Shadow Economy

Are we in a shadow economy now? The lies that every government pulls out possibly done by the shadow government.

Look at the US job reports, all the media claims is that the job losses is decreased this month. Yet if you look deeper, this is only because the US government is hiring temporary workers for their census. Not to mention people are getting tired of finding a job

Since Febuary the global stock market has seen a tremendous rally without any real change in the fundamentals. Generally the stock market discounts the future so it may rally earlier than the actual economy however if after some time, the market speculation proves to be false, the opposite will happen. The rally which was gained in these past months will reverse – and fast. It may take 3 months to rally to 20% but I believe it only takes 2 weeks for all of that to be erased.

Look at the local Philippine stock market, why is it on a near 30% rally for no reason? A bear market rally? Also the large foreign investors are net sellers and not buyers during this period. Projected GDP for the country is 3 to 4 percent this year where the real GDP is barely 1%. Inflation is down to 3.3% from the double digits of last year.

The US is the country’s top trading partner. If they don’t consume, then we have very little exports. China is our second and since China is a manufacturing nation and most of it’s export are to the US, no US demand, no demand from China, no exports to there either.

So why is the stock market rising up? Is there a shadow investor hoping people will see the dramatic rise? I’m looking at you suspiciously – mutual fund companies, insurance companies and banks touting 30% return and selling their products. There is still no real gain as last year they lost nearly 50% and a 30% increase this year still means were’s still down another 30% to make it up to last years original number.