Friday, January 22, 2010

Slowly, Silently but Surely the Riptide of Truth Ripples the Glassy Waters of an Illusion

To those who think that the worst of the economic crisis is over, rein your horses right there and gallop back into them stables real quick as a maelstorm is gathering yonder beyond the horizon. Much of what has been put out in recent months since March has been generally hocus-pocus of the highest order with little empirical evidence to back those assertions.The fact of the matter is that while my predicted meltdown has been averted largely due to massive Quantitative Easing, frantic bailouts and manic pump-priming efforts by the powers that be, the underlying rot is very much in place and the disease has burrowed deeper into the terminally ill patient.

Fake medical reports of recovery has been posted by sinsehs, ayurvedics and doctors the world over that laud a recovery in manufacturing and an improvement in exports as indicators of better times ahead. In fact, China reports phenomenal growth that defies all logical analysis and sane economic reasoning. Are exports recovering? Is the credit crunch over? Are unemployment figures on the retreat? Are foreclosures a ghost of the past? Are retail sales on the rebound? The answer to all these questions is a resounding NO .

So what proof is out there to support my contention. Well , the Baltic Dry Index above is a good barometer, for starters. And as a striptease performance by Miss Truth, nothing else can be bettter. We have sinsehs and shamans alike talking about export growth ad nauseum but the BDI at 3158 yesterday is hardly setting the business world alight with its lame pyrotechnics, right?
Observe how its corpuscular blood count of 3158 is way below the norm, a reading which even an anaemic global economy breached during the heights of the fire storm last year as the graph attests and which this graveyard of flying dutchmen (in our neighbourhood, mind you) affirms. Talking about ghost fleet, why not take a tour of the ghost city in China before it dissappears under the desert sands like Ubar of once upon a time in those Arabian Nights.

So what is all this talk about recovery and the return of the boomtown rats to the boomtimes. Well, if you are versed in the art of churning out exotic cuisines, bear's paw, tiger's genitals, pangolin soup and the like, then cooking data and figures would be kid's stuff wouldnt it? And by artificially blowing up a bubble, you set yourself up for the inevitable too and that is why there is creeping panic in Beijing that things are slowly spiralling out of control as recent efforts to throttle the surge in money supply seem to indicate.

As for Uncle Sam, his lying eyes are about to shed more tears of despair. And this comes after a series of economic data that were as mindboggling for their temerity as much as for their veracity so much so it was pointless sifting through that garbage. Hence , my reticence on all things economic but then again, all the silk and satins of the world can never cover the scrawny assets of Old Maid Lie for long and none of her butt jobs, silicone tits or face lifts gonna con us into embracing her as the Real Deal save for charlatans and imbeciles. Yeah, the same crowd that hailed the Black Coot in the White House as the new saviour and who are now baying for his blood....

Fact is, despite all those rosy quarterly earnings reports and positive outlooks built on bone jarring cost reductions, massive retrenchments, inventory drawdowns, fire sales and frozen wage packets, the Yankee economy is in a trough as consumers cut back spending amid dwindling/negative wage increases vis-a-vis cost of living, the gripping fear of unemployment, the stark diminution in asset values and an irreparably blitzkrieged personal finance landscape. Add that to increased foreclosures, the impending squall over commercial property and the burgeoning number of bank closures (140 last year, 4 already in January) and you get the picture that March-December 2009 is every bit an illusion as the heady Wall Street Days of 1931 were.

Revert : Read "Next Asia" by Stephen Roach, great book and prescient too and all the more believable than all the folktales of Cathay and the voodonomic yarns from the Big Apple cobbled together........

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