# The Bears Den (Bears only!)



## wayneL (18 January 2006)

Record number of families losing their (overpriced) homes

http://www.dailytelegraph.news.com.au/story/0,20281,17854374-5001021,00.html



> House price crush
> 
> EXCLUSIVE by DARREN BEHAR Consumer Affairs Reporter
> 
> ...


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## wayneL (18 January 2006)

Malcom Frasers words might be prophetic.



> Out of a clear blue economic sky, the Australian Federal Government plans to introduce a program to
> protect bank deposits and other deposits should a bank, insurance company or credit union FAIL!
> Horrors! What does somebody in OZ know that nobody else knows? Apparently, Mr Costello,
> Australia’s Treasurer, has written a letter to the Australian Bankers Association seeking their comments
> ...


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## michael_selway (18 January 2006)

wayneL said:
			
		

> Record number of families losing their (overpriced) homes
> 
> http://www.dailytelegraph.news.com.au/story/0,20281,17854374-5001021,00.html
> 
> ...




Hmmm... this reminds me of the Asian crisis back in 1997 (esp hk) when house prices and stockmarkets were overvalued, then crashed. People who bought new homes at the peak high prices were forced to pay more by the banks as their mortgage wasnt worth much anymore.


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## ob1kenobi (19 January 2006)

Wayne, I found the following on the Reserve Bank of Australia web site. I thought it interesting and relevant to your discussion here. Cheers!


> *ABOUT FINANCIAL SYSTEM STABILITY*
> 
> Stability of the financial system is a long-standing responsibility of the Reserve Bank – a mandate reconfirmed by the Government when it introduced landmark changes to Australia's financial regulatory structure in July 1998. These included the transfer of responsibility for the supervision of banks to a new integrated regulator, the Australian Prudential Regulation Authority (APRA), and the establishment of the Payments System Board within the Bank.
> 
> ...


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## tech/a (19 January 2006)

We,ve had a single day of selling and it could turn into a week and from the posts on this board you'd swear you'd all been diagnosed with terminal cancer.

Trade the market as it unfolds,dont get caught up in the reactionary sensacialism.Take necessary risk measures and if you see an opportunity long or short take that as well.


Have a look over this board and you'll see why emotions play such a part in trading.


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## wayneL (19 January 2006)

tech/a said:
			
		

> We,ve had a single day of selling and it could turn into a week and from the posts on this board you'd swear you'd all been diagnosed with terminal cancer.
> 
> Trade the market as it unfolds,dont get caught up in the reactionary sensacialism.Take necessary risk measures and if you see an opportunity long or short take that as well.
> 
> ...




Hey! no Bulls allowed in here!!!!! hahahah


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## wayneL (19 January 2006)

Tech

You've known me long enough tech to know I'm ALWAYS Bearish. You've also known me long enough to know I'll run with the Bulls...if they're running (incognito of course )

For a couple more accounts of why I'm permanently bearish listen to these interviews by Jim Puplava... God bless him!

George Blake 
http://www.netcastdaily.com/broadcast/fsn2006-0114-2.mp3

Mathew Simmons "Twighlight in the Desert"
http://www.netcastdaily.com/broadcast/fsn2005-0806-2.mp3

James Kunstler "The Long Emergency"
http://www.netcastdaily.com/broadcast/fsn2005-1001-2.mp3

Oh, lets not forget Jims interview with Prechter:
http://www.netcastdaily.com/broadcast/fsn2005-0618-2.mp3

India? China? Part of the problem Sir!!!

Cheers


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## tech/a (19 January 2006)

When it becomes bearish then thats the way I'll trade it.

If it drops 25% of my open equity in a day so be it,I'm not going to trade against continuous new highs.

I trade longterm,daily weekly or even monthly fluctuations dont have a great effect on things,while the short term traders have a heart attack if they are the wrong side of yesterday.

I'd rather be longterm on the right side than short term on the wrong side.

Wayne you may prove to be right as Kris did.I actually learnt from Kris and now hold PNO have since .045c (yeh its a dabble).
And I may well join you in your hunting trip.

But seriously have you read all these reactionary posts on this board."The sky is falling"!!!
Imagine if they were trading futures and got locked limit down! (Hmm theres an arguement for the futility of stops in some instruments).


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## wayneL (19 January 2006)

tech/a said:
			
		

> When it becomes bearish then thats the way I'll trade it.
> 
> If it drops 25% of my open equity in a day so be it,I'm not going to trade against continuous new highs.




And right you are, in the context of your method.



			
				tech/a said:
			
		

> I trade longterm,daily weekly or even monthly fluctuations dont have a great effect on things,while the short term traders have a heart attack if they are the wrong side of yesterday.
> 
> I'd rather be longterm on the right side than short term on the wrong side.




That's not quite fair Tech. This implies ALL short term traders are prone to wild emotional swings. This is not true with successful short term traders. I would go as far as to say that with successful traders as a group, short term traders would have more control over their emotions than long term traders. (successful ones I'm talking about)



			
				tech/a said:
			
		

> Wayne you may prove to be right as Kris did.I actually learnt from Kris and now hold PNO have since .045c (yeh its a dabble).
> And I may well join you in your hunting trip.




Well one thing is undeniable. The world economy/ecology is not sustainable. When the poop hits the propeller, financially,  is the only variable.



			
				tech/a said:
			
		

> But seriously have you read all these reactionary posts on this board."The sky is falling"!!!




It could be. LOL



			
				tech/a said:
			
		

> Imagine if they were trading futures and got locked limit down! (Hmm theres an arguement for the futility of stops in some instruments).




There is essentially no difference between a lock limit move and a huge gap in a stock. A stop won't save you when a stock gaps against you either.

The difference happens when people leverage themselves up to a ridiculous degree with futures. Same thing happens to short option traders .

When the value of the underlying commodity is considered when position sizing, it is no different to stock trading. For instance 1 Feeder Cattle contracts represents 50,000lbs of beast at ~ $1.10/lb. That an underlying value of $55k PER CONTRACT, yet the margin is only $1,350. It's easy to see where people can get into trouble.

In fact, statistically, there is a higher risk of gaps with stocks than lock limits in futures. Imagine if that sort of leverage was available  with stocks
(eerm, it is via CFDs...there are plenty of blow ups there too)

Check out this one on a supposed "Blue Chip"


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## tech/a (19 January 2006)

Good God what was the news?

Wayne you miss understand my longterm/short term comments

I'll re phrase it.
"Id rather be on the right side over the longterm than on the wrong side over the short term."

My reference was to timeframes not trader types.

Have to laugh when typing this my Wife rang to tell me the Japanese market has fallen big time,say it on the morning news.(As trading is as boring as hell I dont talk about it with her--she just knows we trade/invest).
"Thanks sweetheart I'll be careful!"


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## bullmarket (19 January 2006)

Good morning everyone and sorry to butt in but I just wanted to let wayneL know there is a smiley available for his earlier reference "When the poop hits the propeller".......it's   :fan 

I'll let you guys get back to it..

cheers 

bullmarket


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## GreatPig (19 January 2006)

wayneL said:
			
		

> tech/a said:
> 
> 
> 
> ...



Yet ironically enough, our Chicken Little is one of the few still talking the stocks up 

Cheers,
GP


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## mit (19 January 2006)

I was wondering if anybody has looked at buying out of the money index puts to hedge a portfolio against the worst rather than trying to time the market?

MIT


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## Knobby22 (19 January 2006)

Wayne, I think you have a point.
Did you see this article in today's Age?



Endless spending on foreign luxuries must stop
By Ernest Rodeck
January 19, 2006

PRIME Minister John Howard says Australia can't go broke because our governments owe little money. If persons or businesses owe the money, that is their affair! Is he right?

In theory, yes. In practice, no. Here is the reason: half the foreign debt is owed by our banks on short-term revolving loans. The loans are denominated in foreign currency and nearly all fall due within six months. No Australian government could allow our banks to go broke. Our credit standing would be shot for years to come.

Something like this happened to Argentina and Brazil in 2001, to Russia in 1999, to Thailand and Indonesia in 1997, to Mexico in 1982 and to many other countries before that. It usually means that something unexpected and damaging happens to a country. Then, the local currency loses its value, most people lose their savings and many their jobs. Years of depression follow.

If that concerns you, please read on.

Former Westpac Bank chief executive Bob White gave the keynote address at the National Summit on Foreign Debt in 1990. He said: "I have been alarmed by the myth and misinformation about Australia's foreign debt problem. That deficit is in foreign dollars, not Australian dollars. If you want to drink French wine, drive BMWs or eat Californian oranges, you might have the Australian dollars to pay for it, but someone else has to find the foreign dollars to pay the French, German or American producers.

"There are only three sources from which these foreign dollars can be found: they can be borrowed; we can sell a bit more of the farm; or we can increase our foreign dollar earnings.

"It is painfully obvious that endless borrowing and endless sales of bits of the farm will ultimately destroy us."

Since then our foreign debt has increased from 40 per cent to 50 per cent of our gross domestic product. Yet, no disaster has struck us. Was Bob White wrong? Of course not. What he said is just plain common sense. It is a disaster waiting to happen.

I remember Treasurer Peter Costello driving a "foreign debt truck" around the country before the 1996 elections. He was evidently concerned. The debt has risen since but the Treasurer no longer seems to worry. Why not?

We owe $440 billion. A meaningless figure to me. Let us look at it in terms of an average Australian family of father, mother and two children. How much do they owe? We have 20 million people or 5 million such groups of four. The answer is $440 billion divided by 5 million, or $ 88,000 for each family of four. At 5 per cent interest that is $85 per week.


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## justjohn (19 January 2006)

SORRY BEARS IT LOOKS LIKE ITS BACK TO SLEEP :goodnight  FOR YOU FELLAS BECAUSE THE BULLS ARE UP AND RUNNING AGAIN


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## Jay-684 (19 January 2006)

justjohn said:
			
		

> SORRY BEARS IT LOOKS LIKE ITS BACK TO SLEEP :goodnight  FOR YOU FELLAS BECAUSE THE BULLS ARE UP AND RUNNING AGAIN




Sure hope so!

Wish I had some cash yesterday to buy up, only had $4k handy


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## mit (19 January 2006)

justjohn said:
			
		

> SORRY BEARS IT LOOKS LIKE ITS BACK TO SLEEP :goodnight  FOR YOU FELLAS BECAUSE THE BULLS ARE UP AND RUNNING AGAIN




Indeed it looked as though yesterday's selloff was mostly due to oversea's issues. However, I'd wait for close first as the market has been reversing on a pin lately.

Mit


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## wayneL (19 January 2006)

justjohn said:
			
		

> SORRY BEARS IT LOOKS LIKE ITS BACK TO SLEEP :goodnight  FOR YOU FELLAS BECAUSE THE BULLS ARE UP AND RUNNING AGAIN




It's not a competition, it's a long term view. What happened yesterday or today has no bearing. 

The bears den is always open for business. Bears make money with the bulls 

The question is, can the bulls survive when the time comes.


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## Bobby (19 January 2006)

> We owe $440 billion. A meaningless figure to me. Let us look at it in terms of an average Australian family of father, mother and two children. How much do they owe? We have 20 million people or 5 million such groups of four. The answer is $440 billion divided by 5 million, or $ 88,000 for each family of four. At 5 per cent interest that is $85 per week.




I can't remember who said this some years back but the suggestion was we sell Tasmania so as to pay off all our foreign debt plus a nice hand out to all Aussies.
Stupid ideas like this always get some supporters!  

Have Fun, Bob.


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## michael_selway (19 January 2006)

wayneL said:
			
		

> It's not a competition, it's a long term view. What happened yesterday or today has no bearing.
> 
> The bears den is always open for business. Bears make money with the bulls
> 
> The question is, can the bulls survive when the time comes.




haha yeah the bulls may have won yesterdays/todays battle, but they havent wont the war.

But when the war comes the bears will ensure they will be big casulties  :goodnight


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## wayneL (19 January 2006)

Knobby22 said:
			
		

> Wayne, I think you have a point.
> Did you see this article in today's Age?
> 
> Endless spending on foreign luxuries must stop
> ...




Could this tie in with the article I posted earlier?

One thing is for sure, the Gu'mint treats us like mushrooms.


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## tech/a (19 January 2006)

I cant understand this *"Just you wait you'll see" attitude * of people who are just willing those who trade in the direction of the market to crash and burn!!.

There are a few here who have----and still do---stick with the fantastic positive action of the market!

Others sit and watch slinging as much Krap as they can muster as soon as the market takes a breather. Willing these opportunists to financial disaster.

*Get a grip you people* go and make a buck *and when the market takes a belting do something about it!!*

You're the sort of people who see opportunities pass you by and you get all bitter and twisted because other people are doing *what you wished you had the guts to do!*

And if you think this is directed at anyone in particular then.
If the cap fits its YOURS.

Wayne the answers simple dont act like a mushroom,find your own paddock and insulate yourself.
Contrary to popular belief people can and some do control their own destiny despite governments.

Michael Of course they have won the war.
There were Bears 20 yrs ago and 10 yrs ago and 5 yrs ago and now.


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## wayneL (19 January 2006)

mit said:
			
		

> I was wondering if anybody has looked at buying out of the money index puts to hedge a portfolio against the worst rather than trying to time the market?
> 
> MIT




Mit,

Cheap insurance, but won't insulate you much as gamma is very low until you get close to the money.  Even then delta only gets to -0.5 when at the money so your put has to go well into the money to be an effective hedge.A better hedge is non-correlated or reverse correlated assets (e.g. gold), or sectors.

Meanwhile time decay happens.

Another alternative is more complicated spread strategies with index options, but you need a view and time frame with options, not just a sitting hedge.


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## Smurf1976 (19 January 2006)

This isn't a personal comment directed to anyone here, but the thing I've noticed about bulls is that they're highly selective. In short, a bull market is good provided that they profit from it. So called "bulls" are constantly complaining when even the slightest bullish move occurs in some markets.

For example, interest rates and oil. The mere hint of a bullish move, or in real estate terms "improvement", in interest rates or oil prices and the bulls and the media start screaming. Let's hear some bulls cheering whenever interest rates rise or oil goes up. It's just another market after all and you trade with the market, so no cause for complaint. Just imagine if petrol matched the rampant inflation in house prices. Fantastic news for all sorts of things, but not the bulls who in reality only want a bull market in the assets they happen to own. Somewhat biased IMO.


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## wayneL (19 January 2006)

tech/a said:
			
		

> Wayne the answers simple dont act like a mushroom,find your own paddock and insulate yourself.
> Contrary to popular belief people can and some do control their own destiny despite governments.




Well thats the whole point of this thread.  

Tech,

You grossly misunderstand Bear logic. We don't necessarily miss opportunities. We are just more concious of true risk...doesn't mean we don't take risk to the upside, we most certainly do. Bears are long oil, gold and suchlike. Bears are actually commodity *Bulls*, the truth be known.

Bear thought is deeply distrustful of governments and seeks to look behind the spin and propaganda. They may try to treat us like mushrooms, but bears invariably have alternative intellegence sources outside of the mainstream media.

You castigate the bears for taunting bulls...I detect a certain irony in that. The bulls have gatecrashed our party even though there's a sign on the door that says *Bears Only*, specifically to either taunt or proselytise.

But that's OK it helps to develop the Bear case.

And just to recap some of the risks on the horizon:

Peak oil
Global warming
Global cooling (depends which group of religiosly fanatical zealots you want to believe)
Bird Flu
War (over oil and *WATER*)
Demographics
and various other scenarios.

Lets not forget, some of the foremost businessmen crashed and burned in the '30's. The bears survived that because they were aware of risk.


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## michael_selway (19 January 2006)

tech/a said:
			
		

> Michael Of course they have won the war.
> There were Bears 20 yrs ago and 10 yrs ago and 5 yrs ago and now.




hehe yeah, i mean Bulls have won the war most of the time, but the notable All Ords wars won by Bears were in 1987 & 2002 (sars period). Along the way there a few battles won by Bears (corrections) eg Mar05 and Oct05, Sep11 etc







On the Nasdaq, seems like the bulls havent recovered from the war won by the Bears since 2000!






On the Nikkei, seems like the bulls havent recovered from the war won by the Bears since 1990! Everytime the Bulls come to fight back their right, it seems like they get pushed lower by the Bears....


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## wayneL (19 January 2006)

Found on a UK forum:

A post by a Housing Bear...I thought it pertinent, but also hilarious   :



> Was in the bank the other day, we just got married and did all the name changing lark.
> 
> Anyway the topic of houses turned up, and this financial advisor said " you have to get on the ladder"
> 
> ...


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## TheAnalyst (19 January 2006)

Nice post Mich



			
				michael_selway said:
			
		

> hehe yeah, i mean Bulls have won the war most of the time, but the notable All Ords wars won by Bears were in 1987 & 2002 (sars period). Along the way there a few battles won by Bears (corrections) eg Mar05 and Oct05, Sep11 etc
> 
> 
> 
> ...


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## tech/a (19 January 2006)

My apologies I was under the impression the discussion was pertaining to our market.

That being the case thanks Michael for showing some charts of bear/ish markets.
I'm certain those trading them would be using the appropriate trading stratagies for the market they are in.

When the time arises and the ALL ORDS shows clear bearish characteristics then it should be traded that way.

But to start screaming bear after a singular event????


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## Smurf1976 (19 January 2006)

Why is it that long term stock charts always start around 1980? And why not price the market in "real terms" the way that economists compare prices over time?

Why not a proper 40 year real terms chart? Oops! I know, it doesn't help the bull case if we look at both SECULAR BEAR and SECULAR BULL markets. Best to look at the bull portion only since that paints a better picture. It's not just stocks of course, real estate people do exactly the same and also conveniently ignore the effects of inflation and the cost of renovations to the property.

Using the same logic of carefully selected periods for statistics, I conclude that Hobart is in fact warmer than Brisbane. Over the next 3 days the average maximum temperature forecast for Hobart is 30 degrees with the warmest being 36. For Brisbane it's an average of just 27.6 with the highest being only 28. I thus conclude that Hobart is warmer than Brisbane. Absolute nonsense of course since everyone knows that Brisbane is warmer than Hobart, but it shows what you can do with statistics which are themselves accurate if you select a timeframe and situation which supports your case. Hence why the stock bulls love charts starting around 1980, gold bugs love charts featuring the 1970's.

Only a truly long term chart covering multiple major cycles presents an accurate picture which, in the case of anything financial, needs to be adjusted to reflect the declining purchasing power of the currency over that time. Given that a complete valuation cycle lasts somewhere around 35 years (based on US market history, not sure about the ASX) it's misleading to show any chart which covers less than that time. Just like it's misleading to base weather averages on the forecast for the next three days whilst ignoring well over a century of proper records.


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## wayneL (19 January 2006)

Just to clarify, this thread is not about a one day fall on the ASX, it is about the world economy looking forward. Not tommorrow, next week or next month. It's about the next decade.

*OK!!!!!*

++++++++++++++++++++++++++++++++++++++++++++++

http://www.usatoday.com/money/perfi/housing/2006-01-17-real-estate-usat_x.htm



> 43% of first-time home buyers put no money down
> By Noelle Knox, USA TODAY
> WASHINGTON ”” As housing prices soared last year, an eye-popping 43% of first-time home buyers purchased their homes with no-money-down loans, according to a study released Tuesday by the National Association of Realtors.
> 
> ...


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## Smurf1976 (19 January 2006)

tech/a said:
			
		

> When the time arises and the ALL ORDS shows clear bearish characteristics then it should be traded that way.
> 
> But to start screaming bear after a singular event????



Agreed there. The problem is that many bulls seem to think that bear markets are something unlikely rather than the normal event that they are. It's wise to consider all possibilities and prepare accordingly IMO.


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## wayneL (20 January 2006)

http://www.financialsense.com/fsu/editorials/kirby/2006/0116.html



> *THE LOOMING FIAT CURRENCY TRAIN WRECK*
> by Rob Kirby
> January 16, 2006
> 
> ...


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## tech/a (20 January 2006)

Smurf.

Well 20 yrs is as far back as my charts go.Had I had 100 yr charts the I would have used them.

Wayne.
I bought every property other than my Principal Place of residence NO MONEY DOWN.
Started in 97 and finished buying (For investment) in 2001.
I was geared to the Max.
Today the loans still total $1,147,000 and the property both comercial and domestic have a current value of $2,876,000,I know because I've just had them all valued for another pet project.
They are owned by myself/wife or trusts.
I sold one in April and plan to sell another 2 in the next financial year.
Their sale and their re investment will drop the liability by a further $400K.

There is nothing wrong with the principal infact making money from asset is very lucrative.
Its about timing and those who are doing this in a flat and possibly falling market are asking for trouble.

There is not enough quality education in these methodolgies.As few understand them---if they did they would be exploiting them (The opportunities and methods).
Now is the time for patience,in the 90s it was a time for recognition of opportunity and acting upon that.


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## wayneL (20 January 2006)

Tech,

That article was about *FIRST HOME BUYERS*, not sophisticated investors such as yourself.

They don't put money down BECAUSE THEY DON'T HAVE ANY! Plus the payments are usually a stretch.

A whole 'nuther bowl of wax to what your talking about.

Cheers


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## wayneL (21 January 2006)

As I trade at night I hang out in a live trading room on MIRC where there are about 130 pro/semi pro Index futures traders.

It was only the middle of last week where the DOW cracked 11,000 points and there was general euphoria all round and Universal bullishness. I was the only bearish voice (of course).

Well here we are only a week later and ~300 points lower....down 160 of those today (as of the moment) Oil is up, Gold is hitting new highs.... and the sentiment in the room is very gloomy indeed. Well not that gloomy because they're all now short  But goomy on the economy.

I stress that in the medium term, this may mean nothing, we could be back up to 11,000 or more in a month or 2. But in this environment of acute risk, people should be sensitive to potential turning points in sentiment and be prepared to hedge their exposure.

Also this is good news for certain sectors, such as oil and gold. Take a look at sugar too it's going awesome.

Cheers

<edit> The chart is Dow futures. Don't know why the top is blanked out.


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## wayneL (21 January 2006)

-207 at the close

GOOG down $75 from its high last week

Bears Partying


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## mit (21 January 2006)

I have been in various forums since 2003 and I think that Tech is refering to the people on these forums who have said that the market has gone too far/the economy unsustainable and they are out of the market and are short. These guys would have missed a lot of profit over the last two and a half years.

Can you call yourself a bear if you trade with the trend and are long but think the economy stinks? The market is driven by emotions and government action the economy doesn't seem to have much to do with it unless the market starts worrying about the economy.

I haven't been able to get XAO data prior to 1980. I did manage to get DOW from 1929 though (from Yahoo). Looking at the data actual down trends are relatively short (12-18 months or so). What tends to happen is that the market goes up for a long time, go down for a short time or is flat. Interestingly as pointed above the DOW is still in a Bear period since 2002.

After last nights action, Monday is going to be interesting (NOT) on the ASX

MIT


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## wayneL (21 January 2006)

There has been no short covering between the close of the stock market and the close of futures at 4:15PM EST...Futures closing @ -216

Again, be aware of sentiment changes, protect those profits.


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## wayneL (21 January 2006)

mit said:
			
		

> Can you call yourself a bear if you trade with the trend and are long but think the economy stinks?




Very interesting question Mit.

I say yes. Trading with the trend is pragmatism. Preparing for the coming perfect storm is also pragmatism.

Going short against the tide (without very tight stops) is pure faith and one can do it way too soon. This produces Martyrs.

Mercenaries survive longer than Martyrs. To be a surviving bear requires mercenary attitude, and requires running with the bulls when expedient.

Also as pointed out by Smurf. Bears are Bulls, only in different sectors/instruments. eg oil, gold, heritage seeds etc


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## wayneL (21 January 2006)

From the most credible Bear in the world; Stephen Roach Chief economist at Morgan Stanley:

http://www.morganstanley.com/GEFdata/digests/20060120-fri.html#anchor0



> So far, so good, for an unbalanced world -- the sky has yet to fall.  And the longer a lopsided global economy continues to chug along with impunity, the more the broad consensus of opinion becomes convinced that this is a sustainable outcome.  This increasingly complacent mindset may be about to meet its toughest challenge: A likely turn in the liquidity cycle appears to be on a collision course with ever-widening global imbalances.  This could well be a lethal combination that triggers the long-awaited capitulation of the American consumer -- heretofore the mainstay of a US-centric world...


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## Knobby22 (21 January 2006)

Wayne

As he says in his convoluted style is what is going to happen to interest rates and whether they will stangle the US (and Aussie) borrowers. 
I get the impression US consumers are where we were two years ago, borrowing on the house rise equity, enjoying lower manufactured goods prices (thanks China). 

In my opinion, there will be a crunch but it may still be a long way off.
Reasons inflation may rise include - China revaluing the countries exchange rate upwards, excess money supply. Wage breakouts are not occurring in the US. Europe and the US are struggling to compete further reducing inflation.

The crunch will be big but I don't think it will be this year and probably not next year either.


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## clowboy (21 January 2006)

The thing that has me thinking is.....

Such wild swings in the markets as of late.


Granted they havent been that major but big enuff to make me think there are alot of people riding up the bull market with the hand reseting on the eject button.


No doubt the dow will make up most of today's losses next week (as have the asx and nikkie) but when they do truly fall of the perch I think it may be a long fall to bottom.

Think it will be a long climb before that fall too.


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## michael_selway (21 January 2006)

wayneL said:
			
		

> -207 at the close
> 
> GOOG down $75 from its high last week
> 
> Bears Partying




hehe hopefully a corection only this time


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## Happy (21 January 2006)

Dow down, will make nervous Monday.

Also with Australia Day coming, Wednesday can bring some just in case selling and if Thursday no good in US, Friday 27 might be quite a day, if not , not.


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## Smurf1976 (21 January 2006)

tech/a said:
			
		

> Smurf.
> 
> Well 20 yrs is as far back as my charts go.Had I had 100 yr charts the I would have used them.
> 
> ...



My post wasn't directed at you personally Tech. Just an observation that people using charts in general have a tendency to choose a timeframe which suits whatever it is they are attempting to prove rather than showing both sides of the story.

Bulls tend to show charts which start at a bear market bottom and explain away corrections during the bull market with "it's time in the market, not timing the market which counts". If they showed a chart which started at a bull market top then it would be very obvious that timing does matter.

Agreed strongly with your point that what works in a bull market is asking for trouble in a flat or falling market. TIMING MATTERS! Agreed also about the need for education.

As for bearish things in general, the oil price is up strongly again overnight and US oil stocks have reached a new high so I think oil's going to be an issue. http://finance.yahoo.com/q/bc?s=^XOI&t=6m&l=off&z=m&q=b&c=


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## Smurf1976 (21 January 2006)

mit said:
			
		

> I have been in various forums since 2003 and I think that Tech is refering to the people on these forums who have said that the market has gone too far/the economy unsustainable and they are out of the market and are short. These guys would have missed a lot of profit over the last two and a half years.
> 
> Can you call yourself a bear if you trade with the trend and are long but think the economy stinks? The market is driven by emotions and government action the economy doesn't seem to have much to do with it unless the market starts worrying about the economy.
> 
> ...



Worrying too much certainly isn't good for your wealth. Trade with the market rather than trying to predict it IMO. If it's bullish then go long, short or stay out if bearish.

Flat periods. If it's going nowhere (and the Dow has gone effectivley nowhere for over 6 years now) then it comes down to dividends or active trading. Do the dividends justify staying invested or would it be better to put your money somewhere else? Commodity stocks, gold and real estate would have made a lot more profit than simply staying in the general market over the past 6 years in the US. Even in Australia they were the star performers. The alternative, of course, is to actively trade since whilst it has been flat overall there have been some big swings in the US market during the past 6 years.

If you look at it in terms of either valuation or real (inflation adjusted) terms the flat periods seem to be bear markets in practice. A bit like typical Sydney house prices over the past couple of years. They haven't moved a lot but if you're highly leveraged or comparing it to alternative investments then you've lost rather a lot with no clear evidence that the losses are over. It would have been better to invest in something which went up rather than something which was broadly flat with a low yield. Easy to say in hindsight of course.

Timing DOES matter despite what the fund managers, real estate agents and others trying to sell something well above long term valuation trends will claim.


----------



## wayneL (22 January 2006)

From My friend at The Money File$ 



> THE FIAT CURRENCY TRAIN WRECK
> 
> Posted By: FinancialEdEconomica
> Date: Saturday, 21 January 2006, 10:52 a.m.
> ...


----------



## clowboy (22 January 2006)

I really don't understand enuff about economics.

In my limited capacity it would seem that america is running itself into the ground at an unstopable rate, not only that but it seems that everyone knows about it.

I can not comprehend how an elected (assumably reasonably intellegent person - in order to be able to run) could knowingly run a country this way.

The way I understand it america is going into debt at a rate that the trend cannot be reversed (without bankruptcy).

Maybee my simple brain is thinking on too basic a level and doesn't understand the complexities of these matters.

Anyway from what I understand of it america owes the world a whole lot and china is starting to own a whole lot of it. - know where my money is going 


If america (or the government) was to list - would anyone buy stock in the company?


----------



## Knobby22 (22 January 2006)

I believe that George W Bush will go down as the worst President ever.
Far worse the William Harding.
If war is declared on Iran, I hope we are not stupid enough to get involved.
Iran is the middle east predominant power. Iran may destroy the US if poor policy decisions take place.
Scary stuff.


----------



## Smurf1976 (22 January 2006)

Part of the problem with politicians is what people vote for. They want quick fix, easy answers without sacrifice. It's just not the way to solve problems in the long term.

A logical thing for the US to be doing (amongst others) would be diverting capital away from real estate speculation and wasteful consumer spending towards actual production. But who would vote for a president promising big new factories in every city whilst Americans get used to smaller cars and get back to doing real productive work rather than financial services? Not many.

Even in Australia, it would make a lot of sense to be processing our minerals etc here. And likewise it would make good economic (and environmental and road safety) sense to discourage big gas guzzlers on the roads. Likewise real estate speculation is a non-productive use of capital which fails to create real wealth. But how many Aussies are going to vote for someone promising heavy industry and a petrol tax hike? It would massively boost our wealth if we did, but the latte drinking property developer types will be too worried about a factory or two spoiling the view. Big money tends to get what it wants so not much chance of a serious push to boost Australia's economy over the long term. We just keep increasing foreign debt and selling the farm instead. Just like America with the exception of the government's own budget.


----------



## wayneL (25 January 2006)

The loss of jobs in the UK is gathering pace and I don't expect it will be long before we see this in other western economies, including Oz.

I've come to see this as a possible trigger for trouble in the housing market, rather than increasing interest rates. (though there seems to be growing pressure on rates too)

http://www.sky.com/skynews/article/0,,30400-13498131,00.html



> Manufacturing Jobs Go
> Updated: 12:29, Tuesday January 24, 2006
> 
> Around 25,000 jobs were lost in the manufacturing industry over the past three months, says the CBI's latest survey.
> ...


----------



## wayneL (25 January 2006)

An interesting document:

2nd Annual
Demographia
International Housing
Affordability Survey:
2006
Ratings for All Major Urban Markets
Australia  Canada  Republic of Ireland
New Zealand  United Kingdom  United States
(Data for 3rd Quarter 2005)​
http://www.demographia.com/dhi-ix2005q3.pdf

Excerpt:



> Most Unaffordable Markets: The least affordable markets are generally in California, Hawaii, the
> US east coast, Australia, the United Kingdom, New Zealand and Vancouver. The most unaffordable
> market is Los Angeles & Orange County, with a Median Multiple of 11.2, far above the “severely
> unaffordable” threshold of 5.1. The Median Multiple is 8.5 in Sydney, 6.9 in London, 6.6 in
> ...


----------



## Smurf1976 (25 January 2006)

The most ridiculous Australian city on that list is Hobart in my opinion.

Nothing wrong with the place, I live there after all, but Hobart valuations higher than Melbourne??? That's absolutely ridiculous when you compare the two.

Melbourne : A "real" city with millions of people where land within reasonable distance of the city centre is genuinely scarce.

Hobart : A small city which locals call "town". There's undeveloped land within a modest walk of the GPO and no real reason to live near the city centre anyway from a lifestyle perspective (unless you want to live in a big city for the atmosphere etc in which case Hobart isn't the logical choice...).

As I said, I'm NOT bagging Hobart but it's plainly ridiculous that it is anything other than much LOWER valued than Melbourne. It just doesn't make sense no matter how I look at it. There's just no scarcity factor down here and little chance of that changing in the next few decades at least.

I just can't believe that in a state with saw mills all over the place, a big cement works that exports much of its production and a brick factory within an hour's walk of the Hobart GPO it costs so much to build a house. Just doesn't stack up. Can't blame that old excuse of freight across Bass Strait for this one.

IMO builders will just keep building "on spec" until selling prices and construction costs are back in balance. So either construction costs are set to soar or house prices are coming down or some combination of the two.

I've noticed plenty of empty houses for sale lately which must say something about the state of the market.


----------



## phoenixrising (25 January 2006)

I can't post a link for this, have to take my word on it.

Paddington in Sydney is upmarket and has 7 or 8 pubs that people come to from the very top end of Suburbs and City. A stop of before and after a game at SCG or Rugby. Biz lunches, deals to be done, etc.

Yet one of the pubs is thinking of closing at 11pm (lisenced to 12) because it's so quiet. Why would that be? I don't know, but something is happening.

Certainly housing affordability (or lack thereof) is part of it. I see a lot of buildings not getting maint anymore as a backlash.

OK WA is powering on, QLD doing well, but just as the US is a world guide, Sydney is an OZ guide to a degree and is looking uncomfortable imho.


----------



## Julia (25 January 2006)

The connection may appear vague, but reading through this thread, I'm reminded of an oft-quoted aphorism which I can't quite remember but am sure someone will:  something along the lines of

  "Lies, damned lies, and more statistics"


I know that's not right.  Can someone remind me what it is.
Hope the intended reference is not too obscure.

Julia


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## wayneL (25 January 2006)

Julia said:
			
		

> The connection may appear vague, but reading through this thread, I'm reminded of an oft-quoted aphorism which I can't quite remember but am sure someone will:  something along the lines of
> 
> "Lies, damned lies, and more statistics"
> 
> ...




Close Julia. It's "Lies, damned lies, and statistics"

Which leads me to another apt aphorism; "...but in the end, there you go."

Cheers


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## wayneL (26 January 2006)

Baby Boomer Time Bombs 

http://globaleconomicanalysis.blogspot.com/2006/01/baby-boomer-time-bombs.html



> ...which of course is all anyone ever worries about these days, is the affect of 10,000 boomers a day retiring starting 2006. More to the point, one has to wonder about promises that have been made to those boomers, and the preparedness (or lack thereof) of many approaching retirement. One also has to consider the demographics looking forward.


----------



## Knobby22 (26 January 2006)

...and how they will screw the X generation one more time.


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## clowboy (26 January 2006)

Hmmm pity that was an american article.

Would not really have the same effect in Aussie but having said that if the market/realestate went into freefall how much super would people really have??????


Long article...short result....don't count on anyone but yourself for retirement.


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## Smurf1976 (26 January 2006)

phoenixrising said:
			
		

> I can't post a link for this, have to take my word on it.
> 
> Paddington in Sydney is upmarket and has 7 or 8 pubs that people come to from the very top end of Suburbs and City. A stop of before and after a game at SCG or Rugby. Biz lunches, deals to be done, etc.
> 
> ...



There is anecdotal evidence that all is not well pretty much everywhere IMO. A bull market in precious metals, high oil prices, ridiculously low yields on real estate, houses sitting empty and so on.

I'm not wishing for a recession but I do think it's prudent to acknowledge that a 14 year economic expansion is unusually long and it's running into some pretty strong winds right now.

NSW economic growth is at a virtual standstill. More consumers and general business activity than anywhere else and yet its economy is going basically nowhere. I consider this highly relevant since (1) Sydney boomed before the other major cities and (2) this is happening at a time when the national economy is benefiting from the commodities boom which ought to bring at least some minor benefits to NSW. It's arguable that without the flow on benefits from the commodities boom benefiting other states, NSW would be literally in recession since it's so close already.

Only Tasmania is still achieving strong growth but that is heavily propped up by one-off capital works relating to energy. Look beyond that and there's plenty of empty houses and tourism is visibly struggling. It's unusual that Tasmania's economic growth tops the nation, but when it's done so in the past it's been due to deteriorating conditions in the other states rather than genuine local strength and it's the same this time. 

Just as NSW tends to lead, Tas tends to lag. When the leading state is on the edge of recession and the lagging one is the strongest performer I think that ought to be sounding all sorts of alarms about what lies ahead.

I don't _wish_ for a recession but IMO the warning signs are very much there and it is prudent to consider the possibility. If people are staying away from pubs etc then that's another piece of evidence which points in the same direction.


----------



## phoenixrising (26 January 2006)

Smurf, well said, sums it up well.

I to can feel a recession coming on. In the big scheme of things tho are they a bad thing? It could clear the ineffiencey's away, things become cheaper, people focus on making do with what's here and now rather than chasing big expensive dreams, at least for a while. Taking a breather in other words.

Just like shares really, don't we like to buy low, dips, etc and make a proffit on highs later. Pehaps 10% or 20% cheaper realestate and not taking off again for a number of years.

Would be sad for the retrenched workers tho.
Some food for thought.


----------



## wayneL (27 January 2006)

Check out this video

http://tvnz.co.nz/view/tvone_minisite_story_skin/653276?format=html



> Is 2006 the year to hunker down, stock up the pantry with tins and torches and horde coins to use in a crisis, as barter or bribe? British financier and multi-millionaire Jim Mellon believes it's sound. He's just co-authored a book 'Wake Up - How to Survive and Prosper in the Coming Economic Turmoil" [due out in NZ in February]. In New Zealand for just a few days Jim Mellon spoke with Jendy Harper.


----------



## Porper (27 January 2006)

wayneL said:
			
		

> Check out this video
> 
> http://tvnz.co.nz/view/tvone_minisite_story_skin/653276?format=html




I watched this guy being interviewed in New Zealand this week.A doomsayer and a bit odd.I think you answered your own question as he is writing a book, the more he can scare people the more money he will earn presumably.

The Dow is getting volatile though which is a sign that something is around the corner.At least I can go short next week when my CFD account is up & running.!!


----------



## wayneL (27 January 2006)

Porper said:
			
		

> ... as he is writing a book, the more he can scare people the more money he will earn presumably.




I can understand this sort of cynisism, I really can...and thats not meaning to be derogatory at all. But what would be the motivation for writing on such a topic? What would be the sponsoring thought? 

If it was purely profit, he would write on how to get rich quick or some such nonsense. Thats what I would do. Rather, I think he believes his message, and a jolly important message it is. 



			
				Porper said:
			
		

> The Dow is getting volatile though which is a sign that something is around the corner.At least I can go short next week when my CFD account is up & running.!!




Good luck! You will enjoy the flexibility of being able to short sell...heck, you may even become a bear!!   

Cheers

PS What part of NZ are you living in?


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## wayneL (27 January 2006)

Branson fears oil will cause biggest recession

http://business.timesonline.co.uk/article/0,,19149-2010779,00.html



> Sir Richard Branson, the billionaire entrepreneur, has warned that any conflict with Iran could push oil prices over $100 a barrel and trigger "the biggest recession we have ever seen".
> 
> Iran is the world’s fourth-largest oil producer. International concerns over the country’s nuclear developments have risen in the past month, but Sir Richard warned that any military intervention in the region would prove "disastrous" for the world economy.




I think we'll see $100 oil anyway


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## bullmarket (27 January 2006)

Morning everyone 

I think we are a long way off a recession, given that a recession is defined as 2 successive quarters of negative GDP growth.

But I think our and US economic growth will slow in 2006.  A commentator/analyst on Nightly Business Report on SBS last week said he expected US growth to slow to 2.5% in 2006.

I think oil will stay in the $60-$70 range for the forseeable future unless of course there is an escalation in tensions at some of the current global 'hot spots' and/or an unforseen rise in global demand for oil. I think $100 oil is a long way off unless one of the above concerns is triggered.

Locally, consumers are becoming increasingly cautious on at least discretionary spending. Although inflation fell from 3% to 2.8% in the last quarter, oil has shot up sharply since those numbers came out and so I feel inflation will continue to hover around the RBA's upper limit of 3% for at least the next quarter in terms of a potential trigger for raising interest rates.  The RBA said a few months back that the next rate move, whenever that turns out to be, is more likely to be up.

So to summarise all of the above, I don't think it's all doom and gloom but there are greying storm clouds, economic and political, on the horizon we should keep a weather eye on.

Having income as my number 1 priority, I decided to go more defensive in mid 2005 and so am solely invested in lower risk LPT's (with little or no exposure to property development) and energy/infrastructure trusts for their high yields.

The above is just food for though and how I see things atm.

cheers 

bullmarket


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## grumpee boi (28 January 2006)

I posted this on Reefcap:

Interesting article here.
http://www.news.com.au/story/0,10117,17951471-421,00.html

I do think that they should also take into account apartments v. standalone accomodation and in addition to that the area of the accomodation. For instance, Tokyo outside the top 20 is a bit of a joke as I know I guy that just bought a place for around $700,000 and it is tiny. So maybe adjusting for what your money buys you would be a better indication.

Having said that housing prices are still ridiculous in some areas and now we have silly 'current affairs' shows (and I use the term loosely) suggesting that Sydney has bottomed and is ready to go again. That must make young couples, middle class and uni grads extremely optimistic.

Adam


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## mit (29 January 2006)

grumpee boi said:
			
		

> I posted this on Reefcap:
> 
> I do think that they should also take into account apartments v. standalone accomodation and in addition to that the area of the accomodation. For instance, Tokyo outside the top 20 is a bit of a joke as I know I guy that just bought a place for around $700,000 and it is tiny. So maybe adjusting for what your money buys you would be a better indication.
> 
> Adam




It would be an interesting activity as my feeling is that expectations in cities in Australia are high. Young people want to leave home and live near the city and live on a largish block of land. 
My feeling is that though we will go through some volatility over the next couple of years but we will end up with property values the same as now or a little higher if you directly compare properties but the average price will appear to have fallen because people have gone smaller or further from the CBD.
When I visit Sydney I can already see this happening around where my wife and I grew up (Matraville/Rockdale) houses are being pulled down and duplexes/townhouses and units are replacing them.

Note that near where I live you can still buy a house near an urban area and close to the bush and beaches for around $200k.

MIT


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## wayneL (30 January 2006)

U.S. IN TECHNICAL DEFAULT
by Dr. M
(AKA Dr. Chris Martenson)
January 27, 2006

http://financialsense.com/fsu/editorials/2006/0127b.html



> In a shocking development, the Treasury Department website is openly stating that as of January 24, 2006 our national debt stood at $8,185.3 billion and on January 26th at $8,190.5 billion.
> 
> http://www.publicdebt.treas.gov/opd/opdpenny.htm
> 
> ...


----------



## wayneL (31 January 2006)

Lifted from another forum:



> Soros Says Bernanke May Not Be as `Pragmatic' as Greenspan
> Jan. 27 (Bloomberg) -- Billionaire investor George Soros said he's concerned Ben Bernanke may not be as pragmatic as Alan Greenspan has been when he takes over as U.S. Federal Reserve chairman next week.
> 
> ``I'm a little bit worried because Bernanke is an academic,'' Soros, 75, said in an interview today in Davos, Switzerland, during the annual meeting of the World Economic Forum. Greenspan ``had the insight to be very pragmatic and look at everything and not be guided by any particular dogma.''
> ...


----------



## wayneL (1 February 2006)

http://business.guardian.co.uk/story/0,,1697724,00.html



> Spectre of bear casts shadow over Goldilocks' party in the fairytale snows of Davos
> 
> Signs abound of something big and nasty lurking in the midst of complacency
> 
> ...


----------



## wayneL (3 February 2006)

This was posted in another forum by Smurf (good spot m8)

http://www.smh.com.au/news/national/huge-rise-in-repossession/2006/02/01/1138590568709.html



> Huge rise in repossession
> 
> 
> By Matt Wade and Michael Pelly
> ...


----------



## mit (8 February 2006)

I don't know if anybody has noticed this as well. Among other things I run a medium term mechanical portfolio system. Tracking daily it most usually goes up higher than the market on an up day and goes down less than the market on a down day. It does this on about 75% of days.

Of course it would do this or I would just use an index fund. One thing I have noticed is that a week or so before each of the corrections we have had it flips and it underperforms the market for a while.
I assume it is because gains are being made in fewer stocks.

However, it has flipped for the last month or so. I wonder if this is a sign that we are in for a large correction. I've noticed it also in  Don's portfolio on his website.


----------



## Happy (9 February 2006)

XAO chart left shallower trendline after 02 - 03 correction, to follow steeper one similar to 84 – 87 run.

All will come to sudden end and 61% correction a possibility (as after 87), if this is just a correction.

Timing extremely difficult, but it will happen rather sooner than later, as some cherries lined up already. October might be good excuse?


----------



## bullmarket (9 February 2006)

Hi happy

Below is a monthly chart of XAO on a logarithmic scale from 1982 to the present.

I use log scales in this case as a given vertical distance on the chart represents the same percentage change in the value of XAO as the same vertical difference anywhere else on the chart.

So you can see that the percentage change in XAO in the 83-87 run up was very much larger than the percentage increase we have had in XAO in the Mar03 to present run up.  And the percentage increase in XAO from late '90 to the present (about 15 yrs) is still a little less than the meteoric rise we had in the 4 years from 83-87. (by eye-balling the chart)

I've also displayed on the chart the Fib retracement levels for the Mar03 to present upleg.  Barring any major global political or economic disasters I still think we'll mainly trade sideways for at least the next 5 months.  I mainly look at the ASX200 index (XJO) and I doubt it will break 5000 with any real conviction, if at all for at least the first 6 months of 2006 and probably for all of 2006.  But if there is a correction, then what level XJO drops to will largely depend on the significance and severity of the trigger that caused the correction....so who knows..

cheers

bullmarket


----------



## nizar (9 February 2006)

good work

wow i cant believe it took 6 years 2 recover from oct87 crash...


----------



## Happy (9 February 2006)

Semi-log chart can make us feel safe, all we need now is some time to go by and action to make it happen.

I cautiously move closer to the emergency exit, trying to pinch some OP Money as I move along.


----------



## bullmarket (9 February 2006)

no problem happy 



			
				Happy said:
			
		

> Semi-log chart can make us feel safe, all we need now is some time to go by and action to make it happen.
> 
> I cautiously move closer to the emergency exit, trying to pinch some OP Money as I move along.




I usually use linear scales on my normal daily charts but I tend to use log scales on charts over very long time frames and with a huge range in the data.

When comparing sizes of price, index or whatever ranges over a long time period I believe it is more meaningful to have a look at the % changes rather than the changes in the absolute values....but that's just me...

But I agree in general with you.  I think there is more downside than upside risk atm and last June I decided to go more defensive with my investments and so am currently solely invested in relatively low risk 'blue chip' listed property and infrastructure/energy trusts to lock in a high yield and income for at least this year - but this is in accordance with my objectives, plans and risk tolerances.  

Looking at the PER's I posted in a spreadsheet yesterday for the main ASX market indexes I see the market as at best fair value and probably starting to look a little expensive atm. 

I think even blind-freddy can see the greying geo-political and global economic storm clouds coming up over the horizon.

cheers


----------



## Smurf1976 (9 February 2006)

http://www.gloomboomdoom.com/marketcoms/mcdownloads/060202.pdf

It relates to the US markets but I think this article is worth reading. It draws comparissons with various indicators such as the level of foreign buying, managed fund cash holdings etc and US stock market moves in the following months.

In short, it argues that there are multiple pointers towards a looming significant decline.


----------



## IGO4IT (9 February 2006)

Hi guys,

was reading on the beginning of the thread & read the bankrupt bank scenario due to the crash of property market (no one can afford to pay back their loans)

I think we'll be looking more in "insurance" companies crashing when the property market falls. (not banks) every loan has insurance & every bank (I would assume) has an insurance policy againist loss in any transaction.

insurance companies busting means less consumer security, lower intrest rates  & bright future for everyone.

am I right or just started losing my mind


----------



## mit (10 February 2006)

nizar said:
			
		

> good work
> 
> wow i cant believe it took 6 years 2 recover from oct87 crash...




However, if you came out of the crash with most of your money intact you could have recovered very quickly. That's why I am not a long term buy-and-hold trader.

If you look at the weeks leading up to the 1987 crash in detail you can see that  from a peak in September there was a 10% drop in the markets before it fell of the cliff. This is equivalent to an almost a 500 point drop currently. This would allow most medium term traders to be stopped out of their positions in a fairly orderly way and some to get their shorts in order.

MIT


----------



## mit (10 February 2006)

I've included the Dow Jones from 1940 with a log scale. Showing charts from 1980 is misleading because it seems to indicate that the except for some brief retracements markets only go up. You can see here that for over a decade from 1966 to 1982 the market went sideways. Note that currently the DOW has been moving sideways for about a half a decade.

MIT


----------



## Knobby22 (18 February 2006)

From the Age today.

Reserve Governor Ian Macfarlane yesterday said standards had been steadily slipping as lenders jostle for market share in the super competitive home loan market, leaving families and the economy vulnerable.

"Lending standards have been progressively eroded so that lenders are now engaging in practices that would have been regarded as out of the question five or 10 years go," Mr Macfarlane told a parliamentary committee.

"The classic example is that we now have advertising on television encouraging people who have got no money at all to borrow 100 per cent for a house," he said. "If you own none of the house, how much commitment are you going to have if things turn tough?"


My take is that the rise in house defaults is more to do with reckless lending than some bearish downturn however if we do get a shock or collapse, it will probably snowball  and hit a lot harder due to the middle class love affair with debt occurring at present. Cash will be king.


----------



## Smurf1976 (18 February 2006)

In his speech yesterday, the RBA Governor also noted that house prices nationally have on average been flat since 2003 and are falling in Sydney.


----------



## Ann (18 February 2006)

I am not a Bear at all....more your brassyknocks.....rhymes with  : 

But I am The Fool who dares to go.

I reckon the XAO is just going to *#&! itself next week. Look out below. With all of the companies going ex-divie and the look of the chart, I thought a nice wee Teddy Bears Picnic might be in order. Honey sanger anyone?  Perhaps a nice cup of Mead?


----------



## Goin' For Broke (19 February 2006)

This has been very interesting reading. I might as well add my two bits.
First bit: If housing is so unaffordable, why is it everywhere I look whole new suburbs are going up, chockers with brand new homes? And big ones at that! Peoples standards keep going up. We want a bigger and better house than our parents had. We want the absolute best house that we can possibly afford pushing our finances to the max. But what happens to those who have to sell? An embarrassing downsize, or go back to the rental trap? More rental demand - higher rent, more money for the investors who can ride out the storm. Rich/poor divide increases a little more.
Second bit: People want nice stuff - cheap. Can't buy that here, hence China. They are working for peanuts, we won't. Australia keeps selling a piece of the farm as many of you put it, to pay for it. Obviously unsustainable eventually. Now rather than actually work and produce something for money, more and more people are investing their money to work for them. Great, but what is being produced? Trading shares and making money but not actually producing any products! Oopps, I think I just upset everybody here! I just know I'm going to catch all kinds of krap for this one. You just got to have a sence of humour though? The investors finance the business that produces the stuff in the factories, giving the poor bloke a job. Rich/poor divide widens further. I don't know I'm just rambling.


----------



## clowboy (19 February 2006)

Goin for Broke?

Where do you live (if you dont mind disclosing?)

By the sounds of things it would be perth(or WA) as WA is the only state to still have suburbs poping up everywhere (and a large amount of investment activity).

While I aggree with what you say in that everyone wants to do nothing(or next to it) for something, this only becomes flawed when those doing lots for nothing lose interest in what we have to offer.

By that I mean that while the likes of China want our comodities we can as a whole just sit back and enjoy the vast growth in wealth.

Just the other day at work a collegue was telling me how he is going to work in the mines.  No Qualifications, starting package of $60,000 PA with increases after first three months, and all he will be doing is pushing buttons on a computer.

I also read an article on the expectations of generation Y or X or whatever late teen early 20's is called which was saying that they where all deluded itno thinking that they would one day live the dream of starting/running a business and become filthy rich never having to do anything again.  It was saying that this thought process was basically a result of people such as Boost bars founder etc etc.

Eventually reality will set back in and times will be tough again it is just a case of When and not If IMO.

Having said that it was argued that it could be a long wait for a downturn/recession......How long did Japan substain economic growth before it fell of the perch?

Someone like me (25) having never seen anything but the good times might be in for a rude awakening one of these days.


----------



## Goin' For Broke (19 February 2006)

I'm in Adelaide. From my limited research, Adelaide house prices are still rising in general, albeit slowly. Don't quote me on that.


----------



## michael_selway (16 March 2006)

wayneL said:
			
		

> This was posted in another forum by Smurf (good spot m8)
> 
> http://www.smh.com.au/news/national/huge-rise-in-repossession/2006/02/01/1138590568709.html




Hmmm the BULL is back today/this week?

Please explain!   

thx

MS


----------



## wayneL (16 March 2006)

michael_selway said:
			
		

> Hmmm the BULL is back today/this week?
> 
> Please explain!
> 
> ...




The article was about housing? You refering to the share market I believe?

However, the bear is patient


----------



## Knobby22 (20 March 2006)

The nightmare scenario has made the Age in Melbourne!

Bush's Iran plan a time bomb with explosive results
By Kenneth Davidson
March 20, 2006
THE updated version of the Bush Administration's 2002 national security strategy, released in Washington last week, identifies Iran as the country that may pose the biggest danger to the United States.
According to Reuters, the strategy document, which reaffirms pre-emptive military action as a central tenet of US security policy, raises fears the Bush Administration will resort to force to prevent Iran acquiring nuclear weapons.
If force is used, it will come in the form of air strikes, as US land forces are already overstretched in the occupation of neighbouring Iraq.
One question still to be confronted is the impact such a strike would have on the US economy and how that would affect the global economy, particularly Australia, which is, after the US, the largest-deficit country in the advanced industrial world.
At the very least, a broadening of the war in the Middle East would be certain to push up interest rates in the US and Australia, because the central banks there would have to protect the currencies' value by increasing yields. How far and fast would depend on judgements about the likely outcome of the military intervention.
An air strike against Iranian nuclear facilities is unlikely to be surgical. There are about 50 sites associated with nuclear development in Iran and they are mainly sited in towns where civilian populations would be at risk. An attack would be certain to inflame the Islamic world against the US, almost certainly lead to a full-scale civil war in Iraq with the support of the predominantly Shiite Iranian people, and the US fleet in the shallow and narrow Persian Gulf would have to withdraw or be vulnerable to Iranian missile attack.
Worse, any air strike against Iran is unlikely to get the support of the United Nations Security Council, given that China and Russia would likely veto any resolution put up by the US.
Why would the Bush Administration risk widening Gulf War II to include Iran when it still has the chance to limit its losses to Iraq? The most popular explanation is that the US wants to pre-empt the Iranian decision to set up a Tehran oil bourse to facilitate the selling and buying of oil in euros instead of US dollars.
The idea is that this would cause a chain reaction in which more and more oil producers and their customers would trade in euros and eventually force the US to pay for its oil in euros too. This would mean the US would have to do what every other country in the world has to do, namely earn foreign exchange through exports in order to pay for its oil imports.
Last year the US trade deficit for petroleum products was about $300 billion. While the $US remains the international reserve currency and oil continues to be traded in dollars, the US can pay for its oil simply by printing more IOUs in the form US treasury bills.
If the US had to find euros (or yuan) to pay for its oil, it would have to increase taxes, cut consumption and increase exports. In short, according to this scenario, the US could no longer afford to be a military superpower and would have to cut back its global adventures.
In the process, the $US would collapse, wiping out the accumulated financial assets of America's major creditors and probably causing a depression of 1930s dimensions. More generally, such a development opens up the question of whether the reserve status of the $US is supporting US superpower status, or whether US military power is propping up the reserve currency status of the $US.
WHILE the possibility of oil trading in euros and the yuan present a possible long-term threat to US economic and military hegemony, it doesn't have to be dealt with immediately.
Similarly, the threat of a nuclear-armed Iran is at least some years into the future. But even with nuclear weapons and the missiles to deliver them and the control systems to guide them, deterrence and the doctrine of mutually assured destruction (MAD) applies to Iran as much as it did to the Soviet Union.
The main strategic change is that if Iran gets the bomb, the US (and Israel) can't attack Iran unless they are prepared to risk MAD.
The cynical explanation for the Bush Administration's threats against Iran is that, like the build-up to the invasion of Iraq, the real objective is "regime change", which has been re-enforced by the slump in President Bush's approval rating to 34 per cent.
The only thing on the political horizon that might restore Republican fortunes is a new and credible national security threat in order to keep control of Congress in the November elections.
If the Republicans lost control of Congress, the way becomes open for hearings into the constitutionality of the Bush Administration's use of wiretaps on Americans without warrants as required by legislation.
The Republican majority in both the Senate and the Reps has blocked examination of the legality of this and other actions by the Bush Administration.
How far the Bush Administration is prepared to go in Iran in order to avoid losing control of Congress to a hostile Democrat majority, which might opt for impeachment, will have fundamental consequences for the global economy in 2006.


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## Mofra (20 March 2006)

IGO4IT said:
			
		

> I think we'll be looking more in "insurance" companies crashing when the property market falls. (not banks) every loan has insurance & every bank (I would assume) has an insurance policy againist loss in any transaction.



I don't mean to be technical sorry, but deposit holding lenders generally don't insure loans with an LVR below 80% (lower for low doc loans).

Some smarter lenders (such as, in a few weeks, my new employer!) insure every loan, then package the debt and sell it to investors so they are holding little (and in some cases none) of the risk themselves.

Negative equity is a reality in many areas (not just Sydney) and some Mortgage Lending compacies have blackballed some suburbs completely.

You are right in mentioning insurance companies though -  in my experience, they are much more likely to engage in forced debt recovery than the banks, who despite their reputation will try many ways to re-package the debt into a manageable way first.


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## brerwallabi (28 March 2006)

I just came across this and I don't think anything much has changed lately in fact its probably got worst. After reading the comments below click on the link and check out the US national debt, maybe I have posted this on the wrong thread maybe it should be in the gold thread - all the more reason to buy gold and gold stocks.,

High Interest Kills Consumers
We live in a "buy it today, pay for it next year society." For the first time in a decade, people loaded with debt will now have to pay more money back due to the rising cost of interest.

Already, big spenders are in a crunch. Credit card debt is so bad that in the second quarter of 2005, the American Bankers Association reports that 4.81% of credit card accounts had payments that were past due by 30 days or more.

For the consumer, who is laden with credit card debt, the cost of interest is rising. The average penalty rate was 22.91% on credit cards and penalty rates are as high as 29.99%. You might as well be borrowing money from the Sopranos.

The ABA warned that personal loans, auto loans, home equity loans, and lines of credit are showing substantial increases in delinquent payments. Add to that the problem farmers are having paying back loans and the problem just keeps growing. Today, we all owe far more money than any of us can really imagine. The “Perfect Financial Storm” won’t be complete until there is a massive wave of loan defaults, bankruptcies, and corporate failures. It’s coming– sooner than later.

Is this the death knoll for our consumer driven U.S. economy?

http://www.brillig.com/debt_clock/


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## michael_selway (29 March 2006)

wayneL said:
			
		

> The article was about housing? You refering to the share market I believe?
> 
> However, the bear is patient




hehe yeah how patient?

thx

MS


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## wayneL (29 March 2006)

michael_selway said:
			
		

> hehe yeah how patient?
> 
> thx
> 
> MS




He waits until the moment of maximum complacency and arrogance


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## Dr Doom (29 March 2006)

The trouble with being a "bear" is that I/we still have that part of the brain that is responsible for logic and common sense intact. I have therefore come to the conclusion that a surgical procedure whereby this part of the brain is removed and replaced with an entire Lemmings brain is needed to trade the current "weight of money" market. 
Let's face it, until the US and other central banks stop creating liquidity then the bull will keep pummelling the bears, although the time is also fast approaching when the US's role as reserve currency will be put to the test. 
Gold is the key. 
What's also been bullish for gold is that it has strengthened with the US dollar has strengthened also.
Fellow bears, be patient and our time will come (unfortunately for the rest of the world).


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## bullmarket (29 March 2006)

Below is a post from late January - 2 months on I don't see anything to change my view atm - and currently waiting for the :fan 

cheers

bullmarket 



> I think we are a long way off a recession, given that a recession is defined as 2 successive quarters of negative GDP growth.
> 
> But I think our and US economic growth will slow in 2006. A commentator/analyst on Nightly Business Report on SBS last week said he expected US growth to slow to 2.5% in 2006.
> 
> ...


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## wayneL (29 March 2006)

Dr Doom said:
			
		

> The trouble with being a "bear" is that I/we still have that part of the brain that is responsible for logic and common sense intact. I have therefore come to the conclusion that a surgical procedure whereby this part of the brain is removed and replaced with an entire Lemmings brain is needed to trade the current "weight of money" market.
> Let's face it, until the US and other central banks stop creating liquidity then the bull will keep pummelling the bears, although the time is also fast approaching when the US's role as reserve currency will be put to the test.
> Gold is the key.
> What's also been bullish for gold is that it has strengthened with the US dollar has strengthened also.
> Fellow bears, be patient and our time will come (unfortunately for the rest of the world).




Yes agree!

Lemming brain is great in this market. One should leave the incision open however, to expedite a quick transfer of brains as the occasion arises. Keep the old brain hooked up to the life support machine also...

Hmmmmm....maybe leave just a few neurons of the old brain in also, so we still have the sense to know when to swap over...

Cheers


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## Dr Doom (29 March 2006)

Unfortunaltely, my simple mathematics suggests that the current economic experiment is unsustainable. The US requires the rest of the world to continue to finance it to the tune of some $3B per DAY, something that China & Japan are increasingly hesitant to do. 
Also, there are increasing signs that the US interest rate mechanism has little to do with controlling inflation but rather a calculated attemtp to sustain the US dollar as the default world currency. 
Warren Buffet got his fingers burnt to the tune of a couple of billion following logic, but the US fed and their electronic printing presses are too greater match for even the so called "worlds greatest investor".
If the price to pay for continued US dollar dominance is a recession, then the feds have already decided this course.
This will also have the effect of "cancelling" a great proportion of those dollars printed over the last 20 years or so, and so the cycle starts all over again.


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## bullmarket (29 March 2006)

Hi Dr Doom

yes interesting to watch atm - and I generally agree with you. 

I see the US bumped rates up another 25 bps o/night with the 'forward language' as they put it  suggesting 1 or 2 more rises before adopting a wait and see mode.

I think US rates would have to either go up significantly more and/or oil would have to go $75-80+ before a big enough dent was made in US consumer confidence (the main driver of the US economy) to initaite a recession.

but who knows....something out of left field could spring up at any time....nothing would surprise me nowadays.   

so I'm starting to dig out and dust off my umbrella and drize-a-bone in case the cow manure eventually hits that proverbial fan   

cheers

bullmarket


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## Dr Doom (31 March 2006)

Back on to the local scene, I am getting very nervous about the XJO ASX200. Looks like getting to the irrational stage setting itself up for a correction. Lookiong at the charts, the ratio of bull runs to retracements is getting smaller ie shorter sharper advances followed by short sharp retracements.
Going by this very rough guide, a market correction is due withhin a week, give or take a couple of days.
Also, in real terms the US Dow Jones would have to be around the 14000 level to be anywhere near new bull market highs. In real terms it hasn't even kept up with inflation. If it couldn't break out of the trading band when interest rates were practically zero, what chance of the Dow making any meaningfull gains with interst rates on the rise (to support the dollar)?.


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## Smurf1976 (31 March 2006)

Given what's at stake, I think the US interest rates will be raised to whatever level is required to maintain reserve currency status. If that sinks the economy then so be it.

My reasoning is simply that the US stands to lose far more from a Dollar collapse than it does from simply having a recession / depression. Losing the next election versus losing the US dominance of the world. 

As for stocks, the US market reached what by any definition was a top in 2000 and has not yet reached the valuation levels normally associated with bottoms. Also Australian real estate underwent a rather visible blow off in 2003 and valuations are still nowhere near those seen at market bottoms. Meanwhile the world trend in interest rates is up, the gold price is rising and growth seems to be slowing a little. Think about that...


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## Knobby22 (31 March 2006)

Dr Doom, you're a bear! I never suspected.


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## Dr Doom (31 March 2006)

Thank you   
Couldn't resist taking out some short CFD's today, with the frenzy in full swing eg Rinker which by the way has a lot to loose in a US housing shake-out, downturn, CRASH.


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## Knobby22 (31 March 2006)

I suspect you are right about Rinker.

I am bearish long term but think this boom will go a while longer yet.
These things always seem to go longer than expected. Prices aren't silly yet.
The world is more resiliant than ever. It is the US that worries me a little but while China and India boom they will hold out.

My other point is that if the US domestic economy crashes a bit, it will really only hurt the poor and part of the middle class. The US is not run for them anyway.


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## michael_selway (31 March 2006)

Knobby22 said:
			
		

> I suspect you are right about Rinker.
> 
> I am bearish long term but think this boom will go a while longer yet.
> These things always seem to go longer than expected. Prices aren't silly yet.
> ...




They updated forecasts a bit only

Hm current P/E is 20 now!

Earnings and Dividends Forecast (cents per share) 
2005 2006 2007 2008 
EPS 62.8 100.3 126.4 140.4 
DPS 21.0 35.0 40.2 44.6

Thx

MS


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## bullmarket (1 April 2006)

Hi Dr Doom 



			
				Dr Doom said:
			
		

> Back on to the local scene, I am getting very nervous about the XJO ASX200. Looks like getting to the irrational stage setting itself up for a correction. Lookiong at the charts, the ratio of bull runs to retracements is getting smaller ie shorter sharper advances followed by short sharp retracements.
> Going by this very rough guide, a market correction is due withhin a week, give or take a couple of days.
> Also, in real terms the US Dow Jones would have to be around the 14000 level to be anywhere near new bull market highs. In real terms it hasn't even kept up with inflation. If it couldn't break out of the trading band when interest rates were practically zero, what chance of the Dow making any meaningfull gains with interst rates on the rise (to support the dollar)?.




I'm also watching XJO and I agree the weekly chart at least shows there could be some profit taking soon but I wouldn't say I am nervous about it.

Below is my updated average market PER's spreadsheet which shows  the weighted (by market cap) and unweighted average PER for the ASX indices down to ASX300.  The weighted average PER for XJO is 17.1 atm and the unweighted is 19.8 using forcast 2006 EPS numbers

Personally I tend to put more emphasis on the weighted average so based solely on PER's I see our market atm as fair value at best with a bias to looking a little expensive overall.  I am not expecting a 1987 style crash at all but a drift back to the ~4800 support level from earlier this year is definitely on the cards imo if things go pear shaped in the US and/or here.

Personally, our market has had a sensational run since March 2003 so I am happy to just let things slide atm but an eventual retrace to below 4800 would be a very bearish medium to long term signal for me.

cheers

bullmarket


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## Knobby22 (1 April 2006)

Bullmarket, you're a bull. I never suspected. (cheeky grin)


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## michael_selway (4 April 2006)

http://www.smh.com.au/news/business/buffett-takes-19b-bet-on-shares/2006/04/03/1143916464286.html

INVESTMENT guru Warren Buffett, struggling to find acquisitions big enough to boost Berkshire Hathaway's returns, is making a $US14 billion ($19.6 billion) bet global stockmarkets won't go into free fall.

Berkshire has sold a form of insurance to buyers wanting protection from a drop in "four major equity indices" over the next 15 to 20 years, according to a US Securities and Exchange Commission filing.

Instead of buying the individual shares, Mr Buffett is wagering that the indices - three of which are outside the US - won't tumble and force Berkshire to pay a claim.

The "long-duration equity index put contracts" are among the largest transactions Berkshire has disclosed and represent the kind of risk that Mr Buffett, the company's chief executive officer, is turning to as undervalued companies get harder to find.

Mr Buffett calls such investments, including stakes in oil derivatives, silver and zero-coupon bonds, "unconventional".

"They figured out a very interesting strategy that basically nobody else can do because of their size and long-duration capital," said David Winters of Wintergreen Advisers in Mountain Lakes, New Jersey. "Buffett and [sidekick Charlie] Munger have made the ultimate contrarian play here. They take a premium in today and they're willing to buy securities if markets really plunge," he said.

Mr Buffett, 75, has become the world's second-richest person largely by buying stocks he considered undervalued, such as Coca-Cola Co, Gillette, Wells Fargo and American Express, and holding them for years.

The stock-index contracts, derivatives that function like put options, increase Berkshire's risks from market losses. A 30 per cent decline in each of the indices last year would have led to a $US900 million pretax loss for the company, according to the March 7 SEC filing. Berkshire's "maximum exposure" was about $US14 billion at the end of last year, the filing said.

Berkshire didn't disclose which stock indices are covered under the contracts, how they're structured, who bought them or how much Berkshire was paid.

For Berkshire to lose the $US14 billion that the company says is at risk, all four indices covered by the puts would have to fall to zero, according to Gary Gastineau, managing director of ETF Consultants, a research firm in Summit, New Jersey. That's unlikely, given historical trends.

The S&P 500, the benchmark index for US stocks, has generated a positive return over any 25-year period since 1925, assuming dividends were included, according to a 2002 study by Ned Davis Research in Venice, Florida.

Bloomberg

Hm hes a Bull?

thx

MS


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## clowboy (4 April 2006)

from my quick read of that is it implying that if stock markets crash he has purchased the right to buy certain stocks from people????

It may seem like madness but how many people have I heard say , if only the market would crash, I'd mortage the house.


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## professor_frink (9 April 2006)

Was just reading an interesting article on the financial sense website- worth a look-
http://www.financialsense.com/fsu/editorials/moede/2006/0407.html


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## professor_frink (17 May 2006)

I think I've found the world's biggest bear! he's calling for an imminent global crisis and depression  

http://www.financialsense.com/fsu/editorials/laird/2006/0516.html




> The world is about to change radically... in every way, and you and your life are going to be directly affected, and soon too.






> The very recent price swings of gold are being driven by fear of a US dollar collapse that will kill the USD SYSTEM. This, coming at the same time that there is a world energy war brewing in the Middle East.






> we are looking at a world war coming and also a great depression due to the collapse of the USD system. Your life is about to change radically.


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## Knobby22 (17 May 2006)

Yea, there are always uberbears and fearful shareholders willing to buy their books. They mainly talk rubbish however.

I am getting bearish but not for those silly reasons.


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## Dr Doom (4 June 2006)

Well that wasn't hard to pick was it?.... the correction I mean.
Still on track with the master plan - short non-gold stocks in market strength, bail out at the bottom, then go long GOLD for the ride home. A trade on the side, short $US against Swiss Franc.
Talking about market strength, I've noticed that all the 'up' day's in the XJO etc have been very half-hearted, very indecisive. 
Lots of money to be made though, lots of volatility for CFD trades....


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## RichKid (6 June 2006)

This is for you Wayne, you are such a notorios bear that the first thing I thought of when I saw the cover was you- mainly due to all those funny cartoons and quips you make, patience my friend, your market will come (unless it has found us already)...
http://www.economist.com/opinion/displaystory.cfm?story_id=6975848

That bear does look soft and cuddly though, I feel like petting it but that might have my head taken off with one paw sweep, beware the bear!


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## wayneL (6 June 2006)

OOOhhhh! I like it!

Straight into "my pictures" with that one.


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## wayneL (6 June 2006)

Another of my more recent aquisitions


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## RichKid (6 June 2006)

wayneL said:
			
		

> Another of my more recent aquisitions




Ahhh, very nice Wayne!


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## IGO4IT (6 June 2006)

Imo, US$ was & is already in trouble more than we thought.

Russia is planning for Roubel based bourse to trade its metals & oil. Iran is planning to have multi-currency SE to trade its oil, China & its Yuan & Middleeast markets are falling like crazy!! who's backing up the US$ again?? who said gold was bearish?? what else again is out there?? How long will it be before the Euro takes over the US$ role?

I think the DOW had/has many more issues to solve other than inflation rates. America stopped being the centre of the universe when they put their interest rates to nothing! They created a monster that is eating itself now as there's nothing esle to eat!

what will all these Yens that are all over the world & put in every single country's SE be doing back in Japan?!!!

very interesting!

cheers,


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## RichKid (7 June 2006)

A great article on conspiracy theories and FX/commodity markets, from a site with a beautiful name: The Prudent Bear! http://www.prudentbear.com/internationalperspective.asp


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## professor_frink (8 June 2006)

just came across this one-


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## wayneL (8 June 2006)

Hah! A beauty Professor!

Into the collection with that one


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## wayneL (8 June 2006)

This is live from the NASDAQ as they prepare for the opening bell


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## professor_frink (8 June 2006)

well its official now isn't it


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## RichKid (8 June 2006)

wayneL said:
			
		

> This is live from the NASDAQ as they prepare for the opening bell
> ............




Nice one Wayne....It's an omen!! I keep seeing em everywhere, all the time, it's a sign, more and more keep appearing, they've left the woods...


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## pacer (8 June 2006)

OH Yeah baby and I'm happy as a bear in the woods, or the rubbish can...scraping out all the fast food and crap i can......hit RIO on friday short with all I had and will see you in the bar after work for a BEER not a BEAR yyyyeeeehaaaaaa!!!!!   RIDE THE BULLS AND SPANK THE BEARS

YAAAALLLLLLL come back now,ya hear
Don't you guys see the trend....... it's the same as the small dips and rises ...JUST BIGGER...........check your mapping over the last 5 years and see you'll see the same map at the high spots and then the lows.......but more enlarged...get out your bloody magnifying glasses

Prediction.....lower tomorrow with slow up trend thru the week then a good drop next week, unless it starts on Friday...possibly the news may be not so bad in three weeks when the US changes it's mind, but ......
either way I wont buy till then, and then expect the market to ramp a bit or fall a touch then ramp and level out......look at previous graphs

Some of U guys are so wrapped up in your own 'BULL'**** it's not funny......

Go short or go home I say...picked up $500 in interest aswell .... Knarley dudes....riding the waves of capitalism...GOD I CRACK ME UP!!!

FEEL FREE TO ABUSE ME, I ABUSE MYSELF NOW AND THEN.............
ESPECIALY WHEN I MAKE A QUID......BLOODY BOURBON...AAAARRGGGHHH

YOURS TRULY...THE PACER.......I usualy bet on horses ..... hehe


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## GreatPig (8 June 2006)

Someone give that guy a couple of aspirin and put him to bed... :


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## RichKid (8 June 2006)

Pacer,
One more bit of rubbish like that last post and I'm going to ban you til you sober up, no more chances, stop bragging like a kid, you keep posting the same boast in every thread.

RichKid
moderator


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## coyotte (8 June 2006)

Been Short on both BHP & MCC

Bit concerned though as BHP hit its Jan 06 high in Oz today -- the last 3 times its done this on its US chart it swiftly rebounded to a new High

MCC looks like heading for its 3rd test of support level --- waitng for the 4th when all hell should break out either way


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## professor_frink (9 June 2006)

coyotte said:
			
		

> Been Short on both BHP & MCC
> 
> Bit concerned though as BHP hit its Jan 06 high in Oz today -- the last 3 times its done this on its US chart it swiftly rebounded to a new High
> 
> MCC looks like heading for its 3rd test of support level --- waitng for the 4th when all hell should break out either way





 Yeah I have a few bhp puts that were the WTFOTM(thanks for that phrase wayne!) type 3 days ago that are now nicely ITM. A little bit concerned bout the jan highs holding it up a bit. Base metals got smacked around overnight so it looks like it could break lower today(but I'm probably wrong  )

Fall I say, FALL!


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## nizar (10 June 2006)

More good news for bears next week

"I don't think we'll get much of a rally in front of next week's CPI and PPI numbers," said Owen Fitzpatrick, managing director private wealth management at Deutsche Bank, referring to key inflation data due next Tuesday and Wednesday.
"There is a lot of concern that if these numbers don't come in at reasonable levels, we'll see the market trade off further." 

http://www.marketwatch.com/News/Sto...E2C-464B-96E5-DFB826300739}&siteid=mktw&dist=


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## Knobby22 (6 August 2006)

Profits are up, inflation is up, interest rates are up.

This morning on Inside Business, 

 DR JOHN EDWARDS, CHIEF ECONOMIST, HSBC: It gave a lot more information, although there were some mixed messages. One important message which wasn't in the statement on Wednesday is that the Reserve Bank thinks core inflation has peaked at 3 per cent, which is where it is now, and it will remain around 3 per cent according to the Reserve Bank for the next year or two, which seems to imply that no further rate increases will be necessary. 

ALAN KOHLER: Except that another way of looking at that is that it is forecasting 3 per cent inflation, which is the top of its band. Surely it will want to bring it down from that, won't it? 

DR JOHN FLETCHER: No, I don't think so. I think if it is satisfied that headline inflation is coming down, as it will be, and if it is satisfied it's not going beyond the top of its target band, then it can - under our inflation targeting procedures in Australia - it can wait it out so long as it doesn't accelerate, which is what it is saying. 

ALAN KOHLER: What are your odds now on another rate hike? 

DR JOHN FLETCHER: It remains a very lively possibility. But I would say about 30 per cent, whereas the market is saying about 70 per cent. I think the market has got it a bit too high. 


http://www.abc.net.au/insidebusiness/content/2006/s1707348.htm

If he is correct, and his arguments appear to be the prevailing orthodoxy, then we have no need to panic and this bull market will merely pause.
If inflation is not as easily controlled, and I fear it may not be - then watch out! 

If we do have a bear market, I don't think it will be a crash but rather a long slow fall over a long time say 4 years exacerbated by the slow failure of the resouces boom. I also think there will still be many successful stocks over this time. We will have interesting times unlike other times in stockmarket history.

Does anyone else think similarly or do you think I am talking rubbish?


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## Dr Doom (22 December 2006)

Calling all bears, time to awake from hibernation. Some interesting notes from   Nouriel Roubini 

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Dec 21, 2006

Hard Landing Macro News of the Week:

    * NAHB confidence index of home builders further down and at an historic low
    * Building permits down another 3% after falling 5% in the previous month; as low as they were in 1997.
    * Mortgage applications down 10% in the last week after some recovery in previous week
    * GDP growth revised down to 2% on even worse residential construction
    * Initial claims for unemployment benefits rising and continuing claims at their highest level since January
    * Philly Fed index of manufacturing strongly down again for the third month in a row
    * Stock market indexes falling today on US growth worries in spite of surge of M&A activity
    * Foreclosures in mortgages increasing
    * Subprime borrowers in trouble: study says 20% of them may go into foreclosure
    * Distressed loan problems spreading from secured mortgage loans to unsecured consumer loans (see HSBC)
    * Yield curve further inverted
    * Transportation sector (leading indicator of economic activity) in trouble as bad news from Fedex, other transport companies and the Dow Transportation index fall suggest
    * Major retailers showing slow retail sales growth (Circuit City, Best Buy, Wal-Mart)
    * Same store sales among major retailers in latest December week (ICSC-UBS survey) up only 2.4% relative to a year ago (i.e., flat in real terms).
    * Commodity prices falling, including copper and other metals (suggesting US and global economic slowdown).
    * PPI inflation up again
    * Current account deficit up in Q3 to $225 billion (annualized $900b)


Soft Landing Macro News of the Week:

    * Housing starts up 6% after falling 14% the previous month; so they are still down 8% over the last two months
    * Leading indicators index slightly up this month
    * Dow Jones index reaching new highs before slumping towards the end of the week
    * M&A activity reaching a frenzy; but academic study suggests that such M&A waves are followed by underperforming stock markets
    * Have I missed anything else...or is that it all for the soft landing news....?


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## justjohn (21 February 2007)

After 6 consecutive weeks of positive gains, fellow bears were a big chance this week :


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## Garpal Gumnut (21 February 2007)

Knobby22 said:
			
		

> Profits are up, inflation is up, interest rates are up.
> 
> This morning on Inside Business,
> 
> ...




dear Knobby22, 

I certainly do not think you are silly but Alan Kohler and the Reserve bank have as much chance of picking the future as you or I. Certainly listen to these guys but if you think differently you are just as likely to be correct. A bear correction is overdue, just a matter of when.

Garpal


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## Knobby22 (21 February 2007)

What I am saying Gumnut is not short term corrections in the market  but that high inflation is on the way caused by too much liquidity. This will cause a long slow major collapse as interest rates rise, stifling investment and commodity prices.


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## Garpal Gumnut (21 February 2007)

Knobby22 said:
			
		

> What I am saying Gumnut is not short term corrections in the market  but that high inflation is on the way caused by too much liquidity. This will cause a long slow major collapse as interest rates rise, stifling investment and commodity prices.




dear Knobby22

Don't worry over a bear move. Just go bearish, buy puts if thats the way you feel. its not the end of the world if the market retraces. Go with the flow. Investment , commodity prices and interest rates have an "interesting" relationship. 

I value your thoughts

Garpal


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## Dr Doom (22 February 2007)

Comrades,
The problem generally is too much money and too much leverage. The chance of a long slow correction diminishes each day there isn't one. Due to the nature of our modern derivatives markets, it only takes one X factor to start the ball rolling for eg look at some of the commodities recently, not just falling back but correcting severely. Be prepared for the bear to gather pace after this reporting season is over maybe?. Then one thing will feed on another & before we know it we have a crash as all those intricate derivative products which are confusingly intertwined start to feed on each other, a self perpetuating downward spiral. Time for cash and or gold?.

Maybe this is the X factor?

--------------------------------------------------------------
Bubbles Brewing in Shanghai, Tokyo, and London

By Gary Dorsch 

February 21, 2007

www.sirchartsalot.com

There is a bubble growing. Investors should be concerned about the risks,” said Cheng Siwei, vice-chairman of China’s National People’s Congress in a January 31st interview with the Financial Times. “But in a bull market, people will invest relatively irrationally.
Every investor thinks they can win. But many will end up losing. But that is their risk and their choice, ” Cheng warned. In what might develop into the third biggest stock market bubble in history, ranked alongside Japan’s Nikkei-225 of 1986-89, and the Nasdaq’s 1999-2000 bull run, the Shanghai Composite “A” share Index, restricted mainly to Chinese nationals, has posted a 140% gain over the past 12-months, after soaring 46% in the fourth-quarter of 2006 alone. And without deliberate market intervention, the A-share market could inflate into a Nasdaq-like bubble.

How Beijing decides to deal with the Shanghai bubble, can have a great impact on the outlook for the Chinese economy, global commodity markets, and exporters in the region from Australia, Hong Kong, Japan, and Korea. Will Beijing try to prick the bubble and set-off a steep correction, or carefully calibrate a series of tightening measures to take some steam out of the market and simply flatten it out?

http://www.kitco.com/ind/Dorsch/feb212007.html


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## Knobby22 (22 February 2007)

Good point Dr Doom.


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## BIG BWACULL (22 February 2007)

On the other hand



> Is the Shanghai stock market in a Bubble?






> It’s popular to call a market that triples in value within less than two years, a bubble, but seen from a different angle, the spectacular resurrection of Shanghai “A” share index might have corrected a grossly undervalued position, into closer alignment with the global benchmark






> From 2001 thru 2005, China’s economy and the Shanghai “A” share market spent much of time moving in opposite directions. China was emerging as the world’s leading manufacturing power, its economy was growing at an frantic 9.5% pace, and exports were tripling, yet the Shanghai A share index, lost half of its value, sliding from a high of 2200 to below 1000 on June 6, 2005.




or is it catchin up for lost time ? 

http://www.kitco.com/ind/Dorsch/feb212007.html


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## Dr Doom (27 February 2007)

Crunch time for the US markets this week with some sobering data to come out, which has some people a little uncomfortable if the forecast analysts consensus turns out to be close to the mark. A number of important reports and figures are due to be released, and some are due to be revised down, notably GDP.

Tonights action

Durable-goods orders - expected to be <down>
Consumer confidence - expected to be <down>
Existing-home sales - expected to be <up>

Wednesday night

GDP - expected to be <revision down> (less than 2% expect some fireworks)
Chicago PMI - expected to be <up>
New-home sales - expected to be <down>

If the US data is worse than consensus then expect a major correction to a fragile DOW, already at the bottom of this current trend channel. The problem for the ASX market will be coming on top of today's 'sell-off', a compound correction which may give us the first negative week for some 2 months.


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## CanOz (27 February 2007)

Is it just me or has a little selling pressure crept into the market this afternoon?


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## greggy (27 February 2007)

CanOz said:
			
		

> Is it just me or has a little selling pressure crept into the market this afternoon?



Yes, after a strong run, a bit of profit taking was overdue.


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## justjohn (27 February 2007)

justjohn said:
			
		

> After 6 consecutive weeks of positive gains, fellow bears were a big chance this week :



After 7 consecutive weeks of positive gains,fellow bears we are a BIGGER chance this week. Go you good thing :beat:  :bananasmi


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## Dr Doom (27 February 2007)

CanOz said:
			
		

> Is it just me or has a little selling pressure crept into the market this afternoon?




hi CanOz,
I think it's indicative of what might happen when the real deal arrives, ie it will be breathtakingly savage. See BHP intraday chart just drop off the edge  

How are you positioned for a market correction?. Have you gone short? What instruments do you use?.

DD


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## numbercruncher (17 August 2007)

This aint no ordinary Bear!


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## theasxgorilla (17 August 2007)

numbercruncher said:


> This aint no ordinary Bear!




I wouldn't even call it a bear market yet.  3 weeks and a little over 10% after 4 years of nearly unprecedented good times hardly constitutes a bear market.  The bears have been chanting the same 'debt bubble' song since before Greenspan's famous 'irrational exuberance' comment over 10 years ago.  The only thing that has changed is that the mainstream media have been chanting along with you for the last 3 weeks...making it seem as if you actually knew something.  Enjoy your moment in the sun...and remember, a stopped clock is right twice a day.


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## insider (17 August 2007)

theasxgorilla said:


> a stopped clock is right twice a day.




I like the quote


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## theasxgorilla (17 August 2007)

numbercruncher said:


> This aint no ordinary Bear!




...you're right...it's a muppet!


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## numbercruncher (17 August 2007)




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## Knobby22 (26 November 2007)

I have argued the bull case for a while now and have long been a bull but I am now getting bearish.

Inflation in the US and the world is rising, requiring higher interest rates hile demand falls efffecting the world. Other countries are also producing inflation internally such as China which will be exported to the world once the US dollar starts rising again.

Below I am quoting Colin Twiggs from Incredible Charts  who I greatly respect following. Unfortunately I can't produce the Chart.

"The yield curve remains our most accurate tool for predicting recessions. The only problem is that signals can occur 12 to 18 months in advance of a down-turn — leaving plenty of time for doubts to grow as the market keeps rising. 

Every time there has been a significant rise in short-term interest rates over the last 45 years, a recession has followed — except on those rare occasions where long-term rates have shown a corresponding rise, maintaining a positive yield curve. In a nutshell: whenever the yield spread (maroon line) falls to zero, a recession follows."

This has happened. A recession in the US will occur causing a fall in the stock market. Oil also isn't helping.


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## Whiskers (26 November 2007)

Knobby22 said:


> I have argued the bull case for a while now and have long been a bull but I am now getting bearish.
> 
> Inflation in the US and the world is rising, requiring higher interest rates hile demand falls efffecting the world. Other countries are also producing inflation internally such as China which will be exported to the world once the US dollar starts rising again.
> 
> ...




Yeah, I noticed that too Knobby. I'm feeling a bit bearish for the US too, but not sure how far and wide it will spread this time.

I believe this is the chart you mention.


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## Knobby22 (27 November 2007)

Thanks Whiskers for reproducing the chart. Much appreciated.


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