Xie Guozhong:Hard Landing vs. Stimulus
The following article was written last Monday and is in the current issue of Caijing Magazine. The basic point is that (1) the bounce since Nov 08 that was driven by technical factors and stimulus hope is over, (2) bad corporate and economic news, much worse than expected, would weigh on markets, (3) markets could bounce again only after the 4Q08 corporate and economic news are digested, and (4), while another bounce in 2Q-3Q0 is possible, it would still be a bear market rally. The global economic contraction may stop in 2H09. But it wouldn't be the beginning of another growth cycle. Indeed, with so much monetary and fiscal stimulus, we may get stuck with stagflation through 2010. Only structural reforms in the US and China could start another growth cycle and bull market. Happy CNY! Andy Hard Landing vs. Stimulus By now a barrage of economic and corporate data is showing unequivocally that the global economy is in a hard landing. The US lost over half a million jobs in both N...