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Cambodians officials who last week put a brave face on the global financial crisis are in good company – like that of former United States President Bill Clinton.
After all the former US president said in a recent interview that we ‘will see some good economic news from the stimulus fairly soon.’
He made the remarks on a United States television news program in response to questions relating to the recently inaugurated President Obama’s performance in office as well as the current president’s handling of the economic crisis.
He said that he agreed that President Obama should tray and educate the American people but added that he just wanted “the American people to know that he’s (President Obama) confident that we are going to get out of this and (that) he feels good about the long run.”
Cambodia’s Commerce Minister Cham Prasidh – on the other hand – was speaking at the 2009 Outlook Conference at the Phnom Penh Hotel when he made his remarks. He was quoted in the Phnom Penh Post last week as saying that he believed the crisis would soon come to an end.
Both men conveyed a particularly upbeat assessment about the world’s economy at a time when good news is in short supply.
So, with these upbeat messages in mind I set out to try and find some examples of optimism (or some ‘reasons to be cheerful’) to justify putting a more positive spin on President Obama’s (and other officials’) message regarding the overall economy. This is what I came up with –
Reason to be cheerful #1 – Gold is up. The price of gold has increased by about USD $90-100 per ounce (as of last Friday) since President Obama took office on January 20th. At that time gold was priced at about USD $840 per ounce – last week gold was selling at around the USD $920 – 930 mark. So if you are invested in gold or in a gold fund there is reason for optimism.
Reason to be cheerful #2 – Oil is down. This is bad news if you are invested in an oil company or the oil services sector. However, this is great news if you are an oil consumer – as most of us are. After all the price of petrol at the pumps should be lower as should our electricity bills and air travel. The price of oil hit a record high above USD $147 per barrel in July last year before falling back later in the year. Last week oil was trading in the USD $40s range.
Reason to be cheerful #3 – The good Macro Hedge Funds are up. These are funds that invest in all the products in the major markets such as stock, bonds, currencies, commodities (though not necessarily at the same time). The strategy of such hedge funds is to profit from the changes in global economies that might in turn affect the markets. They are volatile but can be a highly effective investment. And it just so happens that with the volatility of today’s markets the macro hedge fund strategies are up too.
Reason to be cheerful #4 – Managed Futures funds are up. Funds trading in futures contracts (based on the future prices of certain commodities) have also done well. Funds such as Man AHL Diversified Futures PLC have posted gains of 24.9% in 2008 and averaged 14.6% per annum since 1998. If you are an investor in futures fund you may also have good reason to be optimistic.
Reason to be cheerful #5 – And the final reason to be cheerful comes from former President Bill Clinton himself. On the very same talk show in which he was quoted as saying “I think you will see some good economic news from the stimulus fairly soon” he added that he thought “you’ll start to see people express gratitude for getting the unemployment benefits, the tax cuts and the food stamps.”
He also added that “you’ll see the money flowing through the economy. Then I think you’ll see every state be able to quantify how much better shape they’re in, because of the education and health money.”
And although former President Bill Clinton was talking specifically about the United States we can only hope that his ‘reasons to be cheerful’ extend to the world beyond America as well – including Cambodia.
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