I dont think polarised views on either end will prevail. The big difference between now and GFC 1 was GFC one was off considerable highs with events unfolding rapidly and unexpectedly, hence the sharp and drastic fall. This time around we have been slowly grinding down and alot of global concerns are factored into where we are at.
Will things improve or get worse from here?
Negative: 1.EU is and will be in a prolonged recession. Which will have impact on consumption, china imports, energy etc. 2.US fiscal decision will start to get in headlines. 3.US preidential elections unclear 4.China slowing
Positive 1. I think people will be in for a rude shock on the China lsowing theory and commodities will stage a come back. China's economy is exactly where they wanted to be. Decision was made last year to curb inflation and reduce growth and that is exactly what has been achieved.
2. Now decsion is made to bolster growth, China is still an infrastructure investment led economy and not yet doemstic consumption led. So the recent moves to bolster infrastructure spend and credit will positively impact growth. So exports will be impacted but infrastructure project will increase net net = higher growth
3. QE in my opinion will be announced priot to further deteriration, this will give a temporary boost
So on the balance i think there is more risk on the downside than the upside but would play it 40% long 60% cash or short
SEA Price at posting:
51.5¢ Sentiment: Buy Disclosure: Held
