Some economic realities


The chart on the left hand side is the common freight rate which has dropped by 90% within a few months to the levels of the 2001 recession already. So much to the fact what economic activity is doing. The UK showed a contraction of 0.5% for the last quarter which in the USA is still denied officially. Most importantly is the fact that the earnings still expect double digit growth for the next quarters – that is definitely not going to happen.

On the other hand we have assuming 10% lower markets from here some cheap stocks on a temp basis which are worth to be bought as the dust settles and the governments can accomplish that regular money flows are warranted. A business needs to be able to do short-term financing to buy their goods. Hence we to see with the rate cuts measures which put simple but crucial business money processing into a controllable system which is dependable. Otherwise the counterparty risk we had in the financial world would spread to the corporate world and that would be lethal. Goods and money need to flow and not be disrupted and people need their brains to concentrate on their core business not to stand in front of TV screens to see if their savings are save.

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~ by behindthematrix on October 24, 2008.

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