20091015

As if

The Dow Jones Industrial hit the 10k mark, again.

This is not the same index : General Motors or Citigroup Incorporated have gone after September 2008 (AIG left the DJI a little bit earlier). And this is not the same Bank Of America either...
So basically a makeshift index passes a symbolic mark. So what ? This new bubble is simply not sustainable. And Mr Jones cannot make much dough out of industries which often have yet to evolve.

Asia is booming, again.

And real estate bubbles keep inflating in South Korea, Hong Kong, or China. Hu Jintao wants to secure positions for his friends before the 2012 regime reshuffle, and Beijing decided to sacrifice long term economic soundness for short term growth. Seoul also refuses to deflate the housing bubble for fear of accelerating the second dip. LEE Myung-bak knows the demand will grow during the construction of all programs launched before 2008, but hopes that the hard landing will not happen under his "sit and watch".

Financial institutions are racking up profits, again.

Part of their garbage has been collected, but they keep doing business as usual : destroying value in the long term to maximize short term gains, focusing innovation on ways of bending laws, sucking money from places where investments are really needed. Total crap.

...

Three years after the downturn, one year after The Crisis, we are somehow still in denial (see "
This is not a financial crisis"), and the same diagnosis applies.

There's still a lot of greedy money out there : unable to find exciting guaranteed returns (closer to 5% than to the 15-20% they were used to - not enough to hedge inflation which is bound to come back with a vengence), investors keep fueling bubbles in stocks, commodities, gold, currencies, private equities, and even real estate.

Regulation remains a dirty word and everything is done to undermine collective and comprehensive efforts to reform the system.

The question is not if but when the next wake up call comes. Before the end of the year ? H1 2010 ? Will the illusion even last until 2011 ? Will everything collapse big time in 2012 ?

Yet I'm still confident :
in the long term, we are to evolve from free market to fair market.

blogules 2009

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