This is Mr Lincoln Augustus, first second cousin of Holymagiman
Just sitting back here thinking the thoughs on a pleasant Tuesday morning. Just watching the world go by. Just thinking out the thoughts, which get more confused the more one reasons them out, and which just don't seem to reach an acceptable conclusion.
So I while away the time watching the three chickens in their little coop, pecking away at all the late worms who should have gone to bed much sooner. "Chi'ken" Johnson brought them in today, and Mma grudgingly took them , after much prodding of their chests and tugging of their wings. And so they while away thrir time, pecking, pecking, pecking. Poor things, they know not that their gooses will be cooked before this days sun has set. Curried, hopefully, in the corriander gravy Mma' is famous for. Such good things to looks forward to, and life goes on.
I see that the world Bank is predicting that the world economy will shrink by 2.9% this year, and that global trade will fall by 10%.
We were all very amused by this, seeing as how these were the very gurus who got it so wrong the last time. I suppose that they have track record on their side, seeing as how they have gotten it wrong so badly for so long that, by te balance of probabilities, they have to get it right sometime. So, maybe now. Then again, maybe not.
But whatever, it sure has thrown the markets into a downward spin.
Holymagiman asked us whether we thought that the recent gyrations in the share markets could have been due to some selling of puts in the indexes by someone in the know. Gosh, that would have raked in a cartload of money to anyone who knew what the World Bank report was all about.
Of course, Uncle tobias and i, and the delightful Miss Millie all told him that such things were unthinkable and that they did not happen,for are not the people who run the World bank all honourable people. Insider trading coming from the world bank would be unthinkable, just as insider trading coming from within the ranks of the august central banks never happens.
it is interesting to see the thoughts of interest rate hikes creeping into the market-place. An interesting diversionary thought, to while away the time between drinking coffee and swatting flys. Mr Obama seems pretty good at that, swatting flies I mean. Though he took a bit of a while doing it.
Holymagiman can pluck a fly by its backwing in midflight, ten times out of ten. Effortless ease, and them flies never see it coming.
Just like I do not see any interest rate hike by a central bank coming. the poor mutts have been cutting interest rates and cutting interest rates till they had no more places to cut, then they have been quantitative easing and quantitative easing till the ink all ran dry. and for what and why?
Because the housing market went belly upside down, that's why. And when the housing narket went belly up, so too did construction and so too did demand for fit-outs, and jobs and so on.
And things are still very fragile. the NINJA loans have had their toll on the housing market, now it is the next wave due to job losses. So it will be a brave central banker who will raise rates now, when there is every chance the housing market will tank at the first sign of a rate rise.
And this is nothing to do with the size of the rate rise, it is everything to do with market perceptions of the implications of a rate rise. And if the housing market does tank a second time, then we will truly be in the depths of a very cold, very long and very bitter winter.
And even the geese in the central banks are not going to keep on proving to us that they are gooses. Hopefully not, but who knows.
So my thoughts are that rate rises are most unlikely in the short to medium term.
So, where does that leave us with the after effects of quantitative easing, I wonder? That is pretty inflationary in its end efffect, so leaving money in the bank is probably going to have a negative effect.
I would therefore reason that in such an environment, things such as resources, oil, gold and shares in good companies have to go but one way, and that is up. And so I would reason that the recent gyrations in the markets are but a hiccup in the scheme of things.
Just some thoughts to while away the time. the chicken look contented.
