Sunday, April 19, 2009

When will the present global economic crisis end?

We seem to have hit a bottom in the present global slowdown. Things should improve from here. The fact that has made the present crisis very severe –the bursting of global real estate bubble- will make the recovery very sharp. Why? Because the deflated housing assets do have some intrinsic value & they satisfy a very genuine need of housing. Unlike the previous bust led by the bursting of dot com bubble in 2000- where most of the internet ,dot com companies were worthless- here that is not the case. And hence the inference of swift & fast V-shaped recovery in global economy.
Hence I am willing to stick my neck out and predict a full blown recovery of global economy by end of 2009. so now is the time to invest in assets like equities & make a fortune.

Saturday, April 4, 2009

FEAR & GREED

FEAR & GREED
SUPPLY & DEMAND
ILLIQUIDITY & LIQUIDITY

Fear = Illiquidity = Supply of assets for sale

Greed = Liquidity = Demand
These equations explain what has been happening in the world of business from time immemorial. This what explains the recent about 20% increase in global stock indices. Though there has been some marginal decrease in the decline of global economy, particularly U.S. economy, the upside in the indices is explained by the increasing stock prices making the people just a bit greedy and hence the consequent increase in liquidity.