Good news start to outweigh the bad ones these days. Australia is to ride through the financial storm by supplying the resources for Chinese industry. The China's growth is to decrease a few percentage points but still to remain above 10%. Aussie one is to drop from 4.7 in 2007 to 2.5 in 2008 and 2.2 in 2009.
With the lack of bad news, the good ones are popping up. Central banks reduced rates. They are pumping cash into the system. The share prices are still low because of fear. Also, the prices include the negative prospects for the near future.
The important issue is - things change. Every day the IMF and other financial institutions adjust their economic forecasts. This means that the forecasts are wrong in the first place. The sharemarket prices include these discounts with a negative outlook for the market in the future. A clear sign of bad times. As they say, that leaves an opportunity that good times may appear.
I bet the best forecasts were in 2007, just before the bust started. :)
With the lack of bad news, the good ones are popping up. Central banks reduced rates. They are pumping cash into the system. The share prices are still low because of fear. Also, the prices include the negative prospects for the near future.
The important issue is - things change. Every day the IMF and other financial institutions adjust their economic forecasts. This means that the forecasts are wrong in the first place. The sharemarket prices include these discounts with a negative outlook for the market in the future. A clear sign of bad times. As they say, that leaves an opportunity that good times may appear.
I bet the best forecasts were in 2007, just before the bust started. :)
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