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-- Posted Wednesday, 5 May 2010 | Digg This Article | | Source: GoldSeek.com
The fall out from the Greek debt crisis refused to die down yesterday with markets fearing similar debt crises in Spain and Portugal. The euro fell below $1.30 and acted as a transmission mechanism taking the mayhem across the Atlantic to give markets their biggest sell-off since January. Only the short exchange traded funds enjoyed big rises yesterday. The basket of 10 short ETFs recommended in the May edition of the ArabianMoney newsletter jumped by 4.5 per cent. The ArabianMoney newsletter is available by subscription. Short ETFs Short ETFs are designed to capture the inverse of market falls. If market falls continue then this performance will compound heavily to deliver a spectacular result. But markets have disappointed those shorting the long rally since March 2009 for many months, causing big losses. Yesterday’s sell off was the most broadly based since January and also the deepest in percentage terms. The Dow Jones lost two per cent, the S&P 500 closed down 2.38 per cent and the Nasdaq dropped close to three per cent. With government debt problems mounting in Europe, and protestors storming the Acropolis in Athens to call for a revolution, the fear of a W-shaped recession has returned with a vengeance. China has also been tightening up on lending to calm its runaway economic boom, bringing Asian financial markets sharply down. Even Australia put the boot in by raising interest rates and announcing a new super-tax for mining companies. The realization is coming to financial markets that the recent tentative recovery has been fueled by government stimulus, spending levels and ultra low interest rates that cannot last much longer. Gulf State implications For the Gulf States this will mean a lower oil price for a period of renewed recession in major global economies. However, it is not clear that spending cuts are achievable and the alternative is to print money and cause inflation. This inflation would be reflected in much higher oil prices, and this could mean another oil boom much sooner than many observers currently think is possible. The danger then is of another boom and bust cycle, with savage volatility in local equity and real estate prices. This could mean a quick recovery in the UAE stock market after the initial shock of the latest crisis in financial markets is over. The May edition of the ArabianMoney newsletter considers this possibility in detail and recommends UAE stocks as its Trade of the Decade for subscribers. Gold and silver will be the other big winners as inflation returns.
-- Posted Wednesday, 5 May 2010 | Digg This Article | Source: GoldSeek.com
Previous Articles by Peter Cooper
About Peter Cooper:
Oxford University educated financial journalist Peter Cooper found himself made redundant by Emap plc in London in the mid-1990s and decided to rebuild his career in Dubai as launch editor of the pioneering magazine Gulf Business. He returned briefly to London in
1999 to complete his first book, a history of the Bovis construction group.
Then in 2000 he went back to Dubai to become an Internet entrepreneur, just as the dot-com market crashed. But he stumbled across the opportunity to become a partner in www.ameinfo.com, which later became the Middle East's leading English language business news website.
 Over the course of the next seven years he had a ringside seat as editor-in-chief writing about the remarkable transformation of Dubai into a global business and financial hub city. At the same time www.ameinfo.com prospered and was sold in 2006 to Emap plc for $27 million, completing the career circle back to where it began a decade earlier.
He remains a lively commentator and columnist as a freelance journalist based in Dubai and travels extensively each summer with his wife Svetlana. His financial blog www.arabianmoney.net is attracting increasing attention with its focus on investment in gold and silver as a means of prospering during a time of great consumer price inflation and asset price deflation.
Order my book online from this link
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Short ETFs Only Winners as Greek Contagion Hits Markets Again
