So what is next?
These are some of the latest trends
- The equity markets are recovering due to increased money flow from the US Fed that is trying to offset the credit crunch.
- Commodities are showing the signs of bubble and there is where the next correction is expected.
- European economies, PIGS are under pressure due to high debt/gdp ratio and increasing borrowing costs.
- Chinese economy is white hot due to significantly, and artifcially, undervalued Yuan.
Conclusions:
- Watch for the Chinese economy to take short position on commodities.
- Leverage low interest rates for long term capital investments.
- Do not take overleveraged positions at anytime as credit will become scarce and more expensive in the long term.
- Keep solid cash positions for good equity and real asset deals
- Watch Euro as it entered a negative territory due to high indebted European states with expensive and unsustainable social programs.