The US Senate passed the bailout bill last night. By 74 votes to 25. Those Senators had obviously taken note of the big market tumble that followed Monday’s vote in the House of Representatives.
The House votes on this tomorrow... so the markets are still holding their breath. Meanwhile, more gloom in the real economy:
- UK house prices are down 12.4% over the last 12 months.
- Purchasing manager surveys point to a contraction in the real economy across the industrialised world. As the FT’s John Authers puts it, we were heading for recession even before this latest phase of the credit crunch began. Whatever happens in Washington, the real economy is heading south...
Because a colleague of mine, Manraaj Singh, tells me that, in actual fact, there is no global credit crunch.
"What do you mean?" I asked him.
"I mean there isn’t a global crunch," he said. "This whole thing is a western phenomenon. The Gulf States... East Asia... they’re awash with capital. And their banks are lending it".
It’s a valid point. And it applies not only to the emerging markets’ financial sector. Global economic growth, after all, is still positive, despite hitting a wall in the developed world.
"You can’t grow rich by investing in stability," says Manraaj. "You add to your wealth by investing in growth."
This makes sense. It’s not that "the West is dead" — though there are many commentators (and, as you’ll see in a moment, western politicians too) who are happy to imply that it is.
No, what’s going on here is a shift — a shift or focus, a shift of power and a shift of momentum. Let’s call it "The Big Shift".
The Big Shift plays a big part in the financial crisis we’re all experiencing right now. But if you look at the crisis in a global context, you’ll see it also presents opportunity, too.
That always happens with this kind of tectonic move. There are winners and there are losers... the trick is being on the right side of the line.
That’s exactly where Manraaj plans to be. He reckons the recent market chaos has presented investors with the opportunity of a lifetime.
You see, Manraaj is one of the boldest investors I know. He specialises in the kind of adventurous forays that make the reputations of the greatest investors. To borrow a phrase George Soros uses a lot, he "goes for the jugular".
Manraaj has just written a new report in which he sets out his investment strategy for playing this global turmoil. In it you’ll discover:
- How the financial crisis has presented you with the opportunity of a lifetime...
- Why the dollar’s set to receive another hammer blow within two years...
- The specific markets in which Manraaj is investing right now, and...
- What you need to do immediately to position yourself for The Big Shift
I urge you to do so.
Until tomorrow
Ben Traynor
Editor
Fleet Street Daily
Selected articles:
Garry White on the expensive environment targets that must be scrapped.
Manraaj Singh on how to profit from the decline of the West.
The Daily Reckoning — Paying for Wall Street’s mistakes
The fix is in!
Well...the hacks came through, just like Churchill said they would. At least the hacks in the US Senate. The Senate voted last night to burden the entire nation with Wall Street’s mistakes. Only a handful of Senators dared oppose the measure, among them Bernie Sanders, a socialist from Vermont:
"The masters of the universe, those brilliant Wall Street insiders who have made more money than the average American can even dream of, have brought our financial system to the brink of collapse," Sanders said, and are demanding that the middle class "pick up the pieces that they broke."
Sanders must be delighted by the collapse of investment banking. But he says the way they’re going about imposing socialism is unfair to the proletariat. Oh well...you just can’t please everyone!
You can read the Daily Reckoning in full here.
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