2009 April Global Monitor

April 2009 BCM Global Monitor Summary: • Economy has peaked in terms of spending, production & employment • Global economy in Stage 5 – Early Downturn Stocks: May have further downside risk (perhaps 20%) Commodities: Likely to have formed a bottom Government Bonds: Likely to have formed a top Firm Strategy: Budget offerings, look for long-term supplier contracts Personal Strategy: Protect job, expand skills, reduce spending, rent

Global Economic Summary, Asset, Personal & Business Strategy 2 Global Economy Personal Strategy 1. Consumer sentiment remains at historical lows 1. Conservative Investor: Cash is king, wait for transition to equities 2. Consumer wealth is falling with stocks down and property falling 2. Aggressive Investor: Long-term government bonds 3. Consumer spending (demand) growth continues to 3. Property: Rent over buy if possible contract 4. Employment: Protect job, expand skills 4. Business production/service activity continues to 5. Finances: Reduce debt and spending contract 6. Debt: Look to refinance at lower interest rates 5. The global manufacturing/services PMI appears to have bottomed Business Strategy 6. Global unemployment continues to rise 1. Competitive Strategy: Continue budget offerings 7. Leading indicators in several economies have, or 2. Operational Strategy: Continue cost reductions, are close to bottoming reduce inventory 8. The OECD World CLI may bottom as early as June 3. Human Resources: Review remuneration 9. The global economy is early in Stage 5 – Early conditions Downturn 4. Supplier Strategy: Anticipate upcoming purchase of capital equipment Asset Classes 5. Acquisitions/Divestments: Anticipate possible 1. Equities: Possible short-term bottom in place, acquisitions further risk to downside 2. Property: Further falls ahead in November 2010 3. Bonds: A likely top has been achieved 4. Commodities: At or near bottom April 2009 BCM Global Monitor

Global Economy: What stage are we in? 3 The business cycle is Expansion Slowdown Downturn Recovery Actual currently in Stage 5 – Economy 1. Early 2. Late 3. Early 4. Late 5. Early 6. Late 7. Early 8. Late Early Downturn. OECD Leading Over the next few Indicator (100) months we expect to see further declines in OECD Reference Series (100) economic indicators until consumer sentiment and Consumer spending recovery. Sentiment Consumer The trigger for the Spending Grth transition to Stage 6 is increasing consumer Industrial Production sentiment and spending, leading to a reversal in Rising Stagnating Falling Falling Stagnates Rising Rising Stagnating PMI production related Above 50 Above 50 to 50 Thru 50 Below 50 Below 50 To 50 At 50 series. Rising Stagnating Falling Falling Stagnates Rising Rising Stagnating PSI Above 50 Above 50 to 50 Thru 50 Below 50 Below 50 To 50 At 50 For now the momentum appears to be to the Unemployment downside. Rate Business Investment Reserve Bank Funds Rate 8 Stage Business Cycle April 2009 BCM Global Monitor

8 Stage Asset Class Cycle: Where to invest? 4 Expansion Slowdown Downturn Recovery Asset Classes 1. Early 2. Late 3. Early 4. Late 5. Early 6. Late 7. Early 8. Late Stock Market Commodity Sectors Government Bonds Stock Market • The stock market is predicting a smooth recovery based on early positive economic results (e.g. US PMI) • Stocks may have further downside (~30%) once the March 6 rally concludes • The current rally does not appear supported by economic fundamentals Commodity Sector • Commodities, particularly copper and oil, are rising strongly • The Baltic Dry Index has been falling in contraction to commodity strength • Sound long-term commodity fundamentals have commodities ahead of our 8-stage economic model Bond Sector • Extreme central bank interest rate interventions have bonds ahead of our 8-stage model predictions • The top in bonds appears to have been achieved in Dec 2009 8 Stage Business Cycle April 2009 BCM Global Monitor

8 Stage Firm Business Cycle: Business Strategy Ideas? 5 Expansion Slowdown Downturn Recovery Business Strategy 1. Early 2. Late 3. Early 4. Late 5. Early 6. Late 7. Early 8. Late Competitive Budget Quality Key Customers New Customers Offerings Offerings Strategy Sales Consider long- Move to long- Key Customers Consider short- Move to short- New Cust. term contracts term contracts Budget Offers term contracts term contracts Quality Offers Strategy Operations More cost Expand Cost cutting Plan Expansion cutting Operations Strategy Human Review Avoid wage Enter wage Limit Hires Hire Staff negotiation negotiation conditions Resources Acquisitions/ Avoid acq., Sell Plan for Make assets acquisitions acquisitions Divestments Supplier Move to short- Press for Move to long- Press quality term discounts term Contracts Debt (Loan) Sell assets, Seek short-term Ensure credit Procure capital Seek long-term reduce debt funds availability equip funds Management Firm Business Cycle Strategy Ideas • Continue to focus on budget offerings, consumers/customers/clients are under financial pressure • Target sales activity towards key customers with budget offerings (recognise their financial pressure) • Look to use the crisis to implement cost cutting, institute more efficient work practices/processes • Look to review wage remuneration rates to lock in lower unit labour costs • If cashed up, start planning for acquisitions that will expand market share or product offering • Continue to press for discounts from your major suppliers 8 Stage Business Cycle April 2009 BCM Global Monitor

8 Stage Personal Business Cycle: Personal Strategy Ideas? 6 Personal Expansion Slowdown Downturn Recovery Strategy 1. Early 2. Late 3. Early 4. Late 5. Early 6. Late 7. Early 8. Late Conservative Stock Transition to Transition to Stock Market Stock Market Term Deposit Term Deposit Stock Market cash stock market Investing Strat. Market Aggressive Stocks & Stocks & High Quality High Quality Corporate Transition to Commodities Stock Market Commodities Commodities Long Bonds Long Bonds Bonds Stocks Investing Strat. Employment Pursue Seek secure Become Plan next Assume Pursue Seek wage rise Expand skills promotion employment indispensible career move responsibility promotion Strategy Spending & Debt Cut back, Focus on Buy major Take long-term Essential only retire debt retiring debt items debt Strategy Housing Avoid buying here, prices and Avoid buying here, lower as Try to buy here, prices and sentiment buoyant lower prices are ahead sentiment subdued Considerations Personal Business Cycle Strategy Ideas • Conservative investors remain in cash. Begin planning your stock investments as we approach Stage 6 • Aggressive Investor may look to transition towards corporate bonds or look for a stock market bottom • This is a time to expand career skills through skills training or difficult assignments • Focus on essential purchases only at this stage, look to retire debt • Avoid buying property here if possible, lower prices are ahead 8 Stage Business Cycle April 2009 BCM Global Monitor

Global OECD Composite Leading Indicators 7 Most nations CLI remain in downturn (below 100 and decelerating). The rate of deceleration for Russia, Brazil and China in particular suggest further declines ahead. Korea and Italy have accelerating CLI suggesting a near term recovery for these nations. Global Economic Maps April 2009 BCM Global Monitor

Global OECD Standardised Unemployment Rate 8 All nations shown now have rising unemployment over a 3month period. Whilst Spain remains in unemployment purgatory, we see the US and Canada leading OECD nations into recession induced high unemployment with high and increasing unemployment rates. Global Economic Maps April 2009 BCM Global Monitor

Global OECD Standardised Consumer Confidence 9 Consumer confidence appears closer to a bottom than business confidence with the rate of decline beginning to slow. The UK, Australia, Korea, Brazil and Spain have stable consumer confidence (i.e. not falling, near Y-axis). China has low and declining consumer confidence. Global Economic Maps April 2009 BCM Global Monitor

Global OECD Standardised Business Confidence 10 Business confidence remains subdued everywhere except Korea. US business confidence looks to be improving, Australia’s has stabilised, and confidence in most other OECD nations continues to decline. Global Economic Maps April 2009 BCM Global Monitor

OECD Standardised Consumer Confidence History 11 OECD World Consumer Confidence Historical lows reflect severity of the 2008 Financial Crisis. The good news is that sentiment may have bottomed for the cycle. Global Economy April 2009 BCM Global Monitor

JP Morgan Global All-Industry PMI 12 Mar Feb Summary 37.4 40.1 Output Contracting at slower rate 36.7 37.7 New Orders Contracting at slower rate 39.1 37.5 Employment Declining at record rate 45.1 41.3 Input Prices Falling at faster rate Note index is a diffusion index, >50 indicates improvement over previous month, <50 a decrease, =50 indicates no change. Slight improvement for the month, however the PMI and sub-component remain in contraction. Employment weakened noticeably to a record rate of contraction. Global Economy April 2009 BCM Global Monitor

JP Morgan Global Manufacturing PMI 13 Mar Feb Summary 35.8 37.2 Global PMI Contracting at slower rate 33.4 35.2 Output Contracting at slower rate 31.4 35.8 New Orders Contracting at slower rate 35.0 35.8 Employment Falling at slower rate 35.1 34.2 Input Prices Falling at faster rate Note index is a diffusion index, >50 indicates improvement over previous month, <50 a decrease, =50 indicates no change. Slight improvement for the month, however the PMI and sub-component remain in strong contraction. Employment strenthened marginally for the month. Global Economy April 2009 BCM Global Monitor

JP Morgan Global Services PMI 14 Mar Feb Summary 38.6 41.5 Output/activity Contracting at slower rate 38.1 38.3 New Business Contracting at slower rate 37.9 40.6 Backlogs of work Contracting at slower rate 40.3 37.9 Employment Contracting at faster rate 47.9 43.3 Input Prices Costs falling at faster rate Note index is a diffusion index, >50 indicates improvement over previous month, <50 a decrease, =50 indicates no change. Improved for March noticeably to 41.5. Whilst all elements remain in contraction, backlog improved, new business was steady, and employment and input prices fell. Global Economy April 2009 BCM Global Monitor

OECD World/NAFTA CLI & Industrial Production 15 The World* CLI declined 0.82 to 91.41 in February The NAFTA CLI declined 1.00 to 90.52 in February (previous month decline 1.05). If the trend of a (previous month decline 1.22). If the trend of a slowing rate of decline continues the CLI should slowing rate of decline continues the CLI should bottom in 4 months (June 2009). bottom in 5 months (July 2009). Industrial production continues to collapse. A 6-9 Industrial production continues to collapse. A 6-9 month delay on the CLI suggests an economic month delay on the CLI suggests and economic recovery in 1st quarter 2010. recovery in 1st quarter 2010. Global Leading Indicators April 2009 BCM Global Monitor

OECD Major 4 Europe/Major 5 Asia CLI & Industrial Production 16 The Major 4 Europe CLI declined 0.06 to 94.42 in The Major 5 Asia CLI declined 0.92 to 90.47 in February (previous month decline 0.39). The February (previous month decline 1.12). If the Major 4 Europe CLI will likely bottom in March trend of a slowing rate of decline continues the CLI should bottom in 5 months (July 2009). Industrial production continues to collapse. A 6-9 month delay on CLI bottoming suggests an Industrial production continues to collapse. A 6-9 economic recovery in 4th quarter 2009. month delay on the CLI suggests and economic recovery in 1st quarter 2010. Global Leading Indicators April 2009 BCM Global Monitor

OECD CLI Analysis: US, China, Australia, & World 17 The peak rate of decline of the US (consumer), China (manufacturer) and World CLI was in November 2008. Australia (commodities) decline rate peaked in January 2009. We anticipate global CLI bottoming around Qtr 4 2009, with an economic recovery in 1H 2010. Leading Indicator Analysis April 2009 BCM Global Monitor

US, UK & Australian House Price Index 18 Global house prices continue to decline. US, UK and Australian prices are down 30%, 19% and 4% respectively. The US market peaked in June 2006, the UK in October 2007 (US +16 months), and Australian in March 2008 (US + 21 months). S&P Case-Shiller Futures data suggests US house prices will bottom in November 2010 with a peak- trough decline of 35.9% (115.2 on the index). Global Property April 2009 BCM Global Monitor

US, UK & Australian House Price Annualised Rate of Change 19 Global house prices continue to decline with the US, UK and Australian prices falling at 19.4%, 15.7% and 3.0% per annum respectively. The gain from June 1994 to the peak was 194%, 261%, and 204% respectively (Perth, Australia 351%). Only UK house prices are showing a slowing in the rate of house price declines. Global Property April 2009 BCM Global Monitor

OECD United States CLI & Industrial Production 20 The US CLI declined 1.12 to 89.87 in February (previous month decline 1.36). If the trend of a slowing rate of decline continues the CLI should bottom in 5 months (July 2009). Industrial production continues to collapse. A 6-9 month delay on the CLI suggests an economic recovery in 1st quarter 2010. US Economy April 2009 BCM Global Monitor

OECD US Standardised Consumer Confidence History 21 OECD US Consumer Confidence US consumer confidence forming a bottom. US Economy April 2009 BCM Global Monitor

US Consumer Sentiment and Personal Consumption 22 US Consumer Confidence (via Uni Michigan survey) Real personal consumption spending contracted at a slower rate (~-1.2%) compared to the previous declined to near record lows. month. We need to see a rise in spending as a precursor to Look for a rise above 65 towards 70+ as evidence a general recovery. of recovery. US Economy April 2009 BCM Global Monitor

US Industrial Production & Unemployment Rate 23 Unemployment is sky-rocketing, above 8% and Industrial production continues to collapse, down rising rapidly. 12% year-on-year. Lower production means less need for workers… Falling employment will lead to lower spending and further US house price declines. US Economy April 2009 BCM Global Monitor

US GDP and Private Employment 24 Private employment growth, our bellwether US GDP continues to decline, currently -0.8% yoy. indicator, continues contract (-4.2%). USPRIV is The rate of decline in production and employment indicating Stage 5 – Early Downturn for the US suggest further declines ahead. economy. US Economy April 2009 BCM Global Monitor

ISM PMI/NMF: Historical of New Orders and Production/Activity 25 Production and services activity improved for the month, continuing to suggest peak contraction has past. Most note- worthy is the continued rise in manufacturing new orders, although new services business contracted further. US Economy April 2009 BCM Global Monitor

OECD Euro Area CLI & Industrial Production 26 The Euro Area CLI declined 0.19 to 93.82 in February (previous month decline 0.51). It is likely that the Euro Area CLI will bottom in March. Industrial production continues to collapse. A 6-9 month delay on the CLI suggests an economic recovery in 4th quarter 2009. Euro Economy April 2009 BCM Global Monitor

OECD Euro Area Harmonised Unemployment Rate 27 Continues to rise, up 0.3% to 8.5% in February. Further rises ahead… Euro Economy April 2009 BCM Global Monitor

EC Euro Economic Sentiment, Business Climate & Production 28 Economic sentiment for March is showing signs of recovery in the EU and EA led by the services and construction sector. Business climate remains in a steadfast downtrend. Euro Economy April 2009 BCM Global Monitor

OECD Japan CLI & Industrial Production 29 The Japan CLI declined 1.48 to 89.74 in February (previous month decline 1.55). The decline rate of the CLI is stable making predictions of a CLI bottom difficult. The plunge in Japanese industrial production defies description. Medium term this will have major impacts on the Japanese economy. Japan Economy April 2009 BCM Global Monitor

Japan Unemployment Rate 30 Rose 0.3% to 4.4% in February continuing the business cycle uptrend. Further rises likely ahead… Japan Economy April 2009 BCM Global Monitor

OECD Japan Standardised Consumer Confidence History 31 OECD Japan Consumer Confidence New record low and still declining without a bottom in sight. Japan Economy April 2009 BCM Global Monitor

OECD China CLI & Industrial Production 32 The Euro Area CLI declined 0.74 to 90.08 in February (previous month decline 1.10). If the slowing rate of CLI decline continues, the China CLI may bottom in 2 months (May 2009). Industrial production continues to collapse. A 6-9 month delay on the CLI suggests an economic recovery in 1st quarter 2010. China Economy April 2009 BCM Global Monitor

CLSA China Manufacturing PMI 33 Continued contraction in Chinese manufacturing is indicated by a PMI of 44.8 in March, down slightly from 45.1 in February. Notable was the decline in new business orders which is ominous for future Chinese output. China Economy April 2009 BCM Global Monitor

OECD German CLI & Industrial Production 34 The German CLI declined 0.31 to 90.32 in February (previous month decline 1.08). It is likely that the German CLI will bottom in March. Industrial production continues to collapse. A 6-9 month delay on the CLI suggests an economic recovery in 4th quarter 2009. German Economy April 2009 BCM Global Monitor

German Harmonised Unemployment Rate 35 German unemployment rises continues to rise, up to 7.4% in February from 7.3% in January. Germany was perhaps the last OECD nation to experience a rise in unemployment. German Economy April 2009 BCM Global Monitor

OECD German Standardised Consumer Confidence 36 OECD German Consumer Confidence Consumer sentiment plunging, no bottom in sight. German Economy April 2009 BCM Global Monitor

OECD United Kingdom CLI & Industrial Production 37 The UK CLI declined 0.24 to 95.74 in February (previous month decline 0.28). It is likely that the UK CLI will bottom in the April-May 2009 timeframe. Industrial production continues to collapse. A 6-9 month delay on the CLI suggests an economic recovery in 4th quarter 2009. United Kingdom Economy April 2009 BCM Global Monitor

United Kingdom Harmonised Unemployment Rate 38 UK unemployment continues to rise, up to 6.4% in December 2008 from cycle lows in December 2007. United Kingdom Economy April 2009 BCM Global Monitor

OECD UK Standardised Consumer Confidence History 39 OECD UK Consumer Confidence Consumer sentiment plunging, no bottom in sight. United Kingdom Economy April 2009 BCM Global Monitor

OECD France CLI & Industrial Production 40 The France CLI rose 0.09 to 96.41 in February (previous month decline 0.03) marking a bottom in this series. Industrial production continues to collapse. A 6-9 month delay on the CLI suggests an economic recovery in 4th quarter 2009. France Economy April 2009 BCM Global Monitor

France Harmonised Unemployment Rate 41 Unemployment rose 0.3% to 8.6% in February. Note the previous months rise was 0.2% indicating that unemployment is accelerating. Further rises expected. France Economy April 2009 BCM Global Monitor

OECD France Standardised Consumer Confidence History 42 OECD France Consumer Confidence Consumer sentiment plunging, no bottom in sight. France Economy April 2009 BCM Global Monitor

OECD Italian CLI & Industrial Production 43 The Italian CLI rose 0.35 to 96.70 in February (previous month rise 0.09). The Italian CLI bottomed in December 2008. Industrial production continues to collapse. A 6-9 month delay on the CLI suggests an economic recovery in 3rd quarter 2009. Italian Economy April 2009 BCM Global Monitor

Italian Harmonised Unemployment Rate 44 Unemployment held steady in December at 6.9%. However the trend is for continued increases from the May 2007 lows. Italian Economy April 2009 BCM Global Monitor

OECD Italy Standardised Consumer Confidence History 45 OECD Italy Consumer Confidence Consumer sentiment still falling, though not at extremely low levels. Italian Economy April 2009 BCM Global Monitor

OECD Canadian CLI & Industrial Production 46 The Canadian CLI declined 1.16 to 90.61 in February (previous month decline 1.29). If the slowing rate of CLI decline continues, the CLI may bottom in 9 months (November 2009). Industrial production continues to collapse. A 6-9 month delay on the CLI suggests an economic recovery in 2nd quarter 2010. Canadian Economy April 2009 BCM Global Monitor

Canadian Unemployment Rate 47 Unemployment following the US and rising rapidly. Canadian Economy April 2009 BCM Global Monitor

OECD Canadian Standardised Consumer Confidence History 48 OECD Canadian Consumer Confidence Consumer sentiment plunging, no bottom in sight. Canadian Economy April 2009 BCM Global Monitor

OECD Australian CLI & Industrial Production 49 The Australian CLI declined 0.96 to 96.05 in February (previous month decline 0.79). If the slowing rate of CLI decline continues, the CLI may bottom in 7 months (September 2009). Industrial production continues to collapse. A 6-9 month delay on the CLI suggests an economic recovery in 2nd quarter 2010. Australian Economy April 2009 BCM Global Monitor

Australian Unemployment 50 Unemployment has bottomed for the cycle and is The growth rate in full-time equivalent now rising rapidly. employment negative (contracting). Unemployment above 7-8% is expected. Further falls in full-time employment is certain. Australian Economy April 2009 BCM Global Monitor

US Treasury Yields (Overnight, 1 Year, 10 year) 51 10yr US Treasury bonds fell to a cycle low of 2.1% 1yr US Treasury notes remain ~0.5% yield in December 2009 before rising to around 2.9% in reflecting the safe haven status and the April. deteriorating economic conditions. Sustained rises above 3% may indicate economic recovery and/or inflation. Global Economy (via US Economy) April 2009 BCM Global Monitor

Inflation v Deflation (via US 10 Year Treasury Yields) 52 Implied 10yr future inflation predictions have widened, though remain at very low levels (1.2%). Low inflation predictions reflect the dire economic predictions due to the current crisis (deflationary expectations), however these have widened recently. Note the November 2008 10yr inflation predictions were effectively 0% amidst the financial gloom. Global Economy (via US Economy) April 2009 BCM Global Monitor

US Consumer Debt Outstanding & Debt Servicing Payments 53 Debt service payments are down slightly to a still- Consumer debt growth again hit a series low of very-high 14.0%. The high payments and inability 0.4%. The current crisis can be described as ‘peak to expand credit further are a major drain on the credit’ as the fall in credit-fueled spending is one of economy. the major causes of the economic contraction. Global Economy (via US Economy) April 2009 BCM Global Monitor

US GDP, Consumer Debt & Personal Consumption 54 Much of the GDP growth since 1983 has been The fall in annualised GDPis easily seen in light of fueled by credit growth expansion (particularly changes in annual consumer credit growth. since 2001). Consumer spending growth is clearly driven by consumer credit (debt) growth. And this is plunging!!! Global Economy (via US Economy) April 2009 BCM Global Monitor

US Personal Savings Rate 55 US consumers have reversed their spending patterns of the last decade, achieving a savings rate not seen since 1995. The need to save is driven by record high indebtedness and debt servicing payments. Whilst this chart is provided for the US, it is representative of the savings patterns of consumers in other OECD nations such as the UK and Australia. Global Economy (via US Economy) April 2009 BCM Global Monitor

Oil Price Change (annualised) and Industrial Production 56 Industrial production continues to decline, not yet Oil price changes tell us much about the state of confirming a bottom in the oil series. the economy. This series may be predicting a rise in economic activity (as occurred at previous lows). Global Economy (via US Economy) April 2009 BCM Global Monitor

Commodities Basket 57 Falling commodities reflect weak demand in a weak economy. Commodities have recovered around 13% from their February 2009 lows suggesting that economic recovery may be imminent. Commodities April 2009 BCM Global Monitor

Oil Price and US Oil Stocks 58 The US (as indicator for the global economy) The last 5 weeks have seen a powerful rise in oil continues to accumulate oil inventories, albeit at a from ~$35 to $55 (~48%). The rise above $50 is slightly reduced rate. This seems at odds with significant suggesting that December 2009 was the recent rises in the oil price. oil price low. Commodities April 2009 BCM Global Monitor

Dr Copper and the Baltic Dry Index 59 The BDI has fallen since its early March high, Rising copper is suggesting increasing economic seemingly in contradiction to the recent runup in activity and thus a possible imminent recovery. commodities prices. As the BDI appears to lead commodities, changes in BDI/commodities over then next few months will be important. The Baltic Dry Index is the daily shipping rate for bulk dry cargo Copper is a useful leading economic indicator as it is a key material ships carrying goods such as iron ore, coal and wheat. It is believed in the manufacture of durable goods, particularly electrical and to provide a good leading indicator of economic activity. plumbing items. Commodities April 2009 BCM Global Monitor

Agriculture (Grains) & Livestock 60 Livestock prices are trending higher from their Agricultural grains prices continue to strengthen March 2009 lows. Having exceeded 220, the trend off their December 2008 lows though are yet to appears higher suggesting a strengthening break out of the 260-320 range. economy. Commodities April 2009 BCM Global Monitor

Gold and the US Dollar 61 The uptrend in the US dollar appears intact. The Gold has weakened in March having retested the USD seems headed towards the 88-90 range $960/ounce level. which should place downward pressure on commodity prices. Commodities April 2009 BCM Global Monitor

Stock Market: Developed Economies 62 Consistent with early signs of a recovering economy, developed stock markets have rallied from the March 6, 2009 lows. Most markets are approaching resistance formed by the January 2009 highs. The index covers the US (^GSPC), Japan (^N225), UK (^FTSE), Germany (^GDAXI), France (^FCHI), Australia (^AORD), Canada (^SPTSE), Spain (^SMSI), and Italy (^SPMIB). Stock Markets April 2009 BCM Global Monitor

Stock Market: Emerging Economies 63 Emerging markets (BRIC) recovered on March 9, 2009 along with developed markets. Emerging markets have exceeded their January 2009 highs indicating a new bullish trend may be inplace. The index covers Brazil (^BVSP), Russia (^RTS.RS) and India (^BSESN), China (^HSI). The US (^GSPC) is provided as a reference series to enable a comparison with developed markets above. Stock Markets April 2009 BCM Global Monitor

Bond Market: US 7-10 & 20+ Year Treasury Bonds 64 Bond prices (long and shorter duration) may have peaked for the cycle in December 2008. US Treasury purchases by the US Federal Reserve are likely to limit further price declines with prices stabilising at current levels. The index covers the iShares Lehman 7-10yr Treasury Bond Fund (IEF) and iShares Lehman 20+yr Treasury Bond Fund (TLT). The US (^GSPC) is provided as a reference series to enable a comparison with developed markets above. Bond Markets April 2009 BCM Global Monitor

OECD CLI & Industrial Production (Nations 1-4) 65 Global Composite Leading Indicators April 2009 BCM Global Monitor

OECD CLI & Industrial Production (Nations 21-23, South Africa) 70 Global Composite Leading Indicators April 2009 BCM Global Monitor

BCM Book of the Month: Meltdown… 71 Meltdown: A Free Market Look at Why the Stock Market Collapsed, the Economy Tanked, and Government Bailouts Will Make Things Worse • Is Capitalism the Culprit? • The media tells us that \"deregulation\" and \"unfettered free markets\" have wrecked our economy and will continue to make things worse without a heavy dose of federal regulation. • But the real blame lies elsewhere. In Meltdown, bestselling author Thomas E. Woods Jr. unearths the real causes behind the collapse of housing values and the stock market- -and it turns out the culprits reside more in Washington than on Wall Street. • And the trillions of dollars in federal bailouts? Our politicians' ham-handed attempts to fix the problems they themselves created will only make things much worse. • Available on the BCM Website: – Podcasts – Book Reviews – Websites April 2009 BCM Global Monitor

72 Interested?? Don’t forget to subscribe to this publication and receive notification directly to your inbox. Alternatively, you can register for our BCM US Monitor ($0.99/month), or our BCM Australian Monitor ($1.49/month). These country specific publications provide far greater detail on their respective economies. Essential for the active monitor!! Understand, monitor and exploit the business cycle… April 2009 BCM Global Monitor

Disclaimer, Fair Use, Copyright 73 Disclaimer. Mark Walmsley B.Eng, MSc, MBA is the Business Cycle Monitor editor. The statements, opinions, buy or sell signals, and analysis presented in this document are provided as a general information and are for news commentary and educational services only. All opinions, estimates, buy or sell signals, and predictions expressed herein constitute the judgment of the author as of the date indicated and are subject to change without notice. The information contained in the newsletter is expressed in good faith, but its accuracy is not guaranteed. Nothing contained in this newsletter is intended to be, nor shall it be construed as, investment advice, nor is it to be relied upon in making any investment or other decision. Prior to making any investment decision, you are advised to consult your financial planner, broker or other appropriate tax or financial professional to determine the suitability of any investment. Neither Business Cycle Monitor nor Mark Walmsley shall be held responsible or have any liability for investment decisions based upon, or the results obtained from, the information provided. Fair Use Policy. The BCM Global Monitor is sold to customers for personal use only. BCM considers it ‘fair use’ to forward one copy of the BCM Monthly to friends, family or associates for the purpose of introducing said individuals to BCM monthly publications. Such introductions lead to increased subscribership, greater research resources and a higher quality report. BCM does not consider it ‘fair use’ to repeatedly forward BCM products to individuals thus circumventing this policy. Copyright. Copyright 2009. All rights reserved. Business-Cycle Information. This summary should be read in conjunction with the business cycle articles and references provided at www.business-cycle-monitor.com. These provide additional information on how the business cycles functions. Description and References. Additional information on these indicators, global maps, the simplified economic model and the sources used in this publication can be found at the BCM website. www.business-cycle-monitor.com April 2009 BCM Global Monitor

2009 April Global Monitor

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