Wednesday, April 29, 2009

Markets break through on nothing but bad news...

There's a decidedly positive bias to the markets right now. I love the psychology of a market that sees the economy shrinking 6% as a good thing. Can you imagine a circumstance where the economy is roaring and one or two negative indicators crashed the market? Of course, not - the markets just don't work like that.

Right now the chart readers and stargazers are back in charge of the markets and they foresee the markets going up another 5-10% from here. It's all expectations right now and the expectations are that things are going to get better. I'm stunned by the public's consumption of opinions offered by banks and Fed Reserve officials that felt the housing crisis would be "contained" and the banks were well capitalized in 2008. They were wrong last year and I'm not convinced they have any better grip on reality today.

China - The Land of Opportunity....

Jim Rogers is a famously successful investor that has been right more often than wrong. As a qualifier, Mr. Rogers has recently sold his NYC townhouse and relocated his family to China because he is a big believer that Asia is going to be the economic powerhouse driving the global economy for decades to come. So with the understanding that Mr. Rogers might be talking his book (promoting his own investments) consider how well thought out this argument is.......

Do you think this crisis is just going to solidify the advantages of China and these other Asian and Southeast Asian economies?

Well, again, throughout history, the center of the world has shifted to where the capital is, where the assets are. You don't see any period in history where things are shifting to the debtors, and America's the largest debtor nation in the history of the world. Unless something is different this time, unless the world's changed very very dramatically, the center of the influence, the center of power, the center of the earth, the center of the globe, is going to be shifting towards Asia, because that's where all the money is. Have you ever heard of anybody saying, "Let's go to where all of the debtors are"? It just doesn't happen that way.


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