Letter From the Editor

During the first two months of the new year 2010, the global financial markets has seen a number of positive and negative news headlines sending most of the domestic and international broader stock market indices to a roller coaster ride.  Although there were a number of positive economic indicators in the US signaling a recovery, for instance the growth of GDP and increase in Industrial Activity, it was not significant enough to convince the market participants for another bull run.  The negative news on debt crisis and significant budget deficits in Greece and other weaker European countries concerned the international investors the most, by questioning the stability and recover of the global markets. 

Not very long ago, some stronger developed countries took pride in the strength and stability of their currencies reflecting the economic and political power, but the story has been different in the past few years of the crisis with the three major currencies (the US Dollar, Euro, and Pound Sterling) depreciating significantly.  First the US Dollar took a hammering in 2009 with the return of risk appetite and ability to borrow currencies at low rates and sending money out of the US to fund speculative “Carry Trades”.  Later, the Euro plummeted because of the concerns about the Euro Zone’s exposure to sovereign-debt problems in the weaker countries like Greece, Portugal, and Spain.  In addition, the Pound Sterling started to hit the ground with concerns of British government’s significant deficits.  Interesting to note is that none of the politicians and central banker of these countries are neither upset nor taking actions to counter the problem, but have chosen to sit in the sidelines with a positive belief that their depreciating currencies would boost exports and eventually stimulate their country’s economic activity to help recover.  This time the depreciating currencies have not been punished in a traditional way – by higher inflation, like the double-digit inflation that was accompanied by depreciating currencies in the 1970s.  The direction of the trend of the major currencies has been of paramount interest to exporters, given the desperate scramble for growth that has followed the credit crunch and the global recession

Although the GDP growth rate in the United States has significantly been positive for the last two quarters of the year 2009 coupled with an increasing Industrial Activity, it is has not influenced much to improve the consumer confidence about future prospects.  The Conference Board Consumer Confidence Index, a closely watched measure of consumer confidence, tanked in the month of February 2010 by a month on month rate of 18.6 per cent.  The Consumer Confidence is a key indicator observed by the financial markets to evaluate the consumer spending pattern and forecast the economic activity in the medium term.  Consumer Confidence is a driving force for consumer spending, which drives two-thirds of the country’s economic activity.

To keep our readers (you) stay abreast of the transient economic indicators and understand its implications on their investments and wealth, we have worked on a partnership with Mr. John Lounsbury, Ph.D., CFP, an investment consultant and financial planner, to write valuable articles on economic analysis to our readers. Mr. Lounsbury is Certified Financial Planner who has several decades of experience in corporate management and teaching college level courses.  Like always, we are strongly committed to provide our Investor Concepts readers the best of information and analysis on potential opportunities, trends, and analysis right to your computer screen.  If you to like the articles, analysis, and insights that you read on our site, you can share it with your friends through email or social networking sites by playing a significant role in helping your folks manage and protect their wealth. Our production director and webmaster, Mr. Endre Palfi has enabled a feature called “Add This”, a button towards the bottom of the webpage of every article you read, which will enable you to share it with your friends on Facebook, Twitter or other social networking sites.