World GDP, Rebound?


“The Great Recession is receding, according to our measure of global GDP” [Economist]

We don’t have rational markets. Market ups and downs aren’t straight lines. Prices rise too high on the way up and fall too far on the way down. If you want to understand how the market really works, read George Soros classic “The Alchemy of Finance“.

In most of the countries that have published third-quarter figures, GDP was lower than a year earlier. The exceptions were mostly in Asia: China and India recorded the fastest growth, followed by Indonesia. Only one European country, Poland, reported higher GDP in the third quarter than a year earlier.

If the rebound is being led by China, then I’d be very concerned about the sustainability of the rebound. Perhaps the China of 2050 will be placed well to lead the rebound, but the current Chinese economy is based on: Exports (in trouble), Real Estate (empty houses are “gold bricks” in the mind of chinese investors), and massive State Spending (but where is the tax base to support the spending).

Bottom line, I don’t think this is anywhere near over. More like a sunny day in the winter.

One thought on “World GDP, Rebound?”

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