New President, Old Problems

The Positive Effects on the global share markets after a Positive New US President been selected was shorlived.

On Wed & Thur, Wall ST fell by a total of about 10% - this could have triggered off a Massive 1-day 23% drop like it did in 87 - the Black Monday. Luckily, it rose by 2.85% on Friday, on rumours that Federal Reserve has to cut rate again and the US Government is to bail out the Autocar industry.

Given that the US Rate is already at 1%, the Lowest since 1958, how much Lower could it be - or How Effective will a Lower Rate actually change things? The Rate is now back to late 2003 level, which was blamed by most commentators as the Root Cause of the Current Bubble - Cheap Money.

Now, one of the Biggest Employer in US is in Deep Trouble, the Autocar industry - together they directly employ 3 Million workers - imagine they all join the "Dole Queue"? And the Indirected Employed workers also in Millions! The three big names, GM, Ford and Chrysler need Big Cash to survive, Need Money NOW.

How much Spare Cash the US Government has? Or to print?
So what other industries it has to save after the Banking, Insurance, now, the Autocar.....?? the Airline, the Retail.....?

US Unemployment Rate is at 6.5%, rose from 6.1% - the Highest since 1994 - did I not say in my previous blog about "Higher Unemployment."? It will rise Higher and Higher - Everywhere.

UK had its shocking 1.5% rate cut on Thursday, making its Base Rate now at 3%, the Lowest since 1955 - and the Biggest Cut since BOE took over the Interest Rate Cut decision since 1997. The reasons?

UK House Price dropped by 2.2% in October when compared with September, making the Annual House Price drop of 15%! And IMF released its outlook for UK on the same day, predicting the UK Economy Growth is to Shrink by 1.3% in 2009! Worse than US, Worse than Euro Zone!

Australia had another 0.75% drop On Tuesday, 2% has been cut so far, making its Base Rate at 5.25%, the Lowest in 2 1/2 years. Still, the current Global Slowdown has made a A$40 Billion Hole in its Federal Budget!

And its Biggest Childcare Provider, the ABC learning, with 1,200 centres in Australia employing over 16,000 staff has finally collapsed - Administrator called in days ago. The Once darling of the Share Market now vanished, leaving the Government to rush putting in an A$22 Million temporary assistance package. The Lesson?

Never Overstretch Yourself.

ABC Learning BORROWED TOO MUCH! And TOO Optimistic!

Are you making the Same Mistake,
Overestimate the Income by 20% AND Underestimate the Expenditures by 20%?
Leaving yourself 40%+ BIG HOLE!

IMF has just pointed out the economies of the Industrial Countries are Shrinking - the First time since WWII - except Australia, which it is seen to have growth at 1.8%, though Our Prime Minister, Kevin Rudd insisting it should be 2.x%!

In short, the US Economy will GET WORSE.
So will the global share markets!
And everytime there is a rebound, remember to SELL!

Keep CASH- CASH is no longer King - CASH IS NOW GOD!

Fate
Never Lose Focus - Or Lose Your Cash