You’re Next Move Could be the most Important One You Make All Year!We believe that 2009 will offer many unique investments opportunities and, with a patient approach, has the potential to be a rewarding year for investors. Asset prices across the board are severely depressed, driven down by the wave of negative economic and corporate news that swept the financial markets last year. As conditions stabilise, and they will, we anticipate sentiment to improve later in 2009 thereafter followed by asset appreciation. We are not of the opinion that the end of the world is nigh!
It would have been hard to imagine four months ago, that the price of crude oil, then near $150 a barrel, would plummet over 70% to its current level.
The recent rally in the US Dollar against other major currencies shows it may have been knocked down, but certainly not knocked out. Below we discuss why the Dollar is due renaissance, and why this may actually come to the aid of faltering global economy.
The global economy continues to slow and markets are dropping under the increasing weight of soaring inflation and a credit contraction. We're facing an outright bear market in financial assets so where should we as cautious investors be looking?
Having recovered from the credit-crisis induced falls at start of the year, global equity markets have once again succumb to selling pressure as investor’s fret over the declining economic growth and soaring inflation. Economic growth in the UK, as measured by real GDP slowed to a 1.8% annual rate in the first quarter of 2008 against 3.1% and 2.5% annual rates in the first and second half of last year respectively.
Earlier this month the President of United States, George Bush, declared that the US was not in a recession but simply a slowdown; shortly after past-Federal Reserve Chairman Alan Greenspan predicted there was a 50% chance of US recession, and just this week the sage of Omaha, Warren Buffet declared that the US was already in a recession. Below we ponder who is right and does it actually matter.
Even through the answer was pretty clear many where left scratching their heads as to why the Bank of England left UK interest rates unchanged at 5.0% following their last meeting. Firstly US rates have been cut several times this year to ward off the possibility of economic recession, yet UK rates remain high in contrast. Secondly the UK housing market is still in decline.
FOR SALE: 5th Largest US Investment Bank, priced to sell.
Markets Never Move in a Straight Line. 
The Euro is continuing to strengthen against the US Dollar and having firmly broken out of its long-term trading range against Sterling (1.52 to 1.37) looks set to move even higher, in the short-term at least. The Dollar has been on a losing streak against most major currencies since it became clear that the US economy is in a recessionary environment. Growth forecasts have been cut and interest rates have begun to fall. The UK economy, through not facing the same recessionary forces as the in the US, has started to slow led primarily by a soft property market and fears over consumer credit. The Bank of England has temporarily put its inflation-fighting mandate on hold and is now looking to stimulate growth in the economy. UK base rates have already been cut once in December and look set to fall again in February.