Sunday, June 3, 2012

Links about the Global Economy you need to read and understand!

Update June 4, 2012: After the U.S. stock market close Egan-Jones downgraded the sovereign debt of the UK from AA to AA-!
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We all read and hear the headlines about the stock market dropping like a stone Friday, but what does that singular event really mean?

In the soundbite world that we live in most of us are all too aware that the Dow Jones Industrial Average, an extremely narrow look at the U.S. and global economy, dropped about 275 points on Friday.

Watching the majority of the business shows and listening to the investment "experts" that they parade on, you would be under the impression that if you have a "long-term investment horizon" and are willing to step in and use this "overdone correction" of the market to "slowly dip your foot in and buy good companies with strong balance sheets" that you have been presented a great opportunity.

And why? Because according to them "stocks are on sale" and on sale is the time to buy anything.

Sounds good but those prognosticators on the sell-side of the market make a living from investors buying, and therefore you really need to do your own investigation to determine whether if in fact what they are saying is actually plausible.

And, that when all is said and done, you can feel comfortable buying stocks and investing your hard earned money.

This of course assumes that the viewers these sages are speaking to actually have any "free cash-flow" to funnel into anything other that surviving day-to-day. But I digress.

The bottom-line is that nobody really knows what's going to happen because if they did, well, they wouldn't have to be selling you investment ideas to make a living.

What we do know is that we live in a world where the economy is a global one and that as bad as the U.S. economy and U.S. government fiscal health looks, some EU countries like Greece, Spain, Italy, Portugal and Ireland (the PIIGS) look exponentially that much worse.

Caveat emptor my friends, caveat emptor!

Some links to read in order to better understand the GLOBAL economy!
The Economist: Spanish woes: Hard pounding

Urdu Wire: World growth at risk as US employment stumbles

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