The global business cycle is now caught with two options, try to inflate the commodities cycles is going to kick you in the teeth, deflate you are going to accelerate the deflationary forces from falling asset prices. We have debt levels that are decelerating around the world; we have commodities in the late stage of a blow-off that if they move much higher is going to crimp discretionary demand very quickly. If we get any spike in interest rates, you are going to collapse Real Estate in every major developed market because the consumer is up to their eyeballs in debt.
The US is in a recession, Europe about to go into a recession, the BRIC countries decelerating very quickly…probably a recession in 2009... Markets have corrected the bear market rally... interest rates are at a critical level, spreads are moving up again..
On another note GM has fallen back to the levels of 1982, hopefully there aggressive move to hybrids and plug in electric cars will revive this once great company...
