Sean Hyman's blog

Could China lead the way out of this mundane sideways range that we’re seeing in stocks? So far it has been perking up and showing signs of life far quicker than most other world indices.

The Shanghai composite Index appears to have broken its downtrend and is close to pushing through the upper end of its sideways range.

Morgan Stanley’s China A Shares Fund (CAF) seems to track this index fairly closely. See the chart below. The upper chart is the Shanghai Composite Index and the Morgan Stanley ETF is below it. It looks like the Chinese New Year is off to a good start so far.

Could they default again on billions of dollars in debt like they did in 1998?

If you think things are bad here in the U.S. or in Europe or Asia, then you haven’t taken a look at Russia. When you see how things are going there, you will think we all “got off easy”.

Now I’m not watering down what we are all experiencing in our economies but just pointing out the fact that some have it so much worse than we do.

The stock portfolios of banks in Japan have been hurting as badly as anyone else’s lately. The Bank of Japan fears that it could cause these banks to stop lending towards the end of their fiscal year (March 31^st) and even beyond.

Therefore, overnight, the Bank of Japan decided to start the process of buying 1 trillion yen worth of stock from these banks. This way it will help to shore up their capital and help them to continue the lending process without being so tied to their stock market.

The central bank will purchase shares until April 2010 and will hold these shares until at least March of 2012.

Oh the woes of New Zealand! The way I see it, this little country has at least five things going against it right now that I think will continue to weigh on its currency.

So let’s talk about these factors that are weighing down on the country all at once and you will see what I mean.

First of all, commodity prices have plummeted and this country depends heavily on exporting commodities around the world (predominately dairy and agricultural products).

California could be out of Cash as Soon as Next Week!

While there may be many promises of “change” happening in America…one thing that is definitely “changing” is the relationship between China and the U.S.

Why is this increasingly important? There are a few reasons but a couple of important ones off the top of my head are:

Will the pound go to parity with the U.S .dollar or have we seen the bottom in the pound?

George Soros is the world renowned investor that shorted the British pound so heavily back in 1992 that it was even more than the Bank of England could combat and it forced the pound out of Europe’s system of linked exchange rates. The plummeting pound caused the central bank to panic and for Soros to profit… to the tune of $1 billion dollars in profits. So that tells you just how enormous his position had to have been. Wow!

I know this is a hard one to believe, being that we are obviously in the middle of a deflationary period, but savvy institutional players are already starting to position themselves for inflationary times ahead.

Inflation! Have I lost my mind? Actually, no... Let me explain what I mean.

Former central banker Volcker (who is on Obama’s economic team) is prepping the world for deficits of $2 to $3 trillion dollars as the U.S. goes into one of the biggest spending sprees that (believe it or not) will make George Bush’s spending look like child’s play.

The financial world is listening. They’ve seen the leading indicators of the economy in the beginning stages of perking up. They’ve seen stocks stabilize and they’ve seen the down draft in commodities halt.

Where has the integrity gone in America? Where are the guys that really look out for the best interest of the corporation, its employees and shareholders?

They seem “few and far between” don’t they? One of the ones that disgusts me the most right now is the former CEO of Merrill Lynch.

To me, this guy is not much better than a Madoff! While Merrill is sinking like a rock, what is he doing? Redecorating his office to the tune of $1.2 million dollars.

While Wal-mart gets bashed all the time for many of its moves….go and look at Lee Scott’s office. You wouldn’t think it was the office of the biggest employer in the world. However, I bet their shareholders like it. Ha-ha!

Get ready for the “economic pipes” to be unclogged and for a tidal wave of inflation to head our way!

I assure you, that Obama’s economic advisors will be the “drain-o” that gets the pipes unclogged. When this happens, the Fed knows that it will have to “mop up” this excessive liquidity in the financial system.