Remember 'Green Shoots'? Looking More Like Weeds.

A recent article posted on AdvisorAnalyst.com by Eric Sprott titled: ' Whither Green Shoots', questions the validity of the March '09 rally. "What happened to the strong (economic) recoverythe market rally was promising?" asks Sprott.

Recent economic data are dousing the belief in a lasting economic recovery. Signs of slowing are showing up in the US, Europe, Japan and China. The significance of the weaker than expected US retail sales number yesterday morning, is that it is the second monthly disappointment in a row, and consumption is supposedly 70% of US GDP. On this side of the border, I believe a similar percentage of Canadian GDP is exports to the United States.

"Much of the market action the past 12 months has defied traditional market rules." says Sprott. As an example he highlights the US banking sector: "Of the 986 bank holding companies in the US last year, a total of 980 lost money." The remaining 6 deemed 'too big to fail' made money based on tax payer bail outs.

The stock market rally from March '09 was a monetary phenomena rather than a fundamental one, and we've been watering weeds all along. If you'd like a copy of Scotia Economics 'Global Forecast Update' ask us at yourlifeyourplan.ca or call 250-868-5525.

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