1. Presented by Jack Crooks President Black Swan Capital Agora Financial Investment Symposium - Vancouver 24 July 2009

2. www.blackswantrading.com

4. Source: Stephen Jen, Morgan Stanley www.blackswantrading.com

5. Major “green shoots” disappointment – rethink! - Double-dip recession - China disappointment - Emerging market crisis Capitulation out of EM Money flow out of China European banking risk Global Rebalancing Hide in US Treasuries www.blackswantrading.com

6. Overconsumption Overproduction CA Deficit Nations CA Surplus Nations United States China …an end to the symbiotic relationship! www.blackswantrading.com

7.  Potentially an end to the Export Model  Subpar global growth for years [Industrial production crushed for majors]  Heightened pain for emerging markets  Deflation the problem now, not inflation www.blackswantrading.com

8. US-China Symbiotic Relationship Single Currency Zone Argument www.blackswantrading.com

9. US-China Symbiotic Relationship Game Over? Single Currency Zone Argument Money Locked Inside the System US Consumer Wealth Fading Crunch Cap Invest @ 45% GDP Seemingly costless Chinese capital? Property & Stock Bubbles X X X X X Chinese Government Explicit Stimulus X X Forcing Asian Trade Partners to Adjust [China surplus up, but exports to West down] www.blackswantrading.com

10. Source: Leto Research www.blackswantrading.com

11. Free CreditCredit Crunch Lower CA Deficit Means US Requires Less Int’l Funding Consumption Savings Implicit Weak Dollar Policy 50% 6-mo $35T Legacy Non-bank www.blackswantrading.com

13. Eurostat reports today industrial new orders in the Eurozone declined by 30.1% from a year ago. In Germany, the decline was 32.2%. This is the tenth consecutive month of sharp declines averaging above 30% per month. It seems that industrial contraction in Europe today is twice as bad as in 1929-1930. The fact that export powerhouse Germany leads the collapse raises questions about the euro, whose exchange rate is literally killing German manufacturing. Leto Research, 7/22/09 www.blackswantrading.com

14.  Front-end load infrastructure build  $1.7 trillion spent in first half, in a $4 trillion economy ▪ Massive inefficiencies and excess capacity ▪ Bubble Trouble…cap controls and fixed currency ▪ Stocks/Real Estate/Banking Lending  Demand slack and no exports mean…  Rising unemployment = Social tension  More consolidation of state power and belligerence www.blackswantrading.com

15. Japan Creditor Superpower 1988 BOJ formula as US Current Account Improved 1.Boost stock & property market 2.Give buffer for export companies to turn inward 3.Stock & property trigger wealth effect 4.Stimulates consumers & residential investment China Creditor Superpower US Stock Market Crash Credit Crunch www.blackswantrading.com

16.  Commodities get whacked! 50% fall left?  Stocks tumble!  The US dollar surges on another major global risk bid! www.blackswantrading.com

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