currency regime is central to the issue, Sarkozy argued. Exchange rate instability and the under-valuation of certain currencies lead to unfair trade and competition, he said. “The prosperity of the post-war era owed a great deal to Bretton Woods, to its rules and its institutions. That is exactly what we need today; we need a new Bretton Woods.” Sarkozy said that France would place the reform of the international monetary system on the agenda when it chairs the G8 and G20 next year.
In his address, Sarkozy also called for an examination of the nature of globalization and capitalism. “This is not a crisis in globalization; this is a crisis of globalization,” he said. “Finance, free trade and competition are only means and not ends in themselves.” Sarkozy added that banks should stick to analysing credit risk, assessing the capacity of borrowers to repay loans and finance economic growth. “The role of the bank is not to speculate.” He also questioned the rewarding of high compensation and bonuses for CEOs whose companies lose money. Capitalism should not be replaced but it has to be changed, the French president declared. “We will only save capitalism by reforming it, by making it more moral.”
Speaking before Sarkozy, Doris Leuthard, President of the Swiss Confederation and Federal Councillor of Economic Affairs, told participants that the international community has to bridge the gap between rhetoric and reality as it tackles major challenges such as the global economic crisis, climate change and the Doha Round of multilateral trade negotiations. “We must all sit down together in a responsible manner, bring our part of the solution to the table and allow a conclusion to be reached that benefits us all.” While “rhetoric and reality all too often diverge by large margins,” Leuthard said, the bottom line is that “people need jobs and a salary.” She concluded: “We have talked enough. It is now time to get moving.”
Earlier, World Economic Forum Founder and Executive Chairman Klaus Schwab warned of the consequences if countries are too preoccupied by domestic problems and ignore long-term challenges such as global warming. “We hope that governments don’t become overwhelmed by internal issues and constraints to the detriment of exercising the necessary global stewardship.” Added Schwab: “We run the risk that 2010 becomes the year of the social crisis following the financial crisis of 2008 and the economic crisis of 2009.” He noted that one of the top priorities for this Annual Meeting is to encourage entrepreneurship and job creation.
Notes to Editors
More information about the Annual Meeting 2010 at http://www.weforum.org/annualmeeting
Programme of the Annual Meeting at http://www.weforum.org/annualmeeting/programme
Connect with the Forum on other social networks http://www.weforum.org/socialmedia
Press Releases at http://www.weforum.org/pressreleases
For updates about the activities of the World Economic Forum, subscribe to RSS feed
___________________________________________
2009/12/25
Call for Participation: OMG's Real-time, Embedded and Enterprise-Scale Time-Critical
Event will be part of OMG Standards for Mission Critical Systems Workshop; May 24-26, 2010, Washington, D.C., USA
NEEDHAM, Mass., Dec. 22 /PRNewswire-USNewswire/ -- OMG(TM) today issued a Call for Participation for the Eleventh Annual Real-time, Embedded and Enterprise-Scale Time-Critical Systems Workshop, to be held on May 24-26, 2010 in Arlington, VA, USA. The Workshop is part of the OMG Standards for Mission Critical Systems Workshop, alongside parallel events on Complex Event Processing and Cyber Security, which Real-time and Embedded Workshop participants are also invited to attend. For more information or to respond to the Call for Participation, please visit http://www.omg.org/rt2010. The submission deadline is February 1, 2010.
For more click the link below:
Call for Participation: OMG's Real-time, Embedded and Enterprise-Scale Time-Critical
NEEDHAM, Mass., Dec. 22 /PRNewswire-USNewswire/ -- OMG(TM) today issued a Call for Participation for the Eleventh Annual Real-time, Embedded and Enterprise-Scale Time-Critical Systems Workshop, to be held on May 24-26, 2010 in Arlington, VA, USA. The Workshop is part of the OMG Standards for Mission Critical Systems Workshop, alongside parallel events on Complex Event Processing and Cyber Security, which Real-time and Embedded Workshop participants are also invited to attend. For more information or to respond to the Call for Participation, please visit http://www.omg.org/rt2010. The submission deadline is February 1, 2010.
For more click the link below:
Call for Participation: OMG's Real-time, Embedded and Enterprise-Scale Time-Critical
2009/12/17
THE GREAT STABILISATION
Dec 17th 2009
The recession was less calamitous than many feared. Its aftermath will
be more dangerous than many expect
IT HAS become known as the "Great Recession", the year in which the
global economy suffered its deepest slump since the second world war.
But an equally apt name would be the "Great Stabilisation". For 2009
was extraordinary not just for how output fell, but for how a
catastrophe was averted.
Twelve months ago, the panic sown by the bankruptcy of Lehman Brothers
had pushed financial markets close to collapse. Global economic
activity, from industrial production to foreign trade, was falling
faster than in the early 1930s. This time, though, the decline was
stemmed within months. Big emerging economies accelerated first and
fastest. China's output, which stalled but never fell, was growing by
an annualised rate of some 17% in the second quarter. By mid-year the
world's big, rich economies (with the exception of Britain and Spain)
had started to expand again. Only a few laggards, such as Latvia and
Ireland, are now likely still to be in recession.
There has been a lot of collateral damage. Average unemployment across
the OECD is almost 9%. In America, where the recession began much
earlier, the jobless rate has doubled to 10%. In some places years of
progress in poverty reduction have been undone as the poorest have been
hit by the double whammy of weak economies and still-high food prices.
But thanks to the resilience of big, populous economies such as China,
India and Indonesia, the emerging world overall fared no worse in this
downturn than in the 1991 recession. For many people on the planet, the
Great Recession was not all that great.
That outcome was not inevitable. It was the result of the biggest,
broadest and fastest government response in history. Teetering banks
were wrapped in a multi-trillion-dollar cocoon of public cash and
guarantees. Central banks slashed interest rates; the big ones
dramatically expanded their balance-sheets. Governments worldwide
embraced fiscal stimulus with gusto. This extraordinary activism helped
to stem panic, prop up the financial system and counter the collapse in
private demand. Despite claims to the contrary, the Great Recession
could have been a Depression without it.
STABLE BUT FRAIL
So much for the good news. The bad news is that today's stability,
however welcome, is worryingly fragile, both because global demand is
still dependent on government support and because public largesse has
papered over old problems while creating new sources of volatility.
Property prices are still falling in more places than they are rising,
and, as this week's nationalisation of Austria's Hypo Group shows,
banking stresses still persist. Apparent signs of success, such as
American megabanks repaying public capital early (see article[1]), make
it easy to forget that the recovery still depends on government
support. Strip out the temporary effects of firms' restocking, and much
of the rebound in global demand is thanks to the public purse, from the
officially induced investment surge in China to stimulus-prompted
spending in America. That is revving recovery in big emerging
economies, while only staving off a relapse into recession in much of
the rich world.
This divergence will persist. Demand in the rich world will remain
weak, especially in countries with over-indebted households and broken
banking systems. For all the talk of deleveraging, American households'
debt, relative to their income, is only slightly below its peak and
some 30% above its level a decade ago. British and Spanish households
have adjusted even less, so the odds of prolonged weakness in private
spending are even greater. And as their public-debt burden rises,
rich-world governments will find it increasingly difficult to borrow
still more to compensate. The contrast with better-run emerging
economies will sharpen. Investors are already worried about Greece
defaulting (see article[2]), but other members of the euro zone are
also at risk. Even Britain and America could face sharply higher
borrowing costs.
Big emerging economies face the opposite problem: the spectre of asset
bubbles and other distortions as governments choose, or are forced, to
keep financial conditions too loose for too long. China is a worry,
thanks to the scale and composition of its stimulus. Liquidity is
alarmingly abundant and the government's refusal to allow the yuan to
appreciate is hampering the economy's shift towards consumption (see
article[3]). But loose monetary policy in the rich world makes it hard
for emerging economies to tighten even if they want to, since that
would suck in even more speculative foreign capital.
WALKING A FINE LINE
Whether the world economy moves smoothly from the Great Stabilisation
to a sustainable recovery depends on how well these divergent
challenges are met. Some of the remedies are obvious. A stronger yuan
would accelerate the rebalancing of China's economy while reducing the
pressure on other emerging markets. Credible plans for medium-term
fiscal cuts would reduce the risk of rising long-term interest rates in
the rich world. But there are genuine trade-offs. Fiscal tightening now
could kill the rich world's recovery. And the monetary stance that
makes sense for America's domestic economy will add to the problems
facing the emerging world.
That is why policymakers face huge technical difficulties in getting
the exit strategies right. Worse, they must do so against a darkening
political backdrop. As Britain's tax on bank bonuses shows, fiscal
policy in the rich world risks being driven by rising public fury at
bankers and bail-outs. In America the independence of the Federal
Reserve is under threat from Congress. And the politics of high
unemployment means trade spats are becoming a bigger risk, especially
with China.
Add all this up, and what do you get? Pessimists expect all kinds of
shocks in 2010, from sovereign-debt crises (a Greek default?) to
reckless protectionism (American tariffs against China's "unfair"
currency, say). More likely is a plethora of lesser problems, from
sudden surges in bond yields (Britain before the election), to
short-sighted fiscal decisions (a financial-transactions tax) to
strikes over pay cuts (British Airways is a portent, see article[4]).
Small beer compared with the cataclysm of a year ago--but enough to
temper the holiday cheer.
-----
[1] http://www.economist.com/displayStory.cfm?story_ID=15127534
[2] http://www.economist.com/displayStory.cfm?story_ID=15127235
[3] http://www.economist.com/displayStory.cfm?story_ID=15127500
[4] http://www.economist.com/displayStory.cfm?story_ID=15130582
See this article with graphics and related items at http://www.economist.com/opinion/displaystory.cfm?story_id=15127608
Go to http://www.economist.com for more global news, views and analysis from the Economist Group.
- ABOUT ECONOMIST.COM -
Economist.com is the online version of The Economist newspaper, an independent weekly international news and business publication offering clear reporting, commentary and analysis on world politics, business, finance, science & technology, culture, society and the arts.
Economist.com also offers exclusive content online, including additional articles throughout the week.
- SUBSCRIBE NOW AND SAVE 25% -
Click here: http://www.economist.com/subscriptions/offer.cfm?campaign=168-XLMT
Subscribe now with 25% off and receive full access to:
* all the articles published in The Economist newspaper
* the online archive - allowing you to search and retrieve over 33,000 articles published in The Economist since 1997
* The World in - The Economist's outlook on the year
* Business encyclopedia - allows you to find a definition and explanation for any business term
- ABOUT THIS E-MAIL -
This e-mail was sent to you by the person at the e-mail address listed
above through a link found on Economist.com. We will not send you any
future messages as a result of your being the recipient of this e-mail.
- COPYRIGHT -
This e-mail message and Economist articles linked from it are copyright
(c) 2009 The Economist Newspaper Group Limited. All rights reserved.
http://www.economist.com/help/copy_general.cfm
Economist.com privacy policy: http://www.economist.com/about/privacy.cfm
The Economist, Economist.com and CFO Europe are trading names of:
The Economist Newspaper Limited
Registered in England and Wales. No.236383
VAT no: GB 340 436 876
Registered office: 25 St James's Street, London, SW1A 1HG
The recession was less calamitous than many feared. Its aftermath will
be more dangerous than many expect
IT HAS become known as the "Great Recession", the year in which the
global economy suffered its deepest slump since the second world war.
But an equally apt name would be the "Great Stabilisation". For 2009
was extraordinary not just for how output fell, but for how a
catastrophe was averted.
Twelve months ago, the panic sown by the bankruptcy of Lehman Brothers
had pushed financial markets close to collapse. Global economic
activity, from industrial production to foreign trade, was falling
faster than in the early 1930s. This time, though, the decline was
stemmed within months. Big emerging economies accelerated first and
fastest. China's output, which stalled but never fell, was growing by
an annualised rate of some 17% in the second quarter. By mid-year the
world's big, rich economies (with the exception of Britain and Spain)
had started to expand again. Only a few laggards, such as Latvia and
Ireland, are now likely still to be in recession.
There has been a lot of collateral damage. Average unemployment across
the OECD is almost 9%. In America, where the recession began much
earlier, the jobless rate has doubled to 10%. In some places years of
progress in poverty reduction have been undone as the poorest have been
hit by the double whammy of weak economies and still-high food prices.
But thanks to the resilience of big, populous economies such as China,
India and Indonesia, the emerging world overall fared no worse in this
downturn than in the 1991 recession. For many people on the planet, the
Great Recession was not all that great.
That outcome was not inevitable. It was the result of the biggest,
broadest and fastest government response in history. Teetering banks
were wrapped in a multi-trillion-dollar cocoon of public cash and
guarantees. Central banks slashed interest rates; the big ones
dramatically expanded their balance-sheets. Governments worldwide
embraced fiscal stimulus with gusto. This extraordinary activism helped
to stem panic, prop up the financial system and counter the collapse in
private demand. Despite claims to the contrary, the Great Recession
could have been a Depression without it.
STABLE BUT FRAIL
So much for the good news. The bad news is that today's stability,
however welcome, is worryingly fragile, both because global demand is
still dependent on government support and because public largesse has
papered over old problems while creating new sources of volatility.
Property prices are still falling in more places than they are rising,
and, as this week's nationalisation of Austria's Hypo Group shows,
banking stresses still persist. Apparent signs of success, such as
American megabanks repaying public capital early (see article[1]), make
it easy to forget that the recovery still depends on government
support. Strip out the temporary effects of firms' restocking, and much
of the rebound in global demand is thanks to the public purse, from the
officially induced investment surge in China to stimulus-prompted
spending in America. That is revving recovery in big emerging
economies, while only staving off a relapse into recession in much of
the rich world.
This divergence will persist. Demand in the rich world will remain
weak, especially in countries with over-indebted households and broken
banking systems. For all the talk of deleveraging, American households'
debt, relative to their income, is only slightly below its peak and
some 30% above its level a decade ago. British and Spanish households
have adjusted even less, so the odds of prolonged weakness in private
spending are even greater. And as their public-debt burden rises,
rich-world governments will find it increasingly difficult to borrow
still more to compensate. The contrast with better-run emerging
economies will sharpen. Investors are already worried about Greece
defaulting (see article[2]), but other members of the euro zone are
also at risk. Even Britain and America could face sharply higher
borrowing costs.
Big emerging economies face the opposite problem: the spectre of asset
bubbles and other distortions as governments choose, or are forced, to
keep financial conditions too loose for too long. China is a worry,
thanks to the scale and composition of its stimulus. Liquidity is
alarmingly abundant and the government's refusal to allow the yuan to
appreciate is hampering the economy's shift towards consumption (see
article[3]). But loose monetary policy in the rich world makes it hard
for emerging economies to tighten even if they want to, since that
would suck in even more speculative foreign capital.
WALKING A FINE LINE
Whether the world economy moves smoothly from the Great Stabilisation
to a sustainable recovery depends on how well these divergent
challenges are met. Some of the remedies are obvious. A stronger yuan
would accelerate the rebalancing of China's economy while reducing the
pressure on other emerging markets. Credible plans for medium-term
fiscal cuts would reduce the risk of rising long-term interest rates in
the rich world. But there are genuine trade-offs. Fiscal tightening now
could kill the rich world's recovery. And the monetary stance that
makes sense for America's domestic economy will add to the problems
facing the emerging world.
That is why policymakers face huge technical difficulties in getting
the exit strategies right. Worse, they must do so against a darkening
political backdrop. As Britain's tax on bank bonuses shows, fiscal
policy in the rich world risks being driven by rising public fury at
bankers and bail-outs. In America the independence of the Federal
Reserve is under threat from Congress. And the politics of high
unemployment means trade spats are becoming a bigger risk, especially
with China.
Add all this up, and what do you get? Pessimists expect all kinds of
shocks in 2010, from sovereign-debt crises (a Greek default?) to
reckless protectionism (American tariffs against China's "unfair"
currency, say). More likely is a plethora of lesser problems, from
sudden surges in bond yields (Britain before the election), to
short-sighted fiscal decisions (a financial-transactions tax) to
strikes over pay cuts (British Airways is a portent, see article[4]).
Small beer compared with the cataclysm of a year ago--but enough to
temper the holiday cheer.
-----
[1] http://www.economist.com/displayStory.cfm?story_ID=15127534
[2] http://www.economist.com/displayStory.cfm?story_ID=15127235
[3] http://www.economist.com/displayStory.cfm?story_ID=15127500
[4] http://www.economist.com/displayStory.cfm?story_ID=15130582
See this article with graphics and related items at http://www.economist.com/opinion/displaystory.cfm?story_id=15127608
Go to http://www.economist.com for more global news, views and analysis from the Economist Group.
- ABOUT ECONOMIST.COM -
Economist.com is the online version of The Economist newspaper, an independent weekly international news and business publication offering clear reporting, commentary and analysis on world politics, business, finance, science & technology, culture, society and the arts.
Economist.com also offers exclusive content online, including additional articles throughout the week.
- SUBSCRIBE NOW AND SAVE 25% -
Click here: http://www.economist.com/subscriptions/offer.cfm?campaign=168-XLMT
Subscribe now with 25% off and receive full access to:
* all the articles published in The Economist newspaper
* the online archive - allowing you to search and retrieve over 33,000 articles published in The Economist since 1997
* The World in - The Economist's outlook on the year
* Business encyclopedia - allows you to find a definition and explanation for any business term
- ABOUT THIS E-MAIL -
This e-mail was sent to you by the person at the e-mail address listed
above through a link found on Economist.com. We will not send you any
future messages as a result of your being the recipient of this e-mail.
- COPYRIGHT -
This e-mail message and Economist articles linked from it are copyright
(c) 2009 The Economist Newspaper Group Limited. All rights reserved.
http://www.economist.com/help/copy_general.cfm
Economist.com privacy policy: http://www.economist.com/about/privacy.cfm
The Economist, Economist.com and CFO Europe are trading names of:
The Economist Newspaper Limited
Registered in England and Wales. No.236383
VAT no: GB 340 436 876
Registered office: 25 St James's Street, London, SW1A 1HG
Apple iPhone could reboot education
Brian X. Chen (wired.com) reports that Abilene Christian University has just finished the first year of a pilot program in which 1,000 freshman students each received a free iPhone or iPod touch to explore how the always-connected devices ”might revolutionize the classroom experience with a dash of digital interactivity.” Says Bill Rankin, a professor who helped plan the initiative: “I think this is the next platform for education.”
Read more…
http://www.wired.com/gadgetlab/2009/12/iphone-university-abilene/
Read more…
http://www.wired.com/gadgetlab/2009/12/iphone-university-abilene/
2009/12/10
IDC plans to create sustainability index for IT
IDC - Press Release
IDC Plans ICT Sustainability Index to Guide Nations Towards Their CO2 Emissions Targets
05 Aug 2009
FRAMINGHAM, Mass., August 5, 2009 – IDC today announced plans to create an index that scores a country's ability to use information and communications technologies (ICT) to effectively reduce its CO2 emissions. Results of the first IDC ICT Sustainability IndexTM will be released prior to the United Nations Climate Change Conference to be held December 7-18, 2009 in Copenhagen, Denmark.
The ICT Sustainability Index utilizes a variety of inputs to determine a country's ability to use ICT to reduce its CO2 emissions. In addition to population and GDP data, the Index correlates a country's current energy profile with its ICT investment and spending patterns to help make climate change targets attainable. By using additional ICT-related input factors to this base line, the Index score also effectively measures a country's readiness to leverage ICT to lower its carbon emissions. The Index scores will allow IDC to rank nations fairly and transparently as they tackle the long-term challenge of environmental and economic sustainability. The Index will be accompanied by a special study offering qualitative recommendations to policy makers on where ICT investments can contribute to achieving climate change goals.
IDC Plans ICT Sustainability Index to Guide Nations Towards Their CO2 Emissions Targets
05 Aug 2009
FRAMINGHAM, Mass., August 5, 2009 – IDC today announced plans to create an index that scores a country's ability to use information and communications technologies (ICT) to effectively reduce its CO2 emissions. Results of the first IDC ICT Sustainability IndexTM will be released prior to the United Nations Climate Change Conference to be held December 7-18, 2009 in Copenhagen, Denmark.
The ICT Sustainability Index utilizes a variety of inputs to determine a country's ability to use ICT to reduce its CO2 emissions. In addition to population and GDP data, the Index correlates a country's current energy profile with its ICT investment and spending patterns to help make climate change targets attainable. By using additional ICT-related input factors to this base line, the Index score also effectively measures a country's readiness to leverage ICT to lower its carbon emissions. The Index scores will allow IDC to rank nations fairly and transparently as they tackle the long-term challenge of environmental and economic sustainability. The Index will be accompanied by a special study offering qualitative recommendations to policy makers on where ICT investments can contribute to achieving climate change goals.
Subscribe to:
Posts (Atom)