Rebecca Wilder’s economic updates (May 29 – June 5): Looking hard at the bottom
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June 7th, 2009 by Prieur du Plessis, Investment Postcards from Cape Town
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This post is a guest contribution by Rebecca Wilder*, author of the of the News N Economics blog.
The global economic reports are becoming saturated with signs of a forming bottom. Auto sales in Japan and the US are improving somewhat; exports are dangling in the double-digit loss rates; and GDP really couldn’t get much worse (the inventory cycle alone will create some growth). Finally, money growth rates are slowing, perhaps an indication that policy makers feel that the worst is behind us.
The lagging information: Q1 GDP was just awful
Looking behind: Inflation still falling on seriously weak demand in Q4 2008 and Q1 2008, although recent oil swings might throw a wrench in the trend.
Some troubling news still: exports anemic..still. South Korea released its May data on exports (Malaysia, India, Indonesia, and Thailand through April), which stumbled another 8.7% to -28.3% over the year. Not a good sign for May export reports across the rest of Asia.
Good news (possibly): Auto sales in Japan and the US may have troughed. The upward momentum is surely a good sign for consumer spending numbers, but notice sales are still down 19% and 20% over the year!
Finally, money supply growth rates are slowing. In the US and UK, I take this as a sign that central banks are slowing their easing strategies somewhat. However, in the EU, the lack of QE policy allowed M3 growth fall to its slowest annual pace since 2001, 4.9%.
It appears that the global economy has finally found the ripcord.
Source: Rebecca Wilder, News N Economics, June 5, 2009.
*Rebecca Wilder is an economist in the financial industry. She was previously an assistant professor and holds a doctorate in economics.
Dr. Prieur du Plessis is an investment professional with 26 years' experience in investment research and portfolio management. More than 1,200 of his articles on investment-related topics have been published in various regular newspaper, journal and Internet columns, including his blog, Investment Postcards from Cape Town. He has also published a book, Financial Basics: Investment. Prieur is Chairman and principal shareholder of South African-based Plexus Asset Management, which he founded in 1995. The group conducts investment management, investment consulting, private equity and real estate activities in South Africa and a number of foreign countries. He also serves as Honorary Consul of Slovenia for South Africa, actively developing economic, cultural and scientific relations between Slovenia and South Africa. Prieur is 54 years old and live with his wife, television producer and presenter Isabel Verwey, and two children in Cape Town, South Africa. His leisure activities include long-distance running, traveling, reading, motor-cycling and scripophily. Read more from the author/contributor here.
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