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DEUTSCHE BANK: Western Economies Are Screwed, And Investors Face A 'Disturbing Paradox'
TBI ^ | 9-20-2012 | Matthew Boesler

Posted on 09/20/2012 10:37:19 AM PDT by blam

DEUTSCHE BANK: Western Economies Are Screwed, And Investors Face A 'Disturbing Paradox'

Matthew Boesler
September 20, 2012

Wikimedia Commons

In a new report entitled Gold: Adjusting For Zero, Deutsche Bank analysts Daniel Brebner and Xiao Fu paint an incredibly dark picture of the bind the global economy is in right now.

Brebner and Xiao are pretty frank about how levered up the financial system is at the moment, and they warn that the next shock will be totally involuntary and unexpected.

Here is what the analysts have to say about how upside down the world is right now and the risks looming on the horizon:

We believe the balance of 2012 could remain challenging for investors, given the many negative indicators and warning signs. Certainly extremes in leverage in the Western economies and questions regarding growth in China present investors with a worrying post-2012 future. However, in our view there are nearly zero real choices available to global policy makers. The world needs growth and it is willing to go to extraordinary lengths to get it. This is creating distortions where old rules don’t seem to apply and where investors face a disturbing paradox:

1.Those who are right are likely to be wrong
2.Those who lose, often win
3.Those who are imprudent can be rewarded
4.Dumb money can win

In the first instance, we believe investors are right to worry; the imbalances in the global economy are extreme and need to be urgently addressed, proactively. This is unlikely however, making a necessary future adjustment likely to be involuntary and therefore unexpected. Those who are right are likely to be wrong for a considerable period of time.

In the second instance,

(snip)

(Excerpt) Read more at businessinsider.com ...


TOPICS: News/Current Events
KEYWORDS: collapse; economy; recession; recovery
IAS
1 posted on 09/20/2012 10:37:26 AM PDT by blam
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To: blam

That’s ok, the rest of us are stupid too.


2 posted on 09/20/2012 10:42:20 AM PDT by palmer (Jim, please bill me 50 cents for this completely useless post)
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To: blam
GARY SHILLING: Here's Why There's No Housing Recovery And Prices Will Collapse Another 20% (Oops!)


3 posted on 09/20/2012 10:57:54 AM PDT by blam
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To: blam

This is the blunt medicine right here. Ignore at your own expense.


4 posted on 09/20/2012 7:33:14 PM PDT by Free Vulcan (Election 2012 - America stands or falls. No more excuses. Get involved.)
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