Saturday, June 7, 2014

Financial Economics - The new paradigm

Economics of today is far different from Laissez faire concepts that we learned in school or universities. Enormous Govt. intervention after and during GFC has distorted the global economy rendering the classical economics and finance to be nearly worthless.

Such great govt. interventions has resulted a different and new sets of global problems. It is true the economy and the financial markets are decoupled.

How long will this floating in the air will last? I have no idea. As a cycle believer and practitioner, the momentum will continue and runs its course before deflates. I share and agree that the global markets is due for a serious correction. What and where I beg to differ is the timing this will happen!

Will this deflation and correction come tomorrow? Next week? Next month? Next year? I have no idea and I will let my own financial model guide me along the way.

For now and the immediate future, I do not think the music will stop abruptly. Again, it is markets with interventions and this makes prediction more difficult.

Until the actual serious correction comes, ignore the soothsayers but be prepared when it comes!    

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