This morning the market is euphoric again over news that the Bank of Australia chose to raise interest rates and declare the economic downturn a thing of the past. Too bad Canada didn't sell more of our stuff to Asia. Thanks to massive government stimulus, and widespread speculation and stockpiling, Asia has been pretty much the only hot demand spot in recent months. Australia has therefore naturally seen a pick up in demand for its raw material exports. Over on our side of the world, the US is still floundering and Canada is still desperately seeking some customers with a pulse. Whether Asian demand can continue in light of weak demand everywhere else is doubtful. I suspect Australia may have sounded the all clear a little too soon, time will tell.

Roubini did a CNBC spot yesterday talking about the risk of shock to commodity exporting countries which is likely to come when the world economy does not bounce back as quickly as many are forecasting. He talks about the large disconnect we have seen over recent months between soaring risk assets and real prospects for economic recovery.



I think Roubini is right about the economic headwinds, but as my friend ...   more »