By Shaun le Roux

The Credit Crisis was at the heart of the monumental collapse in global stock markets in 2008.

The credit-specific crisis has largely been averted by extraordinary government and central bank intervention, which has seen a massive expansion in the monetary base, and credit markets are now operating on pre-crisis terms. Now that we have that particularly ugly episode behind us, we can turn our attention to real world economics and try to assess what financial markets have in store for us over the years ahead.

We are of the view that no rational investment decision can be made today without first recognizing the major secular changes that are busy taking place in the world. In two key areas, the balance of power is in the process of shifting. We believe that you ignore these shifts at your peril.

Firstly, we believe that the world is becoming increasing dependant

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Facts about the Opel deal emerging: Reuters reports on a company trustee who claims that more than €600 million of German aid has been set aside for upgrading the auto industry in Russia.  Putin has praised the sale as the 'right market choice'.   The EU will investigate the money offered by the German government to the purchasers of the unit.  The Chief economist from the European Bank for Reconstruction and Development has suggested that a ruble devaluation will not cure Russia's economic ills but rather moving away from commodities will herald economic growth.  'It is not a sustainable recovery yet in Russia or globally because it is based on massive government and central bank intervention': Arkady Dvorkovich is realistic about Russian prospects.  The ...

Home sales improve…  Are we there yet…  Intervention talks…  Buying on dips… And Now… Today’s Pfennig! Good day…and a Fabulous Friday to you. As I was sitting here this morning collecting my thoughts, it just hit me like a ton of bricks that we’re already towards the end of July and next weekend brings us into August…where’s the pause button when you need it. Anyway, yesterday started out like any other quiet morning so far this week but we did see a nice little run in the currencies only to see profit taking as we moved into the late afternoon. As I turned the computer screens on this morning, I see where the overnight markets brought us right back up to the levels we began with this time yesterday. The big story that moved the markets was the better than expected housing numbers that, again, gave investors that warm and fuzzy feeling that I

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As someone who likes to be optimistic, I'm finding myself in the uncomfortable position of being a bear. Bluntly put, I don't think the current rally is going to stick.

There are 3 reasons why I'm bearish.

The recession is getting worse. The ISM manufacturing index set a new 26-year low. Black Friday sales were not enough to prevent a steep drop in November retail sales. 553,000 jobs were lost last month - the biggest drop since December 1974. Valuations are not as cheap as they could be. The Dow Jones Industrial Average still trades at a double-digit P/E. There have been previous periods where the average has traded at single-digit P/Es. On a technical basis, the Dow had been setting lower highs and lower lows - a bearish trend. (Today's rally could break that trend, but we would need follow-through buying to support it.)

Despite these reasons, stocks are rallying. The only plausible

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There is a lot of hope being priced into the markets.

I don't know of any of other reason to explain why the stock markets rallied during Thanksgiving week and held onto much of their gains this week.

Let's look at the facts.

The recession is getting worse. The ISM manufacturing index set a new 26-year low. Black Friday sales were not enough to prevent November retail sales from being horribly down. 553,000 jobs were lost last month - the biggest drop since December 1974.

Valuations are not as cheap as they could be. The Dow Jones Industrial Average ($DJI) still trades a double-digit P/E. There have previous periods where the average has traded at single-digit P/Es.

On a technical basis, the Dow has been setting lower highs and lower lows - a bearish trend. My colleague, Kevin Matras, described the chart pattern as a "sloppy descending triangle"; in

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Gold sank in the overseas markets, rallied back into positive territory by mid-morning Friday, but made its high for the day there, as it declined for the rest of the Comex before steadying through the Globex and finishing at $723.70, down $12.00. For the week, gold was off 1.5%.

Platinum bottomed near $770 in late Hong Kong trading, but moved gradually higher through most of the rest of the day, ending at $819/oz., down $7. For the week, platinum gained 3%.

Silver also hit its low late in Hong Kong, and it too pushed steadily higher, making it back into positive territory to close at $9.86/oz., up 13 cents. For the week, silver tacked on 5.2%. (Click here for charts)

While silver had a decent day, gold turned in yet another lackluster performance, ending October with a loss of 18%, the largest monthly decline for the metal in 28 years.

Gold

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Russia's President Dmitry Medvedev today pledged $20 billion in financial support for the Russian stock market and cut oil taxes in an attempt to bring a halt to what has now become Russia's worst financial crisis in a decade. Medvedev took this action in order to try to lay the basis for a reopening of Russia's bourses tomorrow, following three days of irregular operation on the back of a 25% drop in the Micex Index. Following the announcement Russian shares traded in London surged and the interbank lending rate plunged.The announcement followed a meeting between Medvedev, the central bank Chairman Sergey Ignatiev and Russia's Finance Minister Alexei Kudrin. Ignatiev also announced that central bank reserve requirements for Russia's banks would be eased in an attempt to provide more liquidity.The tax cut for oil exports will come into effect on Oct. 1 and save producers and refiners ...

Investors have been pulling their money out of Russia in the wake of the Georgia conflict at the fastest rate since the 1998 rouble crisis, according to new figures published yesterday. Data released by Russia’s central bank showed a drop in foreign currency reserves of just over $16.4bn in the week beginning August 8. This was one of the largest absolute weekly drops in 10 years. The only larger drop in reserves since 1998 was $16.5bn in June 2006, when Russia paid off the bulk of its Paris club debt.Russian debt and equity markets have also suffered sharp falls since the conflict began on August 8, with yields on domestic rouble bonds increasing by up to 150 basis points in the last month.While the value of the rouble has stayed relatively stable since the start of the conflict, with the help of central bank intervention, the ...