investmentcontrarians.com / By Sasha Cekerevac / July 12, 2013
The time to act is close at hand. As long-time readers of my pages are aware, one of my primary concerns about the current economy has been the complacency of investor sentiment. If you look back to any period just prior to a significant market correction, what you will usually find is that investor sentiment had grown almost immune to the possibility of a negative event.
As volatility decreases over time, through a steady climb up for stocks, many investors seem to forget that shocks to the system do occur regularly. This complacent level of investor sentiment lulls people to sleep—until they are awoken by the realization that there are extreme risks present. And that leads to sharp market corrections.
At this point in time—at least from the U.S. perspective—things do appear to be getting better. But there are increasingly worrisome signs that much of the rest of the world is actually moving backwards—toward worsening economic conditions.
The latest news from China shows that the country experienced a much worse-than-expected decrease in exports—3.1% in June year-over-year—one of the worst readings since the depths of the recession in 2009. In addition, imports to China dropped 0.7% year-over-year.
China is in the middle of a significant restructuring program, and they are not keen on pumping additional stimulus into their economy unless they see an emergency scenario.
Thanks to BrotherJohnF