My Finance Journal

Sources close to “Mann International” say that the firm remains of the opinion that US consumers will remain conspicuous by their absence from retail sales figures for the considerable future.

The US technically emerged from its long recession last week when data showed that its economy grew by 0.9% in the quarter through September – equivalent to annual growth of 3.5%. Although markets rallied strongly on the news, gains fell away sharply the next trading day after investors digested the fact that much of the rise in consumption could be attributable to government spending in the form of incentive schemes like the so-called “cash for clunkers” program.

Analysts at “Mann International” said that the Obama administration had to consider whether the withdrawal of such programs would derail the recovery and said that the US government was effectively the new US consumer.

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“Mann International” analysts believe that Investors worldwide borrowing US dollars and buying assets – typically commodities and equities – are fueling the next bubble which, once deflated, could seriously damage the nascent recovery underway in several countries.

The relative cheapness of the USD and its ample supply is causing many analysts to identify Asia as the new “place to be” and borrowing in the first world and lending to the developing world is fast becoming the trade du jour.

“Mann International” has made no secret of its misgivings about the fact that the US stock market appears to be insulated with cheap leverage.  The firm believes that generating cheap dollars enables hedge funds to speculate and build leverage in many other asset classes.

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“Mann International”: Any lingering hopes that the United Kingdom would be in a position to withdraw from its program of quantitative easing were dashed after data released by the Office for National Statistics (ONS) showed that Europe’s second largest economy remained mired in recession for the sixth straight quarter.

Broad consensus among economists had expected the UK’s beleaguered economy to emerge from its recession with modest growth of 0.2% but the ONS figures showed that GDP had actually contracted by -0.4%. The foreign exchange markets immediately rounded on sterling which plunged to as low as $1.6384 against the US dollar.

Analysts at “Mann International” said that the news came as no surprise to the Asian-based investment boutique which has remained skeptical of speculation that the UK could feasibly withdraw its bond purchase scheme at the next meeting of the Monetary Policy Committee in November.

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