- Posted October 28, 2012 by
Global recession opportunities in 2013
Global economic slowdown is worsening as it cut its growth forecasts and warned U.S. and European policymakers that failure to fix their economic ills would prolong the slump. Global growth in advanced economies is too weak to bring down unemployment and what little momentum exists is coming primarily from central banks. U.S. growth has slowed to 1.3%. Greece and Spain are in recession and China's economy has lost momentum for seven consecutive quarters and is now growing at 7.4%. Dow Jones loss over 450 $ in last several days. China's slow growth report will have it's influence on Asian market, whic is a biggest market after U.S Market and may will have it's influence on Hon Kong, Mumbai, Tokyo market. Debt crises in Dubai will be common for arabic countries, low price for oils and fast moving price is a second major problems for gulf countries.
If we look at the world, essentially Europe, the US, China and emerging economies that depend heavily on China, Europe is already in recession, the German economy is still growing slightly but likely to go into recession, the other economies are already in recession. The US has decelerated and I don't see much growth in the next 6-12 months. China's manufacturing activity fell to a nine-month low in August as firms struggled with global woes. Preliminary figures from HSBC's closely watched purchasing managers' index (PMI), which gauges nationwide manufacturing activity, hit 47.8 this month, the lowest since November. New export business declined at its sharpest rate since March 2009, HSBC said, without giving a figure.
High unemployment rate in Spain, Greece is more than 25 % and 1 from 3 yong people are unemployed it's global problem. What does Eurozone offer to young people? nothing. It's time not to think about recovery of Euro, just better to think make some reforms
There are more and more stocks that are breaking down, economic sensitive stocks and companies that cater to the high-end," he said, adding "that suggests to me the economy is likely to weaken and the huge asset run is likely to come to an end with significant asset deflation. Suddenly recessions are more risky for global economy than we can exapt it. Maybe it's is more opportunities for individual investors to find or buy cheap stocks and discounted property, but for companies it's a way of bankcruptcy.
Maybe we will have question: How a recession impacts large businesses?
- Falling stocks and slumping dividends
- Credit impairment and bankruptcy
- Employee lay-offs and benefit reductions
- Cuts to quality of goods and services
- Reduced consumer access
- A recession's impact on small businesses
Investors seem to be a lot more optimistic. They're banking on monetary easing in their "risk-on" trades: going long on stocks and commodities and shorting bonds and the dollar. He recommends the opposite. Stocks have outperformed Treasuries this year but longer term the opposite was true.
I think we could have a global recession either in Q4 or early 2013.
By Irakli Berdzenadze
Personal Financial and Investment Consultant