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||Asean Affairs 23 January 2013
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Shayne Heffernan Weekly Economic Outlook
Global Economic Outlook Dims
While many are talking about the so called Rally we are having, I am yet to see any signs that justify a move higher, in fact, I am not sure I even see a rally.
When looking at the numbers from Wall St, there must be a mathematical adjustment for QE1, 2, 3, 4 etc. Given the Fed at some stage must reclaim that investment, where is the Rally?
Now we are building to another market spike, celebrating a solution to the Fiscal Cliff issue, this is of course a celebration of failure. Seeing the Debt Ceiling lifted gives me no comfort in relation to the US Economy.
The Debt Ceiling was designed to be an alarm bell, and that alarm bell is ringing louder than ever but few are listening. The discussion in Washington should be, Why is the Debt Ceiling so high? How can we reduce the dependance on debt? Where are we taking the US Economy?
But instead we have political infighting and Washington trade offs, very soon if the US Debt is not addressed, it will result in catastrophic failure as we have seen in Europe.
Countries can not run forever on printed money, the US Economy is starting to look like Japan in the 1980s with decades of recession the most likely prospect.
So we have a situation where the US Economy is questionable, Europe continues with a political circus that will destroy the region or leave Germany as the owner of the EU, where should we be investing?
The answer is, as it always is, look for value, but now we must look for Multinational value, companies that have a spread of revenue evenly balanced from Asia, USA, Europe and emerging markets.
Parts of Economies, and parts of the world will still grow, that is where to be invested.
So here is a sample my value list:
In Europe it is more challenging and not yet time to buy in to most.
FTE remains value
Gold, Real Estate, Silver, Metals, Fine Art should also be part of your portfolio.
The full list and the details on each was distributed to clients at the beginning of the month (click here to become a client)
In answer to those that point to various local indicators to say things are improving, I have a number for them, it is 5m.
5m people will become unemployed globally with a record 202 million people worldwide expected to be officially jobless this year. That number is expected to rise by another three million in 2014 and should hit 210.6 million by 2017. Without people working, without income creation the economy will slide.
Last year saw a clear return of the financial crisis, jobless numbers increased by four million to 197 million in 2012.
Shayne Heffernan Ph.D.
Economist/Hedge Fund Manager
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Heffernan Capital Management
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