Russell Napier on Bloomberg TV (23/9/11) — ‘We’re getting a change in the structure of the way the world works’

Russell Napier was interviewed on Bloomberg TV on September 23rd, 2011. He had some interesting thoughts on the diverging trends in the West and the East and the implications for one’s portfolio allocation strategies. It is worth a listen as Russell Napier scarcely appears on financial television — see below for the video and summary.

 

 

Summary:

 

  • ‘We’re getting a change in the structure of the way the world works’
  • A market system involves prices that are set by supply and demand. However, sometimes the government just doesn’t like the prices
  • Here’s what we have to look forward to; Exchange controls — limiting capital outflows, price manipulation of bank capital.
  • In the East governments have no real reason to get involved in markets. In the West there is a structural swing towards more and more government intervention in markets.
  • Usually when a central banker says ‘things are worse than they expected’ then he says ‘ here’s more medicine’. This time Bernanke said ‘things are worse than I expected… and there’s no more medicine.
  • Operation twist doesn’t involve an expansion in the balance sheet of the Fed.
  • ‘When the share price of Bank of America does what it does it’s telling you that the banking system isn’t working.’
  • People think markets make prices and the government responds. Actually sometimes the government just doesn’t like the price.
  • Western earnings won’t hold up. There’s an illusion that stocks are cheap in the US. As for Asian stocks: – at some stage in the 6-9 months they may look cheap.
  • Asian central banks have lots of options to respond to crises – Western central banks don’t.
  • The recent past has been bad for Asian currencies — but these are a much better bet than developed world currencies.
  • Markets might like the nationalisation of banks. However, this is very bad in the long run.
  • Investors are convinced that Euro will collapse.
  • People say that its deflation, devaluation, national default — no it’s not; its nationalisation.

See here for our collection of rare historical economic data.

Posted Oct 8, 2011
by | Categories: Other

Comments are closed.