Morgan Stanley economist Stephen Roach still bearish
Economists are often wrong. They tend to be early with their gloomy predictions, and they tend to be late with their bullish views. For example, Paul Krugman was calling for the real estate bust back in 2005 if I recall but nothing really happened until 2007. The same with Stephen Roach, who was warning about commodities bubble and the trade imbalance back in 2005, while nothing happened until 2008. So, if you are going to listen to them, keep that in mind.
Bloomberg interviewed Stephen Roach recently and he is quite bearish. For what it's worth, he has always been bearish for the most part over the last 3 or 4 years but it seems that his view hasn't changed much. He says all of Asia is in recession or slowing materially. He does not agree with the view floating around in Wall Street that China will lead us out of this mess. He reiterates his view that the US economy is going to face serious issues and a Japan-like lost decade is not out of the question, although he doesn't know if it'll be a decade or shorter.
The segment also has Mario Gabelli, who says he likes some Hong Kong stocks, which are trading below cash. I haven't done much work but I think it is better to look at Hong Kong stocks than Japanese stocks. Japanese companies are not shareholder-friendly and have very low ROE but if Hong Kong stocks are trading near or below book value, I would rather pick them. One should, still, watch out for potential problems in China. Chinese companies probably also have less transparency and higher corruption so discount them heavily. Just remember that there is no need to rush. Missing the bottom is fine if the upside is large.
Bloomberg interviewed Stephen Roach recently and he is quite bearish. For what it's worth, he has always been bearish for the most part over the last 3 or 4 years but it seems that his view hasn't changed much. He says all of Asia is in recession or slowing materially. He does not agree with the view floating around in Wall Street that China will lead us out of this mess. He reiterates his view that the US economy is going to face serious issues and a Japan-like lost decade is not out of the question, although he doesn't know if it'll be a decade or shorter.
The segment also has Mario Gabelli, who says he likes some Hong Kong stocks, which are trading below cash. I haven't done much work but I think it is better to look at Hong Kong stocks than Japanese stocks. Japanese companies are not shareholder-friendly and have very low ROE but if Hong Kong stocks are trading near or below book value, I would rather pick them. One should, still, watch out for potential problems in China. Chinese companies probably also have less transparency and higher corruption so discount them heavily. Just remember that there is no need to rush. Missing the bottom is fine if the upside is large.
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