Monday, 5 March 2012

What, me worry?

I think it's a very big moment that China through the auspisious of the Premier Wen has lowered GDP forecasts to 7.5%. China’s economy is encountering new problems; there is downward pressure on economic growth and prices remain high,” quotes the FT. Now to those of us who've watched closely over the last 12 months this always seemed inevitable. Having said that, the natural inclination of the anglo saxon world and for that fact the G20 in toto has continually ignored the facts around them. Even now the bulls will probably suggest that China will pump money into their economy and thus bail out the rest of the world. This is a fallacy. A lot of the money that will now go into domestic China will be used to supplement the vast majority of the workforce and not the condo buying middle and upper middle classes of the mega cities. These people will clearly go through the same deleveraging that we've seen elsewhere in the world.

At no stage in the last 3 years have I been an outright Aussie dollar bear. The closest I got was a long CAD trade in a pair with the AUD on the basis of oil. I was short AUDCAD back in November and really it did very little. I'm still surprised at that, but the Aussie central bank put the rates cuts I expected on hold thus perpetuating the carry trade. No great damage done. I'd start to short the AUD now on the basis that Chinese imports of raw materials will likely start to weaken which will force the hand of RBA supremo Stevens into cutting rates. 

Times up, sorry Aussie brothers
Speaking of things I'm start worry about, it's less than a month now until my firs Grand Fondo. The GF Dolci Terre di Novi" is 105k's of pain on April fools day and I don't feel ready. Todays exercise consisted of a long hour in the gym. Thats clearly not enough to make the GF an easy task. I think I worry too much as after all the idea is to try something different, not to win the bloody thing! I've got to stop thinking everything is a competition. 

I'm not sure my cycling kit is going to be colorful enough!

No comments:

Post a Comment