1) I could be wrong here... but I believe a major cause was the tightening of money supply by the government then. That caused a contraction in the economy that spiralled into a severe recession or depression. This probably explains why currently QE is being chosen to combat the slowdown. In most economists' eyes, deflation is a scourge much harder to control than inflation, at this point, QE seems to have done its job with most distraught economies reporting some sort of bottom and are expecting smallish growth by next year.
Is this good enough to remove the argument that the global economy is heading towards a depression?
Quarterly profits at the 495 companies in the S&P 500 that have reported results since April 7 dropped 32 percent on average, according to Bloomberg data. Analysts expect annual earnings in the measure to decline 15 percent before rebounding 22 percent in 2010, estimates compiled by Bloomberg show.
‘Deflationary Bias’
The income and spending data “reflects a deflationary bias in the economy,” said Kevin Caron, a Florham Park, New Jersey- based money manager at Stifel Nicolaus & Co. “Why pay 18 times earnings for an economy with a deflationary burden on its shoulders?”
Sounds plausible and probably correct.
Wonder how many times governments inflate their own money supplies trying to keep things ticking along while disadvantaging savers. At what point does it turn to that "dead cat"? Guess, when governments tighten their belts?
Heard the other day that we are now looking at the "square root" symbol, not the V,W,L or U ..... anyway
This thread is just going to keep on re-appearing!
In that case, the "infinity" symbol might be more appropriate!
That came shortly after the company announced conditions had improved in May and June, after a flat performance in April, and that it was now trading ahead of the same months in 2008 on a total and like-for-like sales basis.
It now sees net profit for the second half of fiscal 2009 rising by 20 per cent 30 per cent on the same period last year, compared to earlier guidance of growth of zero to five per cent.
Damn pesky increase in profit guidance from one of our retailers... JBH did so recently too.. HVN sales have also marginally increased in the last 9 months
http://business.theage.com.au/business/djs-stock-soars-on-guidance-boost-20090630-d2yw.html
For the year to date, David Jones stock is returning 49.4 per cent against the overall market at 8.7 per cent.
JB Hi-Fi's total return this year is 60.1 per cent and Harvey Norman's return is 27.7 per cent -- all standout performances.
This week’s report from the US Federal Reserve suggested that deflation was no longer a significant risk, while a new forecast from the Organisation for Economic Co-operation and Development also suggested that the risk of deflation had been averted.
Eurozone annual inflation has turned negative for the first time, complicating the job of the European Central Bank as draws a line under emergency measures to tackle continental Europe’s recession.
Consumer prices in the 16-country eurozone were 0.1 per cent lower in June than the same month a year before, according to Eurostat, the European Union’s statistical office.
DCB
gg
Nick
(enjoying the rally whilst it lasts)
I hate the rally, I 've been a bear (Polar) for the winter.
Really peeeeeed off I sort of missed this rally
Even bought some Japan ETF's to stem the bordom...
Loving the rally, though I fear we may see a retrace in the not to distant future. This time I won't get caught napping!I hate the rally, I 've been a bear (Polar) for the winter.
Really peeeeeed off I sort of missed this rally
Even bought some Japan ETF's to stem the bordom...
The recovery is so far, very similar to the 1920's depression DCB -
How are some of your calls going?
BHP - $13.00, MQG - Under $1.00 (That is not a typo)
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