The only places to find growth in 2009 will be the emerging market economies. All the developed nations are most likely looking at negative GDP growth next year.
Broadly speaking, a recession is pretty much priced into equities at this point. However, the long-term consequences of the financial crisis aren’t priced in. Expect consumers’ and investors’ attitudes to change, with people in developed economies beginning to save more, while people in the developing nations will begin to spend to nurture domestic demand economies.
There’s no question Asia will remain the world’s factory for the long term. The factories are built and have the capacity and technology to produce valuable goods for years to come. Once the global economy starts to grow again, these factories will return to full capacity. This is a long-term positive for Asia, too, but the development of a sustainable domestic demand driven economy–a burgeoning middle class–will be the real game-changer.
The only places to find growth in 2009 will be the emerging market economies. All the developed nations are most likely looking at negative GDP growth next year.
Time has passed, but once again we’re finding that investors don’t care about fundamentals. This time around, though, no one is willing to pay anything for strong companies at discounted prices because all are certain that this recession will prove to be like no other.
Last week was the first week of foreign investor net buying since May. Given the negative sentiment and depressed valuations, this is a positive factor. Although a positive week doesn’t make a trend, Asia remains the best long-term bet for investors.
Economic numbers, like the markets, are stretched to the downside, and it shouldn’t be too shocking to receive a positive surprise in economic activity early in 2009. This may not be the economic bottom, but it should put a floor under the extremely distressed global economy.
Today’s generation of utility management is looking for ways to meet demand and environmental mandates in ways best calculated to win regulatory support. And there’s nothing like renewable fuels and conservation these days to get the thumbs up for breaking ground–or more important, for earning generous returns on investment.
US authorities are in full socialization mode, where the capitalist model is being thrown out of the window. Look at the actions, not the words. The more irresponsible a company or individual has been during the past 10 years, the better its chances of being saved. Even the grotesque US automakers will be bailed out, for the nth time.
Not long ago investors had few qualms about paying 30 times earnings for almost any company; the dot-com frenzy was in full swing, and prevailing sentiment suggested that the new technology boom would allow companies to enjoy endless years of strong earnings growth.
