Quite some time I last wrote. Well, I (and all of us) was going through the current topic itself!
This is about the world stock markets that crashed one after the other like a house of cards. Just stocks? Oh did I forget the bonds, real estate, credit cards, CDO multiples, jobs, confidence...Sounds like just yesterday.
Let us talk a little botany...life cycle of a tree?
Most trees grow out of a seed. That tiny seed that someone/something sometime sowed somewhere. And then ample sunshine, regular mineral enrichment of the soil, and adequate watering helped sprout the seed. It became a sapling. So it became easier for it to grow into a plant, and its journey from there to become a fully grown tree was quite a cake-walk. The whole process takes anywhere form 9 months to 2-3 years.
My point is not botany, but an empirical analysis of the series of crashes we've faced in the past two years.
We're facing currency risks now-a-days. The currency of the future and the royal currency - both have already been through rough times. The currency deemed to beat gold is now under pressure, and is bring in jeopardy currencies of the rest of the world. Middle east currencies are losing pegged value and are tensed. Eastern currencies are appreciating and are still tensed! Grass is greener on the other side, is it? Oh, we spoke about trees. Done! Well, this is a regime of currency shocks! Great, accepted!
Where did this regime come from? The abrupt GDP growth rate differences around the world. That came from the so-called "recession". Job-cuts emanating from losses suffered because of confidence crash, that happened due to the stock and bond market crashes, which it is believed was a direct overshoot of the COD multiples and families, which in fact was a result of housing market and credit card crisis. All this in just 2 years! Okay, must have been the growth stage of the plant to become a tree...the fast one...in the life cycle of a tree...botany lesson?
Damn what would have been the slow "sapling to plant" stage?
Oh and the most difficult sprouting stage?
Who harnessed this big tree?
What is the next stage? Fruits? Multiple seeds? Forests? OMG!!!
And now that we have a tree giving us oxygen, there's big penalty - ecological and financial - to cut it off!
What are we headed for?
