Is it USD700 billion bailout plan proposed by US’s government would only represented 5% on GDP of USA? I think most of the people have been mislead. I am really in doubt the above said calculation, because as I aware before this crisis, USA ‘s annual GDP is about 13 trillion, but it was included the contribution of Financial Services in the country.
Assuming every year, Financial Sector was contributed about 20 % of the total GDP in USA. Now, the said GDP should be adjusted about 2.6 trillion to 10.4 trillion. So, the said bailout was represented 6.7% on yearly GDP. But this calculation also needed assumption on others sector remains contributed same effort to GDP as previous year. Otherwise, the calculation would not be sustained as well. Everybody noted USA would face recession in the coming year and it will brings the GDP make adjustment accordingly. This is a issue will bring another the above siad GDP more uncertainty and impact of the accuracy calculation.
After illustration the above example, I hope everybody would understand why in this period I were continue advice stay away or out from equity market.
Just imagine, if one day Palm Oil future hit below RM1, 200/MT. What is the reasonable price of SIME Darby, KLK or IOI? Is it such counter’s current price on KLSE can be sustained?
So, if you have such data in hand, please calculate accordingly before start buying the above said counter. I do not want to highlight my estimate figure at here, because my figure brings you unbelievable.
Assuming every year, Financial Sector was contributed about 20 % of the total GDP in USA. Now, the said GDP should be adjusted about 2.6 trillion to 10.4 trillion. So, the said bailout was represented 6.7% on yearly GDP. But this calculation also needed assumption on others sector remains contributed same effort to GDP as previous year. Otherwise, the calculation would not be sustained as well. Everybody noted USA would face recession in the coming year and it will brings the GDP make adjustment accordingly. This is a issue will bring another the above siad GDP more uncertainty and impact of the accuracy calculation.
After illustration the above example, I hope everybody would understand why in this period I were continue advice stay away or out from equity market.
Just imagine, if one day Palm Oil future hit below RM1, 200/MT. What is the reasonable price of SIME Darby, KLK or IOI? Is it such counter’s current price on KLSE can be sustained?
So, if you have such data in hand, please calculate accordingly before start buying the above said counter. I do not want to highlight my estimate figure at here, because my figure brings you unbelievable.
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