# Imminent and severe market correction



## Uncle Festivus

Blow-off top in world markets - get ready! 

~~~~~~~~~~~~~~~~~~~~~~
*Fund issues dire equities warning*

By Robert Orr

Published: April 3 2007 19:09 | Last updated: April 3 2007 19:09

A leading UK fund manager has sold off about half the equities in the portfolios he oversees in anticipation of an imminent and severe market correction.

Ken Murray, the founder and chief executive of Blue Planet Investment Management, has revealed he has offloaded equities and cut the gearing on the firm’s portfolios to zero in the belief a US economic recession is set to wipe more than 20 per cent from the value of global stock markets.

Blue Planet, a specialist investor in the financial sector with $350m of assets under management, operated three of the four best performing financial funds in the UK last year, according to figures from Bloomberg. Its Worldwide Financials fund was the best performing investment trust in the UK and the world over the last three years. About 25 per cent of Blue Planet’s portfolios are now in cash.

Mr Murray warned the impending market correction was likely to be considerably more severe that either of the two most recent downturns that began in February just past and in April last year.

Mr Murray, who began the share sales two weeks ago after the latest downturn, said a consumer spending slowdown was already under way in the US. Combined with rising inflation and a slowdown in corporate earnings, this would drag the world’s largest economy into recession.

“People don’t want to believe bad things will happen but the market will correct very sharply,” he said.

“It is time to get out of the market and I don’t think it would be unreasonable to expect the market to fall by more than 20 per cent in a very short space of time”.

Mr Murray has built a reputation as one of the UK’s most successful investment trust managers. He has combined his role of chairman and chief executive with an active role as an asset allocator via his position of head of investments.

A leading figure in the Scottish financial establishment, Mr Murray founded Blue Planet in 1994. Prior to that, in 1990, he established the Bank of Edinburgh and led the move to consolidate the UK’s fragmented building societies sector.

Bank of Edinburgh bought the Heart of England Building Society before being swallowed up by Scottish Amicable.

Mr Murray said investors could ill afford to ignore warnings from the likes of Alan Greenspan. The former chairman of the Federal Reserve warned earlier this year that the US faced the risk of recession.


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## Sean K

Oh no, here we go again. I anticipate another round of doomsayers claiming the world is about to implode because the market is toppy and the US housing sector looks ill. This has been going on for some time. Eventually they will be right of course. 

I look forward to the bears rampaging across this thread with gusto. 

(I have a foot in the bear den atm  )


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## Porper

Uncle Festivus said:


> Blow-off top in world markets - get ready!
> 
> ~~~~~~~~~~~~~~~~~~~~~~
> *Fund issues dire equities warning*
> 
> By Robert Orr
> 
> Published: April 3 2007 19:09 | Last updated: April 3 2007 19:09
> 
> A leading UK fund manager has sold off about half the equities in the portfolios he oversees in anticipation of an imminent and severe market correction.
> 
> Ken Murray, the founder and chief executive of Blue Planet Investment Management, has revealed he has offloaded equities and cut the gearing on the firm’s portfolios to zero in the belief a US economic recession is set to wipe more than 20 per cent from the value of global stock markets.
> 
> Blue Planet, a specialist investor in the financial sector with $350m of assets under management, operated three of the four best performing financial funds in the UK last year, according to figures from Bloomberg. Its Worldwide Financials fund was the best performing investment trust in the UK and the world over the last three years. About 25 per cent of Blue Planet’s portfolios are now in cash.
> 
> Mr Murray warned the impending market correction was likely to be considerably more severe that either of the two most recent downturns that began in February just past and in April last year.
> 
> Mr Murray, who began the share sales two weeks ago after the latest downturn, said a consumer spending slowdown was already under way in the US. Combined with rising inflation and a slowdown in corporate earnings, this would drag the world’s largest economy into recession.
> 
> “People don’t want to believe bad things will happen but the market will correct very sharply,” he said.
> 
> “It is time to get out of the market and I don’t think it would be unreasonable to expect the market to fall by more than 20 per cent in a very short space of time”.
> 
> Mr Murray has built a reputation as one of the UK’s most successful investment trust managers. He has combined his role of chairman and chief executive with an active role as an asset allocator via his position of head of investments.
> 
> A leading figure in the Scottish financial establishment, Mr Murray founded Blue Planet in 1994. Prior to that, in 1990, he established the Bank of Edinburgh and led the move to consolidate the UK’s fragmented building societies sector.
> 
> Bank of Edinburgh bought the Heart of England Building Society before being swallowed up by Scottish Amicable.
> 
> Mr Murray said investors could ill afford to ignore warnings from the likes of Alan Greenspan. The former chairman of the Federal Reserve warned earlier this year that the US faced the risk of recession.




We've been hearing this so much even I got sucked in and have been shorting the market for months.Obviously losing a rather large chunk of my profits for the year  

Any sane person would be going with the market and not fighting against it.

Bound to crash now


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## CanOz

You know though, the market just doesn't feel like its doing the bull thing easy? Anyone relate to what i'm saying? It all feels so artificial, not like it the market felt before the Feb slide....before the market seem to move easily, almost fluidly, predictable....now its volitile, very unpredictable.

There are just my thoughts, no analysis, just an observation so don't crucify me ok.

Cheers,


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## nizar

People have been saying this for more than a year now.
Nothing new.
Markets will continue to do what they want.
Rather than try to predict (a useless excercise) what will happen, just BE PREPARED for (all scenarios as to) what may happen and have a plan as to how to trade the price action.


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## wayneL

nizar said:


> People have been saying this for more than a year now.
> Nothing new.
> Markets will continue to do what they want.
> Rather than try to predict (a useless excercise) what will happen, just BE PREPARED for (all scenarios as to) what may happen and have a plan as to how to trade the price action.



Can't disagree with that.

Likewise if a bear, be prepared to be long if thats what the market is doing. I don't have one short stock at present... all longs. Doesn't make me a bull, just pragmatic.


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## Uncle Festivus

The crux of the post was that here was obviously a very successful fund manager taking a fairly decisive stance due to fundamentals of the US housing market, which cannot be glossed over by vested interests - it's a timebomb ready to explode with global implications. 
I agree with Canaussieuck about the market 'feel', it just doesn't feel right. We are becoming used to daily ranges of up to 50 to 60 points, whipsawing on every bit of news. 
On Monday the market tanked because of interest rate fears, Tuesday took the opposite view, Wednesday traded on the fact, so now we have 4 weeks leading to an even higher probability of an increase. 
Great for daytraders, but may be hiding a deeper message about global liquidity excesses about to be reigned in in spectacular fashion maybe.

Nizar, I agree also, but I don't have investments anymore, I only do short term trades, the rest in cash. Maybe predict is not the best description, rather trying to ascertain if the global economy is getting better or worse based on the latest data and trends. To me it's turning, only the time scale is unknown.


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## wayneL

Uncle Festivus said:


> The crux of the post was that here was obviously a very successful fund manager taking a fairly decisive stance due to fundamentals of the US housing market, which cannot be glossed over by vested interests - it's a timebomb ready to explode with global implications.
> I agree with Canaussieuck about the market 'feel', it just doesn't feel right. We are becoming used to daily ranges of up to 50 to 60 points, whipsawing on every bit of news.
> On Monday the market tanked because of interest rate fears, Tuesday took the opposite view, Wednesday traded on the fact, so now we have 4 weeks leading to an even higher probability of an increase.
> Great for daytraders, but may be hiding a deeper message about global liquidity excesses about to be reigned in in spectacular fashion maybe.



Agree with this too.

It must be pointed out as well that large funds are forced to take a much more strategic view. They cannot whip in and out of positions like a private  trader.

Hence, if Blue Planet's view is of imminent danger, then they are right to exit. But we here can micromanage.


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## Knobby22

And since they have sold half their stocks, they are bound to tell everyone to try to ensure a correction ensues.


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## Sean K

Uncle Festivus said:


> The crux of the post was that here was obviously a very successful fund manager



Didn't the article say he was managing $350m. That's not really that much is it? Successful? Is he?

Just amplifying a point that this is just but ONE dude trying to get his name in the paper, touting his OWN analysis. I just wish we could all get an objective and GENERAL opinion on the state of the world/US economy without some (potential) upstart (with lots of shorts on) encouraging punters to sell with articles like this. 

I look forward to reading contrary articles over the next few days written by investors who are all long.


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## wayneL

Knobby22 said:


> And since they have sold half their stocks, they are bound to tell everyone to try to ensure a correction ensues.



No different to the bulls ramping the market on bubblevision all day long Knobby


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## Wysiwyg

nizar said:


> People have been saying this for more than a year now.
> Nothing new.
> Markets will continue to do what they want.
> Rather than try to predict (a useless excercise) what will happen, just BE PREPARED for (all scenarios as to) what may happen and have a plan as to how to trade the price action.




Laughing out loud Nizar....Ratchet up those stop losses and batten down the hatches. It could be true.:badsmile:


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## jtb

I'm piling into oilers, 75% in OEL, CVN and EMR.
One other gold and one iron/gold.

No base metals or uranium as of today 

12 month hold on all 

non illigitamus carborundum


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## Uncle Festivus

kennas said:


> Didn't the article say he was managing $350m. That's not really that much is it? Successful? Is he?
> 
> Just amplifying a point that this is just but ONE dude trying to get his name in the paper, touting his OWN analysis. I just wish we could all get an objective and GENERAL opinion on the state of the world/US economy without some (potential) upstart (with lots of shorts on) encouraging punters to sell with articles like this.
> 
> I look forward to reading contrary articles over the next few days written by investors who are all long.




I'm not sure he's an upstart Kennas - 

http://www.blueplanet.eu/blueplanet_investment_trust_uk.184.html

Shorts on? Encouraging punters to sell??


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## Sean K

Uncle Festivus said:


> I'm not sure he's an upstart Kennas -
> 
> http://www.blueplanet.eu/blueplanet_investment_trust_uk.184.html
> 
> Shorts on? Encouraging punters to sell??



Upstart is obviously a poor choice of words here. He's a pro of course, and I know not much more than the difference in a shiraz from the Coonawarra compared to the Hunter....He has a nice web site too. 

Don't you think he's got his shorts on. At least 3/4 pants then?


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## noirua

I wonder how long it will take for markets to truly forget setbacks that occurred quite recently. More likely that we are going to be hit again and quite soon. Outlook does not look any different from when we had the last slide, imho, and so it's stay with 80%+ cash for the time being.


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## CanOz

kennas said:


> and I know not much more than the difference in a shiraz from the Coonawarra compared to the Hunter....




Love to hear your analysis on this Kennas....maybe in the 'poison' thread?

Cheers,


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## CanOz

noirua said:


> I wonder how long it will take for markets to truly forget setbacks that occurred quite recently. More likely that we are going to be hit again and quite soon. Outlook does not look any different from when we had the last slide, imho, and so it's stay with 80%+ cash for the time being.




Totally, totally, totally agree with you!

Cheers,


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## Kimosabi

Well you don't to go to very many extremely well respected Financial Web Sites to see the warning bells ringing out everywhere.

As far as Blue Planet is concerned I'd invest with them purely due to the fact that they have obviously been paying attention enough to see that things could get bad and were prepared to act on what they have seen.  As opposed to most other that Funds that mostly just shrug their shoulders and send you a statement with -20% balance plus some fees on it.


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## >Apocalypto<

I am one to listen to the price and not other onions, no matter how good there evidence is until I see it I wont act on it or agree with it.

But I agree with this and I also believe in what a few other members are saying.

There is a mayor possibility that we will see a massive correction and soon.

I have attached a chart of the XAO monthy time frame.

You can all see it for yourself if you believe in anything Gann has taught.

Now from what i know about Fan if the price is above the 45 degree line it is bullish.

Gann said that the perfect harmony between price and time is 45 degrees and when price moves away from that angle it's unstable and will return to it.

Our market is way off that line and has no real correction on a monthly chart!

So for a healthy retracment of 33 - 36% is a return to around 5000 or little under.

That is something to think about and with the fundamental of what UF posted about the weak US economy, it does line up with what a healthy trend should do.

Will it be the end of our history breaking bull market? I hope not, just a healthy correction that we need! 

SEE ATTACHED PDF

Gann followers please tell me if I am wrong.


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## CanOz

You can see that this is just plain crazy to think this can last! Gann, EW, heck even the the fundies are saying this is nuts.....You know when you think of the recent changes to Super...the Aus Gov't has in effect, created a PPT of thier own before the next election...digressing a tad i know.

I don't have time nor the the experience to trade this in a consistantly profitable method yet....but i've got some new books today....hopefully i can learn to trade commodities effectively, and not just shares. For in that i feel is the key the to finding a decent trend again. 

I'm 90% cash, and plan to stand aside. 

Cheers,


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## nizar

CanOz said:


> I'm 90% cash, and plan to stand aside.




Well in that case youve missed some great opportunities these last few weeks.
Stocks breaking out everywhere to be honest some days i dont even check what the index is doing, its not really relevent unless you trade the index.


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## constable

nizar said:


> Well in that case youve missed some great opportunities these last few weeks.
> Stocks breaking out everywhere to be honest some days i dont even check what the index is doing, its not really relevent unless you trade the index.




Must agree !! It has been fairly slap happy the last 2 weeks and the intra day ranges have been very loose.


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## >Apocalypto<

nizar said:


> Well in that case youve missed some great opportunities these last few weeks.
> Stocks breaking out everywhere to be honest some days i dont even check what the index is doing, its not really relevent unless you trade the index.




Nizar that is a good point as a share will perform on their own right regardless of market direction.

The health of the XAO is the health of the Australian market it is important if you want to know where u stand.


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## CanOz

nizar said:


> Well in that case youve missed some great opportunities these last few weeks.
> Stocks breaking out everywhere to be honest some days i dont even check what the index is doing, its not really relevent unless you trade the index.




Definitely the case for sure Niz, but its the time factor too...I guess I'm looking for a trend I can ride, either up or down, medium term. I just don't have hours in the day to trade profitably in these conditions. Great to watch though...there will be other opportunities....soon.

Cheers,


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## chops_a_must

nizar said:


> Well in that case youve missed some great opportunities these last few weeks.
> Stocks breaking out everywhere to be honest some days i dont even check what the index is doing, its not really relevent unless you trade the index.




Pretty much.

I don't know why people are saying "it's all forced". I've had more breakouts on my watchlists that I know what to do with (or know how to trade). Maybe I'm looking in all the right places, just concentrating on all the right sectors and all the right stocks... Doubt it though...


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## Freeballinginawetsuit

Feel free to post that Watchlist Chops.


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## Atomic5

This all looks like the the last all-out bound-for-hell run before May to me.


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## Uncle Festivus

The XJO is up approx 9% from the correction low in 4 weeks! Someone has turned up the speed of the mechanical bucking bull a few notches, but will it throw the rider(s) in the end?


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## Sean K

Uncle Festivus said:


> The XJO is up approx 9% from the correction low in 4 weeks! Someone has turned up the speed of the mechanical bucking bull a few notches, but will it throw the rider(s) in the end?



I think there needed to be a greater pullback for the market to remain healthy. On a 3 year semi log chart we're nudging the top channel resistance line. Should pull back to the other side soon. Sorry, no chart, saw it in the Fin yesty I think. On the otherhand, perhaps there's just so much money looking for a home we'll be in a sweet spot for some time.


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## nizar

kennas said:


> I think there needed to be a greater pullback for the market to remain healthy. On a 3 year semi log chart we're nudging the top channel resistance line. Should pull back to the other side soon. Sorry, no chart, saw it in the Fin yesty I think. On the otherhand, perhaps there's just so much money looking for a home we'll be in a sweet spot for some time.




Kennas. 
Technically what you say is correct and i agree with it.
But there is too much money that is gonna wanna take advantage of the Super laws, and this influx will power the markets at least until June 30.
In my opinion.


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## professor_frink

kennas said:


> I think there needed to be a greater pullback for the market to remain healthy. On a 3 year semi log chart we're nudging the top channel resistance line. Should pull back to the other side soon. Sorry, no chart, saw it in the Fin yesty I think. On the otherhand, perhaps there's just so much money looking for a home we'll be in a sweet spot for some time.



It doesn't look like a sweet spot to me, looks to be getting ahead of itself quite a bit IMO


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## Sean K

professor_frink said:


> It doesn't look like a sweet spot to me, looks to be getting ahead of itself quite a bit IMO



Perhaps sweet spot is the wrong phrase. Purple patch? Indian Summer? Bull run? Glory days? Irrational Exhuberance? A period in time when the cabbie is making some great trades?


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## professor_frink

kennas said:


> Perhaps sweet spot is the wrong phrase. Purple patch? Indian Summer? Bull run? Glory days? Irrational Exhuberance? A period in time when the cabbie is making some great trades?




I think for it to be a bit more sustainable over the next few weeks it needs to pause for a breather. If it carries on like this, I'll start looking for a short entry
If a cabby starts giving me tips(or like my mowing man did last May), I'll open up the short regardless!


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## Uncle Festivus

I'm thinking that left to it's own devices the Aus market would just keep going up ad infinitum. What will be interesting is if the US reporting season disappoints (and housing, auto sales etc etc) and their market starts to correct, what will the Aus market do? Money coming in looking for a home but world fundamentals turning lower. Assuming it will take months for a global softening to work through to the Aus market, and hence affect employment, is it possible to have a situation where lending institutions could have so much money as to take it on themselves to lower interest rates irrespective of the official rate? In affect, too much money, or the Reserve bank loosing control of the monetary lever? I'm not an economist so not sure if this scenario is even plausible.


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## >Apocalypto<

professor_frink said:


> I think for it to be a bit more sustainable over the next few weeks it needs to pause for a breather. If it carries on like this, I'll start looking for a short entry
> If a cabby starts giving me tips(or like my mowing man did last May), I'll open up the short regardless!




Ha Ha Ha

That is classic Frink,

And the best part it was in May, maybe he was giving u a heads up to look for bargains!

Well I thought it was bad when the bell boy gave tips but the mowing man Jeezzzzzz

P.S Can I have his number?


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## Col Lector

professor_frink said:


> I think for it to be a bit more sustainable over the next few weeks it needs to pause for a breather. If it carries on like this, I'll start looking for a short entry
> If a cabby starts giving me tips(or like my mowing man did last May), I'll open up the short regardless!




So Frink, must assume your professorship awarded in Biogotry and Narrow-mindedness. That you are not one equipped or aspiring to the admirable talent of multitasking. 
Maybe your mower-man follows that noble Oz profession as a means to get some sun & vitamin D??....as a respite from night-after-night  of lucrative mental-gymnastics trading offshore markets!???


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## wayneL

Col Lector said:


> So Frink, must assume your professorship awarded in Biogotry and Narrow-mindedness. That you are not one equipped or aspiring to the admirable talent of multitasking.
> Maybe your mower-man follows that noble Oz profession as a means to get some sun & vitamin D??....as a respite from night-after-night  of lucrative mental-gymnastics trading offshore markets!???



Surfing or golf is more fun... well, some might question golf being fun.  

Hell, even lounging about on a banana chair on the back veranda with a pina colada sounds more appealing. I tend to go bike riding instead of more high impact outdoor pursuits, as my legs are about the only bits that aren't %$#@ed up... apart from this confounded cruciate ligament thats making life hell at the moment.


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## CanOz

Col Lector said:


> So Frink, must assume your professorship awarded in Biogotry and Narrow-mindedness. That you are not one equipped or aspiring to the admirable talent of multitasking.
> Maybe your mower-man follows that noble Oz profession as a means to get some sun & vitamin D??....as a respite from night-after-night  of lucrative mental-gymnastics trading offshore markets!???




 Give it rest, he was only trying to use it as an example of irrational exuberance.


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## Kimosabi

Col Lector said:


> So Frink, must assume your professorship awarded in Biogotry and Narrow-mindedness. That you are not one equipped or aspiring to the admirable talent of multitasking.
> Maybe your mower-man follows that noble Oz profession as a means to get some sun & vitamin D??....as a respite from night-after-night of lucrative mental-gymnastics trading offshore markets!???




Great, just what we need, an e-pissing competition....


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## Sean K

Col Lector said:


> So Frink, must assume your professorship awarded in Biogotry and Narrow-mindedness. That you are not one equipped or aspiring to the admirable talent of multitasking.



Can someone please call an ambulance, a brain just fell out of it's head.


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## wayneL

kennas said:


> Can someone please call an ambulance, a brain just fell out of it's head.



Did anyone see where it went? Last time I dropped something that size it took me ages to find. : 

Heaven help us if PCness prevents us from using traditional idiom


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## Col Lector

Point being....lateral thinking...and the fruitful application of it,  does not rest solely within the "financial community". In fact exposure to non-parallel occupations/pursuits may even heighten ones's insight, and effectiveness.


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## Col Lector

Plenty of thinking time pushing a mower around an acre or two.


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## Kimosabi

kennas said:


> Can someone please call an ambulance, a brain
> just fell out of it's head.




Well we got him in the ambulance, but then he fell out...


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## Sean K

Col Lector said:


> Plenty of thinking time pushing a mower around an acre or two.



Thanks Jim. Jim's Lawn Mowing right?  Thank the Lord I live in an apartment! I don't have to mow and I can concentrate on vino. And watching Jamie Oliver cook. Right now, he's recommending we buy some uranium explorer in Antarctica.


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## Col Lector

As in Jim...the master of diversification....first lawns, then hedges, next pedicures and ear-cleaning...all the time pushing his monsterous sums accrued between financial markets and tax-havens....using a vast array of financial instruments very adeptly???


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## professor_frink

Col Lector said:


> So Frink, must assume your professorship awarded in Biogotry and Narrow-mindedness. That you are not one equipped or aspiring to the admirable talent of multitasking.
> Maybe your mower-man follows that noble Oz profession as a means to get some sun & vitamin D??....as a respite from night-after-night  of lucrative mental-gymnastics trading offshore markets!???




Evening Col,

For the record, the mowing man and I get on quite well. It was a running joke between the 2 of us for a while after the May top, and we still discuss trading/investing now when he's around. I probably should clarify, he wasn't giving me tips- he knows where my money comes from- it was the fact that he hadn't asked me any specific questions about the markets or trading until a week or so(might have been 2, I can't quite remember ) before the May top, when all of a sudden he started asking me about a couple of gold companies he had heard about(LHG being one, I can't remember the other now, will ask him tom when he shows up).

I'm sorry if I've offended you Col, it wasn't my intention I'd also like to extend my apology to the rest of the people working as mowing men out there. Love your work.

If it wasn't for him lending me a book about investing, I wouldn't have that dodgy phrase stuck under my username!


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## Col Lector

Professor, 
Though I cant speak for the Mower-men (except maybe those who relish the art of recreational grass-taming), your clarification is appreciated and accepted on behalf of those oft-maligned-multi-taskers - who rarely enjoy being stuffed in that pigeon-hole.
Regards Col


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## Col Lector

Professor, 
I must also add that I feel for your mowerman....by May he/she (political correctness is not dead) would have experienced the full brunt of a sustained bear-market... with few forecasts of a turn to cheer him. The  seasonal variables - low temps> slow rootgrowth with consequent minimal foliage upside would have heightened his concern.
No wonder he was seeking your learned counsel. 
Could be appropriate to factor this into his future remuneration package...eg, AUD 20 plus a diversified hedging bonus of say x no. options in say Coke-Amatil.
Might benefit him more in a hot dry dusty season (or even cold & low-foliage) than a glass of their fizzy cola.


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## Sean K

Col Lector said:


> by May he/she (political correctness is not dead) would have experienced the full brunt of a sustained bear-market...



A sustained bear market by May? 3 weeks away? Sustained? You must mean May 09?   

I think the grass will be growing nice and strong until the end of the fine month of the fire breathing Aries. Then, in May, I shall turn into a bear pending further signals of an oncomming winter of all winters.


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## Col Lector

I think you must reread......in May 07 the grass-cutting market was in the grips of a sustained bear-market....prolonged by several years lack of precipitation, and heightened by the prevailing seasonal factors....ie, grass grows slowly with winter coming on. 
Might be time to step out of the apartment for a walk (and some lawn research) in the park. Just watch the cops if you take the vino with you.


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## Col Lector

Correction....May 06. I assume the Professor is not so all-knowledgeable as to be able to converse with his mower-man in the future.
But then again...cant rule that out....we have all seen the movie "The Lawnmower Man". Compulsory viewing before considering playing on any market methinks


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## Col Lector

Might be time to open a lawn-mowing thread.


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## >Apocalypto<

Col Lector said:


> Might be time to open a lawn-mowing thread.




Ha Ha Ha,

Well if i send my self broke again then that is a serious option!

Keep me posted!


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## Buffettology

Interesting.

Good to see another man with great credentials agreeing with myself.  I have convered about 75% of my portfolio into cash, though may put a bit more into stocks following the May RBA meeting.  

I predicted the last quarter of 2007 for the crash.  Though, I think it will bounce back quickly, so you better have your funds ready.  Refer to my thread in the main stock forum.

I think we will see around a 20% correction, maybe slightly more, in a very short period.  With a bounceback of around 10% coming soon after.


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## insider

So do you guys think that a correction will happen in May even though there was a correction a short while ago?


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## Kimosabi

Buffettology said:


> Interesting.
> 
> Good to see another man with great credentials agreeing with myself. I have convered about 75% of my portfolio into cash, though may put a bit more into stocks following the May RBA meeting.
> 
> I predicted the last quarter of 2007 for the crash. Though, I think it will bounce back quickly, so you better have your funds ready. Refer to my thread in the main stock forum.
> 
> I think we will see around a 20% correction, maybe slightly more, in a very short period. With a bounceback of around 10% coming soon after.




I think the drop will be triggered by the US.  I'm waiting for a private equity deal to flop, triggering a Bank to collapse or something equivilent.

We'll follow the US down, and then we'll realise China is still buying our commodities etc...

We'll probably go into a Bear Market when our Interest Rates start going down.  I think they are going to go up a lot more before they'll start going down.

Now if you want to see something real disconcerting, have a look at this:



> Military (USD$558 billion), Health (USD$428.5 billion),  *Interest on the Debt (USD$398.6 billion*)  , Income Security (USD$123.5 billion), which, “includes federal funds outlays on the function area income security with the exception of housing assistance, and food and nutrition assistance.”
> 
> What?!? Well, before I could work up a good hissy-fit of confusion and indignation at the fact that the government is just giving people so much cash that it equals USD$1,000 for every non-government worker in the whole country, the list continues with Education (USD$93.2 billion), Veterans’ Benefits and Services (USD$68.9 billion), Nutrition (USD$53.9 billion), Housing (USD$38.3 billion), Natural Resources and the Environment (USD$31.3 billion), and Job Training (USD$6 billion).
> 
> http://www.dailyreckoning.com.au/united-states-taxes/2007/04/17/




um, does anyone else see a problem with this picture???

Interest on US Debt is their third biggest expense


----------



## Buffettology

Kimosabi said:


> I think the drop will be triggered by the US.  I'm waiting for a private equity deal to flop, triggering a Bank to collapse or something equivilent.
> 
> We'll follow the US down, and then we'll realise China is still buying our commodities etc...
> 
> We'll probably go into a Bear Market when our Interest Rates start going down.  I think they are going to go up a lot more before they'll start going down.
> 
> Now if you want to see something real disconcerting, have a look at this:
> 
> 
> 
> um, does anyone else see a problem with this picture???
> 
> Interest on US Debt is their third biggest expense




Everyone knows the US debt bill is incredible, however, it is largly debated whether or not this is a long-term problem, most economists from my understanding beleive it is of little concern.  If the debt is generating returns in excess of the IR, then its no problem.  This is a hugely debated topic though, and you will find numerous articles on the web about it.  In the short-term however, or even the medium-term, this will have absolutely no effect on a stock market crash\correction.  Infact, any problem due to this debt level would not be seen until the very very distant future.

A private equity deal to flop?  What exactly do you mean?  Most loan defaults and bank troubles, would come from an increasing IR in the US, and an inability for all the property market mortage holders to pay back the banks.  Though, the banks are all backed (the large ones), so a bank collapsing is very seldom seen, and the large banks are partically impossible to collapse.  

IR will not go up a lot more, but why would an IR fall induce a bear market?  Quiet the opposite.  

If the US market crashes, no doubt the Chinese economy will also struggle, and our commodity sector will implode.  

Though, from those IMF reports, it appears the world economy is stable for the short-term at least, with only a minor slowdown in growth.


----------



## Spineli

I agree that there is no problem with the US in servicing its interest on debt repayments in the immediate future.

Correct me if I am wrong, the US some time ago reached its statutory cap (limit) with debt in the vicinity or exceeding 30 trillion US.

You may ask, what is there to stop the US Govt from increasing its statutory cap? The Democrats! They want to wipe that Defence Bill clear!

The US market grew to near record levels on the back of sentiment that the US is heading for a soft landing and not into recession.

Im not doubting the recovery of the US recovery, all I'm saying is that a lot of investors continue to be wary of the "IF"...

So keep yourselves covered!


----------



## Kimosabi

Buffettology said:


> Everyone knows the US debt bill is incredible, however, it is largly debated whether or not this is a long-term problem, most economists from my understanding beleive it is of little concern. If the debt is generating returns in excess of the IR, then its no problem. This is a hugely debated topic though, and you will find numerous articles on the web about it. In the short-term however, or even the medium-term, this will have absolutely no effect on a stock market crash\correction. Infact, any problem due to this debt level would not be seen until the very very distant future.
> 
> A private equity deal to flop? What exactly do you mean? Most loan defaults and bank troubles, would come from an increasing IR in the US, and an inability for all the property market mortage holders to pay back the banks. Though, the banks are all backed (the large ones), so a bank collapsing is very seldom seen, and the large banks are partically impossible to collapse.
> 
> IR will not go up a lot more, but why would an IR fall induce a bear market? Quiet the opposite.
> 
> If the US market crashes, no doubt the Chinese economy will also struggle, and our commodity sector will implode.
> 
> Though, from those IMF reports, it appears the world economy is stable for the short-term at least, with only a minor slowdown in growth.




What I mean by a private equity flop, is most Private Equity Deals are highly leveraged.  If someone screws up on one of these deals, it could have a severe impact on the Business being bought and the lending institutions.

Considering lending institutions have been stupid enough to lend money to people who shouldn't have money lent to them in a consumer situation, ie subprime mortgages, what's to say the lending institutions aren't going to do something stupid in private equity.

On the interest rate thing, I'll PM you where I got the Interest Rate perspective from.


----------



## CanOz

Asian markets are taking a pounding today...every index is down, and the Japan 225 is down 425 points! 

What a pummeling.


----------



## professor_frink

CanOz said:


> Asian markets are taking a pounding today...every index is down, and the Japan 225 is down 425 points!
> 
> What a pummeling.



all of the Asian markets are looking pretty sick today(although the nikkei is staging a recovery as I type).

The 2 main markets I follow(nikkei and Hang Seng) look to be putting in lower highs too


----------



## Sean K

I've started thinning out. Now the market is bound to fly off to 6500 tomorrow.


----------



## Uncle Festivus

Getting close now - China is the key


----------



## chops_a_must

Uncle Festivus said:


> Getting close now - China is the key




How?

Interest rates will be on hold; commodities going on another run; our dollar coming down; China's growth still strong. Our market is flattening, NOT topping, and is still trending incredibly strongly, and in a tight range right now.

As discussed many times over, the China share market has no influence on its own.

A severe and imminent market correction is only inevitable when it breaks out from the trend, and as of now, it is not doing so. It looks to be consolidating for a breakout in my eyes, and that will take it out of the trend, and then it will be likely IMO. 

Unless commodities crash, it doesn't look like it will correct on fundamentals. Unless you would care to enlighten me as to how. A few weeks back it was sub-prime, then China... it has had no impact. Unless something fundamentally changes, the worst I can see happening is a technical dip.


----------



## wayneL

chops_a_must said:


> A few weeks back it was sub-prime, t



Sub-prime hasn't even played out yet. That game is in the first of nine innings.


----------



## Uncle Festivus

chops_a_must said:


> How?
> 
> Interest rates will be on hold; commodities going on another run; our dollar coming down; China's growth still strong. Our market is flattening, NOT topping, and is still trending incredibly strongly, and in a tight range right now.
> 
> As discussed many times over, the China share market has no influence on its own.
> 
> A severe and imminent market correction is only inevitable when it breaks out from the trend, and as of now, it is not doing so. It looks to be consolidating for a breakout in my eyes, and that will take it out of the trend, and then it will be likely IMO.
> 
> Unless commodities crash, it doesn't look like it will correct on fundamentals. Unless you would care to enlighten me as to how. A few weeks back it was sub-prime, then China... it has had no impact. Unless something fundamentally changes, the worst I can see happening is a technical dip.




China holds the key at least for Australia, because we have been relying on the commodities rebound to prop up an otherwise ordinary economy.
The China boom isn't based on a very sound financial system, and it is this that will ultimately bring a correction. The Chinese government has tried to organise an orderly reduction in growth but this has failed. They want to cool the economy so be prepared for more interest rate rises in China, maybe at more than a measured pace.

Combine that with the real estate bust in the US, interest rates rising in the Euro countries (& maybe Australia), the Aussie dollar reducing the competitiveness of Australian companies (miners included), rental squeeze & housing affordability in Australia and you have a slow but steady increase in negative factors/sentiment just waiting for an x factor to tip the balance.


----------



## CanOz

chops_a_must said:


> How?
> 
> Interest rates will be on hold; commodities going on another run; our dollar coming down; China's growth still strong. Our market is flattening, NOT topping, and is still trending incredibly strongly, and in a tight range right now.
> 
> As discussed many times over, the China share market has no influence on its own.
> 
> A severe and imminent market correction is only inevitable when it breaks out from the trend, and as of now, it is not doing so. It looks to be consolidating for a breakout in my eyes, and that will take it out of the trend, and then it will be likely IMO.
> 
> Unless commodities crash, it doesn't look like it will correct on fundamentals. Unless you would care to enlighten me as to how. A few weeks back it was sub-prime, then China... it has had no impact. Unless something fundamentally changes, the worst I can see happening is a technical dip.




Yeah, must say although i feel bearish i don't see any big danger signs so far this week, even the Asian markets recovered well from this mornings lows.

Energy costs could dampen the mining bulls though, and oil is on the move again.

Cheers,


----------



## chops_a_must

Uncle Festivus said:


> China holds the key at least for Australia, because we have been relying on the commodities rebound to prop up an otherwise ordinary economy.
> The China boom isn't based on a very sound financial system, and it is this that will ultimately bring a correction. The Chinese government has tried to organise an orderly reduction in growth but this has failed. They want to cool the economy so be prepared for more interest rate rises in China, maybe at more than a measured pace.
> 
> Combine that with the real estate bust in the US, interest rates rising in the Euro countries (& maybe Australia), the Aussie dollar reducing the competitiveness of Australian companies (miners included), rental squeeze & housing affordability in Australia and you have a slow but steady increase in negative factors/sentiment just waiting for an x factor to tip the balance.



So what if the China boom isn't based on a financial system? It isn't in their interest to raise rates so fast that it crashes the economy. But the fact remains, they are growing very quickly. When it shows signs of slowing, be worried then, but until such a time there is no reason to panic. I mean, the imports of many commodities into China this year have doubled, but I'm sure that factor will be ignored.

The US housing bust has had no effect on our markets, and it doesn't seem likely it will at all.

The rising dollar has done the job of an interest rate rise. An will do so elsewhere.

Our miners are likely to better expectations despite the rising dollar. Plus, it increases profit margins of importers.

But there is nothing here that isn't in the market already. Yes yes, long term, the financial system in China is a worry, but the fact remains, you haven't given any backing to a claim of an imminent and severe correction. Apart from some unforeseen "x" factor. The least you could have proposed would be a blow off top on the DOJI scaring all other markets. Although, the bears are getting murdered there as well, so maybe it is best to ignore that one.

But come on, "I'm afraid to drive my car because I might die." "I'm afraid to do exercise because I might get injured." Oh noez, I'm crippled by anxiety and afraid of everything unknown! Rarrrrrrrrrr!!! *breaks down in tears*

If you are so afraid of loss as to worry about the unknown to the extent where every single negative factor becomes a reason for a correction/ crash, you could never invest in the market/ shares in the first place.


----------



## nizar

chops_a_must said:


> So what if the China boom isn't based on a financial system? It isn't in their interest to raise rates so fast that it crashes the economy. But the fact remains, they are growing very quickly. When it shows signs of slowing, be worried then, but until such a time there is no reason to panic. I mean, the imports of many commodities into China this year have doubled, but I'm sure that factor will be ignored.
> 
> The US housing bust has had no effect on our markets, and it doesn't seem likely it will at all.
> 
> The rising dollar has done the job of an interest rate rise. An will do so elsewhere.
> 
> Our miners are likely to better expectations despite the rising dollar. Plus, it increases profit margins of importers.
> 
> But there is nothing here that isn't in the market already. Yes yes, long term, the financial system in China is a worry, but the fact remains, you haven't given any backing to a claim of an imminent and severe correction. Apart from some unforeseen "x" factor. The least you could have proposed would be a blow off top on the DOJI scaring all other markets. Although, the bears are getting murdered there as well, so maybe it is best to ignore that one.
> 
> But come on, "I'm afraid to drive my car because I might die." "I'm afraid to do exercise because I might get injured." Oh noez, I'm crippled by anxiety and afraid of everything unknown! Rarrrrrrrrrr!!! *breaks down in tears*
> 
> If you are so afraid of loss as to worry about the unknown to the extent where every single negative factor becomes a reason for a correction/ crash, you could never invest in the market/ shares in the first place.




Great post.

Can - about oil, have a look at what happend to oil prices in 2005, and then look at XJO/XAO calendar returns


----------



## Uncle Festivus

chops_a_must said:


> But come on, "I'm afraid to drive my car because I might die." "I'm afraid to do exercise because I might get injured." Oh noez, I'm crippled by anxiety and afraid of everything unknown! Rarrrrrrrrrr!!! *breaks down in tears*
> 
> If you are so afraid of loss as to worry about the unknown to the extent where every single negative factor becomes a reason for a correction/ crash, you could never invest in the market/ shares in the first place.




Chops, you are reading far too much into the post. I'm still trading both long & short, I'm not afraid, in fact the current market wip-sawing is daytraders heaven. 

Simply, you need to make at least 10% on any investment just break even due to monetary inflation, which is both the reason for the current global bull and will be the reason for it's demise; only the severity is in doubt.

The signs of China's approaching day of reckoning are already appearing - wages are rising, interest rates are rising, bad loans are rising, monetary inflation is over 20%, factories and housing are being built & left empty, the environment is a basket case, the health of the Chinese is deteriorating (& the consequent drain on the health system).......

Just as any good thing is amplified by China, so too will any bad thing, only many times worse. Just be prepared.

Theres also a minor matter of the Japanese Yen carry trade, but we'll leave that for another day....


----------



## wayneL

Uncle Festivus said:


> Chops, you are reading far too much into the post. I'm still trading both long & short, I'm not afraid, in fact the current market wip-sawing is daytraders heaven.



Uncle,

I find that when folks run out of logic, they resort to satire and/or non sequitur, both of which are evident in the post you refer to.

for e.g. Look at what Peter Schiff has to put up with on Bubblevision... same nonsense.

Cheers


----------



## Buffettology

Uncle Festivus said:


> Chops, you are reading far too much into the post. I'm still trading both long & short, I'm not afraid, in fact the current market wip-sawing is daytraders heaven.
> 
> Simply, you need to make at least 10% on any investment just break even due to monetary inflation, which is both the reason for the current global bull and will be the reason for it's demise; only the severity is in doubt.
> 
> The signs of China's approaching day of reckoning are already appearing - wages are rising, interest rates are rising, bad loans are rising, monetary inflation is over 20%, factories and housing are being built & left empty, the environment is a basket case, the health of the Chinese is deteriorating (& the consequent drain on the health system).......
> 
> Just as any good thing is amplified by China, so too will any bad thing, only many times worse. Just be prepared.
> 
> Theres also a minor matter of the Japanese Yen carry trade, but we'll leave that for another day....




Just one question, why does the IMF predict further high rates of growth through 2008 in China in their global report?  

Bad loans is probably the biggest problem in China.  Though, I have not studied their economy in depth.  Wages rising, how is that bad, its natural for wages to rise with GDP growth?  IR rising, thats to counter inflation, are they rising by an alarming rate?  What do you mean by monetary inflation?  Are you simply talking about CPI equivelant?  

The biggest problem in China I beleive, is their pegged currency, once this is taken off, we are going to see some serious problems!


----------



## wayneL

Buffettology said:


> Just one question, why does the IMF predict further high rates of growth through 2008 in China in their global report?
> 
> Bad loans is probably the biggest problem in China.  Though, I have not studied their economy in depth.  Wages rising, how is that bad?  IR rising, thats to counter inflation, are they rising by an alarming amount?  What do you mean by monetary inflation?  Are you simply talking about CPI equivelant?
> 
> The biggest problem in China I beleive, is their pegged currency, once this is taken off, we are going to see some serious problems!



I have a question.

How often is the IMF correct in it's projections? I have no idea of the answer, but the odd time I have taken notice, they are dead wrong. Not to say they mightn't be eventually correct in this instance, just question how much stock can be put in their reports.


----------



## nizar

wayneL said:


> How often is the IMF correct in it's projections?




They cant be worse than ABARE


----------



## Buffettology

wayneL said:


> I have a question.
> 
> How often is the IMF correct in it's projections? I have no idea of the answer, but the odd time I have taken notice, they are dead wrong. Not to say they mightn't be eventually correct in this instance, just question how much stock can be put in their reports.




I am not doubting Uncles knowledge of the Chinese market, I am simply asking some legitimate questions on his arguement.  

As far as the IMF, I am not certain either.  I know they have implemented some rediculous policies on economies in the past in which they have lent money too, in times of crisis.  Asian economic meltdown for example.  But they are a very well established economic organisiation, and I imagine their economic outlook analysts are pretty sound.


----------



## Kimosabi

Well, as far as I'm concerned, it all comes down to how much risk your prepared to take.

If you think the market is overcooked take your money out of the market and stick under your pillow.

What everyone has to understand, is at the moment the world is going through a money/credit expansion phase.  What this effectively means, is that the governments of the world are basically printing more and more money at the moment.



> Money supplies all over the world are increasing - 10% per annum in the United States, 10% in Europe, 14% in Asia.
> 
> http://www.dailyreckoning.com.au/increasing-money-supply-buys-white-bread-and-raw-sewage/2007/04/24/




What this means is the price of everything is going up from food to shares to property, etc.

Now what I haven't quite worked out yet, is why are the governments of the world printing more and more money?


----------



## wayneL

Kimosabi said:


> Well, as far as I'm concerned, it all comes down to how much risk your prepared to take.
> 
> If you think the market is overcooked take your money out of the market and stick under your pillow.
> 
> What everyone has to understand, is at the moment the world is going through a money/credit expansion phase.  What this effectively means, is that the governments of the world are basically printing more and more money at the moment.
> 
> 
> 
> What this means is the price of everything is going up from food to shares to property, etc.
> 
> *Now what I haven't quite worked out yet, is why are the governments of the world printing more and more money?*



I have two opposing theories.

1/ There is some sinister motive that can only be speculated on when wearing a tin foil hat.

2/ They are not as smart at they, or we, think they are/

I'm not sure which, but I note which economies are in sync on this, and which aren't.  Hmmmmmmm


----------



## Crafty

Kimosabi said:


> Now what I haven't quite worked out yet, is why are the governments of the world printing more and more money?





There are more and more people.      As the population increases so must money supply (unless we all want to be poor.   )

Unfortunately the side effect of this is erosion of the value of our currency...


----------



## wayneL

Crafty said:


> There are more and more people.      As the population increases so must money supply (unless we all want to be poor.   )
> 
> Unfortunately the side effect of this is erosion of the value of our currency...



That's not how it works.


----------



## Freeballinginawetsuit

wayneL said:


> I have a question.
> 
> How often is the IMF correct in it's projections? I have no idea of the answer, but the odd time I have taken notice, they are dead wrong. Not to say they mightn't be eventually correct in this instance, just question how much stock can be put in their reports.





That same quote could be applied to many observations by the those making them, especially to the marketplace.

As time passes its enivitable that everyone will get a right call on opposing points in the cycle.


----------



## wayneL

Freeballinginawetsuit said:


> That same quote could be applied to many observations by the those making them, especially to the marketplace.
> 
> As time passes its enivitable that everyone will get a right call on opposing points in the cycle.



Of course. But if you don't publish them, you only obliged to recall the correct ones. LOL


----------



## Crafty

Oh come on, of course it works like that...

You can't be serious?   How do you think it works?


----------



## Uncle Festivus

Crafty said:


> There are more and more people.  As the population increases so must money supply (unless we all want to be poor.  )
> 
> Unfortunately the side effect of this is erosion of the value of our currency...




That's correct in it's simplest form. However, a 10% increase in the US money supply (if we could determine that these days as the central bank has stopped publishing M3) is not proportionate with the birth rate the last time I looked. 20% in China = ?200 million??

I think the main culprit is Japan with effectively zero interest rates, trying to pump prime their economy but actually being the worlds supplier of (unproductive) cheap credit feeding speculative booms eg commodities & real estate.

Reuters stories - 

"The Australian dollar fell around one percent against both the yen and the U.S. dollar and weakened the high-flying New Zealand currency, bringing the carry trade into question. 

Under the trade, investors borrow low-yielding currencies such as the Japanese yen and Swiss franc to buy assets in high yielders such as the Australian dollar. 

Soft Australian inflation prompted investors to cut expectations of an interest rate rise and sent the currency lower, dragging the high-yielding New Zealand dollar with it. A possible unwinding of the carry trade has been a key concern among investors because of its implications for other assets. "(This) is a timely reminder of the damage that a sudden swing in interest rate sentiment can inflict," HBOS said"

"Asian markets slipped on Tuesday as surging oil prices and the crisis in US mortgage lending raised fears of a slowdown in the US, the regions' top export market. 


Toyota Motors and other Asian automakers slumped after US giant General Motors said a crisis in the subprime mortgage sector hurt auto sales this month. Traders now await US housing data due later in the day"

*Everything is connected*


----------



## wayneL

Crafty said:


> Oh come on, of course it works like that...
> 
> You can't be serious?   How do you think it works?



I'm deadly serious. It is far more complex than that.

The population is not rising 10-14% per year now is it? 

Some reading for you


----------



## Buffettology

This money market talk is bringing back memories of ISLM models, god help me!


----------



## chops_a_must

wayneL said:


> Uncle,
> 
> I find that when folks run out of logic, they resort to satire and/or non sequitur, both of which are evident in the post you refer to.
> 
> for e.g. Look at what Peter Schiff has to put up with on Bubblevision... same nonsense.
> 
> Cheers




Hardly. I plagiarised Mark Douglas.

I asked for an answer to a question about which factor will bring about an imminent and severe correction. Instead, i got this:



> The China boom isn't based on a very sound financial system, and it is this that will ultimately bring a correction.




A vague, clearly in depth explanation, and what's more, irrefutable evidence as to what will cause an *IMMINENT* correction.

So while we are engaging in Sophistic argument that will without doubt be retrofitted to whatever circumstances arrive, I can safely say that it will be my bad gas that inevitably brings down all markets and economies. You know it's true. I can't be wrong. Butterfly wings and all that jazz.


----------



## Uncle Festivus

Chopster,
Chinese macro example - the latest 'fad' is for Chinese solar cell manufacturers to do IPO's to American's. Manufacture of cells has ramped up to the point of oversupply. Transpose this to any other sector you care to name & you then get the idea of what's happening in China - easy credit chasing hot sectors with low profit margins. 
That's how the China machine works - high volume, low margins. When you get to the stage of overproduction combined with a reduction in demand eg the US consumer credit cycle turning due to the housing bust then simple economics dictates that the company with the lowest margin is restrained or goes broke. This is happening now. More eg's to follow....

Everything is connected 

PS tonight's markets should be interesting


----------



## chops_a_must

I've got to say wayne, that is absolute rubbish.

Why can't perma bears be contrasted with chicken little?

I can't really see how it is a personal insult when your predictions of doom and gloom are on the record here, yet are way off the mark.



> Chopster,
> Chinese macro example - the latest 'fad' is for Chinese solar cell manufacturers to do IPO's to American's. Manufacture of cells has ramped up to the point of oversupply. Transpose this to any other sector you care to name & you then get the idea of what's happening in China - easy credit chasing hot sectors with low profit margins.
> That's how the China machine works - high volume, low margins. When you get to the stage of overproduction combined with a reduction in demand eg the US consumer credit cycle turning due to the housing bust then simple economics dictates that the company with the lowest margin is restrained or goes broke. This is happening now. More eg's to follow....
> 
> Everything is connected
> 
> PS tonight's markets should be interesting




And uncle, it is once again a long term danger, not IMMINENT.

The US markets have shrugged off bad housing figures thus far, I don't see why today it should be any different this time.


----------



## wayneL

Chops,

Present your arguments, but leave the _ad hominem_ nonsense out.


----------



## chops_a_must

wayneL said:


> Chops,
> 
> Present your arguments, but leave the _ad hominem_ nonsense out.



How is comparing a perma bear to chicken little ad hominem? And more to the point, how can an analogy be regarded as a personal insult? It's apt.

I believe I gave a very good response and presented an argument that is along the lines of what Mark Douglas teaches. 

It was you that decided that my post was illogical, and an ad hominem statement followed. It's there if you want to read it again.


----------



## wayneL

chops_a_must said:


> How is comparing a perma bear to chicken little ad hominem? And more to the point, how can an analogy be regarded as a personal insult? It's apt.
> 
> I believe I gave a very good response and presented an argument that is along the lines of what Mark Douglas teaches.
> 
> It was you that decided that my post was illogical, and an ad hominem statement followed. It's there if you want to read it again.



1/ I am not a perma-bear. I am bearish at the moment. I will readily become a bull when I think the time is right. By the way my portfolio consists of longs at the moment, so I consider myself as a pragmatist with an eye on risks in the economy.

2/ Chicken little premise that the sky was falling was based upon being hit on the head with a piece of fruit. This allegory implies bearishness based upon false data. I reject that.

3/ Satire is offensive.

Now get over it on move on.

Cheers


----------



## chops_a_must

wayneL said:
			
		

> 3/ Satire is offensive.



Oh.. is that why Full Frontal got axed?


----------



## Uncle Festivus

chops_a_must said:


> How is comparing a perma bear to chicken little ad hominem? And more to the point, how can an analogy be regarded as a personal insult? It's apt.
> 
> I believe I gave a very good response and presented an argument that is along the lines of what Mark Douglas teaches.
> 
> It was you that decided that my post was illogical, and an ad hominem statement followed. It's there if you want to read it again.




I call the shots as I see them and as the facts present themselves, I don't regard myself as a 'permabear' either; I trade on the facts present and possible outcomes are postulated on the facts. 
It's becoming obvious that you get too caught up in the semantics of the discussion rather than presenting a credible alternative. 
And please try to not resort to personal degradation when you have nothing to contribute.


----------



## Buffettology

lol, come on guys, your both smart dudes.  No need for the flirtation 

I personally, have split my risk by holding about 45% of my portfolio in cash, waiting for a correction to buy cheap, and the rest encase the bull continues until the years end.  

Each to their own.

Uncle, your an economist I gather?  Where did you study?  Or are you a self taught economist?  

BTW, do you have a round about time when you think a correction might take place?  I said in the last quarter of the year, but since these latest inflation figures, Im not so sure now.  I think a small correction of say 5% may happen again in the next few months, but that we may push into next year before experiencing a 20% correction.  Im not overly knowledgable on the Chinese economy, but one thing I worry about, is the quality of data and indicators coming out of China.


----------



## chops_a_must

Uncle Festivus said:


> It's becoming obvious that you get too caught up in the semantics of the discussion rather than presenting a credible alternative.



Once again, hardly.

I asked what would be the factor, or as to how our markets would correct. And all I have been given is grandiose and non-specific statements of things that will undoubtedly cause problems in the mid to long term. Yet, the title suggests an IMMINENT and SEVERE correction. None has been forthcoming in the better part of a month. I presented reasons why I didn't think the market would correct, yet no counter claim was forthcoming.

So, what does "imminent" mean? How "severe" is severe? As the frontman of this thread, I would say that the onus is on you to sure up your case, and the meanings of the words put forward. That's what I am asking, because it is just the same old stuff that hasn't made the slightest difference...


----------



## wayneL

Chops,

Your taking this all a bit too seriously mate. It's just banter. The market will do what it will do and people will say what they say about it.

Relax.


----------



## Freeballinginawetsuit

Uncle Festivus said:


> I call the shots as I see them and as the facts present themselves, I don't regard myself as a 'permabear' either; I trade on the facts present and possible outcomes are postulated on the facts.
> It's becoming obvious that you get too caught up in the semantics of the discussion rather than presenting a credible alternative.
> And please try to not resort to personal degradation when you have nothing to contribute.





Speculation aside,

I would suggest let the market determine your exits/entries wether trading or investing, not the noise.

Fundamentally nothing has changed for the main, at least in what I trade/invest. Market/business or otherwise it comes down to the basics.........and that trend is still intact.

You however are speculating and your guess is as good as anyones, as has been proven . 

I agree the cracks are thier and have been for some time, but the market has proved resilient....suprisingly so!.


----------



## Uncle Festivus

Buffettology said:


> lol, come on guys, your both smart dudes.  No need for the flirtation
> 
> I personally, have split my risk by holding about 45% of my portfolio in cash, waiting for a correction to buy cheap, and the rest encase the bull continues until the years end.
> 
> Each to their own.
> 
> Uncle, your an economist I gather?  Where did you study?  Or are you a self taught economist?
> 
> BTW, do you have a round about time when you think a correction might take place?  I said in the last quarter of the year, but since these latest inflation figures, Im not so sure now.  I think a small correction of say 5% may happen again in the next few months, but that we may push into next year before experiencing a 20% correction.  Im not overly knowledgable on the Chinese economy, but one thing I worry about, is the quality of data and indicators coming out of China.




No, I just try to make sense of why things happen & the consequences. There is plenty of material to be found on the internet for research. 
I think that the bottom line is that an unrestrained fiat (capitalist?) system needs periodic purges (recession/depressions?) to 'reset' the ledger every so often, and as Waynes sig intimates that the longer the excesses are allowed to go unchecked then the severity of the correction will be proportional to the excesses. 
Perhaps the word 'imminent' might not be the best word (as it was attributed to the company in the first post), but the way things are shaping up in the US I wouldn't be surprised that things started happening "soon" .
Lot's of market affecting data out in the US this week - housing and CPI to focus on.
Unless there is a remarkable turnaround in US housing and we get deluged with rain here, there are tough times ahead.

Frontman? No, just presenting views for discussion.


----------



## Buffettology

Could be a compliment, all depends on your interpretation of an economist.  Being one myself, I would answer, yes!

Im not so sure China has gotten to the stage you are talking about yet, I myself, have not read anything solid that would indicate so.  

I dont see it for example, in a similar situation to Thailand and its bad debt crisis of which helped trigger the Asian economic crisis.  Further, Im not so sure inflation is out of hand over there.  It can still be reigned in through tight monetary policy IMHO.  I think China will experience a slight slowing of growth in the short-term, but not a recession/depression.

I think the US figures and their housing market impacts will be the big thing to cause trouble in the short-term.  But global growth appears strong enough at least in the short-term, to keep some stability in this rampant speculation 3rd stage of our bull market.


----------



## bean

People are looking at China.  Look at the US. The markets over there are in the process of blowing a top. DOW 13500 by next week anyone
Whatever it reaches as its final blowoff and then retractment then a try and failure for new highs alas a 87 type crash. 
DOW last 17 trading days 8 up 1 down 
7 up one down 
now tonight? up again.
judging by posts another good indication (everyone aboard)


----------



## Uncle Festivus

Data just out - 

MARCH SALES OF EXISTING HOMES DOWN 8.4%, BIGGEST DROP IN 18 YEARS

U.S. April consumer confidence at lowest level since Aug.

Mmmmm..... biggest drop in 18 years......lowest levels since....... 

Hard to ignore


----------



## wayneL

bean said:


> People are looking at China.  Look at the US. The markets over there are in the process of blowing a top. DOW 13500 by next week anyone
> Whatever it reaches as its final blowoff and then retractment then a try and failure for new highs alas a 87 type crash.
> DOW last 17 trading days 8 up 1 down
> 7 up one down
> now tonight? up again.
> judging by posts another good indication (everyone aboard)



Might get a down night tonight. US Consumer confidence, RE prices down.

(Could just be interpreted as bullish however  )


----------



## bean

Nope looks like it will be up blast off


----------



## wayneL

bean said:


> Nope looks like it will be up blast off



The wheel is still spinning... place yer bets.


----------



## wayneL

wayneL said:


> The wheel is still spinning... place yer bets.



BTW ignore the unrepresentitive DOW. The SP500 is down 4 as I hit the send key


----------



## CanOz

The wall St. Mini punctured support. The tech100's leading the way a bit too. Wish i could stay awake to short this.

Good trading all.

cheers,


----------



## bean

volume is high on US markets for this early hour


----------



## bean

I have been posting on price of gold watching the current market moves DOW and all down a laggard if you like in gold stocks ia moving positive.
I also say that the markets and gold stocks moving together (in line) Even though terrible news market down they will finish up tonight


----------



## nizar

bean said:


> volume is high on US markets for this early hour




Yeh the bulls are very resilient.
Agree with Wayne - its really IBM (+4.0%) and Texas Instraments (+7.7%) thats holding the DOW up.
S&P500 down by almost 6pts at the minute.


----------



## wayneL

bean said:


> Even though terrible news market down they will finish up tonight



I would not be surprised.


----------



## Uncle Festivus

The Dow Jones Industrial Average  jumped 135.95 points to 13,089.89, after having crossed the key level 13,000 for the first time. It struck an intraday record of 13,107. Twenty-nine of the 30 Dow components ended in positive territory. 
 	 		 "In and of itself, [Dow 13,000] is not very important for the market," said Jay Suskind, director of trading at Ryan, Beck & Co. 
 	 		 "Psychologically, it shows the market has been doing well and draws retail-type investors," he said. "But this may not be such a good thing, as retail investors often show up late to the party."


----------



## chops_a_must

Uncle Festivus said:


> The Dow Jones Industrial Average  jumped 135.95 points to 13,089.89, after having crossed the key level 13,000 for the first time. It struck an intraday record of 13,107. Twenty-nine of the 30 Dow components ended in positive territory.
> "In and of itself, [Dow 13,000] is not very important for the market," said Jay Suskind, director of trading at Ryan, Beck & Co.
> "Psychologically, it shows the market has been doing well and draws retail-type investors," he said. "But this may not be such a good thing, as retail investors often show up late to the party."



I hope we aren't trying to find stuff to justify us telling the markets what they should be doing...  

To me, I've always thought and been told that retail investors don't usually have the power to move markets. But then again, I'm always amazed at the power of people's stupidity, and have learnt never to under-estimate it. Lol.

But as the markets race to record highs, and as no one is wanting to get hit by a bus by putting shorts on, maybe it is time to start looking at these things we thought would crumble markets? I don't necessarily agree with what I am going to say, but perhaps we need to re-assess them?

My first point would be, (and I guess this relates to the US markets more than us) that the US economy has been growing very strongly for a number of years, so why shouldn't it be setting record highs? The gold price has also come down at the same time the DOW climbs... typically a bullish signal...

Even if the US economy is structurally stuffed long term, it might not affect company profits for a while, if at all, if production is continually going offshore with cheaper labour, and fewer tarriffs etc. So perhaps the US economy is beginning to detach from its markets? I guess the case in point there would be the DOJI outperforming the S&P 500 as the companies in the S&P have less capability for moving offshore.

The other factors may be the share buy backs and weaker USD. If, as they say, 4% of stocks will be bought back from companies on the DOJI and S&P... so logically, shouldn't both of these indexes go up by a minimum of 4% this year?

The weak USD may also be inflating the US stockmarket if foreign money is coming in. Plus, it will be helping exporters.

Lastly, maybe the sub-prime melt down is not going to have a short term impact. Although, it will eventually undoubtedly. But people defaulting on sub prime loans would typically not be able to invest in markets, and this lending facility has not spread to companies on mass outside of the financial sector... yet. However, GM have said that sub-prime is the reason they can't sell their crap cars... I'd say it's more likely due to the fact that they are selling crap cars, as the reason they can't sell their crap cars... but anyway. Personally, I think this will end up affecting consumer spending in 6 months to a years time.

And one important point. It's a presedential election year. Historically, these are the best years to be in the market.

Not sure how much of this I believe... just vomiting my thoughts out to see if they have merit.


----------



## bean

> I hope we aren't trying to find stuff to justify us telling the markets what they should be doing...
> And one important point. It's a presedential election year. Historically, these are the best years to be in the market.




And to be sure the market won't crash just because its a election year.
Yes the market will tell us if this is the final blowoff which may finish early next week as it takes a breather and retries and can't take the top out.

But no need to worry its an election years
Remember that as it falls


----------



## Uncle Festivus

There was bullish company news for the US markets last night that should have given it some impetus & all they could do was flatline at best. It's either a breather before the next assault or a rounding exhaustion top. Doesn't say much for when the reporting season finishes, ie finish looking at past data, & get back to focusing on the fundamentals  & future prospects for profit growth 'going forward'.

It also looks like the real estate bust is spreading to other countries. Problems in Spain have the potential to rock the Euro boat.


----------



## bean

I have made up various programs on DOW US markets and gold etc.
The DOW has been Up, its short term trend up.  I have been saying the DOW in a final blowoff.  I have aslo said the NASDAQ above 2550 will be back in bubble territory. 2554 yesterday and 2557 today.
If I enter monday as a down day the NASDAQ will turn its trend to down and it doesn't have to be a big day down.  If Monday is down and continues for tuesday it is set up for a 2% - 3% down day on NASDAQ tuesday.
Is the top in I do not Know but will wait for what happens monday.
It may be a short term top is in?

The DOW may rise but the NASDAQ ?  The DOW may carry the NASDAQ higher?


----------



## nizar

Uncle Festivus said:


> There was bullish company news for the US markets last night that should have given it some impetus & all they could do was flatline at best. It's either a breather before the next assault or a rounding exhaustion top.




It was poor GDP data (showing slower growth) that made the futures weaken before the open.
They've had a big week over there, 4 days up out of 5 and up 1.2% for the week. You cant expect green everyday.


----------



## Uncle Festivus

nizar said:


> It was poor GDP data (showing slower growth) that made the futures weaken before the open.
> They've had a big week over there, 4 days up out of 5 and up 1.2% for the week. You cant expect green everyday.




The Dow goes up, S&P500 flat. Which one is telling us the real story?
FWIW, I've gone short the DJIA. 

----------------------

While euphoria sweeps stock markets here and worldwide, there are at least a few voices of dissent. 
One, unsurprisingly, is legendary value investor Jeremy Grantham -- the man Dick Cheney, plus a lot of other rich people, trusts with his money. Grantham, chairman of Boston firm Grantham Mayo Van Otterloo, has been a voice of caution for years. But he has upped his concerns in his latest letter to shareholders. Grantham says we are now seeing the first worldwide bubble in history covering all asset classes.

Everything is in bubble territory, he says.  
Everything. 'The bursting of this bubble will be across all countries and all assets.' 
  -- Jeremy Grantham

http://biz.yahoo.com/ts/070427/10353243.html?.v=3


----------



## Kimosabi

Uncle Festivus said:


> The Dow goes up, S&P500 flat. Which one is telling us the real story?
> FWIW, I've gone short the DJIA.
> 
> ----------------------
> 
> While euphoria sweeps stock markets here and worldwide, there are at least a few voices of dissent.
> One, unsurprisingly, is legendary value investor Jeremy Grantham -- the man Dick Cheney, plus a lot of other rich people, trusts with his money. Grantham, chairman of Boston firm Grantham Mayo Van Otterloo, has been a voice of caution for years. But he has upped his concerns in his latest letter to shareholders. Grantham says we are now seeing the first worldwide bubble in history covering all asset classes.
> 
> Everything is in bubble territory, he says.
> Everything. 'The bursting of this bubble will be across all countries and all assets.'
> -- Jeremy Grantham
> 
> http://biz.yahoo.com/ts/070427/10353243.html?.v=3





I like the last statement,



> As for timing, he concedes that's impossible to predict. But here's the kicker: Even Grantham thinks you probably need to be bullish right now. The reason? Most bubbles, he notes,* go through a short but dramatic "exponential phase" just before they burst.* Like Japan in 1989 or the Internet in early 2000.




We still haven't seen the irrational exuberance phase yet, but I think it's coming...


----------



## nizar

Uncle Festivus said:


> The Dow goes up, S&P500 flat. Which one is telling us the real story?




Yeh obviously the latter.
If you think flat for one day after a big run is bearish then i hope you make a killing.


----------



## bean

More on my earlier post THE TOP IS IN ????

My program is showing a small down day will turn this market.
If I entered a small down day on previous days this market has been rising my signals for the next five days remain positive.
If I enter a small down on Nasdaq the first two days drop to neutral reading and next three out a negative.
For the DOW and NYSE the first two days are still positive third is neutral four and fith are negative.

What does this show, It shows as this market has been rising its internals have been weakening.

The top may not be in of course if it rises monday.
But who can say when a top is in?
The day after!!!

Will it be a short term top or the final.
I do not know yet.


----------



## Uncle Festivus

nizar said:


> Yeh obviously the latter.
> If you think flat for one day after a big run is bearish then i hope you make a killing.




It's been flat for a few day's, while the Dow has kept going. I may be out by a few day's but will also depend on the news data out this week being less than good also. 

By my calcs if the current rate of increase in the Dow since the low point in March of 11940 is continued then we are looking at a yearly return of 80%. (1180 points in 32 day's) - not sustainable I would have thought.

Also, the bar for company returns has been artificially lowered this qtr but still only shows a return of 7.4% so far, well below the double digit returns previously, but the market still deludes itself this is sufficient to keep the party going. 

The last (97) of the remaining S&P500 companies are still to report this week, a couple of big names eg GM likely to report better but still average earnings. Can the momentum from the rest keep the market going another week before the interest rate decision next week? Any doubters will close out & sit on the sidelines till it's a bit clearer.

The market tells itself what it wants to hear but eventually the fundamentals take over I guess. 

My 2c worth


----------



## purple

Uncle Festivus said:


> The market tells itself what it wants to hear but eventually the fundamentals take over I guess.




yeah...the issue is when does this 'eventually' happen? at the moment our May slay is quietly making the rounds, and Sydneysiders pop up with these :

"`You got bad news coming out of the world's biggest economy (US) as well as one of the fastest growing (China), which is enough to make investors anywhere pause for thought,'' said Michael Birch, who helps manage $133 million at Wallace Funds Management in Sydney. "

excerpt from :
http://www.bloomberg.com/apps/news?pid=20602005&sid=aEhZCqRDMoj0&refer=world_indices


----------



## krisbarry

Yep I am almost 100% in cash now, I hope for the love of god we get a pretty nasty correction.  Anyway who said you have to be nice in this stock market game 

Appears that its every man or women for that matter... for himselfor herself


----------



## zed327

I agree with you Stop The Clock but i'm to scared to jump out of AGS with the jorc due and a few other positives happening.

Just going run a tight stop loss just in case.

A correction is coming because the ASX is just so over bought at the moment, it just can't keep going straight up at this rate.


----------



## Knobby22

Stop_the_clock said:


> Yep I am almost 100% in cash now, I hope for the love of god we get a pretty nasty correction.  Anyway who said you have to be nice in this stock market game
> 
> Appears that its every man or women for that matter... for himselfor herself




Good to see you guys in cash.
It will reduce the correction and force the market even higher as scared bulls try to get back in. We are in for a good year.


----------



## bean

Knobby22 said:


> Good to see you guys in cash.
> It will reduce the correction and force the market even higher as scared bulls try to get back in. We are in for a good year.




But bulls or longterm bulls who think the market is going up and up are a good indicator if the market corrects very severly for months and months or years.  Tell us when you sell. So we will know it is time to get back in.


----------



## Tech_king

I don't care if its a correction or long term, i make money from both! I am not biased at all!


----------



## Kimosabi

Interesting read from Alan Kohler



> *Market offers good history lesson*
> 
> _29th April 2007, 12:00 WST_
> 
> 
> 
> With the Dow Jones industrial average having passed through 13,000 points for the first time during the week, the pricing of US equities versus bonds is once again at an extreme, as it was in 2000. But not in the way you think.
> 
> And if history is any guide, the allordinaries index will also hit 13,000 in a year.
> 
> At the peak of the Dow in 2000 the US equity yield was 3.2 per cent (based on a trailing price earnings ratio of 31.3 times) and the US 10-year bond yield was 6.5 per cent. Shares were obviously expensive, bonds were cheap, and so it turned out.
> 
> Now the average p/e ratio in the US is 18 times, producing an earnings yield of 5.5 per cent. The 10-year US bond yield has fallen to 4.7 per cent.
> 
> Shares are now cheap, despite the dramatic new record on the Dow, and bonds are expensive.
> 
> Much the same is true of Australia, although we are better off using comparisons with September 1987 rather than 2000, since our market didn’t really participate in the dotcom bubble, because we didn’t have many dotcoms.
> 
> But it’s a similar story. In 1987 the trailing price/earnings ratio of the Australian market was 20.4, which produces an earnings yield of 4.9 per cent. The 10-year bond yield was then 12.5 per cent.
> 
> Today the earnings yield is 6.4 per cent and the bond yield 5.9 per cent. The so-called Fed model, which is controversial, says that the two yields should be roughly equal, so while the relationship between them in September 1987 indicated that shares were very expensive (and/or bonds were cheap), the reverse is now true.
> 
> As we stand here with the Dow at 13,000 and the all ordinaries at 6141, shares are cheap.
> 
> That might seem a strange thing to say after three years of 20-25 per cent capital gains from the Australian sharemarket, and a 10 per cent gain so far this year, and with many otherwise excitable analysts getting strangely sombre.
> 
> But today’s graph — prepared by Shane Oliver of AMP Capital Markets — proposes another view via history.
> 
> Dr Oliver has matched the two low points of the market in the 1980s and 2000s — August 1982 and March 2003 — which is when the two bull markets began.
> 
> It is now equivalent to about December 1986. History never repeats itself exactly of course, but if it did, the Australian index would hit 13,000 next January — before crashing spectacularly. The point is that the sharemarket has not yet had the price/earnings multiple “blow off” that usually marks the end of a bull market.
> 
> The 1987 blow off only took the average p/e ratio to 20.4 because inflation was 8.5 per cent and the bond yield was 12.5 per cent — more than double what it is now. But that p/e was double the then 10-year average.
> 
> Now the trailing p/e is 18 times, but inflation is 2.7 per cent and the bond yield 5.9 per cent (3.2 per cent real versus 4 per cent real in 1987).
> 
> Times change, but in my view people do not. At the end of a long bull market, with abundant cash and rampant optimism, people tend to go nuts. They start extrapolating existing growth forever and price assets accordingly. So far that has not happened: share prices have merely kept pace with earnings as they are now, not what optimistic forecasters think they might be.
> 
> I’m starting to get a lot of emails from people predicting imminent doom and gloom — one confidently predicted that the market would crash last Tuesday.
> 
> In many ways it is easy for a pundit to predict the end of a bull market because if it doesn’t happen, you just change the date. No one has really lost money believing you — they just might not have made as much.
> 
> Predicting that the market will go up takes courage, because if people invest and it crashes, they lose real money and come looking for you with a half-brick. But here goes: the market is going up from here, possibly a lot. If it does, it will end in disaster. If it’s “just” another 25 per cent, that will be fantastic.
> 
> Alan Kohler publishes Eureka Report, an investment newsletter financially backed by Carnegie Wylie & Co. The views expressed here are Kohler’s alone.
> 
> http://www.thewest.com.au/default.aspx?MenuID=31&ContentID=27330




This is the graph that wasn't on the Internet Version of this article. The file size of the scanned version was too big to be readable.


----------



## nizar

zed327 said:


> I agree with you Stop The Clock but i'm to scared to jump out of AGS with the jorc due and a few other positives happening.
> 
> Just going run a tight stop loss just in case.
> 
> A correction is coming because the ASX is just so over bought at the moment, it just can't keep going straight up at this rate.




Zed - What do you mean by overbought?
XAO RSI is sitting on about 60.

Uncle - Whats wrong with 80% this year for the DOW, do you know what was the DOW return in 1986? It was about 100% for the few months before the big drop, and this would be in line with Alan Kohlers article.


----------



## bean

bean said:


> I have made up various programs on DOW US markets and gold etc.
> The DOW has been Up, its short term trend up.  I have been saying the DOW in a final blowoff.  I have aslo said the NASDAQ above 2550 will be back in bubble territory. 2554 yesterday and 2557 today.
> If I enter monday as a down day the NASDAQ will turn its trend to down and it doesn't have to be a big day down.  If Monday is down and continues for tuesday it is set up for a 2% - 3% down day on NASDAQ tuesday.
> Is the top in I do not Know but will wait for what happens monday.
> It may be a short term top is in?
> 
> The DOW may rise but the NASDAQ ?  The DOW may carry the NASDAQ higher?





> More on my earlier post THE TOP IS IN ????
> 
> My program is showing a small down day will turn this market.
> If I entered a small down day on previous days this market has been rising my signals for the next five days remain positive.
> If I enter a small down on Nasdaq the first two days drop to neutral reading and next three out a negative.
> For the DOW and NYSE the first two days are still positive third is neutral four and fith are negative.
> 
> What does this show, It shows as this market has been rising its internals have been weakening.
> 
> The top may not be in of course if it rises monday.
> But who can say when a top is in?
> The day after!!!
> 
> Will it be a short term top or the final.
> I do not know yet.




Glad to see the NASDAQ did what I said it would.
The action tonight and tommorow will say if it was indeed the final top


----------



## wayneL




----------



## tech/a

Close.
But one leg to go by my count.
5920 needs to hold in this corrective move
for the final wave to play out.
Which will be a wave 5 of 5 of 5 of 5.
Pretty important top.


----------



## Uncle Festivus

nizar said:


> Uncle - Whats wrong with 80% this year for the DOW, do you know what was the DOW return in 1986? It was about 100% for the few months before the big drop, and this would be in line with Alan Kohlers article.




The current (financial) world resembles little to that which existed in 1986, so too does any comparisons of historic data eg Kohler article (who takes any notice of media finance gurus anyway  ). 
All I'm saying is that the _rate of change_ is unsustainable in the short term so combined with continuing 'soft' data, we could get a pause. But, none of the data coming out even suggests a bottom forming for a 'soft landing' scenario eg GDP, housing, consumer credit crunch etc, so as far as the US is concerned the risk is to the downside (especially since such a 'big' number has been breached). The Oz market may have a bit of life left though as it may lag due to commodities still to peak, and the super behemoth.


----------



## bean

I post the following today on the price of gold so some parts may not make full sense to everyone but the Goldys know what I'am talking about

Gold bugs you have several questions I need to give answers to 
otherwise 
you will start to discount what I have been saying. (The bears will 
agree the bulls may still need convincing)
.
Gold and gold indexes dropped last night while the general market was 
up. True
However they moved up from there lows when the market rose.
Nasdaq did not drop 2-3%. True but I did say we needed weakness and 
also 
mentioned the DOW still had strength and wanted to rise. The Nasdaq at 
one stage was 15 point down but the was want to go higher.
The TOP IS IN - TRUE
Believe it or not it is
NYSE closed last wed 9746

I called the top Friday
Friday NYSE 9705 today 9640
S&P 500 1494 today 1486
Nasdaq 2557 today 2531

The only one is the DOW and what will be said the Dow has made a new 
record.
The DOW is carrying the market.

All US markets internals are at a danger stage and dropping each day
My Nasdaq reading today is neutral the the trend next 5 days all 
negative (and the negativity is increasing)
The question to ask is how longer can the DOW hold up the market.
Are the market internals positioning themselves for a “CRASH”
Yes a CRASH.. If it is indeed a ‘crash day’ then I may only pick it up 
one or two days before

Gold nothing has changed it may move up if the Dow advances and the 
indexes follow.
BUT remember it will fall with them as well.
US $ is it trying to rally or get traction?

I have also started to see a few gold writers come up and turn short 
term bearish on gold.
Pity how they didn’t mention it a few weeks ago


----------



## Smurf1976

I'm more into investing long term than active trading so don't look at charts too much.

But from a fundamental perspective, I've been thinking of a short, sharp correction in the markets followed by a new bull market in "things" for quite a while now. "Things" as in things you can touch and hold - commodities etc.

My underlying reasoning is that historically at least, the US Fed raises rates to the point that _something_ breaks. I'm thinking that the "something" will probably include the stock market at some point. Once that happens, the door is open for reinflation on a rather big scale IMO since it's what the Fed does best and their track record is pretty consistent in recent times.


----------



## chops_a_must

Uncle Festivus said:


> FWIW, I've gone short the DJIA.



I hope you reversed your position... or at the very least, closed it. What was your signal for a short anyway? 

I don't know why anyone would think of shorting a technical breakout from a five year consolidation... but anyway.

Here's a nice article for all you scare mongerers!



> Dollar Heads for Weekly Gain as Data Show Economy Strengthening
> 
> By David McIntyre and Stanley White
> 
> May 4 (Bloomberg) -- The dollar headed for the biggest weekly gain in four months against the euro as strength in manufacturing and services suggested the Federal Reserve will refrain from cutting interest rates in coming months.
> 
> The dollar was also set for a second winning week versus the yen, trading at the highest since February, as the yield spread between U.S. and Japanese two-year bonds widened to the most in three weeks. The Institute for Supply Management's index of services grew the fastest in three months in April, while manufacturing was the best in almost a year.
> 
> ``The data don't support the idea the economy is falling into a hole, pricing out the possibility of the Fed cutting rates,'' said Tony Morriss, a currency strategist at Australia & New Zealand Banking Group Ltd. in Sydney. ``The yield differential has moved in the dollar's favor.''
> 
> The U.S. currency was poised for its first weekly gain in six against the euro, trading at $1.3550 at 9 a.m. in Singapore, a rise of 0.7 percent, the biggest since Jan. 5.
> 
> The dollar traded at 120.38 yen and touched 120.47 yesterday, the strongest since Feb. 27. The currency advanced 0.6 percent from 119.63 yen in New York last week.
> 
> The yield premium on U.S. two-year Treasuries over similar- maturity Japanese bonds was 3.84 percentage points, the widest since April 16. The yield advantage was 3.79 percentage points at the end of last week.
> 
> Interest-rate futures showed 17.5 percent odds the Fed will lower borrowing costs in August, down from a 22.5 percent chance a week earlier.
> 
> Employment, Services Data
> 
> The ISM's index of non-manufacturing businesses increased to 56 from 52.4 in March, the Tempe, Arizona-based group said. Readings above 50 point to growth in services such as banking, retailing and construction, which make up almost 90 percent of the U.S. economy.
> 
> The dollar may draw added support as the improving economic data this week suggest a report on the U.S. labor market later today may beat expectations.
> 
> The U.S. economy created 100,000 new jobs in April, slower than the 180,000 jobs added in the previous month, according to the median estimate of 85 economists surveyed by Bloomberg News. The Labor Department will release the data at 8:30 a.m. in Washington today.
> 
> Payrolls in March rose more than economists' estimates. The Labor Department last month also upwardly revised data for January and February.
> 
> ``We have an above-consensus expectation for a 115,000 increase in payrolls, which would add to the sense that U.S. data are holding firm,'' said Sue Trinh, currency strategist at RBC Capital Markets in Sydney. ``We no longer expect the Fed to cut rates this year. This is absolutely supportive for the dollar.''
> 
> The U.S. currency may rise to 121.50 yen and $1.35 per euro today, she said.
> 
> European Rates
> 
> Europe's single currency may head for an ninth weekly advance against the yen, the longest stretch since January 2002, on speculation European reports on services and retail sales today may reinforce expectations the central bank will raise interest rates further this year.
> 
> Royal Bank of Scotland Group Plc's services index rose to 57.6 in April, the fastest pace in three months, from 57.4 in March, a Bloomberg survey shows. Retail sales in the 13 nations that share the euro grew 2.3 percent in March after rising 1.2 percent in February, a separate survey shows.
> 
> ``In Europe, the view is the economy is getting stronger and stronger,'' said Michael Thomas, head of economics and strategy at ICAP Australia Ltd. in Sydney. ``The Europeans are just about to put up rates again. The euro should continue to be stronger against the yen.''
> 
> Support for Euro
> 
> The euro may rise to $1.3700 and 165.77 yen in the next week, Thomas said. The European Central Bank's benchmark rate is 3.75 percent, while the Bank of Japan's overnight lending rate is 0.50 percent, the lowest among major economies.
> 
> The yield spread between benchmark 10-year German and Japanese bonds reached 2.60 percentage points, the widest in almost three years.
> 
> Interest-rate futures indicate investors anticipate the ECB will increase borrowing costs twice more this year. The yield on the December contract was 4.375 percent yesterday, above 4.355 percent a week earlier.
> 
> The contract settles to the three-month interbank offered rate for the euro, which has averaged about 16 basis points above the ECB's benchmark since 1999.
> 
> To contact the reporter on this story: David McIntyre in Sydney at dmcintyre2@bloomberg.net ; Stanley White in Tokyo at swhite28@bloomberg.net .
> Last Updated: May 3, 2007 21:04 EDT
> 
> http://www.bloomberg.com/apps/news?pid=20601087&sid=ae5cOvziN2tE&refer=home


----------



## Uncle Festivus

chops_a_must said:


> I hope you reversed your position... or at the very least, closed it. What was your signal for a short anyway?
> 
> I don't know why anyone would think of shorting a technical breakout from a five year consolidation... but anyway.
> 
> Here's a nice article for all you scare mongerers!




A week early I think for that call, only made some lunch money at the top of the daily [FONT=Arial,Helvetica,sans-serif]Reverse Symmetrical Triangle[/FONT], but a day trade all the same. A week is a long time for me in these conditions .

Yes, the $US was due for a technical bounce. But, if this fails, it wont take much to take it under 80 this time.

Also - The market has been staging a seemingly unstoppable advance over the past two months, with the Dow Jones Industrial Average rising in 22 out of the past 25 sessions, its longest winning streak since 1929.


----------



## Freeballinginawetsuit

Uncle Festivus said:


> Also - The market has been staging a seemingly unstoppable advance over the past two months, with the Dow Jones Industrial Average rising in 22 out of the past 25 sessions, its longest winning streak since 1929.





Indeed, quite the opposite net effect of what was being forecast on ASF 2 months ago!.

Its not exactly 'rocket science' stating it after the fact now is it UF, and that punters will be locking in profits at some point.


----------



## krisbarry

Hurry up and crash, should be any day now 

Cash is King in May, just look at the statistics...the month of May is almost always a filthy month.

They don't call is *Mayday* for nothing...thats the day you make contact with your managed funds and switch to the cash option.  Mine hit the cash option on the 2nd of May, very happy with my choice, just waiting now, very patiently!

*MAYDAY ALERT, MAYDAY ALERT...THE MARKET IS READY TO CRASH*


----------



## Kimosabi

Stop_the_clock said:


> Hurry up and crash, should be any day now
> 
> Cash is King in May, just look at the statistics...the month of May is almost always a filthy month.
> 
> They don't call is *Mayday* for nothing...thats the day you make contact with your managed funds and switch to the cash option. Mine hit the cash option on the 2nd of May, very happy with my choice, just waiting now, very patiently!
> 
> *MAYDAY ALERT, MAYDAY ALERT...THE MARKET IS READY TO CRASH*




The May crash was on Tuesday, it's all up hill from here...


----------



## YOUNG_TRADER

Stop_the_clock said:


> *Hurry up and crash*, should be any day now
> 
> *just waiting now, very patiently*!
> 
> *MAYDAY ALERT, MAYDAY ALERT...THE MARKET IS READY TO CRASH*




Patiently or nervously?

Sounds like your hoping rather than waiting for a crash


----------



## BIG BWACULL

It MAY crash, It MAY not any way  MAY we MARCH on


----------



## dj_420

Stop_the_clock said:


> Hurry up and crash, should be any day now
> 
> Cash is King in May, just look at the statistics...the month of May is almost always a filthy month.
> 
> They don't call is *Mayday* for nothing...thats the day you make contact with your managed funds and switch to the cash option.  Mine hit the cash option on the 2nd of May, very happy with my choice, just waiting now, very patiently!
> 
> *MAYDAY ALERT, MAYDAY ALERT...THE MARKET IS READY TO CRASH*




stop the clock, there are probably so many people like you waiting for a crash you have taken all the hot money out of the market already! thanks sideliners for preventing a devastating crash. there would already be so much money on sidelines waiting to get in market gets bought up on any dips.

over last couple months i have been moving most of my portfolio into long term stocks. holding uranium, iron ore and zinc stocks. and BTW i still have some cash aside for a pending correction.

i also think stop the clock that you have been cashing out since around xmas if i can remember correctly, you may have missed some good runs.


----------



## krisbarry

Stop dancing around the issues...next week we will see the signs of a correction.


----------



## YOUNG_TRADER

Stop_the_clock said:


> Stop dancing around the issues...next week we will see the signs of a correction.




And having exited some spec stocks that have returned amazing 100%+ returns in around 1 month I'll be waiting with close to $200k in cash


----------



## marklar

I've exited all my blue chips (and converted to cash for now), but continue to "play" with some speccies.  In the last little hiccup most of my speccies barely moved, so I'm a little more confident to hold them if the market does turn south.

I'd love to get into property but the market in Melbourne is far too hot!  Even turning up for property inspections is now a waste of time, they're typically sold prior to auction or for stupidly high prices.

Looks like cash is king for a bit.

m.


----------



## 2020hindsight

Freeballinginawetsuit said:


> Its not exactly 'rocket science' stating it after the fact now is it UF, and that punters will be locking in profits at some point.



 indeed
hopefully a picture is worth 100 characters 
caption reads "It's time we had a reality check gentlemen, we 're not exactly rocket scientists"


----------



## Freeballinginawetsuit

marklar said:


> I've exited all my blue chips (and converted to cash for now), but continue to "play" with some speccies. In the last little hiccup most of my speccies barely moved, so I'm a little more confident to hold them if the market does turn south.




Wouldn't the specks be the last ones you would want to be holding in any pullback..............or for the matter any recent entries in fundamental stocks at the top of the cycle


----------



## nomore4s

YOUNG_TRADER said:


> Patiently or nervously?
> 
> Sounds like your hoping rather than waiting for a crash




mmm and not so patiently it would appear


----------



## 2020hindsight

Corrections - those things that everyone hears about that were due to happen - (note past tense )

reminds me, the best bet at the craps table in the casino is on the "Don't Pass" line - effectively betting against the dice - and against all the other punters .  It takes a brave person to bet there.  No one shouts you a drink when you win for instance lol.  
But that said, it is still the best bet


----------



## Freeballinginawetsuit

2020hindsight said:


> Corrections - those things that everyone hears about that were due to happen - (note past tense )
> 
> reminds me, the best bet at the craps table in the casino is on the "Don't Pass" line - effectively betting against the dice - and against all the other punters . It takes a brave person to bet there. No one shouts you a drink when you win for instance lol.
> But that said, it is still the best bet




Seems like a lot of 'bets' entered the market since March's pullback, and against the table odds.............are you serious!.

Whats youre 'bet' when on mass they exit 20/20?.................presuming at some point in time youre entry/exit signal shines


----------



## Julia

marklar said:


> I've exited all my blue chips (and converted to cash for now), but continue to "play" with some speccies.  In the last little hiccup most of my speccies barely moved, so I'm a little more confident to hold them if the market does turn south.
> 
> I'd love to get into property but the market in Melbourne is far too hot!  Even turning up for property inspections is now a waste of time, they're typically sold prior to auction or for stupidly high prices.
> 
> Looks like cash is king for a bit.
> 
> m.




If you are talking about genuine blue chips, why would you have exited them at this stage, or for that matter, at all?

I've held blue chips through countless corrections.  They recover, and go on to new highs, so why would you incur unnecessary brokerage and complicate your tax situation?

If you've made money out of speccies, those would be what I'd be selling if you really have a clear basis for expecting a correction.


----------



## Julia

Stop_the_clock said:


> Hurry up and crash, should be any day now
> 
> Cash is King in May, just look at the statistics...the month of May is almost always a filthy month.
> 
> They don't call is *Mayday* for nothing...thats the day you make contact with your managed funds and switch to the cash option.  Mine hit the cash option on the 2nd of May, very happy with my choice, just waiting now, very patiently!
> 
> *MAYDAY ALERT, MAYDAY ALERT...THE MARKET IS READY TO CRASH*



So you want the market to crash simply to reinforce and rationalise your own decision.  As has already been pointed out, you have missed out on some excellent profits by moving to cash as early as you have.

Do what you like.  I simply don't care.
But don't wish a crash for everyone else just to justify your own choices.
There are many inexperienced investors out there who would not have the fortitude to cope with a severe correction and who would quite unnecessarily sell, losing money.

Kris, you repeatedly expect other people to empathise with your situation, but as far as I can tell, you are quite devoid of empathy towards anyone else.  Egocentricity is a largely unrewarding characteristic.


----------



## bean

yes to call a crash you must have reasons and a time frame and why its going to be a crash or start a very severe correction and one which may be long lasting. Tonight a quick look at the futures saw gold up so knew straight away  US markets were going to be up. CALL a TOP wednesday or thursday next week.  What the DOW will get to 13650 give or take (1000 points) sorry one extra zero.


----------



## 2020hindsight

Freeballinginawetsuit said:


> Seems like a lot of 'bets' entered the market since March's pullback, and against the table odds.............are you serious!.
> 
> Whats youre 'bet' when on mass they exit 20/20?.................presuming at some point in time youre entry/exit signal shines



FBIAW.  A few misunderstandings here . 
I was just saying that stop the clock was making a bearish prediction, and getting a pasting for his troubles. 

Personally  I was fully committed to the market as of Wednesday (100% invested), then sold about 85% on Thursday, leaving a few bucks in YML and (rats) ERA (of all the stupid stocks to get stuck with - but it owes me bigtime lol ) (I should ve stuck with FMG lol)

I think we all were predicting a May correction were we not - maybe this year will be different.  Just when you work out the pattern (or rather when Alan Kohler points it out to you) that "sell in May and walk away" makes historical sense - then that's the year you should have "BOUGHT in may " lol. Is it wise to bet on history repeating? Or is it just another "superstition" to deal with maybe?

In the end, it's all a gamble aint it, if not for you experts then it certainly is for me (hence the reference to the casino ) 

As for what's my bet on the best exit time?   Pure guesswork / superstition. 

PS Somewhat off thread , but I found this new word for "Fear of Friday the 13th" on google  



> http://en.wikipedia.org/wiki/Friday_the_13th  The fear of Friday the 13th is called *paraskave-deka-triaphobia *(a word that is derived from the concatenation of the Greek words Παρασκευή, δεκατρείς, and φοβία, meaning Friday, thirteen, and phobia respectively; alternate spellings include paraskevodekatriaphobia or paraskevidekatriaphobia) or friggatriskaidekaphobia, and is a specialized form of triskaidekaphobia, a phobia (fear) of the number thirteen.




Others include:-  http://en.wikipedia.org/wiki/-phobia
Hexakosioihexekontahexaphobia — fear of the number 666. 
Panphobia — fear of everything or constantly afraid without knowing what is causing it 
Gerontophobia, fear of growing old, or a hatred of old people.

But in summary, you're right mate - I've made about 10% on my portfolio since March.  Just that I'm guessing a correction is around the corner.  (Just a guess ok ).  If not, then "I've left a bit of money on the table for the next bloke ". 

PS As for "correctionaphobia" - Some people get it, some don't 
PS I dont bet "short" - not allowed to on SMSF's.  So I just have to be cashed up if a correction happens - simple as that .  I'm either on the market , or in the bank. 

So currently I'm experiencing probably what will turn out to be a totally irrational "correctionaphobia"... and mainly in the bank. 
but  "beeraphobia"?  nope , never experienced that one. :bier:


----------



## Freeballinginawetsuit

Hi 20/20,


FWIW, bearish talk this time around has more merit than last time .

Agree that the last few months on the market have been surprising, certainly exceeded my modest forward view.

I dont own YML though


----------



## 2020hindsight

freeball, 
I guess what really hurts me is to get in here after a mini-correction (lol) - and find all these expert traders who bet short, and they're congratulating each other lol - really pisses me off (and probably most of us in here who only invest "long"). But heck, they are cleverer that me, and they are entitled to celebrate.  

If you ever play craps, especially in Nevada or some such,  you'll find it's much like two-up, in that everyone is usually behind the dice-roller to do well.  Yellin and hollerin and whoopin lol.  

Very rarely does someone bet against the dice - and if he does, he doesn't say a word when he wins - if he does he gets a black eye, lol.

(But as I said back there, I think the casino advantage for the initial bet is about 1.41% for pass line, and about 1.40% for Dont Pass - so he wins a fraction/;smidgeon more often that the ones doing the whoopin and hollerin)
Question then to ask is which one is happier lol.

PS I'm a beginner and I intentionally don't study my investments too much (leaving a fair bit to lady luck) - I'm working on the principle that I want to stretch the period when my "beginner's luck" applies as long as possible 

PS optimists might not be correct as often as pessimists, but they are allegedly a lot happier


----------



## bean

To pick a top and the start of a crash (or severe correction is a dream but others nightmare) The markets do what they want and when they want.  The challange is to look at every possibility of a correction and see how severe or mild it is.  Most people are complacement when a correction comes because the market go up afterwards.
The amount of investors on this site who are expecting a correction is small compared to the BULLS. But some of those are wiling to ride out certain stocks 
(a) they think there stock will recover quickly
(B) it happened before and my stock is higher in a few weeks
(c) Uraniun price rises or stays the same all the time  (what would happen to uranium stocks if the price dropped one week heaven forbid two in a row) 
(d) everyone calls for a Crash and it does not happen like it has over and over again for the last XX years no one takes them seriously (one day they might be right)
(e) we have to watch China that where the correction will start.
(f) we a lemmings true/false

To the bulls good luck to The bears good luck
to those that think and know 
we don't need any


----------



## nizar

It doesnt really bother me if we have a correction or not.
I have stops in place, if they are hit, i exit with a loss.
Iv got profit taking exits in place, if they hit, then i exit with a profit.
If neither than i hold.
Simple really.

Id rather not get involved with prediction.
Ill leave that to the analysts, who make money from their analysis and not their trading (i got that quote from michael but i must admit its gold).


----------



## 2020hindsight

bean said:


> ...... (d) everyone calls for a Crash and it does not happen like it has over and over again for the last XX years no one takes them seriously (one day they might be right)
> (e) we have to watch China that where the correction will start.
> (f) we a lemmings true/false
> To the bulls good luck to The bears good luck
> to those that think and know , we don't need any



Yep, more interesting comments, bean.
d) the boy that cried "bear" - so far it has usually only been a little koala correction  - one day this bludy great grizzley will come charging over the hill, lol.
e) China will initiate the correction - you might be right. Would post-olympics withdrawal be a possible trigger maybe?  Maybe when the effect of greenhouse emissions start to bite, and the financial world is forced to slow down, who knows. 
f) Interesting analogy to lemmings - like the old dilemna, do you subscribe to 
"buy on bad news , sell on good"   ; or  "the trend is your friend" .
I never know which one to follow lol.  
Finally I agree with you in wishing everyone (lemmings and loners alike) best of luck.
(and even brave dude traders like nizar lol)

PS No way do I use stops.  My biggest mistakes have always been to sell on a small correction when I should have held and weathered the storm .  .  I swear the manipulators of the markets know just how far to drop the price to trigger those stops, then they make a killing  - (and I don't have time to monitor the market full-time during the day).  Just another conspiracy theory I hold.  (Apologies gents, comments from the peanut gallery here - back to you experts - "over and out" on this one lol


----------



## Freeballinginawetsuit

20/20,

Sorry but I was under the impression that you had exited the market back in March and were watching from the sidelines. If memory serves me correctly?.

I had know idea you maintained youre longs and took the opportunity to trade what was in front of you.

Hope you continue to do well!.


----------



## Kimosabi

I'm sure that while the inexperienced investor is Selling in May and going away, the smart money is Buying in May and staying to Play...


----------



## nizar

2020hindsight said:


> Finally I agree with you in wishing everyone (lemmings and loners alike) best of luck.
> (and even brave dude traders like nizar lol)
> 
> PS No way do I use stops.  My biggest mistakes have always been to sell on a small correction when I should have held and weathered the storm .  .  I swear the manipulators of the markets know just how far to drop the price to trigger those stops, then they make a killing  - (and I don't have time to monitor the market full-time during the day).  Just another conspiracy theory I hold.  (Apologies gents, comments from the peanut gallery here - back to you experts - "over and out" on this one lol




2020.

Just some advice from my experience. Use loose stops, give them some room to move (i give them plenty) and let them run. I thought i was a champion doing a nice quick trade on WMT bought i think 6 and sold 7.4, trying to be a bullmarket daytrader, and now its 40c. If i had put a stop at maybe 5c then i couldve rode the whole trend.

Iv decided i want to go for big profits now, not quick profits.

Also i dont put my stops in market anymore, but instead use end of day stops. For example, i bought AED today. Stop if it closes at or below $4.70. Stop is pretty far from the price action. I actually did buy WMT as well at 40c. Stop is if it closes at or below 29c. Loose stops mean you buy less shares though. But that does mean you will have cash to top up on pullbacks (after the bounce, of course) 

Just my opinion.


----------



## chops_a_must

2020hindsight said:


> I swear the manipulators of the markets know just how far to drop the price to trigger those stops, then they make a killing  - (and I don't have time to monitor the market full-time during the day).  Just another conspiracy theory I hold.  (Apologies gents, comments from the peanut gallery here - back to you experts - "over and out" on this one lol




Oh my word they do. If you read the Market Wizards books, they tell you they aim for badly placed stops. I think it is more prevalent in professional trading arenas like currencies and so forth, but no doubt it happens in equities as well. I've noticed it tends to happen with stocks on the run, and if you are stopped out there, then you need to change the strategy for next time I guess.

But really... personally, I'm very happy with my returns for this year already, and if we are to see a correction, in the big scheme of things, I'll still be ahead in my mind. We are due for some kind of correction soon no doubt, may be a few weeks away. Who knows, who cares in the scheme of things? Don't think it will be a crash... but if there is one starting, I'm sure I'll be stopped out in the first hour on everything one day, and still be able to preserve capital, which is more than a lot of people on here I guess... And then we can go back to investing like people did when it wasn't trending, hunting dividend yield.


----------



## bean

HINDSIGHT unfortuately I think a crash/sevre correct starts next thursday at latest
and everyone looking at china when it is actually the US.
But I could be wrong but time wil tell


----------



## 2020hindsight

Freeballinginawetsuit said:


> 20/20,  Sorry but I was under the impression that you had exited the market back in March and were watching from the sidelines. If memory serves me correctly?.
> 
> I had know idea you maintained youre longs and took the opportunity to trade what was in front of you.
> 
> Hope you continue to do well!.



freeball, I'll tell you the full story, lol.
After the cyclone I got out of FMG thinking it would have a plateau for a while.  You suggested buying something with a bit more of an afro "for the shearing", lol - so I took your advice and looked around - followed Young Trader's suggestion to buy YML  - went up 25% the other day, and I got out .

So indirectly I have you to thank  
Although getting back into my original FMG would have been ok as well.  lol.

I love it when you can screw up and still win  - so much kinder than betting on the horses. 

and chops , nizar , bean - well done for "keeping the faith" through the fog of financial war.  

fortes fortunes aduvaat , or whatever , " fortune favours the brave" lol. - 
I think Julius Caesar was thinking of the stock market when he said that lol.  ( or was it someone else, ? who knows, who cares? - as long as we don;t lose our shirts, lol)

PS money is of no consequence - unless you have none 

mmm bean , you predict Thursday the 10th May.  
could be right - then again, could be case of "thor-deka-may-probia ". lol

(PS. hard to imagine that the USA can continue to throw money at Iraq and Afghanistan at the present rate for ever, yes?)


----------



## Freeballinginawetsuit

2020hindsight said:


> freeball, I'll tell you the full story, lol.
> After the cyclone I got out of FMG thinking it would have a plateau for a while. You suggested buying something with a bit more of an afro "for the shearing", lol - so I took your advice and looked around - followed Young Trader's suggestion to buy YML  - went up 25% the other day, and I got out .





lol, yeah well I was probably talking about letting youre longs grow before cutting them and trading the spikes on the ones youd been following for a while, but were toppy prior  .

YML would have been one of the last stocks I would have considered at that particular time/ever..............but thats just me.

Seems we just never gel on our conversations, probably worlds apart on how we trade the market. Thats what I like about ASF, its so interesting to see others views on investment/trading.

After a year posting its clear my methods are from Mars, but hey alls good!.


----------



## son of baglimit

folks it aint rocket science - you know the market is due for a fall when - 

people who have never, ever taken one degree of interest in the market suddenly come over to you at work, only because you happen to have a copy of AFR on your desk, and ask for stock tips.

the classic 'last in - last out' crowd - they get burnt due to lack of any understanding, and realise only then they shouldnt have touched the market - but of course they will do it again in about 5 years time - cant help themselves - dont want to be the only one who missed the action.

i always flick them away, telling them to put their money into their boring mortgage / high interest online bank account, and keep away from this dreaded stock market monster - it will only eat them alive.


----------



## wayneL

I am reliably informed by the muppets in my town that the market will never go down.


----------



## marklar

Julia said:


> If you are talking about genuine blue chips, why would you have exited them at this stage, or for that matter, at all?



'cos I've got other purposes for the money in the next couple of months and would rather exit them with a profit than with a loss.



> If you've made money out of speccies, those would be what I'd be selling if you really have a clear basis for expecting a correction.



I don't have a lot of $ invested in speccies, but it's an amount I'm happy to risk, at least for now.

m.


----------



## Uncle Festivus

Freeballinginawetsuit said:


> Indeed, quite the opposite net effect of what was being forecast on ASF 2 months ago!.
> 
> Its not exactly 'rocket science' stating it after the fact now is it UF, and that punters will be locking in profits at some point.




Huh? After what fact? (Wot u talkin bout Willis?) 

The sell in May theory has some merit in that it coincides with the end of the quarterly reporting season, the wind down to the financial year end  & book squaring and the start of the Summer holiday season - simply all those Americans lock in their profits & go away and enjoy the fruits of their labours.


But, what makes it interesting at this particular point in time is that it loosely coincides with a secular cycle finishing & possibly the start of a consolidation cycle. The particular cycle being the US housing bubble. It's not rocket science to know that building things is a pretty big contributor to a countries economy, and you can see what happens when that stagnates, just look at NSW for the last 2 years.

Multiply that sort of cycle by an amount proportional to the respective economies of the US & Aust. and you then have the US housing bubble. The evidence is in that, even ignoring the sub-prime debacle, the bubble has indeed burst with the most immediate effect being felt by home builders, shown up by the accounts of the large listed companies.

If the numbers coming out were trivial eg normal cyclical aberrations then  it would be  carry on as per usual, but it's nearly every day that  the data  proclaims a new record of some sort eg  lowest since XX or most since XX etc.  Home builders are hurting and I wouldn't be surprised to see the first of them declare bankruptcy sometime in the future.

The crux of the point is that once a bubble like this even mildly deflates (which it has not, it's well & truly busted) then the flow on effects start snowballing, & when it starts to show up in the employment figures then it's time to reassess the market strategy.

Marketwatch report - 

                         The headlines of the report were weak, but the details were even weaker.                  
Nonfarm payrolls rose just 88,000 in April, according to the establishment survey. That's the weakest job growth in 29 months. Payrolls have grown by an average of 129,000 per month so far this year, down from 225,000 at this time last year.
In the separate household survey, employment plunged by 468,000, the most since November 2002.
The employment-population ratio fell from 63.3% from 63%, the lowest in a year.
The unemployment rate rose to 4.5% from 4.4%, but the increase would have been larger except 392,000 potential workers dropped out of the labor force altogether, the biggest decline in the labor force in nearly four years. Unemployment grew by 77,000 to 6.8 million.
The average workweek declined, and total hours worked in the economy dropped by 0.4%.
Average wage growth was tepid, rising just 4 cents to $17.21, a 0.2% gain. Wages are up 3.7% in the past year, well off of the peak of 4.3%.
The longer the market discounts this sort of data, preferring to focus on excess liquidity driven money shuffling eg takeovers & buyouts (because companies can't see a more productive way of spending the cash) then the harder the consolidation phase. 

*Praemonitus praemunitus*


----------



## hacheln_mice

Food for thought about the US job growth:
------------------------------------
    1. Economic Deceleration Contained to Overall Economy

    U.S. job growth in April slowed to 88,000, less than the 100,000 economists expected. And that’s actually the good news.

        * The bad news is related to the comical shenanigans of the the Birth/Death Model.
        * The Birth/Death model contributed 317,000 adds.
        * That’s not a typo. That’s 317 thousand adds.
        * According to Minyanville Professor Scott Reamer, since 1999 there has been only one other month in which the add was bigger, January 2004.
        * For some perspective, in the 36 month period ending March 2002 - 36 months - the total adds from the birth/death model were 353,000. Over 36 months.
        * Since the beginning of the year, the birth/death model has accounted for a net 388,000 jobs.
        * Last year it added 964,000 jobs.
        * The kicker is that the Bureau of Labor Statistics refuses to allow academics and commercial economists access to the models they use for the birth/death additions.
-----------------------------------------
What's a US dollar worth nowadays again?

Looks like another reason Aussie equities will continue to trump US equities for the rest of eternity.


----------



## purple

bean said:


> HINDSIGHT unfortuately I think a crash/sevre correct starts next thursday at latest
> and everyone looking at china when it is actually the US.
> But I could be wrong but time wil tell




Whoa!  you can predict the exact date of the crash?

Please tell me which stock is gonna breakout! I'll put my house on it!


----------



## nizar

Nice to see articles like this in the mainstream media:

http://www.theage.com.au/news/busin...shouldnt-buy-in/2007/05/04/1177788399619.html

To be honest, i think an "imminent and severe market spike" will send my stocks through the roof!

Also, Bill Mclaren reckons 6600+ by June for XJO. Im not a huge fan but i tend to take note of his calls that i agree with LOL


----------



## wavepicker

nizar said:


> Nice to see articles like this in the mainstream media:
> 
> http://www.theage.com.au/news/busin...shouldnt-buy-in/2007/05/04/1177788399619.html
> 
> To be honest, i think an "imminent and severe market spike" will send my stocks through the roof!
> 
> Also, Bill Mclaren reckons 6600+ by June for XJO. Im not a huge fan but i tend to take note of his calls that i agree with LOL




Sometimes it's better to disregard the "experts", most of all the headlines in the newspapers. Articles in the papers are traps for the unwary, suffice to say, do your own analysis and study your market well.

Cheers


----------



## Cyber Man

From my own studies and experience I cant see a major market correction happening in the near future. I see no reason fundamentally or technically and I see no major resemblance to any period prior to any major correction in history.

On the spi, I think we will see a top this coming week and then a 500 point retracement down to the middle of June and then a mad rush up to anywhere between 7000 - 8000 until October this year. After that top the market will go down for some time.

Thats just my view on the market at this point in time. I'm not trading at the moment and I haven't traded for years.


----------



## YChromozome

hacheln_mice said:


>




Classic. 

I see T-shirtHumor.com's first design - "Take a bath in the real estate market with Mr. Housing Bubble, if I pop you're screwed - (Not affiliated with Mr. Internet Bubble)" ”” become best seller in less than a week.

Can't work out where to buy what appears to be version 2 above. (I'm wondering if I would get kicked out of many open inspections wearing it)


----------



## krisbarry

Julia said:


> So you want the market to crash simply to reinforce and rationalise your own decision.  As has already been pointed out, you have missed out on some excellent profits by moving to cash as early as you have.
> 
> Do what you like.  I simply don't care.
> But don't wish a crash for everyone else just to justify your own choices.
> There are many inexperienced investors out there who would not have the fortitude to cope with a severe correction and who would quite unnecessarily sell, losing money.
> 
> Kris, you repeatedly expect other people to empathise with your situation, but as far as I can tell, you are quite devoid of empathy towards anyone else.  Egocentricity is a largely unrewarding characteristic.




Don't stress your pretty little head ...Only missed out on 2 up days at this stage, being the 3rd and 4th of May.

Going back through many, many years of charts the May corrections start anytime from now.  Almost every year that I can find it shows May as being a pretty rough month.

So...what make you so sure this year will be different?


----------



## krisbarry

In the month of May last year, I lost over $1,000 in my Hesta super fund, then switched it to Colonial First State and lost a further $3,500.  So by the end of May $4,500 was lost just in super alone.

My personal shares went south by thousands too.

I do remember crying in May last year after I had lost so much money...I am being honest here...I truely started crying.

That is why I am protecting my wealth this time around, and by the way who said protecting wealth was a bad thing.   As far as I am aware its one of the most basic trading rules that I did not follow last year, but am implimenting it this year.

Look at the charts people....find me a month of May that the market did not correct, its very rare!


----------



## YOUNG_TRADER

Stop_the_clock said:


> Going back through many, many years of charts the May corrections start anytime from now.  Almost every year that I can find it shows May as being a pretty rough month.
> 
> So...what make you so sure this year will be different?




Take a look at 2005, we had a nasty correction in March and as a result May 2005 was one of the best months, fast forward to Feb/March 2007 again another nasty little correction, can May correct again in such a close time frame? I just don't think so but have hedged my bets anyway.




Stop_the_clock said:


> I do remember crying in May last year after I had lost so much money...I am being honest here...I truely started crying.




Its only money my friend it comes and it goes, nothing to cry about, seriously need to get things in perspective, perhaps a visit to a hospital to see what a real loss in life is.


----------



## Rafa

YOUNG_TRADER said:


> Its only money my friend it comes and it goes, nothing to cry about, seriously need to get things in perspective, perhaps a visit to a hospital to see what a real loss in life is.





Well said YT, you are spot on...
Its only money...

And whilst there is some art to the stock market, the overriding principle I always follow is that you should never gamble with what you are not prepared to lose.


----------



## 2020hindsight

Freeballinginawetsuit said:


> lol, yeah well I was probably talking about letting youre longs grow before cutting them and trading the spikes on the ones youd been following for a while, but were toppy prior  .
> 
> YML would have been one of the last stocks I would have considered at that particular time/ever..............but thats just me.
> 
> Seems we just never gel on our conversations, probably worlds apart on how we trade the market. Thats what I like about ASF, its so interesting to see others views on investment/trading.
> 
> After a year posting its clear my methods are from Mars, but hey alls good!.




Lol , well i took what I THOUGHT was your advice, and still did ok - lol.  How's that for luck.
Every now and again I remind myslf that with mt level of knowledge in the trading stuff, I'm lucky not to be even broker than I already am lol.  

PS You say your ideas are from Mars.  As long as your ideas are Sirius mate  - and not from URanus, lol


----------



## 2020hindsight

Stop_the_clock said:


> In the month of May last year, I lost over $1,000 in my Hesta super fund, then switched it to Colonial First State and lost a further $3,500.  So by the end of May $4,500 was lost just in super alone.
> 
> My personal shares went south by thousands too.
> 
> I do remember crying in May last year after I had lost so much money...I am being honest here...I truely started crying.




Dont tell me YOUR problems STC, lol - I had just started investing in early May last year, put all my newly formed SMSF on, and before I got the oars out ready to start rowing to the big gold pot - I'd lost about 15% of it lol.

PS would you be kind enuf to post a graph of May trends over the years . pls - so we can check the accuracy of this "Maybe May, maybe not"  thing .


----------



## bean

I am doing post on the Gold price to show when the correction may start.

I am a gold bull we look at markets a bit different to other Investers.

Because what I say there you have to understand the Gold Market and why we invest in Gold

So the top wednesday night and thursday night  down and the is the start of the severe and immenent market corection.

Which may be bigger than you think


----------



## purple

People are reading very positive comments, such as this one  - Commsec’s 4th May 07 commentary, here are excerpts :  

	…Budget solidly in the black, the Government is well placed to announce tax cuts, increased assistance to families and greater infrastructure spending… 

	…Government will probably estimate this year’s budget surplus around $15 billion or 1.5 per cent of GDP with the projected 2007/08 surplus expected to be around $12.5 billion.

	…the Reserve Bank should have few problems with any stimulus being applied to the economy…

	… construction sector is poised to boost activity in the coming year assisted by stable interest rate settings…

	… construction of houses and apartments should trend higher over the year given that interest rate settings are on hold…

	… job market data is likely to be healthy… 

	…We expect that employment rose by around 20,000 in April with the jobless rate remaining at a 30-year low of 4.5 per cent..


	…retail trade probably rose by around 0.5 per cent in March...


Craig James
Chief Equities Economist


There still exists a large portion of investors who are not the fundamental analysis type, who merely read the papers, go by friends’ gossip and analysts’ reports. With the air being so positive, it feels like more people are going to be lured out to put their money into the market.

I do foresee a correction coming, but perhaps not so quickly, perhaps not in May. 

When I look into the market depth and see a long, long list lot of small parcels being bought, and share prices just inexorably increasing with each buy, I’ll know that the bubble is near the bursting point, too many small retail investors queing up to buy often signifies the peak of the trend. At the moment, it doesn’t look like it yet.


----------



## Who Dares Wins

bean said:


> I have made up various programs on DOW US markets and gold etc.
> The DOW has been Up, its short term trend up.  I have been saying the DOW in a final blowoff.  I have aslo said the NASDAQ above 2550 will be back in bubble territory. 2554 yesterday and 2557 today.
> If I enter monday as a down day the NASDAQ will turn its trend to down and it doesn't have to be a big day down.  If Monday is down and continues for tuesday it is set up for a 2% - 3% down day on NASDAQ tuesday.
> Is the top in I do not Know but will wait for what happens monday.
> It may be a short term top is in?
> 
> The DOW may rise but the NASDAQ ?  The DOW may carry the NASDAQ higher?





People can keep on posting things like this on here every few days and there is nothing more certain than they will be right....eventually. Its true, the market will correct one day. Its just WHEN is the question. Last week they say its going to happen tomorrow then nothing, then again this week. 

What I laugh about is after 3 or 4 months it happens and they say 'there told you so'. Haha Go on, keep on predicting disaster guys, if you say it enough you'll be right.

I don't know how you have the nerves to trade when you think this every day?


----------



## Wysiwyg

Who Dares Wins said:


> People can keep on posting things like this on here every few days and there is nothing more certain than they will be right....eventually. Its true, the market will correct one day. Its just WHEN is the question. Last week they say its going to happen tomorrow then nothing, then again this week.
> 
> What I laugh about is after 3 or 4 months it happens and they say 'there told you so'. Haha Go on, keep on predicting disaster guys, if you say it enough you'll be right.
> 
> I don't know how you have the nerves to trade when you think this every day?




The response to the question/exclamation posed is what the thread starters are looking for.They have no idea when things are going to change and try to gauge public response.The feedback is never definitive but creates an active topic nonetheless.


----------



## YChromozome

What are your thoughts on the new super laws?

I was aware of the extra money flowing into super, that the fund managers have to park somewhere. Other than that, I hadn't really put much thought into it.

Talking to some people in that age group last weekend, and all of them think drawing tax free super out after 1st July is wonderful. Some are picking out their 4WDs to buy, others the colour scheme for their kitchen or bathroom renos. Others are going to draw upon super to give their kids a start in the housing market.

You have to wonder if there will be a binge come 1st July? This could be good for retail trade and services later in the year, but I assume the super funds are liquid enough to pay those funds out. I assume they are probably holding so much in cash now, or will they be forced to sell assets?


----------



## constable

bean said:


> I am doing post on the Gold price to show when the correction may start.
> 
> I am a gold bull we look at markets a bit different to other Investers.
> 
> Because what I say there you have to understand the Gold Market and why we invest in Gold
> 
> So the top wednesday night and thursday night  down and the is the start of the severe and immenent market corection.
> 
> Which may be bigger than you think




And should you be incorrect, exactly what will be your excuse and what is your timetable for trying again on this prediction?????


----------



## nizar

constable said:


> And should you be incorrect, exactly what will be your excuse and what is your timetable for trying again on this prediction?????




I second that.

I remember bean called a top 2 weeks ago that was going to happen last week. DIdnt happen. But thats okay. If he keeps trying he will eventually be right.

Interesting to see this thread started on 4th of April.
Imminent??


----------



## chops_a_must

nizar said:


> Imminent??



I asked for a definition of that. None forthcoming and was told I wasn't contributing to debate and just arguing on semantics. Lol!

Bean's posts kind of strike me as paranoid and forceful. Kind of like one of those crazy people you meet and see on movies and such that try and convince you that something they are halucinating is in actual fact real.

If the Nasdaq if if if if then
If the S&P if then if if then then if
blah blah

It's simple though. If the markets go up, they go up. If the markets go down, they go down. If they go sideways, they go sideways. Have a plan for all of these situations and lets look at ways for trading the situations at hand, rather than speculating on future situations at hand. 

Cheers,
Chops.


----------



## bean

> I second that.
> 
> I remember bean called a top 2 weeks ago that was going to happen last week. DIdnt happen. But thats okay. If he keeps trying he will eventually be right.
> 
> Interesting to see this thread started on 4th of April.
> Imminent??




True but I am trying to call a top In gold - gold indexes - the Dow - and a bottom US$ 
So I need all to be alinged to give the reaction

*True as well that eventually I might right. * 

The thread started on the 4 th of April why to show that Gold and Gold indexes have alinged themselves to the general market 
So by starting it then I was able to show the Gold investors what was happening.  Some gold investors are expecting gold to correct. I found the reason why because it had jioned the movment of the stock market.
I also started it then because I could see the DOW forming a top.
I did not know at first a double top or blow off top
Well I know now.
If you read the last part on the Gold Price its easy to know if I am going to be wrong.  
If I am wrong then next week Gold is breaking out to new highs as the US$ collapses? 
What would the US markets do
Rise or Fall
They would rise would you say


----------



## chops_a_must

bean said:


> I also started it then because I could see the DOW forming a top.
> I did not know at first a double top or blow off top



But how do you know this for certain?

Does this mean that as soon as any stock reaches all time highs it is blowing its top?

I agree the DOW is toppy, but whether or not it will crash, come down to previous highs as support, or if this is a part of some long term re-rating... then who knows?

It's just funny when people only see doom when things go up.


----------



## bean

But I was looking for a reason why gold stocks were going to correct  (may/June) and I remembered months before a chart showing US gold indexes moving with the S&P 500.  and they still are so if the ones that are expecting a 30 % correction in stocks are correct. and they are moving with US markets..
If the US markets fall so will gold stocks.
This correction will get gold on a wave three up. 
I was was looking at what would make the gold stock correct and its a market correction because the US$ is at its lows.
Gold is rising - one has got to give 
I am looking for a V bottom occuring in Gold.
The markets can continue down to what all the doomstayers have been predicting for years. I don't care because I'll be in Gold
Is this top in the DOW one of the reason I have been investing in Gold for about 7 Years. most probably.  

One of the days Monday or Tuesday is wrong then I will have to revalulate and see why thats wrong.  Before I was looking for weakness appearing in the Markets.
But is should have been strength. To a final top
Everything would fall into place spot on.

Look I may may wrong but if I had said this on tuesday or wednesday night so what. I said it Know you have three days to watch.  If one day is out doest do what I said you know I am wrong.
But if each day is right what will you do wednesday night.
Thursday night is not a crash. may just be start of correction


----------



## Kimosabi

How about everyone on ASF pulls their money out of the Market on Wednesday and then we can see if we can trigger an ASF led correction...


----------



## krisbarry

A 3% increase in the Aussie market in the past week surely we will see profit taking over the coming weeks. Also note tax time is looming...selling will occur anytime now as investors will be getting in early ready to take profits before share prices start to go south.


----------



## krisbarry

YOUNG_TRADER said:


> Take a look at 2005, we had a nasty correction in March and as a result May 2005 was one of the best months, fast forward to Feb/March 2007 again another nasty little correction, can May correct again in such a close time frame? I just don't think so but have hedged my bets anyway.




So you can only find 1 example of a year out of many years that May has not had a correction, the odds are stacked againts you my friend I need more examples to convince me...can you do some more research please and post more evidence to support your case.


----------



## CanOz

You know its just around the corner when the "analysts" are calling for a breather. *From CNBC a few minutes ago:*
Market Outlook: Analysts Say Proceed With CautionBy Phyllis Burke Goffney | 06 May 2007 | 05:33 PM ET Font size: The bull market roared on this week, with the Dow hitting its 19th record close of the year, but many analysts believe stocks are poised for a breather.

The Dow Jones Industrial Average has risen 23 of the last 26 trading days, while the Nasdaq traded at a 6-year high and the S&P 500 hit a fresh 6 and 1/2-year high. The S&P 500 also crossed the 1500 mark, heading back upward toward its record close of 1527 reached in March 2000.

"I think we're getting to the point of being overbought," Bill Nichols, senior managing director of equity trading at Bear Stearns, told CNBC.com.  "A little bit of caution should be used when you have these big moves up because we tend to have a bit of a pullback."

"We are very extended and in need of a pause to refresh," said Al Goldman, chief market strategist for A.G. Edwards.  "The environment is set for a very normal pause, particularly when I see people say we are never going to correct."

Shifting Focus

This past week, corporate earnings and reports of mergers and acquisitions drove the markets.  Analysts say that is likely to change next week as earnings wind down.

"I think we start to shift our focus," said Steven Lord, chief investment strategist for The Trend Investment Group.  "After we get through earnings, we'll be looking at the economy, the price of oil and that nut job (Mahmoud Ahmedinejad) over in Iran. None of that is very good."

On Wednesday, investors will get the latest interest rate decision from the FOMC and, undoubtedly, sift through the Fed's comments for any signs of future action.  Economists expect the Fed to hold rates steady at 5.25%.  Wall Street will also get more economic data including retail sales numbers and the producer price index.

A slowing economy, the slump in the housing market and inflationary pressures have prompted analysts to look for good economic news.

"This market has been one of surprise, surprise, surprise," said Peter Cardillo, chief market economist at Avalon Partners. "Even though we have a drag from the housing market, the industrial sector is doing nicely. With the exception of import prices and inflation data, I think the economic reports will come in at expectations or even beat expectations."

Expect More M&A

Even if the market takes a dip, most analysts believe there are several strong factors giving stocks support including a wave of M&A activity.  This week, Rupert Murdoch's News Corp. made a $5 billion unsolicited offer to acquire Dow Jones and there were reports that Microsoft was in talks with Yahoo either over a combination or joint venture.  Also, Reuters confirmed it received a preliminary bid to be acquired.  Several sources said Thomson was the interested buyer.

"I expect M&A to continue to be strong due to the global economy," said Cardillo.  "It isn't the only thing boosting the averages in general, but the bottom line is that it's a strong positive sentiment."

"I think the M&A activity is going to be a constant drum beat that we're going to be seeing for the next 18 months," said Peter Andersen, portfolio manager of Dreman Value Management. "Even though the consumer seems a little weak now, we have to put that in perspective and also weigh that against the very, very strong situation in corporate America right now.  We see balance sheets are very, very firm and cash has built up."

However, the constant frenzy of M&A activity is what has The Trend's Lord worried. "It's insane," he said. "How many more drinks can a drunk have. Sure, the M&A activity could continue, but this is not healthy for the markets. There are a lot of companies, like Microsoft and Yahoo, that are looking to get bigger because they can't get better."

Trade Cautiously

While most analysts appear to be bullish on stocks long-term, many advise investors to be careful in the near-term at these market levels.  

"I wouldn't disturb long-term money," said Goldman of A.G. Edwards. "But if you're looking at putting new money in the market, I would take a walk around the block and wait until we get a pullback."

"The question is, Do you fight a charging bull?" said Cardillo.  "Long-term, I'd agree with staying the course, but short-term traders should certainly be cautious.

And many analysts say, if you still want to put new money to work in this market, be selective.

"With so much investor cash sitting on the sidelines, I still think there's more momentum in this market, but you have to be selective," said Alan Lancz, president of Alan B. Lancz & Associates. "We like healthcare stocks like biotechs. I think you are going to see more acquisitions with large pharmaceuticals trying to replace their patent revenues. There are still opportunities to make money even with the market advancing."


----------



## Cyber Man

Stop_the_clock said:


> So you can only find 1 example of a year out of many years that May has not had a correction, the odds are stacked againts you my friend I need more examples to convince me...can you do some more research please and post more evidence to support your case.




Are you talking about the Aus share market? What do you mean by "correction"? More than 10% down? More than 20% down? or just the normal fluctuations?


----------



## hacheln_mice

Based on 'contrarian' thinking, when idiots at Merrill Lynch start touting BHP as potential private equity target , you know the market is closer to the end of its recent run rather than its start.

That said, I don't believe there will be a crash.  What is it with these emotionally charged descriptors .  If there is a 1987 style move, I'd be fully leveraged and buying up everything I can.

In terms of "sell in May and go away", here's some Dow analysis: http://blog.afraidtotrade.com/sell-in-may-and-go-away-a-look-at-the-dow-since-2001/


----------



## krisbarry

Today marks the 1st day of the correction


----------



## 2020hindsight

hacheln_mice said:


> ..In terms of "sell in May and go away", here's some Dow analysis: http://blog.afraidtotrade.com/sell-in-may-and-go-away-a-look-at-the-dow-since-2001/



Thanks for that hacheln,  So lol -  All you optimists are thinking it's a rerun of 2003?
the pessimists (at least those that are waiting for a correction before re-entering) are thinking 2005 (presumably)
and the reality? - who nose ?? probably 2004 lol
(Please not 2002 lol)

PS NOte that the y axis is not a constant scale.  How good was 2006!! or 2003 for that matter. 

PS I just find myself asking "If I had asked myself a month ago did I think there would be such a steep graph for the last month, I'd have probably said no,- therefore in my gut, should I not expect a correction, however minor. ? "  But I concede, total absence of science on my part.  And if I'm wrong and it is another 2003, then I'll get back in in a month or three, and I will have " left some money on the table" - "left a bit of profit for the next guy" lol (yet again )


----------



## Uncle Festivus

Stop_the_clock said:


> Today marks the 1st day of the correction





Can't see that happening STC, maybe end of week for consolidation with US data out. Too many market's coming back from holiday playing catch up this week. For the time being, onwards & upwards. (Did I just put the mocka on the market?)


----------



## Kauri

Would a big spending consumer friendly election year budget from a govt. that is trailing significantly in the polls presented by a treasurer who knows if his party loses the election that he will spend quite a few years leading the opposition instead of inheriting the Prime-ministership affect the markets at all??


----------



## Uncle Festivus

Depends how desperate Costello & Howard are, and whether they direct all those excess billions into real productive projects or just fan the inflation & interest rates flames again. These are the ones espousing financial responsibility eg with the interest rates are lower under Liberal etc. 

A big chance to reform personal tax this time. 

It's funny how the baby boomers are now changing the rules to suit their retirement eg no tax on lump sums.

One things for sure, there will be very few negatives for consumers generally and consequently for the sharemarket. To infinity & beyond


----------



## CanOz

Kauri said:


> Would a big spending consumer friendly election year budget from a govt. that is trailing significantly in the polls presented by a treasurer who knows if his party loses the election that he will spend quite a few years leading the opposition instead of inheriting the Prime-ministership affect the markets at all??




LOL! Naaaahhhhhh!


----------



## Uncle Festivus

*Looks like a bear capitulating - bulls =1, bears = 0 

ANNANDALE, Va. (MarketWatch) - Has Richard Russell finally thrown in the towel on his long-standing bearishness?

*Read what Russell wrote on his website:

                                           "We saw something that is extremely rare [on April 20 and April 25], in fact I can't remember ever having seen this before. What I'm referring to is that on those two dates all three Dow Jones Averages -- Industrials , Transports  and Utilities - closed at simultaneous historic highs. To me, a fellow steeped in Dow Theory for over half a century, this was like a clap of thunder... My take on the situation is that the stock market (and the Dow Theory) told us that an unprecedented world boom lies ahead." 

                                                     "I believe the markets talk in their own secret language. And when the market does something that has never been done before, that serves as a 'kick in the pants' for me. It's telling me, 'Russell, wake up. Something very unusual is going on. Get up out of your chair -- and pay attention'."


----------



## Buffettology

Still a bear uncle?  How much of your portfolio are you currently holding in cash? 

I was a bear, but have turned half/half again, I have my portfolio split around 50/50.


----------



## Uncle Festivus

Buffettology said:


> Still a bear uncle?  How much of your portfolio are you currently holding in cash?
> 
> I was a bear, but have turned half/half again, I have my portfolio split around 50/50.




 Just when you thought it was safe to go back in the water......
Daytrading mostly, each stock on it's merits, see what happens? Actually, probably less than 20% cash, 70% mostly core portfolio, rest for daytrading longs & shorts.


----------



## Kimosabi

> *Home Prices Fall in Rich New York Suburbs Once Immune to Slump
> *
> 
> By Bob Ivry
> May 9 (Bloomberg) -- The U.S. housing slump has hit New York City's richest suburbs.
> 
> The average price in Westport, Connecticut, home of chief executive officers Herbert Allison of TIAA-CREF and Jeffrey Kindler of Pfizer Inc., and actor Paul Newman, fell 8.2 percent to $1.56 million in the first four months of 2007 from the same period last year, according to multiple listing service data. In Chappaqua, New York, where Bill and Hillary Clinton live, properties sit on the market an average of seven months before they sell, up from five months a year ago.
> 
> Wealth and excellent credit have until now spared bedroom communities in New Jersey, Connecticut and New York's Westchester County from declines in home prices. Now the tightening of credit in response to rising subprime defaults has disrupted the real estate food chain, bringing the national housing slump to Manhattan's doorstep. Prices fell as much as 18.8 percent this year in 15 of the 24 areas in which data was collected.
> 
> ``People who may have bought their first home may not be able to do so now, and that stops some of the movement,'' said Doug Werner, a broker at William Pitt Sotheby's International Real Estate in Darien, Connecticut.
> 
> *``Whales eat plankton. If the plankton disappears, what will happen to the whales?''*
> 
> Rest of the article can be found here ==> http://www.bloomberg.com/apps/news?pid=20601109&refer=home&sid=aHBopkXhEA24




Anyone have any ideas what happens when the house prices of the Wall Street Elite start dropping?


----------



## nizar

Kimosabi said:


> Anyone have any ideas what happens when the house prices of the Wall Street Elite start dropping?




Dont think it matters much as the Wall street Elite bonuses are always rising


----------



## bean

> Forum: International Markets  24th-April-2007, 11:59 PM
> Replies: 212  Imminent and severe market correction
> Views: 7,547 Posted By bean
> Re: Imminent and severe market correction
> 
> People are looking at China. Look at the US. The markets over there are in the process of blowing a top. DOW 13500 by next week anyone
> Whatever it reaches as its final blowoff and then retractment...




To those who think I post rubbish half the time why is everyone starting to get worried abou the US market toppin or blowing off.
I am sorry if I jump ahead of myself


----------



## vert

dow down 147 points, could this be the start and its friday - profit taking?
cci 20 fallen below +100 which signals end of current trend


----------



## dj_420

quite possible

i am set either way now, have my core long term portfolio and around 30% cash. so havent missed any gains this year and ready for some falls. 

if i sold long termers would be up for some rather large CGT, which not prepared to do.


----------



## bean

DECISION TIME IS HERE

US MARKETS I called a high on 9/5
DOW is still making new highs???

Lets look at some US markets closing prices and dates
Nasdaq high 9th may 2576  today 2457
S&P 500  high 9th may 1513     today 1501
Dow Transports high 8th May 5218   today 5126
Dow Utilities high 7th May 531    today 530
NYSE composite high 9th May 9828    today 9825
NYSE international 100 high 4th & 9th May 7050  today 7003
S&P small cap 600 index high 9th May 433   today 427 

I could continue with the list but I think the picture is clear

Gold is falling/correcting 
If US Gold Indexes which are following US markets are at a decision point.  The DOW if it makes a new high tonight may start to turn some of the other US indexes into making new highs therefore giving strength to the overall market.
Gold and Gold indexes if follow the direction of the general market could break to the upside.

If I am correct and the 9 th May was the high in US Markets (except the Dow - 30 stocks)  and Gold is correcting 
Expect tonight down in everything!!!!!
Or double tops made.

But if the US markets start making new highs 
tonight / tomorrow night
Could I turn bullish??


----------



## Uncle Festivus

bean said:


> If I am correct and the 9 th May was the high in US Markets (except the Dow - 30 stocks)  and Gold is correcting
> Expect tonight down in everything!!!!!
> Or double tops made.
> 
> But if the US markets start making new highs
> tonight / tomorrow night
> Could I turn bullish??




Possible, it could either go up or down, or sideways, so sort of makes it a bit clearer. 

True, it's (the DOW) starting to defy logic at this rate of advancement so another 200 point retracement is on the cards.


----------



## bean

Uncle Festivus said:


> True, it's (the DOW) starting to defy logic at this rate of advancement so another 200 point retracement is on the cards.




That sort of retractment tonight would be enough to turn a few of those US Indexes I mentioned BEARISH.
(The Nasdaq for example would drop 2% plus easy in the blink of an eye)
And would possibly make it to hard for the DOW to pull them back up.

Who knows two down days in a row and the rest would turn BEARISH 
technically speaking.
And the DOW flattened

But just have to wait and see as I said if the DOW rises and pulls the others with it I may turn BULLISH

Will know tonight and tomorrow night.


----------



## tech/a

bean said:


> That sort of retractment tonight would be enough to turn a few of those US Indexes I mentioned BEARISH.
> (The Nasdaq for example would drop 2% plus easy in the blink of an eye)
> And would possibly make it to hard for the DOW to pull them back up.




This is tongue in cheek---isnt it.



> Who knows two down days in a row and the rest would turn BEARISH
> technically speaking.
> And the DOW flattened




Technically speaking---perhaps you could expand on your definition of a technical confirmation that a market (any market) has turned bearish.
Particularly after a 2 day move.



> But just have to wait and see as I said if the DOW rises and pulls the others with it I may turn BULLISH




Perhaps you could also expand on technical bullish qualifications.



> Will know tonight and tomorrow night.




The only thing we will know for certain are the closing prices.


----------



## OK2

go for it tech/a. I wanted to question some of the beans comments lately but did not feel qualified to criticise another user in the forum. I still enjoy the diverse assessments of world markets by all users when they support their comments.


----------



## nizar

tech/a said:


> The only thing we will know for certain are the closing prices.




And the trend.
If closed flat its possible that it was 100pts up at a stage but then got dumped, or 100pts down at a stage and punters saw it as a buying opportunity.


----------



## Uncle Festivus

Well, 6 weeks later and it's neither imminent or severe. Move along please, nothing to see here (the policeman said as he stood in front of the blazing fireworks factory).


----------



## Kimosabi

Uncle Festivus said:


> Well, 6 weeks later and it's neither imminent or severe. Move along please, nothing to see here (the policeman said as he stood in front of the blazing fireworks factory).




haha, now that we've got to this point, the Dow will probably be down 1000 points tonight...


----------



## Uncle Festivus

Kimosabi said:


> haha, now that we've got to this point, the Dow will probably be down 1000 points tonight...




Dunno. I really can't see anything that is going to rock the boat soon. Central banks used the last correction as a rehearsal for any subsequent attempts at corrections; besides, if you have unlimited amounts of money at your disposal would you be worried? I think gold is looking pretty sick in these conditions too, you could say it's a has Bean  .


----------



## bean

bean said:
			
		

> That sort of retractment tonight would be enough to turn a few of those US Indexes I mentioned BEARISH.
> (The Nasdaq for example would drop 2% plus easy in the blink of an eye)
> And would possibly make it to hard for the DOW to pull them back up.





			
				tech/a said:
			
		

> This is tongue in cheek---isnt it.




No With technical you should maybe look into the various components and analysis market movements believe it or not some markets move to % at a particular time frame or span.  Technical analysis may also be looking at specific things over certain time frame (throw in a variable or two) Moving averages?? I use them so what. I also use other variables (could be price related to time) why does everything have to be uniformed quite easy to have a deviation that you would not pick up.
I give all variables/technical/averages a number the value of that depends on its importance its relevance in time.
Nasdaq 
I suppose you have done technical analysis on it what would two days down do to it.

Mine depending on the size of the move (I know one day would be greater than 2% because of values I get back) To prove it I need two days down at this point in time and one day will be 2% or more I may only need one day.



			
				bean said:
			
		

> Who knows two down days in a row and the rest would turn BEARISH
> technically speaking.
> And the DOW flattened





			
				tech/a said:
			
		

> Technically speaking---perhaps you could expand on your definition of a technical confirmation that a market (any market) has turned bearish.
> Particularly after a 2 day move.




Using the above as I said I values – Nasdaq has been correcting and weakening since 26th April - so guess what I only need two days down.  If it had strength it would take more than two days maybe three or four. 
Why do you think I have been mentioning the Nasdaq all the time
Is closing price on the 26th April 2554
Today 2547
Does it take a rocket scientist
Thats why why i also look a price in relation to time




			
				bean said:
			
		

> But just have to wait and see as I said if the DOW rises and pulls the others with it I may turn BULLISH





			
				tech/a said:
			
		

> Perhaps you could also expand on technical bullish qualifications.




Bull is when you may enter certain values and the trend  (as in opposite to he trend) does not change (if the trend is up) Bear is the same.
More would also relate to values they have  the higher the plus value the stronger the trend  vise versa
Anyway time will tell




			
				bean said:
			
		

> Will know tonight and tomorrow night.





			
				tech/a said:
			
		

> The only thing we will know for certain are the closing prices.




TRUE
But I have also been looking for this correction in Gold to include the markets


----------



## bean

tech/a said:


> This is tongue in cheek---isnt it.
> Technically speaking---perhaps you could expand on your definition of a technical confirmation that a market (any market) has turned bearish.
> Particularly after a 2 day move.
> 
> 
> Perhaps you could also expand on technical bullish qualifications.
> 
> The only thing we will know for certain are the closing prices.




Sorry forgot to highlight the quotes in my response


----------



## >Apocalypto<

tech/a said:


> This is tongue in cheek---isnt it.
> 
> 
> 
> Technically speaking---perhaps you could expand on your definition of a technical confirmation that a market (any market) has turned bearish.
> Particularly after a 2 day move.
> 
> 
> 
> Perhaps you could also expand on technical bullish qualifications.
> 
> 
> 
> The only thing we will know for certain are the closing prices.





Tech as per norm your post is music to my ears.

I don't even bother asking for technical proof in this topic any more as it's all fear mongering.

Yes people we will have another correction and I think sooner then later due to the current angle of the dow value. but will it be the end of the bull I lean towards a no unless all supports are broken and economies crumble.

Hey Tech after our next major correction will that start a final wave 5, or are moving into a wave three in the overall picture in this trend? do you call may a wave 2 or April 05 a wave 2?


----------



## bean

bean said:


> I have made up various programs on DOW US markets and gold etc.
> The DOW has been Up, its short term trend up.  I have been saying the DOW in a final blowoff.  I have aslo said the NASDAQ above 2550 will be back in bubble territory. 2554 yesterday and 2557 today.
> 
> The DOW may rise but the NASDAQ ?  The DOW may carry the NASDAQ higher?




*Oh look I mentioned the Nasdaq in my post tonight here is my post from the 28th April*
Question me if you want but there you have it


----------



## >Apocalypto<

> Using the above as I said I values – Nasdaq has been correcting and weakening since 26th April - so guess what I only need two days down. If it had strength it would take more than two days maybe three or four.
> Why do you think I have been mentioning the Nasdaq all the time
> Is closing price on the 26th April 2554
> Today 2547
> Does it take a rocket scientist
> Thats why why i also look a price in relation to time. from Bean




Bean,

The Nazz has been weakening from May not 26 of april see chart. Yes it is weaking quicker then the dow.

Now it does look weak on the short term but where in that chart can u tell me it will plunge 200 points in a period and then drag the us market with it.

I see a healthy trend getting ready to do a normal part of its cycle I have placed two fibbs with support line with healthy retracements to 38% breakaway trend. 38% & 50% main trend line.

So as you see lots of healthy room to move with out us being able to call the end.

I may be way off what your saying bean i am damn sleepy now.

What i am say is there is no real proof on the chart to say 200 in a period and just from two days action! Two days will never make a market!

(If it's there please show me what it is *I can't see*)

see pdf chart


----------



## >Apocalypto<

OK2 said:


> go for it tech/a. I wanted to question some of the beans comments lately but did not feel qualified to criticise another user in the forum. I still enjoy the diverse assessments of world markets by all users when they support their comments.




If you see a hole in any ones post and you can raise a constructive objection with out getting personal.

Then you have all the right OK2, don't worry about the post number next to their nick.

Please it is the only way we can learn!


----------



## bean

Trade_It said:


> Bean,
> 
> The Nazz has been weakening from May not 26 of april see chart. Yes it is weaking quicker then the dow.
> 
> Now it does look weak on the short term but where in that chart can u tell me it will plunge 200 points in a period and then drag the us market with it.
> 
> I see a healthy trend getting ready to do a normal part of its cycle I have placed two fibbs with support line with healthy retracements to 38% breakaway trend. 38% & 50% main trend line.
> 
> So as you see lots of healthy room to move with out us being able to call the end.
> 
> I may be way off what your saying bean i am damn sleepy now.
> 
> What i am say is there is no real proof on the chart to say 200 in a period and just from two days action! Two days will never make a market!
> 
> (If it's there please show me what it is *I can't see*)
> 
> see pdf chart





10 day a/d less than 1.00 since 26 th april
New highs / lows since  then 
adv vol/declne vol
all been decreasing and on number of occassion bwlow 1.00
a dow day of signifiance bring thenm down to 0.75 or less


----------



## bean

Should also State that the above is in all other US markets from the same date.
The only one i cannot analysis is the DOW - 30 stocks!!!
That why I called the top back then and also 9th may as final top.
Because every market in the US is *#*#

They are all held up by the DOW.

Every market will go to very low readings if two down days occour.
I also use other variables and different time frames
I also believe US markets lead the world and thats why I follow them


----------



## nizar

bean said:


> I also believe US markets lead the world and thats why I follow them




Well they certainly havent been leading us in this bullmarket.
Our indices are more resource and miner-weighted.

Look at DOW versus XAO since 2003 until present.


----------



## Wysiwyg

bean said:


> Should also State that the above is in all other US markets from the same date.
> The only one i cannot analysis is the DOW - 30 stocks!!!
> That why I called the top back then and also 9th may as final top.
> Because every market in the US is *#*#
> 
> They are all held up by the DOW.
> 
> Every market will go to very low readings if two down days occour.
> I also use other variables and different time frames
> I also believe US markets lead the world and thats why I follow them




Hi bean...I notice you make predictions on U.S. market movements!

`bout as good as my oil price predictions lol.


----------



## bean

Wysiwyg said:


> Hi bean...I notice you make predictions on U.S. market movements!




My worst mistake was using my program an exiting on 6/6/01
I had gold stocks


----------



## bean

sorry 6th sept


----------



## Wysiwyg

I`ll tell ya what though fella , a lotta my watch-list stock have been on the crab or slight decline.:kebab


----------



## bean

I should be asleep Tassie time.  Why am I a still awake to answer and prove that I am right.
I know that I will not be right a lot of the time and you want answers.
I give a few but why should I give you what has taken me years and hours to find.
A lot of analysis you use I don't one number can give me the answer.
I have posted on several threads.
TOE (TORO)  was I wrong in any of my anaylisis. Sorry I made a profit I hope thos that read did as well.
I now pick on world markets a little challenge.
Believe me the US markets control the world.
To understand watch


----------



## Uncle Festivus

Bean, I think your problem is that you don't post a chart or similar explaining things for the technical analysts here to give them comfort. At the same time it's a bold move to say the market will tank because 'of my indicators'. I can actually see a valid point in your advance decline ratios too; the markets are up but the a/d is usually telling another story. 

The fact is, nobody knows with certaintly if it will tank massivly or when, so be prepared and take it as it comes. Who's going to blink first - the US Fed (Goldman Sachs) or the Chinese Fed (the Commies) - both have unlimited financial armour at their disposal. Protectionist wars still percolating!

Edit - actually some things starting to move now - copper & gold are getting hammered, oil up $2, and the Dow has just hit 'a big number' - 13500 (Nasdaq & SP500 down & flat). I wouldn't be surprised to see a 'Black Friday' correction day tomorrow? 

Chinese copper inventories announced today I think.



> "The U.S. housing permits were bearish on Wednesday, and there is a lot of speculation that Chinese buying will slow -- expectations are for another sizeable rise in warehouse stocks in Shanghai on Friday,"


----------



## bean

Uncle Festivus said:


> Bean, I think your problem is that you don't post a chart or similar explaining things for the technical analysts here to give them comfort. At the same time it's a bold move to say the market will tank because 'of my indicators'. I can actually see a valid point in your advance decline ratios too; the markets are up but the a/d is usually telling another story.
> 
> The fact is, nobody knows with certaintly if it will tank massivly or when, so be prepared and take it as it comes. Who's going to blink first - the US Fed (Goldman Sachs) or the Chinese Fed (the Commies) - both have unlimited financial armour at their disposal. Protectionist wars still percolating!
> 
> Edit - actually some things starting to move now - copper & gold are getting hammered, oil up $2, and the Dow has just hit 'a big number' - 13500 (Nasdaq & SP500 down & flat). I wouldn't be surprised to see a 'Black Friday' correction day tomorrow?
> 
> Chinese copper inventories announced today I think.




I just posted and lost everything I said.
I do not do charts.  I cannot I use numbers, I use them incorporated in different time frames into one program but give them different values.
I do look at charts of other people/analysis as guide

Last night action I new if my top I called on US markets was to stay in place they could not rise I had no leeway in price and time action.
I did not know what sort of action but I new it would not be up.

And I now have my price/time technical analysis etc etc 
That if tonight is down and drops and has weakness, yes you are look at falls (get my two days in a row) Nasdaq should be approx  2% or more.

But if the DOW has strength it may pull market higher and my TOP is wrong.


----------



## >Apocalypto<

bean said:


> 10 day a/d less than 1.00 since 26 th april
> New highs / lows since  then
> adv vol/declne vol
> all been decreasing and on number of occassion bwlow 1.00
> a dow day of signifiance bring thenm down to 0.75 or less




Bean are we talking about the same Naz?

Did you look at the chart do u look at any charts? It made new highs in may! so how was it making lower lows in April!

Good trading to you mate.


----------



## bean

I called first top 26th April
So weakness would have had to have started before
From the 17th of April to date 23 trading days

Dow has risen on 18

Lets look at say advance declining stock for example
Dow only has 30 easy to manipulate and have every seeing the market is going great new whoopie!!

Of those 23 trading days advancing stocks outnumbered declining stocks
NYSE on *10* days  do we have a problem here

surely the NASDAQ must be better
Only *8*

Technically wise just on that  it sure looks like a declining market to me
without doing any figures or charts

You are looking at the Dow making new highs so you are thinking everything is rosey

Look inside and you might see something different
Thats why I don't use charts
I look at WHY


----------



## KIWIKARLOS

Perhapes if we keep this thread going for another 12 months we will see this so called "severe and IMMINENT market correction"

All I've seen since Feb is huge gains and alot of comments from well respected people saying the economic environment looks positive for the future.

I keep hearing people say this resembles the 87 build up before correction but since 87 there have been so many changes to world economics and world development.

Hedge funds, private equity the growth in China and India coupled with 6-7 % growth in africa and there is still plenty of opportunity out there.

Whos to say past trends are exact indicator for future trends. My point is there have been milestones in history where the fundamentals of economics change and nobody can predict the future outcomes. eg. Adam Smith wealth of nations etc. perhapes we are seeing one of these evolutions now?


----------



## greggy

When the market fell to around the 5450 mark or so back in Mar 07 all the panicking pessimists were headed for the exits.  At that time I saw it as an opportunity and predicted that our market will go to 7000 points at some time this year.  Those who've sold out have missed out on some reassonable profits out there. Yes, there is sure to be a major correction at some point down the track, but IMO I can't see it happening just yet.  I would, however, be a tad cautious around Oct 07 this year.  Taking profits along the way is often a sound strategy, selling in panic mode isn't. These are just my thoughts anyway.
DYOR


----------



## >Apocalypto<

KIWIKARLOS, greggy

very good posts guys very realistic.


----------



## professor_frink

bean said:


> I called first top 26th April
> So weakness would have had to have started before
> From the 17th of April to date 23 trading days
> 
> Dow has risen on 18
> 
> Lets look at say advance declining stock for example
> Dow only has 30 easy to manipulate and have every seeing the market is going great new whoopie!!
> 
> Of those 23 trading days advancing stocks outnumbered declining stocks
> NYSE on *10* days  do we have a problem here
> 
> surely the NASDAQ must be better
> Only *8*
> 
> Technically wise just on that  it sure looks like a declining market to me
> without doing any figures or charts
> 
> You are looking at the Dow making new highs so you are thinking everything is rosey
> 
> Look inside and you might see something different
> Thats why I don't use charts
> I look at WHY




That post makes absolutely no sense to me. Am I missing something here? anyone?


----------



## CanOz

Its bloody obvious to me that we'll have a correction...its a no brainer...when is the only question...its liquidity thats keeping markets pumping, not fundementals. 

Whats so annoying about Bean's comments is the fragmented ramblings..."the Dow is being manipulated"...duh! Gold up, Dow up, Gold down, Dow up...who cares.

The markets are choppy, churning, no clear turn yet though.

Life goes on, trade your plan's man!

Cheers,


----------



## bean

Uncle Festivus said:


> Edit - actually some things starting to move now - copper & gold are getting hammered, oil up $2, and the Dow has just hit 'a big number' - 13500 (Nasdaq & SP500 down & flat). I wouldn't be surprised to see a 'Black Friday' correction day tomorrow?
> 
> Chinese copper inventories announced today I think.




Now If I was a BEAR and looking at attacking the US Markets.
It would play out like this

Yes tonight I would look at hitting the markets
Hopefully 200 points down on the Dow would be good
Nasdaq and a few other US Indexes down 2% or more that would turn some bearish

On Monday follow up with another attack on the Dow
Get it to break 13200
Could take Tuesday to finally put 13200 and 13000 to rest and turning the Dow bearish (under 13200)  to join the other markets and hopefully taking out 13000 on the way
And putting a gap between closing price and 13000
Monday may be all it takes but Tuesday for good measure 


Of course we all know no one can say what the markets will do.
They will do what they want.


----------



## hacheln_mice

Bean, what you stated above is unlikely given that Friday is options expirations in the US.  Insto's will be trying to pin the strikes, and over the past few years, this has meant flat to positive movements on the markets.  Moreover, shorts will probably to tempted to exit the week flat in anticipation of 'merger Monday'.

Anyway, the yen crosses aren't acting bearishly yet.

It's okay to be cautious now, but I don't think it's ever wise to try and time a crash. (Hope what I said does not actually break the market: )


----------



## tech/a

bean said:


> I called first top 26th April
> So weakness would have had to have started before
> From the 17th of April to date 23 trading days
> 
> Dow has risen on 18
> 
> Lets look at say advance declining stock for example
> Dow only has 30 easy to manipulate and have every seeing the market is going great new whoopie!!
> 
> Of those 23 trading days advancing stocks outnumbered declining stocks
> NYSE on *10* days  do we have a problem here
> 
> surely the NASDAQ must be better
> Only *8*
> 
> Technically wise just on that  it sure looks like a declining market to me
> without doing any figures or charts
> 
> You are looking at the Dow making new highs so you are thinking everything is rosey
> 
> Look inside and you might see something different
> Thats why I don't use charts
> I look at WHY





Thanks for clearing that up.

For those interested in elliot.

On the Daily's this is a wave 5 of 5 of 5 of 5 making it a major top (when it is confirmed).
Its also a wave 5 on the Weekly's.
It will be a Wave 3 completion on Larger timeframe. (I'm not near my Computer so cant post charts (actually 3000k away).

See Panic thread if interested in some E/W charts I posted a week or so ago.


----------



## noirua

All eyes on China as the balloon grows bigger and bigger! Will the giant pin prick the baloon?  

Will the subsequent draft blow down the surrounding packs of cards in Asia? 

Will Australasia wobble and crash?  

Will the Americas glide into recession?  

Will Europe stall?  

But maybe, the boom will go on and on?  

Maybe, it's all different now and we are in a new world lead by China, India and Emerging Markets?  

Maybe, Japan is about to come completely out of its shell and drive on up?


----------



## >Apocalypto<

noirua said:


> All eyes on China as the balloon grows bigger and bigger! Will the giant pin prick the baloon? Will the subsequent draft blow down the surrounding packs of cards in Asia?




China China China

First its the US housing market now china wonder what the next bogey man will be!

Tech/a

Your info on Elliot

Are you talking about Naz or question I asked you about All ords?


----------



## Uncle Festivus

Interesting times indeed. The next issue to face could be the effects of rising interest rates in the Euro zone showing up in various property markets coming off the boil, eg Spain is in a bit of trouble.


----------



## tech/a

Trade it.

The Ords.


----------



## >Apocalypto<

tech/a said:


> Trade it.
> 
> The Ords.




Cheers Tech,

Was reading YTA (your trading edge) last night and Tom Schoulen was saying that wave 5 would be the next major wave after a bigger correction larger time frame. That's If i am on the right path in seeing what his chart said as i have a very basic understanding of wave. just wanted to check with other wave users. 

what r u up 2, out in the sticks?


----------



## tech/a

> what r u up 2, out in the sticks?




In Perth for a Mates 50th.
Which after Lunch on Wednesday seems it will morph into an engagement party for him and his partner--(She proposed at lunch!!) on Saturday night.


----------



## >Apocalypto<

tech/a said:


> In Perth for a Mates 50th.
> Which after Lunch on Wednesday seems it will morph into an engagement party for him and his partner--(She proposed at lunch!!) on Saturday night.




She proposed! That is not common, he must be quite a catch.


----------



## bean

tech/a said:


> This is tongue in cheek---isnt it.
> 
> 
> 
> Technically speaking---perhaps you could expand on your definition of a technical confirmation that a market (any market) has turned bearish.
> Particularly after a 2 day move.
> 
> 
> 
> Perhaps you could also expand on technical bullish qualifications.
> 
> 
> 
> The only thing we will know for certain are the closing prices.



O/K  I proved my thoughts being an elliott waver give me your thoughts on down waves 
Just for my Curiosity after all when I called the top or decision time you now come out and say its wave five of five and long term is you say it after ME now you prove it why elliot wave says this or do I see the same things they do 
Or like all elliot wavers you have an alternative count


----------



## bean

Actually I just thought something for fun lets see who can produced the movements on the US markets for 10 days  in advance
After all you are now saying wave five of five 
Not that I want to say where are you coming from


----------



## Kauri

bean said:


> Actually I just thought something for fun lets see who can produced the movements on the US markets for 10 days in advance
> After all you are now saying wave five of five
> Not that I want to say where are you coming from




   Trade what you see in the present, not what you want or expect to see in the future.


----------



## Boyou

greggy said:


> When the market fell to around the 5450 mark or so back in Mar 07 all the panicking pessimists were headed for the exits.  At that time I saw it as an opportunity and predicted that our market will go to 7000 points at some time this year.  Those who've sold out have missed out on some reassonable profits out there. Yes, there is sure to be a major correction at some point down the track, but IMO I can't see it happening just yet.  I would, however, be a tad cautious around Oct 07 this year.  Taking profits along the way is often a sound strategy, selling in panic mode isn't. These are just my thoughts anyway.
> DYOR




Hi greggy, Just wondering why Oct is so signifigant... please elaborate on that.

Cheers Ya'll


----------



## nomore4s

bean said:


> O/K  I proved my thoughts being an elliott waver give me your thoughts on down waves
> Just for my Curiosity after all when I called the top or decision time you now come out and say its wave five of five and long term is you say it after ME now you prove it why elliot wave says this or do I see the same things they do
> Or like all elliot wavers you have an alternative count




um,  Bean I'm pretty sure Tech and other EW practioners have said this for awhile. May have even been posted previously on this thread but I know it has been posted before on this site.


----------



## greggy

Boyou said:


> Hi greggy, Just wondering why Oct is so signifigant... please elaborate on that.
> 
> Cheers Ya'll




Hi Boyou,

With the 20th anniversary of the Oct 87 crash coming up this year I feel that there may well be a lot of scared people around who will use the anniversary as an excuse to take some profits off the table.  No doubt with the market going on to new highs, the media will be out and about scaring people off the table.  I also feel that up until this time that the market will continue to be very strong.  My father who began trading in the 1960s and is speculating to this very day always told me to be careful about May and Oct (especially Oct) of each year as he felt that they were volatile months for the sharemarket.  In 87 he predicted that the sharemarket would collapse and indeed it did in Oct just like it did in Oct 29.  He reckons history repeats itself.  Now having traded for 28 yrs I reckon this theory is pretty accurate.  However, as I've said before, we're pretty safe for this month as we had a correction back in Mar 07.  But I wouldn't be surprised should the market continue its strong upward run (7,000 this year I predicted back during the darkest days of the Mar 07 correction), thats it has a significant correction around Oct time.  Its more psychology rather than anything else.  
If want a very scary parallel, back in 1929 the Stanley Bruce Govt, a conservative govt, was brought down over IR lawas. At the following election, just before the crash, Stanley Bruce become the first PM to lose his seat.  Shortly after the sharemarket crashed in Oct 1929.  With a swing of around 4% or so needed to unseat Howard and a possible election defeat with IR laws being a central issue, could history be possibly repeated?
I'm still bullish, but am taking profits off the table as I go along. I currently have a financial interest in only BYR, ERL (via the option issue) and PXR (options).
DYOR


----------



## nizar

Greg i think if you look at historical data september is generally a worse month than october.

S&P500 only 5pts off alltime high.

Just like any stock, i expect the S&P will rally once the previous high and 6-years of resistance is taken out, probably next week.


----------



## greggy

nizar said:


> Greg i think if you look at historical data september is generally a worse month than october.
> 
> S&P500 only 5pts off alltime high.
> 
> Just like any stock, i expect the S&P will rally once the previous high and 6-years of resistance is taken out, probably next week.



Hi Nizar,

I agree that the S&P will continue to rally. In relation to market performance I think that there's been more volatility over the years in Oct and that's when a number of crashes have occurred. Its partly explained by what I call the fear factor.


----------



## CanOz

nizar said:


> Greg i think if you look at historical data september is generally a worse month than october.
> 
> S&P500 only 5pts off alltime high.
> 
> Just like any stock, i expect the S&P will rally once the previous high and 6-years of resistance is taken out, probably next week.




OR

It _could_ double top.

 

Cheers,





S&P 500 futures


----------



## nizar

CanOz said:


> OR
> 
> It _could_ double top.




Yeh, it could also plummet to 1,000.
Or was that beans target? LOL.

LIke iv said before, it doesnt pay to be a bear in a bullmarket.
We will know next week if its a blue sky break or a double top.

THanks for your thoughts, Can.


----------



## Boyou

Hi greggy, Thanks for the fullsome response to my question...lots of food for thought there.I am a newbie to the market ,have some small parcels in (mostly) gold explorers ..soon to be producers, I hope.
               I will be keeping Oct in my mind,but one thing hits me about your ideas ...how bloody irrational it all is! (The market that is ..not your ideas)

Cheers Ya'll


----------



## tech/a

bean said:


> O/K  I proved my thoughts being an elliott waver give me your thoughts on down waves
> Just for my Curiosity after all when I called the top or decision time you now come out and say its wave five of five and long term is you say it after ME now you prove it why elliot wave says this or do I see the same things they do
> Or like all elliot wavers you have an alternative count




I'm currently in Perth
3000kms from my computer and charting software.
Happy to run through the exercise when Im back (Monday) and have time.

On E/W counts.
As I explained in the thread on "Maybe this isnt the top" there are often alternate counts. All analysis---even yours is there to be proven OR disproven. Markets are dynamic and so should analysis.
Price action hasnt yet proven the top is in yet---in my view.


----------



## tech/a

Beens.

My E/W analysis on the XJO is here and has been for ages.
https://www.aussiestockforums.com/forums/showthread.php?t=6211&page=7

This will be a wave 5 completion when the market proves that its been completed.
So far it hasnt.

Now is there anything else I can help you with?


----------



## bean

tech/a said:


> Beens.
> 
> My E/W analysis on the XJO is here and has been for ages.
> https://www.aussiestockforums.com/forums/showthread.php?t=6211&page=7
> 
> This will be a wave 5 completion when the market proves that its been completed.
> So far it hasnt.
> 
> Now is there anything else I can help you with?




But I have this thing that if US Markets move up this week I may turn Bullish because the US Indexes that are still below May 9 th high (which are few) will breakout from that and that include the US gold indexes (I invest in gold and silver).  If they do that then DOW will be 14000 plus over the next 10 days.  Which will move all workd markets up?

Elliot wavers who have Gold bouncing would become right and if gold and gold stocks move higher then commodities would join the advance and your top would be wrong.

But I also have this thing that if they falter and decline early this week then most of the next ten days will be down and so will world markets.

But I only have a two three day max window left for the Dow (US Markets)  to start its decline and if it does US gold indexes will move down with it and gold as well.


----------



## CanOz

bean said:


> But I have this thing that if US Markets move up this week I may turn Bullish because the US Indexes that are still below May 9 th high (which are few) will breakout from that and that include the US gold indexes (I invest in gold and silver).  If they do that then DOW will be 14000 plus over the next 10 days.  Which will move all workd markets up?
> 
> Elliot wavers who have Gold bouncing would become right and if gold and gold stocks move higher then commodities would join the advance and your top would be wrong.
> 
> But I also have this thing that if they falter and decline early this week then most of the next ten days will be down and so will world markets.
> 
> But I only have a two three day max window left for the Dow (US Markets)  to start its decline and if it does US gold indexes will move down with it and gold as well.




With all due respect Bean, your starting to sound a bit silly. Perhaps you should get someone else to review your posts and let you know what they think.....its getting difficult to follow you. 

I would hate to see you lose too much credibility, but someone here is really going to give you a serve unless you get 'your ducks in a row', if you know what i mean.

All the best,


----------



## CanOz

Seeing how gold is said to be a manipulated market i thought it would be interesting to look at other indicators that could mean a change is coming:

In no particular order (currency futures):

1.) The ozzie dollar is sitting just above the 10 year high and in a bullish pattern IMO.
2.) The British pound is just a wisker below its '92 high, same thing bullish.
3.) The loony (CDN) is at all time highs, or at least as far as my data goes back (25 yrs), as bullish as you can get having just broken out.
4.) The US dollar index is nearly as low as its ever been and in a serious decending wedge.
5.) The Euro is very close to all time highs and looks like breaking out.
6.) The Yen has just hit the bottom trendline of an ascending triangle.


On top of this you've got all time highs in many equity markets.

Also, US Treasury notes just hit support on Friday.

What does all this mean? Is this convergence on a massive scale? Or am i reading to much into all of this?

Got to be an interesting week.

Cheers,


----------



## bean

Now If I said the closing High I called on the 9th May in the US Markets is still in place. 
Everyone would start laughing.

Lets take a look after friday's close
Nasdaq Conposite 9th May 2572	 friday 2558
Nasdaq 100 	9th May 1906		 friday 1896
Nasdaq financial 100 7th May 3186 	friday 3178
S&P 400 Midcap 9th May 899		 friday 898
S&P Composite 1500 9th May 343 	friday 342
S&P 600 smallcap 9th May 433 		?friday 428
And a few others as well. However some gave way on Friday just.
US Gold index are only a couple of % below there May highs and a few % below ther April Highs.

What I am saying if the DOW continues its advance at the begining of this week it will drag the above indexes with it?
Which would give more strength to its advance.
I also said the Nasdaq above 2550 would be back in bubble territory. On 26th April 2554 as you can see with the high it made on 9th May 2572 and friday's close 2558 it appears as thought it does not want to go higher? but could it be dragged higher

Us Gold indexes could be drag higher as well and will break out and Gold US750 -775 if they do that the DOW will be moving higher (lots 14500+??)

So there is roughly 3 days advance and the Dow maybe able to do the all the above

Basically the Bears have three days to take the Market down.
The above mentioned US indexes can still turn bearish with one or two days in a row down.
The others that just broke above there previous highs on Friday need two down in a row
So the next three days decide the next few weeks or months

As I said I may turn bullish during the week.  But until then I am extremely Bearish.


----------



## Sean K

bean said:


> Now If I said the closing High I called on the 9th May in the US Markets is still in place.
> 
> Everyone would start laughing.



Bean, I've lost count of the number of predictions you have called which have not eventuated. Didn't the US hit a record on Friday? How could 9 May have been a top? I'm damn confused.


----------



## Sean K

bean said:


> What I am saying if the DOW continues its advance at the begining of this week it will drag the above indexes with it?
> 
> Which would give more strength to its advance.......
> 
> As I said I may turn bullish during the week.  But until then I am extremely Bearish.



This is really damn confusing. Or funny.


----------



## bean

kennas said:


> This is really damn confusing. Or funny.




Simple not every US Market is advancing.
Yet we have new records on the DOW most days.
If your not worried you should be.
Because the Dow is the only thing keeping those other Markets from turning Bearish.
So if the DOW does not advance
Well lookout below because these indexes have been partly correcting already.


----------



## CanOz

bean said:


> Simple not every US Market is advancing.
> Yet we have new records on the DOW most days.
> If your not worried you should be.
> Because the Dow is the only thing keeping those other Markets from turning Bearish.
> So if the DOW does not advance
> Well lookout below because these indexes have been partly correcting already.




It adds more weight to the "someone's buying the index" theory posted by Wayne (i think) on the Int'L index trading thread.

Cheers,


----------



## Sean K

bean said:


> Simple not every US Market is advancing.
> Yet we have new records on the DOW most days.
> If your not worried you should be.
> Because the Dow is the only thing keeping those other Markets from turning Bearish.
> So if the DOW does not advance
> Well lookout below because these indexes have been partly correcting already.




Been there will, of course, be a top formed sooner or later. The market may correct a few %, and then continue, or not, but I can't see how the indices you mention have partly 'corrected' already. The figures you have already quoted (below) have each index only _just _off it's highs. Hardly in correction mode. Markets do not just go in a straight line. 



bean said:


> Lets take a look after friday's close
> Nasdaq Conposite 9th May 2572 friday 2558
> Nasdaq 100 9th May 1906 friday 1896
> Nasdaq financial 100 7th May 3186 friday 3178
> S&P 400 Midcap 9th May 899 friday 898
> S&P Composite 1500 9th May 343 friday 342
> S&P 600 smallcap 9th May 433 ?friday 428



I just hope you are right and the market goes through a bit of consolidation so we can move on.


----------



## >Apocalypto<

bean said:


> Simple not every US Market is advancing.
> Yet we have new records on the DOW most days.
> If your not worried you should be.
> Because the Dow is the only thing keeping those other Markets from turning Bearish.
> So if the DOW does not advance
> Well lookout below because these indexes have been partly correcting already.




Bean it is very dangerous when you assume anything. 

The DOW is 30 stocks it is not the US market.

I really suggest you start adding some basic charting to your trading cuz your highs and lows do not show up on the charts.


----------



## nizar

bean said:


> Simple not every US Market is advancing.
> Yet we have new records on the DOW most days.
> If your not worried you should be.
> Because the Dow is the only thing keeping those other Markets from turning Bearish.
> So if the DOW does not advance
> Well lookout below because these indexes have been partly correcting already.




Look at the s&p500. Almost at record highs.
How can you say thats not advancing??
Its pretty hard to make 500 companies look good (as opposed to 30)


----------



## KIWIKARLOS

hahahahahaha everytime i read this forum i get a good laugh, the pessimists are flogging a dead horse here i feel. :


----------



## >Apocalypto<

KIWIKARLOS said:


> hahahahahaha everytime i read this forum i get a good laugh, the pessimists are flogging a dead horse here i feel. :




It is also getting quite delusional as well!


----------



## tech/a

As you overcome the need to be right---you realise that infact all you need be is *PROFITABLE*.

Calling tops and or bottoms is interesting---the only thing that listens to my calling is my DOG, gets it right everytime!

More guessing than analysis seen here---well from my observations.


----------



## KIWIKARLOS

My biggest scepticism is that everyone is basing this on the past, my argument is that today is nothing like the past.

Today we have massive potential for exponential growth from around the globe, think of all the markets and countries which are opening up for business. the ex-soviet counties that have huge fossil fuel supplies, China, Russia hell even africa has 6% growth.

And sure the rapid growth in china might not be sustainable at such high levels but there is multitudes of smaller nations pickin up the pace, who's to say were not on the verge of an economic revolution.


----------



## CanOz

KIWIKARLOS said:


> My biggest scepticism is that everyone is basing this on the past, my argument is that today is nothing like the past.
> 
> Today we have massive potential for exponential growth from around the globe, think of all the markets and countries which are opening up for business. the ex-soviet counties that have huge fossil fuel supplies, China, Russia hell even africa has 6% growth.
> 
> And sure the rapid growth in china might not be sustainable at such high levels but there is multitudes of smaller nations pickin up the pace, who's to say were not on the verge of an economic revolution.




I certainly wasn't ever calling a top to a booming market, just a business cycle. I too believe that the commodity super cycle theory will power on, as you say, with the help of BRIC. 

I do believe we'll see the current cycle end, sooner rather than later. My only interest is for the experience of seeing the cycle end, and begin again, watching the charts as they correct, its a great time to be so focused on the markets. Daily records being smashed, weekly and monthly records falling too.

Like i've said before, this is history in the making. Very interesting times. Very profitable times.

Cheers,


----------



## Uncle Festivus

nizar said:


> Look at the s&p500. Almost at record highs.
> How can you say thats not advancing??
> Its pretty hard to make 500 companies look good (as opposed to 30)




I agree, it's harder to manipulate 500 stocks than it is 30. So it raises the idea that the Dow could be manipulated somewhat.

Having just done a crash course in Bean-o-lingo, I think/assume Mr Bean is trying to say is that relative to the DOW other indices performance are lagging a bit. 
Now if this has any semblance of correctness then any meaningful retracement in the Dow, for whatever reason, may impact more on the other indices because they are already just 'tagging along' so to speak.

Who knows, it could all be bull 

Charts - Nasdaq & S&P500 relative to the Dow - is this a valid comparison?


----------



## tech/a

Uncle.

Well it could be.
The strongest stocks are generally the last to come off.

*All* charts interestingly 
Nasdaq
S&P
Dow

and the ASX are *all* on multiple wave 5 completions with regard to Elliott analysis.

Been maybe hard to follow but may well be on to something.


----------



## bean

Uncle Festivus said:


> I agree, it's harder to manipulate 500 stocks than it is 30. So it raises the idea that the Dow could be manipulated somewhat.
> 
> Having just done a crash course in Bean-o-lingo, I think/assume Mr Bean is trying to say is that relative to the DOW other indices performance are lagging a bit.
> Now if this has any semblance of correctness then any meaningful retracement in the Dow, for whatever reason, may impact more on the other indices because they are already just 'tagging along' so to speak.
> 
> Who knows, it could all be bull
> 
> Charts - Nasdaq & S&P500 relative to the Dow - is this a valid comparison?




Uncle Festivus
Thankyou 
That’s what I am seeing in my programs except I am seeing it in numbers (I use numbers and give them values (based on short medium and long term) and get a value in return.) I am getting negative or just in positive for the Nasdaq each day since the 10th May. The last 4 days have been negative and the number is increasing.  It should be decreasing in fact it should be positive.  The other indexes if I enter a down day (nothing to bad) they nearly turn negative or are so weak two days down in a row will turn them. That should not happen if they have strength.
I use averages, a/d, up and down vol, highs and lows, random time series numbers and a couple of other things.


----------



## >Apocalypto<

bean said:


> Uncle Festivus
> Thankyou
> That’s what I am seeing in my programs except I am seeing it in numbers (I use numbers and give them values (based on short medium and long term) and get a value in return.) I am getting negative or just in positive for the Nasdaq each day since the 10th May. The last 4 days have been negative and the number is increasing.  It should be decreasing in fact it should be positive.  The other indexes if I enter a down day (nothing to bad) they nearly turn negative or are so weak two days down in a row will turn them. That should not happen if they have strength.
> I use averages, a/d, up and down vol, highs and lows, random time series numbers and a couple of other things.





Bean, 

I see what your saying and this was said last year as well Dow was leading other indexes.

I have no clue in how you work out your reason to make a trade but if it works and your coming out on top then i say well done!

i will give you another possible clue if your into index trailers.

All ords is more then the S&P200 i have never seen this before but i have only 1.7 years looking at the figures.

does that say no one big is game to buy the top 200 right now? or is everyone just buying MBL!


----------



## Wysiwyg

Trade_It said:


> but if it works and your coming out on top then i say well done!




  your is you are is you`re.lol


----------



## nizar

Trade_It said:


> All ords is more then the S&P200 i have never seen this before but i have only 1.7 years looking at the figures.
> 
> does that say no one big is game to buy the top 200 right now? or is everyone just buying MBL!




Interesting observation TI.
WHen the indices first crossed 4000, XAO did hit it first.
But for 5000 and 6000 it was XJO that hit it first.
Now XAO>XJO...
Hmmm.... So punters are buying up the top490 companies minus the top 200....

Interesting...

If s&p500 breaks new highs this week then its onwards and upwards for this bullmarket.....


----------



## bean

nizar said:


> If s&p500 breaks new highs this week then its onwards and upwards for this bullmarket.....




Yes but if it cough's its getting PNEUMONIA


----------



## nizar

bean said:


> Yes but if it cough's its getting PNEUMONIA




Yeh well in that case give a bit of ceftriaxone/amoxycillin and a bit of roxithromycin (to cover the atypicals) and she'll be aight !


----------



## bean

nizar said:


> Yeh well in that case give a bit of ceftriaxone/amoxycillin and a bit of roxithromycin (to cover the atypicals) and she'll be aight !




By my recking the stocks that have been making the advance are all ones that rely on a weak US$  most of there profits have come from overseas markets.  The others have been financial as the money supply has increased
The ones that are not making the advance are Nasdaq- well its still in a bear???
And the smaller cap which rely on the US consumer who are borrowed to the tilt and are suffering from high fuel prices interest rates and a slowing economy.
All very important to US market and they are the ones that are showing a recession on the US economy is one or two quarters away.
My opinion someone may understand in a few months


----------



## >Apocalypto<

Wysiwyg said:


> your is you are is you`re.lol




Lat time i checked this was a stock forum, not a spelling road show you rude prick!


----------



## nizar

Trade_It said:


> Lat time i checked this was a stock forum, not a spelling road show you rude prick!




LOLOLOLOLOL 
hahahaah


----------



## Yeti

Wysiwyg said:


> your is you are is you`re.lol




Actually that should be _you're_. If you're going to comment on other peoples' spelling you want to make sure you get it right yourself- even the apostrophes


----------



## bean

Sound like a broken record
However Bulls no need to worry If the US markets, US Gold Indexes and Gold are up tonight and tomorrow I will be nearly turning Bullish.
I am a Gold Bull, however Gold & US Gold Indexes are not joining the party at the moment, could change in the next day or two
The XAU & HUI are sitting just below most of there moving averages, and a few other thing I use. 
However why have they not broken out when every other Index is making new highs???
Could it be they know something???
Nasdaq new record closing high, my reading turned slightly positive however and couple of up days and well you will have the Nasdaq and other US markets gaining strength and US Gold Indexes breaking out.
I still only need one down day and Nasdaq is negative again and two down days in a row and the US Markets will be changing direction. And the Gold Indexs until they turn positive I am of the belief that the Markets going down. 
Gold stocks will fall if the US Markets correct 

My time frame window is now reduced to one possibly two days for the Markets to start correcting
Tonight and at latest Wednesday night


----------



## Who Dares Wins

Speaking of broken records Bean, I think you are starting to sound like one.

Since mid april when it was all this was supposed to happen the value of my portfolio has increased by 34%. And i've only made 1 trade during that time.

I'm seriously beginning to doubt this "program" that you're always raving on about.


----------



## bean

Who Dares Wins said:


> Speaking of broken records Bean, I think you are starting to sound like one.
> 
> Since mid april when it was all this was supposed to happen the value of my portfolio has increased by 34%. And i've only made 1 trade during that time.
> 
> I'm seriously beginning to doubt this "program" that you're always raving on about.




I trade Gold Stocks and most have not gone anywhere. Some are down.
I am in front too

So everyone is happy

But I might be the happiest soon


----------



## tech/a

*Ah now I see.*

Markets drop gold rises.

*Hidden agenda's.*
More hope and analysis fitting than actual market action analysis.


----------



## >Apocalypto<

tech/a said:


> *Ah now I see.*
> 
> Markets drop gold rises.
> 
> *Hidden agenda's.*
> More hope and analysis fitting than actual market action analysis.




Totally agree with you tech.

Assuming one market will react to another's move is a dangerous way to trade.

Bean, 

If your banking on that, have a good look at the charts last may, Gold and indexes dropped hard at the same time! Gold lost over $100's, $45 in a session!


----------



## bean

Trade_It said:


> Totally agree with you tech.
> 
> Assuming one market will react to another's move is a dangerous way to trade.
> 
> Bean,
> 
> If your banking on that, have a good look at the charts last may, Gold and indexes dropped hard at the same time! Gold lost over $100's, $45 in a session!




I trade using the US Gold Indexes. I get buy and sell signals of them.
What I am saying is I do not have a buy signal could get one this week.
But I wonder why they have not given one as yet.
Do they expect the correction in the markets?
I am in the camp that expects a correction in US Gold Indexes and Gold
I may have to change to Bullish if I get a buy signal this week.

I know if the markets correct the gold stocks will fall
I do not have a buy signal as yet.
If I am not going to get one its because everything will be correcting


----------



## tech/a

Time to leave this thread.
Back again when something *REALLY* happens.


----------



## brerwallabi

bean said:


> My time frame window is now reduced to one possibly two days for the Markets to start correcting
> Tonight and at latest Wednesday night



So your waiting for the US home sales Thurs and Friday morning then and then you can say told you so?
So you don't get a buy signal the market corrects?


----------



## bean

brerwallabi said:


> So your waiting for the US home sales Thurs and Friday morning then and then you can say told you so?
> So you don't get a buy signal the market corrects?




No I said I would get a buy signal if the US Market went up and dragged US Gold Indexes with it (Tuesday or Wednesday)
Looking this morning they did not really go up.
US Gold Idexes hit for nearly 2%
Gold down
US Gold Indexes will going in the same direction as the market.


----------



## wayneL

There's hasn't been a decent short setup on my whole watchlist of stocks for ages. However, even though the US indices haven't shown much sign of a correction, some of my stocks are starting to look a bit dodgey.

No open shorts on stocks yet, but it just feels toppy to me. That said, lots are going like the blazes too... even some real crap like builders, that are warning, as well as releasing diabolical guidance.

Up is down, etc etc etc

If that sounds like a confused post... you're right! lol


----------



## bean

Why do I sound like a broken record and keep repeating myself

First posts were US Gold Indexes following US Markets (S&P)
I am in the Bearish Camp which sees a correction in Gold Indexes and Gold
The correction would be occurring the US Markets falling

Excluding todays prices lets look Dow 12076 on 13 March
We will start from 14th so we have 48 trading days
Dow up 37
Nyse up 33
Nasdaq up 32
S&P 500 up 31

XAU up 28

Not to far away with the number of days up.  So running pretty much with the US Markets
XAU closing high in April 148.11 on the 16th April 
Just about the time everyone was saying Gold ready to break above US $690

XAU closing May high 143.15 on the 7th May
I call the US Markets tops 9 May some have just passed then

I start calling correction or I get a buy on US Gold Indexes yesterday and day before
XAU 138.36 yesterday
Today 135.81

The XAU is making lower Highs????

It does not believe the US Market advance because it does not want to give me a buy signal
On saying that if US Markets advance it will take XAU with it and I will get a buy signal?? 
Do the US Gold Indexes know something????


----------



## Sean K

bean said:


> Why do I sound like a broken record and keep repeating myself
> 
> First posts were US Gold Indexes following US Markets (S&P)
> I am in the Bearish Camp which sees a correction in Gold Indexes and Gold
> The correction would be occurring the US Markets falling
> 
> Excluding todays prices lets look Dow 12076 on 13 March
> We will start from 14th so we have 48 trading days
> Dow up 37
> Nyse up 33
> Nasdaq up 32
> S&P 500 up 31
> 
> XAU up 28
> 
> Not to far away with the number of days up.  So running pretty much with the US Markets
> XAU closing high in April 148.11 on the 16th April
> Just about the time everyone was saying Gold ready to break above US $690
> 
> XAU closing May high 143.15 on the 7th May
> I call the US Markets tops 9 May some have just passed then
> 
> I start calling correction or I get a buy on US Gold Indexes yesterday and day before
> XAU 138.36 yesterday
> Today 135.81
> 
> The XAU is making lower Highs????
> 
> It does not believe the US Market advance because it does not want to give me a buy signal
> On saying that if US Markets advance it will take XAU with it and I will get a buy signal??
> Do the US Gold Indexes know something????



Golly...


----------



## nizar

Well looks like the 7-year s&p500 record all time high will be broken tonight.
I think the figure is 1527.

Currently sitting on 1530.


----------



## barney

Not sure how "imminent and severe" the drop will be, but the all ords has been giving us plenty of warning over the past couple of weeks .......... Rising prices on falling momentum from my limited experience is the most reliable "indicator" of the lot ............ A 200 point drop over the next week or so would be no surprise imo ............ after that who knows ........


----------



## Kimosabi

Um, I don't want to crash anyones party, but is anyone else slightly disturbed by the following article???



> *Looming Crash Prompts Most Hires for Distressed Debt Since 2002 *
> 
> *The biggest winners from the global buyout boom are hiring distressed-debt bankers in Europe at the fastest pace in five years.*
> 
> Goldman Sachs Group Inc., the world's most profitable securities firm, hired Andrew Wilkinson, the lawyer who advised creditors in the bankruptcies of Eurotunnel Plc and Parmalat Finanziaria SpA, to help lead its restructuring business in London. Morgan Stanley, the third most-active merger adviser this year behind Citigroup Inc. and Goldman, added seven bankers in the past year, boosting its group to 61. Blackstone Group LP, poised to become the world's largest publicly traded buyout firm, is starting a corporate restructuring group in Europe.
> 
> *``When the turn does come, it will be unlike anything we have ever seen before,''* said Iain Burnett, 43, managing director of Morgan Stanley's special situations unit in London. ``The scale of it could be considerable because of the size of some of these leveraged deals,'' said Burnett, who began his career in London a month before the October 1987 stock market crash.
> 
> Firms are paying as much as $3 million a year for bankers who advise bankrupt companies and for traders who specialize in defaulted debt, according to Heidrick & Struggles International Inc., the world's third-largest recruiting firm. That's on par with derivatives and commodities traders.
> 
> *Adding Debt*
> 
> Restructuring groups are growing faster in Europe than in the U.S. as companies in the U.K., France and Germany pile on record amounts of debt, according to Standard & Poor's. European companies borrowed a record $252.6 billion in loans and bonds rated below investment grade, according to data compiled by Bloomberg.
> 
> European companies acquired by buyout firms had debt equal to 6.2 times earnings before interest, tax, depreciation and amortization in the first quarter of this year, according to Fitch Ratings. That's up from 5.1 times in 2004 and 4.8 in 2003.
> 
> Heidrick & Struggles, based in Chicago, says it's placing more distressed-debt bankers in London than at any time since 2002, after Internet-related companies crashed. So far, there isn't much work to do. Near-record-low defaults have reduced Europe's market for distressed debt to 150 billion euros ($202 billion), a quarter of the size five years ago, according to data compiled by Deutsche Bank AG.
> Little to Do
> 
> Only one European company -- Teksid SpA, an auto-parts maker based in Turin, Italy -- has defaulted this year, and only four companies worldwide have missed interest payments, according to Moody's Investors Service.
> 
> ``Banks have to pay market rates to attract quality employees, but the problem is the employee may be sitting on his or her hands for six to 12 months,'' said Lee Thacker, capital markets partner at Heidrick & Struggles in London.
> 
> Companies are classified as distressed when they're in default or their bonds yield at least 10 percentage points more than similar-maturity government securities, according to S&P. Traders of distressed debt buy bonds and loans in a bet the securities will appreciate when the company's finances improve. If there's a bankruptcy, they may demand equity in the reorganized company in return for the debt.
> 
> European companies almost doubled borrowing this year to $225 billion of loans from the same period in 2006, Bloomberg data show. They sold an additional $27.6 billion of so-called junk bonds, a 30 percent increase from a year earlier. Such debt is rated below Baa3 by Moody's and BBB- by S&P.
> 
> *Lowest Rates*
> 
> The riskiest companies, those with a CCC credit rating or worse, are able to get the lowest borrowing rates ever, at 3.3 percentage points above benchmark European government debt, Merrill Lynch & Co. indexes show.
> 
> The yield gap reached a high of 42.1 percentage points in the month after the terrorist attacks of September 2001.
> 
> ``It's like a hangover, people will wake up and say, `what have I done?''' said Michael Weinstock, who helps manage $3 billion of distressed debt at private equity firm Quadrangle Group LLC in New York. Quadrangle this month hired a second banker to focus on European distressed debt.
> 
> *``Record-high levels of financing now mean record levels of defaults in the future. There's every reason to believe we're near a market top.''*
> 
> The ranks of distressed debt bankers in Europe have swelled by about 30 percent to 400 this year, according to London-based financial recruiter Kennedy Associates. Worldwide, there are about 1,500 bankers specializing in debt of troubled companies, including 800 in the U.S. and 300 in Asia, said Jason Kennedy, founder of Kennedy Associates.
> European Pace
> 
> ``The U.S. market is larger and more established,'' said Kennedy, who has hired distressed-debt bankers in London for clients including Goldman, Citigroup and Lehman Brothers Holdings Inc., all based in New York *``Many banks here are just starting to build up their distressed desks.''*
> 
> Investing in Europe's troubled companies picked up 14 years ago when Frankfurt-based Deutsche Bank hired Martin Dent, followed a year later by Julian Nichols, who is head of distressed debt in Europe for Germany's largest bank. Deutsche Bank, which doubled its distressed-debt staff over three years to about 120 bankers worldwide, more than any other bank, is planning to increase, Nichols said.
> 
> ``Distressed debt will continue to grow,'' Nichols said. ``As the value of leveraged loans in the market increases, the absolute level of defaulted debt will increase, even if the ratio remains similar to what it is currently.''
> Goldman Hires
> 
> Goldman last year hired Lachlan Edwards from London-based investment bank NM Rothschild & Sons Ltd. to head its restructuring unit. In March, it brought in Wilkinson, the former managing partner at law firm Cadwalader Wickersham & Taft in New York.
> 
> Goldman co-President Gary Cohn said ``the institution that figures out first that the credit environment has changed will be best positioned,'' according to a May 17 note to clients by Jeffery Harte, a Chicago-based analyst for Sandler O'Neill & Partners.
> 
> Greenhill & Co., the investment bank established by former Morgan Stanley Group Inc. President Robert Greenhill, hired Martin Lewis, 52, in February from Miller Buckfire & Co., the firm advising bankrupt energy company Calpine Corp. of San Jose, California, and auto-parts maker Dura Automotive Systems Inc. of Rochester Hills, Michigan, on their reorganizations.
> 
> Greenhill, chairman and chief executive officer of the New York-based investment bank, said in a release at the time that the hiring was ``in preparation for when the economic cycle turns.''
> 
> *Ramping Up*
> 
> ABN Amro Holding NV doubled a group that deals with troubled companies to 20 in the past year, and plans to have 40 in the ``medium term,'' said Boe Pahari, global head of special situations and distressed capital in London for Amsterdam-based ABN Amro, the largest Dutch bank.
> 
> New York-based Merrill Lynch in November hired Ben Babcock from Lazard Ltd. to set up a corporate restructuring business in London. Babcock has since added one person dedicated to restructuring and can pull in people from Merrill Lynch's corporate finance business as needed, he said.
> BNP Paribas SA, France's biggest bank, hired Steven Franck from New York-based Morgan Stanley this year to increase its distressed debt operation in London to four.
> 
> *``People have been forecasting a meltdown in credit in the next 12 to 18 months,''* said Michael Gibbons, head of the special situations desk at Paris-based BNP Paribas. ``We tend to crash when we least expect it, rather than when we forecast it.''
> 
> Adding Staff
> 
> New York-based Blackstone in December hired Close Brothers Group Plc's
> Martin Gudgeon, who advised creditors of Eurotunnel and the management of Polestar Group, a Milton Keynes, England- based magazine printer that agreed to a $1.6 billion restructuring in December to avoid collapse.
> 
> Houlihan Lokey Howard & Zukin, the Los Angeles-based investment bank, employs 20 in Europe for its restructuring business, up from two when it started in 2002. The bank is looking to build a similar group in Asia, according to Joseph W. Swanson, its London-based managing director.
> 
> Zurich-based UBS AG, Europe's largest bank by assets, has been adding staff to its distressed-debt business this year, said Doug Morris, a spokesman in New York who declined to provide details.
> 
> Jeff French, a spokesman in London for Citigroup, the most active merger adviser this year, declined to comment. JPMorgan Chase & Co. spokeswoman Stefania Signorelli, Credit Suisse spokeswoman Rebecca O'Neill and Lehman Brothers spokeswoman Ruth Lavelle, all reached at their offices in London, also declined to comment.
> 
> *Apollo Coup*
> 
> Banks are looking for opportunities like the 2003 takeover of Zurich-based Cablecom AG by Apollo Capital Management LP, along with Goldman and Soros Private Equity Partners. They bought the distressed debt of Switzerland's largest cable TV company, swapped it for equity and in 2005 sold it to John Malone's Liberty Global Inc. for $2.2 billion.
> 
> S&P forecasts the default rate, which was 2.3 percent in April, will rise above 2.5 percent by year-end in Europe. In the U.S., the 12-month default rate is 1.4 percent.
> 
> ``The risk in all of this is that the higher we fly, the further we could fall as and when the market turns,'' said Paul Watters, S&P's London-based director of debt recovery ratings. ``Many borrowers are tacitly acknowledging the growing vulnerability.''
> 
> Link


----------



## excalibur

I think that its not new news any longer.
The reaction of the market has begun.


----------



## KIWIKARLOS

hahahahaha BS

People gettin edgy and taking profits, we were hitting highs last week and its hardly a freefall. Alot of companies will be posting big profits in a few weeks, buying opportunity if anything.

A big market correction needs a trigger and there simply hasn't been one yet. Sure the US housing market is kaput but there is alot of signs showing postives. In my opinion line ball atm, there will be more highs to come in the next weeks /months


----------



## moxy

Hi all

I'm going to throw my cap in with you Kiwi and agree that this is another blip on the radar. Your spot on with those earnings announcements...God, leighton came out recently with an upgrade of 50%!. I think we will see a few more companies with these "surprises" over the coming weeks.


----------



## hacheln_mice

Looking at the Dow Jones, from a fibonacci time cycle perspective (if anyone believes in this sort of stuff), we're nearing a 'correctional' phase, especially since 3rd major leg matches the 1st major leg in height (on a linear basis).

The long term bull will most definitely continue, but not without a very lengthy consolidation/churning period in my view.  The projected Feb/March bottom will probably be the beginning of some 'base building' rather than a straight up move.





---------------------
For the All Ords, the next 2 week's action will be critical.  





So far, the market has found strong buying interest, and I suspect that is due to superfund money flowing in, but that'll end by 6/30 (right?).  Even if we do have a strong showing in the coming weeks, I suspect that'll only delay the 'inevitable' correction.  Another sign that a correction may be nearing is the change of leadership since March, as the materials and energy sector started to strongly outperform the other sectors.  Typically, strong runs in materials and energy come near the middle or the end of an intermediate term trend rather than the start of it.  Then you've got the dodgy investment banks upgrading companies left right and center trying to create demand cautious.  My belief is that investment banks soak up supply when everyone is looking to sell, and release supply when everyone is looking to buy so that they can buy later at a lower price.  I suspect investor sentiment is strong/resilient enough to suggest investors are all bulled up and willing to buy all dips, even after this week's slide (although I can't prove this...it's just a feeling) which is the kind of environment needed for a correction (ie. release of supply) to occur.  MBL's equity issue, and kneejerk ramp and dump is a prime example.  Then there's Shane Oliver calling for the All Ords to double or something like that.  Generally, retail investors are the first one to buy in a drop, and the last one to sell in a bullish run.

If you look at the Index of new 30 week closing highs vs new 30 week closing lows in the All Ords, you can see that the market internals are very weak despite the indices being near all time highs.  This suggests the rally is narrowing rather than broadening so stock selection at the moment is critical to making money in the markets.  Not everything an investor buys at the moment is going up.





For now I'm neutral/bearish on the markets.  Longer term, I'm still very very very very bullish.


----------



## bepra1

Indeed, Imminent and severe market correction has happened :bloated:


----------



## Kimosabi

bepra1 said:


> Indeed, Imminent and severe market correction has happened :bloated:




Ha, this is only the beginning...


----------



## nioka

Kimosabi said:


> Ha, this is only the beginning...




Pessimest!!!!!!! Have faith.


----------



## Kimosabi

nioka said:


> Pessimest!!!!!!! Have faith.




I'm not a Pessimist, I'm a Realist!!!!


----------



## Sean K

Kimosabi said:


> I'm not a Pessimist, I'm a Realist!!!!



There is a _chance _of a crash, but a _probability _of a correction, IMO.

Subprime is going to be contained to the poor bible bashers in backwater USA.
Transfer to the market that really matters will not occur.
The world economy is generally pumping.
Interest rates low, employment high, company profits keep increasing.
BRIC will prop up the world over the next 10-20 years.
We need a decent correction of 10% to keep the markets healthy.

On the other hand, the $US bursting into confetti could be ordinary....buy gold when it settles.


----------



## BIG BWACULL

Kimosabi said:


> I'm not a Pessimist, I'm a Realist!!!!



Maybe your an optimistic pessimist


----------



## Awesomandy

kennas said:


> Subprime is going to be contained to the poor bible bashers in backwater USA.




Although, would I be correct to say that it is the top end of town who lend the most money? In that case, if the poor don't do well and can't repay their mortgage, everyone else suffers as well?


----------



## nioka

Kimosabi said:


> I'm not a Pessimist, I'm a Realist!!!!




I'm the realist. Here is why there will only be a short term correction . ( For me at least.)
 Chinese and Indian people will want to keep inproving their standard of lining and so my interest in AOE, MGX, SMY, AGM. LYC, FNT, will continue to grow.
 The climate change problems, along with a looming oil crisis will help my interest in AOE, AUT, TAS, EDE, VPEO & ESI  increase in value regardless of the US housing and mortgage busts. 
A few of my speccies may suffer but if they come good it will be because they have great discoveries. e.g. NWR, LAF& PRE 
 OIL, one of the stocks to rise today, will be in demand more in tough times than good.
I,m not only a realist but an an optimist and I also have confidence ( and 75 years experience)


----------



## Sean K

Awesomandy said:


> Although, would I be correct to say that it is the top end of town who lend the most money? In that case, if the poor don't do well and can't repay their mortgage, everyone else suffers as well?



Yep, you may be right. Might be all by degrees eventually. If company profits keep going up (see reporting season) then the top end of town may be able to pay their bills, less a few who dabbled in the more speculative and inventive financial services products. Bill Gates can pay out the sub prime bill at the moment.....at least!


----------



## dhukka

kennas said:


> There is a _chance _of a crash, but a _probability _of a correction, IMO.
> 
> Subprime is going to be contained to the poor bible bashers in backwater USA.




Really? Even though it has spread to Alt-A and prime mortgages



> Transfer to the market that really matters will not occur.




...and which one would that be?




> Interest rates low, employment high, company profits keep increasing.




Employment has peaked, company profits are still increasing but an ever diminishing rate (*6%* in the latest quarter in the US) The US earnings cycle has almost run it's course, expect earnings growth to flat-line next year. 



> The world economy is generally pumping.
> BRIC will prop up the world over the next 10-20 years.




The US economy accounts for *31%* of world GDP. Japan about *14%*, the BRIC economies currently contribute *10%* of world output. If the US consumer decides to take a vacation the BRIC economies won't be able to prop up the rest of the world.


----------



## Sean K

You've got me Dhukka. As I said, I'm no economist, so thanks for your thoughts. Some points however..



			
				Dhukka said:
			
		

> Really? Even though it has spread to Alt-A and prime mortgages




Has it? I haven't got any figures but would be interested to see the % of total mortgages that have being affected. From my reading and recollection of TV interviews and reports it's a blip. I defer to your facts if you have them. 



> ...and which one would that be?



This would be the US middle and upper class who are the biggest consumers I guess. The ones getting sub prime loans are living on the bread line and can't afford second plasmas for the dunny so they matter less, but I'm not saying are are totally insignificant, just far less. 



> Employment has peaked, company profits are still increasing but an ever diminishing rate (*6%* in the latest quarter in the US) The US earnings cycle has almost run it's course, expect earnings growth to flat-line next year.



Has it peaked for the foreseable future? Could it remain at high levels for longer? What is the point where unemployment significantly effects the markets? If employment drops a bit and company earnings ebb, does this create a crash? Earnings growing at 6% or thereabouts isn't even a recession, is it? Didn't GDP growth jump 3.4% last quarter in the US. Hardly the platform for a recession is it? Core inflation did drop sharply I note, but depends on which economist you are as to what's really important, I don't know. 



> The US economy accounts for *31%* of world GDP. Japan about *14%*, the BRIC economies currently contribute *10%* of world output. If the US consumer decides to take a vacation the BRIC economies won't be able to prop up the rest of the world.



Yes, but the paradigm is shifting. China has just taken over from Germany as the second biggest economy and growing at an incredible rate. Japan is comming out of a 10 year recession and set to grow. Is the US consumer en masse, going to all go on holiday at the same time? A proportion of the 31% might, but how much would created a global crash?

I am not saying that the US is NOT going to go through a slow down, but that doesn't translate to crash, or even SEVERE correction. 10% would be healthy. What is severe anyway? 15%, 20%. A crash might be 20% or more.

As far as Australia goes, we're just responding to the US out of sentiment at the moment, there's nothing really fundamental yet in the effect of a US slow down on us, although, sure, by the time we're feeling the pinch, it'll be too late to act. I do nate that two hedge funds in two weeks -- first Basis Capital then Absolute Capital -- have frozen redemptions from their funds citing an illiquid market, but two funds out of how many?

From a finance company research note I received today:



> The current bull market has been underpinned by earnings. The market has gained roughly 140% while earnings have risen 132%. During the 1980's bull-run the market went up 421% but earnings only rose 121%. Hence, P/E expansion was largely responsible for the bull-run in the 80's.
> 
> The finance sector offer a forecast yield of 4.50% (ff) and trades on a P/E of about 14x. Earnings growth this reporting season should be at least 10%. The Australian banking sector has little exposure to sub-prime or "No doc lending". Housing lending volumes are reasonably robust while business lending volumes are strong. At the same time, Australian banks are picking up strong growth from their Wealth Management divisions and continue to drive costs lower.
> 
> The resource sector has undergone a recent re-rating in P/E but BHP and RIO still only trade on current P/E's of 14x. If commodity prices continue to remain buoyant and indeed head higher (like iron ore, coal and oil are expected to) then the forward P/E's are still likely to be around 10-12x. Earnings growth could conceivably be at least 20% pa for the next few years based on production growth and strong commodity prices.
> 
> Investors need to be a little more wary in the Industrial and Property sector for this is where M&A activity has driven up the valuations on many stocks with average earnings growth. Rinker, Alinta, Coles, Flight Centre, Qantas and Investa Property Group are good examples of this recent phenomenon.
> 
> So in summary, the conditions for a share-market crash do not seem to be in place. 58% of the market seems to be trading on fairly low valuations, strong yields and have reasonably good prospects of future earnings growth. Yes interest rates are rising but really all we are seeing is the unwinding of historically low rates due to strong economic growth both here and globally. The cash rate is 6.25% while 10 year bonds are 6.0%. These are certainly not overly restrictive and seem reasonably low given underlying inflation is currently 2.75%. The Australian Government is cashed up with a large budget surplus, superannuation flows continue to grow by 10% pa and Company balance sheets are in good shape with gearing low. When you add that the global economy is expected to grow by 4.8% over 2007 and 2008 (even with low US growth) the conditions for a continuation of the bull-market look
> in-tact. However, from here it is unlikely that "all ships will rise on a rising  tide" investors will need to be in the right sectors and the right stocks.
> 
> We believe that investors should be buying Banking stocks which have been unfairly treated due to negative sentiment over the US housing market.
> 
> All of the majors (ANZ, CBA, WBC, NAB, SGB) look to be offering great value with NAB looking particularly attractive at $38.81.




It's sentiment, and the butterfly wings, that cause a crash, and even severe corrections, and this _may _just be just another blip in the secular bull for the Australian market. 

Having said that, that damn butterfly will get us tomorrow.


----------



## dhukka

kennas said:


> You've got me Dhukka. As I said, I'm no economist, so thanks for your thoughts. Some points however..
> 
> 
> Has it? I haven't got any figures but would be interested to see the % of total mortgages that have being affected. From my reading and recollection of TV interviews and reports it's a blip. I defer to your facts if you have them.





The percentage of total mortgages affected in each category I don't have. I have some anecdotal evidence such as:

Alliance Bancorp - a residential mortgage lender specializing in Alt-A mortgages based in California filed for bankruptcy. 

Last week Citigroup Inc. reported defaults on some Alt A mortgages packaged into bonds last year are now outpacing those from subprime loans.

Check out all the ABX indexes on markit.com Every class has been hit. 



> This would be the US middle and upper class who are the biggest consumers I guess. The ones getting sub prime loans are living on the bread line and can't afford second plasmas for the dunny so they matter less, but I'm not saying are are totally insignificant, just far less.




Alt-A's are defaulting, these mortgages require some proof of income as opposed to sub-prime. Not your second plasma TV in the dunny crowd but not bread-line either.   



> Has it peaked for the foreseable future? Could it remain at high levels for longer? What is the point where unemployment significantly effects the markets?




I'd say employment has already peaked and is affecting the economy. Here is an article that explains the US employment picture rather succinctly. 



> If employment drops a bit and company earnings ebb, does this create a crash? no. Earnings growing at 6% or thereabouts isn't even a recession, is it?




The point about earnings in this:

The current US earnings cycle is one of the longest on record. If we count a profit cycle from the point that year-over-year earnings growth turns positive to when it first turns negative, this is the *third-longest* cycle since *1950.* The longest cycle took place during the *mid to late 90's*, lasting *5  ½* years. A cycle of *4  ¾*years ended in *1981*. The current cycle is just* 3 months* shy of that record.

But that also makes the current cycle more than twice as long as the average cycle of just over *2* years. _Source_



> Didn't GDP growth jump 3.4% last quarter in the US. Hardly the platform for a recession is it? Core inflation did drop sharply I note, but depends on which economist you are as to what's really important, I don't know.




Yes GDP did turn in a solid number. Whilst not terrible read here as to why I believe it wasn't as strong as the headline number suggests



> Yes, but the paradigm is shifting. China has just taken over from Germany as the second biggest economy and growing at an incredible rate. Japan is comming out of a 10 year recession and set to grow.




I'd be interested to see your figures on that. I have Japan as still the second largest economy. 



> Is the US consumer en masse, going to all go on holiday at the same time? A proportion of the 31% might, but how much would created a global crash?




Agreed , not everyone is going to take a break at the same time. If there is one thing we know about the American consumer it is that they are a resilient bunch. We do know from the last few months of retail sales data that they are feeling the pinch of higher gas and food prices.  

More importantly they have been spending beyond their means since 1999 thanks to asset appreciation. Now that the MEW ATM has been shut off they are turning to credit cards. For how long can that continue? Anyone's guess. 



> I am not saying that the US is NOT going to go through a slow down, but that doesn't translate to crash, or even SEVERE correction. 10% would be healthy. What is severe anyway? 15%, 20%. A crash might be 20% or more.




No it doesn't necessarily translate into a crash. I'd say severe is whatever you think it is. 




> As far as Australia goes, we're just responding to the US out of sentiment at the moment, there's nothing really fundamental yet in the effect of a US slow down on us, although, sure, by the time we're feeling the pinch, it'll be too late to act.




See the article above from Hoisington Investment Management. _"U.S. domestic demand leads the domestic demand in the large foreign economies by six to nine months"_



> I do nate that two hedge funds in two weeks -- first Basis Capital then Absolute Capital -- have frozen redemptions from their funds citing an illiquid market, but two funds out of how many?




The real question which was posed by Kim Ivey, chairman of the Australian Alternative Investment Management Association, which represents 80 of the nation's hedge fund managers. Commenting on the exposure of local hedge funds to the subprime market he said:

_"I expect that it will be contained to just a handful.'' "More of a concern is what will happen once the fallout moves from the subprime sector to more senior debt, when many more managers have exposure.''  
_

As we know form the articles above the fallout is spreading.


I'm actually more bullish than the article you cited on the Australian economy. I expect *FY07* earnings growth of at least *15%* but more likely around *18%.* 



Do you think the US earnings cycle is now dead? That earnings can keep rising indefinitely? 

Every-time the US economy slows so does ours and so do all other major economies, do you think this time will be different?

If you answer yes to to both these questions or even one of them you belong in the "this time is different" crowd and as we now from history that crowd is often if not always wrong.


----------



## Sean K

Thanks for the time you've put into this dhukka, much appreciated.



> I'd be interested to see your figures on that. I have Japan as still the second largest economy.




Yes, typo, I meant China taking over Germany as third.



> Now that the MEW ATM has been shut off they are turning to credit cards. For how long can that continue? Anyone's guess.



Yes, is a big risk. This is just for a proportion of people though. Probably those purchasing in the past 10 years. Perhaps the majority of Yanks still have lot of equity in their property.



> Do you think the US earnings cycle is now dead? That earnings can keep rising indefinitely?
> 
> Every-time the US economy slows so does ours and so do all other major economies, do you think this time will be different?
> 
> If you answer yes to to both these questions or even one of them you belong in the "this time is different" crowd and as we now from history that crowd is often if not always wrong.



My answer is probably to one and _maybe_ for two. It depends how the rest of the world picks up the slack over the next 2-5 years. 

I have a feeling there will be a gap between the US sliding, and BRIC taking over at the same time as Japan recovering. Hopefully, Japan picks up and then BRIC to make a relatively painless transition. Perhaps I'm just overestimating the American consumer and the reliance of the world on the US $$ still. 

Cheers.


----------



## wigaz

To both of you you have provided some very well researched and poignant arguments. Congratulations!

I would like to add my very humble 2c worth in saying that:

Neither of you really mentioned CHina and it's impact on the global economy. I think this is severely underrated! I'm not taking a stance either way. All I'm trying to point out is that maybe the US economy and its cycles are/will be overshadowed by the Chinese Dragon Economy.  Thus business cycles may be being redefined. 

Have we ever seen the world do so well as we have in the last 5 years? Thats a genuine question?

Maybe the game is changing/has changed.

Cheers guys and once again good work to both of you!

W


----------



## dhukka

wigaz said:


> To both of you you have provided some very well researched and poignant arguments. Congratulations!
> 
> I would like to add my very humble 2c worth in saying that:
> 
> Neither of you really mentioned CHina and it's impact on the global economy. I think this is severely underrated! I'm not taking a stance either way. All I'm trying to point out is that maybe the US economy and its cycles are/will be overshadowed by the Chinese Dragon Economy.  Thus business cycles may be being redefined.
> 
> Have we ever seen the world do so well as we have in the last 5 years? Thats a genuine question?
> 
> Maybe the game is changing/has changed.
> 
> Cheers guys and once again good work to both of you!
> 
> W




On the contrary I think it is one of kennas' main points - that is that the baton of world growth is being passed to China. I also linked an article in my original post which mentions the impact of China.

 No doubt China is becoming  a major economic force but I think it's effect on global growth is overestimated. The US economy is still *5* times the size of China.   

The US economy accounts for *30%* of world GDP. The US consumer is responsible for 2/3 of the US economy. 2/3 of 30% is 20%. Thus *20%* of world GDP is driven by the US consumer. China currently contributes just less than *6%* of world GDP. 

In addition, one of the main sources of Chinese growth is their huge trade surplus -  most of which is with the US. This has been a major driver of Chinese growth. A downturn in US consumption will be felt in China and the rest of the world.


----------



## Uncle Festivus

In the short term I'm not convinced China or BRIC can 'take up the slack', partly because their financial systems are not up to world standards yet, partly because their manufacturing base is a sham and mostly because of the incestuous relationship it has with the US. It's basically just a massive US dollar recycling machine. If the US consumer pikes it, China takes a big hit, then dominoes down the line.


----------



## Taurisk

Uncle Festivus said:


> In the short term I'm not convinced China or BRIC can 'take up the slack', partly because their financial systems are not up to world standards yet, partly because their manufacturing base is a sham and mostly because of the incestuous relationship it has with the US. It's basically just a massive US dollar recycling machine. If the US consumer pikes it, China takes a big hit, then dominoes down the line.




Hi U.C. - some salient points there, but from just watching the news I have come to realise that there is growing demand from China itself for all it produces.  These people want to join the western world and own all the goodies of modern civilisation - so I suspect very soon China's export market will turn around to satisfy home demand.  They've also got a very educated elite in power across the board whose reading material no longer includes the little red book by Mao, but who have engineering, economics and management degrees.
I would not be surprised to find that very soon the economic engine of China will begin to supply its own people, quite apart from the fact that Chinese goods are available everywhere, not just in the U.S.

Cheers

Taurisk


----------



## ideaforlife

I think the above two posts have looked at it one direction only. Indeed it's an interative process with US sourcing its basic products manufacturing from China and the latter also demands goods from the US. Nobody will doubt the influence that the development of China has brought to the world. Look at the growth of BHP for one snapshot. 

As Young_Trader puts it, domestic developments in BRIC desire resources, although the export to the US might decrease to some extend, the internal demand will keep going on and on rising (short, medium and long term), not without slight retracing though. It takes time for the rippling effects of the downturn in the US move onto these countries. 

In analysing the impacts of this correction onto the workd stockmarket some people have failed to realise the era when US or EU single handedly manipulate the world stock market is gradually fading. It doesn't need much indepth research into complicated finance or economy. The proof is that when people make decision in buying/selling, although they take into account of the world economy (but on earth who has a transparent understanding of it? or who can predict?)they often focus more on evaluating the fundamentals (resource and demand) of this particular company. The micro-level behaviour will eventually accumulate to form a macro trend. 

excuse the english - not my mother tongue


----------



## Wysiwyg

I suppose the American ego won`t be too happy when China becomes a dominant world power.

Two very different social structures and we know those yanks love to fight.


----------



## nioka

Why should we expect a market correction? There is a severe problem for the lenders of low doc loans and the like. The mortgage funds are in trouble. That should be a good thing for the stock market as money taken out of the troubled sector has to find a home somewhere. 
Therehas been a lot of discussion lately on these forums regarding property vs shares. If money leaves one it usually goes to the other.
Long live the bulls.


----------



## ideaforlife

nioka said:


> Why should we expect a market correction? There is a severe problem for the lenders of low doc loans and the like. The mortgage funds are in trouble. That should be a good thing for the stock market as money taken out of the troubled sector has to find a home somewhere.
> Therehas been a lot of discussion lately on these forums regarding property vs shares. If money leaves one it usually goes to the other.
> Long live the bulls.




Definitely, I do agree even if looking at monetary market. I believe the bull market for resources will be going on for at least another 10 years.


----------



## Uncle Festivus

nioka said:


> Why should we expect a market correction? There is a severe problem for the lenders of low doc loans and the like. The mortgage funds are in trouble. That should be a good thing for the stock market as money taken out of the troubled sector has to find a home somewhere.
> Therehas been a lot of discussion lately on these forums regarding property vs shares. If money leaves one it usually goes to the other.
> Long live the bulls.




This is part of a text from the man who called this correction, which may or may not have further to 'correct'.

Pimco's Bill Gross 

Some wonder what squelched the hunger of potential lenders so abruptly, while in the same breath suggesting that the subprime crisis is "isolated" and not contagious to other markets or even the overall economy. Not so, and the sudden liquidity crisis in the high yield debt market is just the latest sign that there is a connection, a chain that links all markets and ultimately their prices and yields to the fate of the U.S. economy.


http://www.pimco.com/LeftNav/Featured+Market+Commentary/IO/2007/IO+August+2007.htm


----------



## james99

Uncle Festivus: The correction has, I suspect turned a wee corner, for the short term. I see the LSE is already up over 80 points, and it is not yet midday (plenty of time for me to be proven wrong). So long as it closes ahead, then all should be good until the next correction - do they seem to be about 4-6 months apart? I am sure we will get more. 

The carry trade has resumed and, despite volatility, there is good international monetary supply and inflation is quite well controlled internationally. The miners are especially strong, and there are improved commodity prices. GDP in Australia, UK, Asia and the general Eurozone is strong.

I suspect that we are in the midst of the 3rd stage of a cycle with several years to run and, understandably, some corrections and volatility from time to time. They present buying opportunities. A lower re-ranking of financial stocks, especially non-blue chip, is perhaps in order. 

However, with the superfunds, commodity demand and significant Australian resources, mining and assoicated industries must be very promising. With increased geopolitical uncertainty, Aussie mining stocks (from producers such as RIO / BHP to OXR) and even quite speculative stocks, may appeal far more than those in Asia, Africa etc. There are also some blue chip international stocks that are perhaps undervalued. 

With the fuel concerns, both UGC companies (which currently generally involves quite speculative juniors such as Mee and CXY) and agricultural companies (at least those that can supply potash / nitrogen fertilizer - eg NUF and IPL) must have good growth prospects. I have left aside uranium about which much has been written by many, but tend to think it is a time for considering those with good licence prospects or production ability, if not producers such as Pdn). Associated engineering industries must also have good growth prospects.  That is not to undermine petroleum companies, but value is hard to predict.

I think, perhaps, that it is a time to select the sectors more carefully, rather than to rely on general market growth and that resource and defensive will both offer good potential for growth. The former, for reasons stated, and the later becuase they have been undervalued / largely ignored for several years and will now attract conversative money. Finanaical sectors can be carved off, to a degree.

Finally, although we are all avid stock watchers, to differing degrees, there are still many who have not yet jumped into the market, whereas in the 1987 / 2000 etc busts there was very widespread public participation in the market. 

All of course IMO. I disclose interests in some but not all of the stocks mentioned and many different stocks could be substituted. No recommendation is intended to be attached to them.


----------



## gfresh

Some good points. 

Your point regarding participation. Personally I think the Government is not doing enough to encourage share ownership in this country.. other than where it suits them, such as Telstra (and how good was that for the majority of mum and dad investors ). In fact media frenzy over any sort of drop in the market by the uneducated is seen as yet another reason to stay out. 

By making it an attractive investment vehicle via appropriate incentives (a further cut in capital gain for share purchases?), not only would it possibly put the pressure off the property demand as an investment vehicle (with it's mountain of deductions), but help fund and encourage the future of Australian businesses' and ventures throughout this country. Even encourage overseas participation and investment. Way too much emphasis is put on property, and no wonder, you'd have to have rocks in your head not to buy 1, 2, 3+ properties rather than shares if you had the money available. Simply as property can slash your income tax by massive amounts, shares do not. Pollies: reduce the damn demand, stop yabbering about the supply!

I think we lack in this area. It's not wonder as well, speaking to my friends, etc, buying in shares seems to "black magic"  - simply a lack of understanding of how the sharemarket works, and what it offers.


----------



## Sean K

This doesn't help my theory that sub prime is going to be contained. 



			
				The Australian said:
			
		

> *MacBank: brace for sub-prime loss *
> Geoffrey Newman | August 01, 2007
> 
> THE Australian fallout from the sub-prime loan crisis in the US worsened substantially last night after Macquarie Bank revealed that retail investors faced losses of up to 25 per cent in two of Macquarie's high-yield investment funds.
> 
> Macquarie, known colloquially as the millionaires' factory because of the headline-grabbing size of its executives' pay packets, said last night that two of its funds which were marketed to smaller investors could lose a quarter of their value, or more than $300 million.
> 
> The director of Macquarie Fortress Investments, Peter Lucas, said in a statement to the market that the average price of assets in the portfolios had fallen by 4 per cent in the month to July 30 but because of loans made against the funds, which have about $1.3 billion invested, they could lose a quarter of their value.
> 
> He also warned that the funds faced possible margin calls from their lenders if they could not sell enough assets to reduce leverage.
> 
> Macquarie becomes the third similar fund to get into trouble after Basis Capital and Absolute Capital froze investors' money, but it could mark a new, dangerous phase as the Fortress funds did not in fact have any direct exposure to US sub-prime mortgages.


----------



## james99

It is quite difficult to predict. I see the LSE surged upwards strongly last night, yet the US markets dropped on credit concerns, even though US consumer confidence is high. All quite contradictory. Interestinly, the $value of the actual losses in the subprime funds is small compared with the value of the increase or decrease of the markets each day. The perception of loss is greater than the actual loss, but of course perception plays an important role in markets.


----------



## ducati916

james99 said:


> It is quite difficult to predict. I see the LSE surged upwards strongly last night, yet the US markets dropped on credit concerns, even though US consumer confidence is high. All quite contradictory. Interestinly, the $value of the actual losses in the subprime funds is small compared with the value of the increase or decrease of the markets each day. The perception of loss is greater than the actual loss, but of course perception plays an important role in markets.




Not when you double leverage that figure.

First leverage = margin.
Hedge Funds can buy $1.00 for $0.05

Then they add to that mix derivatives, now worth some $300 Trillion to leverage that initial margin bet further.

Thus, the dollar value is immense.

Billions of dollars evaporate in hours from Bank/Hedge Fund/Insurance Co/Pension Fund Balance sheets thus forcing them to either;

*liquidate [take losses]
*liquidate alternate assets to meet margin calls.

Margin has gone from the 5% to 50% in the last 10/12 days in the US.

This is a huge mess, and the selling begets further selling, until it cannot be stopped, thus is the positive feed forward cycle reinforced, *reflexivity* as referred to by Soros.

jog on
d998


----------



## tech/a

Duc

You still running that fundie portfolio?


----------



## Sean K

kennas said:


> This doesn't help my theory that sub prime is going to be contained.



This seems to have been reported incorrectly.



> *DJ Macquarie Bank Says No Direct Exposure To Fortress Funds*
> 01/08/2007 09:02AM AEST SYDNEY
> 
> (Dow Jones)--Macquarie Bank (MLB.AU) said Wednesday it has no direct exposure to its two high-yield investment funds that have been adversely impacted by price volatility in the U.S. credit market.
> 
> Macquarie had said earlier that two of its funds that were marketed to smaller investors could lose a quarter of their value, or more than A$300 million, according to a report on The Australian newspaper website.
> 
> A spokeswoman for Australian Bank told Dow Jones Newswires that the bank has no direct exposure to Fortress Funds.


----------



## Uncle Festivus

gfresh said:


> Some good points.
> 
> Your point regarding participation. Personally I think the Government is not doing enough to encourage share ownership in this country.. other than where it suits them, such as Telstra (and how good was that for the majority of mum and dad investors ). In fact media frenzy over any sort of drop in the market by the uneducated is seen as yet another reason to stay out.





To the contrary, I think we are overexposed via superannuation; a case of all the eggs in the one basket. As per Ducati, a self perpetuating downward spiral if it takes hold due to leverage and debt. Contagion & domino effect getting a foothold.


----------



## james99

I think it is fair to say that the fact and timing of the margin call on American Home Mortgage was unexpected (certainly it was unexpected by me although I have long been wary of the impact of ARM loans; I was less surprised by the Macquarie portfolios) and the FTSE is currently down almost 130 (it rebounded slightly from its low of 150 but may drop again). 

Ducati and Uncle Festivus, I do agree with the self perpetuating spiral theory, and certainly think that the current sell-off is both risk and sentiment driven, but for many non-financial sectors the fundamentals are still very good. I do not think that we are at the stage of collapse and tend more to the view that the issue is not whether there will be a recovery, but when and for how long. 

Of course, a recovery will probably not be aided by any Au reserve bank rate rise. I am in NZ and you should be happy with your lesser OCR.

On a cheery note, I see Murdoch today got the Journal; so clearly some optimism displayed there. I have rather cheerfully also just bought some (hopefully) share bargains, but perhaps if I am wrong with my broader market view I can with hindsight observe the time I tried to catch and was cut by a falling knife ... I do not quite aim to buy at the bottom, because that is impossible to predict, but hopefully have bought with plenty of room for a rise - some of your resource stocks really do have very good prospects.


----------



## Uncle Festivus

Well it wasn't as imminent but still somewhat severe, just hope it is _only_ a correction! Keep dropping those dollars Benny!


----------



## bean

There is a problem no buyers on US market volume low to start with tonight
It might be Bull Goodnight


----------



## bean

bean said:


> There is a problem no buyers on US market volume low to start with tonight
> It might be Bull Goodnight




NO Teasing but this is a problem...volume is less than half what it has been at this current time...Have the buyers dried up.


----------



## bean

bean said:


> NO Teasing but this is a problem...volume is less than half what it has been at this current time...Have the buyers dried up.



I am off to bed this current rally (tonight at the current time a feather is holding it up.) Volume is still less than half what it would be.
I will try not to snore so as not to send a tremor through the market because thats all it needs.
(Now if it does drop...I did not snore)


----------



## doctorj

A picture from the wayneL photo album - in his youthful, rebellious days...


----------



## bean

Well went back in today 100% and dropped a couple %
However 
One for the Bulls


----------



## bean

An update on last night inverted head and shoulder
the Bulls did not show themselves really needed to be up more than what it was (benefit of the doubt however but a failure is bad back to test the lows pretty quick)
Back in cash - just in case in turns tonight


----------



## INORE

awwww i dunno things dont look too bad in the big picture.......


----------



## chops_a_must

doctorj said:


> A picture from the wayneL photo album - in his youthful, rebellious days...




That looks disturbingly like one of my heroes, Stephen Malkmus.


----------



## bean

INORE said:


> awwww i dunno things dont look too bad in the big picture.......
> 
> View attachment 12555




But a few periods in there not to good. So you have a bad two five or ten years now thats O/k.


----------



## INORE

bean said:


> An update on last night inverted head and shoulder
> the Bulls did not show themselves really needed to be up more than what it was (benefit of the doubt however but a failure is bad back to test the lows pretty quick)
> Back in cash - just in case in turns tonight
> 
> View attachment 12554




well all seems ok'ish so far tonite.....only just opened i know but seems to be positive...


----------



## bean

INORE said:


> well all seems ok'ish so far tonite.....only just opened i know but seems to be positive...



Yes but it should be exploding away last night should have moved two not one % and tonight it is struggling (If it had moved with any force would have taken DOW back to 13700-13900 within a matter of days (3 day) 
Red by midnight and its downhill all the way


----------



## Wysiwyg

The new housing sales and durable goods reports out tonight in the U.S.
A continued decline in new house sales is expected by the analysts and will prolly see a downer on the U.S. indices.


----------



## Porper

Wysiwyg said:


> The new housing sales and durable goods reports out tonight in the U.S.
> A continued decline in new house sales is expected by the analysts and will prolly see a downer on the U.S. indices.






The people that matter will already know the data, still, they might use it to manipulate prices.

Having said that the Dow is in overbought territory, so the next few days could be a consolidation or worse, down a fair bit.


----------



## >Apocalypto<

Porper said:


> The people that matter will already know the data, still, they might use it to manipulate prices.
> 
> Having said that the Dow is in overbought territory, so the next few days could be a consolidation or worse, down a fair bit.




Hi Porper,

Good points, one thing on the dow that stuck out to me is the declining volume on this couter rally move. So I am think some more down side to come. From what I have read that is normal volume behavior in a counter rally.

this rally looks really wild on the xjo fair to vertical but I will look to buy in on a higher low. though my gut tells me its suicide!


----------



## drmb

Interesting article on finance.yahoo.com - Four Tips for Riding a Seesaw Market by Laura Rowley Posted on Thursday, August 23, 2007, 12:00AM

My neck hurts. According to the Mayo Clinic's web site, whiplash occurs "when the head is jerked forward and back, stretching the soft tissues of the neck beyond their limits." Lately, I find that an involuntary neck-snapping occurs every time I walk past a television, computer screen, or radio, and catch the latest stock market update.


This is typically followed by an ill-advised trip to the Internet to survey my investment accounts -- sagging like cheap hosiery bunched at the ankles. Who knew stocks and stockings could have so much in common? If this market doesn't give you whiplash, stop reading. But if a 300-point drop in the Dow evokes the sensation of digesting bad oysters, here are a few tips to ease your market-induced stress.


*Be True to Your Goals*
• Investing is about meeting life goals, so make sure your allocation reflects your aspirations.


I hate when people say that investing in the stock market is gambling. Money thrown on a blackjack table in Atlantic City can evaporate instantly (which, regrettably, I learned the hard way). But that's never happened with a reasonably diversified portfolio of stocks and bonds.

On the other hand, a diversified portfolio will swing in value, a natural reflection of the economic cycle. The investor's best defense is to develop a specific allocation strategy that's like Donald Trump's hairstyle -- highly individualistic and oblivious to passing fads.

"It's important to come up with an allocation to meet and achieve goals -- that's the biggest disconnect I see," says Michael Steiner, wealth manager with RegentAtlantic Capital in Chatham, N.J. "Clients will come in with a portfolio, and when I ask what the objective of the portfolio is, 99 percent say, 'To make money.' But what's the money for?" 

*Be Realistic*

• Financial goals need to be concrete, precise and measurable -- with real timeframes and credible numbers.

For instance, Steiner says, "If you want to retire at 62 and live on a $70,000 after-tax [income], then the portfolio should be constructed to meet that goal."

Nobel laureate Harry Markowitz demonstrated that the bulk of investment returns come from allocation -- the mix of investments -- rather than the choices made in each category. It's kind of like nutrition: You'll get fat if you eat more ice cream than vegetables. It doesn't matter whether it's Ben & Jerry's Chunky Monkey or Edy's Cookie Dough.

"That's the most basic investment decision most people will make -- how much you have in cash, bonds, and stocks," says Charles Farrell, of Northstar Investment Advisors in Denver. "Then, within the bond and stock categories, check to ensure that you're adequately diversified. People debate the appropriate amounts, and there's no correct answer, but what generally makes sense is to have a broadly diversified and balanced account." (Novice investors, see my blog for allocation how-to's.)

By contrast, if you're in the market with vague hopes of getting rich, you'll likely abandon ship when stocks decline -- which everyone knows is the ideal time to get in. "It's been proven time and time again: When there's doom and gloom, it's usually the best time to buy," says Steiner. "Emotionally, it's the hardest decision to make, even though fundamentally it makes sense."

*Be Patient*

• Stocks are an excellent investment -- over time.

If you're unnerved by the latest market rout, it may be time to reconsider your risk tolerance. But first look at the timeframe of your investments.

"The more time you have -- for instance, until retirement -- the more you can tolerate the natural gyrations of the markets," says Michael Furois, president of The Planning Associates in Phoenix. Ariz. "When looking at your 401(k) or other investment account statements, you may have to remember this: The reduced value of your investments is only a temporary decline in price, not a permanent loss in value."

In its best year, the S&P 500 rose nearly 54 percent; in its worst year, it dropped about 43 percent, according to Ibbotson Research. Nobody knows what's going to happen in the future, but studies based on the past performance of the S&P 500 have found that since 1925, the chance of losing money over a year is 28 percent; over 5 years, 10 percent; over 10 years, 3 percent; and over 20 years, 0 percent.

"One good way to test your comfort level is to take a hypothetical market decline and apply it to the amount you have invested in the market," Farrell suggests. "For instance, if the market declines 20 percent, that will affect each one of us differently. If this is my first year as an investor and I have $5,000 in the market, my account might decline $1,000. Probably not a life-changing event. If I have $500,000 in the market and am age 50, I might see a decline of $100,000. Each investor has to honestly answer whether they're comfortable with that type of volatility."

From 2000 to 2002, investors experienced declines of 50 percent. Farrell points out: "Apply that number to the amount you have in equities and see how you feel. If you can stay committed during that type of cycle, and focus on the probability of long-term positive returns, then you're probably in the right place," he says. "If the potential decline in your account value concerns you, then you may be taking too much risk and it's probably time to consider some modifications."

In the meantime, also consider that from its low point in 2002, the Dow has risen about 6,000 points, or roughly 80 percent.

*Be Introspective *

• Market volatility can be a reminder to reassess risk and rebalance.

If the market roller coaster is keeping you up at night, don't get down on yourself. You probably couldn't have predicted you would feel this way. People make predictive errors for a variety of reasons, but one that's perhaps most germane here is something called "the hot/cold empathy gap." When people are in a "cold" or neutral emotional state, they often have trouble imagining how they would feel or what they would do if they were in a "hot" state -- angry, hungry, in pain, or, say, watching their E*Trade account plummet in value.


On the other hand, when we're experiencing a hot state, we have difficulty imagining that we'll cool off at some point (which is why, in the heat of the moment, it seems perfectly reasonable to sell all the stocks in your E*Trade portfolio and put the money under your mattress).


Meanwhile, studies on loss aversion have found investors tend to feel the pain of losses more than the joy of gains. "Investors generally make mistakes when they're reacting out of either fear or greed," says Farrell. "Having a balanced and diversified account generally helps combat the tendency to be driven by those two very powerful emotions."

Once you design an allocation strategy, rebalance it at least once a year to reflect the original mix. "Maybe you let those winners ride a little too long and weren't diligent about maintaining your allocation," says Steiner. "Maybe your 60-40 stock-to-bond ratios went to 50-50, and you felt too overconfident."

*Get Help*
If you're not sure how much risk to take, or whether your investments accurately reflect your life goals or appropriate timeframes, get some help. Many 401(k) providers have investment professionals available to talk to participants about their allocations. Or consider talking with a fee-only financial planner.


----------



## INORE

nice article...

again i think fridays DJIA close will be another fairly ho-hum affair...which in turn should make for a nice start to ASX on monday to make-up for todays close...


----------



## drmb

INORE said:


> nice article... again i think fridays DJIA close will be another fairly ho-hum affair...which in turn should make for a nice start to ASX on monday to make-up for todays close...




Take another look! 

Symbol Last Change 
Dow 13,378.87  142.99 (1.08%) 
Nasdaq 2,576.69  34.99 (1.38%) 
S&P 500 1,479.37  16.87 (1.15%) 
10-Yr Bond 4.6330%   0.0150 
NYSE Volume 2,522,251,000 
Nasdaq Volume 1,663,246,000 

DJI:^DJI
Index Value: 13,378.87 
Trade Time: 4:04PM ET 
Change:  142.99 (1.08%) 
Prev Close: 13,235.88 
Open: 13,231.78 
Day's Range: 13,208.65 - 13,381.47 
52wk Range: 11,273.90 - 14,121.00


----------



## sassa

drmb said:


> Take another look!
> 
> Symbol Last Change
> Dow 13,378.87  142.99 (1.08%)
> Nasdaq 2,576.69  34.99 (1.38%)
> S&P 500 1,479.37  16.87 (1.15%)
> 10-Yr Bond 4.6330%   0.0150
> NYSE Volume 2,522,251,000
> Nasdaq Volume 1,663,246,000
> 
> DJI:^DJI
> Index Value: 13,378.87
> Trade Time: 4:04PM ET
> Change:  142.99 (1.08%)
> Prev Close: 13,235.88
> Open: 13,231.78
> Day's Range: 13,208.65 - 13,381.47
> 52wk Range: 11,273.90 - 14,121.00




I'm confused.What are you trying to tell Inore?


----------



## drmb

sassa said:


> I'm confused.What are you trying to tell Inore?




May have been ho hum at 1130 am but all US SX closed high at end of trade - 
"Bulls Mad Dash Ends Week on Wall St. AP - Wall Street ended its calmest week in a month with a big advance Friday, rising on solid economic readings that countered the bleak sentiment that has blanketed the financial markets."

That's not ho hum to me!!


----------



## Rob_ee

drmb said:


> May have been ho hum at 1130 am but all US SX closed high at end of trade -
> "Bulls Mad Dash Ends Week on Wall St. AP - Wall Street ended its calmest week in a month with a big advance Friday, rising on solid economic readings that countered the bleak sentiment that has blanketed the financial markets."
> 
> That's not ho hum to me!!




In other words it's a guessing game.

Either the sub prime thing doesn't matter or it will come home to roost sooner or later.  

Since I have no idea when/if that may happen I am quite happy to sit out of the market at the moment ,and yes I have missed large possible gains recently.

I think i read somewhere that the ASX has made the largest % gains in decades during the past 2 weeks ???

Go figure ?, there are more important things than money , spring is in the air
and my garden beckons.

I am a wuss
Rob


----------



## sassa

Rob_ee said:


> In other words it's a guessing game.
> 
> Either the sub prime thing doesn't matter or it will come home to roost sooner or later.
> 
> Since I have no idea when/if that may happen I am quite happy to sit out of the market at the moment ,and yes I have missed large possible gains recently.
> 
> I think i read somewhere that the ASX has made the largest % gains in decades during the past 2 weeks ???
> 
> Go figure ?, there are more important things than money , spring is in the air
> and my garden beckons.
> 
> I am a wuss
> Rob



A guessing game-sort of.Investors look for any any positive signs to buy in but do they really dissect the information given.Take for example the Dow yesterday which started off very cautiously because of the credit squeeze and then -bingo-the numbers for the housing market came in above all expectations.Was the fact that they were for the June15-July15 period(which is historically a strong month in America) really analysed and the fact that cancellations are not included in the data?This data is notorious for the number of revisions it goes through and as Paul Kasriel of Northern Trust said,"I would take the numbers with a grain of salt."
The real effect of the slowdown in the housing sector will be seen in the August and September figures as people now have to have 20% down and even then you will be subject to credit reviews.This spillover into the real economy will create a drag on growth(enough to be a recession?) and a bearish effect? on the market.


----------



## Rob_ee

sassa said:


> A guessing game-sort of.Investors look for any any positive signs to buy in but do they really dissect the information given.Take for example the Dow yesterday which started off very cautiously because of the credit squeeze and then -bingo-the numbers for the housing market came in above all expectations.Was the fact that they were for the June15-July15 period(which is historically a strong month in America) really analysed and the fact that cancellations are not included in the data?This data is notorious for the number of revisions it goes through and as Paul Kasriel of Northern Trust said,"I would take the numbers with a grain of salt."
> The real effect of the slowdown in the housing sector will be seen in the August and September figures as people now have to have 20% down and even then you will be subject to credit reviews.This spillover into the real economy will create a drag on growth(enough to be a recession?) and a bearish effect? on the market.





And of course a lot of the euphoria is based on the premise that the other type of rate cut will be made in September OR sooner.
Now that all is well and the clouds have lifted just maybe there will be no cut after all ?

Wonder what that will do to the market. ?

The reason why I am presently being a wuss is that my trading exploration in MS is not coming up with anything at all in the past 2 weeks.
Since I have done reasonably well so far (bless AXM) there is no reason to change


----------



## INORE

drmb said:


> May have been ho hum at 1130 am but all US SX closed high at end of trade -
> "Bulls Mad Dash Ends Week on Wall St. AP - Wall Street ended its calmest week in a month with a big advance Friday, rising on solid economic readings that countered the bleak sentiment that has blanketed the financial markets."
> 
> That's not ho hum to me!!




Yes i agree that wasnt a ho-hum finish...perhaps this cats made of rubber....

I tend to agree that the US rates wont be cut if everything starts to resume an upward pattern, BUT if there was some more large scale drops you would expect them to use it and hence if we get another drop before they cut rates, that would create a good BUY opportunity....and with this assumption some people may not be buying back as much and waiting for the next pull back and recovery cycle.....and the rubber cut continues to bounce but perhaps a little less high each time....


----------



## zt3000

Anyone else of the view that when the govt tells the people to stay calm, and everything is ok ... things in fact are usually really really bad ....??


----------



## GreatPig

Remember: be alert, not alarmed 

GP


----------



## sassa

GreatPig said:


> Remember: be alert, not alarmed
> 
> GP




Come Saturday,our time,when Bernanke addresses the whole world financial market,all players will be alert and could be very alarmed.Figures to be revealed this week in the U.S.about housing sales and consumer spending will have a bearing on whether he will intimate that there will be a cut to the Fed rate.If the figures,as expected,are down,will he be game enough to cut the Fed rate?What nasties lurk in his own system and those of the world if he does intimate that there will be a cut?


----------



## sassa

sassa said:


> Come Saturday,our time,when Bernanke addresses the whole world financial market,all players will be alert and could be very alarmed.Figures to be revealed this week in the U.S.about housing sales and consumer spending will have a bearing on whether he will intimate that there will be a cut to the Fed rate.If the figures,as expected,are down,will he be game enough to cut the Fed rate?What nasties lurk in his own system and those of the world if he does intimate that there will be a cut?




Interesing article by Caroline Baum at Bloomberg titled "Bernanke Opts For Tough Love & Targeted Cure."
In the article Baum says-"He proved himself to be cool under pressure and measured in his response,addressing the immediate need for liquidity by providing more of it-on demand."
Further,"We were all conditioned to expect Greenspan's type of parenting,giving the child what it wants even if,in the long run,the treatment does more harm than good."
"The Bernanke Fed is working hard to disabuse(free from a mistaken idea) investors of the notion that market turmoil translates into an immediate rate cut......capitalism without financial failure is not capitalism at all,but a kind of socialism for the rich."
Finally,"....bubbles don't end well.At some point there is no greater fool to take the overpriced asset off the last buyer's hands.The jig is up.Prices collapse.The real estate bubble has an added feature.The bad loans aren't just a matter between borrower and lender.The loans have been packaged,pureed and processed as complex credit derivatives,marketed and sold with a good dose of leverage.The ultimate effect of all this financial engineering gone awry is,as they say in the mortage-backed securities market-TBA."


----------



## INORE

i didnt like the look of this, this morning...looks like a loss of confidence increasing throughout the day....back to cash for this once bitten trader.


----------



## wayneL

sassa said:


> "The Bernanke Fed is working hard to disabuse(free from a mistaken idea) investors of the notion that market turmoil translates into an immediate rate cut......capitalism without financial failure is not capitalism at all,but a kind of socialism for the rich."



Quite a few commentators are coming out with similar statements; fair comment too.

Wall Street et al must be allowed to weather the consequences of its binge. It might mean a deeper recession, but ultimately it will be much healthier for western economies.


----------



## sassa

INORE said:


> i didnt like the look of this, this morning...looks like a loss of confidence increasing throughout the day....back to cash for this once bitten trader.
> 
> View attachment 12698



Looks like the good old U.S.of A markets might open on a positive.The S & P 500 futures is up and also the Nasdaq at 5a.m.(NY time).European markets are responding positively after a shaky start but all could........


----------



## sassa

wayneL said:


> Wall Street et al must be allowed to weather the consequences of its binge.



The majority of articles in journals,the discussions on audio/visual at Bloomberg and Market Watch,the intervention of the Fed and the direction of the markets all point to no imminent or severe market correction at all.
Contributors are pointing to the resetting of mortgages in the sub prime next month as the telling time and the impending recession.
Analysts are not divided equally on a recession but lean heavily to no recession at all.The President said the government will step in and help people reset their mortgages to prevent them losing their homes.The Fed will cut rates(some say 125 basis points)to help with credit-this,of course,won't help the banks with the debt problems they have on their books(I think?).
It would seem there is no financial risk in the markets now and investors are certainly backing that up with the indices climbing when they really should be.......
So where is this credit crisis?


----------



## explod

sassa said:


> The majority of articles in journals,the discussions on audio/visual at Bloomberg and Market Watch,the intervention of the Fed and the direction of the markets all point to no imminent or severe market correction at all.
> Contributors are pointing to the resetting of mortgages in the sub prime next month as the telling time and the impending recession.
> Analysts are not divided equally on a recession but lean heavily to no recession at all.The President said the government will step in and help people reset their mortgages to prevent them losing their homes.The Fed will cut rates(some say 125 basis points)to help with credit-this,of course,won't help the banks with the debt problems they have on their books(I think?).
> It would seem there is no financial risk in the markets now and investors are certainly backing that up with the indices climbing when they really should be.......
> So where is this credit crisis?




I learnt the hard way not to take any notice of Wall Street and in particular Bloomberg and Market Watch.

This is the punch line yet few heed it.    'I never invest in anything that I do not understand"   Warren Buffet,  wealthiest investor in the world.

Analystic journalists are paid to maintain the status quo.   At the moment that is to try and hold up Wall Street while the smart money and the Fed can reajust themselves.    Unless it can break strong resistance at 13500 the Dow is still in a down trend


----------



## Sean K

sassa said:


> The majority of articles in journals,the discussions on audio/visual at Bloomberg and Market Watch,the intervention of the Fed and the direction of the markets all point to no imminent or severe market correction at all.
> 
> Contributors are pointing to the resetting of mortgages in the sub prime next month as the telling time and the impending recession.
> 
> Analysts are not divided equally on a recession but lean heavily to no recession at all.......
> 
> So where is this credit crisis?



sassa, it might just depend on which articles you read. I'm trying to keep an open mind but I'm always swayed by the bullish articles more because I'm that kind of guy! An ostrich 

Seriously, I'm not positive you can validate the future of the market on a few newspaper articles. All have an agenda. Perhaps the news writers have a vested interested in getting it right, or is it to sell newpapers? Maybe that ends up hand in glove. 

Can you give some references to the analysts summary etc?


----------



## DTM

sassa said:


> The majority of articles in journals,the discussions on audio/visual at Bloomberg and Market Watch,the intervention of the Fed and the direction of the markets all point to no imminent or severe market correction at all.
> Contributors are pointing to the resetting of mortgages in the sub prime next month as the telling time and the impending recession.
> Analysts are not divided equally on a recession but lean heavily to no recession at all.The President said the government will step in and help people reset their mortgages to prevent them losing their homes.The Fed will cut rates(some say 125 basis points)to help with credit-this,of course,won't help the banks with the debt problems they have on their books(I think?).
> It would seem there is no financial risk in the markets now and investors are certainly backing that up with the indices climbing when they really should be.......
> So where is this credit crisis?





Please correct me if I'm wrong but didn't the US Government also say to people not to fix their interest rates when it was 0 or 1% a little while ago??

They even wheeled out GDubbya to tell people not to fix, and that variable was better than fixed?

Go figure


----------



## sassa

kennas said:


> Can you give some references to the analysts summary etc?




javascript:vlaunch('http://www.marketwatch.com/tvradio/player.asp?guid={5AE0C5E8-0FEA-4DA2-86F5-68D6BD2426AB}')


----------



## Sean K

sassa said:


> javascript:vlaunch('http://www.marketwatch.com/tvradio/player.asp?guid={5AE0C5E8-0FEA-4DA2-86F5-68D6BD2426AB}')



sassa, what part of that link do I use? Thanks.


----------



## surfingman

http://www.marketwatch.com/tvradio/player.asp?guid={5AE0C5E8-0FEA-4DA2-86F5-68D6BD2426AB}

use the part inside '   '


----------



## Uncle Festivus

sassa said:


> The majority of articles in journals,the discussions on audio/visual at Bloomberg and Market Watch,the intervention of the Fed and the direction of the markets all point to no imminent or severe market correction at all.
> 
> So where is this credit crisis?




The commentator in the Marketwatch piece alludes to a phenomenon called stagflation, without actually saying it as it might scare people. I vaguely recall a bit of market turmoil some weeks ago which constituted a correction? There was some animated requests pleading for the US Fed to come to the rescue with an interest rate cut as well. So a new week and all is back to normal.

As far as I can tell nothing has improved over the last few weeks other than stocks regaining the losses to be nearly back to where they were before the correction. I remember nearly all analysts trying to explain what was going on, but the best one was that the market was a tad overheated & needed a healthy retracement. So now that we are back in overheated territory are we again overbought?

The imbalances in the US are now structural and will detract further from GDP in the coming qtrs, so the show has just had it's full dress rehearsal for the main event to come. More 'mark to market' asset write downs. 

The new mantra is 'The return *of* capital rather than return *on* capital'.

Classic bull trap.

http://www.marketwatch.com/news/story/take-more-just-rate-cuts/story.aspx?guid=%7BDF4666CE%2D2FFB%2D423A%2D9751%2DC5E083C525B2%7D


----------



## Sean K

surfingman said:


> http://www.marketwatch.com/tvradio/player.asp?guid={5AE0C5E8-0FEA-4DA2-86F5-68D6BD2426AB}
> 
> use the part inside '   '



That wasn't really a well rounded summary to me. 

Maybe if Marc Faber had have given his opinion as well there might have been some balance.


----------



## sassa

kennas said:


> That wasn't really a well rounded summary to me.




Hi Kennas,
Could you direct me to an article that explains the behaviour of the markets now when I think that they should be falling or marking time?Do you have any thoughts on the spread of the Dow indices?


----------



## Sean K

sassa said:


> Hi Kennas,
> Could you direct me to an article that explains the behaviour of the markets now when I think that they should be falling or marking time? Do you have any thoughts on the spread of the Dow indices?



Not at the moment, will get back to you. I'm not the one to ask about US indices though, I'd just be quoting someone else. 

There's a few threads discussing the direction of the market though. Some TA, some FA, and there's lots of confliction in and amongst.....


----------



## Uncle Festivus

sassa said:


> Hi Kennas,
> Could you direct me to an article that explains the behaviour of the markets now when I think that they should be falling or marking time?Do you have any thoughts on the spread of the Dow indices?




sassa,
 Another viewpoint to confuse us?



> In the midst of all this, many investors are baffled that equity markets have not been more seriously damaged. Part of the explanation, which may be a more hopeful pointer for the global economy, is that confidence in the corporate sector has taken much less of a knock than in finance. With relatively unstretched balance sheets, business people across the world have responded to falling share prices by initiating share buy-backs.
> Boardroom insiders’ purchases of shares have also been outweighing sales by a big margin.
> Whether the optimism holds up in the face of a slowing economy remains to be seen.
> The large chunk of corporate profits attributable to finance in the US and UK is also a bear pointer. While central banks have so far succeeded in keeping the financial show on the road, the problems of the housing market and the flakiness of the accountancy for complex financial instruments means that there is a drip feed of bad news yet to come.



http://www.rgemonitor.com/blog/roubini/212919/


----------



## dhukka

sassa said:


> The majority of articles in journals,the discussions on audio/visual at Bloomberg and Market Watch,the intervention of the Fed and the direction of the markets all point to no imminent or severe market correction at all.
> Contributors are pointing to the resetting of mortgages in the sub prime next month as the telling time and the impending recession.
> Analysts are not divided equally on a recession but lean heavily to no recession at all.




Here's a question for you sassa, how many mainstream analysts/economists predicted the last US recession? If you can come up with one you'd be doing well. Economists are great contrarian indicators. 



> The President said the government will step in and help people reset their mortgages to prevent them losing their homes.




A gross over-generalization, the measures proposed by congress would help around 80,000 households, there are 2 million ARM resets to come over the next 12 months.



> The Fed will cut rates(some say 125 basis points)to help with credit-this,of course,won't help the banks with the debt problems they have on their books(I think?).




No it won't and it won't bring back the sub-prime market , all the mortgage originators that have gone bust or the secondary market for non-prime RMBS. 



> It would seem there is no financial risk in the markets now




Is that so? you should inform the rest of the financial community that are unwilling to borrow or lend to each other, I'm sure they'll be relieved to know. 


Um lets' see, how about the fact that every other day a mortgage originator goes bust or a hedge fund announces they have serious trouble. How about the now non-existent LBO market? How about the shrinking ABCP market? How about the difficulty in obtaining a mortgage? How about widening credit spreads, falling housing prices and sales, falling residential investment, massive losses and write-downs from builders, building sentiment at 16 year lows, falling corporate earnings for financial companies. 

Yeah I don't know what they are on about with this credit crisis stuff


----------



## sassa

Uncle Festivus said:


> sassa,
> Another viewpoint to confuse us?
> 
> http://www.rgemonitor.com/blog/roubini/212919/




Thank you,a very interesting read with some thoughtful comments such as-
"The central banks have reacted sensibly to the implosion in the money markets with their repeated injections of anti-coagulant. But at the root of it all is the correction of a credit bubble."
And how does a credit bubble correct?Does it break and send other kinds of unwanteds into the financial sector or does the huge amounts of investment cash available from other rich economies(e.g.China)smooth it out?


----------



## sassa

kennas said:


> Not at the moment, will get back to you.




Found this article.
http://money.cnn.com/magazines/fortune/fortune_archive/2007/09/17/100250262/index.htm


----------



## bean

Looks like after todays action China may join the party with everyone in the coming days.


----------



## numbercruncher

bean said:


> Looks like after todays action China may join the party with everyone in the coming days.





What action happened today ?


----------



## YOUNG_TRADER

I'm not sure, but Beans comments maybe in reference to Chinese Inflation at 10 yr highs

http://www.marketwatch.com/news/sto...7C-425C-9BD5-69D5723ABB58}&dist=TQP_Mod_mktwN


----------



## bean

YOUNG_TRADER said:


> I'm not sure, but Beans comments maybe in reference to Chinese Inflation at 10 yr highs
> 
> http://www.marketwatch.com/news/sto...7C-425C-9BD5-69D5723ABB58}&dist=TQP_Mod_mktwN




Yes and the Markets dropping.  So was that their top???


----------



## >Apocalypto<

Bean their sharemarket and economy do not have anything to really do with each other its not a gage of health like ours is.

now looking at their chart, SSE 180 INDEX looks like they are starting another correction nothing to really worry about yet.

but we all know how avalanches start! 

the main thing that interests me on this selling is it reminds me of the expanding pattern the dow made a while back before it banded to set up fall if i remember correctly but I am not saying that that will happen here.

good trading


----------



## bean

Trade_It said:


> Bean their sharemarket and economy do not have anything to really do with each other its not a gage of health like ours is.
> 
> now looking at their chart, SSE 180 INDEX looks like they are starting another correction nothing to really worry about yet.
> 
> but we all know how avalanches start!
> 
> the main thing that interests me on this selling is it reminds me of the expanding pattern the dow made a while back before it banded to set up fall if i remember correctly but I am not saying that that will happen here.
> 
> good trading




A correction is heathly?  I have also been waiting for a top has it happened?
They say a 10% correction to markets is healthy this may happen in two or three days!!!


----------



## >Apocalypto<

bean said:


> A correction is heathly?  I have also been waiting for a top has it happened?
> They say a 10% correction to markets is healthy this may happen in two or three days!!!




i say in regards to china that 20-30% is healthy! 10% is a dip! ha ha ha

well I am no EW or Gann expert so i am not very good at calling tops but I personally think it's to early to call a top on china right now, based on what I see on the chart.


----------



## sassa

dhukka said:


> Um lets' see, how about the fact that every other day a mortgage originator goes bust or a hedge fund announces they have serious trouble.




http://money.cnn.com/2007/09/14/news/companies/goldman_alpha_fund/index.htm


----------



## sassa

God bless America.When the Americans do something they don't do it in halves.There was a severe market correction overnight and in the opposite direction to what this thread was referring to.Such an uptrend from 2.15pm to the close of market is probably unparalleled in the Dow.Was this a knee jerk reaction?Will the Dow continue to climb to the 14000 mark that some writers in this forum have been predicting?Will the market subside in the next weeks?
Thoughts please.


----------



## Uncle Festivus

This all has a striking similarity to a junkie getting a 'fix', only the short term gain still won't alleviate the long term pain brought about due to the housing bust. What the US Fed has actually said by caving in to the debt junkies is that the US is probably already in recession or so close as to be borderline. Helicopter Ben is showing his weak hand approach to solving this problem by throwing money from the virtual helicopter.

So what happens the day after all this has time to sink in and cooler heads have had time to digest the ramifications of all this? Time to take some profits maybe? Not looking forward to tomorrows market action.


----------



## CanOz

Uncle Festivus said:


> This all has a striking similarity to a junkie getting a 'fix', only the short term gain still won't alleviate the long term pain brought about due to the housing bust. What the US Fed has actually said by caving in to the debt junkies is that the US is probably already in recession or so close as to be borderline. Helicopter Ben is showing his weak hand approach to solving this problem by throwing money from the virtual helicopter.
> 
> So what happens the day after all this has time to sink in and cooler heads have had time to digest the ramifications of all this? Time to take some profits maybe? Not looking forward to tomorrows market action.




I agree totally with this....how can this fix anything???

I thinks its just another escape route for all those trapped want to be sellers from the last quick drop....

Maybe i'm pessimistic? In any case, happy to be on the sidelines, too busy to trade, only time to save.

Cheers,


----------



## sassa

Uncle Festivus said:


> So what happens the day after this has time to sink in and cooler heads have had time to digest the ramifications of all this? Time to take some profits maybe? Not looking forward to tomorrows market action.



Hi Uncle,
Don't know about taking profits.Am a believer in the futures.At 6.00a.m.(American Eastern Time) they have the DJIA up to 13893 and the SPI 200 to 6408.


----------



## Wysiwyg

Uncle Festivus said:


> This all has a striking similarity to a junkie getting a 'fix', only the short term gain still won't alleviate the long term pain brought about due to the housing bust. What the US Fed has actually said by caving in to the debt junkies is that the US is probably already in recession or so close as to be borderline. Helicopter Ben is showing his weak hand approach to solving this problem by throwing money from the virtual helicopter.
> 
> So what happens the day after all this has time to sink in and cooler heads have had time to digest the ramifications of all this? Time to take some profits maybe? Not looking forward to tomorrows market action.




What are you blokes going to do in a bear market?Tell everyone how things are going great and a bull run is just around the corner....lol


p.s.  now would be a good time to pick up some cheap houses.


----------



## Who Dares Wins

bean said:


> A correction is heathly?  I have also been waiting for a top has it happened?
> They say a 10% correction to markets is healthy this may happen in two or three days!!!





Well, with all this talk of corrections, collapse, apocalypse, end of the world, 100 year bear markets etc........and then the Dow goes up 335? I'm surprised to say the least.

If thats a bad day I wouldn't mind seeing it it on a good day.

!!!!!!!!!


----------



## wayneL

Who Dares Wins said:


> Well, with all this talk of corrections, collapse, apocalypse, end of the world, 100 year bear markets etc........and then the Dow goes up 335? I'm surprised to say the least.
> 
> If thats a bad day I wouldn't mind seeing it it on a good day.
> 
> !!!!!!!!!



It's 'cause everybody is looking at the chart upside-down.


----------



## Wysiwyg

wayneL said:


> It's 'cause everybody is looking at the chart upside-down.





The old mirror in front of the screen trick hey.lol  I remember magdoran mentioning that for seeing reverse head and shoulders I think.


----------



## dhukka

sassa said:


> God bless America.When the Americans do something they don't do it in halves.There was a severe market correction overnight and in the opposite direction to what this thread was referring to.Such an uptrend from 2.15pm to the close of market is probably unparalleled in the Dow.Was this a knee jerk reaction?Will the Dow continue to climb to the 14000 mark that some writers in this forum have been predicting?Will the market subside in the next weeks?
> Thoughts please.




Sassa obsessing over the day to day fluctuations in the Dow or any other index for that matter doesn't tell you anything. At best it is short term noise. Apart from the psychological effect what has the Fed's rate cuts accomplished?

You may not have seen amidst the euphoria of helicopter Ben's antics that housing foreclosures approached a quarter of a million in August up *115%* on the previous year and *36%* on the previous month. Also consider that August numbers are before the first wave of ARM resets. 

Also slipping under the radar was builders sentiment now at it's lowest point ever since it was first measured back in *1985*. 

Just out 10 minutes ago, Housing starts down *2.6%*, building permits down *5.9%*, both are at their lowest levels since *June 1995*. 

The USD hit a *15 year low* yesterday against a basket of the most commonly traded currencies, does this help the US consumer? Retails sales are already struggling, now consumers are facing higher gas prices as oil punches through $82 a barrel. Employment looks shaky, corporate profits are peaking. Out today, Morgan Stanley's *3Q07* profit was off *17%*. 

In short all the fundamentals pointing to a significantly weaker US economy going forward are still in place. Fed rate cuts did not change any of that, as if they could.


----------



## sassa

dhukka said:


> Sassa obsessing over the day to day fluctuations in the Dow or any other index for that matter doesn't tell you anything. At best it is short term noise. Apart from the psychological effect what has the Fed's rate cuts accomplished?
> 
> You may not have seen amidst the euphoria of helicopter Ben's antics that housing foreclosures approached a quarter of a million in August up *115%* on the previous year and *36%* on the previous month. Also consider that August numbers are before the first wave of ARM resets.
> 
> Also slipping under the radar was builders sentiment now at it's lowest point ever since it was first measured back in *1985*.
> 
> Just out 10 minutes ago, Housing starts down *2.6%*, building permits down *5.9%*, both are at their lowest levels since *June 1995*.
> 
> The USD hit a *15 year low* yesterday against a basket of the most commonly traded currencies, does this help the US consumer? Retails sales are already struggling, now consumers are facing higher gas prices as oil punches through $82 a barrel. Employment looks shaky, corporate profits are peaking. Out today, Morgan Stanley's *3Q07* profit was off *17%*.
> 
> In short all the fundamentals pointing to a significantly weaker US economy going forward are still in place. Fed rate cuts did not change any of that, as if they could.




But all this information, available to the premarket, has not had any deterrance whatsoever.The futures have increased from 44 to 60 since this became known and one trader on CNBC predicted the breaking of the 14000 today.Also,the European markets continue to gather strength.If all the fundamentals of a weaker U.S.going forward are in place,why aren't the markets reflecting this with either caution or a downward trend?


----------



## explod

sassa said:


> But all this information, available to the premarket, has not had any deterrance whatsoever.The futures have increased from 44 to 60 since this became known and one trader on CNBC predicted the breaking of the 14000 today.Also,the European markets continue to gather strength.If all the fundamentals of a weaker U.S.going forward are in place,why aren't the markets reflecting this with either caution or a downward trend?




Yes Sassa, the sheeple of the US follow the Wall Street propaganda as you obviously do too.    The dropping of interest rates is what got the US into trouble in the first place and the new drop will only increase the pain and make the ultimate recession much worse.    

Yep the market is intoxicated on any positives and ingnore the problems at thier peril.  Investors you would think would wise up,   I have no sympathy for their stupidity.  It is the ordinary innocent hard working people at the bottom of the food chain who I feel for in the coming period


----------



## dhukka

sassa said:


> But all this information, available to the premarket, has not had any deterrance whatsoever.The futures have increased from 44 to 60 since this became known and one trader on CNBC predicted the breaking of the 14000 today.Also,the European markets continue to gather strength.If all the fundamentals of a weaker U.S.going forward are in place,why aren't the markets reflecting this with either caution or a downward trend?




Sassa, 

I don't think you get my point, the day to day movements in the stock market, or futures market are largely irrelevant. They tell you very little about the longer term direction of the market, which I gather is what you're interested in, is it not? 

Sure if you are a day-trader then the daily machinations of the market and individual stock prices are your primary focus. 

Why did the subsequent meltdown of the tech boom take so long to materialize when the fundamentals were in place months beforehand?

With your current obsession of focusing on the opening price for the DOW or ASX futures you'll never see anything coming past tomorrow.


----------



## Wysiwyg

What I see some trying to say is the top is now and it`s hello `02` again.They might be right  and only time wll tell.

p.s. an `04` `05` trend would be healthy overall.yes.


----------



## Wysiwyg

But then again it is a different crowd from last century.Youthful exuberance?Changed schooling?Information more rapid?More/easier credit to play with?Live now pay later attitude?

Yes indeedy david,without solid foundations ... the building remains shaky.


----------



## Who Dares Wins

Uncle Festivus said:


> So what happens the day after all this has time to sink in and cooler heads have had time to digest the ramifications of all this? Time to take some profits maybe? Not looking forward to tomorrows market action.




Well with the Dow potentially up again do you know what its time for all you bear market rampers to do now? Its time to stand up and say:

WRONG AGAIN.

Oh, whats that.........tomorrow night did you say.


----------



## wayneL

Who Dares Wins said:


> Well with the Dow potentially up again do you know what its time for all you bear market rampers to do now? Its time to stand up and say:
> 
> WRONG AGAIN.
> 
> Oh, whats that.........tomorrow night did you say.



:sleeping:

I told you already, everybody is looking at their charts upside down.


----------



## bean

Who Dares Wins said:


> Well with the Dow potentially up again do you know what its time for all you bear market rampers to do now? Its time to stand up and say:
> 
> WRONG AGAIN.
> 
> Oh, whats that.........tomorrow night did you say.




Why the US is deteriorating into a recession. Word Inflation spiralling out of controll.  World wide housing and financial crisis  I haven't mentioned everything and the list is growing by the day.

The DOW may well rise another two or three days.  'So what' reality will hit and when it does don't say you weren't warned.


----------



## explod

bean said:


> Why the US is deteriorating into a recession. Word Inflation spiralling out of controll.  World wide housing and financial crisis  I haven't mentioned everything and the list is growing by the day.
> 
> The DOW may well rise another two or three days.  'So what' reality will hit and when it does don't say you weren't warned.




Agree with you Bean but you are usually the one following the lead from day to day fluctuations of the US market.

Yes the bull out of Wall Street just allows more of the smart money to reposition so as to take it off the mugs.   We will see in a few more days how it pans out.


----------



## lusk

explod said:


> Agree with you Bean but you are usually the one following the lead from day to day fluctuations of the US market.
> 
> Yes the bull out of Wall Street just allows more of the smart money to reposition so as to take it off the mugs.   We will see in a few more days how it pans out.




Sounds like another conspiracy theory  is the PPT involved?

Just because you think that its all coming to an end because you've read it somewhere doesn't mean it will. It may go up to new highs it may turn and head down soon, who knows, who cares! Just follow the trend thats all you can do or else you will miss alot of opportunities.


----------



## Uncle Festivus

Wysiwyg said:


> What are you blokes going to do in a bear market?Tell everyone how things are going great and a bull run is just around the corner....lol
> 
> 
> p.s. now would be a good time to pick up some cheap houses.






Who Dares Wins said:


> Well with the Dow potentially up again do you know what its time for all you bear market rampers to do now? Its time to stand up and say:
> 
> WRONG AGAIN.
> 
> Oh, whats that.........tomorrow night did you say.




Yes, wrong again. All back to normal - what _was_ I thinking!


----------



## Sean K

Uncle Festivus said:


> Yes, wrong again. All back to normal - what _was_ I thinking!



 LOL. 

I do wonder if we'll find a way out of this mess....however:

I always come back to the fundamental reason why this situation has perhaps eventuated and I think it might be human behavior. It's why Communism will never work. It's why we have fences around our houses, and buy expensive jewelry, buy the latest fashion, or mobile that does exactly the same thing as the last one but is 1 oz lighter. Human's!


----------



## dhukka

Who Dares Wins said:


> Well with the Dow potentially up again do you know what its time for all you bear market rampers to do now? Its time to stand up and say:
> 
> WRONG AGAIN.
> 
> Oh, whats that.........tomorrow night did you say.




What a ridiculous statement. Your argument consists of this: Bears are wrong because the DOW went up last night. Not even the most bearish of investors would have expected anything less than a stockmarket rally after the Fed cut rates.

To summarize the bearish arguments consist of something like this: Given the slowing momentum on a number of fronts in the US economy (housing, employment, consumer spending, corporate profits) bears believe the balance of risks to be on the downside. That doesn't mean they expect the DOW to start going down tomorrow. Nor does it make them wrong if it doesn't. Nor does it make bulls right. Again, daily fluctuations are short term noise. 

The S&P 500 closed at *1,276.05* on January 2nd, 2001. The Fed cut rates 50bps on Jan 3rd. The S&P 500 closed at *1,347.56, *up *5.6%* for the day. Then the market started to sell off, falling almost *20%* by March. That doesn't mean history will repeat but it is worth noting that the only other time in recent memory that the Fed started a rate cutting cycle with 50 bps the economy went into recession and the markets fell considerably.  

Ask yourself why the Fed cut rates. Is it because of a positive economic  environment? What is the case for the bullish story? There are cogent arguments to put forward for the continuation of the bull but the observation that the DOW went up last night or will go up tonight based on what the futures market is forecasting is not one of them.


----------



## Porper

explod said:


> Agree with you Bean but you are usually the one following the lead from day to day fluctuations of the US market.
> 
> Yes the bull out of Wall Street just allows more of the smart money to reposition so as to take it off the mugs.   We will see in a few more days how it pans out.




With all the doom and gloom from everybody maybe we should be aware who is taking who for a clown ?

The consensus seems to be that the smart money is selling into the latest good news.

Just maybe they are buying from all the people with the doom and gloom outlook.


----------



## greggy

For the moment at least this thread is looking a bit outdated.  We've had 2 siginificant corrections this year and everytime the doomsayers have been saying that this is the end of the bullmarket.  Well guess what, the corrections will only lengthen this bull market IMO.  When the market fell to the mid 5,000 mark earlier this year I predicted will hit 7,000 points sometime this year.  I'm still hoping it will.
DYOR


----------



## explod

Porper said:


> With all the doom and gloom from everybody maybe we should be aware who is taking who for a clown ?
> 
> The consensus seems to be that the smart money is selling into the latest good news.
> 
> Just maybe they are buying from all the people with the doom and gloom outlook.




No way, I reckon the doom and gloom money were out long ago.    In fact I am very optomistic on certain invetsments, just THINK the Dow overvalued


----------



## dhukka

greggy said:


> For the moment at least this thread is looking a bit outdated.  We've had 2 siginificant corrections this year and everytime the doomsayers have been saying that this is the end of the bullmarket.




On the contrary we haven't had any significant corrections this year, we had a mild one in August. Who were the doomsayers that called an end to the bullmarket? Do you have links, names, dates? 



> Well guess what, the corrections will only lengthen this bull market IMO.  When the market fell to the mid 5,000 mark earlier this year I predicted will hit 7,000 points sometime this year.  *I'm still hoping it will*. DYOR




To summarise your argument: because the market has rallied after 2 minor corrections this year it will continue to rally. The market will rally to 7,000 points sometime this year based on your hope that it will. :bonk:


----------



## greggy

dhukka said:


> On the contrary we haven't had any significant corrections this year, we had a mild one in August. Who were the doomsayers that called an end to the bullmarket? Do you have links, names, dates?
> 
> To summarise your argument: because the market has rallied after 2 minor corrections this year it will continue to rally. The market will rally to 7,000 points sometime this year based on your hope that it will. :bonk:



Lighten up a bit dhukka.  Its only a prediction and you must say not the worst one at the time.  Many in the media were quick to scare many investors and call up pessimists.  As for links, names, dates etc I'm not a member of the FBI.  The correcion in Aug 07 was around 15% from its high to the bottom. If you take a look at the spec end of the market its still largely in the doldrums.  
It also seems that you like to pick a few fights, so why not take up boxing?  
DYOR


----------



## Sean K

dhukka said:


> On the contrary we haven't had any significant corrections this year, we had a mild one in August.



Mild correction? More than 12% is fairly significant isn't it? 6-8% is a 'mild' correction perhaps. 



dhukka said:


> To summarise your argument: because the market has rallied after 2 minor corrections this year it will continue to rally. The market will rally to 7,000 points sometime this year based on your hope that it will. :bonk:



If we've had a 'significant' correction, then this point may not be valid. 


Unfortunately, I can not do a semi-log chart, because I am an amateur, but it still looks to be trending up to me. While it's still above the 200d ma, I believe that means it's trending up......to be corrected of course.


----------



## greggy

kennas said:


> Mild correction? More than 12% is fairly significant isn't it? 6-8% is a 'mild' correction perhaps.
> 
> If we've had a 'significant' correction, then this point may not be valid.
> 
> 
> Unfortunately, I can not do a semi-log chart, because I am an amateur, but it still looks to be trending up to me. While it's still above the 200d ma, I believe that means it's trending up......to be corrected of course.



Hi Kennas,

Nice chart there as always. I hope you haven't been infected by the "alien virus" over there. Besides the significant correction in Aug we also had a mild one earlier this year.  
DYOR


----------



## dhukka

greggy said:


> Lighten up a bit dhukka.  Its only a prediction and you must say not the worst one at the time.  Many in the media were quick to scare many investors and call up pessimists.  As for links, names, dates etc I'm not a member of the FBI.  The correcion in Aug 07 was around 15% from its high to the bottom. If you take a look at the spec end of the market its still largely in the doldrums.
> It also seems that you like to pick a few fights, so why not take up boxing?
> DYOR




Greggy, I regularly pound the boxing bag at the local gym but also like to take a few shots at hollow posts with nothing to back them up. A 15% correction significant. Don't know about that, I'll concede it was more than minor maybe moderate would be a better word? 

It is only a prediction but a prediction based on what?


----------



## dhukka

kennas said:


> Mild correction? More than 12% is fairly significant isn't it? 6-8% is a 'mild' correction perhaps.




As above 15% significant, depends who you talk to. The bottom was an intra-day dip that lasted an about hour before recovering a good deal. 



> Unfortunately, I can not do a semi-log chart, because I am an amateur, but it still looks to be trending up to me. While it's still above the 200d ma, I believe that means it's trending up......to be corrected of course.




Yes the long term trend still seems to be in place. The point of this information is?


----------



## greggy

dhukka said:


> Greggy, I regularly pound the boxing bag at the local gym but also like to take a few shots at hollow posts with nothing to back them up. A 15% correction significant. Don't know about that, I'll concede it was more than minor maybe moderate would be a better word?
> 
> It is only a prediction but a prediction based on what?




Dhukka, so you reckon my post was hollow, how nice of you to have added me to the list of people you've insulted.  Its indeed been a growing list.  To do so you probably think that you're better than the rest of us.  
At the time of my prediction many people were panicking.  I felt that the economy was in good shape and that the mining boom would continue to strenthen. The market is trading on reasonable multiples and that when positive market sentiment returns that the bull market would continue to strengthen. 
DYOR


----------



## sassa

Who Dares Wins said:


> do you know what its time for all you bear market rampers to do now? Its time to stand up and say:
> 
> WRONG AGAIN.




You are so right at the moment-it is time for the bear rampers to stand up and say WRONG AGAIN.But only FOR THE MOMENT.
Not many people want to mention or talk about the spiralling devaluation of the dollar and the huge effects it is going to have on the markets.It seems devaluing is not in any economist's or banker's vocabulary.
While a devalued dollar has some positives for the country,the negatives far outweigh them with the main one being inflation which will be imported. 
This is happening at the moment and the best example is oil prices.Other contributors may wish to comment on this and the effects it can have on the stock market as well as the fleeing of investors away from the dollar to the Euro instead of buying U.S.treasuries.
The Fed has lowered interest rates to free up money markets but not those associated with mortgages.
The theory is that people will borrow to buy cars,white goods etc thus upping employment and stimulating the economy.This should stop recession.
But the housing sector is another story-banks,financial institutions have put the brakes on.So this very important part of the employment sector falters across many related industries.Unemployment up and we all know what happens then.
So I am prepared to say wrong again for the moment and will get back in 2 months time when the $50b.mortgage resets have started to have their downpull on the economy.


----------



## doogie_goes_off

If the spike in base metal prices o/night is an indication of the undervaluing of metals, we are in for a rally the mining sector. If this does not lead to a continued bull market for the All Ordinaries/Australian market then I will be very suprised. Bears can hibernate and miss the ride if they want but its spring in Australia. We do not have to constantly look to the US for a lead, it's a world economy and it's growing steadily overall, any correction now will simply be a rock on the bullock track, I'm back on the bull.


----------



## dhukka

greggy said:


> Dhukka, so you reckon my post was hollow, how nice of you to have added me to the list of people you've insulted.  Its indeed been a growing list.  To do so you probably think that you're better than the rest of us.




Yes I seem to have underestimated the fragile emotions of the delicate flowers on the forum who react more to what they see as insults than to any productive arguments.   



> At the time of my prediction many people were panicking. I felt that the economy was in good shape and that the mining boom would continue to strenthen. The market is trading on reasonable multiples and that when positive market sentiment returns that the bull market would continue to strengthen.




Thanks for this, this is what I'd call a decent line of argument with evidence to back it up, wasn't so hard was it?


----------



## Sean K

dhukka said:


> Yes the long term trend still seems to be in place. The point of this information is?



We're in a bull market for a reason. But obviously that's past performance...


----------



## greggy

dhukka said:


> Yes I seem to have underestimated the fragile emotions of the delicate flowers on the forum who react more to what they see as insults than to any productive arguments.
> 
> 
> 
> Thanks for this, this is what I'd call a decent line of argument with evidence to back it up, wasn't so hard was it?




Hey Dhukka, you've gone from talking about boxing to talking about flowers.  Does that make you a florist?   Your sarcastic tone is a bit of a worry and you're definitely a teaser, but I'll just laugh it off, just as other forum members have.


----------



## Sean K

dhukka said:


> Yes I seem to have underestimated the fragile emotions of the delicate flowers on the forum who react more to what they see as insults than to any productive arguments.



Once again, going the man.


----------



## dhukka

kennas said:


> We're in a bull market for a reason. But obviously that's past performance...





OK, still don't see what it had to do with the preceding discussion though.


----------



## greggy

dhukka said:


> OK, still don't see what it had to do with the preceding discussion though.



Dhukka, this discussion is fast becoming very pointless.  Besides I don't understand the relevance of your love for flowers.  Treat the mods with respect.


----------



## dhukka

greggy said:


> Dhukka, this discussion is fast becoming very pointless.  Besides I don't understand the relevance of your love for flowers.  Treat the mods with respect.




Sorry greggy, I''m a bit slow I still don't understand how kennas' point about the market being in a long term uptrend pertains to the preceding discussion. 

Actually I do like flowers very much, they are pretty little things don't you think?

As for mods, they deserve the same respect as anyone else on the forum, no more, no less


----------



## greggy

dhukka said:


> Sorry greggy, I''m a bit slow I still don't understand how kennas' point about the market being in a long term uptrend pertains to the preceding discussion.
> 
> Actually I do like flowers very much, they are pretty little things don't you think?
> 
> As for mods, they deserve the same respect as anyone else on the forum, no more, no less




I often buy flowers for my wife. The mods do a great job on this forum. I feel that Kennas' point is relevant.


----------



## Uncle Festivus

doogie_goes_off said:


> If the spike in base metal prices o/night is an indication of the undervaluing of metals, we are in for a rally the mining sector. If this does not lead to a continued bull market for the All Ordinaries/Australian market then I will be very suprised. Bears can hibernate and miss the ride if they want but its spring in Australia. We do not have to constantly look to the US for a lead, it's a world economy and it's growing steadily overall, any correction now will simply be a rock on the bullock track, I'm back on the bull.




There is a misconception by the look of some posts that seems to think that to post some comments that are not 'bullish' then the poster is automatically 'labeled' as a bear or bearish. This little black 'bear' did all right yesterday so I'm hardly missing the ride, let alone hibernating. 

As far as the US goes (and depending on how the contagion pans out in a number of other countries as well, eg Britain), you would have to admit they have some structural problems that are not going to be fixed with a 50 bp cut in interest rates. In fact it could be making the situation even worse.

At the same time I am still very positive on the outlook for Aus shares in general going for a ride on the back of the commodities spike (at least the top 500 or so, the rest of the market has just died? where's the volume??), until & unless China catches the cold as well (which may start to get interesting soon because of the latest news re inflation and market exuberance).

If you think the US will come out of this bigger and better then please post your reasons why - so to at least balance things up a bit? 

These are not ordinary times, perhaps we are witnessing once in a generation events unfolding, so be prepared when extraordinary things happen.


----------



## Nicks

Uncle Festivus said:


> The crux of the post was that here was obviously a very successful fund manager taking a fairly decisive stance due to fundamentals of the US housing market, which cannot be glossed over by vested interests - it's a timebomb ready to explode with global implications.
> I agree with Canaussieuck about the market 'feel', it just doesn't feel right. We are becoming used to daily ranges of up to 50 to 60 points, whipsawing on every bit of news.
> On Monday the market tanked because of interest rate fears, Tuesday took the opposite view, Wednesday traded on the fact, so now we have 4 weeks leading to an even higher probability of an increase.
> Great for daytraders, but may be hiding a deeper message about global liquidity excesses about to be reigned in in spectacular fashion maybe.
> 
> Nizar, I agree also, but I don't have investments anymore, I only do short term trades, the rest in cash. Maybe predict is not the best description, rather trying to ascertain if the global economy is getting better or worse based on the latest data and trends. To me it's turning, only the time scale is unknown.




Interesting reading this now Uncle. Can you please tell me what this weekends X Lotto numbers will be please, thank you in advance (though I bet you already knew that).


----------



## Nicks

doogie_goes_off said:


> If the spike in base metal prices o/night is an indication of the undervaluing of metals, we are in for a rally the mining sector. If this does not lead to a continued bull market for the All Ordinaries/Australian market then I will be very suprised. Bears can hibernate and miss the ride if they want but its spring in Australia. We do not have to constantly look to the US for a lead, it's a world economy and it's growing steadily overall, any correction now will simply be a rock on the bullock track, I'm back on the bull.




I agree 100% doogie, but the unfortunate problem is that we do!! ('constantly look to the US for a lead')


----------



## sassa

Uncle Festivus said:


> These are not ordinary times so be prepared when extraordinary things happen.




Uncle Festivus,
An ominous thought from David Callaway,editor-in-chief,of MarketWatch about extraordinary things that can happen-

We've been downplaying this crisis for far too long. It's fine to celebrate the rally in stocks over the past few days. But let's not forget that most of Wall Street still has one hand on the sell button.


----------



## greggy

sassa said:


> Uncle Festivus,
> An ominous thought from David Callaway,editor-in-chief,of MarketWatch about extraordinary things that can happen-
> 
> We've been downplaying this crisis for far too long. It's fine to celebrate the rally in stocks over the past few days. But let's not forget that most of Wall Street still has one hand on the sell button.




Isn't it amazing how bull markets often climb over a wall of worry.  When many of the so-called are overly worried markets often seem to move in the opposite direction. I remember when I was a teenager my father told me that "you can't go wrong with the long-term strategy of buying quality stocks at reasonable prices." My strategy hasn't changed since.    
DYOR


----------



## Porper

sassa said:


> Uncle Festivus,
> An ominous thought from David Callaway,editor-in-chief,of MarketWatch about extraordinary things that can happen-
> 
> We've been downplaying this crisis for far too long. It's fine to celebrate the rally in stocks over the past few days. But let's not forget that most of Wall Street still has one hand on the sell button.





New all time highs and still all the doom and gloom.

It is irrelevant what the market may do due to the state of the US economy, the credit crisis or anything else, what is relevant is what the markets are telling us.

There is no denying we are in a super bull market, until price action tells us otherwise we should ALL be making money.

Waiting for a "severe and imminent correction" may have some waiting a long time.

I too paid to much attention to the perceived serious financial crisis bandwagon, bear market blah blah, all we have done is miss out on almost 15% rise very quickly.

The market may well crash at any time, but it sure doesn't appear that way at the moment.


----------



## >Apocalypto<

greggy said:


> Isn't it amazing how bull markets often climb over a wall of worry.  When many of the so-called are overly worried markets often seem to move in the opposite direction. I remember when I was a teenager my father told me that "you can't go wrong with the long-term strategy of buying quality stocks at reasonable prices." My strategy hasn't changed since.
> DYOR




sorry to be a wet blanket but we need to also look at what is really happening.

BHP and the miners are such a major part of the market right now.

Take away that report in BHP and would we have rallied in the last two days like we have? again look at the report it's self, is it complete fact? It's speculation.

Since BHP then RIO really started to fire, i noticed the buyers moved into those two and then the rest of the market very quickly it's only takes a couple brave ducks to cross the road to convince the rest its safe to cross.

I am not doubting the move but you need to look at what it's made up of yes we are at recored highs but there are other factors that suggest this is playing to a script. 

Interesting times.

Good Trading.


----------



## Kimosabi

Porper said:


> New all time highs and still all the doom and gloom.
> 
> It is irrelevant what the market may do due to the state of the US economy, the credit crisis or anything else, what is relevant is what the markets are telling us.
> 
> There is no denying we are in a super bull market, until price action tells us otherwise we should ALL be making money.
> 
> Waiting for a "severe and imminent correction" may have some waiting a long time.
> 
> I too paid to much attention to the perceived serious financial crisis bandwagon, bear market blah blah, all we have done is miss out on almost 15% rise very quickly.
> 
> The market may well crash at any time, but it sure doesn't appear that way at the moment.




We have just had a break in the clouds before the REAL Storm kicks in...


----------



## sassa

Trade_It said:


> sorry to be a wet blanket but we need to also look at what is really happening.
> 
> BHP and the miners are such a major part of the market right now.
> 
> Take away that report in BHP and would we have rallied in the last two days like we have?




Agree.Be interesting to see what BHP's report is tomorrow in regards to the gold find in S.A.Talk is that commodity prices to be renegotiated with China will increase by at least 25%.And then,in the meantime,if global demand for commodities falls because of the effects of the credit crunch yet to be felt.Well.......


----------



## Porper

Kimosabi said:


> We have just had a break in the clouds before the REAL Storm kicks in...




Yes, we have been having this storm for a long time now, May, Feb & July just to mention the last few.

I think the argument for a bear market is wearing a bit thin. 

Just to put it in perspective the all ords was below 3000 in 2003, so just a swift 140% rise up to today.Even if we have a crash of mega proportion the Bulls will still be way ahead.

Not that I am a Bull, I am neutral but the Bear argument just hasn't materialised , even though  we try and talk ourselves into it.


----------



## bean

Porper said:


> Yes, we have been having this storm for a long time now, May, Feb & July just to mention the last few.
> 
> I think the argument for a bear market is wearing a bit thin.
> 
> Just to put it in perspective the all ords was below 3000 in 2003, so just a swift 140% rise up to today.Even if we have a crash of mega proportion the Bulls will still be way ahead.
> 
> Not that I am a Bull, I am neutral but the Bear argument just hasn't materialised , even though  we try and talk ourselves into it.




The argument for a bear market grows each day.  The financial crisis in the markets is only going to get worse.  
To have the FED lower interest rates when the US in a BULL and has a small correction.
Doesn't that tell you something?  
Everything is not rosey.  

You had a 140% rise it only takes 50% and you have lost it.

A correction will come to the 'US' then follow through on to world markets.
Its fine investing and riding the BULL but must be wary.

Like tonight will the US/DOW rise 250 points or will it drop 250 points?

If it drops does that mean the BEAR is sneaking back?


----------



## sassa

bean said:


> The financial crisis in the markets is only going to get worse.




Much worse if the IMF report is correct.Bernanke said that the fallout of the sub-prime was $100b.The IMF says that it is double that-$200b.


----------



## Porper

bean said:


> The argument for a bear market grows each day.
> Everything is not rosey.
> 
> 
> A correction will come to the 'US' then follow through on to world markets.




Well, you are right there, a correction will come...................eventually.

I dare say you will all say I told you so as well.

Trouble is, how much of the rise will you miss out on ?  1%, 100%.

Maybe best to just go along with the market rather than predict where the US economy is.


----------



## wayneL

Porper said:


> Well, you are right there, a correction will come...................eventually.
> 
> I dare say you will all say I told you so as well.
> 
> Trouble is, how much of the rise will you miss out on ?  1%, 100%.
> 
> *Maybe best to just go along with the market rather than predict where the US economy is.*




How about both?

Agree it's foolish not to trade where the momentum is, but I still think it's a good idea to keep an eye on the big picture.


----------



## Porper

wayneL said:


> How about both?
> 
> Agree it's foolish not to trade where the momentum is, but I still think it's a good idea to keep an eye on the big picture.





Totally agree Wayne, but some people seem obsessed either bullish or bearish, doesn't really matter.I am sure we have all at some point leant to far one way, I know I have, don't mind admitting it, I've lost plenty trying to short the market but really the recent bull run has been unstoppable.As we all know markets often react very differently to how we expect.

Sure the US is in trouble down the line,  but the markets aren't confirming this with negative price action, infact quite the opposite.

All I am saying is look at what is happening now -, even with all the perceived problems.


----------



## wayneL

Porper said:


> Totally agree Wayne, but some people seem obsessed either bullish or bearish, doesn't really matter.I am sure we have all at some point leant to far one way, I know I have, don't mind admitting it, I've lost plenty trying to short the market but really the recent bull run has been unstoppable.As we all know markets often react very differently to how we expect.
> 
> Sure the US is in trouble down the line,  but the markets aren't confirming this with negative price action, infact quite the opposite.
> 
> All I am saying is look at what is happening now -, even with all the perceived problems.




Yep agree.

But looking at "why" the market is bullish, viz, the ridiculous .5% cut by Uncle Ben, and then "why" Uncle Ben cut .5%, could give a clue as to the future.


----------



## sassa

Porper said:


> Sure the US is in trouble down the line,  but the markets aren't confirming this with negative price action, infact quite the opposite.




The main reason the market is being so positive as Wallstreeters,economists and analysts are putting it is because,"the Fed is here to help."
The release of reports in America today will have an impact on the markets and this one
http://money.cnn.com/2007/09/25/news/companies/lennar/index.htm
will have a major bearing.


----------



## greggy

Trade_It said:


> sorry to be a wet blanket but we need to also look at what is really happening.
> 
> BHP and the miners are such a major part of the market right now.
> 
> Take away that report in BHP and would we have rallied in the last two days like we have? again look at the report it's self, is it complete fact? It's speculation.
> 
> Since BHP then RIO really started to fire, i noticed the buyers moved into those two and then the rest of the market very quickly it's only takes a couple brave ducks to cross the road to convince the rest its safe to cross.
> 
> I am not doubting the move but you need to look at what it's made up of yes we are at recored highs but there are other factors that suggest this is playing to a script.
> 
> Interesting times.
> 
> Good Trading.




I feel that 7,000 this year is not out of the question (I made this prediction when the market was trading in the mid 5,000 range earlier in the year).  Resource stocks especially are still largely trading on reasonable multiples.  Our economy is still strong. Interest rates are still relatively low along with low inflation and unemployment.  Market sentiment has turned remarkably positive in recent weeks.  This bull market is not over by any means.
DYOR


----------



## professor_frink

greggy said:


> I feel that 7,000 this year is not out of the question (I made this prediction when the market was trading in the mid 5,000 range earlier in the year).  Resource stocks especially are still largely trading on reasonable multiples.  Our economy is still strong. Interest rates are still relatively low along with low inflation and unemployment.  Market sentiment has turned remarkably positive in recent weeks.  This bull market is not over by any means.
> DYOR




At the rate we're going greggy, we'll hit 7000 by the end of next week


----------



## theasxgorilla

wayneL said:


> But looking at "why" the market is bullish, viz, the ridiculous .5% cut by Uncle Ben, and then "why" Uncle Ben cut .5%, could give a clue as to the future.




I wonder how many people are taking it a step further and offsetting the gains on Wall Street against falls in the USD.  If you destroy a currency by aggressively dropping rates in an economy that is experiencing inflation and the stock market rallies it only looks good on the chart...but under the surface.


----------



## airjordan

has anyone been been keeping an eye on the hang seng. i think there bubble is gonna burst any day now which will obviously send shockwaves through our market. checkout the attachment below. macd is the highest it has ever been, index gapped up today and the uptrend is way to steep to hold in my opinion. i'm happy being on the sidelines for a few weeks. any comments welcome.


----------



## theasxgorilla

airjordan said:


> index gapped up today




Wow, would you look at that gap!  Given the steepness of the rally you'd have to be betting on that getting filled wouldn't you??


----------



## wayneL

theasxgorilla said:


> I wonder how many people are taking it a step further and normalising the gains on Wall Street against falls in the USD.  If you destroy a currency by aggressively dropping rates in an economy that is experiencing inflation and the stock market rallies it only looks good on the chart...but under the surface.




That's been a consistent argument for some of the bears like Peter Schiff. From an international currency perspective that's true. But I only partially subscribe to that. If that were a big factor, those markets whose currencies are strong would be stagnant. This is just not the case.

People are buying stocks and there's no way to get around that.

Whether or not these recent purchases turn out to be wise ones (for buy and holders) remains to be seen.

The credit crunch, which is widely believed by the masses to have been ameliorated, has a long way to run, according to folk whose opinion I respect.

Understanding how money is created, a continuing and worsening credit crunch will be devastating, but of course CB's are at work trying to stave that possibility off. (which ultimately can only be temporary, given the level of malinvestment)

The question is "when?" and how far can SMs run until that point.

There are huge cracks in the underlying world economy, but the SM marches on. 

It beats the s#!t out of me.


----------



## Shane Baker

theasxgorilla said:


> I wonder how many people are taking it a step further and offsetting the gains on Wall Street against falls in the USD.  If you destroy a currency by aggressively dropping rates in an economy that is experiencing inflation and the stock market rallies it only looks good on the chart...but under the surface.




DJIA v USD index and DJIA v AUDUSD

Cheers


Shane


----------



## Trembling Hand

airjordan said:


> has anyone been been keeping an eye on the hang seng. i think there bubble is gonna burst any day now which will obviously send shockwaves through our market. checkout the attachment below. macd is the highest it has ever been, index gapped up today and the uptrend is way to steep to hold in my opinion. i'm happy being on the sidelines for a few weeks. any comments welcome.




It is getting a bit toppy but its not a sure bet. This index has only 38 or so stocks in it and some are flying, like some in our market (BHP etc) A correction is always posible but a complete meltdown or bursting of the bubble............... I wouldn't put any of my money on it yet.


----------



## hacheln_mice

Shane Baker said:


> DJIA v USD index and DJIA v AUDUSD
> 
> Cheers
> 
> 
> Shane




Nice and informative post. It would certainly be interesting to see if the broader S&P500 Index can post an all time high after being adjusted for dollar depreciation in the coming weeks.


----------



## Flying Fish

trembling Hand said:


> It is getting a bit toppy but its not a sure bet. This index has only 38 or so stocks in it and some are flying, like some in our market (BHP etc) A correction is always posible but a complete meltdown or bursting of the bubble............... I wouldn't put any of my money on it yet.




I reckon the whole scenario looks bearish. All these gains have been on light volumn, just delaying tactics, .. I won't look at shares for a while.


----------



## Trembling Hand

Flying Fish said:


> I reckon the whole scenario looks bearish. All these gains have been on light volumn, just delaying tactics, .. I won't look at shares for a while.




Light volume?? which market are you talking about?


----------



## dhukka

theasxgorilla said:


> I wonder how many people are taking it a step further and offsetting the gains on Wall Street against falls in the USD.  If you destroy a currency by aggressively dropping rates in an economy that is experiencing inflation and the stock market rallies it only looks good on the chart...but under the surface.




The chart below is courtesy of Sitka Pacific Capital Management showing the rise in the S&P in gold and Euros. The chart is a few days old but you can see in Euro terms the S&P still has a way to go to get back to recent highs.


----------



## theasxgorilla

wayneL said:


> That's been a consistent argument for some of the bears like Peter Schiff. From an international currency perspective that's true. But I only partially subscribe to that. If that were a big factor, those markets whose currencies are strong would be stagnant. This is just not the case.




This is admittedly a VERY one dimensional and shallow counter argument...but, we've all seen the correlation of world equity markets through various 'panicy' corrections these last couple of years, right?  What if everyone is just looking at the S&P500 as it's presented, in absolute terms, and saying, well...if the American's think they can keep it up than I suppose there is nothing to really worry about to the downside, the risk is to the upside...they're expanding and if we don't do likewise then we're missing out!

I know as an argument it lacks any sophistication as far as economic analysis is concerned...but when I see Schiff stuck on mainstream shows 3 against 1 (bulls v Schiff) and the obvious lack of sophistication shown but so many of the bull-side arguments I can only think that a lot of the rest of the world is thinking the same thing...see no evil, hear no evil, speak no evil...and besides, China is keeping us all really busy and my pension fund is still going up...who's up for golf this weekend?


----------



## sassa

wayneL said:


> The credit crunch, which is widely believed by the masses to have been ameliorated, has a long way to run, according to folk whose opinion I respect.




If you are a bear you'll love reading this article from Bloombergs today.
If you are a bull,you won't want to,but I know you will because you will repudiate what has been said.
http://www.bloomberg.com/apps/news?pid=20601087&sid=ad4W7q15.lds&refer=home


----------



## greenfs

My broker returned from a luncheon presentation in melbourne today made by Challenger Group. The presentation involved the consequences of the shift away from the US economy. It was indicated that whereas historically US GDP accounted for 35% of World GDP, that value has slipped now to 23%. Therefore, any problems arising in USA will have less of a REAL impact on the world economy these days.

In addition, the presentation focussed on the fact that profit reportings are continuing at 18% increase as with earlier years and therefore the current market momentum can be sustained.

A word of warning though. There will be stocks that continue to fall off the rails in the future just like SIP and CDR have in recent times. So, we all need to proactively manage our portfolios to ensure that the bad eggs are eradicated early. Maybe we should start a thread entitled "Possible Bad Eggs" and award a prize to the stock picker on a quarterly basis?


----------



## bean

It would appear everything is rosey in the financial markets again.
Thats why tonight POG and it would appear other commodities are going to be hit.
Well POG is up only when things are bad?
Everthing is fine
Palm Swings to First-Quarter Loss
EBay Takes $1.4 Billion Charge
•	Citi's Bad News Looks Good To Investors  (only US2.7B loss so far)
And earning season has just started 
but a party the DOW is 14000.

ASX new high
(stock tipping for October only two days old but only 40% in green)

Its a Bull


----------



## explod

bean said:


> It would appear everything is rosey in the financial markets again.
> Thats why tonight POG and it would appear other commodities are going to be hit.
> Well POG is up only when things are bad?
> Everthing is fine
> Palm Swings to First-Quarter Loss
> EBay Takes $1.4 Billion Charge
> •	Citi's Bad News Looks Good To Investors  (only US2.7B loss so far)
> And earning season has just started
> but a party the DOW is 14000.
> 
> ASX new high
> (stock tipping for October only two days old but only 40% in green)
> 
> Its a Bull




Problem with people like you and I Bean is that we are regarded as pessimists because we are optimists in regards to the gold price going up and we are also optimistic about the US dollar going down  (in the long term of course and with major corrections.  And I add this so that we can be seen as clearly in step)

The next problem we have is that we not only believe in this raging rising gold/ inverse dollar thingo of a bull, BUT,,, we grab it so hard by the horns that we get thrown all over the place.   It then becomes hard to distiguish between the optimist and pessimist. 

Now that is a bit gloomy.    Maybe the secret is the spoon bender who can do things like that by just thinking about it.   Could this be why the Dow keeps going up when we think it should go down.   Wall Street have cottoned on to this spoon bender technique, thats it.

We live in interesting times.


----------



## Flying Fish

sassa said:


> If you are a bear you'll love reading this article from Bloombergs today.
> If you are a bull,you won't want to,but I know you will because you will repudiate what has been said.
> http://www.bloomberg.com/apps/news?pid=20601087&sid=ad4W7q15.lds&refer=home




Weird hey. My citbank credit card people sent out a letter offering to bump up mycredit limit by 3250$. I can now have 9500$ on it !!!! Still lots of free money out there by the sounds of it ........


----------



## rub92me

bean said:


> It would appear everything is rosey in the financial markets again.
> Citi's Bad News Looks Good To Investors  (only US2.7B loss so far)
> And earning season has just started
> but a party the DOW is 14000.



That's what baffled me as well. Bad earnings: great!, let's reward you with a solid rise in shareprice.  Similar news from Deutsche Bank today and hardly a ripple. It's starting to look a bit like ostriches with their heads in the sand at the moment imo.


----------



## Porper

Not that I am bullish particularly, but this does seem to be the most probable count for the Dow.

Bad news is just getting ignored, will it last ? Nobody knows.

Certainly the easiest, simplist count without getting in to complex expanded flat patterns etc.


----------



## rub92me

Next to come is Merrill Lynch with over $4 billion written-off. They already sacked two executives. Get ready for another party on Wall Street!


----------



## Sean K

rub92me said:


> Next to come is Merrill Lynch with over $4 billion written-off. They already sacked two executives. Get ready for another party on Wall Street!



Where's that news rubme?


----------



## dhukka

kennas said:


> Where's that news rubme?




Merrill will report mid-month. The news of substantial write-downs has been out for a while. I assume the *$4* billion rubme is alluding to is the expected mark-to-market losses on some of its assets. 

The story comes from a Goldman Sachs earnings revision which saw them cut Merrill's FY07 forecast by *26%*. Should be an interesting report.


----------



## jurn

kennas said:


> Where's that news rubme?




There's article in today's SMH
Merrill Lynch sacks two execs, prepares write-offs
http://www.smh.com.au/news/business/merrill-lynch-sacks-two-execs-prepares-writeoffs/2007/10/04/1191091276438.html


----------



## Sean K

dhukka said:


> Merrill will report mid-month. The news of substantial write-downs has been out for a while. I assume the *$4* billion rubme is alluding to is the expected mark-to-market losses on some of its assets.
> 
> The story comes from a Goldman Sachs earnings revision which saw them cut Merrill's FY07 forecast by *26%*. Should be an interesting report.



Thanks dhukka. 

So, if they don't write down $4b their sp will probably shoot up?....

Seems to be the wave of the day at the moment. 



> *Equities ignoring recession worries *
> October 03, 2007
> 
> WE are in the midst of the worst financial crisis since 1998. The American housing market is in its direst state - sales and prices are down, foreclosures and defaults are up - since they started keeping statistical records 50 years ago. The fear of a recession is so large that a reluctant Federal Reserve has reversed course and sharply cut interest rates.
> 
> The US dollar is falling to levels against major currencies not seen in decades. Oil is climbing to record highs. On Monday, Citigroup, one of the nation's biggest banks, said its profits for the three months to September would probably drop 60 per cent from a year earlier.
> 
> Could somebody please tell the stock market?




As you have pointed out with some stats though, history has shown the market to be irrational on the odd occasion....


----------



## dhukka

kennas said:


> Thanks dhukka.
> 
> So, if they don't write down $4b their sp will probably shoot up?....
> 
> Seems to be the wave of the day at the moment.




Kennas,

Judging from Merrill's push into riskier asset markets and based on other brokers with similar exposures that have already taken write-downs, there is little doubt that MER will be marking down asset values. The actual amount is still unknown but expect it to be in the billions. 




> As you have pointed out with some stats though, history has shown the market to be irrational on the odd occasion....




Absolutely, As Keynes once said:


> "The market can stay irrational longer than you can stay solvent"




if the mark-downs come in at $2 billion and not $4 billion the market may push MER stock higher but at the end of the day it's all short term noise. Of more importance is what is coming ahead.


----------



## sassa

Great numbers for the American investor and economy last night with the release of the payroll numbers.And for that matter,also the world markets.One thing puzzles me-the revision up from 4000 jobs down to 89,000 up for August.This is a mind boggling revision of 93,000 jobs-how can so many new job creations be missed?
The Dow hit record height at one stage but pulled back to be under all time highs.Maybe the investor isn't all that sure of these numbers.Was the increase due to psychological cause?
This IMMINENT and severe market correction is taking some time. Data being released monthly is against this. Many will still point to the housing crisis.
One analysts said that the numbers did not tell the state of the economy and the risk of recession is still just under 50-50.But then again,there are so many different analyses of conditions by "experts"that the whole matter is clouded to most.


----------



## Uncle Festivus

sassa said:


> Great numbers for the American investor and economy last night with the release of the payroll numbers.And for that matter,also the world markets.One thing puzzles me-the revision up from 4000 jobs down to 89,000 up for August.This is a mind boggling revision of 93,000 jobs-how can so many new job creations be missed?
> The Dow hit record height at one stage but pulled back to be under all time highs.Maybe the investor isn't all that sure of these numbers.Was the increase due to psychological cause?
> This IMMINENT and severe market correction is taking some time. Data being released monthly is against this. Many will still point to the housing crisis.
> One analysts said that the numbers did not tell the state of the economy and the risk of recession is still just under 50-50.But then again,there are so many different analyses of conditions by "experts"that the whole matter is clouded to most.




I would take most statistical data coming out of the US, especially employment & inflation data, with a pinch of salt. 
This thread was started some months ago - the correction has already been & gone, & the fundamentals havn't changed, in fact only gotten worse. Maybe there should be a new thread - Imminent & severe market crash .

The US is already experiencing a number of sector recessions eg housing & auto's, while a number are flatlining at best.



> Sales of new homes tumbled 8.3 percent in August to the lowest in more than seven years and house prices dropped the most in four decades, the Commerce Department in Washington said last week. Consumer confidence fell to the lowest in almost two years in September, according to the Conference Board's index of confidence.
> ``The big picture is you're going to have a consumer that is going to be pulling back significantly,'' Pimco's Kiesel said. ``The rate cuts by the Fed are unlikely to save housing.''




Keep in mind that the recent correction is possibly only the start of a larger move, as the wealth affect lessons and money velocity decreases through out the US economy reducing the last mainstay - consumer spending. The lower US dollar is making imports even more expensive.

The money shuffling firms on Wall St are just starting to expose what sort of icebergs they have just hit. This isn't over by a long shot.

While it makes us feel all warm & fuzzy to be soothed by the rhetoric from our financial masters, no matter how hard they try to gloss over the real factual data there is only one outcome from artificially prolonging the effects of the liquidity binge hangover from the easing in 2002. Bernanke may have given the world the financial equivalent of a Berroca, but the damage has been done and continues to be done globally. I'll be trading the data & the markets as it comes along, but I won't be buying any cheap tickets for a deckchair on the Titanic .


----------



## sassa

Uncle Festivus said:


> I would take most statistical data coming out of the US, especially employment & inflation data, with a pinch of salt.
> This thread was started some months ago - the correction has already been & gone, & the fundamentals havn't changed, in fact only gotten worse. Maybe there should be a new thread - Imminent & severe market crash .




Why take the data with a pinch of salt?Are the figures cooked to lead the ordinary person to think things are not as bad as they really are?If they are cooked,surely the investment firms and traders know this and would not be participating in the markets.The volumes being traded show that the market is gaining more confidence each day.
I agree with a new thread with new direction to discuss the implications of the data now being divulged from the various Fed and financial bodies.


----------



## Uncle Festivus

sassa said:


> Why take the data with a pinch of salt?Are the figures cooked to lead the ordinary person to think things are not as bad as they really are?




Maybe. Like you said in post 61, such large differences in data makes me question the validity of the data & the methods they use to collect, even though they make the proviso that the data is prone to statistical errors. Even so, money has been made & lost on basically something that perhaps didn't even happen eg the employment numbers didn't go negative after all, but after the data was released I recall there was a sizable sell-off. 
No, I don't think they are telling us the whole story, but traders can still trade it.


----------



## Porper

Uncle Festivus said:


> This thread was started some months ago - the correction has already been & gone




I hardly think this little blip we have just had can be called a severe market correction.

Look at the real correction in 2000, then look at what we have just had, you can hardly see it on the chart it is that minor.

Not to say we won't get the big correction but we certainly haven't had one yet.


----------



## Uncle Festivus

Porper said:


> I hardly think this little blip we have just had can be called a severe market correction.
> 
> Look at the real correction in 2000, then look at what we have just had, you can hardly see it on the chart it is that minor.
> 
> Not to say we won't get the big correction but we certainly haven't had one yet.




Yes, splitting hairs I guess as to being severe, but stil a technical correction? So will the real correction/crash please stand up - then again maybe it better not .


----------



## Porper

Uncle Festivus said:


> Yes, splitting hairs I guess as to being severe, but stil a technical correction? So will the real correction/crash please stand up - then again maybe it better not .




I wasn't having a go at you festivus, just pointing out that if we are going to have a "real" correction we are still waiting for it.

Just looking at a log chart of the Dow since 1947, quite interesting.Looking at the corrections since then, we don't look like we will get one for a few years yet, but who knows, the markets act in wierd ways, present Bull run no exception.US in serious trouble and we are surging to all time highs.


----------



## wavepicker

Porper said:


> I hardly think this little blip we have just had can be called a severe market correction.
> 
> Look at the real correction in 2000, then look at what we have just had, you can hardly see it on the chart it is that minor.
> 
> Not to say we won't get the big correction but we certainly haven't had one yet.




200-2003 was full on bear market not a mere correction,  wiping off almost 39% of the DJIA. Perhaps the term "a slow crash" would be more appropriate. At least it gave investors multiple opportunities to unload with all the deep retracements it had unlike 29 and 87 before going as low as it did.


----------



## rub92me

dhukka said:


> Kennas,
> 
> Judging from Merrill's push into riskier asset markets and based on other brokers with similar exposures that have already taken write-downs, there is little doubt that MER will be marking down asset values. The actual amount is still unknown but expect it to be in the billions.
> 
> if the mark-downs come in at $2 billion and not $4 billion the market may push MER stock higher but at the end of the day it's all short term noise. Of more importance is what is coming ahead.



Well the actual write downs were more like $5 billion, more than anyone expected. And guess what: the share price went up 2.5%. You gotta laugh...


----------



## Porper

wavepicker said:


> 200-2003 was full on bear market not a mere correction,  wiping off almost 39% of the DJIA. Perhaps the term "a slow crash" would be more appropriate. At least it gave investors multiple opportunities to unload with all the deep retracements it had unlike 29 and 87 before going as low as it did.




I totally agree, 2000 was a bear market, not that I was around then but the chart says it all.

In Elliot Wave terms, it in my opinion was a correction to the last impulse higher, wherever you want to start that impulse it is irrelavant.

I suppose it depends on what time frame you are looking at, 29, 87 etc and we are looking at the largest time frame possible.To some people a couple of months ago could have been a severe market correction.I see it as a blip in a raging bull market.


----------



## Awesomandy

sassa said:


> The Dow hit record height at one stage but pulled back to be under all time highs.Maybe the investor isn't all that sure of these numbers.Was the increase due to psychological cause?




I wouldn't worry about that one too much. It's most likely just some profit taking on a Friday afternoon.



Porper said:


> To some people a couple of months ago could have been a severe market correction.




Given my limited experience, it's actually the biggest correction I've seen (ignoring the times when I wasn't interested in the markets). 

I have recently heard a report too, that quite a few markets are actually cheaper than they were, in terms of the P/E ratio of the index. Can't recall where I've got that one from, but it's an interesting point, I guess.

Either way, the concerns over the health of America are definitely still with us - it looks like the credit bubble is getting rather large.


----------



## dhukka

sassa said:


> Great numbers for the American investor and economy last night with the release of the payroll numbers.And for that matter,also the world markets.One thing puzzles me-the revision up from 4000 jobs down to 89,000 up for August.This is a mind boggling revision of 93,000 jobs-how can so many new job creations be missed?
> The Dow hit record height at one stage but pulled back to be under all time highs.Maybe the investor isn't all that sure of these numbers.Was the increase due to psychological cause?
> This IMMINENT and severe market correction is taking some time. Data being released monthly is against this. Many will still point to the housing crisis.
> One analysts said that the numbers did not tell the state of the economy and the risk of recession is still just under 50-50.But then again,there are so many different analyses of conditions by "experts"that the whole matter is clouded to most.




Sassa,

Indeed the revision to August payrolls was welcomed by the market. It just shows how much statistical noise there is in the numbers and that you need to pay more attention to the revisions rather than the current month's data. 

However I wouldn't say these are great numbers. If you consider that the increase in payrolls has averaged 97,000 per month over the past three months and that the US economy needs to add between 150,000 - 200,000 jobs per month just to keep up with new entrants into the labour force, then these numbers are not very good at all. 

The unemployment rate rose 0.1% and it will continue to rise if the economy can only produce 100,000 new jobs a month and economics 101 tells us that rising unemployment is often a precursor to recession. That said, current employment numbers a long way from recessionary levels at the moment.


----------



## dhukka

rub92me said:


> Well the actual write downs were more like $5 billion, more than anyone expected. And guess what: the share price went up 2.5%. You gotta laugh...




Just a coincidence that Merrill Lynch and Washington Mutual announced big earnings downgrades moments before the employment data? 3Q07 earnings season is shaping up to be an interesting one.


----------



## bean

Maybe US investors are on drugs... on a high at the moment.
When it wears off *soon* they will be on a downer.

Hopefully Back to reality


----------



## hangseng

Porper said:


> I hardly think this little blip we have just had can be called a severe market correction.
> 
> Look at the real correction in 2000, then look at what we have just had, you can hardly see it on the chart it is that minor.
> 
> Not to say we won't get the big correction but we certainly haven't had one yet.




*Thats not a correction this is a correction*  (sorry being flippant, this is crash) Note the dates! Worst case scenario is the SPI could drop 1000pts back to the last correction point IMO, if it does it won't last long and I doubt now if that would occur.

Interesting from IC Charts notes today:
"The Dow Jones Industrial Average recovered to a new all-time high above 14000. The market may have sufficient momentum for one more rally, but I suspect that the party is over. Earnings disappointments in the financial, housing and homeware sectors are likely to continue through 2008 and there is concern that this will spill over into other sectors. Breakout above 14000 signals a test of the upper trend channel and a target of 15000 [14000+(14000-13000)], but this is a time for vigilance rather than euphoria."


----------



## YChromozome

The slow down and credit crunch in the US is one worry.

The other is the Chinese market. A graph from Alan Kolher's report on Friday. The market is about 1.8x overvalued :


----------



## sassa

dhukka said:


> Just a coincidence that Merrill Lynch and Washington Mutual announced big earnings downgrades moments before the employment data? 3Q07 earnings season is shaping up to be an interesting one.




But herein lies the problem.Are the earning downgrades true?When these large financial institutions lose a lot of cash,the Fed desists from requiring that the losses be be marked to market value.


----------



## dhukka

sassa said:


> But herein lies the problem.Are the earning downgrades true?




Whether these companies will have to write more down in future periods we will just have to wait and see. However a couple such as UBS and Merrills seem to be taking their biggest hits in the 3rd quarter. 



> When these large financial institutions lose a lot of cash,the Fed desists from requiring that the losses be be marked to market value.




Firstly, in reference the write down of assets. This does not represent a loss of cash. This is a balance sheet adjustment that has to be taken through the P&L. 

Secondly the Fed has nothing to do with requiring companies to mark to market. The market prices for the particular assets in question takes care of that. It is not nor has it ever been the domain of the Fed.


----------



## Uncle Festivus

dhukka said:


> Sassa,
> 
> Indeed the revision to August payrolls was welcomed by the market. It just shows how much statistical noise there is in the numbers and that you need to pay more attention to the revisions rather than the current month's data.
> 
> However I wouldn't say these are great numbers. If you consider that the increase in payrolls has averaged 97,000 per month over the past three months and that the US economy needs to add between 150,000 - 200,000 jobs per month just to keep up with new entrants into the labour force, then these numbers are not very good at all.
> 
> The unemployment rate rose 0.1% and it will continue to rise if the economy can only produce 100,000 new jobs a month and economics 101 tells us that rising unemployment is often a precursor to recession. That said, current employment numbers a long way from recessionary levels at the moment.




There is a trend developing, going by the 3 month averages. These are quarterly bars too so it looks to be aligned with the housing bust, which hasn't bottomed yet.


----------



## dhukka

The NAHB housing index is usually a pretty good leading indicator of payrolls and judging by the current trend the future doesn't look good. Source: http://contraryinvestor.com/.


----------



## wavepicker

dhukka said:


> The NAHB housing index is usually a pretty good leading indicator of payrolls and judging by the current trend the future doesn't look good. Source: http://contraryinvestor.com/.





Speaking of the housing index, looking at the HGX(Philadelphia Housing Index).  This maybe in it's last throws to the downside for the time being. Still would look more completed with lower prices but then might start the largest rally since the whole bear camapaign started, but in no way implying the entire bear market has finished.

Cheers


----------



## wavepicker

This is my take on the current EW count of the DJI (Weekly), Have tried to number this chart as objectively as possible adhering to the rules and guidelines of the EWT as much as I can. There are other possibilities....

Cheers


----------



## Porper

wavepicker said:


> This is my take on the current EW count of the DJI (Weekly), Have tried to number this chart as objectively as possible adhering to the rules and guidelines of the EWT as much as I can. There are other possibilities....
> 
> Cheers




Wavepicker, after the completion of the wave 5, where is this in a larger degree count ?

Are you expecting an a,b,c correction in relation to the count on the chart, then another impulse higher or a larger degree correction.

Just interested in your thoughts to compare with others and my own count.


----------



## wavepicker

Porper said:


> Wavepicker, after the completion of the wave 5, where is this in a larger degree count ?
> 
> Are you expecting an a,b,c correction in relation to the count on the chart, then another impulse higher or a larger degree correction.
> 
> Just interested in your thoughts to compare with others and my own count.




Hi Porper,  this is the way I am looking at things.  This great bull market began after 1976 int he DJIA.  This long term wave count since 1976 counts best as an almost completd 5 wave structure(on log chart-sorry don't have a chart handy)

There are quite a few alternates to the chart with both bullish and bearish implications.  The best alternate that comes to mind is that within red 
wave 5, green wave 4 is incomplete and blue wave b is about to complete and green wave is thus more of a sideways complex correction with green wave 5 of red wave to come later.

There is a good chance we may have hit an important cycle point on Friday or will do so in the next few days. This might be the start of a major correction that will be deep and last till mid November OR it could be a only minor (11-14 days) and then the market continues bullishly until early next year where there are some very long term cycles overlapping. But those same long terms cycles could even take effect from now.

I am short the DJIA and XJO as of last week, and will see where it takes me. If I get stopped then then the market is more bullish than I estimated and I wll tarde to the long side till next year.

Cheers


----------



## sassa

With apologies to thread writers at Market Watch in response to an article that the stock market will go to new highs in this month.
"Financial storm has definitely passed."
Cablegram to Winston Churchill,Nov.1929.

"We feel that fundamentally Wall Street is sound,and that for people who can afford to pay for them outright,good stocks are cheap at these prices."
Goodboy and Company,October,1929.

"1930 will be a splendid employment year."
U.S.Dept.of Labour,New Year's Day forecast,Dec.1929

"I am convinced that through these measures we have re-established confidence."
Herbert Hoover,Dec.1929

Sorry to break the continuity of the last three threads.Am not trying to draw any parallels to the current situation.


----------



## ta2693

A imminent market correction is coming. 

http://au.blogs.yahoo.com/michael-pascoe/49/if-this-is-the-recovery-a-rate-rise-isnt-far-behind
interesting reading from yahoo finance. It makes very cautious on longterm investment. 
"The credit crisis has been doing the RBA's job for it by making money more expensive, but just about every indicator you can think of is now flashing "rate rise".

There was another one today - retail sales remaining strong in August despite all the scary financial headlines and whiff of panic that was around for much of the month."

If the interest rate rise, market is going to have another correction. I am thinking whether it is wise to build longterm investment portfolio after the interest lifted?


----------



## Porper

wavepicker said:


> Hi Porper,  this is the way I am looking at things.  This great bull market began after 1976 int he DJIA.  This long term wave count since 1976 counts best as an almost completd 5 wave structure(on log chart-sorry don't have a chart handy)
> 
> There are quite a few alternates to the chart with both bullish and bearish implications.  The best alternate that comes to mind is that within red
> wave 5, green wave 4 is incomplete and blue wave b is about to complete and green wave is thus more of a sideways complex correction with green wave 5 of red wave to come later.
> 
> There is a good chance we may have hit an important cycle point on Friday or will do so in the next few days. This might be the start of a major correction that will be deep and last till mid November OR it could be a only minor (11-14 days) and then the market continues bullishly until early next year where there are some very long term cycles overlapping. But those same long terms cycles could even take effect from now.
> 
> I am short the DJIA and XJO as of last week, and will see where it takes me. If I get stopped then then the market is more bullish than I estimated and I wll tarde to the long side till next year.
> 
> Cheers




Thanks Wavepicker, here is a count in log of the Dow since 1946, with a few basic time projections thrown in (still learning) anyones thoughts appreciated.


My thoughts :Wave 4 is too short in time to be a completed wave.It must be longer in time than any corrective wave of 1 less degree, which it isn't.

If wave 4 isn't completed then wave c of 4 could go on 'till the next time projection which is 2014 !!. That means a bear market from anytime soon 'till 2014.

If wave 4 is complete then maybe we will have a bull market up 'till then.

Also note the next time projections which are in 2026 !! I'll almost be a pensioner by then


----------



## wavepicker

Porper said:


> Thanks Wavepicker, here is a count in log of the Dow since 1946, with a few basic time projections thrown in (still learning) anyones thoughts appreciated.
> 
> 
> My thoughts :Wave 4 is too short in time to be a completed wave.It must be longer in time than any corrective wave of 1 less degree, which it isn't.
> 
> If wave 4 isn't completed then wave c of 4 could go on 'till the next time projection which is 2014 !!. That means a bear market from anytime soon 'till 2014.
> 
> If wave 4 is complete then maybe we will have a bull market up 'till then.
> 
> Also note the next time projections which are in 2026 !! I'll almost be a pensioner by then



Thanks for your thoughts Porper,

If then in your count wave 4 is incomplete, we need an impulse down (wave C) to complete the irregular correction that started in 2000. This would imply a target sub 7200 pts. Either way it does not really matter then which wave count is adopted as they are both implying the same thing.

There are a myriad of possibilities in a long term EW count with data that goes back almost 200 years. I think that this is probably well beyond the scope of the general discussion on this forum. When one is faced with looking at long term wave counts, things become very subjective in terms of EW as there are too many possibilities. I tend to think that our jobs as traders is to reduce the number of possibilities not increase them (i.e. increase the probabilities)

However if looking at a long term chart, the crash of 29 must be counted as significant on a log chart.    I liked to start my current count after the bear market of the 70’s because that is when this current great asset mania in stocks, land etc really started.

For the near term I am looking at other time cycles and other TA to help out with the decisions when EW is ambiguous about probable wave counts.

BTW Is your long term wave count software(Dynamic Trader) generated or is it done by you?

Often the software counts tend to focus too much on the swings and place very little emphasis of the patterns which are the key IMO??


----------



## Porper

wavepicker said:


> BTW Is your long term wave count software(Dynamic Trader) generated or is it done by you?




Wavepicker,

Dynamic trader doesn't do wave counts, only swings of degree.I do all my counts myself and always will.

I agree that long term counts are very subjective, I only started at 1946 because thats when my data starts from.1929 should be in there as you say.

I don't think looking at a super cycle count should influence us too much, because as you point out, we are talking years for a wave C to complete.Impulses in the wave will be very tradeable, even as an invester.


----------



## sassa

Tonight on Bloombergs:
"Option traders buying of puts now exceeds buying of calls."
This is a fair indication that the Dow has reached its peak.


----------



## sassa

And I forgot to add,the last time puts exceeded calls was in 2001 and the market fell 34%.


----------



## Awesomandy

sassa said:


> "Option traders buying of puts now exceeds buying of calls."
> This is a fair indication that the Dow has reached its peak.




Not necessarily. We don't know the reason why the puts are being bought. If I'm running an equity based hedge fund, it is highly possible that I'm increasing my leverage to buy long to take advantage of the resumption of the bull market, while also buying more put options as a hedge. Of course, it's not as simple as that, but that's the basic idea.


----------



## sails

sassa said:


> Tonight on Bloombergs:
> "Option traders buying of puts now exceeds buying of calls."
> This is a fair indication that the Dow has reached its peak.




That would probably be better stated trading in puts now exceeds trading in calls" due to the fact that for every buyer there is a seller.  

And we don't know whether the big money is long or short those puts.  Even if the big money is long, we also don't know if these puts have been coupled with long stock turning them into synthetic calls (bullish) as Andy has mentioned.  

That's not to say the market won't come tumbling down as I have seen that happen in the past when put trading exceeds call trading at market highs but, equally, I have found it to have no effect at all on a bearish outcome.  IMHO, it isn't a very reliable indicator for the above reasons!


----------



## happytrader

sassa said:


> Tonight on Bloombergs:
> "Option traders buying of puts now exceeds buying of calls."
> This is a fair indication that the Dow has reached its peak.




Pain and loss or the fear of such is highly subjective and individualised. The same goes for whether we view something as cheap or overpriced. On looking back at the crash of 1987 even though it dropped within days as apposed to the usual slide over months scenario, the Dow in fact only lost a year of gains. It then remained tightly contracted in 1988 and was back around its 1987 highs by the end of 1989. If you weren't too terribly distracted by the crash, 1988 saw building societies offering 17% return on 6 month deposits.

Anyone that was in the market prior to the crash of 1987 will tell you they were making such excellent gains, they were happily funding their spending sprees. 

So what you say? Taking some money off the table or locking in profits along the way for enjoyment is fine. It doesn't have to be an all or nothing thing. BTW, I learned that by watching my parents who have traded the stockmarket for over 40 years.

Cheers
Happytrader


----------



## sassa

Hi Andy,Happy Trader and Sails,
http://www.bloomberg.com/apps/news?pid=20601109&sid=aouTzYS5mCCY&refer=home


----------



## nikki

i am terribly confused by the bloomberg articles because they talk about a drop in the index over a period of time (i.e. six months) rather something that is imminent and severe. anyone have thoughts on this! 

also, are people more cautious given the recent correction? what was happening to the S&P or the DJIA before july 2001 when the market dropped 34%. i.e is the comparison with 2001 misleading if the psychological situation is different?

are people more educated about options these days and the protection it offers in terms of protecting profits? i.e. is this divergence because people know more or are more cautious or wary?


----------



## Wysiwyg

nikki said:


> also, are people more cautious given the recent correction?know more or are more cautious or wary?




Many jumped during the recent sharp decline in indices and are still recovering.
	

		
			
		

		
	






	

		
			
		

		
	
 With an increasing number of market participants due to the bull run excitement (prolly the U stock fever) experience arrived in the form of personal fear of loss.

So yes , many are cautious of the low to mid caps and the current borrowing drama but the bargain hunters did very well out of it.


----------



## wavepicker

Some interesting research by cycles technician Peter Eliades (www.stockmarketcycles.com), suggests we are entering a dangerous period cyclically for stocks, from now until November 2007. He bases that upon the decennial pattern whereby years ending in an '07 have their worst performance from October into November. 


http://www.stockmarketcycles.com/current_observations.htm


----------



## sassa

LONDON (CNNMoney.com) --" U.S. stock futures rose Thursday as traders shook off profit worries and aimed to restart the record-setting rally."
What better news could you have for the markets.


----------



## nikki

how about record number of foreclosures in september.

i get annoyed at how these news agencies (yahoo especially) try and give meaning to simple pofit-taking. yesterday's DJIA performance was strange given that only a couple of companies had reported.

is this intense rally meaningful to someone in terms of elliot wave or some other theory that might predict a potential downturn.

i am getting really concerned at how all the markets are peaking so strongly???? noticed the indian market putting on 4.98% in one day?????? what is going on.


----------



## >>Apocalypto<<

nikki said:


> how about record number of foreclosures in september.
> 
> i get annoyed at how these news agencies (yahoo especially) try and give meaning to simple pofit-taking. yesterday's DJIA performance was strange given that only a couple of companies had reported.
> 
> is this intense rally meaningful to someone in terms of elliot wave or some other theory that might predict a potential downturn.
> 
> i am getting really concerned at how all the markets are peaking so strongly???? noticed the indian market putting on 4.98% in one day?????? what is going on.




What's going on?

Buying is going on, follow it until it changes..... really it's that simple


----------



## Wysiwyg

nikki said:


> how about record number of foreclosures in september.
> 
> i get annoyed at how these news agencies (yahoo especially) try and give meaning to simple pofit-taking. yesterday's DJIA performance was strange given that only a couple of companies had reported.
> 
> is this intense rally meaningful to someone in terms of elliot wave or some other theory that might predict a potential downturn.
> 
> i am getting really concerned at how all the markets are peaking so strongly???? noticed the indian market putting on 4.98% in one day?????? what is going on.




All time highs trigger a caution meme in many share market participants.The fear meme kicks in and the risk averse (and shorters) begin the cycle of correction.Any differing observations?


----------



## sassa

The market indicators for the Nasdaq and Dow tonight are rising at such an incredible rate that there will triple digit gains in the high hundreds or over 200.


----------



## wavepicker

sassa said:


> The market indicators for the Nasdaq and Dow tonight are rising at such an incredible rate that there will triple digit gains in the high hundreds or over 200.




 4:30 am: Doesn't seem so any more!! Dow falling like a brick


----------



## Sean K

wavepicker said:


> 4:30 am: Doesn't seem so any more!! Dow falling like a brick



What the heck happened? Dropped 200 pts. I didn't see any news...


----------



## wavepicker

kennas said:


> What the heck happened? Dropped 200 pts. I didn't see any news...




I can't find any either....


----------



## Whiskers

kennas said:


> What the heck happened? Dropped 200 pts. I didn't see any news...




Could November oil up to $83 do it?


----------



## wayneL

Bob Pissant-i explains it away. http://www.cnbc.com/id/21253749

IMNSHO, while riding this bull, folks recognize that things ain't so freakin' rosy and are feeling a bit flighty.


----------



## Sean K

wayneL said:


> Bob Pissant-i explains it away. http://www.cnbc.com/id/21253749
> 
> IMNSHO, while riding this bull, folks recognize that things ain't so freakin' rosy and are feeling a bit flighty.



There's been numerous opportunites the past few weeks to cash in. This seems pretty minor. Perhaps the _perception _that they were coming up to a correction was enough.... The rise in the DJI/XAO has surprised everyone by my reading, even my last taxi driver. And that was in Cuzco!


----------



## Porper

wayneL said:


> Bob Pissant-i explains it away. http://www.cnbc.com/id/21253749
> 
> IMNSHO, while riding this bull, folks recognize that things ain't so freakin' rosy and are feeling a bit flighty.




Big rejection of higher prices on the Dow.I was watching it reverse sharply as it was happening.

I shorted the Aus 200 mini contract this morning, was down only 17.5 points, still only down 23.5.Surely it will lose more than this, I am thinking at least a 50 point down day ?

We will see.My shorting record is atrocious so don't follow me !!


----------



## Sean K

Porper said:


> My shorting record is atrocious so don't follow me !!



Thanks Porp, gone long. Cheers!


----------



## nikki

i was watching the massive drop in the DJIA the other night (morning??) as well - the European central bank governor (or one of them) gave a speech suggesting that the US re European rates needing to go up. 

apparently the market interpreted that as a signal to the US federal reserve that they should not drop rates. 

most interesting for me about that drop was that resources stayed strong!!

i noticed that the rally of the S&P last night did not go above previous highs even  in intraday trades. any chartists out there - is that a bearish signal.


----------



## sassa

nikki said:


> :
> 
> i noticed that the rally of the S&P last night did not go above previous highs even  in intraday trades. any chartists out there - is that a bearish signal.




This may help understand why there will be no bear market(courtesy GRG55 at iTulip).
weak data = Fed ease, stocks rally
consensus data = lower volatility, stocks rally 
strong data = economy strengthening, stocks rally 
bank loses $4bln = bad news out of the way, stocks rally 
oil spikes = great for energy companies, stocks rally 
oil drops = great for the consumer, stocks rally 
dollar plunges = great for multinationals, stocks rally 
dollar spikes = lowers inflation, stocks rally 
inflation spikes = will inflate all assets, stocks rally 
inflation drops = improves earnings quality, stocks rally


----------



## theasxgorilla

Thats gold sassa, and about spot on....it's all about perception...and as you just demonstrated...it can be spun any which way and whilst the catch-phrase of the decade continues to be 'not on my damn shift!', money in the market is as safe as houses....did I just say that??


----------



## bean

nikki said:


> i was watching the massive drop in the DJIA the other night (morning??) as well - the European central bank governor (or one of them) gave a speech suggesting that the US re European rates needing to go up.
> 
> apparently the market interpreted that as a signal to the US federal reserve that they should not drop rates.
> 
> most interesting for me about that drop was that resources stayed strong!!
> 
> i noticed that the rally of the S&P last night did not go above previous highs even  in intraday trades. any chartists out there - is that a bearish signal.




This article is from a BEAR read!!!  Not in this arcticle but a previous one it the DOW can make 15100.  Google US$662 (at least) currently $630 its current P/E 54 
it looks as though everything is going to rise.  Bubbles galore when it ends is a guess but it will end badly however one has to invest capital so as not to miss any gains but one must also take some gains of the table along the way.

http://news.goldseek.com/RickAckerman/1192372800.php


----------



## Awesomandy

bean said:


> Bubbles galore when it ends is a guess but it will end badly however one has to invest capital so as not to miss any gains but one must also take some gains of the table along the way.




Yes, I definitely agree to that. I'm holding very few shares long at the moment, just mostly doing day trades here and there.


----------



## sassa

An article for those who are predicting a correction.
http://www.businessweek.com/investor/content/oct2007/pi20071011_576542.htm


----------



## nikki

can anyone help with this query? someone tells me that the rally and drops last week in the DJIA and the S&P were done on really low volumes and that most institutional investors are still on the sidelines. 

does this mean anything? can anyone compare this to what it might have looked like in the past years in october of the 1st quarter for the S&P and the DJIA. apparently 12 out of the past 13 1st quarters have been very good for the S&P. unfortunately, i do not have the know-how to figure out the answers to my questions

i am trying to decide whether to exit a few trades this week but need more evidence so i can be factual about my choice!! any help would be great????

all this reflection on the 1987 crash is giving me headaches


----------



## sassa

I've said it before and I'll say it again,"Wallstreeters have no overseeing authority as to how to value their financial instruments."Poor results can be posted as big profits.Now,if this report has substance,then the market has been led astray.
http://money.cnn.com/2007/10/14/news/companies/goldmanearns.fortune/index.htm


----------



## Wysiwyg

sassa said:


> An article for those who are predicting a correction.
> http://www.businessweek.com/investor/content/oct2007/pi20071011_576542.htm




There is no doubt about a correction.I have seen it.

While shopping this evening I observed this beautiful lady with slender legs, ponytailed hair and bright smile.I looked down toward my feet and noticed a massive correction, the likes of which brought a smile to my face and knowingness that all in the world is as it should be.


----------



## sassa

Wysiwyg said:


> There is no doubt about a correction.I have seen it.
> 
> While shopping this evening I observed this beautiful lady with slender legs, ponytailed hair and bright smile.I looked down toward my feet and noticed a massive correction, the likes of which brought a smile to my face and knowingness that all in the world is as it should be.



Great Scott.Did you race straight home or was the missus with you?


----------



## rub92me

sassa said:


> I've said it before and I'll say it again,"Wallstreeters have no overseeing authority as to how to value their financial instruments."Poor results can be posted as big profits.Now,if this report has substance,then the market has been led astray.
> http://money.cnn.com/2007/10/14/news/companies/goldmanearns.fortune/index.htm



Wow, you would think that after Enron and the introduction of Sarbanes Oxley they wouldn't dare to be that creative with their derivatives accounting.  It will be interesting to see what their external auditors think of this...


----------



## Awesomandy

rub92me said:


> It will be interesting to see what their external auditors think of this...




They have the option of letting things go, and hope they trade out of any problems, or just send the companies to the wall, and lose the revenue from possibly a very large client.


----------



## sassa

sassa said:


> I've said it before and I'll say it again,"Wallstreeters have no overseeing authority as to how to value their financial instruments."
> And have a read of this from Martin Hutchinson-
> Goldman Sachs, for example, reported this week that the “Level 3” assets in its books, those for which liquidity is lowest and valuation most difficult, had jumped by a third in the quarter to $72.05 billion. These “Level 3” assets presumably don’t include Goldman’s multi-billion dollar holding of the Industrial and Commercial Bank of China, quoted daily on a stock exchange, however over-inflated its share price and illiquid its trading market. Instead, they appear to represent mostly derivatives and securitization assets linked distantly to mortgage loans and leveraged buyout deals, whose valuation is carried out by the operating unit itself, based on the price at which it would have to sell the asset to preserve its bonus pool from unexpected losses.
> Set against Goldman’s capital of $36 billion, that $72 billion is a frightening figure. At some point, probably in a downturn, the real value of those “Level 3” assets will have to be recognized. No doubt the resulting losses will be written off against capital but even Goldman’s brilliant and gloriously paid accountants will find it difficult to write off $72 billion of losses against $36 billion of capital.
> Corporate profits are Wall Street’s main justification for the current over-inflated level of the US stock market; they have been increasing in every quarter since 2002 and are held to justify an S&P500 earnings multiple of “only” 18. However, Thomson Financial reported Thursday that third quarter earnings, those currently being reported, were likely to come in fractionally below second quarter earnings, for the first time since 2002.
> If that prediction is fulfilled, and we have now passed the peak of earnings in this cycle, then unexpected losses and the need to return corporate accounting to a reasonably conservative basis will make the downward slope in earnings long and steep, so that even if 18 times earnings were an appropriate level, it would imply a massive drop in the stock market. Such a drop in the stock market, particularly if accompanied by an inflation-caused drop in bond markets, will decimate Wall Street’s profits, throwing overpaid bankers out of work and further pressuring consumer spending. It is a vicious circle, spiraling ever more rapidly into an almost (but not quite) bottomless pit.
> It might be time to speculate in a few long term put options – or move your money overseas, but where?


----------



## dubiousinfo

Ok can somebody please explain why the XJO is up this morning.

Got stopped out of a short last week.

Sat on the fence for the last 2 days getting splinters in my butt, and Dow was down again last night, but as soon as I go short again the damn thing goes up.


----------



## nikki

low volumes - the bears are obviously watching!! everyone else in asia is down?

the DJIA, S7P and Nasdaq futures are favouring a very good open tonight!! maybe traders are reading too much into that


----------



## Porper

nikki said:


> low volumes - the bears are obviously watching!! everyone else in asia is down?
> 
> the DJIA, S7P and Nasdaq futures are favouring a very good open tonight!! maybe traders are reading too much into that




Low volume isn't necessarily a bad thing.It can mean that there is no supply at the lower prices, as well as no demand.

The Dow was only down 0.5%, and off it's lows, so today was never going to be a big down day.


----------



## sassa

nikki said:


> the DJIA, S7P and Nasdaq futures are favouring a very good open tonight!! maybe traders are reading too much into that




These figures can turn rapidly.Some very important info coming out tonight with the MBA(applications at mortgage lenders),housing starts for September,CPI(pre market consensus of 0.2%),EIA petroleum inventories report and the Beige Book(which will give an indication of of the likelihood of a further interest rate cut).
You would think that on current economic data flowing from the U.S.A.,a moderate rise in the Dow could only be possible.


----------



## dubiousinfo

The whole of Asia is down, so if the XJO doesn't finish down today, now that I have gone short, I can only conlude that it's something personal and it just doesn't like me


----------



## SevenFX

dubiousinfo said:


> The whole of Asia is down, so if the XJO doesn't finish down today, now that I have gone short, I can only conlude that it's something personal and it just doesn't like me





DubiousInfo...

Today seem to have respected the overall trend down since Oct11, confirmed by earlier touch of 6760.

SevenFX


----------



## dj_420

Trouble stirring??? I personally think we are near to another top, the market has run very very hard since that smallish correction. Are we due for more red?

http://in.biz.yahoo.com/071017/137/6m18n.html


----------



## SevenFX

dj_420 said:


> Trouble stirring??? I personally think we are near to another top, the market has run very very hard since that smallish correction. Are we due for more red?
> 
> http://in.biz.yahoo.com/071017/137/6m18n.html




DJ.

The rest of the (DOW, DAX, FTSE, HS) markets haven't seemed to change a whole lot, so why do you think the Indian market will lead????

Though the SPI has traded down since the 11Oct...????

Thanks
SevenFX


----------



## dj_420

SevenFX said:


> DJ.
> 
> The rest of the (DOW, DAX, FTSE, HS) markets haven't seemed to change a whole lot, so why do you think the Indian market will lead????
> 
> Though the SPI has traded down since the 11Oct...????
> 
> Thanks
> SevenFX




We have seen a number of times DOW futures pointing to up and a large turnaround during trade. Surely some large negative movements will cause some sort of movement.

I could be wrong, but its very hard to find bargains in this market and we were nice and cheap only two months or so ago. I have done ok picking some cheap blue chips and bailing after a small recovery.

I am still long select positions, but have more been focusing on short term trades taking 5-10% here and there.


----------



## sassa

_" The bears point to lagging breadth, a dearth of new highs, sub-par volume, and the fact that Lowry's Buying Power Index, which usually leads the major averages in bull markets, is now scraping along near a six-month low. Furthermore, Lowry's Selling Pressure is not only dominating the Buying Power, but as of Friday's close the Selling Pressure Index was a full 95 points above the Buying Power Index. Thus, according to the bearish argument, all we're seeing now is some kind of a low-volume blow-off preparatory to a final stock market top."_
Anyone know anything about Lowry's Buying Power Index and Selling Pressure?


----------



## sassa

The overseas markets in the last half hour have appreciated considerably.The FTSE has shot up .7%.
The S&P futures has increased from 5.3 to 9.6 and the Dow  from 36 to 64.
What's going on?


----------



## Whiskers

sassa said:


> The overseas markets in the last half hour have appreciated considerably.The FTSE has shot up .7%.
> The S&P futures has increased from 5.3 to 9.6 and the Dow  from 36 to 64.
> What's going on?




Someone got a leak on the US CPI figures out shortly!


----------



## sassa

Whiskers said:


> Someone got a leak on the US CPI figures out shortly!




But the consensus on the cpi is +0.2 with the core +0.2.This would not warrant the increase in the futures that is happening.
The S&P has risen another point and the Dow an extra 14.The Ftse has reached 1% from 0.1% 45 minutes ago.
This is a very strong surge.


----------



## Whiskers

Seems like stronger than expected US company profits on top of lower base metal prices.

http://www.reuters.com/article/hotStocksNews/idUSL1625707720071017

Geeez, I was expecting lower profits and a bit of a retrace.


----------



## sassa

Whiskers said:


> Seems like stronger than expected US company profits on top of lower base metal prices.
> 
> http://www.reuters.com/article/hotStocksNews/idUSL1625707720071017




JPMorgan and Coca Cola results have come in much stronger than expected.I would imagine along with Yahoo and Intel from after market close yesterday,the market is ready to pounce on any positive rather than negatives.I would have to say that if this increase in the S&P,Nasdaq and Dow continues,we will certainly have an imminent market correction in the plus tonight.


----------



## >Apocalypto<

sassa said:


> JPMorgan and Coca Cola results have come in much stronger than expected.I would imagine along with Yahoo and Intel from after market close yesterday,the market is ready to pounce on any positive rather than negatives.I would have to say that if this increase in the S&P,Nasdaq and Dow continues,we will certainly have an imminent market correction in the plus tonight.




so on good news we are going to correct??? tonight? 

follow the charts sassa, follow the trend until it changes. unless you have a type of time analysis to determine turn dates like a couple of members in here i chat with.

best thing to do is follow the trend until it starts to change it's behavior.

my


----------



## Whiskers

CPI came in at .3 for Sept.



> Consumer prices increased at a seasonally adjusted annual rate (SAAR) of 1.0percent in the third quarter of 2007, following increases in the first and second quarters at annual rates of 4.7 and 5.2 percent, respectively. This brings the year-to-date annual rate to 3.6 percent...



http://www.bls.gov/news.release/pdf/cpi.pdf


----------



## explod

Trade_It said:


> so on good news we are going to correct??? tonight?
> 
> follow the charts sassa, follow the trend until it changes. unless you have a type of time analysis to determine turn dates like a couple of members in here i chat with.
> 
> best thing to do is follow the trend until it starts to change it's behavior.
> 
> my




Spot on Trade It.   It has been mentioned before but worth repeating and one of the best stratiegic books for investing/trading I have ever read:- "Thrend Following" by Michael Covel, Prentice Hall 2004

Once you get the idea right you can set up fixed criteria for indentifying, entering, holding and exiting a trade, stick to the criteria/perameters you work out like glue and investing becomes safe and childs play.   I apply the principals not only to the particular stock but also it's specialty.  When the price of cheese is going up pick also the best trending/stratiegically placed cheese producer


----------



## sassa

Trade_It said:


> best thing to do is follow the trend until it starts to change it's behavior.



And what happens if it crashes overnight?


----------



## explod

sassa said:


> And what happens if it crashes overnight?




That has rarely happened.  There are usually signs.  EG Bank stocks have levelled out over the last few months, so you would be out of them.   

If the stock market was to crash 10% tomorrow BHP would go with it to some degree and you would have to sell.  But as a good trend follower on BHP you are already up over 60% for the year so where is the problem.  You just need to keep your focus on the quality stuff going in the right directions.

A great trade going at the moment for me is AVO, I have recently taken some profit and reduced but if there was a big crash tomorrow I believe the nature of this one would not be effected too much because the gold price is also in a big uptrend

A saying going back a long way "The trend is you friend untill the bend"

It is funny, it took me a lot of time, losses and years to realise that the best investment methods are the simplest.


----------



## >Apocalypto<

sassa said:


> And what happens if it crashes overnight?




lol I will eat my words!

as u can see in the chart yes it has failed at the top retreated very quickly, no surprises to see a rally here but look were that rally starts from, some solid minor support there backing it up. Trend line is a Gann line showing 45 degree angle in the trend, price is moving back to that line (my personal Gann observation). that Gann line is not Calibrated to be a time point. that infomation is for this time point I am not sold bullish yet on the dow. higher low will show something more concrete. 

but Sassa anything can happen in the last hour on wall st! 

good trading!!


----------



## nikki

sassa said:


> _" The bears point to lagging breadth, a dearth of new highs, sub-par volume, and the fact that Lowry's Buying Power Index, which usually leads the major averages in bull markets, is now scraping along near a six-month low. Furthermore, Lowry's Selling Pressure is not only dominating the Buying Power, but as of Friday's close the Selling Pressure Index was a full 95 points above the Buying Power Index. Thus, according to the bearish argument, all we're seeing now is some kind of a low-volume blow-off preparatory to a final stock market top."_
> Anyone know anything about Lowry's Buying Power Index and Selling Pressure?




does this index tell you much about the psychology of the current market?

not sure if i am right but i much prefer to be guided by the VIX (http://finance.yahoo.com/q?s=^VIX&d=t) which trades between 15-20 in bull market conditions.

a few minutes ago, it was trading at 18.5. in August at its worst it was trading @ a high of 37.


----------



## nikki

can you have severe market corrections when clearly not all sectors of the market look the same. 

this report on bloombergs clearly highlights the strength in the commodities: http://www.bloomberg.com/apps/news?pid=20601109&sid=atKzfe69gP1E&refer=home


----------



## Whiskers

Trade_It said:


> Originally Posted by sassa
> And what happens if it crashes overnight?
> 
> lol I will eat my words!
> 
> but Sassa anything can happen in the last hour on wall st!
> 
> good trading!!




Looks like The Dow's a gonna now at -94.   Can't se her coming back from here.

The damn thing has been following POG and POS almost to the minute all night again. Is this an *idiosynchrocy* or an *idiot-synchrocy.* 

Not sure that it's a crash yet. I guess we'll se in the morning. Off to bed in peace now.


----------



## nikki

Whiskers said:


> The damn thing has been following POG and POS almost to the minute all night again. Is this an *idiosynchrocy* or an *idiot-synchrocy.*




Hey whiskers. what is POG and POS?


----------



## wayneL

nikki said:


> Hey whiskers. what is POG and POS?



*P*rice *O*f *G*old

*P*rice *O*f *S*ilver

... and for future reference:

*P*rice *O*f *O*il


----------



## nikki

wayneL said:


> *P*rice *O*f *G*old
> 
> *P*rice *O*f *S*ilver
> 
> ... and for future reference:
> 
> *P*rice *O*f *O*il




thanks for that. do you have a site you use to stream these prices?


----------



## wayneL

nikki said:


> thanks for that. do you have a site you use to stream these prices?




You wont get Live prices unless you have a futures brokerage account, or pay for them.

But if you go to my blog at the link below, there are dynamic charts to most futures contracts (delayed between 20 mins and 1 hr) on the right menu bar at the bottom.

Read the directions there.

Or try this link: http://sites3.barchart.com/pl/ibnetwork/

It will say Unauthorized Access, but just press the "Go" button on  your browser and it will come up.


----------



## krisbarry

Woke up and read the doom and gloom thread, WHAT CORRECTON?, WHAT CRASH?

Dow down a poltry 20 points, Bears go hybern8!


----------



## Awesomandy

Housing starts are at the lowest levels for 14 years, but inflation is quite acceptable. This means there is a hope for another rate cut, so the dow survives for now. The market is also helped by Intel and Yahoo, with their profit figures.


----------



## nikki

wayneL said:


> Or try this link: http://sites3.barchart.com/pl/ibnetwork/
> 
> It will say Unauthorized Access, but just press the "Go" button on  your browser and it will come up.




thanks for that - but what is the "go" button on my browser. i know my browser well but i kept saying "go" and it would ignore me!!!


----------



## nikki

Stop_the_clock said:


> Woke up and read the doom and gloom thread, WHAT CORRECTON?, WHAT CRASH?
> 
> Dow down a poltry 20 points, Bears go hybern8!




ok ok ok you are right - i am a bear but all this time i thought i was lamb!!

i just realised this when i read the following headline on the guardian weeklies web page the wrong way: "France prepares for Black Thursday"

it is about unions going on strike and has nothing to do with a sharemarket plunge in france.


----------



## Uncle Festivus

It's looking like the irrepressible excess liquidity bull market driver never went away, as the maestros in the US Fed and Reserve are working overtime to avert further fallout from the property bust. Even oil at (non inflation adjusted) records has failed to dent the enthusiasm. About time we had some more bears capitulating .

Apparently the best game in town is to get as much money into China to get set before a currency revaluation in an attempt to curb runaway inflation, hence the parabolic chart for their stock market. Basically going up not so much for the intrinsic value to be had from the stocks themselves, but as a currency play, so maybe we have a Renminbi carry trade emerging? Worse case scenario here for foreign investors is if the Chinese authorities place a ban on currency flows out of the country should a market 'event' take place. High stakes game being played out here?

If the Fed cut's rates again then be very very worried, because they are too about a housing led recession. The scene would be set for $AU parity, reducing earnings for (commodities) exporters, cheaper imports fuelling inflation, and a commensurate action on interest rates from the Reserve bank, maybe during an election. Failure to act independently would risk being behind the curve on inflation.

At the very least there will be, and is already happening eg RIO, margin pressure from rising input costs on a global scale, as there is two sides to the commodities bull, even for the producers who are not immune from  increased costs.
It's coming to a head, only the timing is unknown; except for time analysts maybe, who say repentance is close at hand?


----------



## krisbarry

After todays stellar bullish run on the stock market, I think all the bears can hybern8 tonite with their soft cuddly teddy bears...waaa...waaa...booo...hooo

Note the band-aid on teddys head...lol


----------



## Porper

Stop_the_clock said:


> After todays stellar bullish run on the stock market, I think all the bears can hybern8 tonite with their soft cuddly teddy bears...waaa...waaa...booo...hooo
> 
> Note the band-aid on teddys head...lol




Somebody said the other day that we are obviously in a massive Bull market, and this is with all the perceived bad news coming through with the credit crunch, economy etc, etc.

The time to worry is when all the news is bullish.

Never a truer word said.


----------



## krisbarry

There is plenty of wasted opportunites when sitting in cash....waiting for the crash.  

Never a truer word said. Go the bulls...go!


----------



## bean

Interesting to see tonight how much weakness is in the US markets.
May open up down first support not to far under it previous close next is nearly 1% down then 2% down.
But the Nasdaq wants to higher and is the most Bullish
But depends how weak at the opening


----------



## Porper

Stop_the_clock said:


> There is plenty of wasted opportunites when sitting in cash....waiting for the crash.
> 
> Never a truer word said. Go the bulls...go!




Absolutely agree, that is why we should trade the market and not the perceived news.

The crunch will come eventually though, could be next week , month , year or maybe not in our lifetime.

The blind bulls will be wiped out though, just as will the blind bears, those that can adjust to a different market will survive and prosper.


----------



## sassa

Something has "spooked" the markets overseas.In half an hour,the S & P lost
 .67%,the Nasdaq 0.4%,the Dow 0.4% and the FTSE 0.8%.


----------



## sassa

sassa said:


> Something has "spooked" the markets overseas.In half an hour,the S & P lost
> .67%,the Nasdaq 0.4%,the Dow 0.4% and the FTSE 0.8%.




Have found reason.

http://money.cnn.com/2007/10/18/news/companies/boa_earnings/index.htm


----------



## bean

bean said:


> Interesting to see tonight how much weakness is in the US markets.
> May open up down first support not to far under it previous close next is nearly 1% down then 2% down.
> But the Nasdaq wants to higher and is the most Bullish
> But depends how weak at the opening




Nothing spooked it, it was just the matter of what weakness


----------



## BentRod

Sassa... you said the same last night.

Don't even bother with the futures, The only thing that matters is the close!


----------



## >Apocalypto<

BentRod said:


> Sassa... you said the same last night.
> 
> Don't even bother with the futures, The only thing that matters is the close!




very good point......

If i had a 1$ for every time the futures did not follow though on there precived direction I would be making a good living!

Follow the patterns in the chart they never lie, well not that often!


----------



## BentRod

> If i had a 1$ for every time the futures did not follow though on there precived direction I would be making a good living!




Totally agree TradeIt, I would only bother with the futures if I was trading em(which I'm not).

It is no indicator of the close that's for sure.


----------



## sassa

BentRod said:


> Totally agree TradeIt, I would only bother with the futures if I was trading em(which I'm not).
> 
> It is no indicator of the close that's for sure.




I should know better.With the jobless an extra 25,000 over estimates and the Bank of America's results worse than expected,a trader on Bloomberg said that the market would be close to line ball as this gives the Fed extra impetus for a rate cut Oct.31.With the Philadelphia survey expected to come in much weaker during trading,I guess this will give the investors extra heart for a rate cut.


----------



## Awesomandy

Right now, it doesn't matter what the news is. If the banks have good profit figures, then the market will go up. If they have bad numbers, people will think that rates need to be cut, and the market will go up too.


----------



## sassa

Awesomandy said:


> Right now, it doesn't matter what the news is. If the banks have good profit figures, then the market will go up. If they have bad numbers, people will think that rates need to be cut, and the market will go up too.




How true and so I repeat this post-

weak data = Fed ease, stocks rally
consensus data = lower volatility, stocks rally 
strong data = economy strengthening, stocks rally 
bank loses $4bln = bad news out of the way, stocks rally 
oil spikes = great for energy companies, stocks rally 
oil drops = great for the consumer, stocks rally 
dollar plunges = great for multinationals, stocks rally 
dollar spikes = lowers inflation, stocks rally 
inflation spikes = will inflate all assets, stocks rally 
inflation drops = improves earnings quality, stocks rally


----------



## BentRod

I agree chaps.

The market will do what it wants to do regardless of news.
Trying to predict reaction to news is crazy IMO.


----------



## Kauri

sassa said:


> Something has "spooked" the markets overseas.In half an hour,the S & P lost
> .67%,the Nasdaq 0.4%,the Dow 0.4% and the FTSE 0.8%.




  For better or for worse I actually closed out a short last night (SP500) as I see the market playing out a flat W4 here.  
 (Would post a chart but it wont take??)

 Cheers
..........Kauri


----------



## Uncle Festivus

BentRod said:


> I agree chaps.
> 
> The market will do what it wants to do regardless of news.
> Trying to predict reaction to news is crazy IMO.




Perhaps, but reality triumphs over ignorance in the end (just ask US, British, Spanish, and Irish home owners). Shanghai down 3.5% yesterday. Keep watching China for cracks?


----------



## sassa

sassa said:


> How true and so I repeat this post-
> 
> weak data = Fed ease, stocks rally
> consensus data = lower volatility, stocks rally
> strong data = economy strengthening, stocks rally
> bank loses $4bln = bad news out of the way, stocks rally
> oil spikes = great for energy companies, stocks rally
> oil drops = great for the consumer, stocks rally
> dollar plunges = great for multinationals, stocks rally
> dollar spikes = lowers inflation, stocks rally
> inflation spikes = will inflate all assets, stocks rally
> inflation drops = improves earnings quality, stocks rally




And the opposite to the above is-

Bonds? No- Inflation is going to rage.

- Stocks? Overvalued! Overbought! All this global liquidity has inflated prices. It's going to come crashing down.

- Gold? It provides no dividends or interest, has already increased a lot, and will not be a bubble. You could buy some, but have missed out on gains over the past few years. Plus, people recommend holding 5-10% gold. Where does the rest go?

- Commodities? same as gold.

- Currencies? Dollar is depreciating, Euro is already high and I can't find an ETF that sells Renminbi... meanwhile, the Yen might be a good play, but it returns a paltry 0.5%, if that.. and currency is not long-term strategy for lil' ol me.

Housing? Don't even think about it.

International Stocks? Will take a big hit if and when the US markets take a nose dive of several thousand points. China stocks in a major bubble. Europe slowing from high Euro valuation..

Cortesy fourthirtysix at iTulip.


----------



## bean

The Past Performance of the Hindenburg Omen Stock Market Crash Signals 1985 - 2005
http://www.safehaven.com/showarticle.cfm?id=3880


----------



## Flying Fish

sassa said:


> And the opposite to the above is-
> 
> Bonds? No- Inflation is going to rage.
> 
> - Stocks? Overvalued! Overbought! All this global liquidity has inflated prices. It's going to come crashing down.
> 
> - Gold? It provides no dividends or interest, has already increased a lot, and will not be a bubble. You could buy some, but have missed out on gains over the past few years. Plus, people recommend holding 5-10% gold. Where does the rest go?
> 
> - Commodities? same as gold.
> 
> - Currencies? Dollar is depreciating, Euro is already high and I can't find an ETF that sells Renminbi... meanwhile, the Yen might be a good play, but it returns a paltry 0.5%, if that.. and currency is not long-term strategy for lil' ol me.
> 
> Housing? Don't even think about it.
> 
> International Stocks? Will take a big hit if and when the US markets take a nose dive of several thousand points. China stocks in a major bubble. Europe slowing from high Euro valuation..
> 
> Cortesy fourthirtysix at iTulip.




That does leave many outs...


----------



## Wysiwyg

Uncle Festivus said:


> Perhaps, but reality triumphs over ignorance in the end (just ask US, British, Spanish, and Irish home owners). Shanghai down 3.5% yesterday. Keep watching China for cracks?





Agree, it `aint going away in a hurry.




> Oct. 20 (Bloomberg) -- Asian stocks had their biggest weekly drop in two months, led by financial companies, on concern losses from the worst U.S. housing slump since 1991 will spread.




Good information with this story here.


----------



## Bushman

sassa said:


> And the opposite to the above is-
> 
> Bonds? No- Inflation is going to rage.
> 
> - Stocks? Overvalued! Overbought! All this global liquidity has inflated prices. It's going to come crashing down.
> 
> - Gold? It provides no dividends or interest, has already increased a lot, and will not be a bubble. You could buy some, but have missed out on gains over the past few years. Plus, people recommend holding 5-10% gold. Where does the rest go?
> 
> - Commodities? same as gold.
> 
> - Currencies? Dollar is depreciating, Euro is already high and I can't find an ETF that sells Renminbi... meanwhile, the Yen might be a good play, but it returns a paltry 0.5%, if that.. and currency is not long-term strategy for lil' ol me.
> 
> Housing? Don't even think about it.
> 
> International Stocks? Will take a big hit if and when the US markets take a nose dive of several thousand points. China stocks in a major bubble. Europe slowing from high Euro valuation..
> 
> Cortesy fourthirtysix at iTulip.




So what do you suggest the mug punter invests in? I hear there is a ripper horse in race 5 at Flemington next week. Oh that's right - equine flu means horse racing is out. So see you all down at the pokies down at the Parkview hotel. Potential returns of 1000% and peanuts on the house.


----------



## >Apocalypto<

> and peanuts on the house




MMmmm peanuts....................


----------



## wavepicker

Bushman said:


> So what do you suggest the mug punter invests in? I hear there is a ripper horse in race 5 at Flemington next week. Oh that's right - equine flu means horse racing is out. So see you all down at the pokies down at the Parkview hotel. Potential returns of 1000% and peanuts on the house.




How about good old cash, or if that is too boring learning to trade both ways


----------



## Bushman

wavepicker said:


> How about good old cash, or if that is too boring learning to trade both ways




Ha ha WP - just a bit of black humour to keep it all in check. 

Cash is a beauty at 7% and learning some defensive manoeuvres is on the 'to do' list. I actually set up an IG account with the intention of placing some shorts but you need time to manage those and I work full time plus study so some action in an interest bearing account is the more likely possibility. 

Personally I think we will still have a selective bull in all things steel (iron ore, coking coal, nickel, moly etc), gold and oil so I will take some pain on Monday and Tuesday and then ride the wave into the new year on the back of the selective commodities bull. Uranium will also have another run and then there are the new wave of green energy stocks that will one day become a force as fossil fuels inevitably give way to new 'clean & green' energy solutions. What better country to be investing in than Australia in the next 5 years. Personally I am excited at the long term prospects of the ASX. 

If the Yanks slow, the effects wont be felt in China for a few more months. Then there is the once in a 100 year boom going on in China and India that should see Aussies through for a while longer yet. Still looking to diversify away some risk with a purchase of Woolies, Metcash, Westfield and the like. Diversification is the key to me. Get some low and high beta blue chips and get some cream on the cake with a few gold, oil and iron ore speccies. A work in progress for me. 

As for property, retail is a beauty, commercial is good in the right location and residential will feel some pain in areas that are not effected by long term trends such as gentrification. Also we will not feel anywhere near as much pain as the Yanks because we don't have much water, have much fewer cities and therefore have a lot less land to service a growing population.  

Good luck all. Enjoy the ride.


----------



## noirua

The true 20th Anniversary of Black Monday in 1987 is infact Monday 22nd October 2007.

Markets in the boom of the last 5-years are looking quite similar to the 5-year run up in 1987. There is a big difference in interest rates and inflation, however, Asian markets have risen rapidly.


----------



## Aussiejeff

wavepicker said:


> How about good old cash, or if that is too boring learning to trade both ways




Apparently there was a thriving black market in soup kitchen vouchers way back in "The Big One"... bound to be some opportunities there if those times come again 

Still, this drop by Wall Street last Friday was *only* a tiddler... the whole media thing is to concentrate on how many "points" are lost ... not so much emphasis on the actual "percentage" lost. So, with the market points historically climbing over the long term (ie INFLATING the points), ever bigger RECORD "point crashes" - or "pull backs" (take your pick of which media hype you prefer) are going to keep on occuring. It's the % size of movements that matter in the end...... somewhere in the not too distant future there will no doubt be a "crash" of 1,000 points - THE BIGGEST POINTS CRASH EVERRRRR! It might also only be 2% again.... so what?

IMO the markets probably could do with another nip back by a further 5% or so to re-establish a less heated, forward looking momentum. Its healthy to have a breather.... so my tip is ... DON'T PANIC!!.... yet 

AJ


----------



## bean

bean said:


> The Past Performance of the Hindenburg Omen Stock Market Crash Signals 1985 - 2005
> http://www.safehaven.com/showarticle.cfm?id=3880




The criteria required for this was met on friday on the US Markets


----------



## sassa

Bushman said:


> So what do you suggest the mug punter invests in?




Are you in for the long haul or the short?Let's see what happens in the Dow,Nasdaq and S & P 500 tonight.
After a weekend to digest the news,if the Friday trend continues,profits will be taken in fear of losing them.The speculators will sell to cover their margin calls due today.
An interesting 9 days before the Fed meets.


----------



## Bushman

bean said:


> The criteria required for this was met on friday on the US Markets




Here are the omens I will be looking for this week, starting with Amex & Merck this evening. If another CEO mouthes the R word, feathers will fly. 

'But next week is another peak week for earnings reports, with 163 more S&P 500 companies reporting, including six Dow components: American Express Co. and Merck & Co. Inc. on Monday, Dupont  on Tuesday, Boeing Co. on Wednesday and Microsoft Corp. on Thursday.'


----------



## explod

Bushman said:


> Here are the omens I will be looking for this week, starting with Amex & Merck this evening. If another CEO mouthes the R word, feathers will fly.
> 
> 'But next week is another peak week for earnings reports, with 163 more S&P 500 companies reporting, including six Dow components: American Express Co. and Merck & Co. Inc. on Monday, Dupont  on Tuesday, Boeing Co. on Wednesday and Microsoft Corp. on Thursday.'





Yep Bushy, right with you on that.  Unless you are prepared to sit on screens monitoring that chart for many hours, which I am not, then the bottom line is the go.  And if the reports follow the lead of Friday then a very interesting time coming indeed.


----------



## bean

Tonight the US markets could open up to 2% down.

Tonight is all a matter of traction as to what support levels will hold.

And fear if support levels fail to hold in the first few hours


----------



## sassa

Bushman said:


> Here are the omens I will be looking for this week, starting with Amex & Merck this evening. If another CEO mouthes the R word, feathers will fly.
> 
> 'But next week is another peak week for earnings reports, with 163 more S&P 500 companies reporting, including six Dow components: American Express Co. and Merck & Co. Inc. on Monday, Dupont  on Tuesday, Boeing Co. on Wednesday and Microsoft Corp. on Thursday.'




Can help you with estimates-
Amex-(TTM- last 12 months)3.29
         (EPS-current Q)0.85
         (NYT-next year estimate)3.90
Merck-2.20
         0.69
         3.25
Boeing-4.62
          1.24
          6.04
Microsoft-1.42
              0.39
              1.95
No Dupont estimates available.


----------



## sassa

I've just watched it and heard it.An analyst on Bloombergs does not expect the Merril loss of $7.9b. to have much affect on the market tonight as some were expecting the news to be as much as $12b.He expects the market to rise on the techs and the looming advent of a further 50 basis point cut by the Fed next week in response to the Merril report.


----------



## Bushman

sassa said:


> I've just watched it and heard it.An analyst on Bloombergs does not expect the Merril loss of $7.9b. to have much affect on the market tonight as some were expecting the news to be as much as $12b.He expects the market to rise on the techs and the looming advent of a further 50 basis point cut by the Fed next week in response to the Merril report.




No way. And there I was about to jump from the window dressed in my suit. Lucky I live on the ground floor hey. 

Now the question for ML's is what more is to come? Two scenarios as far as I can see - 
1. They have been ultra conservative and have written off everything bar the photocopier and the water cooler; or
2. There is more sitting on or off balance sheet which will come back to haunt them (& us, goddam them) at some future point.

Please let some sanity have prevailed and it be 1!! Otherwise I will most definitely be leaping from my window into the flower bed. Man and I just had my suit dry cleaned.  Oh brother...


----------



## sassa

Bushman said:


> No way. And there I was about to jump from the window dressed in my suit. Lucky I live on the ground floor hey.
> 
> Now the question for ML's is what more is to come? Two scenarios as far as I can see -
> 1. They have been ultra conservative and have written off everything bar the photocopier and the water cooler; or
> 2. There is more sitting on or off balance sheet which will come back to haunt them (& us, goddam them) at some future point.
> 
> Please let some sanity have prevailed and it be 1!! Otherwise I will most definitely be leaping from my window into the flower bed. Man and I just had my suit dry cleaned.  Oh brother...




And ML is going to release an updated report this morning saying that the actual writedown of $7.9b exceeded expectations but not fears and that earnings from operations were better than expected.No why wasn't that reported at the original report?


----------



## Kauri

Bushman said:


> No way. And there I was about to jump from the window dressed in my suit. Lucky I live on the ground floor hey.
> 
> Now the question for ML's is what more is to come? Two scenarios as far as I can see -
> *1. They have been ultra conservative and have written off everything bar the photocopier and the water cooler; or*
> *2. There is more sitting on or off balance sheet which will come back to haunt them (& us, goddam them) at some future point.*
> 
> Please let some sanity have prevailed and it be 1!! Otherwise I will most definitely be leaping from my window into the flower bed. Man and I just had my suit dry cleaned. Oh brother...




  And guess what..   
   Cheers 
...........Kauri



> Merrill also said it took a write-down, after fees, of $463 million for loans to firms doing leveraged buyouts. It said it still had $31 billion of similar loan commitments on its books at the end of the quarter.
> Merrill said that despite the horrific quarter, its liquidity position remains strong while it attempts to resolve its remaining subprime positions.
> It said at the end of the quarter it still has about $15.2 billion of CDO exposure and about $5.7 billion of subprime exposure.


----------



## sassa

A great start to the overseas markets tonight and judging by the market indicators(rising steadily),a good start to the American market.The market seems to more buoyed by the companies reporting better than expected results over those who have had a downturn;by the durable sales orders expected to come in positive after a retreat in August;by the jobless claims expected to fall and the likely rate cut by the Fed next week.
After a significant fight back in the Dow last night(and I notice that our market mirrored it rather than the Nasdaq which was down .88),a better night should be expected in America with a corresponding increase here tomorrow.Looks like the bulls are alive and snorting.


----------



## greenfs

sassa said:


> A great start to the overseas markets tonight and judging by the market indicators(rising steadily),a good start to the American market.The market seems to more buoyed by the companies reporting better than expected results over those who have had a downturn;by the durable sales orders expected to come in positive after a retreat in August;by the jobless claims expected to fall and the likely rate cut by the Fed next week.
> After a significant fight back in the Dow last night(and I notice that our market mirrored it rather than the Nasdaq which was down .88),a better night should be expected in America with a corresponding increase here tomorrow.Looks like the bulls are alive and snorting.




As a betting man, I reckon the bears will win through tonight. Time will tell.


----------



## sassa

greenfs said:


> As a betting man, I reckon the bears will win through tonight. Time will tell.




On what premise/s do you make your claim?


----------



## bean

I am one who believes the market will have a major correction.
However I bought today
Tech stock and four oil stocks.
I think we are ready to have a massive blow off into the Fed meeting.

They have have said .50 % cut 
Two things one everthing is revalued again by a falling US$ like last time.
The next Just how bad the US economy is.


----------



## Sean K

bean said:


> I am one who believes the market will have a major correction.
> However I bought today
> Tech stock and four oil stocks.
> I think we are ready to have a massive blow off into the Fed meeting.
> 
> They have have said .50 % cut
> Two things one everthing is revalued again by a falling US$ like last time.
> The next Just how bad the US economy is.



No gold or silver bean? Still waiting for the big correction? I certainly expect the sp's to come off with any major market move but maybe not as much? I'll certainly be topping up gold in the next push lower.


----------



## sassa

bean said:


> I think we are ready to have a massive blow off .




Heavens above Bean,a most ambiguous term.I expect you mean that the "sheeple" will push up the already overvalued stock with the market's last rally?Tonight or in the next 5 trading days before the Fed announcement?


----------



## bean

kennas said:


> No gold or silver bean? Still waiting for the big correction? I certainly expect the sp's to come off with any major market move but maybe not as much? I'll certainly be topping up gold in the next push lower.




No.  (still have physical)
However POG on way to US$800?
Oil US$100?
Nasdaq another 10% higher?

Hopefully the oils move more goldies in the next few days.
I think this may be a rally into the FED and a sell off on result.
Surely reality must prevail oneday?

PS...A bear is Taboo if they mention the markets dropping
All they are doing at the moment is talking about reality.


----------



## sassa

Early times,but the speed of the rise in the American market tonight is mind boggling.Nasdaq up 2.1%,S & P 1% and  Dow .76% in 5 minutes.


----------



## bean

sassa said:


> Early times,but the speed of the rise in the American market tonight is mind boggling.Nasdaq up 2.1%,S & P 1% and  Dow .76% in 5 minutes.




To slow for a blow off....a few more days???



> Kennas



 you will be pleased to know I today have only 1 oil and 1 gold
I thought tonight was golds turn to out do oil!!!
But I may regret.


----------



## sassa

It is going to take one hell of a mountain of trouble to stop the juggernaut that set sail in the financial markets today.Records broken in many markets with more to come.Problems that were going to cause market trouble have caused nothing more than 2 blimps on the radar.The markets have weathered these disruptions even though banks have written off billions overseas.Analysts paint a rosy picture and the Fed has shown they are capable of handling the situation.Perhaps the ASX will reach 7000 by the end of the week.


----------



## Porper

sassa said:


> Analysts paint a rosy picture and the Fed has shown they are capable of handling the situation.Perhaps the ASX will reach 7000 by the end of the week.




Yes, we are up, up & away, everybody is megga bullish, all is well and tickety Boo.

The all ords is getting ahead of itself, the Dow isn't away yet, so caution ahead I say.

There is getting a wide gap between the Dow and all ords which will narrow again as always.


----------



## krisbarry

Porper said:


> Yes, we are up, up & away, everybody is megga bullish, all is well and tickety Boo.
> 
> The all ords is getting ahead of itself, the Dow isn't away yet, so caution ahead I say.
> 
> There is getting a wide gap between the Dow and all ords which will narrow again as always.




you do sound very bearish.  I would suspect you might be short, or in cash.  I am bullish and fully in the market and fully geared.  Next stop 7000 for the ASX


----------



## krisbarry

US feds will cut rates this week, massive rally will follow, then the Santa Rally, then switch to cash for the correction in Jan/Feb 08...its too easy!


----------



## Whiskers

Stop_the_clock said:


> US feds will cut rates this week,




That's the bit everyone has pretty well factored into their thinking. But the Consumer Sentiment numbers come out first. 

What if they are better than expected and the fed doesn't cut this time?

As sassa said



> Analysts paint a rosy picture and the Fed has shown they are capable of handling the situation.




Just the ticket to restore confidence and carry on carrying on.


----------



## Porper

Stop_the_clock said:


> you do sound very bearish.  I would suspect you might be short, or in cash.




Definitely not bearish, but never a bad thing to be aware of where we are.

Do you give private readings S.T.Clock.?


----------



## sassa

There is a matter about the American and Australian markets that puzzle me.If these were normal times-no sub prime problem and hence no cutting by the Fed-would the markets be appreciating at the rate that they are now?


----------



## Kauri

Stop_the_clock said:


> you do sound very bearish. I would suspect you might be short, or in cash. I am bullish and fully in the market and fully geared. Next stop 7000 for the ASX




  STD,
        Have you pulled out of the Super then, and I thought it was ticking over like clockwork...??
 Cheers
..........Kauri


----------



## sassa

Paul Keating said that it was the recession we had to have.
Jon Markman in America is pushing the same barrow.

http://articles.moneycentral.msn.com/Investing/SuperModels/WhyWeNeedARecessionSoon.aspx


----------



## Wysiwyg

O.k, being a rookie doesn`t allow for much experience but regardless here is another snapshot of what is unfolding on the hang seng(and also not to be ignorant of the pesso`s).Steep or what?First the beginning of October and then now.

p.s. not trying to spook anyone


----------



## Uncle Festivus

Wysiwyg said:


> O.k, being a rookie doesn`t allow for much experience but regardless here is another snapshot of what is unfolding on the hang seng(and also not to be ignorant of the pesso`s).Steep or what?First the beginning of October and then now.
> 
> p.s. not trying to spook anyone




Pick a chart, any chart, shows pretty much the same thing. All waiting/expecting on the next rate cut from the US FED.

The case for a cut is compelling enough based on the deteriorating housing market. The telling thing will be whether it will be 25 or 50 bp's. If it's another 50 bp's then the Fed knows they are already in deep trouble, trying to counter the biggest housing bust in history so far; these things don't resolve themselves in months even, this will take years.

Perversely, the market will rally to new highs, blow-off tops, call it what you will, before reality takes over, by which time it will be too late. Only the timing is unresolved?


----------



## sassa

Reading this makes one think seriously about the continuation of the bull,the inefficiencies of the big 4 and the troubles to come in the markets ahead.

http://www.prudentbear.com/index.php?option=com_content&view=article&id=4809&Itemid=53


----------



## Awesomandy

sassa said:


> Reading this makes one think seriously about the continuation of the bull,the inefficiencies of the big 4 and the troubles to come in the markets ahead.
> 
> http://www.prudentbear.com/index.php?option=com_content&view=article&id=4809&Itemid=53




Interesting article - although I would imagine that there may be a degree of bias, given the name of the site. 

I'm not an expert in pricings, but from what I know, it's a very gray area. Even level 1 assets are not immune to being mis-priced. Say, I can hold stocks in a small company. Shares are being traded everyday, so you would still have your bid/sell prices, but the next day, the market implodes onto itself, and all the buyers disappeared. My holding that was worth $1m yesterday is now worthless when I need it most. Of course, this is a very extreme case, but I would imainge that this scenario is much more probable for the such of level 3's.

And then, even when in much more stable times, how do you price a level 3 asset? From a more pessimistic view point, a level 3 asset is basically a piece of paper the bank has written to itself and/or other banks, and then being valued by a model that is also developed by the bank. i.e. they have a licence to write their own money. In the good times, it's not really a problem, as virtually everyone's making "profits", and nobody complains, and the machine keeps on rolling. 

But then, when the bad times come around, somebody might get a little scared of the risk, and start pulling their money out. The valuation drops, and, given that these new and complex instruments are most likely highly leveraged, we'll see the value plummets very quickly - possibly anywhere up to 50% overnight. Then we are in trouble - this bank has just lost the value of half of its capital, and I would be quite certain that the market will price that in at light speed, and everything else falls into this black hole.

So, basically, my point is that even though they can mark their assets in any way they want and gives the bank whatever profit it wants, when the bad time comes around, everything that doesn't have a buyer would be virtually worthless.


----------



## Whiskers

There are some mixed messages coming out of the US economy. The Consumer Confidence number yesterday was down a little, but not alarming. 

Mortgage application figures released today are up, but it is felt this is distorted a bit by people refinancing and some making multiple applications.

The latest numbers for nonfarm employment growth are up. So it will probably come down to the GDP figures due out in another half hour or so.

My feeling is that despite the subprime problems, the US economy is not stalling as fast as some expect. Unless the GDP numbers are particularly bad, I am still inclineing to the fed holding for now... and we get that market correction forthwith.

For what it's worth gold was trending upwards, but came off in price after the employment numbers came out.



> Wednesday, October 31, 2007, 8:15 am EDT
> 
> Nonfarm private employment grew 106,000 from September to October of 2007 on a seasonally adjusted basis, according to the ADP National Employment ReportTM. The estimated change in employment from August to September was revised up 3,000 to 61,000. October’s increase of 106,000 marked an acceleration of private nonfarm employment after three months (July through September) during which the average monthly change was just 43,000. http://www.adpemploymentreport.com/report_analysis.aspx


----------



## Whiskers

US GDP stronger than expected.

Plenty, but not all economists are still predicting a .25% cut. I'm still in the minority... no cut. 



> *ECONOMIC REPORT*
> 
> *U.S. economy grows at 3.9% pace in third quarter*
> Best growth since early 2006 driven by consumers, exports, military
> By Rex Nutting, MarketWatch
> 
> Last Update: 8:52 AM ET Oct 31, 2007Print E-mail Subscribe to RSS Disable Live Quotes
> 
> WASHINGTON (MarketWatch) -- The U.S. economy shook off the worst housing downturn in a generation to grow at a 3.9% annual pace in third quarter, the best performance in six quarters, the Commerce Department estimated Wednesday.
> 
> The increase in gross domestic product was better than the 3.4% gain expected by economists surveyed by MarketWatch. See Economic Calendar.
> 
> Growth was well balanced in the period from July to September, with strong contributions from consumers, exports, capital spending, military spending and inventory building. Housing investments continued to be a major drag on growth. Read the full report.
> 
> Despite rising worries about commodity prices, the GDP price index, the broadest measure of price changes in the economy, rose just 0.8% annualized, matching a nine-year low. Inflation hasn't been lower since John F. Kennedy's administration.
> 
> Consumer prices rose 1.7%, while core consumer prices, which exclude food and energy prices, rose 1.8%, just within the Federal Reserve's target zone.
> 
> The strong GDP report is unlikely to sway members of the Federal Open Market Committee to hold off on another rate cut later Wednesday. Markets and economists are nearly positive that the FOMC will cut its overnight lending rate by a quarter percentage point to 4.50% at the meeting, in a bid to pre-empt any economic slump stemming from weak housing markets and malfunctioning credit markets.
> 
> http://www.marketwatch.com/news/sto...x?guid={33464B2D-9070-4B37-95AA-E18239F34960}


----------



## Kauri

A couple of things to mull over...
 Cheers
...........Kauri



> Oct 31.
> There are a few themes developing for the Asian session that the market should
> eye closely -
> * Baltic Dry Index - In a sign that the commodity bubble may burst, the Baltic
> Dry index fell 230 pts today to close at 10,656 and biggest fall for the year
> after continual record highs in recent sessions; This move defies the gains to
> record highs in oil and gold today and could signal a turn for commodities,
> which would be bearish for AUD, NZD, CAD & ZAR
> 
> * China Petrol Price Hike - numerous press outlets reported today that China
> will hike petrol prices for the first time since May 2006, fuelling inflation
> and pressuring consumers and businesses, with risk for China stocks eyed on the
> price rise, particularly with recent, consistent comments from Ex-Fed Greenspan
> warning of a China stock bubble
> 
> * The USD losses despite a hawkish Fed - There is increasing speculation that
> the broad-based accelerated selling of the USD against a range of currencies has
> been sparked by a central bank or sovereign wealth fund, raising the possibility
> that an Asian or Mid East country is preparing to shift from a USD peg to a
> basket of currencies; particularly with the USD weakness fuelling double digit
> inflation in the Middle East due to the USD peg.


----------



## Kauri

A couple more (rumours) for mulling...    
 Cheers
...........Kauri 



> November 1.
> Bonds are smartly bouncing off their overnight lows, somewhat in response to
> the disappointing earnings from Exxon, which is weighing on the equity complex,
> though more so off of talk that Citi bank, which as was the case with Merrill
> faces massive subprime/credit writedowns. The *scuttlebutt* is throwing numbers
> *upwards of $30 bln in losses or loss provisions* to be taken by the bank.


----------



## CanOz

Kauri said:


> A couple more (rumours) for mulling...
> Cheers
> ...........Kauri




when do Citi report?


----------



## insider

Kauri said:


> A couple more (rumours) for mulling...
> Cheers
> ...........Kauri




Don't make me cry, Kauri


----------



## Kauri

CanOz said:


> when do Citi report?



 Hi Canni,
 Not sure...I don't play the U.S equity markets... it seems it's more to do with analyst downgrades... so far... 
 Cheers
.........Kauri


> November 1.    The equity complex is not receiving a warm welcome into the new month as analyst downgrades of Citigroup at two investment banks has thrown ice water on Wednesday's party. One of the analysts suggests that the money center bank will be forced to cut its dividend and raise more than $30 bln to shore up its capital.
> The S&P cash index closed the month of October at an all time record high (_which was convenient for hedge fund mark to markets_) and was just shy of closing above the all time intra-month highs. Today however downside targets will be more useful.


----------



## Kauri

insider said:


> Don't make me cry, Kauri




 Insider,
          OK, just to cheer you up a tad..  :hide:  

 Cheers
...........Kauri 



> Nov. 1. The AUD/USD continues to consolidate around 0.9220-40 after the morning decline but risk remains to the downside in the wake of the news that Goldman Sachs has downgraded the mining sector of stocks from "attractive" to "neutral." The news has seen stocks such as BHP Billiton, Rio Tinto and Xstrata all under selling pressure in London this morning. The news has also hit the base metals complex with copper prices lower and zinc hitting a seven-week low. This follows a decline in gold this morning which has dipped under $788.00/oz, down from highs above $796.00/oz in overnight trading.


----------



## ithatheekret

From what I can gather the US markets firmly believes Abby is right and the Dow is going to 15000 , the only problem is I think she forgot to mention when   

I'm rather interested in the effect we will see in the financials once the first quarter credit resets hit . The market commentary would have us believe it's all over , but my calculations say it will take longer to show effects than an interest rate rise ( approx.18mths ) .
In fact I'm waiting anxiously so I can buy banks for bottom drawer fillers and be ready for the next run .

I have the All Ords projected at 7300 for its next target and also believe the two no-brainers BHP and RIO will double in share prices , this eventuation could see the All Ords go stratospheric .


----------



## Kauri

Ooooops...
 Cheers
...........Kauri


> Nov. 1. The credit concerns have been extrapolated by the news that the Fed has just injected at $41 bln repo and the largest since the credit crisis began. The concerns have seen the market now increase the chance of a December 25 bp rate cut, particularly after pricing out such a move yesterday on the hawkish FOMC statement. US ten-yr bonds yields remain near session lows of 4.378% on the credit concerns, down from 4.50% overnight.
> USD/JPY has stalled at 114.60 but risk remains for stops to be triggered under 14.50/60 for a move lower.


----------



## Porper

Thought this chart of the Dow was interesting.Only just noticed it unfortunately.

The patterns in the red boxes are uncanny in their likeness.

The bars above the two wave B's are very alike, and judging by what the Dow is doing as I write the next bar will be identical as well.

If the bigger count is a wave a,b, and C the two patterna will be similar, but they don't usually match as well as this.

Not to say we will go all the way down to the 13000 area, but it is looking more like it.


----------



## tech/a

Porper.

Nice pick up.
If symetry remains the same A and C then your projection is highly likely.
It did in the last move.


----------



## dj_420

ithatheekret said:


> From what I can gather the US markets firmly believes Abby is right and the Dow is going to 15000 , the only problem is I think she forgot to mention when
> 
> I'm rather interested in the effect we will see in the financials once the first quarter credit resets hit . The market commentary would have us believe it's all over , but my calculations say it will take longer to show effects than an interest rate rise ( approx.18mths ) .
> In fact I'm waiting anxiously so I can buy banks for bottom drawer fillers and be ready for the next run .
> 
> I have the All Ords projected at 7300 for its next target and also believe the two no-brainers BHP and RIO will double in share prices , this eventuation could see the All Ords go stratospheric .




With sub-prime jitters re-emerging I cant see our market going that well. I personally would stay away from financials as even if they dont have exposure to sub-prime they will get hit hard anyway.

Our markets look to open around 140 points down at the moment. I missed the short last night.. grrrrrr, so Im waiting for a nice bounce from which to set up some shorts.

Marketwise sitting on around 70% cash, I will liquidate today another 10% cash and wait for the impending correction.


----------



## Porper

tech/a said:


> Porper.
> 
> Nice pick up.
> If symetry remains the same A and C then your projection is highly likely.
> It did in the last move.




At work so can't post a chart but both the Dow and the XJO are way overbought on the weeklies and the daily's (on my oscilator set up).

Doesn't mean to say we are going down, but the more evidence I get the more it looks likely we are going to get a correction or at least sideways for a while.


----------



## Awesomandy

tech/a said:


> Porper.
> 
> Nice pick up.
> If symetry remains the same A and C then your projection is highly likely.
> It did in the last move.




That looks good - very interesting indeed.
Although, it still looks to be a set of higher highs and higher lows. So, after this cycle play itself out, I'm in a way hoping that it would test new highs once again.


----------



## sassa

ithatheekret said:


> I have the All Ords projected at 7300 for its next target and also believe the two no-brainers BHP and RIO will double in share prices , this eventuation could see the All Ords go stratospheric .




That is a big call.What's your time frame and your reasoning with the doubling of BHP and Rio Tinto especially when there is a downgrade for global growth and the biggest consumer of all looks like they might enter a depression.


----------



## ithatheekret

Well sassa , the demand side for our ore has only just started to blossom , many believe we are midstream , but at present the above ground stockpiles are spoken for months in advance , that means every pile of ore at a mine you can see ready for carting , is already sold and it's owner is awaiting its arrival . This has been the case for over a year now , which has led many mining companies into expansion projects . The globes largest importer of ores has fallen to the wayside and lost its place to China , which is on a major infrastucture revamp and rebuild . This will take at least another couple of decades as the great Chinese modernization starts to head inland away from the coastal regions . I haven't seen one analyst put this into their calculations , but if they were to start reading the Chinese papers , it is obvious the collective has their sights set on moving goods across China , making it a super exporter , servicing the needs of Asia .

Now there's the reasoning , but take heed at the rising rhetoric coming out of the USA , these are discomfort signals , and they are struggling with the fact that the slow long route China has taken is succeeding . The good part for us is that the journey is continuing , this can only semaphore a further rise in our dirt miners . The time frame for the All Ords rise depends on the market , but at a rough guess , and unless the next Big Kev stuffs it up , I'd say we'd see 7300-7500 by 2009 .

PS.. I also have the AUD surpassing the peaks we last saw when the Americas Cup was battled for off Fremantle , then it hit 1.20 , I expect that to be left behind by 20 pips at least !


----------



## Kauri

and it just keeps on coming...  
 Cheers
..........Kauri



> November 02: The WSJ is reporting that Merrill Lynch in a bid to slash its exposure to risky mortgage- backed securities, has engaged in deals with hedge funds that may have been designed to delay the day of reckoning on losses, people close to the situation said. The article goes on to say that "the transactions are among the issues likely to be examined by the Securities and Exchange Commission. The SEC is looking into how the Wall Street firm has been valuing, or "marking," its mortgage securities and how it has disclosed its positions to investors, a person familiar with the probe said. Regulators are scrutinizing whether Merrill knew its mortgage-related problem was bigger than what it indicated to investors throughout the summer."
> The story is a real negative for an already beleaguered Wall Street and the AUD and other carry trade currencies have been sold against the JPY since the story broke a short time ago.


----------



## Uncle Festivus

Kauri said:


> and it just keeps on coming...
> Cheers
> ..........Kauri



Watch out Kauri, you'll get a speeding ticket from the ostrich mob with all those D&G snips


----------



## Kauri

Uncle Festivus said:


> Watch out Kauri, you'll get a speeding ticket from the ostrich mob with all those D&G snips




  D&G???? who/what is that???
 Cheers
.........Kauri


----------



## Uncle Festivus

Kauri said:


> D&G???? who/what is that???
> Cheers
> .........Kauri



Doom & gloom or reality & facts?


----------



## SevenFX

Uncle Festivus said:


> Doom & gloom or reality & facts?




UF aren't the markets driven from D&G as the media puts it, *AND* relaity and facts as the company reports it...????

Think Kauri is just referencing creditable sources that paint the picture as they see it..

SevenFX


----------



## sassa

SevenFX said:


> Think Kauri is just referencing creditable sources that paint the picture as they see it..
> SevenFX




As they see it or as the picture really is.The Fed pumped $41b into the markets yesterday,the second largest one day amount ever.It was reported that this money went mostly to Citi who are in a real bind and could fold.
The fat lady(my apologies)has not appeared on stage yet as other Wallstreeters are expected to have larger exposure.And plenty of people have warned that this will take years to repair and at the same time will provide volatility in the markets worldwide.
Will today be Black Friday in America and the market take another large hit?
As Dan Koenig once said,"The market always has a surprise over the horizon.Firstly,it shows its ugly head and then along comes the tail which seems to have no end."


----------



## Kauri

Rumours now floating around about the last NFP figures.... D&G or B&Z ??
 .........and Barclays...
Cheers
..........Kauri


----------



## sassa

Kauri said:


> Rumours now floating around about the last NFP figures.... D&G or B&Z ??
> .........and Barclays...
> Cheers
> ..........Kauri




NFP?non farm payrolls?
D & G?B & Z?
Please explain.
What's the rumour or not prepared to repeat?


----------



## Kauri

sassa said:


> NFP?non farm payrolls?
> D & G?B & Z?
> Please explain.
> What's the rumour or not prepared to repeat?




 Doom and Gloom....Boom and Zoom.. all depends what side of the market you are sat on I guess..
*Rumours* that Barclays has been quietly dipping into the ECB lending facility for credit but *I strongly guess* it is someone mischieviously trying to talk thier holding up..   
 Cheers
..........Kauri


----------



## explod

Kauri said:


> Doom and Gloom....Boom and Zoom.. all depends what side of the market you are sat on I guess..
> *Rumours* that Barclays has been quietly dipping into the ECB lending facility for credit but *I strongly guess* it is someone mischieviously trying to talk thier holding up..
> Cheers
> ..........Kauri




It is generally well known that The US is overstretched and up to its eyeballs in debt.  The world is now awake and will not lend them anymore.  They are broke and there is no one this time around to turn to.   Not gloom and doom, just an ordinary given.

If you invest on facts and the given you will do well.   I feel very sorry for the ordinary innocent Americans who are going to have to change thier lives dramatically to survive and most will suffer enormous hardship.  It was generally said also that 'if America sneezed the rest of the world would catch cold'...   we will all cop the finacial effects when it hits the fan and the great companies of America fall down.

Instinctively we do not want to contemplate that the safe world we grew up in may be crumbling.   Some of us are going to have to realise it big time soon and in high places.    We are the witness to the greatest calamity since earth was created.   Too many people.  (over population =  polution)

Doom and gloom ..... or fact?.


----------



## nizar

sassa said:


> As they see it or as the picture really is.The Fed pumped $41b into the markets yesterday,the second largest one day amount ever.It was reported that this money went mostly to Citi who are in a real bind and could fold.
> The fat lady(my apologies)has not appeared on stage yet as other Wallstreeters are expected to have larger exposure.And plenty of people have warned that this will take years to repair and at the same time will provide volatility in the markets worldwide.
> Will today be Black Friday in America and the market take another large hit?
> As Dan Koenig once said,"The market always has a surprise over the horizon.Firstly,it shows its ugly head and then along comes the tail which seems to have no end."




Citi could fold?
Are you serious?

Thats BIG news.
Im sure thats not going to happen. If the Fed bailed out LTCM, surely they would do the same here, or else it would cause a real disaster IMO...

I mean, we are talking one of the biggest banks in the world


----------



## CanOz

sassa said:


> As they see it or as the picture really is.The Fed pumped $41b into the markets yesterday,the second largest one day amount ever.It was reported that this money went mostly to Citi who are in a real bind and could fold.
> The fat lady(my apologies)has not appeared on stage yet as other Wallstreeters are expected to have larger exposure.And plenty of people have warned that this will take years to repair and at the same time will provide volatility in the markets worldwide.
> Will today be Black Friday in America and the market take another large hit?
> As Dan Koenig once said,"The market always has a surprise over the horizon.Firstly,it shows its ugly head and then along comes the tail which seems to have no end."




WTF SASSA...WHERES THE SOURCE?


----------



## Wysiwyg

CanOz said:


> WTF SASSA...WHERES THE SOURCE?




I got it soy, mint, worcestershire, tomato, barbecue, chilli, etcetera etcetera.

Would you like fries too?:


----------



## sassa

CanOz said:


> WTF SASSA...WHERES THE SOURCE?




Sorry,unable to give link.Read on blog site.Understand it was a rash statement.


----------



## CanOz

Wysiwyg said:


> Would you like fries too?:




I think i have that angle covered thanks Wys.

Cheers,


----------



## Whiskers

Citigroup's financial supermarket model loosing money fast - Capital reserves desperate.



> CitiGroup CEO may quit at urgent meeting; Rubin asked to take over
> 
> Submitted by cpowell on Fri, 2007-11-02 22:33. Section: Daily Dispatches
> 
> Citi's Prince to Offer to Resign
> 
> By Damian Paletta, Robin Sidel, and David Enrich
> The Wall Street Journal
> Friday, November 2, 2007
> 
> Citigroup Inc. Chief Executive Charles Prince will offer to resign on Sunday, according to people familiar with the matter.
> 
> The development comes as board members are expected to gather for an emergency meeting this weekend, people familiar with the matter said. The meeting comes amid worries of further writedowns and pressure on Mr. Prince.
> 
> Robert Rubin, the former Treasury secretary who is the chairman of Citigroup's executive committee, is being considered as a possible interim replacement, but he has balked at taking on the responsibility, those people said. A Citigroup spokeswoman declined to comment.
> 
> Citigroup directors in recent months have publicly pledged their allegiance to Mr. Prince, and he received a key vote of confidence in early October from Prince Alwaleed bin Talal, the bank's biggest individual shareholder.
> 
> But the board's sentiment may have shifted in the wake of Citigroup's dismal third-quarter earnings report last month. Any change of heart may also have been spurred along this week after the board of Merrill Lynch & Co. ousted its embattled CEO, Stanley O'Neal.
> 
> Citigroup has lost more than a fifth of its market value since Oct. 12, the Friday before it reported that its third quarter earnings had slumped 57% under the weight of mortgage defaults and this summer's credit scare. The bank's shares ended trading down 2% Friday at $37.73.
> 
> In reporting its third-quarter earnings, Citigroup warned that it endured a surge in late payments on consumer mortgages in September, costing the bank $3 billion in higher losses and reserves against future bad loans and hurting the value of loans Citigroup hopes to sell to investors. Chief Financial Officer Gary Crittenden said the trend is likely to continue.
> 
> Citigroup also booked $1.56 billion in pretax losses tied to loans and subprime mortgages that were to be repackaged and sold to investors.
> 
> Equally important, the bank said its capital levels had dwindled to below the company's internal target ratios. Executives said the company would stop repurchasing its own shares until it rebuilt its capital, a process it hopes to complete by early next year. Some analysts and other experts think Citigroup will have to take more drastic actions, such as selling off assets or slicing its dividend payouts.
> 
> The third quarter losses came as Mr. Prince was already under heavy pressure from investors to get revenue up, cut costs and demonstrate that Citigroup's financial supermarket model can pay off. Investors have been frustrated by Citigroup's stagnant stock price.
> 
> http://www.gata.org/node/5686


----------



## sassa

CanOz said:


> WTF SASSA...WHERES THE SOURCE?




http://www.agorafinancial.com/afrude/


----------



## sassa

"The smart money is getting out.The financial stocks fell heavily ON HIGH VOLUME, and only recovered on low volume,"wrote a contributor to MarketWatch."The big institutional investors are exiting on high volume points of the day and pumping up prices during low volume time periods,like after hours' trading.That cons inexperienced traders to buy.It's the old classic'pump and dump.'"
Any bulls or bears like to comment?


----------



## explod

sassa said:


> "The smart money is getting out.The financial stocks fell heavily ON HIGH VOLUME, and only recovered on low volume,"wrote a contributor to MarketWatch."The big institutional investors are exiting on high volume points of the day and pumping up prices during low volume time periods,like after hours' trading.That cons inexperienced traders to buy.It's the old classic'pump and dump.'"
> Any bulls or bears like to comment?




Your assessment is spot on.  If you go back a few years and have a look at the Telstra Share Chart you will see the same happened.  Ramped up on low volume 98, smart money got out over the xmas period and into 99, then big time at the end of the financial year in june 99 and the mugs got left holding the falling baby after that.

The smart money knew that once the privatisation process had begun then the great monopoly on communications was over and it has been all down hill since then.


----------



## Whiskers

Fearing I might have under estimated the US credit crisis, I did a bit of postulating on the Gold thread earlier about just this (extracted from sassa's link above).



> Best case, Citibank will not be extending vast amounts of credit any time
> soon, nor will Bank of America or Countrywide Financial or any other major
> American lending institution. Worst case? Don’t even ask.
> 
> This is where the real problems begin.
> 
> Without fresh credit, what will become of the American consumer? How will the
> American consumer continue to over-leverage himself? And what will become of
> the American economy without millions of over-leveraged consumers?
> 
> Play is safe, dear investor. Play it safe. These are not the days that will
> reward investment heroism.




Is is conceivable that this is the beginning of the end of the asset-based credit system and 'natural' progression back to gold backed currencies and the birth of next economic powerhouse... China or Russia!

You guys are probably right in that the smart money is moving, because most of us have no idea of the exact scale of things but rely on the tone of announcements from the banks, treasurey and fed. 

If people can't get credit or worse, the banks can't offer it, and noticing the numbers involved and the size of the injection last week when things were supposed to be going better, I'm now wondering whether Wall St will capitulate next week after people have had the weekend to think a bit more.

Geeez though, I just wish we didn't have to catch a cold every time the yanks sneeze.


----------



## Uncle Festivus

SevenFX said:


> UF aren't the markets driven from D&G as the media puts it, *AND* relaity and facts as the company reports it...????
> 
> Think Kauri is just referencing creditable sources that paint the picture as they see it..
> 
> SevenFX




Yes, I was having a joke with Kauri. The perma-bulls don't like too much reality. Facts & reality will leave hope & ignorance in the gutter.


----------



## explod

Uncle Festivus said:


> Yes, I was having a joke with Kauri. The perma-bulls don't like too much reality. Facts & reality will leave hope & ignorance in the gutter.





I think Uncle you will find quite a few converts to reality have come on board over the weekend.   We have seen the dynamics unfold over the last few years which some say is guessing/hoping or gloom and doom.   

The facts are now patently clear.


----------



## Kauri

Uncle Festivus said:


> Yes, I was having a joke with Kauri. The perma-bulls don't like too much reality. Facts & reality will leave hope & ignorance in the gutter.




Hi UF,
       I got the joke.  .. just the D&G had me baffled.. not having a mobile phone I am not up with all these abbreviations...  
       Incidentally, I am niether a Bull nor a Bear... I just trade the trend as it is at the time.. things change too quickly for a shorter-term trader like me to take a longer-term stand... I think..  
 Cheers
.........Kauri


----------



## Uncle Festivus

Whiskers said:


> If people can't get credit or worse, the banks can't offer it, and noticing the numbers involved and the size of the injection last week when things were supposed to be going better, I'm now wondering whether Wall St will capitulate next week after people have had the weekend to think a bit more.
> 
> Geeez though, I just wish we didn't have to catch a cold every time the yanks sneeze.




This is the problem, the constipated owl as Bill Gross put's it. If the bastions of capitalism eg the worlds biggest, and up till now, profitable banks can't fund their own balance sheet, let alone start to trust their money to borrowers, the US Titanic has just realised the true size of the iceberg it hit a few months ago.



> Another sharp jolt to the financial sector came on Thursday when an analyst at CIBC World Markets predicted that global banking giant Citigroup Inc.       may be forced to cut its dividend or take other steps to make up for a $30 billion capital shortfall. Shares of Citigroup lost about 7% for the session and the selling quickly spread into other banks and financial services stocks.



The wealth effect from rising real estate values has now dramatically  reversed resulting in  a growth recession already.  It is only a matter of time before this infects the so called 'real' economy.

The scary part of all this is that property debt & values in other countries have risen at far greater rates than in the US, especially in the UK & Spain. 

Credit has allowed our first world societies to live beyond our means in an artificial consumption binge which now looks to be resetting to the mean, but only after a vicious overcorrection via a global recession.



> WASHINGTON (MarketWatch) -- Home buyers with the very best credit are still having a difficult time getting mortgages in California, raising concerns that the real estate market in the nation's most populous state could fall much further, sending home values spiraling lower and toppling the state's economy into recession.
> 
> The drop in home values could cost the typical homeowner as much as $200,000 in lost wealth, for a total hit of $2.6 trillion statewide.
> 
> "We could see rapid price declines," said Dean Baker, an economist with the Center for Economic and Policy Research, who's been warning about the housing bubble for years. "These are huge numbers," he said. "Consumption will fall off."



China will be next for a 'resetting'?


----------



## Kauri

Looking better (or worse) all the time...    
 Cheers
..........Kauri



> November 5. Equity bourses look set to drop significantly today on the back of bad news on two fronts. The Citibank subprime write-downs has hit financial stocks hard and now H.K. stocks are expected to come under immense pressure as China tries to "pull the rug" from under the euphoric H.K. market. Over the w/e, China"s Securities and Regulatory Commission said it was considering controlling the volume of investment by mainland institutions in the H.K. market through the QDII program. Premier Wen backed up these comments by the CSRC and now the market is expecting big delays on its implementation. Given that the H.K. market is up nearly 40% since the program was announced back in August, the Hang Seng should come under immense pressure today. The AUD/USD is sitting just above its morning lows and as the day progresses, equity moves are expected to dictate its moves.


----------



## Awesomandy

Whiskers said:


> Geeez though, I just wish we didn't have to catch a cold every time the yanks sneeze.




At the rate things are going, we won't have to worry about the yanks catching colds for much longer - watch out for Asia though.


----------



## explod

Awesomandy said:


> At the rate things are going, we won't have to worry about the yanks catching colds for much longer - watch out for Asia though.




The sell of is gathering some momentum here and in Japan in trade since lunch.

I am thinking of liquidating, as to err on the side of caution may be the wiser move.


----------



## ithatheekret

explod said:
			
		

> I am thinking of liquidating, as to err on the side of caution may be the wiser move.




Cash is King ...huh, as long as it's not Yen  although the carry trade should strengthen that again soon, just in time for the BoJ to step in .........

I think the fait accompli in everyones minds is the reason for movements , margin lending facilities being polished up after a good drive.

One would have to contemplate that not enough heads have rolled in the financial sector ...... you know ...... the smart money crowd, they're smart alright, it's other peoples money they lose. I wonder if the block queue will  lengthen sometime around March next year, one ponders that event ..... and still not a hint of blood from Asian Banks of any note.

Well if the markets are really scared (which I thought it generally was), we'll see if the shudders have hit here by Melbourne Cup Day run up, that's the next rate hike agenda and could turn todays 100 point meltdown into a 6300 shakeup, with anything near 5800 being a nasty prospect. In my mind this is what the market reacts to, that's the skeleton in the closest that really gives the markets teeth a rattling after the bad news bears have thrown their spookies about. 
That's when it's like pulling teeth for the brokerage houses, even worse if they decide to upgrade the system for the futures market in the middle of the day or something silly like that. , now that's when cash automatically becomes King.


----------



## Whiskers

Not looking good for tomorrow. Hang Seng just slipped another 1% down 4.2% for the day. Dow futures slipping out.


----------



## nizar

ithatheekret said:


> Well if the markets are really scared (which I thought it generally was), we'll see if the shudders have hit here by Melbourne Cup Day run up, that's the next rate hike agenda and could turn todays 100 point meltdown into a 6300 shakeup, with anything near 5800 being a nasty prospect.




Yeah, and 580 would be an even nastier prospect


----------



## nikki

hang seng drop linked to regulatory changes & i am not sure how much of it is linked to general scare re credit crunch. 

5% drop is pretty spectacular. another 35% to go before it reaches the levels it was last week


----------



## Awesomandy

nikki said:


> hang seng drop linked to regulatory changes & i am not sure how much of it is linked to general scare re credit crunch.
> 
> 5% drop is pretty spectacular. another 35% to go before it reaches the levels it was last week




It's just giving up the extra gains from the regulatory changes a few months earlier, so... I guess we can think of that as just noise.


----------



## sassa

" I’ll admit that I am rather amazed that key financial stocks – including the financial guarantors, “money centre banks”, and Wall Street firms – were hammered yet the market maintained its composure. NASDAQ was actually up on the week, as major technology indexes added to their robust y-t-d gains. I’ll assume there is a confluence of great complacency and gamesmanship, with operators determined to play aggressively through year-end (bonuses and payouts). 

I wouldn’t bet on the stock market holding 2007 gains for another eight weeks. The Credit meltdown is now moving too fast and furious. Importantly, confidence is faltering for the entire Credit insurance industry, including the mortgage insurers and the financial guarantors. This is a devastating blow for the securitization marketplace, already reeling from pricing, liquidity and trust issues. The Credit system has lurched to the edge of meltdown, while the economy hasn’t even as yet succumbed to recession. It's absolutely scary.  Last week I wrote that subprime and the SIVs were “peanuts” in comparison to the CDO market. Well, the CDO marketplace is chump change compared to Credit Default Swaps and other over-the-counter (OTC) Credit derivatives that, by the way, have never been tested in a Credit or economic downturn. "
Extract from an article by Doug Noland at prudentbear.com.

Two new players on the field-credit default swaps and over-the-counter credit derivatives.
Can anybody give an account of these two?


----------



## ithatheekret

I have always considered credit derivatives as complex instruments purely devised to exchange risk between investors trading/investing in a market.
They are basically linked to some form of an underlying asset, be it a stock, commodity, forex or any tradable instrument within a market including interest rates. All it takes is for two parties to reach an agreement and then set the derivative in place. Then it is a matter of which party had the right value set for the asset.


----------



## sassa

sassa said:


> " I’ll admit that I am rather amazed that key financial stocks – including the financial guarantors, “money centre banks”, and Wall Street firms – were hammered yet the market maintained its composure.




It seems that the positives being reported by the corporates outweigh any negatives.Better profits and stock valuations grab the investors' eyes more than any bad news(which is awash in the U.S. at the moment).
Yesterday's gain of over 100 points just before the end of trade was an attention grabber.I really wonder about this money flooding the markets-how much is financial leveraging?


----------



## Kauri

I realise that the Dow futures aren't that relevant at this time of the day, but someone has spooked them to the tune of 160 points odd...
Cheers
.........Kauri


----------



## alankew

This could be the reason http://money.cnn.com/2007/11/07/markets/markets_nyopen/index.htm


----------



## dj_420

Yeah its not looking good, FTSE hammered, DOW coming off, I dont actually know why markets kept going up while oil was so high, prices like this are not good for any economy.... except maybe Saudi Arabia.


----------



## sassa

Kauri said:


> I realise that the Dow futures aren't that relevant at this time of the day, but someone has spooked them to the tune of 160 points odd...
> Cheers
> .........Kauri




This would have an effect although the gentleman making the statement has since said that "his words were misconstrued."A  serious thought even though it may have been slightly misreported.Words like this would make the markets unsteady.

Cheng Siwei, vice chairman of the Standing Committee of the National People's Congress, was quoted by wire services as saying China should shift more of its $1.43 trillion of currency reserves into "stronger currencies," such as the euro, to offset "weak" currencies like the dollar. 
The euro rallied to a new record high of $1.4703.


----------



## sassa

A $39b writedown by GM.Now that is a big figure.Only last month their shares shot up on a successful agreement with the union.I wonder what the investors will do tonight?With the reported loss of $68.85 a share,I would be feeling a tad queasy and wanting to sell.


----------



## Kauri

Whispers starting out about potential write downs at Morgan Stanely...  
Cheers
.........Kauri


----------



## ithatheekret

Kauri said:


> Whispers starting out about potential write downs at Morgan Stanely...
> Cheers
> .........Kauri




Yes they have problems too , but what is mysterious is that Goldman Sachs are ominously silent .


----------



## sassa

Kauri said:


> Whispers starting out about potential write downs at Morgan Stanely...
> Cheers
> .........Kauri




News of the Morgan Stanley problem.

http://www.marketwatch.com/news/sto...x?guid={84AE5381-B041-478D-BD71-9A93B4670052}


----------



## Gundini

Kauri said:


> Whispers starting out about potential write downs at Morgan Stanely...
> Cheers
> .........Kauri




Yes, around 3.7 Bil which believe it or not is on the lower side of the expected writedown. So maybe they are happy with that result!

More doom and gloom to come yet me thinks... And $100 a barrel for juice can't help either. Head for the hills...


----------



## eMark

Gundini said:


> Yes, around 3.7 Bil which believe it or not is on the lower side of the expected writedown. So maybe they are happy with that result!
> 
> More doom and gloom to come yet me thinks... And $100 a barrel for juice can't help either. Head for the hills...




I know t's early, but has anyone seen the futures for SP500 (-13.10) and Nasdaq (-30.75)


----------



## blablabla

DOW closed this morning at 13300 after a fall of 360 points. DOW futures are now at 13275. It is not a certainty that USA markets will fall again tonight.

The DJI is in a downtrend and it will require some good news to turn sentiment around. More bad news in USA could result in a sea of red here tomorrow.


----------



## eMark

blablabla said:


> DOW closed this morning at 13300 after a fall of 360 points. DOW futures are now at 13275. It is not a certainty that USA markets will fall again tonight.
> 
> The DJI is in a downtrend and it will require some good news to turn sentiment around. More bad news in USA could result in a sea of red here tomorrow.




Well the Morgan Stanley news is currently being factored in to todays futures. Where do you get your info re futures? I get mine from cnn.com

Is this correct??? 

http://money.cnn.com/data/markets/index.html

Nov 8 1:19am

              Change %Change Level 

 Dow      -400.00 -2.92% 13,277.00 
 NASDAQ -30.25  -1.39%  2,150.75 
 S&P       -11.00  -0.74% 1,471.80


----------



## Porper

Porper said:


> Thought this chart of the Dow was interesting.Only just noticed it unfortunately.
> 
> The patterns in the red boxes are uncanny in their likeness.
> 
> The bars above the two wave B's are very alike, and judging by what the Dow is doing as I write the next bar will be identical as well.
> 
> If the bigger count is a wave a,b, and C the two patterna will be similar, but they don't usually match as well as this.
> 
> Not to say we will go all the way down to the 13000 area, but it is looking more like it.




Just updating the chart of the Dow.

The pattern as you can see is still playing out as an almost mirror image of the last correction.

Tomorrow and Monday will be very interesting.Could we have one last push down then have another strong impulse up ?

I am ready and waiting to buy if it carries on like this


----------



## explod

Porper said:


> Just updating the chart of the Dow.
> 
> The pattern as you can see is still playing out as an almost mirror image of the last correction.
> 
> Tomorrow and Monday will be very interesting.Could we have one last push down then have another strong impulse up ?
> 
> I am ready and waiting to buy if it carries on like this




Could the two bottoms be seen as an uptrend line.  If so a breach down could see a further drop.   Probably not enough information.  The first candle is a reverse (nearly a hammer) where as  last night is a solid down which usually says continuation in that direction.  Some of the chart techs may help??


----------



## wavepicker

For months now we had been looking for a cycle peak for the SP500 of 5th October plus or minus a few days. This high came in 3 trading days later than expected, albeit close enough to the mark. The XAO I expected to put in a high around about the same time but this time(unlike the previous 2 major peaks) it kept trending for a few weeks. Them's the breaks....this model has worked very nicely for the yanks markets but not so well for ours this time around.

So when is the next critical low most likely???  Back when the date for the probable peak was calculated which was late August, the next major cycle low date was 14/15th November as well as 20th November another critical date.

I would think the SP500 has good chance of finding support around that cycle point and then rally into Feb/March next year for the final leg up in the bull market.

If this is does happen(these dates are not cast in stone but merely points in time that might prove important) then it we will have quite a good long probable Ending Diagonal pattern in force. Fast moves usually come from such moves(such as 1987), but saying we will have a crash. Just good to take such patterns into consideration and look for probable circumstances from which to trade.

Some excellent trading opportunities at present!!

Cheers


----------



## eMark

Is the DOW at this point really looking at starting down 400 points? I've never seen anything like it. That's what I see in front of me.

http://money.cnn.com/data/premarket/


----------



## Porper

eMark said:


> Is the DOW at this point really looking at starting down 400 points? I've never seen anything like it. That's what I see in front of me.
> 
> http://money.cnn.com/data/premarket/




Not too sure where you get that from eMark, I see them down 58 points ?

400 wouldn't be too bad anyway.You obviously weren't around in 1987.


----------



## sam76

eMark said:


> Is the DOW at this point really looking at starting down 400 points? I've never seen anything like it. That's what I see in front of me.
> 
> http://money.cnn.com/data/premarket/





I see this

Dow 13,311.00 -44.00 -0.33 

bloomberg.com


----------



## explod

Porper said:


> Not too sure where you get that from eMark, I see them down 58 points ?
> 
> 400 wouldn't be too bad anyway.You obviously weren't around in 1987.




Agreed, in fact a bit of a spook with what has come out in the last few weeks and we could easily see a drop to next major support at 11,000.  That's what happens in real corrections.  So far it just been a bit of mild volatility.


----------



## Awesomandy

Porper said:


> Just updating the chart of the Dow.
> 
> The pattern as you can see is still playing out as an almost mirror image of the last correction.
> 
> Tomorrow and Monday will be very interesting.Could we have one last push down then have another strong impulse up ?
> 
> I am ready and waiting to buy if it carries on like this




HSI has regained some of its losses at the end of today, and, apart from the gap down at open, the European markets are doing ok at the moment. I'm actually leaning towards a flat close for the Dow today, or may be even up slightly. 

And, if they start to trend up again, it's probably a good time to buy. Despite the recent volatility, the newer high is higher than the corresponding high from a few months ago, and the newer low is also higher than the corresponding low from a few months ago. This means, the bull is still alive (for now anyway).


----------



## sassa

eMark said:


> I know t's early, but has anyone seen the futures for SP500 (-13.10) and Nasdaq (-30.75)




The market indicators have halved in the last 3 hours with over 5 hours to go to opening time.Are the institutional investors in driving the markets up?


----------



## eMark

Porper said:


> Not too sure where you get that from eMark, I see them down 58 points ?
> 
> 400 wouldn't be too bad anyway.You obviously weren't around in 1987.




Well I was around, but in my teens and most certainly not trading. I'm not shocked by drops of 400, it's just that I have never seen the futures state 400 down. Try this link

http://money.cnn.com/data/markets/index.html

I'm not seeing things  From what I have read, it's obvioulsy not that number, but go and have a look, it's surreal. It's listed with the correct SP500 & Nasdaq figures.


----------



## soso

wavepicker said:


> So when is the next critical low most likely???  Back when the date for the probable peak was calculated which was late August, the next major cycle low date was 14/15th November as well as 20th November another critical date.




Hey wavepicker all currencies that I watch also have major cycle vibrations between 13 and 15 November. Will be interesting to watch!


----------



## wavepicker

soso said:


> Hey wavepicker all currencies that I watch also have major cycle vibrations between 13 and 15 November. Will be interesting to watch!




I notice you took an interest in Magdorans work, do you use Gann Geometric techniques as well?


----------



## Flying Fish

soso said:


> Hey wavepicker all currencies that I watch also have major cycle vibrations between 13 and 15 November. Will be interesting to watch!




So where do I stand with 5000$ australian dollars?


----------



## soso

wavepicker said:


> I notice you took an interest in Magdorans work, do you use Gann Geometric techniques as well?




Mostly time cycles a la McLaren, while price axis I treat it in a simple and classical fashion.  Every once in a while I throw on the chart angles or price vibrations but quickly revert back, simple works better for me


----------



## Nick Radge

Interesting dates Waves. Here are my seasonals for the last 25-years. November 7th (yesterday) the start of weakness through till the 19th...


----------



## wavepicker

Nick Radge said:


> Interesting dates Waves. Here are my seasonals for the last 25-years. November 7th (yesterday) the start of weakness through till the 19th...




Seems like these are lining up quite well then ATM, will be interesting to see how much further weakness we might have going into the end of next week.

If we do get another leg up after mid November it might lead to a very significant in the first 3 months of next year, but for the moment trend is down will trade accordingly

Cheers


----------



## wavepicker

soso said:


> Mostly time cycles a la McLaren, while price axis I treat it in a simple and classical fashion.  Every once in a while I throw on the chart angles or price vibrations but quickly revert back, simple works better for me




I too am a disciple of Mclaren(but not his time cycles analysis just yet as looking at another methodology at present).


Just looking at the currencies/US Dollar. From what I see we are approaching a historic pivot in these. The only question is will it start this month or in the first couple of months of next year?? Also between those timeframes what will the magnitude be? I have only looked at time at present and have not considered any vibrations within price harmonics.

Cheers


----------



## soso

wavepicker said:


> I too am a disciple of Mclaren(but not his time cycles analysis just yet as looking at another methodology at present).
> 
> 
> Just looking at the currencies/US Dollar. From what I see we are approaching a historic pivot in these. The only question is will it start this month or in the first couple of months of next year?? Also between those timeframes what will the magnitude be? I have only looked at time at present and have not considered any vibrations within price harmonics.
> 
> Cheers




I took a lot from McLaren, I especially liked The Foundations course, it changed my view of the markets quite a bit.

I've no idea about the magnitude of a move following a time vibration, at least not at this stage of knowledge. Been talking about this with Magdoran too but haven't heard from him from quite a while, hope he's ok. 
Magnitude is my main area of study since a few months already and for now I am learning to apply EW because I see it as a potential tool to help me gauge the magnitude of the next move. I think is a great complement to time cycles.


----------



## sassa

blablabla said:


> DOW closed this morning at 13300 after a fall of 360 points. DOW futures are now at 13275. It is not a certainty that USA markets will fall again tonight.
> 
> The DJI is in a downtrend and it will require some good news to turn sentiment around. More bad news in USA could result in a sea of red here tomorrow.




With 3 hours to opening in America,a turnaround in the S & P 500 and DJIA
as well as the markets in Europe.Any reason as to why?


----------



## Seaking

sassa said:


> With 3 hours to opening in America,a turnaround in the S & P 500 and DJIA
> as well as the markets in Europe.Any reason as to why?




Rio up over 20% in london on news that BHP has made an offer.


----------



## sassa

Seaking said:


> Rio up over 20% in london on news that BHP has made an offer.




According to Bloombergs,the offer has been rejected.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aPuWfN5U4lT0&refer=home


----------



## Seaking

sassa said:


> According to Bloombergs,the offer has been rejected.
> 
> http://www.bloomberg.com/apps/news?pid=20601087&sid=aPuWfN5U4lT0&refer=home




http://money.cnn.com/news/newsfeeds/articles/djf500/200711080635DOWJONESDJONLINE000562_FORTUNE5.htm


----------



## YOUNG_TRADER

BHP has made an offer for RIO boys,

I think this will stave off a correction short term as the funds and speculators return to the resource sector


----------



## noirua

A severe market correction continues in the financial sector in Europe with Banks continuing to fall by 3% to 6%. It is expected that this downward trend will spread to Asia and the Far East. Concern was expressed by George Soros as to the eventual decline of Chinese Banks with much debt shown on their books as of value, being worthless. Many companies in the financial sector will have to admit and book losses that will in many cases be severe- Australia is not excluded.


----------



## Sean K

noirua said:


> Many companies in the financial sector will have to admit and book losses that will in many cases be severe- Australia is not excluded.



Which Australian institutions are directly exposed to the US Sub prime/CDO problems Noirua?


----------



## Whiskers

After a brief look in green, the Dow soon surcome to gravity and found red with what looks like a little more volume than recently. Be surprised to see it in green in the morning, I think.


----------



## macca

Just looking at those dates of Wave and Nick, on the 15/11 we have the PPI in USA and then on the 16/11 we have the CPI figures being released.

With the oil price being high for the past few months it is reasonable to expect that cost to show up in the inflation figures (unless we see some more creative accounting)

If the market doesn't like the figures, that could be the trigger for the moves predicted in the charts.


----------



## Whiskers

macca said:


> Just looking at those dates of Wave and Nick, on the 15/11 we have the PPI in USA and then on the 16/11 we have the CPI figures being released.
> 
> With the oil price being high for the past few months it is reasonable to expect that cost to show up in the inflation figures (unless we see some more creative accounting)
> 
> If the market doesn't like the figures, that could be the trigger for the moves predicted in the charts.




Yes, indeed.

I'm only just starting to study charting the indicies and am very impressed with their analysis. Many thanks to them for sharing it with us.


----------



## blablabla

eMark said:


> Well the Morgan Stanley news is currently being factored in to todays futures. Where do you get your info re futures? I get mine from cnn.com




Bloomberg website has a lot of useful info.
http://www.bloomberg.com/markets/stocks/futures.html

Read the time on the right-hand-side of the page to make sure the figures shown are recent. Some figures don't update frequently.

phew! glad I didn't short RIO yesterday!
The BHP bid for RIO will make many think twice before selling mining stocks.


----------



## Kauri

Just in case anyone has forgotten the sub-prime ... :axt:
Cheers
.........Kauri



> Tokyo, November 9. Both USD/JPY and EUR/JPY, as well as other JPY crosses, traded lower on the weak Nikkei close. Weaker equity markets and risk aversion have almost inevitably led to JPY buy-backs, especially on the crosses. The Nikkei plumbed fresh lows of the session into the close, settling at 15,583.42, down 188.15 points or 1.19% on the day. TOPIX closed at 1494.35, down 22.59 points or 1.49%. Despite the general trend towards risk aversion, dealers are finding it hard to buy JPY as the latest round of Japanese stock market weakness is due strictly to Japanese factors. News reports out this afternoon point to over *Y100 bln in subprime losses at Mizuho Securities. *Almost needless to say, Mizuho Group stocks plunged, closing down 5.68% on the day. Other Japanese financial stocks also took a bath with Sumitomo Mitsui down 5.9%. USD/JPY and EUR/JPY have traded back down but remain well off early lows. USD/JPY saw a low of 112.40 earlier, EUR/JPY 165.20. Highs were seen at 112.89 and 166.00, respectively.


----------



## eMark

Kauri said:


> Just in case anyone has forgotten the sub-prime ... :axt:
> Cheers
> .........Kauri




Thanks Kauri, I needed that: 

I can always rely on you to post sobering newsbites at this time of day.

Cheers

eMark


----------



## ithatheekret

I think the real correction to come will hit the S&P 500 , the chart looks like it has false highs and set up for failure , the last few months have given it a cleavage shape that I don't like at all , as each rally has come to an abrupt stop mimicking the last rise .


----------



## sassa

nizar said:


> Citi could fold?
> Are you serious?
> 
> Thats BIG news.
> Im sure thats not going to happen. If the Fed bailed out LTCM, surely they would do the same here, or else it would cause a real disaster IMO...
> 
> I mean, we are talking one of the biggest banks in the world




"Since the day it was formed, Citi has been a business model in search of validation. Big couldn't just be better, it had to be unbeatable.
Comment from the Houston Chronicle.
Now, it's simply broken. And a financial solution isn't coming easily. Already, one analyst is predicting the only solution is to bust up the financial supermarket."


----------



## nizar

ithatheekret said:


> I think the real correction to come will hit the S&P 500 , the chart looks like it has false highs and set up for failure , *the last few months have given it a cleavage shape that I don't like at all *, as each rally has come to an abrupt stop mimicking the last rise .




LOL a cleavage shape??!!

Care to post the chart


----------



## Whiskers

This might give the markets a jolt tonight.



> AP
> Consumer Confidence Hits 2-Year Low
> Friday November 9, 3:18 am ET
> By Martin Crutsinger, AP Economics Writer
> *Consumer Confidence Plunges to Lowest Reading Since Gulf Coast Hurricanes of 2005 *
> 
> WASHINGTON (AP) -- Consumer confidence plunged in early November to the lowest level since Hurricane Katrina battered the Gulf Coast and sent oil prices soaring in 2005.
> The RBC Cash Index showed consumer confidence fell to a reading of 64 this month, down sharply from an early October reading of 80.6, when consumer sentiment was on the upswing as the stock market stabilized temporarily following a turbulent August.
> 
> http://biz.yahoo.com/ap/071109/consumer_confidence.html?.v=3


----------



## Uncle Festivus

nizar said:


> LOL a cleavage shape??!!
> 
> Care to post the chart




Someone told me the technical term was a cameltoe, whatever that means!


----------



## eMark

Probably a little early to worry about the futures, but the DOW, NASDAQ & SP500 have all fallen in the last few minutes. Consumer confidence report lower. I didn't think that came out till after the open.

S&P 500 -5.80 1469.70 11/9 5:52am  


NASDAQ -7.50 2098.00 11/9 5:51am  


Dow Jones -42.00 13220.00 11/9 5:51am


----------



## Kauri

eMark said:


> Probably a little early to worry about the futures, but the DOW, NASDAQ & SP500 have all fallen in the last few minutes. *Consumer confidence report lower. I didn't think that came out till after the open.*
> 
> S&P 500 -5.80 1469.70 11/9 5:52am
> 
> 
> NASDAQ -7.50 2098.00 11/9 5:51am
> 
> 
> Dow Jones -42.00 13220.00 11/9 5:51am




Tonights colander..


----------



## sassa

eMark said:


> Probably a little early to worry about the futures, but the DOW, NASDAQ & SP500 have all fallen in the last few minutes. Consumer confidence report lower. I didn't think that came out till after the open.
> 
> S&P 500 -5.80 1469.70 11/9 5:52am
> 
> 
> NASDAQ -7.50 2098.00 11/9 5:51am
> 
> 
> Dow Jones -42.00 13220.00 11/9 5:51am




The FTSE has dropped appreciably in the last 2 hours.From .98 to .25.Rio Tinto continues to rise-6.5% to 8%.


----------



## eMark

Kauri said:


> Tonights colander..




Thanks Kauri.

Then what's Whiskers article on consumer confidence all about? That's what I meant. Is it a sneak preview from Yahoo?


----------



## explod

eMark said:


> Probably a little early to worry about the futures, but the DOW, NASDAQ & SP500 have all fallen in the last few minutes. Consumer confidence report lower. I didn't think that came out till after the open.
> 
> S&P 500 -5.80 1469.70 11/9 5:52am
> 
> 
> NASDAQ -7.50 2098.00 11/9 5:51am
> 
> 
> Dow Jones -42.00 13220.00 11/9 5:51am




Good idea to get it out early, everyone will have forgotten by market open so that they can sail merrily along.  Remember the world is round so we cant' fall off can we.


----------



## sassa

Uncle Festivus said:


> Someone told me the technical term was a cameltoe, whatever that means!




I think you know.It's the cleavage at the intersection of a woman's legs.


----------



## Awesomandy

Stock market tip #69: when the chart starts to form a cleverage shape. Take the money out and spend it on women.


----------



## eMark

eMark said:


> Probably a little early to worry about the futures, but the DOW, NASDAQ & SP500 have all fallen in the last few minutes. Consumer confidence report lower. I didn't think that came out till after the open.
> 
> S&P 500 -5.80 1469.70 11/9 5:52am
> 
> 
> NASDAQ -7.50 2098.00 11/9 5:51am
> 
> 
> Dow Jones -42.00 13220.00 11/9 5:51am




What happened? Did someone drop a bomb somewhere?

Getting tired of this.


S&P 500 -14.50 1461.00 11/9 6:37am  


NASDAQ -16.25 2089.25 11/9 6:36am  


Dow Jones -105.00 13157.00


----------



## Whiskers

eMark said:


> Thanks Kauri.
> 
> Then what's Whiskers article on consumer confidence all about? That's what I meant. Is it a sneak preview from Yahoo?




Yes eMark, it's a summary of alternate surveys to the Michigan University one that is the oficial one. But it is expected to be consistant with them.



> The RBC Cash Index was in line with other surveys of consumer confidence, including the Conference Board's consumer sentiment survey which has also dropped to the lowest level since the fall of 2005.




http://biz.yahoo.com/ap/071109/consumer_confidence.html?.v=3


----------



## eMark

Whiskers said:


> Yes eMark, it's a summary of alternate surveys to the Michigan University one that is the oficial one. But it is expected to be consistant with them.
> 
> 
> 
> http://biz.yahoo.com/ap/071109/consumer_confidence.html?.v=3





That explains it! ...and a jolt it has already given.

Lets' hope that the final report is not worse still.

Who knows how the night will turn out....


----------



## Kauri

eMark said:


> That explains it! ...and a jolt it has already given.
> 
> Lets' hope that the final report is not worse still.
> 
> Who knows how the night will turn out....




Things are looking better already on the sub-prime saga. :axt: 



> November 9. Speculation of a possible GBP 10bn write-down from a UK clearer is being touted as a factor in cable"s sell stop-driven drop to a low of 2.0993, from an earlier 26-year high of 2.1162.






> London, November 9. News of the temporary suspension of trade in Barclays shares (Bloomberg) is being touted as the catalyst for cable"s sell stop-driven slump to a low of 2.0963, from a European morning 26-year high of 2.1162.


----------



## sassa

eMark said:


> What happened? Did someone drop a bomb somewhere?
> 
> Getting tired of this.
> 
> 
> S&P 500 -14.50 1461.00 11/9 6:37am
> 
> 
> NASDAQ -16.25 2089.25 11/9 6:36am
> 
> 
> Dow Jones -105.00 13157.00




Make that 16.2,19.25 and 115 at 6.56a.m.
Plus the FTSE has dropped over 2% since the beginning of trade-from+.94 to -1.14.


----------



## Whiskers

Not much good news so far tonight. Think I will have a shower and go to bed.



> NEW YORK (AP) -- Stocks headed to a lower open Friday after Wachovia Corp. said it expects to increase quarterly loan losses.
> The nation's fourth-largest bank said in a filing with the Securities and Exchange Commission that credit market volatility could cause a $1.1 billion write-down for October alone
> http://biz.yahoo.com/ap/071109/wall_street.html?.v=2






> NEW YORK (AP) -- The maker of the painkiller Vioxx has agreed to pay $4.85 billion to settle thousands of lawsuits in one of the largest civil cases ever, according to published reports Friday.
> http://biz.yahoo.com/ap/071109/vioxx_settlement.html?.v=13






> NEW YORK (AP) -- Wachovia Corp. said Friday the value of its collateralized debt obligations sank in October by an estimated $1.1 billion pretax.
> http://biz.yahoo.com/ap/071109/wachovia_writedowns.html?.v=2


----------



## numbercruncher

> BANGALORE (Reuters) - Sotheby's (BID.N: Quote, Profile , Research) shares lost more than a third of their value Thursday, a day after sales figures from its Impressionist and Modern art auction in New York painted a lackluster picture that triggered fears of a slowdown in the art market.
> 
> With a total take of just under $270 million, the auction at Sotheby's fell far short of even its low pre-sale estimate of $355 million.




http://investing.reuters.co.uk/news/articleinvesting.aspx?type=hotStocksNewsUS&storyID=2007-11-08T194350Z_01_BNG98869_RTRUKOC_0_US-SOTHEBYS-SHARES.xml&pageNumber=0&imageid=&cap=&sz=13&WTModLoc=InvArt-C1-ArticlePage2

Even the art market getting hammered .....


----------



## Nyden

numbercruncher said:


> http://investing.reuters.co.uk/news/articleinvesting.aspx?type=hotStocksNewsUS&storyID=2007-11-08T194350Z_01_BNG98869_RTRUKOC_0_US-SOTHEBYS-SHARES.xml&pageNumber=0&imageid=&cap=&sz=13&WTModLoc=InvArt-C1-ArticlePage2
> 
> Even the art market getting hammered .....





I saw that on CNN finances; I guess that's an indicator that even the exceedingly wealthy are taking a hit this season! 

Is there any potentially *good* news coming out of the US markets anytime soon? I know zit about the American financial schedule, but am tired of every day them announcing some foolish company losing billions; and dragging us down with 'em!


----------



## Sean K

Nyden said:


> Is there any potentially *good* news coming out of the US markets anytime soon? I know zit about the American financial schedule, but am tired of every day them announcing some foolish company losing billions; and dragging us down with 'em!



A positive spin could be that the market may have factored most of the US financial crisis in, and it could well be contained in the sector. While the financial system will probably see many more write downs, it's now expected, so any 'good' news will be well received. I'm a bit naive though, so take anything I make up as most likely tosh.


----------



## Uncle Festivus

kennas said:


> A positive spin could be that the market may have factored most of the US financial crisis in, and it could well be contained in the sector. While the financial system will probably see many more write downs, it's now expected, so any 'good' news will be well received. I'm a bit naive though, so take anything I make up as most likely tosh.




I'm not sure Kennas. The way things are unfolding we are not out of the woods yet, in fact the real contagion may only be just starting?

If anybody is likely to put a positive spin on all of this it would be Helicopter Benny, and he says they/we are in for a rough patch ahead, the next 6 months or so. This is the same man that also said the sub prime (read real estate bust) melt down was 'contained', so make your own conclusions up as to what is in store, 'going forward'. I mean, if this is the best he can do then the reality is a magnitude worse, as he has access to supposedly better data than we do.

As to containment, California may already be in recession - 



> *WASHINGTON (MarketWatch) -- California is on the edge of recession, economists say. Or perhaps the nation's most populous state is already in one. *
> 
> "California seems to be sliding into recession," wrote Jan Hatzius, chief economist for Goldman Sachs, in a research note earlier this week. Hatzius based his appraisal on the sharp increase in the unemployment rate in the state from 4.7% in November 2006 to 5.6% in September 2007.
> While a 5.6% jobless rate may seem low, the important thing is how much it's risen. Hatzius said any increase of more than 0.6 percentage points in California's unemployment rate has always been associated with a national recession.





> *WASHINGTON (MarketWatch) -- Consumers are worried and getting more worried. *
> 
> Their view on current economic conditions has been lower only once during the past 15 years -- when the United States invaded Iraq in 2003, according to a survey released Friday by Reuters and the University of Michigan.
> "Sentiment readings are now out of the caution area and into the DANGER zone," wrote Robert Brusca, chief economist at Fact and Opinion Economics. "Things do seem to be unraveling a bit faster."


----------



## nizar

kennas said:


> A positive spin could be that the market may have factored most of the US financial crisis in, and it could well be contained in the sector. While the financial system will probably see many more write downs, it's now expected, so any 'good' news will be well received. I'm a bit naive though, so take anything I make up as most likely tosh.




I think we should expect some sort of rebound next week.

Its difficult to know the reasons behind these movements because those "analysts" can be so funny sometimes.

I remember on wednesday the markets went up by 117pts (DOW), it was a night when gold/oil went up and the dollar went down. Isn't that the story of the year, lol. The analysts/journos were talking about how the high oil price boosted big weighting stocks such as Exxon, which carried the index higher going into the last hour of trading.

But then on thursday, high oil and low dollar, was part of the reasons why the market went down?? LOL

Thank God these guys analyse and don't actually trade. lol.


----------



## Sean K

Uncle Festivus said:


> I'm not sure Kennas. The way things are unfolding we are not out of the woods yet, in fact the real contagion may only be just starting?



UF, Yes, I agree and stated such in the post. The point I'm making is that it may be factored in. Who is to know how much though? It's like discussing the Chindia story and how much of the 'supercyle' is factored in. Bears will lean one way, and Bulls the other with the factoredinedness of either. 

(is factoredinedness a word? )


----------



## Aussiejeff

nizar said:


> I think we should expect some sort of rebound next week.
> 
> Its difficult to know the reasons behind these movements because those "analysts" can be so funny sometimes.
> 
> I remember on wednesday the markets went up by 117pts (DOW), it was a night when gold/oil went up and the dollar went down. Isn't that the story of the year, lol. The analysts/journos were talking about how the high oil price boosted big weighting stocks such as Exxon, which carried the index higher going into the last hour of trading.
> 
> But then on thursday, high oil and low dollar, was part of the reasons why the market went down?? LOL
> 
> Thank God these guys analyse and don't actually trade. lol.




I think as long as the US dollar stays low or goes even lower, the US economy will continue to nosedive (reagdless of momentary dead cat bounces in the markets). Let's face it, the whole basis of their economy is to "spend, spend, spend" - a lot of it on "useless" luxury imported items like BIG plasma/LCD home theatres, luxury imported clothes and foods etc... add to that their hunger for BIG gas guzzling cars, BIG houses with even BIGGER mortgages and the plunging dollar is really starting to bite them in the proverbial *um... [this all sounds depressingly like the road Australia seems to be currently heading down - but at the moment the skyrocketing Aus dollar is allowing us to keep spending like there is no tomorrow on imports and luxury goods. Of course, like the US has discovered, this scenario won't last forever!]

So, how are the Yanks going to turn around their way of life to become "more frugal" and "less demanding for useless luxury items"? I guess change will be resisted until after a lot of PAIN has been felt in the coming years and months, amid the realisation that their ever sickening economy is no longer as dominant on the world scene. Who knows, something "good" might eventually come out of it - a New American Reality perhaps? One can only hope.... and take our own lessons from what they are going through now and what they are in all likelyhood to go through in the coming months and years ahead. 

Of course, we are smarter.... aren't we?


----------



## ithatheekret

Nyden said:


> Is there any potentially *good* news coming out of the US markets anytime soon? I know zit about the American financial schedule, but am tired of every day them announcing some foolish company losing billions; and dragging us down with 'em!






Well if the banks reported to the market properly , we would at least have some idea about their CDO's and their sub-prime CDO's . 

This unfortunately means we will keep hearing bad news coming out of them until the market is finally desensitized , or can understand the polyglot writings in the banks records after we have broken the codes .

I think the real rough patch to come will be between Jan-April when the credit resets hit , then we may get a fleeting glimpse into that labyrinth of financial records .

Now if that's the worry of worries for you , take heed of this , US bonds are closing in on a 4% yield , if they hit 3.75% ( which I believe they will ) , those worries will suddenly shift toward a US recession . Then the worlds biggest bank will default .............


----------



## dhukka

kennas said:


> A positive spin could be that the market may have factored most of the US financial crisis in, and it could well be contained in the sector. While the financial system will probably see many more write downs, it's now expected, so any 'good' news will be well received. I'm a bit naive though, so take anything I make up as most likely tosh.




I think to a certain extent you're right kennas. This week felt eerily similar to  August. Everytime you turned around there was some negative news. The market comes to expect it so then when you get a day with positive news or even just with no bad news the market rallies. 

Markets are quick to factor events in but tend to over and undershoot on their expectations. Just look at all the euphoria surrounding the Fed's first rate cut in September and the subsequent rally. The US markets are now below where they were before the first cuts. What were the markets factoring in then and was it warranted? 

What has happened since the Fed cut rates? Housing has gotten worse, employment is about the same, consumer spending has slowed and confidence as measured by the Michigan survey is lower than before September. It is almost exactly the same scenario that played out when the Fed began cutting in 2002. The market rallied on the cuts but moved significantly lower over the medium term. 

As stated above this feels eerily similar to what happened in August. Credit spreads are widening again, The ABX indices are cliff diving again, instead of rumours of writedowns we now have them. Instead of potential large credit losses we now have them. the evaporation of ABCP has reaccelerated. Homebuilders are now going bust, rating agencies are cutting more and more ratings on anything remotely infected by the US mortgage market.   

On top of that you have US Government officials running about the globe trying to organize a mass bailout of SIV's. Things must be bad. 

Welcome to credit crunch 2.0 which is much more advanced that the first version.


----------



## bean

DOW THEORY

First the transports have already taken out there August lows 

----------------------------------------------------------------
Extract on Dow Theory  ( Sounds familiar to current setup)

How Averages Confirm

Hamilton and Dow stressed that for a primary trend buy or sell signal to be valid, both the Industrial Average and the Rail Average must confirm each other. If one average records a new high or new low, then the other must soon follow for a Dow theory signal to be considered valid.




Combining the guidelines set forth for trend identification with the theorem on confirmation, it is now possible to classify the primary trend of the market. The chart above shows an array of signals that occurred during a 7-month period in 1998.

   1.
      In April, both the DJIA ($INDU)[$INDU] and DJTA ($TRAN)[$TRAN] recorded new all-time highs (blue line). The primary trend was already bullish, but this confirmation validated the primary trend as bullish.
   2.
      In July, trouble began to surface when the DJTA failed to confirm the new high set by the DJIA. This served as a warning sign, but did not change the trend. Remember, the trend is assumed to be in force until proved otherwise.
   3.
      On July 31, the DJTA recorded a new reaction low. Two days later, the DJIA recorded a new reaction low and confirmed a change in the primary trend from bullish to bearish (red line). After this signal, both averages went on to record new reaction lows.
   4.
      In October, the DJIA formed a higher low while the DJTA recorded a new low. This was another non-confirmation and served notice to be on guard for a possible change in trend.
   5.
      After the higher low, the DJIA followed through with a higher high later that month. This effectively changes the trend for the average from down to up.
   6.
      It was not until early November that the DJTA went on to better its previous reaction high. However, at the same time the DJIA was also advancing higher and the primary trend had changed from bearish to bullish.

Volume

The importance of volume was alluded to above with the chart of the Apr-97 bottom in the DJIA. Rhea notes that while Hamilton did analyze volume statistics, price action was the ultimate determinant. Volume is more important when confirming the strength of advances and can also help to identify potential reversals.
Volume Confirmation

Hamilton thought that volume should increase in the direction of the primary trend. In a primary bull market, volume should be heavier on advances than during corrections. Not only should volume decline on corrections, but participation should also decrease. As Hamilton put it, the market should become "dull and narrow" on corrections, "narrow" meaning that the number of declining issues should not be expanding dramatically. The opposite is true in a primary bear market. Volume should increase on the declines and decrease during the reaction rallies. The reaction rallies should also be narrow and reflect poor participation of the broader market. By analyzing the reaction rallies and corrections, it is possible to judge the underlying strength of the primary trend.


----------



## ithatheekret

Consumer confidence as a measurement , is now akin to a tantilizing smell turning into a tasteless reality . It's like having a bowl of fruit on the table only to find that it's really a sly composite of plastic and wax .

Another silent event that has been delicately washed over , is that the gap between corporate bonds and junk bonds has widened into a chasm . 

Now we here cries for intervention on the USD coming from both home base Americans and European provincial minded politicians . All at the same time Paulson is trying to leverage action on the Yuan by the Chinese collective .

Yet we still see a two year realism gap in the US on just about every negative they have tucked away , like their last recesssion . It just wasn't on their agenda at the time so it became a non-happening event .

Just like the gap between corporate and junk bonds , the reality gap between the average American and prime time America has expanded .

The US needs a recession urgently , to ameliorate the ongoing problems it's administrations have brushed over or created . The reality of the previous recession saw the administration touting a 4% growth rate , that in reality was closer to just under 2% . Next year that 2% growth could look like a peak as the band struggles to push past 1.9% . 

I can't wait to see the polish , the spin doctors  put on that one .


----------



## dhukka

ithatheekret said:


> Consumer confidence as a measurement , is now akin to a tantilizing smell turning into a tasteless reality . It's like having a bowl of fruit on the table only to find that it's really a sly composite of plastic and wax .
> 
> Another silent event that has been delicately washed over , is that the gap between corporate bonds and junk bonds has widened into a chasm .




Spreads on just about everything are getting back to mid-August levels


----------



## ithatheekret

When looking at the charts comparing the ranges between Treasuries and Corporate it's does not really compare with the BB's and under . Eyeball the Treasuries and watch 3.75% approach in the coming months ahead .

Although BB's are going to have to pay much higher yields , just to absorb the credit level that dominates their bonds . The main worry I would suspect is the fact that Leveraged loans have replaced the junk market also , with these loans made against assets . They're still highly speculative graded loans , that could find themselves in hot water .


----------



## sassa

Have a change in mood and look at a British comedy clip about SIV's.

http://club.ino.com/trading/2007/11/09/the-funny-side-of-subprime-sivs-and-cdos/


----------



## Kauri

Now I wonder what exactly that means???...   
Cheers
.........Kauri



> November 12: The UK Telegraph is running a story suggesting that a new US FASB regulation known as FASB regulation 157 will come into effect on Thursday and could lead to a further 100 BLN USD in writedowns. The new regulation will not allow institutions holding sub-prime mortgages or other exotic debt on the basis of assumptions and force them to revalue at market prices. The new regulation  affects the Level 3 tier of assets that are currently valued according to in- house models


----------



## Pommiegranite

Kauri said:


> Now I wonder what exactly that means???...
> Cheers
> .........Kauri




My understanding is:

It mean assets have to be revalued based on market value of the asset as opposed to some spreadsheet model which was created before US housing market took a nosedive.


I'm assuming that the banks have been very conservative in their depreciation of their assets as they have not factored in the state of the US housing market.


----------



## ithatheekret

sassa said:


> Have a change in mood




Thank heavens for humour hey , good clip , my load was a bit jittery .

Speaking of moods .

A mood is an emotion , neither apply here to me , whatever direction the markets go , there is money to be made . Emotions inherently affect technique in wealth creation . The only benefit is the ability to assess the markets "mood" and look at what can disturb it . 

But , I'm one of those persons who would rather watch a tick chart than t.v.


----------



## Whiskers

It sounds like the US might be bracing for another dump this week.

Could be that _FASB regulation 157 _ forcing the hand of the money merchants.



> HSBC, the Subprime Seer:
> Sanguine View Isn't Likely
> By CARRICK MOLLENKAMP
> November 12, 2007
> 
> When British bank HSBC Holdings PLC reports third-quarter results for its U.S. business this week, it will provide an early look at what could be in store for U.S. mortgage lenders, banks with big holdings of securities tied to subprime home loans and even the broader U.S. economy.
> 
> That picture isn't likely to be pretty.
> 
> HSBC's American consumer-lending unit, HSBC Finance Corp., is the classic canary in the coal mine when it comes to identifying new problems in the market for subprime loans, or those that were made to borrowers with weak credit.
> 
> A year ago, the bank, in a little-noticed securities filing, flagged some unexpectedly high delinquencies in its subprime-mortgage book that in February led to an increase in bad-debt costs. That proved to be the beginning of a crisis that spread around the globe, engulfing most of the world's largest banks and big mortgage lenders such as Countrywide Financial Corp.
> 
> Now, some analysts are expecting another unpleasant disclosure from HSBC's U.S. consumer-lending business, one of the biggest subprime lenders in the country. Robert Law and Raul Sinha, London-based banking analysts for Lehman Brothers, said they believe HSBC might have to boost its reserves against souring subprime loans at HSBC Finance's mortgage-services division by $2.4 billion, to a total $4.5 billion. The unit, formerly known as Household International Inc., was acquired by HSBC in 2003.
> 
> The level of reserves suggests that by the end of this year, losses to defaults over the life of the loans could wipe out about 14% of a loan portfolio totaling $41.4 billion, according to Messrs. Law and Sinha. That would confirm some of the more pessimistic forecasts of how the subprime market will fare. The Lehman analysts initially had projected losses of 8%. Lehman has an "overweight" recommendation on HSBC shares, the firm's highest ranking. The analysts said they believe HSBC's access to emerging markets is one factor that outweighs the problems in the U.S.
> 
> "HSBC has proved to be one of the most frank, or perhaps realistic, of all the players in the consumer-finance space," said UBS AG banking analyst Alastair Ryan. "If their message is indeed that things have again turned for the worse, others will follow."
> 
> HSBC's results also could have bigger implications for the U.S. economy. Some analysts expect the losses at HSBC Finance to prompt a slowdown in lending at its 1,260 U.S. branches and other lending outlets, which provide mortgages, auto loans and credit cards to retail customers. That is an area that economists have been watching closely for signs of contagion from the credit crisis. Any pullback in such lending could curtail U.S. consumer spending, which has been the country's main driver of economic growth...
> 
> 
> ...In recent days, other financial firms have trumpeted new concerns about next year. Last month, Morgan Stanley analyst Betsy Graseck said in a report that she expected "contagion from subprime housing to prime housing to auto to card loans." Capital One Financial Corp., a large-credit-card issuer, reported Friday an increase in loan charge-offs and delinquencies in October. Last week, home lender Washington Mutual Inc. predicted a bleak outlook for 2008 U.S. mortgage originations, predicting a drop to $1.5 trillion from about $2.4 trillion this year.
> 
> Write to Carrick Mollenkamp at carrick.mollenkamp@wsj.com
> 
> http://online.wsj.com/article/SB119481148063189270.html?mod=yahoo_hs&ru=yahoo


----------



## Whiskers

China increasing reserve requirements and the unwinding of the carry trade still has some catching up to do according to this guy.

Doesn't bode well for the markets if the cash supply is drying up, does it!

Gold and silver are still falling too.



> FT.com
> Asian stocks sink as exporters suffer
> Monday November 12, 12:05 am ET
> By Andrew Wood in Hong Kong
> 
> 
> Shares in major markets across Asia fell by 3-4 per cent as further reports of subprime losses in the US unsettled investors on Wall Street on Friday and China increased the reserve requirements for banks to try to control its surging economy...
> 
> 
> ...Carry traders, who borrow cheaply in currencies like the yen to deposit the cash in high yielding currencies like the Australian and New Zealand dollars, lost their appetite for risk. The Australian dollar drooped by 0.8 per cent to 90.1 US cents and its New Zealand counterpart fell 0.5 per cent to 75.8 US cents.
> 
> "The unwinding of the foreign exchange carry trade has been limited so far, but we are now looking for some catch up," said Patrick Bennett, Asia FX and rates strategist at Societe Generale in Hong Kong in a note this morning.
> 
> http://biz.yahoo.com/ft/071112/fto111220070015322943.html?.v=1


----------



## dhukka

Kauri said:


> Now I wonder what exactly that means???...
> Cheers
> .........Kauri




Something for the media to beat up but it's really just old news. All the major US brokers and Citigroup adopted this standard early and break out the difference in level 1,2 and 3 assets. The standard comes into effect on November 15th, that doesn't mean anything will happen on that date it just means that they have to start using it. Any changes to the valuation of assets won't be reported until 4th quarter results come out or earnings pre-announcements so you could be waiting until next year to hear about it. 

Minyanville had a good piece on what it all means in last Thursday's *"5 Things You Need To Know"*:



> We continue to read more and more about this November 15 "deadline" for implementation of U.S. Financial Accounting Standards Board Rule 157 (FASB 157 for short) that make it harder for banks to avoid "mark-to-market pricing" of securities.  (See this Special Five Things You Need to Know About Mark-to-Model for more.)
> 
> 
> * CFO Magazine has an article titled, "FASB 157 Could Cause Huge Write-Offs."
> * Why?  Because under the new provisions firms are forced to whenever possible use "observable inputs" in pricing their Level Three assets.
> * In somewhat overly simplified terms, Level Three assets are those that may rely on mark-to-model inputs since they so rarely trade.
> * In may cases there is no way to price the securities.  This gives the firms a lot of leeway in determining their value.
> * But when something does trade, under the new rules it forces that asset out of Level Three based on the pricing data that becomes an "observable input."
> * "It you think banks are writing off large amounts of assets now, wait until new accounting rules take effect this month," the CFO article says.
> * But Goldman Sachs (GS), Merrill Lynch (MER), JP Morgan (JPM), Morgan Stanley (MS) and Citigroup (C) already adopted early implementation of FASB 157 beginning in the first quarter of 2007.
> * Still, we keep reading vaguely grim predictions of looming disaster beginning on November 15.
> * What gives?
> * We think there may be confused causality here.
> * Firms such as American International (AIG) in their 10Q said they are "currently addressing the effect of implementing this guidance."
> * A lot of firms out there are in this boat.
> * Meanwhile, Wall Street's major firms are about the only firms that have already adopted the FASB 157 provisions.
> * The issue is not increased writedowns based on this FASB 157 "implementation date."
> * The issues remains the fear of forced sales creating "observable inputs" at distressed prices that will force assets to be valued at starkly lower levels.


----------



## macca

An article on the News website

<BANKS worldwide may lose as much as $US400 billion ($442 billion) from subprime mortgages, as at least one in four of the risky home loans go into default, analysts said overnight. >

the link

http://www.news.com.au/dailytelegraph/story/0,22049,22750030-31037,00.html

This problem seems to be never ending doesn't it, just when it calms down someone else writes off a few billion to stir the pot.

I guess they are trickling it through the system trying not to spook the punters


----------



## blablabla

The USA volatility index is spiking up again, now nearly as high as it was in the August correction. A volatility peak usually indicates a bottoming in the markets.
http://stockcharts.com/charts/gallery.html?$VIX

Going with the trend, there could be a few more days (or perhaps even weeks?) of falls still to come before a volatility peak is reached.

However, the US dollar has become noticeably stronger in the past 2 days, also reflected in falling gold, oil and base metal prices. A trend reversal could depend on just how much gold, oil etc prices fall. A big fall in gold and oil prices outstripping the rise in the US dollar could signal a return to bullish conditions in the USA. For Australian resource companies a strengthening US dollar is good news as it results in higher AUS dollar receipts, but this could be more than offset if resource prices fall too much.


----------



## Porper

Porper said:


> Thought this chart of the Dow was interesting.Only just noticed it unfortunately.
> 
> The patterns in the red boxes are uncanny in their likeness.
> 
> The bars above the two wave B's are very alike, and judging by what the Dow is doing as I write the next bar will be identical as well.
> 
> If the bigger count is a wave a,b, and C the two patterna will be similar, but they don't usually match as well as this.
> 
> Not to say we will go all the way down to the 13000 area, but it is looking more like it.




Well an update to the chart from a couple of weeks ago, and as expected we hit the 13000 level.

I have ammended the count slightly, but all going along nicely.

It looks highly likely that we have a double zigzag pattern in place, ie.3 waves down, 3 waves up and again 3 waves down.The reason I don't think we will have 5 waves down and hit the August lows at 12500 is that the daily, and more importantly the weekly oscilator has just crossed up from the oversold zone.

We have hit the cluster and rebounded up as can be seen on the chart.If this level does fail and we reverse then we should hit the next cluster just under the August lows.

The Dow isn't home and dry yet but it is looking better, even with all the doom and gloom with the economy.


----------



## Kauri

A possibility that the FASB 157 may be delayed... for whatever reason    ...
Cheers
..........Kauri



> November 15: A report in the Financial Week said that the FASB voted to defer the implementation date of FAS 157, its rule to mark to market assets and liabilities for all non-financial items except for those already reported at fair value on a recurring basis. Analysts say that the report might indicate bigger problems in that sector than previously thought.
> The Dow fell heavily in the last hour with some saying the fall was due to late reports that a bond fund run by GE is suffering losses in their mortgage backed securities and another report saying that Fitch might cut its rating on GMAC deeper into junk.
> The steep fall in the Dow in the last hour pushed the JPY-funded carry trades lower and set the tone for the morning"s trading so far.


----------



## dhukka

Kauri said:


> A possibility that the FASB 157 may be delayed... for whatever reason    ...
> Cheers
> ..........Kauri




Kauri,

Just got this off the FASB Website:



> *NEWS RELEASE 11/14/07*
> *FASB Rejects Deferral of Statement 157 for Financial Assets and Liabilities
> *
> Partial Deferral Granted for Nonfinancial Assets and Nonfinancial Liabilities
> 
> Norwalk, CT, November 14, 2007””At its Board meeting today, the Financial Accounting Standards Board (FASB) reaffirmed its vote against a blanket deferral of Statement 157, Fair Value Measurements. For fiscal years beginning after November 15, 2007, companies will be required to implement the standard for financial assets and liabilities, as well as for any other assets and liabilities that are carried at fair value on a recurring basis in financial statements. As a result, Statement 157 becomes effective as originally scheduled in accounting for the financial assets and liabilities of financial institutions.
> 
> The Board did, however, provide a one year deferral for the implementation of Statement 157 for other nonfinancial assets and liabilities. An exposure draft will be issued for comment in the near future on this partial deferral. The audiocast of the November 14th meeting is currently available at www.fasb.org. More information about topics discussed and decisions reached at the meeting will also be posted on the FASB website in the coming days.




So there is only a partial deferral and that only applies to non-financial assets. The big boys will still have to apply the standard to their shady level 3 assets.


----------



## Uncle Festivus

I thought this was a joke, but you can buy it online! Ben Bernanke would be proud


----------



## Trembling Hand

Uncle Festivus said:


> I thought this was a joke, but you can buy it online! Ben Bernanke would be proud




What no credit cards?


----------



## numbercruncher

> November 17, 2007
> 
> ‘Substantial recession’ may follow lending cuts in US, bank warns
> 
> The credit crunch is so serious that it may force the US banking system to cut lending by as much as $4,000 billion (£2,000 billion), prompting a “substantial recession” in the US, according to stark new research by Goldman Sachs.
> 
> Jan Hatzius, chief US economist at Goldman Sachs, has calculated that banks, brokerages and hedge funds could lose as much as $400 billion on sub-prime mortgage-related investments by the time the dust settles from the surge in defaults on high-risk home loans in America.
> 
> By Mr Hatzius’s estimation, every dollar in losses reduces the ability of highly leveraged Wall Street institutions to lend by $10, as they typically aim for a so-called capital ratio of 10 per cent.
> 
> “If leveraged investors see $200 billion of the $400 billion aggregate credit loss, they might need to scale back their lending by $2 trillion,” Mr Hatzius said.
> 
> Mr Hatzius’s actual prediction of a $400 billion write-off would reduce lending by $4,000 billion.




http://business.timesonline.co.uk/tol/business/economics/article2886499.ece


----------



## numbercruncher

> Markets poised for severe fall, says King
> By Edmund Conway, Economics Editor
> Last Updated: 12:42am GMT 15/11/2007
> 
> The Bank of England Governor has issued an extremely unusual warning on world stock markets, indicating that shares may be heading for a major fall.
> 
> Mervyn King said the full impact of the credit crunch had not yet been felt on equity markets in the West and in developing countries, saying that the possibility of share price falls were one of the biggest risks facing the world economy.
> 
> His warning came as the Bank gave a firm indication that it plans to cut interest rates as many as three times over the next two years to protect Britain's economy in the wake of the credit crunch. The signal caused the pound to drop to a four-year low against the euro, with the single currency now worth 71.13p.




http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/11/15/cnking115.xml&CMP=ILC-mostviewedbox


----------



## dhukka

The evidence is mounting of a coming recession. For anyone who bothered to look it's been there for a while now but even some of the lemmings on Wall Street are starting to pay heed. Sharp stock market corrections usually precede the worst of recessions.  I expect the time is not too far away.


----------



## ithatheekret

There have been a couple of notable comments made by Fed members with regards to dousing hopes of another rate cut . The timing of which , I find questionable in relation to market information , because the bonds look to be pricing in another rate cut . 

Then recently a Mr. Krozner ( Fed member ) , suggested in comment , that there could be a  rough patch ahead for the US housing market , from falling house prices , a slowdown in home building and " subdued consumer spending " . this was added to the comment that the Fed would not be cutting at the next policy meeting ....... noting that he also said that he did not rule out a cut in the future . 

Oh yeah right ...... " Future " , can we get a timeline on that one ..........

The futures market has been at a standstill , the two year yield dropped back
and the pricings have been stuck in the mud .

Now whose focus do we adhere to ? The treasury futures market or Fed members , who are all line up behind , that strong USD dollar policy ........


----------



## dhukka

ithatheekret said:


> There have been a couple of notable comments made by Fed members with regards to dousing hopes of another rate cut . The timing of which , I find questionable in relation to market information , because the bonds look to be pricing in another rate cut .
> 
> Then recently a Mr. Krozner ( Fed member ) , suggested in comment , that there could be a  rough patch ahead for the US housing market , from falling house prices , a slowdown in home building and " subdued consumer spending " . this was added to the comment that the Fed would not be cutting at the next policy meeting ....... noting that he also said that he did not rule out a cut in the future .
> 
> Oh yeah right ...... " Future " , can we get a timeline on that one ..........
> 
> The futures market has been at a standstill , the two year yield dropped back
> and the pricings have been stuck in the mud .
> 
> Now whose focus do we adhere to ? The treasury futures market or Fed members , who are all line up behind , that strong USD dollar policy ........




December 11th is shaping up as a very interesting FOMC meeting. The bond market is screaming for a rate cut but as you said a number of Fed members are saying the current situation doesn't warrant it. Tonight the Fed will release it's first ever forecast of headline inflation which will be close to 4% - another reason not to cut. The Santa Claus rally (which hasn't shown up yet) is in real danger if the market doesn't get what it wants.


----------



## ithatheekret

There's a rumour floating around the forex markets that there could be an emergency meeting held by the Fed. re: a rate cut , which started circulating in late trade stateside . Something about an FT piece on the subject .

Conjecture I know , but the Nikkei rallied and so too the EUR/JPY cross , 

At present the crosses USD/JPY & EUR/JPY look like they are moving in tandem .

So I'll just concentrate on the 200MA .

Physics beats rumours anyday


----------



## Kauri

ithatheekret said:


> There's a rumour floating around the forex markets that there could be an emergency meeting held by the Fed. re: a rate cut , which started circulating in late trade stateside . Something about an FT piece on the subject .
> 
> Conjecture I know , but the Nikkei rallied and so too the EUR/JPY cross ,
> 
> At present the crosses USD/JPY & EUR/JPY look like they are moving in tandem .
> 
> So I'll just concentrate on the 200MA .
> 
> Physics beats rumours anyday




 How about having two bob each way???   



> Japanese shares surged in the afternoon on the back of rumors of an emergency Fed meeting and an article in the Financial Times suggesting the Fed could surprise investors in a good way by upping it economic projections tonight in conjunction with the release of the minutes of the October 30-31 FOMC meeting. The two factors seems to be mutually exclusive with the FT article implying no Fed rate cut against rumors of an emergency Fed meeting to do just this.


----------



## ithatheekret

Yeah , I rate anything out of FT as thilly thauthage material , my opinion of their commentary waded off the edge many moons ago . A piece on inflation and stability got my goat up enough to email the correspondent and let him know it would get tougher once Cable hit parity . That was pre 170's and history has the rest ..........

gotta dash ichimoku crossed


----------



## ithatheekret

I hear there's an emergency FOMC meeting .........

I cracked up listening to CNBC , the economist and Rick Santelli were at it again .

Santelli : Why are they calling out the ambulance before an accident ?

Steve Leisman : Because they know there's going to be an accident Rick .


----------



## bean

Well the DOW is currently at the moment  12864
A close below its August low 12846
According to Dow Theory it will be in A BEAR MARKET

http://stockcharts.com/school/doku.php?id=chart_school:market_analysis:dow_theory


----------



## theasxgorilla

bean said:


> Well the DOW is currently at the moment  12864




I prefer the S&P500, which isn't down that low yet.


----------



## wayneL

theasxgorilla said:


> I prefer the S&P500, which isn't down that low yet.



Yes. I don't understand why serious traders still look at the Dow, with all its Sesame St connotations.

The Dow is OK for Bubblevision, Ma and Pa investor, and assorted muppets... but not us!


----------



## Frank D

Two reason why serious traders still trade the DOW,  it moves in tandem with the S&P, and provides the exact same patterns.

Secondly the spread on ES-minis doesn’t favour traders when working in price increments especially short-term intra-day traders. The spread of the contract is a major factor when trading. The wider the spread the worse it will be for any trader because it limits our money management.

Trading the ES places you at a disadvantage because of the spread, and in fact, it could put you as much or as far as 60%, because of the increments between the two when you compare the Dow and ES iminis

The Dow minis moves in 1 point increments, whereas the ES moves 1 point in 4 point increments, so when you are trading the DOW you have 6 more places to trade and place your stop, or profit objective compared to the ES.

This is very important for any discipline traders using discipline stops or even profit objectives using the Range bars or any method

· 1 point in the E-mini S&P = about 10 points in the Dow minis 
· 1 point in the E-mini S&P = $50; 10 points in the CBOT mini-sized Dow = $50

So the $values of the two are the same, and when you look at the movements of the ranges, again they are very similar over the course of the trading day. 

When you factor in the spread you can see what a disadvantage is when trading the ES.

By trading the Dow minis, the trader is essentially cutting the spread by 60 percent, due to having 6 more places to trade in the same value area.

Thr only thing about ES is the ‘volume’ which makes slippage far more manageable


----------



## wayneL

Frank D said:


> Two reason why serious traders still trade the DOW,  it moves in tandem with the S&P, and provides the exact same patterns.



Yes, true that top traders "trade" dow eminies. 

And of course they are nearly 100% correlated. But for the purposes of the type of analysis usually discussed here, SP500 is more representative.

IMO of course, and each to their own.


----------



## >Apocalypto<

Frank D said:


> Two reason why serious traders still trade the DOW,  it moves in tandem with the S&P, and provides the exact same patterns.
> 
> Secondly the spread on ES-minis doesn’t favour traders when working in price increments especially short-term intra-day traders. The spread of the contract is a major factor when trading. The wider the spread the worse it will be for any trader because it limits our money management.
> 
> Trading the ES places you at a disadvantage because of the spread, and in fact, it could put you as much or as far as 60%, because of the increments between the two when you compare the Dow and ES iminis
> 
> The Dow minis moves in 1 point increments, whereas the ES moves 1 point in 4 point increments, so when you are trading the DOW you have 6 more places to trade and place your stop, or profit objective compared to the ES.
> 
> This is very important for any discipline traders using discipline stops or even profit objectives using the Range bars or any method
> 
> · 1 point in the E-mini S&P = about 10 points in the Dow minis
> · 1 point in the E-mini S&P = $50; 10 points in the CBOT mini-sized Dow = $50
> 
> So the $values of the two are the same, and when you look at the movements of the ranges, again they are very similar over the course of the trading day.
> 
> When you factor in the spread you can see what a disadvantage is when trading the ES.
> 
> By trading the Dow minis, the trader is essentially cutting the spread by 60 percent, due to having 6 more places to trade in the same value area.
> 
> Thr only thing about ES is the ‘volume’ which makes slippage far more manageable





Frank,

is that the case on the normal S&P contract?


----------



## Frank D

Trade it....

Same applies:- S&P moves in quarter point increments

  But most retail traders trade the ES-minis and not the S&P...


----------



## >Apocalypto<

Frank D said:


> Trade it....
> 
> Same applies:- S&P moves in quarter point increments
> 
> But most retail traders trade the ES-minis and not the S&P...




Cheers Frank


----------



## dhukka

For the first time the title of this thread might actually be accurate IMO.  Markets are still grimly holding on for a rate cut however the Fed looks to be drawing a line in the sand. On the one hand they have reduced their growth forecasts for next year and see inflation peaking in *4Q07* - ammunition for a rate cut, yet their outlook for unemployment (to stay below 5%) and commentary suggest that further rate cuts are not warranted at this time:



> "Participants generally agreed that the available data suggested that consumer spending had been well maintained over the past several months and that spillovers from the strains in the housing market had apparently been quite limited to date. Nevertheless, a number of participants cited notable declines in survey measures of consumer confidence since the onset of financial turbulence in mid-summer, along with sharply higher oil prices, declines in house prices, and tighter under-writing standards for home equity loans and some types of consumer loans, as factors likely to restrain consumer spending going forward. Moreover, anecdotal reports by business contacts suggested a softening in retail sales in some regions of the country. Participants expressed a concern that larger-than-expected declines in house prices could further sap consumer confidence as well as net worth, causing a pullback in consumer spending. *All told, however, participants envisioned that the most likely scenario was for consumer spending to continue to advance at a moderate rate in coming quarters, supported by the generally strong labor market and further gains in real personal income."*




The US market supposedly rallied in the last hour of trade due to rumours of an emergency Fed easing. Whilst not out of the realms of possibility it looks unlikely. 

It looks more and more like a replay of August only this time credit problems are worse... actually most things are worse (housing, corporate profits, consumer and business sentiment, manufacturing).  Add to that, the likelihood of the Fed riding to the rescue either at the December 11th meeting or before looks doubtful. Without that psychological intervention by the Fed an imminent and severe correction is on the cards IMBO (In My Bearish Opinion).


----------



## Kauri

dhukka said:


> The US market supposedly rallied in the last hour of trade due to rumours of an emergency Fed easing. Whilst not out of the realms of possibility it looks unlikely.
> 
> .




 The rumour surfaced early on, pretty much in direct contradiction to the Feds outlook, when the affect wore off it was given a second run towards the close, pulled the market up nicely if you were in the know.   Interesting to see the Nikkei has discounted it today... wonder what rumour will be Fed to the punters tonight???  
Cheers
..........Kauri


----------



## Edwood

here's another take on Dow theory

http://www.safehaven.com/article-8851.htm - Sol Palha has called it pretty well on the way up, lets see how we goes now....

....a couple of charts comparing DJIA to UTIL - daily and 15 mins


----------



## ithatheekret

I go with an old theory on the Dow transports , something that has been out of sight out of mind to the majority market stateside .

So goes the transports index , so goes the rest .

Of course the fact that starbucks is not looking good lately and that is a very good barometer for their markets and the economy ( consumer spending side ) ......


----------



## Awesomandy

With HSI down 4%, N225 at 14,837, and FTSE down about 100 points, it looks like this might be it.


----------



## Edwood

hi ithatheekret, I don't follow either theory fwiw was just flagging the alternate view.  based on tonights US close I think that puts us into a bear market according to classic Dow theory - is that right?


----------



## bean

Edwood said:


> hi ithatheekret, I don't follow either theory fwiw was just flagging the alternate view.  based on tonights US close I think that puts us into a bear market according to classic Dow theory - is that right?




Yes it does
*****
However, the reaction high of the secondary move would form and be lower than the previous high. After making a lower high, a break below the previous low would confirm that this was the second stage of a bear market.
Primary Bear Market - Stage 2 - Big Move

As with the primary bull market, stage two of a primary bear market provides the largest move. This is when the trend has been identified as down and business conditions begin to deteriorate. Earnings estimates are reduced, shortfalls occur, profit margins shrink and revenues fall. As business conditions worsen, the sell-off continues.
****


----------



## ithatheekret

Edwood said:


> hi ithatheekret, I don't follow either theory fwiw was just flagging the alternate view.  based on tonights US close I think that puts us into a bear market according to classic Dow theory - is that right?




Yes mate , and it's official for Japan too .

We'll see in 6200 tomorrow , if there's too much earth shattering across the other bourses , we could see in anything close to 5800 after that ....... and below that level I believe is 5400 then 5300 .


We''ll have to see how hard everyone else gets hit first , as they will share the pain around .


----------



## wavepicker

ithatheekret said:


> Yes mate , and it's official for Japan too .
> 
> We'll see in 6200 tomorrow , if there's too much earth shattering across the other bourses , we could see in anything close to 5800 after that ....... and below that level I believe is 5400 then 5300 .
> 
> 
> We''ll have to see how hard everyone else gets hit first , as they will share the pain around .




I don't beleive this will the case just yet, a rally might start soon that might well carry into Feb next year, then the bear campaign will start in earnest here

Cheers


----------



## aaronphetamine

ithatheekret said:


> Yes mate , and it's official for Japan too .
> 
> We'll see in 6200 tomorrow , if there's too much earth shattering across the other bourses , we could see in anything close to 5800 after that ....... and below that level I believe is 5400 then 5300 .
> 
> 
> We''ll have to see how hard everyone else gets hit first , as they will share the pain around .




Gday mate, this is my first post in this thread but i avidly read here daily!

In my opinion i dont think we will see 6200 tomorrow at all, this is my reason/s and they arent technical or anything just based on my feelings considering that ;

The Nikkei closed slightly up
The FTSE is currently up nearly 30 points at the moment... and,
The US markets will be closed becuase of their thanksgivings, so no more bad news will be coming out until they trade on friday.

It seems that any chance the aussie markets have of trying or attemping to try and claw back, they have done recently.

Your views please ?


----------



## ithatheekret

aaronphetamine said:


> Gday mate, this is my first post in this thread but i avidly read here daily!
> 
> 
> Your views please ?




G'day aaron

Copper , Lead , Zinc and Banks  all have woes at the moment and we'll be the only port open for the sailors to riot in ......... so I'll be watching the bids on the LME base metals and for news on NAB and Rams etc.


----------



## Trembling Hand

wavepicker said:


> I don't beleive this will the case just yet, a rally might start soon that might well carry into Feb next year, then the bear campaign will start in earnest here
> 
> Cheers




Not picking you out (I'm sure you have given it more thought than most) but why do we have to go from a Bull to Bear market?
Stocks don't just go up or down, many(most?) go nowhere for a long time. Why don't I see people considering a sideways market. Why is it that it seems everyone is looking for gloom?


----------



## wavepicker

trembling Hand said:


> Not picking you out (I'm sure you have given it more thought than most) but why do we have to go from a Bull to Bear market?
> Stocks don't just go up or down, many(most?) go nowhere for a long time. Why don't I see people considering a sideways market. Why is it that it seems everyone is looking for gloom?




Depends what timeframe you are talking about TH.

BTW, A sideways market can be just as frustrating as a bear(especially if you long term holder who has been used to the instant returns of the last 5 years!!). 

THE DJIA was in a sideways market from 1966 to 1982 but is was often termed the bear market of the 70's.


----------



## >Apocalypto<

wavepicker said:


> Depends what timeframe you are talking about TH.
> 
> BTW, A sideways market can be just as frustrating as a bear(especially if you long term holder who has been used to the instant returns of the last 5 years!!).
> 
> THE DJIA was in a sideways market from 1966 to 1982 but is was often termed the bear market of the 70's.




This post is to both of you guys, Wavepicker and Trembling hand.

from what i have read in my Gann book, Distribution on a weekly chart can last for a long time at the top of a bull market before it starts to descend with force and speed. Not trying to say i am right, I actully agree with both of u and think you both make good points.


----------



## wavepicker

Trade_It said:


> This post is to both of you guys, Wavepicker and Trembling hand.
> 
> from what i have read in my Gann book, Distribution on a weekly chart can last for a long time at the top of a bull market before it starts to descend with force and speed. Not trying to say i am right, I actully agree with both of u and think you both make good points.




Hello Joseph,

This is what I have noticed in the past. After a long trend, a market may either :-

-Enter a long term consolidation, from were it can either start a new trend in the opposite direction OR put in a final blowoff high before changing trend.

-Enter a distibutive or stuggling trend such as an Ending Diagonal and change trend

-Or simply blowoff or capitulate(depending if a bull or bear market respectively) before changing trend.

These are just SOME of the possible scenarios and there are more(Mclaren covers most)

Cheers


----------



## ithatheekret

Xstrata .....  nearly all the oiler and gas plays , quite a few banks all heading south on LSE .

Few base metals sluggish , other digging holes , zinc is up . Gold is above $800 so there's a couple of positives .

I shouldn't have said tomorrow for 6200 , apologies , but tomorrow should start it off . I expect a Christmas rally for Santa , that's a must , especially if they rally for George .

5200  5300  5600  5800  6200 6300  6500  6800  are all the ranges we have seen . These were stages of capital investment , that money is already starting to be protected , it's everyones super etc. , which at times can be sidelined and hoarded until ready for use .

It goes into the market at stages , each move measured by events , supports , fundamentals and technicals . Then we had the news that all stockmarkets hate ...... interest rate rise , the next one will have us at 7% .

Offshore foreign investors are already worried about a few bank holdings related to subprime issues , credit has shut shop for the rest of the year and might come out next year .

Value and Quality are the sort afters , added to that flights to safety , but ..... when it hits everything get's hit . 
Gold , silver and their stocks anything of value that can put liquidity in motion will be attacked . Supports as always will come from Asia for prec. metals , unfortunately other westerners don't see it that way and can exhaserbate the swings after a holiday ...... nothing is sacred to them , except ........ perception , ours , of their investment market .

The news on the big economy front is bad USA softening is a nice word , but they've been in a technical recession for nearly a year , the statements on WMDs held more credence than the statistics spat out at the markets .
They're not the only ones ,  Japanese spinners were touting solid growth blah , blah , blah ....... first cab off the Recession rank . ..... and two major banks there have heavy subprime issues too , except we don't know yet 

With the softening in the US , companies here that have their operations concentrated on the US consumer and so on will also need to be placed in the fridges butter tray .

All the troubles are just starting to emerge though and the unwind will folllow until confidence returns .
The double blow on our indexes are the ores and the banks ...... on top of an interest rate rise , one notch off 7% .


----------



## macca

Seems no one wants to buy their cr**py paper in Europe either now

<Europe Suspends Mortgage Bond Trading Between Banks (Update3)

By Esteban Duarte and Steve Rothwell

Nov. 21 (Bloomberg) -- European banks agreed to suspend trading in the $2.8 trillion market for mortgage debt known as covered bonds to halt a slump that has closed the region's main source of financing for home lenders. >

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aLzGEmrjr0fA

I guess this is the "left field event" we keep looking over our shoulder for 

2008 looks like it might be a good time for trading short CFDs and indexes


----------



## Uncle Festivus

> Stocks don't just go up or down, many(most?) go nowhere for a long time. Why don't I see people considering a sideways market. Why is it that it seems everyone is looking for gloom?



The data for me indicates a bearish stance, while not actively 'looking' for gloom, because it's not hard to find these day's .

Interesting discussion/comparison of Dow theory and sideways markets.

A quick observation could assume that our market has also been 'manipulated' by situation stocks while the rest of the market has been flat, resulting in the head formation, now right shoulder in the XJO?

FWIW, maybe our equivalent for Dow theory style comparisons is consumer discretionary XDJ and ASX200 XJO?

A clear divergence since May 07. Is the Aussie consumer tapped out also?


----------



## ithatheekret

I don't think there's that much too it all to be honest . Corrections are healthy , we can't just keep going up , fundamentals and gravity , whilst unfortunate , are a necessity .

If we look at the money be taken out of the market , we know it will come back , it's just a matter of when .

Funds managers are cyclical in their investing , each going through different stages of investment as they see what fits best , if it doesn't fit they sideline the cash for later .

They evaluate the market thoroughly before dipping their toes , be it in large caps for growth , small caps for value , emerging markets or the international big boards .

What is important is the base economy which the companies operate in and the conditions within that economy .

Right now I'm watching the banks get closer and closer to my entries , soon I hope I will have cheap bank stocks tucked away , the yield on them is still very attractive to me , I just want them at a lower price .


----------



## blablabla

Current base metal prices are falling due to rising output from mines globally and also due to some short-term efforts by China to rein in runaway growth. Lower base metal prices put downward pressure on the SPs of the base metal miners that constitute a large proportion of the ASX, and also reduces demand for the Australian dollar sending it lower. The ausdollar has been weakening for the past fortnight in any case as an indirect result of recessionary fears in the USA being translated into global bearishness. The US dollar remains on its longterm downward path, fortunately for the ausdollar which could otherwise have fallen further. 

For Australia, its weaker dollar pushes up prices and inflation, making another rate rise soon more likely. Rate rises strengthen the dollar. When the dollar was stronger recently this was one of few good arguments against a rate rise, but the present weaker dollar is now a reason to favour a rate rise. The higher the lending rate rises, the less attractive shares become. A bearish vicious circle could be in the making for the Australian share market. 

Until a circuit-breaker switches sentiment to the positive, my forecast is that the general downtrend will not be turning upwards just yet. When global sentiment is as bearish as it is at the moment, the bearishness has a tendency to be self-fulfilling. Smart bears who fear further falls take their money out of the market, putting yet more downward pressure on prices. All that is required now to complete this particular correction is 2 or 3 days of carnage to push prices low enough for bulls to re-emerge. If this does happen then don't worry, there will probably be a rapid rebound similar to after the August correction.


----------



## Kauri

Ye gods and little fishes.... he's missed his calling... should have been an each-way bookie...  
Cheers
........Kauri

GreenPeas'n'Ham speak...



> November 23. The Ex-Fed Chairman is speaking in Oslo and has told reporters that the inflation impact of a weaker Dollar is sometimes unimportant, sometimes very important and that were it not for flexibility in the economy the chances of a U.S recession would be above 50%.


----------



## ithatheekret

*Japanese Regulator declares $12Bln in subprime dilema for Japanese banks*


----------



## Aussiejeff

Only $12Billion? Is that all?


----------



## ithatheekret

Yes , that's all they've announced to date , we know there will be more after the resets next year , I had this info a couple of weeks back , tretaed it as heresay , until I noted the balance sheets difference quoted to me , that came out in an audit report , going back last year . 
I hinted of it in prior posts , but the first wave of news is out know , so we can discuss it at length without fear of legal implications now .

I've heard claims of the figure exceeding 28Bln , but have no alternative as to rate them as plausible gossip or rumour .

I should clarify my 6200 statement a little more as most of the decline , will become forthcoming after the US inspire confidence rally ends . A correction is in motion , unfortunately we will not be able to avoid , as we tend to follow the US markets in our opens and  the strategies of the high rollers . Which I don't really mind as it is a quasi crystal ball , for our markets , giving us some forewarning , if only a day . A 6220 to 5800 correction would be very healthy for our bull run , and I would expect the new levels I spoke of in previous post , which would then bounce back and make news high AGAIN .


----------



## stockwhizben

My position is that we are now entering the next leg in the bull run, the latest bout of sell offs will ease up for a while and should be all good for a little bit and any extra news from the US unless its major will be met with 'ho hum' as people get over it like the market did after Jul/Aug for a while. I bought Friday taking the bet that stocks were too cheap to be ignored and would be bought back sooner or later, that bit came true. woo hoo

Im a bit worried about market reaction when the Fed doesnt cut rates Dec 11 tho. I say there'll be a sell off then. 

I'm also transferring out of banks and going overweight in the big resources and leighton. Fingers crossed

They are just my thoughts at the moment running my portfolio.


----------



## son of baglimit

http://www.fnarena.com/index2.cfm?type=dsp_newsitem&n=7A645145-17A4-1130-F5C649FAD45219B9

look out below.........

wanna buy a cheap house in the states ??


----------



## Kauri

Beware the Taxi drivers... one of the best indicators around..



> Given the changing nature of monetary flows and the subprime issue overhanging almost everything now (Tokyo cabbies are now complaining of less year-end festivities due to losses at Japanese financial institutions due to subprime),




Cheers
.........Kauri


----------



## wayneL

son of baglimit said:


> http://www.fnarena.com/index2.cfm?type=dsp_newsitem&n=7A645145-17A4-1130-F5C649FAD45219B9
> 
> look out below.........
> 
> wanna buy a cheap house in the states ??



I wanna buy a cheap house in the UK. 

Let value return.


----------



## Kauri

early word circulating that a leading US firm has
a downward revision to Fed Funds rate call. Expects the Fed funds rate to be 3.0% by the middle of next year  ....also says that US recession risk has risen, and is now as high as 45%.
Only rumours... so far... but???
Cheers
.........Kauri


----------



## Kauri

Looks like the Financial Times (for mine not always the most reliable of sheets) is jumping in on the Back of the ADIA/Citi story...  
Cheers
.........Kauri


> November 28. The FT website carries a headline article saying that Middle Eastern and Asian sovereign funds have invested around $37bln in western financial companies this year and analysts believe there is significant appetite for further opportunities in this distressed market.
> The funds are taking a more optimistic view than the market on the outlook for banks exchanges and asset managers and could be a significant factor in stabilizing the current problems in the financial system, if the political issues are cleared.


----------



## Sean K

Kauri said:


> Looks like the Financial Times (for mine not always the most reliable of sheets) is jumping in on the Back of the ADIA/Citi story...
> Cheers
> .........Kauri



With the Arabs and Richard Branson, the world economy is safe.  Wonder when the Oracle will step up?


----------



## ithatheekret

Dow up 200 points , S&P ASX200 down 70 points ........

What no confidence rally for us ?


----------



## IFocus

John Mauldins letter Outside the Box talks about The Next Dominos: 
Junk Bond And Counterparty Risk, makes Subprime look very minor small excerp



> The introduction of CDS coincided with a favorable economic climate for creditors and debtors. Since the nadir of the last credit cycle in 2002, creditors had a uniformly positive lending experience with virtually no defaults. The CDS market blossomed and the issuance of credit expanded, untethered by considerations of risk. From a modest infancy, the notional value of CDS today surpasses the amount of underlying cash bonds by an order of magnitude.[vi]  CDS contracts now total $45.5 trillion of outstanding credit risk, growing an amazing nine-fold in the last three years alone.   Putting such a large number in some perspective, $45 trillion is almost five times the U.S. national debt and more than three times U.S. GDP.
> 
> 
> An Insurance Market with No Loss Reserves
> One way of thinking about the CDS market is that of a huge, new insurance industry whose providers reserve nothing for future losses. Imagine what would happen if $45 trillion worth of insurance policies experienced an actuarial average of 5% losses and no one had $2.25 trillion sitting around to foot the bill![vii





Focus


----------



## ithatheekret

Kauri said:


> Looks like the Financial Times (for mine not always the most reliable of sheets) is jumping in on the Back of the ADIA/Citi story...
> Cheers
> .........Kauri




I'm not surprised .......... even though , I don't buy into it .

A movement of debt , that's all it represents to me ............ and ......... I don't think it will be the last for Citi .

11% yield ...... that sizzles , would have been better off cutting the dividend , as long as there were no more problems on the book .........


----------



## ithatheekret

What about others just coming into the light ? Wells Fargo etc. , I suspect the problems are deeper there too . Not just a few billion either , triple digit figures are hinted at around the desks .


----------



## ithatheekret

Subprime losses to reach  ¥626 billion
Kyodo News
Japanese financial institutions are likely to book losses totaling  ¥626 billion in business 2007 as a result of the U.S. subprime loan crisis, according to their reports released by Tuesday.

The projected figure includes appraisal losses on securities holdings linked to subprime housing loans extended to borrowers with poor credit histories in the United States.

In the April-September first half of the business year, banks, credit unions and other financial concerns booked a total of  ¥370 billion in charges against subprime-related losses.

The total included  ¥145.6 billion written off by Nomura Holdings Inc., Japan's biggest securities house.

The outstanding balance of subprime-related securities held by financial institutions totaled  ¥1.33 trillion at the end of September.

Norinchukin Bank on Tuesday became the latest major Japanese financial institution to release a report on subprime-linked losses, saying the total was  ¥105.7 billion for the April-September period.

c/- the Japan Times

http://search.japantimes.co.jp/cgi-bin/nb20071128a3.html


----------



## dhukka

ithatheekret said:


> I'm not surprised .......... even though , I don't buy into it .
> 
> A movement of debt , that's all it represents to me ............ and ......... I don't think it will be the last for Citi .
> 
> 11% yield ...... that sizzles , would have been better off cutting the dividend , as long as there were no more problems on the book .........




Citibank has effectively gone from subprime lender to subprime borrower. *11%* is horrible, corporate bonds are yielding around *9%* at the moment. That adds an extra * $825* million annually to Citigroup's expenses. Not to mention the dilution to existing shareholders. 

It should be remembered that Citi's balance sheet is over *$2* trillion so a *$7.5* billion injection does not get them out of the woods - far from it. Maintaining their dividend will mean they pay out *90%* of profits this year and based on forecasts *60 - 70%* next year so a cut to the dividend can't be ruled out yet.

At this point I think Citi have chosen the lesser of two evils. The stock was up a lacklustre *1.5%* yesterday, on this supposed good news, imagine what would have happened if they announced a cut in their dividend.


----------



## Kauri

and now for the latest indicator.. just in case there are not enough out there already...   
Cheers
............Kauri



> The Globe and Mail has another obscure economic indicator it notes, sales of U.S. motor homes. Apparently, sales fall every time the US is about to go into recession and a University of Michigan forecast says that those sales will decline 4.8% next year. The article recommends watching Winnebago stock.


----------



## Sean K

dhukka said:


> Citibank has effectively gone from subprime lender to subprime borrower. *11%* is horrible, corporate bonds are yielding around *9%* at the moment. That adds an extra * $825* million annually to Citigroup's expenses. Not to mention the dilution to existing shareholders.
> 
> It should be remembered that Citi's balance sheet is over *$2* trillion so a *$7.5* billion injection does not get them out of the woods - far from it. Maintaining their dividend will mean they pay out *90%* of profits this year and based on forecasts *60 - 70%* next year so a cut to the dividend can't be ruled out yet.
> 
> At this point I think Citi have chosen the lesser of two evils. The stock was up a lacklustre *1.5%* yesterday, on this supposed good news, imagine what would have happened if they announced a cut in their dividend.



Dhukka, do you know what % of revenue Citi get from sub prime related products compared to the rest of their revenue streams. Also, what is the % of their writedowns related to sub prime, compared to overall profit? 

The reason I ask is that we're hearing a great deal about write downs, but I'm not hearing how that compares to their profit. Same for the others banks with sub prime write downs. Could it be just a small percentage of revenue?

As you say, their overall balance sheet is $2 trillion, so how much damage is the current and suspected write downs doing to do long term? 

Don't worry if you haven't got the info handy, I'll look for it myself otherwise.

Cheers.


----------



## rub92me

Kauri said:


> and now for the latest indicator.. just in case there are not enough out there already...
> Cheers
> ............Kauri



They had a feature on this the other night on Bloomberg - the RV (Recreational Vehicle) indicator. President of the RV organisation was not too gloomy about the situation though - expecting next year to be flat or slight decline. Unlike other recessions where they really saw a plunge in the RV indicator.


----------



## krisbarry

Look out for the massive rally today, as  the dow Jones moved up hard overnight


----------



## nizar

Stop_the_clock said:


> Look out for the massive rally today, as  the dow Jones moved up hard overnight




You mean like yesterday when the DOW closed +215 and we followed by closing down -68 ?


----------



## jonojpsg

nizar said:


> You mean like yesterday when the DOW closed +215 and we followed by closing down -68 ?




Yeah what's that all about anyway??  When was the last time the DOW went up 2% and we went down 1%?


----------



## professor_frink

nizar said:


> You mean like yesterday when the DOW closed +215 and we followed by closing down -68 ?




If you have a look at a comparison chart of the dow and SPI futs, the 2 markets have been moving pretty well in tandem the past few days.


----------



## hangseng

jonojpsg said:


> Yeah what's that all about anyway??  When was the last time the DOW went up 2% and we went down 1%?




It wont happen today, the market has been heavily manipulated and very volatile. We are heading for a Xmas rally and I am looking for oversold stocks.

There is no reason at for our market to be down.


----------



## dhukka

kennas said:


> Dhukka, do you know what % of revenue Citi get from sub prime related products compared to the rest of their revenue streams. Also, what is the % of their writedowns related to sub prime, compared to overall profit?
> 
> The reason I ask is that we're hearing a great deal about write downs, but I'm not hearing how that compares to their profit. Same for the others banks with sub prime write downs. Could it be just a small percentage of revenue?
> 
> As you say, their overall balance sheet is $2 trillion, so how much damage is the current and suspected write downs doing to do long term?
> 
> Don't worry if you haven't got the info handy, I'll look for it myself otherwise.
> 
> Cheers.




Not sure about the revenue splits. Beware though that whatever it was historically it will change dramatically going forward given that the sub-prime market has effectively frozen up. The issue is not so much what they make from subprime related product but what assets they hold that are backed by subprime. 

Citi had approximately *$55* billion in U.S. sub-prime related exposures as at September 30th 2007. That's pre the writedowns mentioned below. Also remember they are responsible for a number of SIV's funded through commercial paper that nobody wants that have invested in theses same mortgage backed assets. That exposure is estimated at around $80 billion.

Citigroup made *$21.5*billion last year. For the first 3 quarters this year they made *$14.8* billion, that's including about a $3 billion writedown in the 3rd quarter. Writedowwns in the 4 th quarter are expecting to be in the range of $8 - $11 billion pre tax, $5 - $7 after tax, some say it may be more, the CFO says he isn't sure. Best case scenario profit for the 4th quarter is that profit is wiped out and the full year profit remains around *$14.8* billion, worst case profit is about halved from the previous year. 

So roughly, best case is writedowns will represent 30% of profit worst case about 50%.


----------



## wavepicker

nizar said:


> You mean like yesterday when the DOW closed +215 and we followed by closing down -68 ?




That won't be the case IMO today Nizar. As mentioned in the XAO Analysis thread yesterday, we put a low in some days ago. As much as I have a bearish bias myself and would dearly like to see this market get smashed, the bears will have to wait till next year(perhapsd Feb/March when this leg is due to finish)  for that, and for now the market will put in one final leg to new highs. 

being a the last 2 subdivisions of a 5th wave I would not expect these to move up with as much momentum as the last 6 months(apart from today whch will obviously be a good move)


Cheers


----------



## Kauri

A bit of a positive for the exchanges...???
Cheers
..........Kauri



> China Fund - Seeking Reasonable Long-Term Returns  Over DowJones. The fund  notes that it is looking at only "acceptable" risk. According to the report, the fund has no plans to invest in infrastructure but will focus mainly on financial products traded in the open market and index products. It will initially invest via fund managers, noting that it will need more time to prepare for large investments. Branches at major international financial centers will be opened, as per reports earlier this week that they are hiring Japanese strategists. This news Fed into talk of major investments in Japanese stocks and a major rally on the TSE on Monday.


----------



## nizar

wavepicker said:


> That won't be the case IMO today Nizar. As mentioned in the XAO Analysis thread yesterday, we put a low in some days ago. As much as I have a bearish bias myself and *would dearly like to see this market get smashed,* the bears will have to wait till next year(perhapsd Feb/March when this leg is due to finish)  for that, and for now the market will put in one final leg to new highs.




Well said!! hahaha 

You know what they say, bulls make money, bears make money, and sheep get slaughtered


----------



## stockwhizben

Its not fair, US goes up heaps and we only go up by a bit. But when US goes down we go down by round about the same. Dodgy. And as for China, they go up way more than any of the others
This better mean that when profit takers move in on US or the dow drops on some bad news that we go up. That would only seem fair to me


----------



## dhukka

stockwhizben said:


> Its not fair, US goes up heaps and we only go up by a bit. But when US goes down we go down by round about the same. Dodgy. And as for China, they go up way more than any of the others
> This better mean that when profit takers move in on US or the dow drops on some bad news that we go up. That would only seem fair to me




Your claim that 







> "the US goes up heaps and we only go up by a bit. But when US goes down we go down by round about the same."



 is patently false. How about Tuesday for example? Our market fell *-0.6%* after the US market was off more than *-1.5%* the previous night. 

All the US indices have come off more than *10%* from their October highs (excluding the rally of the last two days) by contrast the ASX fell *-7.8%* from it's highs to it's low last week. The US market has clearly felt more pain to the downside than than our market. 

What seems fair to you is irrelevant, the market does with it does, fairness has nothing to do with it.


----------



## roland

dhukka said:


> Your claim that  is patently false. How about Tuesday for example? Our market fell *-0.6%* after the US market was off more than *-1.5%* the previous night.
> 
> All the US indices have come off more than *10%* from their October highs (excluding the rally of the last two days) by contrast the ASX fell *-7.8%* from it's highs to it's low last week. The US market has clearly felt more pain to the downside than than our market.
> 
> What seems fair to you is irrelevant, the market does with it does, fairness has nothing to do with it.




Correct me if I am wrong, but I believe that compared to world markets, we have zoomed ahead of major world indexes, so we are probably going to see some stagnation as the rest catch up. The alternative is to expect some index retraction to pull the Aussie market back in line.

Otherwise we are going to do what we would all like, and that is to be the leading world index, on a comparative percentage growth rate. I suspect my first option of some stagnation would be most likely.

This is just "gut feeling" stuff, no technical basis


----------



## dhukka

roland said:


> Correct me if I am wrong, but I believe that compared to world markets, we have zoomed ahead of major world indexes, so we are probably going to see some stagnation as the rest catch up. The alternative is to expect some index retraction to pull the Aussie market back in line.
> 
> Otherwise we are going to do what we would all like, and that is to be the leading world index, on a comparative percentage growth rate. I suspect my first option of some stagnation would be most likely.
> 
> This is just "gut feeling" stuff, no technical basis




Of course it all depends on time frames and what markets you are talking about. We have outperformed the UK and US markets this year undoubtedly however not the Hong Kong or Shanghai markets. 

It's also interesting to take a look at the effects of currencies. The US market is up a few percent for the year however if measured in Euros it would probably still be down.


----------



## hacheln_mice

dhukka said:


> Your claim that  is patently false. How about Tuesday for example? Our market fell *-0.6%* after the US market was off more than *-1.5%* the previous night.
> 
> All the US indices have come off more than *10%* from their October highs (excluding the rally of the last two days) by contrast the ASX fell *-7.8%* from it's highs to it's low last week. The US market has clearly felt more pain to the downside than than our market.
> 
> What seems fair to you is irrelevant, the market does with it does, fairness has nothing to do with it.




Well said.  To put things in perspective, the All Ords has absolutely smashed the crappy S&P 500 on a relative basis.


----------



## Kauri

Keep hearing that a Financial Inst. is facing big writedowns,, in the Bln's.. possibly in the UK... has been circulating for a couple of days... but, unusually, not a mention of the firms name, so I'm guessing it might be a bit of mischief... mind you i have enjoyed the ride on the Cable on the back of it..   
Cheers
........Kauri


----------



## ithatheekret

I know of Northern Rock and the mega bail out by the Treasury dept. , heard news of Alliance & Leicester top up by Credit Suisse . A&L also had to write down 100M p.stg. in treasury investments , but won't record it as a loss ....

Also , one that I thought was very shrewd Virgin & Richard B. has helped with 200M p.stg. input with chains attached if performance targets are achieved .

Noting that "the" $$Wilbur Ross$$ ( US) will be assisting with restucturing .


----------



## Kauri

ithatheekret said:


> I know of Northern Rock and the mega bail out by the Treasury dept. , heard news of Alliance & Leicester top up by Credit Suisse . A&L also had to write down 100M p.stg. in treasury investments , but won't record it as a loss ....
> 
> Also , one that I thought was very shrewd Virgin & Richard B. has helped with 200M p.stg. input with chains attached if performance targets are achieved .
> 
> Noting that "the" $$Wilbur Ross$$ ( US) will be assisting with restucturing .




 Very soft whispers that it is Royal Bank of Scotland.... but all seems to have gone quiet again...
Cheers
..........Kauri


----------



## ithatheekret

RBS yeah wow , that's a big bank .

There motto is " make it happen " , I wonder if they did  

now you've got me on a search .


----------



## ithatheekret

I can only find 2B pd. stg. ( around $4B USD ) so far , but that AMRO buy close to 24B pd. stg. is looking shakey with the derivative plays it held .

I bet Barclays are sitting back smirking after the fight for it , then there's always Bank of America , both have probably had a good look at the AMRO book .................

I wonder how ING is there were reports of a merger between AMRO and ING being talked about prior to the takeover . 

An interesting side note , is that RBS took a long short on BHP .


----------



## Kauri

OOOOppps   
 The New York Times carried a piece over the weekend saying that a new government report shows that the U.S. economy may have created far fewer jobs this year than the payroll data implies. The sharp downward revision in Q2 personal income growth, when better employment figures were available, i.e. unemployment tax collections, make it likely that job creation data may be revised in coming months. Personal income grew 1.6% in Q2 against 4.5% estimated, suggesting job creation at 50,000 a month, not the current 126,000 estimate and an economy far weaker than had been thought. If this report gains credence, calls for a 50 pts rate cut will intensify.

Cheers
........kauri


----------



## explod

Kauri said:


> OOOOppps
> The New York Times carried a piece over the weekend saying that a new government report shows that the U.S. economy may have created far fewer jobs this year than the payroll data implies. The sharp downward revision in Q2 personal income growth, when better employment figures were available, i.e. unemployment tax collections, make it likely that job creation data may be revised in coming months. Personal income grew 1.6% in Q2 against 4.5% estimated, suggesting job creation at 50,000 a month, not the current 126,000 estimate and an economy far weaker than had been thought. If this report gains credence, calls for a 50 pts rate cut will intensify.
> 
> Cheers
> ........kauri




Well of course, the system has been fudging the figures big time over the last couple of years.  Will be interesting to see how much longer they can suck in the sheeple.  Must be getting very close to breaking point now.


----------



## numbercruncher

> Dec. 3 (Bloomberg) -- U.S. corporate profits are in a recession, and the entire economy may not be far behind.
> 
> Slower sales and higher energy and labor costs are forcing companies from Bear Stearns Cos. to Pitney Bowes Inc. to reduce spending and hiring. Their efforts to keep earnings from eroding even further raise the risk that the economy, already weakened by the steepest housing slide since 1991, may shrink sometime next year.
> 
> ``The earnings recession has already arrived,'' says David Rosenberg, North America economist for Merrill Lynch & Co. in New York. ``We are going to see an economic recession in '08.''




http://www.bloomberg.com/apps/news?pid=20601087&sid=a_TgRes4VjjU&refer=home


----------



## Kauri

Life's hard.. it seems



> December 4th. Merrill Lynch has just issued a comprehensive outlook for 2008 this morning, forecasting that the Fed will need to cut rates to 2% in 2008 from current levels of 4.25%. (Indeed it is very arguable that rates will have to go that low just to fund the mortgage resets that peak in Q1 2008.) Merrill"s economists also forecast the first consumer recession in the US since 1991. The investment bank is also tipping a Japanese rate cut next year as well as growth slows in Japan.




also just wondering... was it in the late 80's in Aussie that we last had slowing growth and trade deficet blow-outs...  

Cheers
.........Kauri


----------



## Kauri

Kauri said:


> Life's hard.. it seems
> 
> Cheers
> .........Kauri




On both sides of the Pond it seems...
Cheers
..........Kauri
PS.. now there is talk that they may nationalise NR!!!!



> Sydney December 5. The FT, Guardian, Telegraph and Times all lead with similar stories saying that the FSA has warned mortgage lenders that 1.4mln homeowners face a sharp jump in loan repayments and many may find it impossible to refinance their mortgages, while the Independent leads on a bearish round up of the UK"s economic problems entitled "is Britain heading for the perfect storm?".
> These sentiments combined with the record fall in the Nationwide Consumer Confidence release today suggest that a negative bias is likely at the London open, with pressure building on the MPC for a rate cut on Thursday.


----------



## ithatheekret

We should lend the US  Paul Keating .

Why is the Fed rolling on its principals and trying to buy off a recession ?

Do they really think that waving the magic wand and inducing a rate cut will save there backsides ?

I can just see the Reserve Bank bailing out mortgages taken out that should never have been issued ......... NOT .

No they let the market forces sort themselves out . 

Generation Y in the US is just about to be stuck with the bill .


----------



## ithatheekret

One thing that could be a look in to , would be a discussion , per views to the business cycle . My view is that we are at the closing end of a 15 year cycle now , credit is tightening and becoming expensive , whilst core prices are rising along with stagflationary hits at staples as well . 

Will the cycle , with the Fed now cutting , as is believed , be stretched to snapping point as the elasticity gives ?

I've heard comments that Feb 08 will see a cut by the RSB , I think it absurd to even test the thinking water with that idealogy . That would mean that the Reserve is willing to placate a markets whim and not concentrate on inflation and peaks in the trading / exchange balance . The peaks are due to a credit overflow , these overflows have to be brought under control , a rate cut or pause will have no effect on them , better they find a Samaritan . A hike may well be the fatal blow for many , but these are loans that struggled to meet the first years repayment . A better gauge for the RSB than saving the blind is the 90 day bill , the balance of trade and the causes of inflation .

I would like to know whether the Treasury Dept. had to be saved from a 43 cent sell down , I have always been suss on that one .............

I believe the administration did ........ in an attempt to prolong the business cycle .


----------



## ithatheekret

Just listening to Neil Dwayne on CNBC , had a giggle at his comment , 

" clearly the US economy has stalled " . 

No chit Neil , oh look the Fed is already out pushing ............


----------



## ithatheekret

We saw the Contraction rally in the US , now we'll see if the UK gets one too , there all having sphincter reactions , rate cut will be the markets rally cry ........


----------



## ithatheekret

my stop / trailer and rev stop all got hit at once ???? moneybags are back .

I'm ....... apparently ......... now short , best be closing that out .


----------



## ithatheekret

out 110.18 somewhere in long 110 and all the 2's


----------



## ithatheekret

US futures are looking reasonable . Is this the Chrissie rally , looks like a 120+ open for the Dow ? Will there be a last hour sell off ?


----------



## nomore4s

ithatheekret said:


> US futures are looking reasonable . Is this the Chrissie rally , looks like a 120+ open for the Dow ? Will there be a last hour sell off ?




FSTE100 is up over 100 points atm as well, not that it's as relevent but.....


----------



## ithatheekret

Someone get on the blower and get Kev to freeze rates for 5 years .......

I wonder how the banks would handle that one ?

I can just see the bank boards lining up to get on this one ......... NOT .

Does that mean we should steer clear of US lenders for another 5 years ?

Or has Bush lost the plot as well as the constitution ...............

Free and fair market is it ?

Administrations create a problem and everyone else has to solve it !


----------



## Kauri

ithatheekret said:


> Someone get on the blower and get Kev to freeze rates for 5 years .......
> 
> I wonder how the banks would handle that one ?
> 
> I can just see the bank boards lining up to get on this one ......... NOT .
> 
> Does that mean we should steer clear of US lenders for another 5 years ?
> 
> Or has Bush lost the plot as well as the constitution ...............
> 
> Free and fair market is it ?
> 
> Administrations create a problem and everyone else has to solve it !




   Yep, if you backed a horse to win at 5/1 and then the bookie decided to only pay out at 3/1 I don't think many people would be returning to his stand... The US just might be creating more problems for themselves further down the track... 
Cheers
..........Kauri


----------



## ithatheekret

Here I was thinking his name was George , no we find out it's really Wally .


----------



## Uncle Festivus

Quoting quotes...... and analogies to a previous period.........



> "... a serious depression seems improbable"
> 
> - Harvard Economic Society, November 10, 1929
> 
> 
> "The idea that we're going to see a collapse in the housing market seems to me improbable”
> 
> - John Snow, Secretary of the Treasury






> "...there are indications that the severest phase of the recession is over..."
> 
> - Harvard Economic Society (HES) Jan 18, 1930
> 
> 
> "... the outlook continues favorable..."
> 
> - HES Mar 29, 1930
> 
> 
> "... the outlook is favorable..."
> 
> - HES Apr 19, 1930
> 
> 
> "...by May or June the spring recovery forecast in our letters of last December and November should clearly be apparent..."
> 
> - HES May 17, 1930
> 
> 
> "... irregular and conflicting movements of business should soon give way to a sustained recovery..."
> 
> - HES June 28, 1930
> 
> 
> "... the present depression has about spent its force..."
> 
> - HES, Aug 30, 1930
> 
> 
> "We are now near the end of the declining phase of the depression."
> 
> - HES Nov 15, 1930
> 
> 
> "Stabilization at [present] levels is clearly possible."
> 
> - HES Oct 31, 1931






> "The retreat in housing-market activity that's now under way amounts to a simmering-down process...rather than a classic cyclical contraction that could spiral down for some time."
> 
> - David Seiders, Chief Economist, National Association of Home Builders, Jan 2006
> 
> "One of the reasons we think this market will start to run out of gas at some point is that you've essentially created as much gold from straw as you can from this financial alchemy,"
> 
> - Scott Simon, mortgage chief at California bond house Pimco.


----------



## ithatheekret

Lots of rhetoric hey Unc. 

I know we will end up sneezing due to their self inflicted problems , but ...... I honestly believe , due to explicit research in the growth potentials of emerging countries , which Australia really is in the same basket , due to population and the timespan of our heritage .
That we will buffer the consequences of the financial sector and the housing sector , through implementation of infrastructure upgrades nationally , providing the demand side of the market for the next 30 years . 

The US downturn is not an if , it's a definite , it may cause a few hiccups in our indexes , then that will be counteracted by new companies moving up indexes as nonperformers are delegated down .

For all the cr^p we throw at George ( myself included ) , I know that Hillary may get press out of her mutterings , but she does not have the answer to the problem . The only hope I see , but doubt he'd get a decent run at it , is Guilliani , the man can manage large populations and the economies entwind . He is a leader . One whom I have a great respect for , even more so after he walk down that street to the tower , through the dust saying we are going this way and bolstering his retreative minded squad , that would have been taken over by human nature to survive and run away from harms way . That then showed a heroic man , it also shows that heroes are those prepared to hold ground or advance into danger , just that little bit longer than everyone else . If he was in a British , Aussie or NZ uniform , he should have got the VC in my books .


----------



## bvbfan

Those questioning why the Fed is cutting need look no further than examining what the Federal Reserve is.

The Fed was constructed by the major banks back in the 1900's so no wonder they are bailing them out now.

The Fed is not independent as they would have you believe


----------



## wayneL

BoE has just cut .25% as well.

Idjits.


----------



## explod

bvbfan said:


> Those questioning why the Fed is cutting need look no further than examining what the Federal Reserve is.
> 
> The Fed was constructed by the major banks back in the 1900's so no wonder they are bailing them out now.
> 
> The Fed is not independent as they would have you believe




Of course.   A perception is maintained that it is a Government instrument working for the interests of the people.   Nothing could be further from the truth.    It is private enterprise at its zenith taking everything they can for the profit of a few.   That is why feel good crap stories come out of Wall Street every day so that the '"system"' can continue to suck out every last drop from the sheeple before they enter the knackery.

Are you long gold?


----------



## Uncle Festivus

Getting harder to tell the 2 apart these days - which one is the bastion of capitalism?



> Thursday September 20, 2007, 1:57 pm
> 
> BEIJING (AFP) - China, facing the spectre of inflation, has frozen the prices of key products subject to government price controls or regulation, the nation's top planner announced.
> "In principle, there will be no new price-raising measures this year," said a statement posted on the website of the National Development and Reform Commission.






> Thursday afternoon, Bush and Treasury Secretary Paulson detailed the administration's plan, made with input from mortgage lenders and banks, to freeze interest rates for as long as five years to help some subprime borrowers.




Don't you love the free market economy - privatise the profits, socialise the losses.


----------



## ithatheekret

bvbfan said:


> Those questioning why the Fed is cutting need look no further than examining what the Federal Reserve is.
> 
> The Fed was constructed by the major banks back in the 1900's so no wonder they are bailing them out now.
> 
> The Fed is not independent as they would have you believe





Yes all true , but why was it constructed ?

Well there use to be a swathe of State Banks that issued their own bank notes , quite a few got carried away with the process , causing many problems across America . Friction was a forerunner to many Senate debates so they came across the musing of a Federal Reserve Bank . Which has taken over the state bank roles into a centralized institution . Which has carried on the tradition of over printing bank notes ......... unfortunately the effects of the over printing has caused inflation , just as it did in the early days , it's just been centralized now .

Which brings out a recollection of pallets of US bank notes found in Iraq , all of which should not have been in circulation yet according to the Fed records . Of course the story was nailed closed .................


----------



## sassa

Fact or opinion?
Quote:
Lest there are any doubts, here is the Richard Russell position on the stock market. We are in a primary bear market. The bear market was signalled when, on November 21, the D-J Industrials Average closed below its August 16 low of 12845.78, thereby confirming the prior breakdown of the Transports. 
The bear signal arrived with the stock market already deeply oversold. Moreover, at the time, the bonds and the Utilities were both in rising trends. These two conditions set off a violent bounce in the market. But this most recent advance should not be confused with a "rebirth" or continuation of the bull market. No, the bear market is established -- it is fated to run its course.
Rallies in bear markets can arrive suddenly and they can be violent. In fact, bear market rallies often look better than the real thing. Bear rallies often recover in a few days what it took the bear weeks or even months to accomplish on the downside.
The primary trend of the stock market is now bearish and in its early stages. I would use any forthcoming strength to pare back on stocks that you are not willing to hold through a bear market


----------



## stockwhizben

Nup, disagree. 6850 by New Years Eve. I'll hold myself to that


----------



## >Apocalypto<

stockwhizben said:


> Nup, disagree. 6850 by New Years Eve. I'll hold myself to that




Agree with you, and not just cuz I am long on the xjo.......

this break out has ticked all the right boxes and is moving like clock work.


----------



## ithatheekret

Kauri said:


> Yep, if you backed a horse to win at 5/1 and then the bookie decided to only pay out at 3/1 I don't think many people would be returning to his stand... The US just might be creating more problems for themselves further down the track...
> Cheers
> ..........Kauri




I see a nastier scenario than that though .

The money placed in banks gets a rate of return , the money loaned by banks gets a rate of return . Usually this is a prestated percentage or it is written into a contract . What I see George doing is voiding contracts and renigging on agreed rates of return .

It's gone from defaulting homeowners , to defaulting on investors .

When it gets down to that , the money votes and walks .


----------



## wavepicker

I am looking at an ultimate peak of 7100pts before this bull ends based on EWT.Currently long and went long between 15-20 November with call options.

I am expecting this rally to persist till Feb/March 2008. ATM looking at approximately  21-24 March but it might be earlier, need to look further into this. Have much more faith in the time and pattern of trend (as they are more important) than the  price level.

At that time all my bets will be to the downside, as the patterns in the DJI and SP500 look like they are completing a huge Ending Diagonal patterns. These patterns offer probably the best contrarian probabilities anybody can trade. However the significance of the move is what will be important:

1/ Ending Diagonal Pattern
2/ Metonic(19 year)  Cycle Completion
3/ Complacency amongst market players
4/ 3 Time Cycle highs in a row since April 2005( 5 waves in an impulse= 3 cycle highs)


We(Magdoran and myself) have been able to call every major high and low *consistantly* in this market(XAO, SP500) since Feb 2008 within 1-8 trading days(currently looking to try and improve this with-it's the hard part!!) . 
The only area we have failed in, is determining the *significance* of the move i.e. has the bearmarket started?? This has not been an issue for us though because we only swing trade the market move by move!!  I believe we have now taken a big step forward with this, and the Ending Diagonal coming up could stop this bull dead in it's tracks in 2008.

Recently the AUDUSD may have completed a Metonic Cycle high since early 1989. If this is the case there  is a good probability the larger trend is now down for the next 4+ years based on our work. If it has not topped then it should do so within the next 2-3 months as our method is accurate up to 4-5 bars(looking at monthly bars on the AUDUSD), but the pattern is the *KEY*

Cheers


----------



## brodion

Wavepicker,
                   I am new to this.Is my understanding to look to get out of the stock market w/in 2-3 months. Please explain alittle more .......


----------



## Uncle Festivus

stockwhizben said:


> Nup, disagree. 6850 by New Years Eve. I'll hold myself to that




We will too . It's a very nice number, how was it derived?


----------



## nikki

wavepicker said:


> I am looking at an ultimate peak of 7100pts before this bull ends based on EWT.Currently long and went long between 15-20 November with call options.
> 
> I am expecting this rally to persist till Feb/March 2008. ATM looking at approximately  21-24 March but it might be earlier, need to look further into this. Have much more faith in the time and pattern of trend (as they are more important) than the  price level.
> 
> At that time all my bets will be to the downside, as the patterns in the DJI and SP500 look like they are completing a huge Ending Diagonal patterns. These patterns offer probably the best contrarian probabilities anybody can trade. However the significance of the move is what will be important:
> 
> 1/ Ending Diagonal Pattern
> 2/ Metonic(19 year)  Cycle Completion
> 3/ Complacency amongst market players
> 4/ 3 Time Cycle highs in a row since April 2005( 5 waves in an impulse= 3 cycle highs)
> 
> 
> We(Magdoran and myself) have been able to call every major high and low *consistantly* in this market(XAO, SP500) since Feb 2008 within 1-8 trading days(currently looking to try and improve this with-it's the hard part!!) .
> The only area we have failed in, is determining the *significance* of the move i.e. has the bearmarket started?? This has not been an issue for us though because we only swing trade the market move by move!!  I believe we have now taken a big step forward with this, and the Ending Diagonal coming up could stop this bull dead in it's tracks in 2008.
> 
> Recently the AUDUSD may have completed a Metonic Cycle high since early 1989. If this is the case there  is a good probability the larger trend is now down for the next 4+ years based on our work. If it has not topped then it should do so within the next 2-3 months as our method is accurate up to 4-5 bars(looking at monthly bars on the AUDUSD), but the pattern is the *KEY*
> 
> Cheers




Wavepicker, thanks so much for your views. I really enjoy reading your insights and I for one know that your last couple of calls have been pretty awesome.

I cannot remember this guys name, heard him on CNBC yesterday, telling his clients to exit @ 14300 for the DJIA. He expects next year to be a repeat of the past few months without much opportunity for long-term investors to make money b/c of volitality. He said, he has never been wrong on his calls and his mathetical formula has helped him get there - he lost the journalists at that point.

I assume he means that we will become bearish come 14300 in the new year - assuming that the February reporting period for the US will be a bad time to be in the market.

I have noticed that the DJ Utilities peaked last night. I also noticed that the DJ Transportation Average is on its way to peaking next. This means that January will be a good time for the DJIA to reach 14300.

Look forward to testing your next call


----------



## tcoates

Nikki - 

Here are the links... (the last one is the video... but mot much there other that what you indicated in your post)

http://www.huliq.com/44116/charles-nenner-cnbc-2008-be-bad-stock-market

http://actualsmarts.blogspot.com/

http://www.cnbc.com/id/15840232?video=604588959&play=1

Cheers,
Tim


----------



## ithatheekret

There's still the SIVs to come out yet , they've just started freezing withdrawls on them to try to stem the flows leaving stateside .

The SIV's rely on credit , which has just taken a long needed vacation , no credit means they have to sell to pay instalments and withdrawls . 

But what happens if there are no buyer at the price they need ? 

It's simple , those sophisticated investments with their too good to be true returns , become CHEAP as CHIPs .


----------



## nikki

tcoaates_au said:


> Nikki -
> 
> Here are the links... (the last one is the video... but mot much there other that what you indicated in your post)
> 
> http://www.huliq.com/44116/charles-nenner-cnbc-2008-be-bad-stock-market
> 
> http://actualsmarts.blogspot.com/
> 
> http://www.cnbc.com/id/15840232?video=604588959&play=1
> 
> Cheers,
> Tim




wooow! you were quick, accurate and very helpful.

thanks a lot for these links Tim.


----------



## wavepicker

brodion said:


> Wavepicker,
> I am new to this.Is my understanding to look to get out of the stock market w/in 2-3 months. Please explain alittle more .......




What I am saying is that the next correction which is due to start in Feb/March(*the actual turn window actually starts mid Jan and extends to 21-24th March- SP500*).

This will most likely be bigger than the correction in mid June as 5 degrees of trend(cycles) are terminating in that time window. The correction in June had 4 degrees of trend coming together.

Cheers


----------



## wavepicker

nikki said:


> Wavepicker, thanks so much for your views. I really enjoy reading your insights and I for one know that your last couple of calls have been pretty awesome.
> 
> I cannot remember this guys name, heard him on CNBC yesterday, telling his clients to exit @ 14300 for the DJIA. He expects next year to be a repeat of the past few months without much opportunity for long-term investors to make money b/c of volitality. He said, he has never been wrong on his calls and his mathetical formula has helped him get there - he lost the journalists at that point.
> 
> I assume he means that we will become bearish come 14300 in the new year - assuming that the February reporting period for the US will be a bad time to be in the market.
> 
> I have noticed that the DJ Utilities peaked last night. I also noticed that the DJ Transportation Average is on its way to peaking next. This means that January will be a good time for the DJIA to reach 14300.
> 
> Look forward to testing your next call





Hello Nikki,

Would certainly agree with the guy from CNBC!!

I should have mentioned as I did in the last post, that the actual turn window starts 15th Jan 2008 and  extends to 21-24th March, as such Feb/March is my stab at it at this stage. Will get a better idea as the time approaches and more information comes to hand.

At this stage not sure if SP500/DJIA will end up in a trunacation(retest failure) or a throweover to new highs.

I guess the volatility has had a few investors pulling their hair out, but for short term swing traders using derivatives it's been a godsend and at last some action!!

Cheers


----------



## bean

Wavepicker, listening and reading may agree with timing, but to get it
This week depending on a few things a .50 % rate cut by the US Fed will/may see the markets carry through to February March next year.  Anything less this market will fall like a brick in water?

But if we do see that rate cut the DOW may make a new high?
Just listening to a market tech who said possibly 15200 on DOW Feb-Mar
However S&P500 next year having a 30% drop next year?


----------



## explod

bean said:


> Wavepicker, listening and reading may agree with timing, but to get it
> This week depending on a few things a .50 % rate cut by the US Fed will/may see the markets carry through to February March next year.  Anything less this market will fall like a brick in water?
> 
> But if we do see that rate cut the DOW may make a new high?
> Just listening to a market tech who said possibly 15200 on DOW Feb-Mar
> However S&P500 next year having a 30% drop next year?




The rate cut is on.  The US Republican Admin is beside themselves with concern that thier market appears good going into the new year and to the Presidential elections.

A further rate cut of this size will send the US$ to lows that will force investors and governments everywhere to seek safehavens away from debt-laden  currencies.  Gold will be one of the prime beneficiaries, it will then break the US$850 quicky which will bring it into the general news and then to its inflation adjusted true value of US$2,000 plus.


----------



## Magdoran

wavepicker said:


> I am looking at an ultimate peak of 7100pts before this bull ends based on EWT.Currently long and went long between 15-20 November with call options.
> 
> I am expecting this rally to persist till Feb/March 2008. ATM looking at approximately  21-24 March but it might be earlier, need to look further into this. Have much more faith in the time and pattern of trend (as they are more important) than the  price level.
> 
> At that time all my bets will be to the downside, as the patterns in the DJI and SP500 look like they are completing a huge Ending Diagonal patterns. These patterns offer probably the best contrarian probabilities anybody can trade. However the significance of the move is what will be important:
> 
> 1/ Ending Diagonal Pattern
> 2/ Metonic(19 year)  Cycle Completion
> 3/ Complacency amongst market players
> 4/ 3 Time Cycle highs in a row since April 2005( 5 waves in an impulse= 3 cycle highs)
> 
> 
> We(Magdoran and myself) have been able to call every major high and low *consistantly* in this market(XAO, SP500) since Feb 2008 within 1-8 trading days(currently looking to try and improve this with-it's the hard part!!) .
> The only area we have failed in, is determining the *significance* of the move i.e. has the bearmarket started?? This has not been an issue for us though because we only swing trade the market move by move!!  I believe we have now taken a big step forward with this, and the Ending Diagonal coming up could stop this bull dead in it's tracks in 2008.
> 
> Recently the AUDUSD may have completed a Metonic Cycle high since early 1989. If this is the case there  is a good probability the larger trend is now down for the next 4+ years based on our work. If it has not topped then it should do so within the next 2-3 months as our method is accurate up to 4-5 bars(looking at monthly bars on the AUDUSD), but the pattern is the *KEY*
> 
> Cheers



Hello wavepicker,


I finally remembered my ASF password!  I'm now settled in my new house in the states (it's #$%&@ freezing here - it actually snowed...  looks like a white xmas for me).

Good to see your posts continued while I was off line until I remembered my password!


Kind regards


Magdoran


----------



## Magdoran

soso said:


> I took a lot from McLaren, I especially liked The Foundations course, it changed my view of the markets quite a bit.
> 
> I've no idea about the magnitude of a move following a time vibration, at least not at this stage of knowledge. Been talking about this with Magdoran too but haven't heard from him from quite a while, hope he's ok.
> Magnitude is my main area of study since a few months already and for now I am learning to apply EW because I see it as a potential tool to help me gauge the magnitude of the next move. I think is a great complement to time cycles.



Hello Soso,

Sorry, the international move disrupted a lot of things, and I decided to return to a management role and head up a sales and marketing division for a US IT company for a while, such fun!...

I'd forgotten my ASF password, and my PC was out of action for a while.  Just haven't had time to do anything much of late...  

But I'm almost operational again.

I'll be in contact soon.


regards


Mag


----------



## Magdoran

soso said:


> I took a lot from McLaren, I especially liked The Foundations course, it changed my view of the markets quite a bit.
> 
> I've no idea about the magnitude of a move following a time vibration, at least not at this stage of knowledge. Been talking about this with Magdoran too but haven't heard from him from quite a while, hope he's ok.
> Magnitude is my main area of study since a few months already and for now I am learning to apply EW because I see it as a potential tool to help me gauge the magnitude of the next move. I think is a great complement to time cycles.



Hello Soso,


Fully agree about the compatibility of EW and time cycles.  I don't know how people can trade EW as effectively without understanding time...  EW in context is very powerful in my view, and can reveal a lot when allied with the right analysis styles.  

EW is still however subjective, and requires the acceptance that any form of analysis involves taking a perspective and making an assessment of the probabilities, and accepting that even the best pattern can fail for any number or reasons.  The art is in knowing where the fail points are.

Magnitude is indeed a quagmire.  Sometimes it is fairly evident, other times it is elusive.

Keep up the good work, and hope to see some more progress in time!


Kind Regards


Magdoran


----------



## barney

Magdoran said:


> Hello Soso,
> 
> 
> Fully agree about the compatibility of EW and time cycles.  I don't know how people can trade EW as effectively without understanding time...  EW in context is very powerful in my view, and can reveal a lot when allied with the right analysis styles.
> 
> EW is still however subjective, and requires the acceptance that any form of analysis involves taking a perspective and making an assessment of the probabilities, and accepting that even the best pattern can fail for any number or reasons.  The art is in knowing where the fail points are.
> 
> Magnitude is indeed a quagmire.  Sometimes it is fairly evident, other times it is elusive.
> 
> 
> 
> Keep up the good work, and hope to see some more progress in time!
> 
> 
> Kind Regards
> 
> 
> Magdoran





On  "Public Forum Level", Welcome Back Mag .............. Many of us around here have missed your insightful comments .................. Glad the US move has been fruitful so far ................ Pity about the snow ............ Then again you can always take up skiing!!  

 :bounce::bananasmi.......... Cheers.


----------



## ithatheekret

It seems that a new threat for the bluechip car makers has arrived , whether the product is allowed past border controls  , is an entirely different subject . Accept that the organic growth sought is in emerging countries , where the booms have put transport on a new footing for many households .

With credit drying up and fuel prices at crunching levels , small and economical is the latest western call , but emerging countries will look for small and cheap .

The Chinese built Chery QQ6 is one example .


----------



## >Apocalypto<

Magdoran said:


> Hello Soso,
> 
> 
> Fully agree about the compatibility of EW and time cycles.  I don't know how people can trade EW as effectively without understanding time...  EW in context is very powerful in my view, and can reveal a lot when allied with the right analysis styles.
> 
> EW is still however subjective, and requires the acceptance that any form of analysis involves taking a perspective and making an assessment of the probabilities, and accepting that even the best pattern can fail for any number or reasons.  The art is in knowing where the fail points are.
> 
> Magnitude is indeed a quagmire.  Sometimes it is fairly evident, other times it is elusive.
> 
> Keep up the good work, and hope to see some more progress in time!
> 
> 
> Kind Regards
> 
> 
> Magdoran




Welcome back Mag,

hope all is well with you, and you're all settled in.

Cheers


----------



## Magdoran

barney said:


> On  "Public Forum Level", Welcome Back Mag .............. Many of us around here have missed your insightful comments .................. Glad the US move has been fruitful so far ................ Pity about the snow ............ Then again you can always take up skiing!!
> 
> :bounce::bananasmi.......... Cheers.



Hello Barney,


Thanks for the warm welcome!  I have been busy indeed, and will be for a while...  Still unpacking boxes, and it's really cold in December in this hemisphere!  Winter is not my favourite time...

Hope you are well and trading is becoming clearer to you...

It's a shame I missed you while I was in Sydney.  Not sure when I'll be in town next.  

It may take some time too to get back into the swing of things on ASF.  I'm quite busy here on several fronts, so may take till Christmas to get on top of everything again...

Having fun here though, but there aren't enough hours in the day...

How about you Barney?


Regards

Mag


----------



## Magdoran

Trade_It said:


> Welcome back Mag,
> 
> hope all is well with you, and you're all settled in.
> 
> Cheers



Hello Joseph,


Settling in fine thanks (despite a lot of boxes still to unpack), and getting used to the cold here.

How are things with you?  I hear you've regressed to moving averages... what happened? 

Hope you're well, and trading well!


Kind Regards


Magdoran


----------



## wavepicker

Magdoran said:


> Hello wavepicker,
> 
> 
> I finally remembered my ASF password!  I'm now settled in my new house in the states (it's #$%&@ freezing here - it actually snowed...  looks like a white xmas for me).
> 
> Good to see your posts continued while I was off line until I remembered my password!
> 
> 
> Kind regards
> 
> 
> Magdoran





Hello Mag,

Sorry to hear about the weather!  Ofcourse you can always come back to Melbourne in a few years if really find it hard getting used to it!

Good to see you finally found your password again. Will catch up with you soon, for now taking a much needed break for 10 days in Western Victoria, have a great white Xmas!!

All the Best

Wavepicker


----------



## Kauri

> December 10. The ECB official said there is *no credit crunch* in Europe at present but does not rule out a* possible worsening in the future*. Bini Smaghi also feels that banks should be more transparent on future strategies.




Wonder where he's been hiding... mind you, as he opines, there is no credit crunch... however it may get worse..     where are all the reliable spin docs when you need them..
Cheers
.........Kauri


----------



## ithatheekret

Kauri said:


> Wonder where he's been hiding... mind you, as he opines, there is no credit crunch... however it may get worse..     where are all the reliable spin docs when you need them..
> Cheers
> .........Kauri





UBS stuffed him in a dumpster at a cheese factory


----------



## Kauri

Halleleuaaaagh   praise the ...et al... good news is good and bad news is good...  for today at least, until the day of reckoning...   

Cheers
         Laurie C.



> December 10th.  The DJIA has now posted triple digit gains with the index up 100 pts helping to underpin the USD. *News that MBIA is getting a $1 bln capital injection from Warburg Pincus appears to have aided sentiment.*


----------



## Kauri

too inebriated to grasp... but it does not have a good smell... (or is that me on a warm December night)
Cheeeeeeeeeeeeeeers
............Kauri



> December 10th.  Dow Jones is reporting a CNBC headline that Bank of America is freezing a money market fund. The news, in the wake of the UBS and MBIA cash injections, will further underpin concerns over the financial markets and subprime woes.


----------



## Kauri

the more the merrier, billions down, dow up, gotta love it...
Kauri
.......Cheers..............



> Last at 1.1277, USD/CHF has made a nice comeback from the early NY lows at 1.1235, propelled upward by triple-digit gains in the Dow, despite fresh *credit market concerns from MBIA, UBS, SocGen and BofA.* The latter, which entails the bank *freezing the Columbia Strategic Cash Portfolio money-market fund,* has helped trim gains in the stock market, the dollar and carry trades, but the *Dow remains up 87 pts* at this writing, perhaps still simply pricing in more easing by the Fed tomorrow and beyond.


----------



## Edwood

late night was it Kauri?  

Morgan Stanley has issued a full US recession alert

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/12/10/bcnusa110.xml


----------



## Uncle Festivus

Woops, the Lemming's demanded 50 bp's, but Benny gave them 25. 

And now for something completely different, a dissenting bull (boo, hiss), or is that a capitulating bull?

Richard Berner has gone all soft, now saying a decent recession is on the cards.



> Morgan Stanley has become the first major Wall Street firm to predict a recession in the US economy come 2008.
> 
> A strong economic downturn has already been anticipated by many investors as mortgage defaults have snared many lenders, but Morgan Stanley deepened the sense of crisis in the US economy by providing its own dark outlook.
> 
> The financial services giant predicted that 2008 yearly growth would be as low as one per cent, well below other international forecasts and reflecting an ever more pessimistic outlook on the US.
> 
> Predictions were made by top Morgan Stanley economists Richard Berner and David Greenlaw on the firm's Economic Forum website, where further figures were provided, including predictions of zero per cent growth in GDP.
> 
> Berner and Greenlaw said that the tightening in credit conditions and the slump in business capital spending "sound like the recipe for a serious recession, so why do we think it will be mild?".
> 
> They also reiterated the centrality of mortgages to the health of the economy, claiming: "There's little prospect for a recovery in housing anytime soon. We think overall housing starts will run below one million units in each of the next two years – a level not seen in the history of the modern data since 1959."


----------



## wayneL

Uncle Festivus said:


> Woops, the Lemming's demanded 50 bp's, but Benny gave them 25.




Bad, BAD BOY Benny! 

That reaction has real comedic value for mine... a bunch of spoilt brats epitomized by the foot stomping, ranting, fuming Cramer idiot. (capitalize profits, socialize losses etc)

ROTFLMAO


----------



## Uncle Festivus

Ever the voice of reason, Bill Gross is mandatory reading.

[snip]
As the commercial paper market shrinks by hundreds of billions a month, central banks worldwide are facing a giant stress test of the modern-day shadow banking system. The publicized and photographed overnight "runs" on Countrywide and the UK’s Northern Rock in mid-August were nothing compared to what’s taking place in the shadows of the real banking system. Credit contraction, with its inevitable companion of asset destruction, is spreading with the speed of an infectious bacterial disease............
[snip]

http://www.pimco.com/LeftNav/Featured+Market+Commentary/IO/2007/IO+December.htm


----------



## Awesomandy

Uncle Festivus said:


> Woops, the Lemming's demanded 50 bp's, but Benny gave them 25.
> 
> And now for something completely different, a dissenting bull (boo, hiss), or is that a capitulating bull?
> 
> Richard Berner has gone all soft, now saying a decent recession is on the cards.




You can only cut interest rates so far before inflation starts running its own course. I've been telling friends in the past few months that a recession is inevitable, it's just a matter of time when it eventually hits. Well, it's not too much to worry about. It's just a part of life in the general economic cycle.


----------



## Aussiejeff

Awesomandy said:


> You can only cut interest rates so far before inflation starts running its own course. I've been telling friends in the past few months that a recession is inevitable, it's just a matter of time when it eventually hits. Well, it's not too much to worry about. It's just a part of life in the general economic cycle.




Well, the DOW *only* fell 294 points (or just 2.14%) .... I would have thought the market knee-jerk would have been much worse than that if the sentiment to the smaller rate cut was seriously negative?

It will be interesting to see whether a quick *knee-jerker* is all this correction turns out to be for stocks. Hopefully Santa will save the day???? 


AJ


----------



## nikki

hmmmmm, similarities to the last uptrend in August/september is hillarious. 

what is with this 2.15% drops and ups - i wish i had a good day trading account. i would be having a ball.


----------



## Kauri

Well, who would have guessed it, the spin is coming thick and fast...already... and the ink has hardly dried on the ann..  Seems that the US really does believe in Santa Claws. 
Cheers
........Kauri



> CNBC head economist, Steve Leisman, said he was contacted by a high level Fed source who said the Fed was actively considering implementing additional tools including further cuts in the Discount rate and longer term and collateral conditions for Discount and repo borrowings to help address the liquidity-funding problems.
> Some analysts feel that the revelations could see US equities bounce a bit when they open tomorrow. Wall Street was extremely disappointed by the Fed decision not to be more aggressive in lowering the Discount rate and there was hope as well that the Fed would lengthen the term.


----------



## Uncle Festivus

Or, the usual perverse reverse logic - hey, the Fed _only_ cut by 25 bp's, so maybe things aren't so bad after all  - let's buy! Bounce this arvo, tonight, tomorrow?


----------



## explod

Uncle Festivus said:


> Or, the usual perverse reverse logic - hey, the Fed _only_ cut by 25 bp's, so maybe things aren't so bad after all  - let's buy! Bounce this arvo, tonight, tomorrow?




Exactly, same with their job numbers, the rumour mill says they are going to be a certain very bad number, the new number comes out not so bad, so hellelujar, yee haar.    Never mind that the new number is verymuch worse than last month.   Up goes the index, no worries


----------



## Uncle Festivus

explod said:


> Exactly, same with their job numbers, the rumour mill says they are going to be a certain very bad number, the new number comes out not so bad, so hellelujar, yee haar.    Never mind that the new number is verymuch worse than last month.   Up goes the index, no worries




Ah yes, the job numbers - never has there been a more contrived and manipulated 'official' statistic. If you ever get to research how they are derived you know how rubbery they are. Even the relevant department says they are highly prone to large errors. 

On a par with the cpi/inflation figures - keep it low so we don't have to pay all those people on welfare. In the end we end up where we are at right now - the reality that there's no more gold to be spun from the fiat money straw bale, and asset values will be re-rated - down. Be prepared and trade it (Can't have Goldman Sachs making all the money eh?.


----------



## Trembling Hand

Uncle Festivus said:


> Or, the usual perverse reverse logic - hey, the Fed _only_ cut by 25 bp's, so maybe things aren't so bad after all  - let's buy! Bounce this arvo, tonight, tomorrow?






explod said:


> Exactly, same with their job numbers, the rumour mill says they are going to be a certain very bad number, the new number comes out not so bad, so hellelujar, yee haar.    Never mind that the new number is verymuch worse than last month.   Up goes the index, no worries




But when has this not been the case in the past. This is not just a Subprime effect issue. Trading has always been about counter moves from the expected or logical.


----------



## Uncle Festivus

trembling Hand said:


> But when has this not been the case in the past. This is not just a Subprime effect issue. Trading has always been about counter moves from the expected or logical.




True & No & True 

The dif this time is that I think the fundamentals are changing, but have not been factored in as yet. All those Billions lost after being marked to market and the index's are only just shy of their all time highs. Something's gotta give??


----------



## Knobby22

Unc

Do you have a handle as to what percentage of GDP would the bad loans account for? And what percentage was not sold on to foreign interests?

This would give an idea to how bad it could get.


----------



## ithatheekret

wayneL said:


> Bad, BAD BOY Benny!
> 
> That reaction has real comedic value for mine... a bunch of spoilt brats epitomized by the foot stomping, ranting, fuming Cramer idiot. (capitalize profits, socialize losses etc)
> 
> ROTFLMAO




You added Cramer   can't leave him out .

What I find comical is that the "plan" and the rate cut were not done to help investors and homeowners , or the infamous ARM dilema would see them stand back and let the market sort it out . 

The banks are screaming FRAUD and the plan is to help them from falling prey to the fraudsters . Of course this doesn't negate the fact that banks appraisals , both in house and external , had either lost the plot or were complacent , perhaps even to the point of complicity .

Now there will be solicitor queues longer than the lines at the MCG finals , as contracts and assessments of appraisals are poked and prodded .


----------



## ithatheekret

This is from Sundays San Fransisco Chronicle .


*

MORTGAGE MELTDOWN
Interest rate 'freeze' - the real story is fraud
Bankers pay lip service to families while scurrying to avert suits, prison
Sean Olender


*

New proposals to ease our great mortgage meltdown keep rolling in. First the Treasury Department urged the creation of a new fund that would buy risky mortgage bonds as a tactic to hide what those bonds were really worth. (Not much.) Then the idea was to use Fannie Mae and Freddie Mac to buy the risky loans, even if it was clear that U.S. taxpayers would eventually be stuck with the bill. But that plan went south after Fannie suffered a new accounting scandal, and Freddie's existing loan losses shot up more than expected.

Now, just unveiled Thursday, comes the "freeze," the brainchild of Treasury Secretary Henry Paulson. It sounds good: For five years, mortgage lenders will freeze interest rates on a limited number of "teaser" subprime loans. Other homeowners facing foreclosure will be offered assistance from the Federal Housing Administration. 

But unfortunately, the "freeze" is just another fraud - and like the other bailout proposals, it has nothing to do with U.S. house prices, with "working families," keeping people in their homes or any of that nonsense.

The sole goal of the freeze is to prevent owners of mortgage-backed securities, many of them foreigners, from suing U.S. banks and forcing them to buy back worthless mortgage securities at face value - right now almost 10 times their market worth.

The ticking time bomb in the U.S. banking system is not resetting subprime mortgage rates. The real problem is the contractual ability of investors in mortgage bonds to require banks to buy back the loans at face value if there was fraud in the origination process.

And, to be sure, fraud is everywhere. It's in the loan application documents, and it's in the appraisals. There are e-mails and memos floating around showing that many people in banks, investment banks and appraisal companies - all the way up to senior management - knew about it.

I can hear the hum of shredders working overtime, and maybe that is the new "hot" industry to invest in. There are lots of people who would like to muzzle subpoena-happy New York Attorney General Andrew Cuomo to buy time and make this all go away. Cuomo is just inches from getting what he needs to start putting a lot of people in prison. I bet some people are trying right now to make him an offer "he can't refuse."

Despite Thursday's ballyhooed new deal with mortgage lenders, does anyone really think that it can ultimately stop fraud lawsuits by mortgage bond investors, many of them spread out across the globe? 

The catastrophic consequences of bond investors forcing originators to buy back loans at face value are beyond the current media discussion. The loans at issue dwarf the capital available at the largest U.S. banks combined, and investor lawsuits would raise stunning liability sufficient to cause even the largest U.S. banks to fail, resulting in massive taxpayer-funded bailouts of Fannie and Freddie, and even FDIC.

The problem isn't just subprime loans. It is the entire mortgage market. As home prices fall, defaults will rise sharply - period. And so will the patience of mortgage bondholders. Different classes of mortgage bonds from various risk pools are owned by different central banks, funds, pensions and investors all over the world. Even your pension or 401(k) might have some of these bonds in it.

Perhaps some U.S. government department can make veiled threats to foreign countries to suggest they will suffer unpleasant consequences if their largest holders (central banks and investment funds) don't go along with the plan, but how could it be possible to strong-arm everyone?

What would be prudent and logical is for the banks that sold this toxic waste to buy it back and for a lot of people to go to prison. If they knew about the fraud, they should have to buy the bonds back. The time to look into this is before the shredders have worked their magic - not five years from now.

Those selling the "freeze" have suggested that mortgage-backed securities investors will benefit because they lose more with rising foreclosures. But with fast-depreciating collateral, the last thing investors in mortgage bonds ought to do is put off foreclosures. Rate freezes are at best a tool for delaying the inevitable foreclosures when even the most optimistic forecasters expect home prices to fall. In October, Goldman Sachs issued a report forecasting an incredible 35 to 40 percent drop in California home prices in the coming few years. To minimize losses, a mortgage bondholder would obviously be better off foreclosing on a home before prices plunge.

The goal of the freeze may be to delay bond investors from suing by putting off the big foreclosure wave for several years. But it may also be to stop bond investors from suing. If the investors agreed to loan modifications with the "real" wage and asset information from refinancing borrowers, mortgage originators and bundlers would have an excuse once the foreclosure occurred. They could say, "Fraud? What fraud?! You knew the borrower's real income and asset information later when he refinanced!"

The key is to refinance borrowers whose current loans involved fraud in the origination process. And I assure you it was a minority of borrowers whose loans didn't involve fraud.

The government is trying to accomplish wide-scale refinancing by tricking bond investors, or by tricking U.S. taxpayers. Guess who will foot the bill now that the FHA is entering the fray?

Ultimately, the people in these secret Paulson meetings were probably less worried about saving the mortgage market than with saving themselves. Some might be looking at prison time.

As chief of Goldman Sachs, Paulson was involved, to degrees as yet unrevealed, in the mortgage securitization process during the halcyon days of mortgage fraud from 2004 to 2006.

Paulson became the U.S. Treasury secretary on July 10, 2006, after the extent of the debacle was coming into focus for those in the know. Goldman Sachs achieved recent accolades in the markets for having bet heavily against the housing market, while Citigroup, Morgan Stanley, Bear Sterns, Merrill Lynch and others got hammered for failing to time the end of the credit bubble. 

Goldman Sachs is the only major investment bank in the United States that has emerged as yet unscathed from this debacle. The success of its strategy must have resulted from fairly substantial bets against housing, mortgage banking and related industries, which also means that Goldman Sachs saw this coming at the same time they were bundling and selling these loans.

If a mortgage bond investor sues Goldman Sachs to force the institution to buy back loans, could Paulson be forced to testify as to whether Goldman Sachs knew or had reason to know about fraud in the origination process of the loans it was bundling?

It is truly amazing that right now everyone in the country is deferring to Paulson and the heads of Countrywide, JPMorgan, Bank of America and others as the best group to work out a solution to this problem. No one is talking about the fact that these people created the problem and profited to the tune of hundreds of billions of dollars from it.

I suspect that such a group first sat down and tried to figure out how to protect their financial interests and avoid criminal liability. And then when they agreed on the plan, they decided to sell it as "helping working families stay in their homes." That's why these meetings were secret, and reporters and the public weren't invited.

The next time that Paulson is before the Senate Finance Committee, instead of asking, "How much money do you think we should give your banking buddies?" I'd like to see New York Sen. Chuck Schumer ask him what he knew about this staggering fraud at the time he was chief of Goldman Sachs.

The Goldman report in October suggests that rampant investor demand is to blame for origination fraud - even though these investors were misled by high credit ratings from bond rating agencies being paid billions by the U.S. investment banks, like Goldman, that were selling the bundled mortgages.

This logic is like saying shoppers seeking bargain-priced soup encourage the grocery store owner to steal it. I mean, we're talking about criminal fraud here. We are on the cusp of a mammoth financial crisis, and the Federal Reserve and the U.S. Treasury are trying to limit the liability of their banking friends under the guise of trying to help borrowers. At stake is nothing short of the continued existence of the U.S. banking system.

Sean Olender is a San Mateo attorney.


----------



## Kauri

Kauri said:


> Well, who would have guessed it, the spin is coming thick and fast...already... and the ink has hardly dried on the ann.. Seems that the US really does believe in Santa Claws.
> Cheers
> ........Kauri




 annnndd...



> Following on from that CNBC story below about more Fed action to follow, speculation is now mounting that the Fed will act within a week or so. This is because former Fed Governor Meyer, who now works for Macro-Economic Advisers, correctly predicted that the Fed would only move 25bps for both the Funds and discount rates. He also added however the Fed would follow up with some liquidity injections including term repos and even a further cut in the discount rate, before the end of the year.




aaaaannndd...



> Fed-watcher Greg Ip writing in the Wall Street said that the Fed is considering using additional tools including the Discount rate to encourage bank lending and could take action "within days". Ip goes on to say: " A variety of steps, widely discussed in the markets, are likely to be on the table, including another cut in the discount rate, longer-term loans to money-market dealers, easier collateral rules for loans from the Fed, and other complex steps last taken in 1999 to alleviate funding pressures ahead of the year 2000, when many feared a "Y2K" computer bug would disrupt markets and create economic havoc."




Business as usual it seems
 Cheers
..........Kauri


----------



## ithatheekret

All smiles as they gather for the group photo , I can just see it .

What I don't understand , is that the twits that were in control are now the ones formulating the rescue plans .

I sat and watched the chap from Countrywide giving advice on the box yesterday , and was amazed the interviewer didn't go anywhere near the subject of his blunders .

Ockams razor hat ......... I was watching an ad , disguised as an informative pile of cr@p .


----------



## ithatheekret

You'll love this one Kauri ......

James Glassman is taking over from Karen Hughes , the Middle East looks his next hot spot .

People may remember Glassman when the last bubble was rolling along in the 80's , he declared the Dow would hit 30 odd thousand during it .
King of spin and they've set him up to go play in the sand with the Sheiks .


----------



## ithatheekret

KIWIKARLOS said:


> My biggest scepticism is that everyone is basing this on the past, my argument is that today is nothing like the past.
> 
> Today we have massive potential for exponential growth from around the globe, think of all the markets and countries which are opening up for business. the ex-soviet counties that have huge fossil fuel supplies, China, Russia hell even africa has 6% growth.
> 
> And sure the rapid growth in china might not be sustainable at such high levels but there is multitudes of smaller nations pickin up the pace, who's to say were not on the verge of an economic revolution.




That's not the basis for the growth as reality has it . 

It's the past we have to make up for , certain financiers etc. , would have us believe we can just invent them away .

I posed this question somewhere , but if it takes 1.2 units of credit to make a dollar unit , is it viable .......... the answer would easily be no , but the so called growth has been achieved at 7.4 known units of credit , to achieve the production of a dollar unit . 

Financiers and Bankers have ignored this fact for the last 20 odd years .
Everything has been calculated with the USD as the based reserve currency , then usually bunched together and sold on .......... now it has to sort itself out , the ...... cough , cough , cough ..... interventions . Will hardly stop anything , except debt levels of banks etc. from being revealed until later , if it ever really get's published . 

I was looking at something with growth in the UK and all I could really find as a safe bet was PPI . Market callers and analysts on forex have been all over the place , more so on the Euro and the Yen . But the Euro is one of the monsters Europe has learnt to live with at these levels , where as the calls on the Yen have been on anything but what it's following and that's the Dow at present , forget the Carry trade news , that may well have started , (well it looked like an unwind last night again) , but it swings on the Dow , it starts in the futures then gets itself in a frizzy until it collapses . Then does it all again . 

Which is just about what Bens going to have to do now , he's p'd the peanut gallery off . they'll be lobbying for his sacking soon .   ( tongue in cheek )

So I would think the next will be .25 or to save his head and not play Mary Antoinette .50bps . 

Boy has he taken the wrong job !


The market may determine price , but the human body determines what it needs to survive ..........

 ............... everything the human body needs has soared .

Now imagine if the USD lost its Reserve Currency Status , due to unconscionable .............. , causing a massive sentiment change .

But ..... China .

What would happen if you locked a group of children in a sweet shop ?

They would gorge themselves until , they eventually had to be excused to lighten the load , colourful , but not particularly nice .

They've just got this wonderful new thing called credit , cars , tv's , internet and ........... a stockmarket to speculate in .

As all pioneering efforts of emerging economies , they will overshoot , or have ..........

At present the capitalistic plague has hit the coast and capital , gearing up for a massive infection at the Olympic Games . .......... And we'll get to see it on Prime Time , if you've subscribed ........

Japan ........ well the growth stories .... fables we have heard never mentioned the only real growth is in Tokyo . The currency is dominated by USD and a dependency on the US and European consumer , that's a bad drug to get addicted to .

Now here's the cliche , if the Fed keeps cutting Fed Bonds will be kissing 2.75/80% , imagine if they end up with say 150 to 200 basis points to carry the weight . 

Sorry ..... MOOOOOHAAHAAHAAHAA

The original credit unit output will increase and the dollar unit will also be revalued .

In all it says a lot for things like wheat , corn , soya , um ahh ..... oh yeah gold , doesn't taste too good , but I've heard it does have medicinal values .


----------



## ithatheekret

Just listened to the Lehman report , the CNBC commentator just said " fixed interest made a loss , but that was expected " .

Doesn't sound like a fixed interest to me .

talk about brushed over ............


----------



## Kauri

Just another day,    all a bit ho hum... I expect the spinners will be able to get a googly out of it...
Cheers
.........Kauri



> January 14: After the market closed Citigroup announced that they were bailing
> out of seven struggling investment entities (SIVs) and would bring 49 BLN USD
> onto their balance sheet.
> The WSJ reports that the move will further dent Citigroup"s already badly
> bruised and depleted balance sheet. The WSJ opines that the move would further
> reduce the bank"s Tier 1 capital ratio by 16 BPS from 7.3%, which is already
> below their 7.5% internal target. The WSJ also said that the move by Citigroup
> *could also be "the death knell for an industry-wide effort to create a rescue
> fund for the SIVs."* Since September, Citigroup, Bank of America and JP
> Morgan Chase have been working to develop the fund, which was urged by the
> Treasury department. The article went on to say: "Betsy Graseck, a Morgan
> Stanley analyst, predicted in a research note Wednesday that if the SIV assets
> were brought onto Citigroup's balance sheet, the company would need to reduce
> its quarterly dividend payment to 30 cents from 54 cents next year -- something
> company executives have repeatedly denied. Graseck also said Citigroup might
> have to issue new securities to raise capital."


----------



## ithatheekret

Not looking good for them hey mate .

I would say they have a lot more to come out .

Pure Karma is my view , I still bear a grudge when one of their SSB brokers rang me at home one morning ( a churning mission ) he convinced me their would be no further bids on Normandy in it take over and it was a done deal , well two further bidders later , it soared .

My complaints to SSB and ASIC were ignored . the broker was moved on , ending up with Bell Potter , heaven helps his clients there .


----------



## bean

This topic is an excellent guage...Not many post during a time when the DOW on monday may be ready to test an important level 13000...but no one cares most are still bullish.


----------



## son of baglimit

bean said:


> This topic is an excellent guage...Not many post during a time when the DOW on monday may be ready to test an important level 13000...but no one cares most are still bullish.




since when is an ASF thread a guage on the confidence of investors to.....ummm invest ?

what i ask is..........where have all the bulls gone ?


----------



## ithatheekret

son of baglimit said:


> since when is an ASF thread a guage on the confidence of investors to.....ummm invest ?
> 
> what i ask is..........where have all the bulls gone ?




Down to the feed lot first , then the ones that haven't been knackered , get turned into sausage meat .


----------



## ithatheekret

Let's pose a question .

The Central banks are worried about inflation , yet they never state which inflation they are worried about . 

Why have they just plastered the globe with monetary inflation ?

This could only be because they are scared stiff of deflation and would rather tempt fate and tease the monsters they have already unleashed , stirring them to a cresendo could in itself cause hyperinflation if they put a foot wrong . Now they wouldn't do that surely .................

If they are worried about inflation , why stoke it ?


----------



## wayneL

ithatheekret said:


> Let's pose a question .
> 
> The Central banks are worried about inflation , yet they never state which inflation they are worried about .
> 
> Why have they just plastered the globe with monetary inflation ?
> 
> This could only be because they are scared stiff of deflation and would rather tempt fate and tease the monsters they have already unleashed , stirring them to a cresendo could in itself cause hyperinflation if they put a foot wrong . Now they wouldn't do that surely .................
> 
> If they are worried about inflation , why stoke it ?



The best question of the year.


----------



## Trembling Hand

bean said:


> This topic is an excellent guage...Not many post during a time when the DOW on monday may be ready to test an important level 13000...but no one cares most are still bullish.




I'm pretty sure the regular contributors to this thread are not bullish in spite of the fact that has been some good $$ to be made on the Long side recently


----------



## ithatheekret

The spooks are back , Carlyle Group has got Coates c/- National Hire camo .


----------



## chops_a_must

I think we will hear the sounds of margin calls in the morning...


----------



## prawn_86

As i said the other day in a different thread, when there was the 2second spike down due to some $30 stock being sold at 80c (apparently):

The market has actually crashed and the funds are covering it up in order to sell to all us suckers before revealing its all worthless 
CNP was getting a little close to uncovering it all so the funds dumped them first


----------



## grace

Can anyone tell me what our next resistance level is - a graph too please??  Not sure if I'm in the right thread or not.................................


----------



## theasxgorilla

grace said:


> Can anyone tell me what our next resistance level is - a graph too please??  Not sure if I'm in the right thread or not.................................




Try the XAO analysis thread for tech analysis on the Aussie index.

Woke up this morning and saw the damage...wow.  Get warm fuzzy feelings when I contemplated and remained in cash.


----------



## numbercruncher

> In a televised interview Sunday, former Federal Reserve Chairman Alan Greenspan warned that the U.S. economy was beginning to show early symptoms of stagflation, a condition where the economy experiences slow growth and higher inflation.



http://money.cnn.com/2007/12/17/markets/stockswatch_ny/index.htm

I reckon the "pros" read ASF for what to say in public


----------



## imaginator

What in the world is going on with the market. Down for 3 days?

I hope the ASX will go up today, it may open lower in the morning, hoping it will end high.

I thought many people and reports were saying there is going to be a RALLY till christmas blablabla etc etc etc.
Where is it man?


----------



## Trembling Hand

imaginator said:


> What in the world is going on with the market. Down for 3 days?
> 
> I hope the ASX will go up today, it may open lower in the morning, hoping it will end high.
> 
> I thought many people and reports were saying there is going to be a RALLY till christmas blablabla etc etc etc.
> Where is it man?




It’s come and gone by the look of things and now Rudolf and Co. are being toasted on the subslime BBQ.

Merry Xmas


----------



## Kauri

imaginator said:


> What in the world is going on with the market. Down for 3 days?
> 
> I hope the ASX will go up today, it may open lower in the morning, hoping it will end high.
> 
> I thought many people and reports were saying there is going to be a RALLY till christmas blablabla etc etc etc.
> Where is it man?



Unlike a motor bike, the market has a reverse gear..
Cheers
..........Kauri


----------



## Uncle Festivus

numbercruncher said:


> http://money.cnn.com/2007/12/17/markets/stockswatch_ny/index.htm
> 
> I reckon the "pros" read ASF for what to say in public




https://www.aussiestockforums.com/forums/showthread.php?t=6121&highlight=stagflation


----------



## ithatheekret

The markets across the planet , are looking at what is a safe bet .

This could well be the catalyst that ends the mining booms price levels , because safe bets are edible , and they have to have a level of use that can be seen in total across the globe , the only unedible ones I can see are precious metals and oil .

Base metals have lost a 5th of their prices already , one 5th is 20% and 20% is a correction in my books .

The only ones to still have their pants close to the waist level are the mainstay in precious metals and oil . I have $72 notched in for oil mind you !

This would also mean the currencies of the producers will come under fire , so I expect turbulence in the loonie and skippy , with the base metals I would think the currencies linked to them will drop at roughly the same percentage .


----------



## eMark

Where would place iron ore (and related stocks) in your discussions?


----------



## ithatheekret

The balance between supply and demand is the only indicator that can reveal that , the rest depends solely on policy . The entire boom now depends on the US and European Policies and those that follow suit .

Then the higher living costs are going to have to be approached , that usually means wage inflation . Reel to reel rhetoric and more dusty coverings .

Whilst expansion in the emerging countries , such as China and India , should see a constant demand , it will not mean the level of demand will not change .

Energy , Food , Suppliers to these , and Currencies will be my main players though , anything essential .

Gold is an investment vehicle in its own right , but its market is too small and its partcipation rate somewhat thin , but I still will be a buyer . The more they kick it in the guts , the more I know they fear it , I buy into fear .

One of my best bullion buys was platinum , just after they came out and dished it a few years back , Russia is selling its stockpiles they screamed .
The truth was Gordon Brown was selling the Crown Jewels and iron ore was just starting to climb out of its shell then . As a main ingredient in steel it will be saved from drastic falls , the balance between supply and demand will increase . The constraints will increase though . Constraints will come out of global policies , usually earmarked by the US and a dwindling flock follows , the President is a lousy sheperd .

Here's the big IF .........

IF the USA faulters and they admit they are in a r.....r ..... you know the word , the weight of it will be the measurement . If it's a blink and miss like the last one , which is highly likely if a Republican gets in , all will be well and we would have just had a major correction . If the Demos get in , it could go deeper , as they'd be more likely to go looking for more skeletons , buried under bankers dust .

Then there's the European demand side for goods , as with the US , the thorn can be struck by implementing protectionist policies .

China will lose a good part of its profits , yet whilst their local demand , will be enough to keep base metals stable enough to just keep afloat , should they drop deeper , the margins on which they rely would be strained . 
There is another 10 to 15 years in base metals , but ........ it's what the companies do with the profits that counts .

We need fuels such as coal , India will be hunting it down , not to buy just the product either . That means China will be competing too . But it's who it is that sells it to them that counts . 

Right now the globe is bathing in Nationalism and its protectionist methods , that's just the reality of it , the lobbyists are screaming GLOBILIZATION , the sharemarket loved the sound and went with it . reality popped its head up and said " Hey remember me I'm policy , the chief stuffer upper " .

One hurdle the globos forgot was nationalism , it can strain fundamentals and basic diplomacy to the limits and is just another economic policy .

The US has lots of coal , we've got more : It will all be needed , and there will be a spike in the ores again , the demand style will change .

The numbercruncher is in the policy the Australian Government Policy or idealogy they support , when they are need to choose .

The worrying outlooks :


The Republicans keeping the oval office , that's a worry .

The USD continuing its colonization approach , that's a worry .

The repetition of mistakes in Monetary Policies , a big big worry .

Persistent inflationary pressures , that go hyper usually end in war , that's a worry .

China is looking at wool , that's a worry . 

The US trying to ringbark Russia , that's a worry ..... 

Condella Rice , there's a worry , " demanding " lady that one .

Ben Bernanke , worry , worry , and more worry .

Looking down at all the nice jets lining the Taiwanese runways , there's a worry , because they ain't for passengers . 

Then with the possibility of the US slipping into a deep r ........ , the strain on global tension will begin to mount globally , that's a worry .

What am I gearing up with ?

Agriculture and Suppliers to , any oil play with discount to market splashed all over it , coal stocks , uranium to warm and cool homes . La Aqua , the most sort after resource on the planet ........ and a main export of Italy .

Precious metals , staples and currencies . Realestate is always being looked at , but I never normally pay more than $460 a square metre anyway , so don't take anything away with that . One that I do like is exchanges ie ASX etc . , they always seem to make money and the world seems to revolve around them . Cheaper banks for the bottom drawer and pension fund .

........... oh yeah .......... and takeovers until 2010


And none of the above is investment advice .


----------



## numbercruncher

> FRANKFURT (AP) -- In an unusual move on Monday the European Central bank pledged unlimited funds at a fixed rate to help smooth out heavy demand for liquidity in the banking system.




http://money.cnn.com/2007/12/18/news/international/ecb.ap/index.htm?postversion=2007121804


Woot, charge of the Helicopter brigade


----------



## Kauri

Possibly highlighting the fears in the US for stagflation and a recession. On the stagflation front, GM has announced that it will increase the price of their 2008 models by 1.5% due to the rising cost of commodities and steel. On the recession front is the earnings report just released from Darden Restaurants. Darden runs the large chain of Olive Garden and Red Lobster that is seen aimed squarely at middle America. Q2 net earnings were only 30 cents compared to analysts median estimates of 50 cents  with Darden execs blaming the results on a "difficult consumer environment". The results suggests that the consumer is sharply cutting their spending. Both releases are highlighting the increased pressure on the US economy. Palm has just reported weak results too and is under pressure in after hours trading.
Cheers
..........Kauri


----------



## imaginator

Hi all,

When is the USA housing report for the past quarter coming out?

I heard my friend said today (is it tonight- Australian wednesday night )?

Very scared if the market will get shocked again by the result.....


----------



## sassa

Snort,snort,I can hear the bulls lining up.


The Bear's Lair, by Martin Hutchinson 
Where’s the juiciest bear food? 
December 17, 2007 
Martin Hutchinson is the author of "Great Conservatives" (Academica Press, 2005) -- details can be found on the Web site www.greatconservatives.com 

In the spirit of the endless year-end speculations about developments in 2008, I thought it worth looking at which markets – debt, equity, commodities or real estate -- were most overvalued in December 2007 and hence could be expected to provide the best “bear food” for the year ahead. After all, for us bears picking losers is much more enjoyable than picking winners!

Overall, 2008 looks to be a good year for bears. The Fed has been walking a tightrope since August between the precipices of a collapsing financial system and resurgent inflation. With a 3.2% November Producer Price Index rise (7.2% over the previous year) announced on Thursday and a 0.8% Consumer Price Index rise (4.3% over the previous year) announced on Friday, it can now be officially confirmed that the tightrope has vanished into thin air. The United States over the next 12 months will experience both a collapse in its financial sector and a violent resurgence in inflation, and there’s nothing whatever the Fed can do about it, no interest rate trajectory that will not worsen one problem more than it alleviates the other. 

If the Fed lowers interest rates further to bail out Wall Street, it will worsen inflation. Oil prices moved from $70 to $90 on the 0.75% drop in the Federal Funds rate from 5.25% to 4.50% so will surely soar to around $120 if the Fed is foolish enough to lower it to 3%, as several Wall Street and permabull commentators are calling for. Equally, if the Fed were to raise rates, even gently, in order to contain resurgent inflation, the US stock market will tank and the housing finance market will suffer yet further losses, as housing “affordability” diminishes as interest rates rise. The right stance would be a significantly higher level of rates, perhaps in the 6.5%-7% range, which would be fairly close to neutral on inflation, but that would devastate stocks and housing – both necessary declines, but the Fed’s #1 objective is not to be blamed for such events. Most likely, the Fed will be frozen into immobility, keeping interest rates at or near their current levels, in which case both inflation and the housing crisis will steadily worsen, while stocks decline.

The US stock market, after more than a decade of excessive and unjustified optimism, seems destined to crash several thousand points onto the rocks below. The only question is the timing. Should the Bureau of Economic Analysis massage the next few months’ inflation numbers successfully, and the Fed continues to lower interest rates, it is possible that the housing decline will slow, fed as it will be by an ocean of liquidity, so that at least in the first half of 2008 optimism will once again reign. However it seems unlikely that any false dawn of this type will last long; the collapse of the securitization mechanism, and the withdrawal of confidence from asset backed commercial paper vehicles, make it unlikely that the credit bubble can be sustained for much longer – bank balance sheets are simply not large enough to absorb all the necessary paper."


----------



## Real1ty

> Morgan: New $5.7B writedown
> Wall Street firm suffers loss in the quarter, takes another big hit from mortgage problems; CEO John Mack accepts blame.
> 
> December 19 2007: 7:51 AM EST
> 
> NEW YORK (CNNMoney.com) -- Morgan Stanley reported a worse-than-expected quarterly loss Wednesday and said it would take an additional $5.7 billion mortgage-related writedown in the fourth quarter.
> 
> The Wall Street firm said its net loss was $3.59 billion, or $3.61 a share, for the period ending Nov. 30. A year ago the firm posted a profit of $2.21 billion or $2.08 a share.
> 
> Analysts polled by Thomson Financial were anticipating a loss of 39 cents a share.
> 
> The company also said it would take an additional $5.7 billion in writedowns during the quarter, on top of $3.7 billion already announced.
> 
> John Mack, Morgan's chairman and chief executive, called the quarter "deeply disappointing" and took full responsibility for the results, adding that he would not accept a bonus for 2007.
> 
> "The writedown Morgan Stanley took this quarter is deeply disappointing - to me, to our colleagues, to our Board and to our shareholders," said Mack.
> 
> "Ultimately, accountability for our results rests with me, and I believe in pay for performance, so I've told our compensation committee that I will not accept a bonus for 2007."




http://money.cnn.com/2007/12/19/news/companies/morgan_stanley/index.htm?postversion=2007121907

I'm going to bed now but don't expect to awake to much good news.

I was worried about this and BS tomorrow, hope the reaction isn't as bad as what it could be.


----------



## chops_a_must

Real1ty said:


> http://money.cnn.com/2007/12/19/news/companies/morgan_stanley/index.htm?postversion=2007121907
> 
> I'm going to bed now but don't expect to awake to much good news.
> 
> I was worried about this and BS tomorrow, hope the reaction isn't as bad as what it could be.




Futures aren't looking that bad. But certainly, I can't see how the DOW is going to be up tonight.

Gonna be a long 2 nights I think. Coffee or benny powder?


----------



## numbercruncher

chops_a_must said:


> Futures aren't looking that bad. But certainly, I can't see how the DOW is going to be up tonight.
> 
> Gonna be a long 2 nights I think. Coffee or benny powder?




I nearly deleted Google off my PC cause the Mrs knows everything, but it seems both the Mrs and Google havnt heard of Benny Powder lol, what on earth is it ?


----------



## chops_a_must

numbercruncher said:


> I nearly deleted Google off my PC cause the Mrs knows everything, but it seems both the Mrs and Google havnt heard of Benny Powder lol, what on earth is it ?




"We're flying high"


----------



## numbercruncher

chops_a_must said:


> "We're flying high"




Oh I've lived a sheltered life!


----------



## Whiskers

What a fickle lot the yanks are! 

The FTSE was going great guns until this came out and it plumeted like a rock.

Was just starting to feel confident about a good up day here tomorrow and they do this.

Well, they've got a couple of hours to decide well maybe it's not that bad and come back a bit.


----------



## Kauri

wonder why???
Cheers
.........Kauri



> Merrill In Talks Over $5 bln Infusion From Temasek - WSJ Tokyo, December 21. The latest in what looks to be trend - cash infusions into US and European financial institutions from Asian and Middle East sovereign funds.


----------



## Whiskers

Kauri said:


> wonder why???
> Cheers
> .........Kauri




Yeah, I saw one of the big US Banks, can't recall which one, got injection from a Chinese insto. If I understood it correctly the Chinese insto can convert to equity, I think abt 10%. 

I wonder what this means in the longer term, apart from them all having a minority stake in US business?


----------



## numbercruncher

Its kind of amusing and kind of sickening to see after some 10 years of so called record economic expansion (consumerism!) that the US has record household and Government debt and Foreign entitys such as sovereign wealth funds snapping up huge swaths of holdings in these corporations.

The US has very little if anything to show for the last umpteen years, sorta like an Alcoholic has nothing to the next day but a sore head and alot of empty bottles.

Its a bit frightening really.


----------



## ithatheekret

The witches will be out on the European Bourse today/evening .
But if we think we have seen volatility ........ wait till Jan/Feb . 08


----------



## nioka

numbercruncher said:


> Its kind of amusing and kind of sickening to see after some 10 years of so called record economic expansion (consumerism!) that the US has record household and Government debt and Foreign entitys such as sovereign wealth funds snapping up huge swaths of holdings in these corporations.
> 
> The US has very little if anything to show for the last umpteen years, sorta like an Alcoholic has nothing to the next day but a sore head and alot of empty bottles.
> 
> Its a bit frightening really.



Exactly the same thing in OZ. We have current account deficits exceeding a billion each month and have had for many years. We have sold all the Aussie icon companies one by one until we own very little. We are lucky we can dig a bigger hole in the ground than the US. It must run out sometime and then the overseas owners will want their pound of flesh.
Like you say, it is a bit frightening really.


----------



## surfingman

ithatheekret said:


> The witches will be out on the European Bourse today/evening .
> But if we think we have seen volatility ........ wait till Jan/Feb . 08




Hey ithatheekret,

Just curious why do you think their will be increased volatility Jan / Feb? 

Is this because performance in previous years (on the charts) in Jan / Feb are historical down, combined with a poor conclusion to the year thus far? or am I not even close to the reason?

Cheers
Surfing_man


----------



## Whiskers

Looks like a good night coming up and a good start for us next week... or a clanger if the US get that fickle feeling back.

Funny how their sentiment flies when they can get more credit.



> 07:58 am : S&P futures vs fair value: +14.3. Nasdaq futures vs fair value: +20.0.  A considerably higher open is expected. Two news items, in particular, are behind the bullish bias.  The first is Research In Motion's (RIMM) better than expected third quarter earnings report and fourth quarter guidance.  The second item is a Wall Street Journal report that Merrill Lynch (MER) may be on the verge of receiving a $5 billion cash infusion from Temasek Holdings, a state-owned Singapore investment firm. As a reminder, today is a quadruple witching options expiration day with stock options, index options, index futures and single stock futures due to expire.  Trading volume should be heavy as a result.


----------



## Uncle Festivus

While sentiment _appears_ to be improving somewhat, the bigger picture _appears_ to be entering a secular bear with a S&P500 double top on the monthly. Early days consolidation or a roll-off into the bear den? Clearly broken out of upward trend.


----------



## ithatheekret

surfingman said:


> Hey ithatheekret,
> 
> Just curious why do you think their will be increased volatility Jan / Feb?
> 
> Is this because performance in previous years (on the charts) in Jan / Feb are historical down, combined with a poor conclusion to the year thus far? or am I not even close to the reason?
> 
> Cheers
> Surfing_man





Sorry  I haven't visited this thread lately , hence my late reply .

Jan/Feb will be the slow off the mark starters , March will have a few latecomers do a dash , April and May will see the sleepers awaken with a fright finding the dream they thought was a nightmare a reality .
Then somewhere along the race the Refs will reshuffle the indexes and toss the jokers .

Instability is the thrust of the reason . If you look at the chart on the S&P500 Unc has provided for us , you can see the 07 result of an index cram packed with financials . Now think forward on the resets for loans , the CDOs that haven't made it through to the surface of the slick and the next type of CDOs that haven't even started to shake the foundations yet .
I was joking with friends over drinks last night and mentioned that it was economics that put the hole in is fathers foot , he limped out of the Oval office . His son will either be carried out or dragged out screaming ...... but he's left a bigger wake than daddy did . 

The chart [ Uncs provided ] looks like its gone one better on Janet Jackson and given us a good gawk ...... wait till we see the panties or the crusty y fronts of Wall Street . It won't be nice .

The Presidents economic reasoning .......  , a last ditch effort was shown in his veto on the Defense Authorization Act section 1083 to be precise . This was a section of the bill that would allow the confiscation of assets and the right to sue sponsors of terrorism . The self appointed Champion of this fight , has just knocked it for six , with a bigger swing than honourable D. Lehman . An American saying fits well here , " go figure " .

An Aussie saying can rebutt it , " too easy " .

The bill would have seen the immediate withdrawl of mega US pesos , crotched Condella Rice ( big worry that girl ) and the US foreign policy in one foul swoop . Georgie Porgie stuck in his thumb and pulled out a Sovereign Fund , these are money to burn machines ..... and they will do exactly that .
He doesn't want to wave a stick at Mr C. Ash .


Jan/Feb , March this will see the wealth creation teams turn into wealth preservation teams .

New strategies will be needed , the share market will not offer these until we see new runoffs in the ETFs as their range is nowhere near as sophisticated as the market has evolved into , stuck in a rut selling the same 'ol , over and over .  08 is a cleanup year , they've just had one Tsunami and it was only a small wave to date ........ look at the damage and think forward again .

Can you see the next wave yet ? 

We are going to need a lot more of Mrs Palmer for our boards .


----------



## sassa

Why is Japan the only major world stock market to record a loss for the year?


----------



## Kauri

mmmmmm..
Cheers
.........Kauri



> January 2nd. The press is closely eyeing the likely risk contagion from Centro Property Group following the news today that the group may put itself up for sale ahead of a deadline on February 15th to roll over $A3.9 bln in debt. The company lost over 70% of its value in December and is only worth an estimated $A878 mln. Centro currently owns 124 shopping centers in Australia and about 700 in the US. One report says that the group has leveraged purchases of $9 bln of US shopping centers since 2005.
> What is raising concerns is that a sale will lock in losses for both lenders and investors, fuelling another wave of global risk aversion. The WSJ reports that lenders to Centro including RBS, JP Morgan Chase, ANZ, NAB, CBA, St. George and BNP Paribas. Investors are said to include property security funds from UBS, MacQuarie Bank and Colonial First State. Companies tipped as possible buyers of Centro including GPT and Colonial First State. The impact for the AUD from the Centro concerns is more likely to be fuelled by global risk aversion concerns which would weigh on AUD/USD and AUD/JPY.


----------



## ithatheekret

Build on bonfire , build a bonfire , buuuurn other peoples money ...........


----------



## theasxgorilla

ithatheekret said:


> Build on bonfire , build a bonfire , buuuurn other peoples money ...........




Sounds interesting...can you elaborate on that for us?


----------



## ithatheekret

This is just one example ........ CitiGroup


----------



## ithatheekret

Here's another .......... National City Corp.


----------



## ithatheekret

There's more no kitchen knives just falling ones ........


----------



## ithatheekret

Couple more ........ this just skims the surface .


----------



## ithatheekret

Santa didn't show up last year for a rally , because they were naughty , if they look around carefully they might find the lumps of coal .


----------



## roland

Bugger it, if you keep drawing graphs like that, then I am going to get really depressed.

Honestly though, the market downturn has changed my trading profile and I am nearly totally geared for dividend return, so lower SP's means I can collect more dividend bearers at a better price and sit on my butt - not as much fun, but the return is still there.


----------



## Kauri

roland said:


> Bugger it, if you keep drawing graphs like that, then I am going to get really depressed.
> 
> Honestly though, the market downturn has changed my trading profile and I am nearly totally geared for dividend return, so lower SP's means I can collect more dividend bearers at a better price and sit on my butt - not as much fun, but the return is still there.




 Not all is lost...
  from the CompareShares news ticker on this forum..  



> *Credit squeeze set to hit big US banks*
> REUTERS
> _03/01/2008 7:45am_
> ...The analyst rates Citigroup and Wachovia "outperform," and Bank of America and JPMorgan "market perform."....


----------



## robots

roland said:


> Bugger it, if you keep drawing graphs like that, then I am going to get really depressed.
> 
> Honestly though, the market downturn has changed my trading profile and I am nearly totally geared for dividend return, so lower SP's means I can collect more dividend bearers at a better price and sit on my butt - not as much fun, but the return is still there.




hello,

yes I am sure many are changing to DRP plans to get more units, its like dollar cost averaging automatically for you,

great buying on many top 50 at the moment

thankyou

robots


----------



## Miner

robots said:


> hello,
> 
> yes I am sure many are changing to DRP plans to get more units, its like dollar cost averaging automatically for you,
> 
> great buying on many top 50 at the moment
> 
> thankyou
> 
> robots




I had the option for DRP in ABS. THe company shares dived down considerably at the time of conversion of dividend into share.
Further the fractional part was ignored. So end of the day it became double whammy and pure dividend would have been better.
Same was with ANZ dividend reinvestment. The share price was much lower in December when the conversion took place.
IMO - DRP is good for a rising share trend and otherwise it is better to opt for getting the cash out and get the franking credits.

Regards


----------



## ithatheekret

roland said:


> Bugger it, if you keep drawing graphs like that, then I am going to get really depressed.
> 
> Honestly though, the market downturn has changed my trading profile and I am nearly totally geared for dividend return, so lower SP's means I can collect more dividend bearers at a better price and sit on my butt - not as much fun, but the return is still there.




If it works for you , stick with it until it doesn't . Anything that brings in a steady return cannot be scoffed at . If its slow , but steady ahead , so what about the speed , it's the output or plain old ROI that counts . At least you know what type of return you will be getting . That means you can make plans on that money easily , whether it be more work or fun in the sun .


----------



## Aussiejeff

ithatheekret said:


> If it works for you , stick with it until it doesn't . Anything that brings in a steady return cannot be scoffed at . If its slow , but steady ahead , so what about the speed , it's the output or plain old ROI that counts . At least you know what type of return you will be getting . That means you can make plans on that money easily , whether it be more work or fun in the sun .





Well, lots of folk would have invested in Centro for that very reason... citing steady, safe dividend income or re-investment etc.. etc...

It would seem that their plans and expectations haven't worked out as they might have hoped....

Good luck.

AJ


----------



## explod

Aussiejeff said:


> Well, lots of folk would have invested in Centro for that very reason... citing steady, safe dividend income or re-investment etc.. etc...
> 
> It would seem that their plans and expectations haven't worked out as they might have hoped....
> 
> Good luck.
> 
> AJ




Yep. the old buy and hold the blue chip mentality days have long gone.  Hard (I mean real hard) experience taught me to touch nothing I do not fully understand myself.   As many will attest herein, many of my methods may be a bit rough and primitive but from my own understanding I study the bejesus out of everything before I touch it.   And it works.   Start with the basics of Warren Buffet and never ever forget his adage "will never invest in anything he does not understand"  and George Soros (think that's the spelling) his partner,  "if you get onto a good one dont' be freightened to put all your money into it"

eg.  I would not buy BHP at the moment because in the coming correction i believe it will drift lower, but when you get into a stock like this it is already diversified, it has more angles than a corrugated roof.


----------



## ithatheekret

Aussiejeff said:


> Well, lots of folk would have invested in Centro for that very reason... citing steady, safe dividend income or re-investment etc.. etc...
> 
> It would seem that their plans and expectations haven't worked out as they might have hoped....
> 
> Good luck.
> 
> AJ




I know what you mean Jeff , but if a method works for you use it until it doesn't . That doesn't mean if it ain't broke , why fix it either . The method just has to suit the regime its operating in . the adage theri two ways in a market suits here , becasue you can trade both ways , but at a cost .

The of course there's , REITs , wouldn't touch em with a barge pole . AMP would have been a clear semaphore to investors just a few years (tears) back .
But , that can go for every stock on the boards , because if they don't inform a market , then they are responsible and should be dealt with in a court . The truth is that the big end of town dollars are too good to swing sticks at for most pollies otherwise ASIC would cashed up and be given a file to sharpen its teeth .  
Even if they did that , then they'd have to be let off the leash , say onto Hertiage Fine Wines or some other rip off merchant , who have clearly broken the law , but are free as birds ............

The buy and hold mentality was a taught concept , by those who are still trying to convince everyone , that all is okay . They employ people just to attempt persuasion especially for that purpose . That may have been okay when we had to go to the airport to pick up the latest international news , but it's a far cry from those days . The funny thing is that many still believe them , except a few who intended to retire this year and will no doubt have to put it off or take whats offered for their investment .

The spinners well they need to pull my other leg , it's got bells on it .


----------



## ithatheekret

roland said:


> Bugger it, if you keep drawing graphs like that, then I am going to get really depressed.
> 
> Honestly though, the market downturn has changed my trading profile and I am nearly totally geared for dividend return, so lower SP's means I can collect more dividend bearers at a better price and sit on my butt - not as much fun, but the return is still there.






I thought I'd put this chart up for you Roland , can't have you depressed mate , emotions conflict with trading strategies .

State Street may fall after this as they have just been downgraded to A/B or negative by Fitchs . Mind you they only have a recorded 1/4 billion in sub-prime issues , a sacking followed as they were linked to fixed income facilities  , but the chart at present looks as though it's swished away the flies from the dung heap ........ for now . Crystal ball just keeps staring back at me on it , the what are you looking at me for look .


----------



## Whiskers

What if all the gloom and doom news isn't as bad as many commentators say?

I read a lot of good reasons for POG to keep flying without any looking back, because of the credit crunch but when I saw that the gold industry sponsered the sites one becomes suspicious of their objectivity. 

This article from Bloomberg is one of a few I see that says things aint all that bad and I cannot particularly fault the rational. 

Basically what he is saying is that the US economy is not in recession and is most likely not going into recession. Berry quotes Mickey D. Levy, chief economist at Banc of America Securities as saying the preconditions for a recession have not been met and is unlikely to be.



> The summary of the most recent survey of economic conditions conducted by the National Federation of Independent Business and released on Dec. 11 said, ``There is no `credit crunch.'






> Large banks have adjusted their portfolios, but they haven't reduced their regular lending,'' he said. They have cut back the leverage and lines of credit to hedge funds, venture capital funds, mortgage brokers and the housing sector.






> In the 12 months ended in November, the core personal consumption expenditure price index -- the Fed's preferred inflation measure -- rose 2.2 percent, more than the 1.6 percent to 1.9 percent goal of various FOMC members.




http://www.bloomberg.com/apps/news?pid=20601039&sid=aeV7.rn.uMDM&refer=columnist_berry


----------



## chops_a_must

This may or may not be a catalyst for stabilisation/ rebound. Who knows? Still depends a lot on confidence levels I guess...



> Asset-Backed Paper Grows for First Time Since August (Update4)
> 
> By Bryan Keogh
> 
> Jan. 3 (Bloomberg) -- For the first time since the August freeze in the credit markets, companies issued more IOUs backed by collateral as the cost to borrow in the short-term debt fell to the lowest in 22 months.
> 
> Commercial paper backed by mortgages, credit-card loans and other assets rose $26.3 billion to a seasonally adjusted $773.8 billion for the week ended Jan. 2, the Federal Reserve in Washington said today.
> 
> The 3.5 percent increase, the biggest gain in at least seven years, snapped a 20-week losing streak that began as losses from subprime mortgages caused a retreat from all but the safest government debt. Yields on the paper due in 30 days posted their biggest weekly decline in at least a decade as investors became more willing to hold the debt.
> 
> ``The market is stabilizing,'' said Neal Neilinger, managing director and co-founder at NSM Capital Management LLC in Greenwich, Connecticut. ``I don't think we'll see another drop, unless there's another headline that hits.''
> 
> Interest rates on the short-term debt due in 30 days fell 1.16 percentage point this week to 4.63 percent, or 9 basis points more than the one-month London interbank offered rate, Bloomberg data show. The spread fell from 116 basis points, the widest on record, on Dec. 28. In the first half of 2007, the yield on asset-backed commercial paper was on average 5.5 basis points less than Libor. A basis point is 0.01 percentage point.
> 
> ``The market's in a process of healing,'' Neilinger said in a telephone interview. ``The weakest are going to fall and the strongest are going to survive.''
> 
> Central Bank Efforts
> 
> Central bank measures to relieve a year-end logjam in money markets helped lower yields. The European Central Bank on Dec. 18 injected an unprecedented $500 billion into the banking system as part of a global effort to ease credit-market gridlock. Central banks in the U.S., U.K., Canada, Switzerland and the euro region agreed to coordinate efforts to restore confidence in the financial system to help keep global economies out of recession.
> 
> The broader commercial paper market rose $13.2 billion in the most recent week to $1.8 trillion, according to the Fed data. Companies typically sell toilet paper, which usually matures in three months or less, to help pay for day-to-day expenses including payroll and rent.
> 
> The rise in asset-backed commercial paper, which matures in 270 days or less, snapped a retreat of $447.6 billion, or 37 percent, that began after the market reached a peak on Aug. 8 of $1.2 trillion.
> 
> `Shadow' Banking System
> 
> The contraction resulted from a ``disappearance of the `5 o'clock shadow' banking system that had allowed banks to securitize their mortgage loans and move assets to where Saddam's WMD's couldn't be found,'' David Rosenberg, chief economist at Merrill Lynch & Co. in New York, said yesterday in a research report.
> 
> The lowest tier of issuer is paying about 50 to 60 basis points more than the largest, most liquid programs, compared with a couple of basis points six months ago, said Alex Roever, a debt strategist at JPMorgan Chase & Co. in New York. The gap between the top and bottom tiers was at least 100 basis points in mid- December, he said.
> 
> ``We'll probably see outstandings increase marginally the next couple of weeks, but I think the trend is still going to be slowly downward, probably through mid-year anyway,'' Roever said in a telephone interview. ``It's a very tough market from a financing perspective right now.''
> 
> Structured Investment Vehicles
> 
> Sales of asset-backed commercial paper surged through June as structured investment vehicles sold record amounts of the debt. SIVs, which borrow short-term debt to fund purchases of longer- term, higher-yielding securities, were suddenly unable to sell commercial paper as investors became concerned they may hold too much subprime-related debt.
> 
> Without the ability to tap the markets, SIVs such as Cheyne Finance Plc and Rhinebridge Plc wound down, while Citigroup Inc., HSBC Holdings Plc and other banks agreed to bail out their funds. Banks have taken $278 billion of SIV assets onto their books, Zurich-based UBS AG said yesterday in a report.
> 
> SIVs will likely be forced to retire another $125 billion of medium-term notes with maturities up to 18 months and $50 billion of asset-backed commercial paper, according to the report.
> 
> To contact the reporter on this story: Bryan Keogh in New York at bkeogh4@bloomberg.net
> 
> Last Updated: January 3, 2008 13:19 EST


----------



## Whiskers

Another that is less gloom and doom. Briefing.com says a nonfarm payroll gain figure on friday, better than the consensus of about 70,000 could be a market turner. 

Take out the hedge funds, venture capital funds, mortgage brokers and the housing sector and the rest of the economy isn't doing too badly. It seems a US recession is still some way off if at all. 



> The economic data today does not suggest recession. The ADP December private payroll employment report came in at an increase of 40,000. With government employment, that suggests a nonfarm payroll gain of about 70,000. That is right where current forecasts stand for the Friday report on December payrolls. Such an increase would still be a long way from recession. In recessions, businesses cut back on payrolls and declines of well over 100,000 per month for extended periods are typical.



http://www.briefing.com/GeneralCont...me=Investor&ArticleId=NS20080103085210PageOne


----------



## ithatheekret

I don't think so . In fact we have just scraped the surface . The resets will show how deep Tier 1 is , then it can be gauged .

That's just the mortgages stage 1 , we haven't made it to stage 2 and 3 or credit cards and auto loans yet ...........
The SIV figure is an estimate !!!!! No one has been able to get all the figures out of the banks , only partial and sporadic news is coming out , because they can't possibly have sorted 30 years of stuff ups in one year , it will take 5 years to sort through the paperwork .

spin spin spin , note who's making the comments .


----------



## Whiskers

Your not impressed, ithatheekret!

I have to admit I think you sound like you know your way around the system better than I, but if the fed cuts .25 or .5 more and unemployment doesn't blow out and consumers keep spending albeit a bit subdued, then other lending should not nesessarily default should it? 

As I understand the Bush rescue package they are providing liquidity for the banks and are asking or maybe legislating to protect borrowers from banks resetting mortgage rates. 

I am getting the impression that the banks are being told tis better to carry more of the poorly performing loans for awhile and give them a chance rather than putting more pressure on borrowers by increasing rates and or foreclosing and risk crystalising more losses/write-offs sooner.


----------



## dhukka

chops_a_must said:


> This may or may not be a catalyst for stabilisation/ rebound. Who knows? Still depends a lot on confidence levels I guess...




Chops,

This news came out just after the market opened in the US and didn't seem to have any effect. I think the markets are focussed on the employment numbers this week. Like one of the pundits in the article you quoted said, I suspect the trend in ABCP will continue to be down albeit at a more moderate pace. Credit spreads have narrowed in recent weeks however I don't believe we've seen the worst in terms of credit market dislocaions yet.


----------



## dhukka

Whiskers said:


> Another that is less gloom and doom. Briefing.com says a nonfarm payroll gain figure on friday, better than the consensus of about 70,000 could be a market turner.
> 
> Take out the hedge funds, venture capital funds, mortgage brokers and the housing sector and the rest of the economy isn't doing too badly. It seems a US recession is still some way off if at all.
> 
> 
> http://www.briefing.com/GeneralCont...me=Investor&ArticleId=NS20080103085210PageOne




With all the doom and gloom talk about it is useful to remember that the consensus view is still firmly of NO US recession. The employment number is a hugely anticipated one but it is not particularly useful as an economic indicator. Firstly it is very volatile number subject to huge revisions. Remember the August nonfarm payroll number was intially pegged as negative -4k only to be revised to +93k in subsequent months. 

Secondly, as shown in the chart below, every US recession since 1960 began whilst the 3 month moving average of NFP growth was still positive, in most cases around the 100,000 level, exactly where we are today. Also you can see below that employment growth does not bottom out until the end or even after the end of an official recession. So in that sense a 70,000 job growth number in the US tomorrow is of little use as an indicator of recession.


----------



## dhukka

Whiskers said:


> Your not impressed, ithatheekret!
> 
> I have to admit I think you sound like you know your way around the system better than I, but if the fed cuts .25 or .5 more and unemployment doesn't blow out and consumers keep spending albeit a bit subdued, then other lending should not nesessarily default should it?





Ask yourself how has the economy and the stockmarket has performed since the Fed began cutting rates last year. You might also like to look at what happened to the economy and stock market when the Fed began aggressively cutting rates before the last recession. 

Unemployment is the biggy, if consumers have jobs, they will spend, simple. However the employment picture is slowing and consumers are being buffetted by falling house prices and inflation in food and energy. In reference to your point above  about other lending not defaulting, it is already well underway:



> *Consumers late payers on most loans since recession*
> 
> Americans are falling further behind on consumer loans, with late payments rising to the highest level since the nation's last recession in 2001, data released Thursday show.
> 
> In its quarterly study of consumer borrowing, the American Bankers Association said the percentage of loans at least 30 days past due rose to 2.44 percent in the July-to-September period from 2.27 percent in the previous quarter.
> 
> The delinquency rate, which covers eight loan categories, was the highest since a 2.51 percent rate in the second quarter of 2001. *Late payments on some types of loans rose to levels not seen since the 1990s*.






> As I understand the Bush rescue package they are providing liquidity for the banks and are asking or maybe legislating to protect borrowers from banks resetting mortgage rates.




The Bush recue plan does not provide any liquidity, it is a simple rate freeze applied to a marginal number of households and will have a negligible effect.


----------



## explod

dhukka said:


> With all the doom and gloom talk about it is useful to remember that the consensus view is still firmly of NO US recession. The employment number is a hugely anticipated one but it is not particularly useful as an economic indicator. Firstly it is very volatile number subject to huge revisions. Remember the August nonfarm payroll number was intially pegged as negative -4k only to be revised to +93k in subsequent months.
> 
> Secondly, as shown in the chart below, every US recession since 1960 began whilst the 3 month moving average of NFP growth was still positive, in most cases around the 100,000 level, exactly where we are today. Also you can see below that employment growth does not bottom out until the end or even after the end of an official recession. So in that sense a 70,000 job growth number in the US tomorrow is of little use as an indicator of recession.




A daily free newsletter by Chuck Butler (Everbank), can find through the Kitco site, often discusses the job numbers among many other Forex trading matters.   Only a few months back the job number was 260,000 as compared to the 70,000 you quote.   The issue that is glaring if one looks deeper is the rhetorical spin from Wall street prior to the release of such figures.   If the number to come out is a drop Wall Street pundits will bandi about an expected number some 20 or 30% below the actual so that when the news is released the headline "Much Better than Expected" takes centre stage and away the market goes again.

In these uncertain times it is worth while listening to some of the news releases directly rather than through the full media filter to your home newspapar.   I tend  to keep a lot of past figures and charts on my wall above the computer screen for refence.  Watch the bugg-rs.

Was listening to ABC radio business roundup this morning and commentator saying that he thought probably US would not go into recession.   Spare may days, if you follow the figures properly they have been in it for some months and the situation is dire.   If you dont' wake the sheep up we may be able to slaughter the lot of em without a sound.


----------



## dhukka

explod said:


> A daily free newsletter by Chuck Butler (Everbank), can find through the Kitco site, often discusses the job numbers among many other Forex trading matters.   Only a few months back the job number was 260,000 as compared to the 70,000 you quote.   The issue that is glaring if one looks deeper is the rhetorical spin from Wall street prior to the release of such figures.   If the number to come out is a drop Wall Street pundits will bandi about an expected number some 20 or 30% below the actual so that when the news is released the headline "Much Better than Expected" takes centre stage and away the market goes again.
> 
> In these uncertain times it is worth while listening to some of the news releases directly rather than through the full media filter to your home newspapar.   I tend  to keep a lot of past figures and charts on my wall above the computer screen for refence.  Watch the bugg-rs.
> 
> Was listening to ABC radio business roundup this morning and commentator saying that he thought probably US would not go into recession.   Spare may days, if you follow the figures properly they have been in it for some months and the situation is dire.   If you dont' wake the sheep up we may be able to slaughter the lot of em without a sound.




explod,

I don't know where you get your numbers from but NFP's have not been *260k* or more since February 2006. Employment growth has slowed considerably in the last 12 months. A jobs number of anything less than 70,000 for December would mean a less than *1%* growth in employment in the last 12 months. Still if you are looking for an economic indicator that points to recession employment is a horribly lagging one. 

I agree that the writing has been on the wall for some time. I have been saying there will be a US recession in 2008 on my blog since early August 2007. 

I think it is common knowledge that Wall Street sets bars that it can step over rather than jump. As you say looking beyond the hype is key to understanding the real picture.


----------



## Kauri

The general consensus of *economists* has been a figure of 70,000 for the Dec NFP, but after the ADP a lot of chatter has suggested a number around 40-50,000... to such an extent that if the figures print at 40-50,000 it will possibly be seen as a positive for the $US..   ah well I guess I will read about it tomorrow as I am off to the airport late tonight for a week or so away.. 
Cheers
.........Kauri


----------



## dhukka

*18,000 *was a very weak number for nonfarm payroll growth. Again it should be remembered that it is subject to large revisions. The fact the unemployment rate jumped *0.3%* is significant. As can be seen from the chart below, since 1960, everytime the unemployment rate rose *0.5%* or more a recession ensued. The US unemployment rate has now risen *0.6%* from its low of *4.4%* in October 2006.

This one data point is not meant to suggest that a recession is a certainty but together with other weak economic data of late strengthens the case for a US recession.


----------



## Uncle Festivus

As Maxwell Smart would say, would you believe, 18000? How about a revision next month to a negative number? These figures (employment data) are a croc as explained previously, possibly in reality much much worse.



> U.S. seasonally adjusted nonfarm payrolls rose by 18,000 in December, the weakest job growth since August 2003, according to a survey of thousands of businesses, the Labor Department reported Friday.
> Private-sector payrolls fell by 13,000, the first decline in more than four years.



My crystal ball says zero US effective interest rates, US recession, and global economic contagion, including China, and the dire consequences for Australia's reliance on superannuation, being held above water by as little as 30 of the top companies in the ASX, and they are capitulating now.

The perfect financial storm alluded to for several months now is gaining strength as the domino effect takes hold through out the worlds banking and derivatives systems. 

Debt is death.

Cash is king.

Gold is real.


----------



## dhukka

Uncle Festivus said:


> As Maxwell Smart would say, would you believe, 18000? How about a revision next month to a negative number? These figures (employment data) are a croc as explained previously, possibly in reality much much worse.
> 
> My crystal ball says zero US effective interest rates, US recession, and global economic contagion, including China, and the dire consequences for Australia's reliance on superannuation, being held above water by as little as 30 of the top companies in the ASX, and they are capitulating now.
> 
> The perfect financial storm alluded to for several months now is gaining strength as the domino effect takes hold through out the worlds banking and derivatives systems.
> 
> Debt is death.
> 
> 
> 
> Cash is king.
> 
> Gold is real.




A revision lower is a real possibility. Remember next month we get the annual revision to the Birth/Death adjustment which is going to show how much the BLS has been overestimating employment growth in 2007. I think the US Fed funds rate will have a 2 handle before they are done. 

It will be interesting to see if the RBA thinks they need to raise interest rates in Feb. My bet is if they do they will be taking it back before the end of the year. It seems commodities are having the last gasp in this current bull market.


----------



## ithatheekret

There's always the slightest chance that next week we could see a move back up the ladder in the US , as the companies start reporting , Wed or Thurs I think .

To be honest I would see it as an opportunity to sell into strength , given the fact that we have been fed crap all through 2007 . The heebee geebees are in place and will take a bit to shake people out of , including the funds that all went diving into a bull trap .

Cynically looking back at all the calls , especially the *Bears Stearn* buy now or miss out calls just to mention one of them for example . One has to ponder the reasoning behind such calls and then shuffle with amazement that they can get away with it . 

It's obviously in the administrations interest to let them continue .

The only persons that should be interested in Bears Stearns and the likes , should the Dept. for Public Prosecutions or the Attorney Generals Dept. or whomever it is their duty to do so . But I don't expect much , more than an out of court settlement with the government . You see its tends to be good business to break the law .


----------



## hacheln_mice

https://www.aussiestockforums.com/forums/showpost.php?p=167474&postcount=318

It is always fun to go back to old posts and see how 'forecasts' are coming along.  So far so good. 

No hindsight there!!! *cough*


----------



## Wysiwyg

hacheln_mice said:


> For now I'm neutral/bearish on the markets.  Longer term, I'm still very very very very bullish.





Nice work hacheln_mice, now i would like you to come away from that wall socket with the knife and tell me if you are still v.v.v.v bullish long term?
Reason being is my eyes tell me a `continuous` slide on indices is happening with the majority swinging to a bearish  mind set.More than just a few month decline sort of thing.
Is it time, in your opinion, for bull run traders to learn the patterning of bear market  trading?  


p.s. if you don`t answer honestly i`ll know


----------



## Lucky_Country

Well with qtrly production and half yearly profit reports out this month or early next we may see some good sentiment return.
Iron ore set too rise as is coal and oil.
Big mining projects coming onstream are driving the AUS economy am more concerned about China and India than whats happenng in the US and have very little to be concerned about in the near too medium term.
US related stocks will struggle but will not turn the market into a bear more like slow the upward trend.
Hopefully by the end of 2008 we shall see a better sentiment from the US but it has too hit the bottom before climbing again and it hasnt hit that yet !


----------



## dhukka

Lucky_Country said:


> Big mining projects coming onstream are driving the AUS economy am more concerned about China and India than whats happenng in the US and have very little to be concerned about in the near too medium term.




Australian mining profits fell to their lowest levels since Decemeber 2005 in the Sep 2007 quarter. 1H08 profits for Australian mining companies will be less than stellar. You don't think what happens in the US effects what happens in China? 



> US related stocks will struggle but will not turn the market into a bear more like slow the upward trend.




Which uptrend would that be? The one in place since 1860? I agree wholeheartedly. 



> *Hopefully *by the end of 2008 we shall see a better sentiment from the US but it has too hit the bottom before climbing again and it hasnt hit that yet




Ahh, there it is, that magical word, 'hope.' I'm hoping it doesn't rain tomorrow so I can wash my clothes and hang them out.


----------



## prawn_86

I have to say that the deeper and harder I look, the more bearish i become.

I still like the resource story, but as i have said before, after the Olympics this year, I will be very wary as i think China may slow down, and possibly 'let' their market crash. They do not want any economic trouble before then, and due to their political structure, can manipulate the markets fairly well imo.

My biggest concern, is how central banks have gone from facilitating a market, to creating a false market by pumping in heaps of liquidity, rather than letting a recession take place. ASX.G touched on it in another thread, that recession is seen as 'natural' in parts of Europe.

IMO this can only end in one ow two ways:
1. Big crash etc etc
2. Countries says to each other "oh well we are all in massive debt, lets just reset to 0 and start again " and then everything will be peachy (this isnot likely)


I know this has probably all been said before but i thought i would add my


----------



## hacheln_mice

Wysiwyg said:


> Nice work hacheln_mice, now i would like you to come away from that wall socket with the knife and tell me if you are still v.v.v.v bullish long term?
> Reason being is my eyes tell me a `continuous` slide on indices is happening with the majority swinging to a bearish  mind set.More than just a few month decline sort of thing.
> Is it time, in your opinion, for bull run traders to learn the patterning of bear market  trading?
> 
> 
> p.s. if you don`t answer honestly i`ll know




Please do not take my words for the gospel.  Unfortunately, I'm only human and I'm therefore prone to making errors, especially in regards to unforeseeable events.

If you haven't noticed, my post was made before the 'credit crunch' started chomping on the bull's right testicle.  I guess I can't be 'vvvvv bullish long term' now can I?  My time machine is broken for the time been so I don't have anything valuable to offer right now other than this and probably this.

Now, I would like you to come away from that time machine of yours and tell me where your time machine was 6 months ago.





In response to learning 'bear market trading', I say no.  If you want to save yourself from a bear market, learn to hedge.  Note that there will always be a bull market somewhere - even during bear markets - you just have to look harder.  While we're on the topic of bull markets, please stand aside and let me enjoy my monstrous gains in Incitec Pivot (IPL).


----------



## ithatheekret

Comrades , Hach does have a point and we must be objective and open minded . Logic say it is right , but time is the issue .

I'm sure we can all agree that the charts posted are linear , I took note of that 5800 , because some will remember it was one of the levels I mentioned during my 6200 test mutterings , some will also note from the ASX chart that it contains the other levels I mentioned , but you will notice the bottom of the pennant is pointing to 5800 , pray we don't get there , personally I think we'll could but , regard 6100 and 5940 as the bottoming areas . We are headed up , but it will take time for confidence to come back , even for top grade stocks that aren't tangled in the US mess . I have a lower area of 5300-5400 , but these would take a total cut back in exports . That ain't going to happen , we are going to sneeze and puke due to snuggling up to the US , but London is going to cop it worse than we will .

I also have a view that a sneaky French provincial old fox , is going to have the last laugh , when it comes to monetary policy in M2 and M3 ..... and I don't mean the commo glamour boy at the French helm .

Abbey Cohen is right the Dow will go to 15000 , but only after the Dow has been reshuffled with the stocks that make it up and a bit longer time than we will have to wait for 7000 . I have an estimate ( note that as I have only got considered stocks as replacements on the Dow) on the Dow , with a peak of somewhere around 14700-14800 by 2010 . Most will also remember , I'm after cheap banks with solid security that can see it ride the stuff ups out , at present the only bank management I like is in Singapore and I've only found one there . The St. George here I believe made a sound call with the malls as security from Centro , they are in control there and St.s will recieve penalties on the loans , even if Centro manages decent refinancing or get a swag of malls dirt cheap . Some of the smaller banks in the US will get swallowed up by larger European banks or Aussie and US banks with enough cash with to expand after the writedowns , which I would expect to grow this quarter and the next .

Just to throw a spanner in the works , I've mentioned to friends who the only ones I offer advise to , they are professionals whose fields I use for free , so they get mine the for the same . I called shorting the market above 6300 as 6280 was the calculated peak with each stock attracting various premiums .

The premium is bade on projected earnings per share and projected organic growth , not relying on the same pile of money riding around a continent in circles which has zero growth rates , but for those who get to hold onto the biggest piles . This is one of the US problems , same cash revolving around , with a reliance on cheap 28 day money to turn a quick profit on if they can manage that .......

In conclusion , even the DH James Glassman who spruiked the Dow will go to 36000 was partly right  , but his time frame was well off , by two maybe three decades from now . The dotcom collapse proved him an idiot , George Bush has just sent the same DH to deal with his middle east allies . So what's that say about George that we didn't already know , he's just sent the best salesman he has to close deals on loans , that's what , after 30 odd years I think most would have forgotten what he said , it comes with the C.R.A.F.T. bug .

Truthfully now ...... How many of you remembered that Malcolm Turnbull had tried to run for a N.S.W. Labor Senate seat , then thought he'd get to be leader of the Liberal Party , I did and vocally reminded my member who was on the way to the airport to clean out his office , when I pulled him up .


----------



## theasxgorilla

Wysiwyg said:


> Nice work hacheln_mice, now i would like you to come away from that wall socket with the knife and tell me if you are still v.v.v.v bullish long term?




If you've been studying finance long enough, and MANY of us have, you'll have noticed that its actually relatively easy to pick faults with what has come to pass.  I mean what the hell was the Federal Reserve Bank creation all about anyhow?  Privatisation of money creation...sick.

While we've had the last 4 decades to analyse the Apollo missions with all our modern day cleverness and technology the people who actually made it happen back then with their arcane means, actually MADE IT HAPPEN.  My point being that its important to remember that whilst there are always bunches of smarties sitting around trying to pick when things will finally go wrong there are probably just as many people with their heads down and bums up just getting on with it.  These are the people who shape history.  The remembered 'I told you so' people are few and far between.

I can see the change in sentiment across world markets and the faults within the monetary system and the cracks that have opened up recently as a result of them...I see it just as clearly as anyone else who has studied it.  Still, it hasn't stopped me or many others making money whilst other people with higher IQs and sharper perceptiveness were calling for tops.  Whether you've tried to preempt the change in sentiment as many of us have, or not, I still see this current move as sideways.  Time passing as opposed to price rocketing (as it has) or falling (as many here reckon it already is).  Time passing = waiting.  There are still plenty of parachutes left to go around.  Although, wasn't Friday night on the US markets rather entertaining??  Can't wait to see if a real support level is actual broken.

Bring it on.

(ING Direct 6%+ loving) ASX.G


----------



## treefrog

worth noting - Chip Anderson"s musings
S&P BULLISH PERCENT GIVES THE BIG PICTURE
Hello Fellow ChartWatchers! 

Welcome to 2008! The start of a new year is always a good time to look for the big-picture perspective on things and few things say "Big Picture" better than the Bullish Percent Indices. By condensing the technical picture for 500 important stocks down into just one number, the S&P 500's Bullish Percent value ($BPSPX) gives you a great indication of the overall health of the market. Check it out: 



Starting in 2004, the BPI settled down into a nice little pattern - rallying after hitting 50% (green arrows) and then reversing soon after passing 75% (red arrows). It repeated this pattern four times as you can see. At the start of 2007 however, something changed - the BPI bounced between 70% and 80% a couple of times, then fell sharply and didn't bounce at 50% for the first time in years (blue arrow). When it finally bounced in September, the BPI was down around 33% (purple up arrow) which was its lowest reading since March 2003. The biggest warning sign came soon afterwards when the BPI was only able to rally back up to 70% before falling again (purple down arrow). That was its lowest "peak" in years and a real sign of weakness. The weakness was confirmed in December when the BPI only rallied back up to 56% - a very troubling sign indeed. 

Remember, these numbers represent the charting "health" of the 500 biggest stocks in the market - and the diagnosis isn't looking promising right now.


----------



## sam76

2308 GMT [Dow Jones] Australian economy is better placed in 2008 to absorb any U.S. recession than in 2001, says Commsec chief equities economist Craig James. Corporate profits at 16-year year highs, bank bad debts near record lows, unemployment rate 4.5%, two points below 2001 recession level; says main concern for Australia is knock-on effects of U.S. slowdown on global economy, reducing demand for Australian exports, but RBA "well placed" to cut interest rates. Any cut in rates would have "powerful" effect in lifting residential building, boosting spending and maintaining growth.(EGC)


----------



## dhukka

sam76 said:


> 2308 GMT [Dow Jones] Australian economy is better placed in 2008 to absorb any U.S. recession than in 2001, says Commsec chief equities economist Craig James. Corporate profits at 16-year year highs, bank bad debts near record lows, unemployment rate 4.5%, two points below 2001 recession level; says main concern for Australia is knock-on effects of U.S. slowdown on global economy, reducing demand for Australian exports, but RBA "well placed" to cut interest rates. Any cut in rates would have "powerful" effect in lifting residential building, boosting spending and maintaining growth.(EGC)





Thanks Mr Craig, points out the obvious, James. All the stats on the Australian economy that he cites look great no doubt. The only interesting point in that paragraph is that he is starting to talk about the possibility of a US recession. If the US does go into recession James certainly didn't anticipate it. 

Maybe he has a better handle on the Australian Economy, although you wouldn't think so from the last sentence. Does he really think that RBA rate cuts will be passed entirely on to homeowners? The US has now cut 100 bps and 30 year mortgage rates are at about the same level they were a year ago. 

As he notes, the big unknown is the extent of the knock-on effects from a slowing US economy. Talking about cheaper housing is of little solace if people start losing their jobs.


----------



## Uncle Festivus

Lucky_Country said:


> US related stocks will struggle but will not turn the market into a bear more like slow the upward trend.
> Hopefully by the end of 2008 we shall see a better sentiment from the US but it has too hit the bottom before climbing again and it hasnt hit that yet !




I'm not sure the US markets are trending upward, if double top's are anything to go by, as per my thread - 

https://www.aussiestockforums.com/forums/showpost.php?p=237680&postcount=972

Going back to the start of monetary debasement on a quarterly chart shows a distinct lack of ' conviction' in strength of the second top advance.

Just can't see any long term drivers to breach new highs on any index in this cycle, which is turning down, with a very long resolution time to turn positive again.


----------



## Sean K

Uncle Festivus said:


> I'm not sure the US markets are trending upward, if double top's are anything to go by, as per my thread -



Isn't the double top target from that set up around 0! 

That's some correction......


----------



## ithatheekret

dhukka said:


> The Bush recue plan does not provide any liquidity, it is a simple rate freeze applied to a marginal number of households and will have a negligible effect.





Negligible , ...........  that's the nice way to put it .

Could you imagine the casualty list if they were doctors , DOA , DOA , DOA .... whoops there's one we missed , BANG , DOA , DOA , DOA ......


----------



## treefrog

kennas said:


> Isn't the double top target from that set up around 0!
> 
> That's some correction......




sure is - on that chart the DT is confirmed below 800 with a target of 200


----------



## Sean K

> *DJ Australian Shares Midday: Down 2.0%; Value Emerging07/01/2008 12:54PM AEST  *
> 
> SYDNEY (Dow Jones)--The Australian share market is down sharply midday Monday, with falls across the board, after Wall Street and the London Metal Exchange suffered Friday from a weak U.S. employment report.
> 
> The benchmark S&P/ASX 200 index was down 126.8 points, or 2.0%, at 6180.7 at 0145 GMT, earlier hitting a three-week low of 6148.1.
> 
> However, volumes remain light, with many institutional clients still on holiday.
> 
> Resources and financials have had the biggest negative impact, with BHP Billiton down 2.1% at A$39.99, National Australia Bank down 2.3% at A$36.46 and Westfield down 3.9% at A$19.04.
> 
> Despite the falls, analysts say the Australian economy is in good shape and value is starting to emerge.
> 
> "It's very much a case of follow the leader," said CommSec chief equities economist Craig James. "But it's still the case that our economy is in a whole lot better shape (than the U.S.). Valuations are very good."
> 
> James said the historic 2007 price-to-earnings ratio is about 14 times, compared with a long-term average of 15.7 times and a low of 13.1 times in August 2007.
> 
> "If it falls to about 13.5, it will represent a good long-term buying opportunity," said James, who has a midyear target of 6900 for the S&P/ASX 200.
> 
> Elsewhere on the share market, Zinifex was down 4.8% at A$11.59 after hitting a 16-month low of A$11.41 following a steep fall in LME zinc prices.
> 
> Telstra, Woolworths and Foster's have outperformed, thanks to defensive buying.
> 
> -By Sydney bureau; 61-2-8235-2950; djnews.sydney@dowjones.com




James is a Bull and his job somewhat depends on the market going OK, but I think he has some qualifications over my degree in beer drinking, and I couldn't call him a ramper. 

Another correction another opportunity? Or, a 50 year Bear?


----------



## dhukka

kennas said:


> James is a Bull and his job somewhat depends on the market going OK, but I think he has some qualifications over my degree in beer drinking, and I couldn't call him a ramper.
> 
> Another correction another opportunity? Or, a 50 year Bear?




Or how about anything in between? It will be interesting to revisit his forecasts in June. Revisiting AMP's Shill, I mean Shane Oliver's forecasts from last year.




> *Market is just correcting itself*
> ...AMP Capital Investors chief economist and head of investment strategy Shane Oliver expects investors to have a rough ride for the next few months but says the long-term direct impact of the downturn will be minimal.
> 
> "However, the main risk is if the crisis leads to a further slump in the US credit and share markets," he says.
> 
> "The US sub-prime mortgage crisis will get worse before it gets better.
> 
> "Total losses could be high - up to $US100 billion ($A116 billion) - but this is small relative to the US mortgage market overall.
> 
> "We don't believe it is enough to trigger a US recession."
> 
> Mr Oliver says over the next six to 12 months the market will continue to rise, as the $US100 billion loss represents only 1 per cent of the total outstanding mortgages in America.
> 
> Despite yesterday's almost 3 per cent fall to 6082.9 points, *Mr Oliver is forecasting that the benchmark ASX 200 index will reach 6700 points by year end and break 7000 points in the first quarter of next year.*
> 
> "There will a rough patch for the next few months *but the market will rally hard in the last few months of the year," he said.*
> Historically, a collapse in the US mortgage market has never significantly affected consumer spending levels or kicked off a recession.




Looks like Oliver was relying on the Santa Claus rally that never arrived. Still he was wasn't too far off (about *-4.1%*). Wonder how close he'll get with his *7000* in *1Q08* call?


----------



## theasxgorilla

Anyone watching the S&P500?  Those boys in the PPT are sure effective aren't they?  Here I was thinking we'd get a weak close and whaddayaknow...


----------



## explod

theasxgorilla said:


> Anyone watching the S&P500?  Those boys in the PPT are sure effective aren't they?  Here I was thinking we'd get a weak close and whaddayaknow...




Yep got an election in November.  The stunts will go way over the top and you and I have a ring side seat.   Not much to be made out of ticket selling though and by the look in thirty years they will not believe you anyway.


----------



## hacheln_mice

theasxgorilla said:


> I still see this current move as sideways.  Time passing as opposed to price rocketing (as it has) or falling (as many here reckon it already is).  Time passing = waiting.  There are still plenty of parachutes left to go around.  Although, wasn't Friday night on the US markets rather entertaining??  Can't wait to see if a real support level is actual broken.
> ASX.G




I second that.  Just one big ol' trading range.


----------



## Edwood

Merrill's reckoning the US is already in recession

http://www.telegraph.co.uk/money/ma...CBQ0IV0?xml=/money/2008/01/07/bcnuseco107.xml


----------



## ithatheekret

Merrills must have some bad news to splutter out I'd presume .......

Nowhere have I seen a reason for them not to go into recession , when as far as I'm concerned they already were , the market just kept going , a sellers market , cough , cough , cough .

But to get down to the nitties thus below has stated " the US faces several challenges " . Hank the w/yank being one of them .


----------



## ithatheekret

Has anyone heard one of the myriad of economists mention the interruption of the perpetual consumption ?

Someone recieved a reply from me here , that "to understand the business helps one negates the risks "

If you understand the motions and structure of true capitalism , the motorisms aspects are clearly defined . Much of this apart from consumers and labour , fulls into the policy box . Shifting idealogies play a main part here , and it is happening , people just have to realise it , including the smart money or they'll get caught again .

There's a lot of avenues we could go down in relation to what has actually happened , which I won't go into or we'd have to start talking wars etc. , but the analysis is easy to acheive when you look into the relations between all the above mentioned and others . Accumulations ( a subject in itself ) , protection of supply in consumer goods and redistribution of wealth are all semaphores .

The shift will cause disruptions all by itself , any stuff ups in ledgers , will just add to it . The fuel is money , always has been in a capitalist world . 

So if we know what the fuel is , then all that has to gauged is the burn rate .

The problem faced is now whether the fuel consumption can be maintained .


----------



## numbercruncher

House equity maxed out, now Americans are being forced to max out Credit cards to cover the shortfall.

Surely more pain to come. Peak debt is surely just around the corner.



> The Federal Reserve reported Tuesday that consumer borrowing rose at an annual rate of 7.4 percent in November, far higher than the 1 percent rise in October.
> 
> The 7.4 percent overall increase in credit pushed total credit up by $15.4 billion - much stronger than the $8.5 billion increase that analysts had been expecting.
> 
> The overall increase left total consumer credit at a record $2.51 trillion. The Fed's credit report tracks all debt not secured by real estate meaning that mortgages, a big chunk of the debt load carried by most households, is not covered




http://money.cnn.com/2008/01/08/news/economy/consumer_borrowing.ap/index.htm


----------



## Whiskers

Assuming they can broker a deal, for arguement sake, to freeze the interest rate of all loans... will the average US consumer take the hint and tighten their belt or continue spending and cause an exponential bust some time later?



> President Bush, meanwhile, conceded, "It's going to take awhile to work through the downturn," and Treasury Secretary Henry Paulson said he is concerned about the potential for additional home defaults.
> 
> Paulson said the administration is exploring expanding a deal it brokered with mortgage lenders last fall to include relief to people who borrowed at prime, conventional rates as well as those with subprime, adjustable-rate mortgages that were due to reset.
> http://biz.yahoo.com/ap/080108/housing_outlook.html


----------



## Whiskers

The Federal Reserve will cut interest rates more than previously anticipated... apparently.

But will it be enough to stave off the bear market that some commentators are now calling! Maybe enough that the Aus market won't hurt too badly.



> *U.S. Will Escape Recession as Consumers Hold Up, Economists Say *
> 
> By Shobhana Chandra and Alex Tanzi
> 
> Jan. 9 (Bloomberg) -- The U.S. will skirt recession as consumer spending slows without collapsing, a survey of economists showed.
> 
> Economic growth will average 1.5 percent in the first six months of 2008, matching the fourth quarter's pace, according to the median estimate of 62 economists surveyed by Bloomberg News from Jan. 3 to Jan. 8. The rate of expansion would be the weakest since the last nine months of 2001.
> 
> It's soft economic activity that feels like a recession, but we probably won't have one,'' said Mickey Levy, chief economist at Bank of America Corp. in New York. ``The state of the consumer is clearly softening, but spending is not declining. That's very important.''
> 
> The Federal Reserve will cut interest rates more than previously anticipated, economists said, triggering a reacceleration in growth by the third quarter that will keep the economy from stalling.
> http://www.bloomberg.com/apps/news?pid=20601068&sid=aEUZyMLV9TMo&refer=economy


----------



## MS+Tradesim

> In a brilliant article in the Wall Street Journal, Carrick Mollenkamp and Serena Ng detailed the rise and fall of a collateral debt obligation (CDO) called Norma, ushered into existence by Merrill Lynch. This is a $1.5 billion CDO created in March of 2007 with over 90% of its paper rating "A" or better, and $1.125 billion rated AAA. In November 2007, the entire CDO was downgraded to junk.
> 
> That is not particularly news, as there are a lot of subprime CDOs that are being downgraded. What caught my eye was how this CDO was created. Quoting (and emphasis mine):
> 
> "For Norma, [the manager] assembled $1.5 billion in investments. Most were not actual securities, but derivatives linked to triple-B-rated mortgage securities. Called credit default swaps, these derivatives worked like insurance policies on subprime residential mortgage-backed securities or on the CDOs that held them. Norma, acting as the insurer, would receive a regular premium payment, which it would pass on to its investors. The buyer protection, which was initially Merrill Lynch, would receive payouts from Norma if the insured securities were hurt by losses. It is unclear whether Merrill retained the insurance, or resold it to other investors who were hedging their subprime exposure or betting on a meltdown.
> 
> "Many investment banks favored CDOs that contain these credit default swaps, because they didn't require the purchase of securities, a process that typically took months. With credit default swaps, a billion-dollar CDO could be assembled in weeks.
> 
> "UBS Investment Research estimates that CEOs sold credit protection on around three times the actual face value off triple-B-rated subprime bonds. 'The use of derivatives "multiplied the risk," says Greg Medcraft, chairman of the American Securitization Forum, an industry association. 'The subprime mortgage crisis is far greater in terms of potential losses than anyone expected, because it's not just physical loans that are defaulting.'"
> 
> The article goes on to detail how the entire CDO world is one large daisy chain of credit default swaps. Who's got your back? And who's got the back of the guy who has your back? And .... you better hope it is not ACA.
> 
> Never heard of the company? You will. ACA has dropped 95%, from $16.55 to $0.86 today. Why? Because the company sold credit insurance on CDOs. "If now junk rated ACA can't come up with an additional $1.7 billion in capital by January 18, it will be insolvent and the $69 billion in credit default swaps on CDOs it underwrote will be worthless." (Shilling) $69 billion? That is huge. Think that won't hurt balance sheets all over the world?




http://www.investorsinsight.com/thoughts_va.aspx?EditionID=634


----------



## numbercruncher

> Jan. 10 (Bloomberg) -- Capital One Financial Corp., the largest independent U.S. credit-card issuer, reduced its full- year profit forecast by about 20 percent because of swelling loan losses in a weakening U.S. economy.




http://www.bloomberg.com/apps/news?pid=20601103&sid=agYg.EonG2ig&refer=news


I also read credit card debt is rising much faster than forecast, ominous warning, the maxed out consumer is hurting 

Implodeometer up another notch


----------



## ithatheekret

We could always try a TRIN value , chuck in an upside down ratio and hope the beta gods aren't against us ...........


----------



## numbercruncher

> The New York Times reported that Merrill Lynch (MER, Fortune 500) is expected to take a $15 billion hit when it reports, nearly twice the loss it original estimated




http://money.cnn.com/2008/01/11/markets/stockswatch/index.htm


----------



## lesm

*Moody's US Debt Downgrade; Oh my, this could be HUGE*

Moody's just warned the US that it is at the point of losing its top Bond rating status, due to huge US spending. This rating was given in 1917, when Moody's first rated US debt.

Why would Moody's cut US debt rating? Perhaps that they know something not in the public domain yet, we all know that the US overspends, what else to it is there? We have to remember that behind Moody's there is Berkshire Hathaway, run by Warren Buffett the Omaha Oracle. Are they expecting something much worse to come?

If more rating agencies announce the same, it could be huge for the Markets. In uncertain Market times (like now), the riskier assets are sold and the flight to the safety moves things to US Treasuries. From this safety flights, the dollar get a lot of support.

With the Moody’s downgrade, these Bonds won't have the same appeal to investors, who in turn will be looking for some other safe assets to hedge their risk, outside of the Greenback.

Watch out for other Rating Agencies moving in on US Debt valuations, they may assist a major market shift.

Full Story on our Forex Blog, 'A View From Afar'. http://forexblogviews.blogspot.com/

Semr TheLFB's Man In Europe


----------



## MS+Tradesim

AMP are late to the party, but at least they are starting to face the facts:



> In other words, there is increasing evidence that the US downturn
> is spreading from the housing sector. What’s more, the latest surge
> in energy prices has only added to pressure on the US consumer and
> inflation worries have arguably slowed the Fed in cutting interest
> rates. These considerations suggest that it is now a 50/50 call as to
> whether the US will go into recession or not.






> Given the high risk of a US recession, it’s worth being aware of
> what it could mean for shares. Recessions are normally bad for
> shares, as profi ts slump undermining valuations. Every US recession
> since 1960 has been associated with a sharp fall in US shares. The
> average decline has been 30%, spread over an average 15 months.
> 
> Australian shares have had a bad run through past US recessions,
> with an average decline of 33.8%.




http://www.ampcapital.com.au/K2DOCS...A6CB-46E1-B4DB-FBC8900FA3B9/OINo43.pdf?DIRECT


----------



## dhukka

MS+Tradesim said:


> AMP are late to the party, but at least they are starting to face the facts:
> 
> 
> 
> 
> 
> http://www.ampcapital.com.au/K2DOCS...A6CB-46E1-B4DB-FBC8900FA3B9/OINo43.pdf?DIRECT




It really boggles the mind how shills like Oliver keep their jobs. How far behind the curve can you get? Maybe it's time to get bullish, Oliver could be a good contrary indicator.


----------



## treefrog

and ending this week.........

MARKET SNAPSHOT
U.S. stocks sink on write-downs in financials
B. of A. seals deal for Countrywide; J.P. Morgan reportedly eyes WaMu
By Kate Gibson, MarketWatch
Last update: 3:28 p.m. EST Jan. 11, 2008 
NEW YORK (MarketWatch) -- Stocks dropped steeply Friday, with the Dow headed toward its most dismal first-eight-trading-days-of-a-year run in 17 years, as write-downs and slashed earnings forecasts signaled slowing consumer spending and sparked increased talk of a recession.
"From an earnings perspective, we're already in recession," said Jack Ablin, chief investment officer at Harris Private Bank. 
The major indexes fell to new session lows after a top Federal Reserve official said investors have been too focused on individual interest-rate cuts rather than the overall direction of monetary policy.

http://www.marketwatch.com/news/sto...x?guid={9384C3E2-4648-4F0A-96D0-16CA32881444}


----------



## treefrog

dow uptrend still in tact but not the head and shoulders

momentum down highest in 5years with potential to sustain for another 2weeks


----------



## Uncle Festivus

dhukka said:


> It really boggles the mind how shills like Oliver keep their jobs. How far behind the curve can you get? Maybe it's time to get bullish, Oliver could be a good contrary indicator.




It's like everything else when things are going good in a bull market - you tell the masses all is ok and keep buying the dips & accumulating, because as we all know, shares/housing/(insert asset class here) keep rising in the long term.

The real test for these economists is when it starts to turn the other way, with reassuring words like - "we see some trouble ahead but Oz should be immune from it all because China will keep buying from us". 

They like to have a bet each way, for when globalisation was the best thing since sliced bread, and global economies were so much more entwined that a downturn in one part would be countered by strength in another. But what happens when, due to globalisation, the downturn is synchronised?  

That's were we are now, so there is unlikely to be any savours out there, not even China, who have a unique ways of dealing with the negative aspects of capitalism, in this case inflation - they just mandate to freeze prices - ultimate capitalism.


----------



## doogie_goes_off

Maybe this thread should be called "the sky is falling". I will be accumulating fundamentally good stocks over the next 2-3 weeks. If you are going to buy specs, just make sure they have $ in the bank that makes them "recession-proof".


----------



## Uncle Festivus

doogie_goes_off said:


> Maybe this thread should be called "the sky is falling". I will be accumulating fundamentally good stocks over the next 2-3 weeks. If you are going to buy specs, just make sure they have $ in the bank that makes them "recession-proof".




Yes, stocks are oversold in this cycle, but how do you pick recession proof stocks? Which stocks are 'fundamentally good' ? How do you know it's not the start of a bear market? Are you not admitting the sky _will_ fall if you want recession proof stocks?


----------



## ithatheekret

Uncle Festivus said:


> How do you know it's not the start of a bear market? Are you not admitting the sky _will_ fall if you want recession proof stocks?




Start of a bear market ?  or continuation ?


----------



## mayk

Don't get me wrong, I thought sky would fall if there would be a depression (or worse)not a recession. It will help people to learn and try to avoid this happening in the future. Sure it will cause pain and suffering but that is life.

I think all the major recessions/depression happen for quite different reasons. The first major depressions sure helped to eliminate that happening again, till now.

I  think american economy will continue to grow. Sometimes I wonder the media interest in 'making recession ' happen. It is a wonderful opportunity for the big money organizations ( all big US/UK banks) to buy property/ shares at a cheap rate.

Sure they sometime get it wrong ( the current subprime ) but then the government (and FED reserve) will help them out and they will be back on track. 

Yes 2008 will be a bit jittery, but ultimately the loss of some will be the gain of other, the redistribution of wealth as they say!


----------



## treefrog

then there's the S&P index - most used as reference to to ozzie market because all the dow co's are far too big to compare with ours

- 5yr uptrend break but no break of the topping pattern support (you're sitting on it now madge)


----------



## treefrog

and the US engine room - the Russell2000 index

5yr weekly uptrend well broken and *weekly* downtrend established (lower high and lower low)


----------



## MS+Tradesim

The case for a bear market attached in PDF. Maybe too dire but I'm starting to agree as fundamentals are in place. I'm certainly not seeing any compelling reasons to disagree. Although maybe I'm missing something.


----------



## bean

Just to remind you of the Dow Theory.  The US markets the primary trend is down.
http://www.financialsense.com/Market/wrapup.htm

The DOW of course during the year may make a new high as US interest rate make there way down to Zero.


----------



## explod

bean said:


> Just to remind you of the Dow Theory.  The US markets the primary trend is down.
> http://www.financialsense.com/Market/wrapup.htm
> 
> The DOW of course during the year may make a new high as US interest rate make there way down to Zero.




Dont' know how long a drop in interest rates will last.  Money supply has almost dried up now and the flight from dollars when it really hits will be swift and catastrophic.

We are entering times that have not been experienced in any living memory and they will be interesting indeed.

In fact we could suddenly have a world war and a financial lock up prior to the change of Pres. in November.    Desperate measures come in desperate times.    Remember ole saviour Big Chief Burnin Bush is ralated to dem six shootin cowboys.    Fastestdrawdewinner. 

Should this be on the gloom/doom thread


----------



## Whiskers

explod said:


> In fact we could suddenly have a world war and a financial lock up prior to the change of Pres. in November.    Desperate measures come in desperate times.    Remember ole saviour Big Chief Burnin Bush is ralated to dem six shootin cowboys.    Fastestdrawdewinner.
> 
> Should this be on the gloom/doom thread




Up until about August when this crisis hit the US I think it probably wouldn't have taken much for Bush to start another little war somewhere. But lately even his own party has been calling on him to spend more time on domestic issues and I think he is becoming acutely aware that given his domestic problems, he can't afford another conflict. 

In fact he is probably only now starting to calculate how much extra Iraq is costing him in cash and fuel oil. It must be a pretty significent sum and would probably relieve some pressure on oil stocks and price.

I wouldn't be surprised to hear him call a significant withdrawl before he leaves office to conserve some of that cash and fuel oil to bolster the economy a bit to give his party a chance of winning in November.

Didn't I read somewhere that the US bond credit rating is, or is likely to be rerated down for the first time ever? That must have him worried a bit.


----------



## numbercruncher

Whiskers said:


> Didn't I read somewhere that the US bond credit rating is, or is likely to be rerated down for the first time ever? That must have him worried a bit.




This is true but subject to the US not addressing and fixing the health-care and pension systems soon.

The US is in massive trouble when you look at the grand scheme of things, massive foreign debt that grows by the day, Unfunded pension system with Millions of baby boomers retireing, unfunded health system , financial system/banks under immense pressure , A consumer driven economy where everyone seems maxed out on debt, falling asset prices and rising Inflation.

And thats before the Climate change wildcard putting pressure on emissions and potentially lowering economic output.

Inflation seems to be the only out for them ?

It wouldnt be a far stretch of the Imagination to consider the USD status as world reserve as somewhat under threat ! Nations of the World must be starting to freak out at their ever dwindling USD reserves purchasing power.


----------



## ithatheekret

I think they're in a tough call zone. Here they have low growth that was deliquent anyway , now that growth is slowing further . The stimulus packages to date have all been inflationary , the cuts and stimulus to come will also be inflationary . 

So why would the Fed. be wanting to tempt hyper fate in a stagflationary enviroment ?

Well , we can see that houseprices are falling ( still ) , this is a recessionary effect by itself , where stimulus and debt issues for raising have now been able to be spread through a borrowing market , that it turn spreads it out again to the ones lending . 

When it gets down to a point where the borrowers become an extinct species , due to lack of capitalization , compounded by the fact that lenders are stuck in a contractive zone of their own , it get's rough , then rougher , then ......

Every capital market collapse has led to a recession , but the two fold effect caused by housing added to the financial squeeze or freezing up , can go much farther than that as we once saw during the Great Depression , but those numbers were mild compared to the mountain we have before us now .

If my case is right , we will go deeper into stagflation , which we have had for the last 8 years , yet it has been denied , then have a period of hyperinflation , until the breach of the banking code is revealed and the real data is laid out for true examination . This will eventually make things so unafforable that consumers will just stop buying and look at alternatives , like repairs before replacement etc. 

Once business has felt the effects of that by-product , deflation will step in as competition forces the exporters to drop prices . That leaves only companies with true organic growth as the ones seen to be attractive on risk and the lower beta stocks of the yesteryears brought back up in index reratings if need be , to be looking for value alone is really insuffice .


What get's me is where's the deflationary effects they're worried about ?

Could it be the lack of manufacturing and reliance on services ?

Or is it just the oversupply of stimulus that created the housing dilema , to now have the trucks back up to pour in more ?

Now , if it's organic growth , we really need , it leaves only few select areas to choose from , this includes gold stocks etc . , I look at the utilities and can see no prospect of organic growth , the only growth that can really be achieved is through acquistions .

I hope that's not over the top for members to understand , I've put it as simply as possibly .


----------



## Kauri

Where are the Trillions of sub-prime fallout/losses hidden??? The banks are slowly owning up to some of it, I guess it's the packaged vehicles that they didn't have time to on sell for thier slice/commission. Some hedge funds have been caught, and even a few councils here in Aus.. but it falls far short of the trillions talked about. Are hedge funds hiding it temporarily by not marking to market, are pension and or super funds sitting on a pile of it, would insurance/wealth management firms be up to thier necks in it?? Does anyone have any idea as to where it is buried, before it bloats and rises to the surface??
Cheers
........Kauri


----------



## Kauri

Even if you lose one eye you can still see with the other.. :bloated:  
Cheers
.........Kauri



> Jan 14th. Finally a cheery piece, this time from Anatole Kaletsky in his regular economic piece for the UK Times entitled "Goodbye to all that: the worst is over for the global credit crunch." Kaletsky argues that "in Britain, there seems to be_ almost no chance of economic and financial disasters comparable to those suffered from 1990 to 1992_." This is because Kaletsky is upbeat about the prospects for the global economy in 2008.
> Kaletsky argues that (1) _the credit crisis is almost over_ with any residual action required readily taken by either banks or governments; (2) _"there will be no US recession"_ as real rates remain low and the Fed has indicated a willingness to cut. Cheap funding should ensure that consumers and businesses keep on spending. And (3) "stock markets around the world will rise". Share prices have _already discounted a recession therefore making stock valuations look attractive_.


----------



## treefrog

dumb question

do we have any of these yet??

cheerz


----------



## Nick Radge

For those that missed it, the US night session S&P just dropped 60-points. Thats 750 Dow points...

...but it bounced straight back. 


Could have been a sell order out of Europe.


----------



## Gundini

Nick Radge said:


> For those that missed it, the US night session S&P just dropped 60-points. Thats 750 Dow points...
> 
> ...but it bounced straight back.
> 
> 
> Could have been a sell order out of Europe.




So what does that mean Nick, was the sell order cancelled/mistake/pending?


----------



## Gundini

Do you mean night fluctuations on the weekend in the US (Futures or Index), or on this chart. Can't see it, but maybe you had to be watching live...


----------



## Edwood

it was live just after 6pm Aus time.  looks like dodgy data / trades - IB put a note out to say any fills on the below will be busted

ESH8 - executions above 14,220 and below 13,980
SPH8 - execution below 13,980
NQH8, NDH8 - executions below 19,060
ZDH8, YMH8, DDH8 - executions below 12,550
EMDH8 - executions below 79,350
NQM8 - executions below 1,922
ER2H8 - executions below 70,230


----------



## ithatheekret

Look in the sky , is it a bird , is it a plane ?

*NO , it's SUPER BEN*


----------



## Kauri

I hear that Japanese Mizuho Bank is going to put Y140 into Merrill....
Cheers
.........Kauri


----------



## numbercruncher

Interesting little read here ...




> Economic Tsunami Is Upon Us
> 
> A simple truth, ignored for generations, is leading us to enslavement and privation. Wealth makes us free, and debt enslaves us. Debt-based currency puts you in debt without your consent and prevents your escape from the consequences. In answer to an editorial by Rob Kall.
> 
> ::::::::
> 
> 
> As long as you have the Federal Reserve System operating with a monopoly on the creation of debt-based money out of thin air, a few things are inevitable:
> 
> 1. The system requires continued growth in order to remain viable, ever increasing as interest on the fake money is compounded. When the Fed says their aim is 'price stability', that means they will inflate the currency at the same rate as economic growth. This means that they rob the population of all increases in productivity, because prices should fall when productivity rises, not stay 'stable'. But stable prices are impossible when all currency is borrowed into existence because the interest to repay it must be borrowed, too, and mathematically you will reach a point where the interest and borrowing must accelerate out of control.
> 
> ...... Article continues at link ......





http://www.opednews.com/maxwrite/diarypage.php?did=5601


----------



## Kauri

Just coming out now...I think...

C's 4th quarter write downs are USD$ 18 Bln (and the good spin...it's before tax  ) .. so expect the Dow to lift.. it's better than expected..
Cheers
...........Kauri


----------



## Gundini

Kauri said:


> Just coming out now...I think...
> 
> C's 4th quarter write downs are USD$ 18 Bln (and the good spin...it's before tax  ) .. so expect the Dow to lift.. it's better than expected..
> Cheers
> ...........Kauri




Lift for a short term only....

But fundimentals say, trouble is here to stay, so move to higher water, and wait...


----------



## chops_a_must

Kauri said:


> Just coming out now...I think...
> 
> C's 4th quarter write downs are USD$ 18 Bln (and the good spin...it's before tax  ) .. so expect the Dow to lift.. it's better than expected..
> Cheers
> ...........Kauri




The write downs appear to be on the more positive end.

Futures are yet to make up their minds. Still a long way to go before open, but it's going to be an interesting night. A sharp move in either direction is on the cards. Not prepared to touch it until it makes up its mind.


----------



## Kauri

Gundini said:


> Lift for a short term omly....
> 
> But fundimentals say, trouble is here to stay, so move to higher water, and wait...



 I spent a lot of time in the desert developing my dry sense of humour.  
Cheers
.........Kauri


----------



## chops_a_must

Kauri said:


> I spent a lot of time in the desert developing my dry sense of humour.
> Cheers
> .........Kauri




And there it should have stayed... :


----------



## >Apocalypto<

Kauri said:


> I spent a lot of time in the desert developing my dry sense of humour.
> Cheers
> .........Kauri




H hA HA HA HA

that is very good Kauri!


----------



## lesm

The US PPI and Retail Sales figures are scheduled to be released at 12:30am AEST, will see what the reaction is.

Entries below show the forecast and previous figures respectively.



> Wed
> Jan 16
> 
> 12:30am  USD  Retail Sales m/m    0.0% 1.2%
> 12:30am  USD  Core Retail Sales m/m    0.0% 1.8%
> 12:30am  USD  PPI m/m    0.2% 3.2%
> 12:30am  USD  Core PPI m/m    0.2% 0.4%
> 12:30am  USD  Empire State Business Conditions Index    10.1 10.3


----------



## >Apocalypto<

chops_a_must said:


> The write downs appear to be on the more positive end.
> 
> Futures are yet to make up their minds. Still a long way to go before open, but it's going to be an interesting night. A sharp move in either direction is on the cards. Not prepared to touch it until it makes up its mind.




i am going to pull a Nick Leeson and bet it all on a quiet night


----------



## Kauri

lesm said:


> The US PPI and Retail Sales figures are scheduled to be released at 12:30am AEST, will see what the reaction is.
> 
> Entries below show the forecast and previous figures respectively.
> Jan 16
> 
> 12:30am USD Retail Sales m/m 0.0% 1.2%
> 12:30am USD Core Retail Sales m/m 0.0% 1.8%
> 12:30am USD PPI m/m 0.2% 3.2%
> 12:30am USD Core PPI m/m 0.2% 0.4%
> 12:30am USD Empire State Business Conditions Index 10.1 10.3




Hi lesm
I think that the main market mover (1330GMT) will be Retail sales... and that it will come in closer to (minus)-0.5% and core at (minus) -0.1% to (minus)-0.2%... now that should get the market moving..  
Cheers
........Kauri


----------



## chops_a_must

chops_a_must said:


> The write downs appear to be on the more positive end.
> 
> Futures are yet to make up their minds. Still a long way to go before open, but it's going to be an interesting night. A sharp move in either direction is on the cards. Not prepared to touch it until it makes up its mind.




Nope.

Deeper it looks like total write downs are in the worse range. Surprise, surprise. But what looks more concerning is the massive drop in revenue, and I'd say that's what's scaring the futures lower. I thought the drop in revenue/ earnings per share was lower than expected, but threw it out as my error. Turns out losses per share were about twice as bad as consensus...

Positive retail sales aren't going to help, but any negative announcement will tank it further I reckon...


----------



## ithatheekret

I think most analysts were looking for softer RPI data from the UK , instead it matched Nov's 06 , Cables gone HUH !   I think a sell off was expected but this might unsettle the BoE more than Cable .

It really show's that the data is baffling some though , could be doing exactly as planned .............


----------



## lesm

Some recent headlines via Reuters.
It appears that Citigroup wrote off $18bln.



> TOP STORIES
> > Citigroup raising $14.5 bln, cuts divi, posts loss[nN15468107]
> > German investor morale hits lowest since Jan 1993 [nL15378243]
> > No let-up in European inflation in December       [nL15131412]
> > Merrill to issue $6.6 billion in preferred shares   [nT370724]
> > German 2007 growth buoyed by trade, investment    [nL15671246]
> > Bank earnings, economy worry investors            [nL15665310]
> > Oil eases to $94, US economy in focus               [nSP16038]
> > Bush presses Saudi Arabia to help tame oil price  [nN15451903]
> > Japan may miss long-term fiscal target-govt report  [nT334096]
> > German wiseman warns against excessive pay rises  [nL15501137]
> > BOJ's Fukui says Japan economic growth slowing      [nT350213]
> > Citi writes off $18 bln, Merrill gets capital      [nL1565536]
> > Stock futures extend losses, Citigroup turns lower[nN15475720]


----------



## lesm

Kauri said:


> Hi lesm
> I think that the main market mover (1330GMT) will be Retail sales... and that it will come in closer to (minus)-0.5% and core at (minus) -0.1% to (minus)-0.2%... now that should get the market moving..
> Cheers
> ........Kauri




Hi Kauri,

You weren't far off the mark -0.4% and -0.4% respectively.

Cheers


----------



## numbercruncher

> Retail sales surprisingly weak in December
> Retail sales fell 0.4%, worse than forecast; excluding automobile purchases, sales also slipped 0.4 %
> 
> NEW YORK (CNNMoney.com) -- Year-end holiday shopping hit the skids in December after cash-strapped consumers curtailed their spending, forcing sales at U.S. chain stores to drop worse than expected, according to a government report Tuesday.
> 
> The U.S. Commerce Department said total sales fell 0.4 percent last month, up from a revised 1 percent gain in November. November sales were originally reported to have risen 1.2 percent





http://money.cnn.com/2008/01/15/news/economy/dec_retailsales/index.htm


Yes thats certain to get the consumer economy edgy !


----------



## ithatheekret

Just got this off a new Deutsche Bank platform , they've downgraded Nvidia , sort of a wow , already lost around $10 from it's highs , I'll be waiting for the markets reaction to that .


----------



## numbercruncher

> WASHINGTON (AP) -- Wholesale inflation shot up in 2007 by the largest amount in 26 years even though falling gasoline costs allowed price pressures to moderate in December.




http://money.cnn.com/2008/01/15/news/economy/bc.economy.ap/index.htm?postversion=2008011509

Oh boy the pieces keep falling into place.


----------



## lesm

posted on forexfactory



> *US Data Weakness Clears Way for Fed Surprise*
> 
> Yen soars across the board (2 1/2 year highs vs USD) as weak US data deepen losses in equity futures and further reduce risk appetite. The combination of weaker than expected US retail sales, weak PPI and dismal subcomponents in the NY Fed’s Empire manufacturing survey clears the way for an inter-meeting Fed rate cut of 50 bps, to be followed by 25-bps later this month. US retail sales and ex autos fell by 0.4%, worse than expectations of -0.1%, while the NY Fed Empire Manufacturing Index slips to 9.03 in January from 9.80. The Index’s employment component drops to 2.44 from 5.00 while the 6-month outlook plunges to 19.44 from 34.59.
> 
> Broad dollar weakness persists as markets allow for the possibility of a rate cut as much as 75-bps, either in the form of a 50-bps move this week and 25-bps at the January 30 FOMC meeting, or a full 75-bp easing in January 30. The performance of this week’s data (retail sales, industrial production and Philly Fed) should determine the timing and magnitude of the Fed moves. Thursday’s Congressional testimony by Chairman Bernanke should also add clarity. Separately, Bernanke agreed yesterday about the need for an economic stimulus package, which is expected to be introduced at the President’s State of the Union Speech next week. Meanwhile, former Chairman Greenspan’s latest recession commentary states that “the US is likely to in recession or soon to be”.
> 
> One way to highlight the deteriorating fundamentals and technicals in US equity indices is the lack of follow through by Asian and European equity markets in the aftermath of broad gains in US equity indices. Such dissonance underlines the lack of strength in risk appetite, which is a key positive for the Japanese currency.
> 
> *Yen Biggest Winner Despite BoJ Downgrade*
> 
> The Japanese yen comes off as the strongest winner among major currencies despite the Bank of Japan’s downgrade of its assessment for the regional economies, which was the first since April 2005. The opposing yen dynamics between weakening economic growth and risk-driven yen gains continue to be skewed by the latter factor as global investor confidence is dragged lower by the latest writedowns from US banks and weak economic dynamics in Europe.
> 
> We continue to warn against the possibility of an inter-meeting Fed cut, which would be a short-term positive for global markets and short-term negative for yen pairs, whereby AUDJPY, NZDJPY and EURJPY are to be the biggest losers.
> 
> Preliminary support stands at 106.20, while key foundation stands at 105.80. Intermittent gains remain capped at 108.20. An intermeeting cut has the potential to lift the pair by 100-130 points.
> 
> *Euro Shrugs ZEW, Exploits USD Damage*
> 
> Euro continues to show strength mainly at the expense of the weak USD and GBP despite weak data from Germany. German investor sentiment took a turn to the worse when the ZEW economic expectations index fell to a 14-year low of -41.6 in January from -37.2 in December. The current conditions indicator hit a 14-month low at 56.6 from 63.5. Meanwhile, German GDP growth estimates for 2007 have been downgraded to 2.5% from 2.9% from 2.9%.
> 
> Euro knives through the 1.49 figure, eyeing 1.4930 but the widening growth disparity inside the Eurozone and reduced risk appetite overseas will continue to provide resistance at 1.4960. Caution must be paid at renewed euro longs as we expect losses to reach down to $1.4860, followed by 1.4820.
> 
> *Sterling Gains on Back of Weak Greenback*
> 
> UK inflation remained unchanged at 2.1% in December, while core CPI also unchanged at 1.4%, strengthening the argument for interest rate cuts this year. With the latest reports on manufacturing and housing moving from bad to worse, today’s inflation figures signals the green light for further selling in the currency. We continue to deem intermittent sterling gains on the back of disappointing US data as an opportunity for the shorts in cable (GBPUSD). Friday’s release of UK December retail sales will also be instrumental in further determining the case for further rate cuts.
> 
> Cable’s gains seen facing resistance at 1.9760, at which point we expect renewed losses especially in the case of selling in equities, Cable eyes support at 1.9640, followed by 1.9580.
> __________________
> 
> Analysis by Ashraf Laidi of CMC Markets


----------



## Kauri

just for interests sake..


----------



## Kauri

a little bit of noise over a bomb in Lebanon that has caused injuries... and was aimed at US embassy vehicle...
Cheers
..........Kauri


----------



## Kauri

the Baltic dry index has now lost 20% since highs in November... Asian shipping mobs are suffering.i.e COSCO in China has done 15% over the past two days, and I hear Oslo is getting pulled down as dry bulk charter rates continue declining... on serious worries of a global slowdown cutting deeply into demand... HK and Singers shipping getting done also.. no amount of spin and rhetoric can explain it away.. it is just a *possible* leading indicator on where the big economies are heading.. (and it's not on a slow boat to China).
Cheers
..........Kauri


----------



## Kauri

Kauri said:


> the Baltic dry index has now lost 20% since highs in November... Asian shipping mobs are suffering.i.e COSCO in China has done 15% over the past two days, and I hear Oslo is getting pulled down as dry bulk charter rates continue declining... on serious worries of a global slowdown cutting deeply into demand... HK and Singers shipping getting done also.. no amount of spin and rhetoric can explain it away.. it is just a *possible* leading indicator on where the big economies are heading.. (and it's not on a slow boat to China).
> Cheers
> ..........Kauri




and now is over 30% down.. fromm 11000 odd in Nov to around 7350..
 when shipping backs off it isn't down to a lack of passengers, rather it's a lack of...  ..  .....


----------



## ithatheekret

The combined Nov./Dec. retail sales in the US does not make the picture any better . Talk about kicked when down , but they may as well call the ambulances now . 

" There's going to be an accident " .

To steal a Leisman line ........


----------



## noirua

UK FTSE 100 Index closed down 3.06% at 6,025.6.  Dow down 209.8 at 12,568.34.


----------



## ithatheekret

The S&P has dropped 30 odd points and that beats the Dows 224 by about 120 odd points in comparison .

So where's the plunge team on a coffee break , so much for Fed policy papers .


----------



## wayneL

ithatheekret said:


> The S&P has dropped 30 odd points and that beats the Dows 224 by about 120 odd points in comparison .
> 
> So where's the plunge team on a coffee break , so much for Fed policy papers .




The PPT needs pollyanna dip buyers to be efective, but even the pollyannas are now soiling themselves.

Their job now is to ensure an orderly selloff without panic.


----------



## Kauri

.

Talk that a Japanese bank group.. Mitsubishi-UFJ.. is getting set for 50 Bln yen loss...
Also unfounded, so-far, whispers that the Fed is in an emergency meeting *now*!!
Cheers
..........Kauri


----------



## korrupt_1

chinese whispers? is it true? are we going to get a surprise cut soon? if they are going to do it, they had better do it now or else the market is going back to the stone age....


----------



## Nyden

Kauri said:


> .
> 
> Talk that a Japanese bank group.. Mitsubishi-UFJ.. is getting set for 50 Bln yen loss...
> Also unfounded, so-far, whispers that the Fed is in an emergency meeting *now*!!
> Cheers
> ..........Kauri




Hope you're right Kauri!! No one's whispered to me :


----------



## bloggs_oz

The sky is falling.  Could all lemmings please report to their brokers to part with their shares.

thank you.


----------



## Kauri

Nyden said:


> Hope you're right Kauri!! No one's whispered to me :




 In my view totally unfounded rumours.. but worth noting as rumours move markets.. at times.. especially if you want them to..   
 I tink it is based on a *TV expert*  (an oxymoron if ever I saw one), on Fri predicting it might happen if US Data this week was weak... persnally I think it is too close to the official meeting for the Fed to risk looking any more desparate than they already are.   .. Note that I am wrong more often than I an right, et al.......
Cheers
.........Kauri


----------



## wayneL

Re ECB comments I posted... somewhere:

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/01/14/bcnfedcut114.xml



> *ECB warns crashing dollar may stop Fed cuts*
> 
> By Ambrose Evans-Pritchard, International Business Editor
> Last Updated: 12:09am GMT 16/01/2008
> 
> Rumours of an emergency rate cut over coming days by the US Federal Reserve have swept the global markets, setting off a fresh plunge in the dollar.
> 
> Gold surged to an all-time high of $914 an ounce in New York on bets that the authorities will flood the global system with further liquidity to stave off a mounting debt crisis.
> 
> ECB council member Lorenzo Bini-Smaghi
> Bini-Smaghi is the first central banker to question the Fed's room to cut
> 
> Ashraf Laidi, a currency expert at CMC Markets, said futures contracts were starting to price in a serious likelihood of a half point cut before the next scheduled meeting at the end of January.
> 
> "With US equity indices testing their August lows and current macro-economic dynamics knocking at the door of recession, we place the probability of a 50 basis point inter-meeting rate cut as high as 70pc to occur as early as next week."
> 
> Lorenzo Bini-Smaghi, a member of the European Central Bank's executive council, warned that the tumbling dollar may now start to foreclose the option of US rate cuts and force the Fed to keep monetary policy tighter than it would like.
> 
> "I would not be so sure about the movements of the Fed. There is a serious problem with the dollar in America. We will see what margins they have for further rate cuts," he told Italy's La Repubblica newspaper.
> advertisement
> 
> It is the first time that a top central banker has openly aired concerns that dollar weakness could constrain US economic policy.
> 
> Until now Washington has largely been able to ignore the currency, treating the slide as a headache for the rest of the world.
> 
> The euro briefly touched $1.49 today, just shy of its all-time high.
> 
> A leaked client note by HSBC added fresh fuel to the rate excitement, suggesting that Fed may now have to slash a full percentage point by month's end to fend off a serious downturn.
> 
> The bank's highly-rated New York economist, Ian Morris, said a new tone of urgency had been struck by top US officials over recent days, raising the possibility of two sets of cuts this month.
> 
> Fed chair Ben Bernanke prepared the way for drastic cuts with a speech on Thursday saying the authorities were "exceptionally alert" to the risks as the housing slump triggers the first wave of jobs losses. US unemployment jumped from 4.7pc to 5pc in December, the sharpest jump in a quarter century.
> 
> US Treasury Secretary Hank Paulson said the administration is rushing to craft a fiscal stimulus package to boost spending. "Time is of the essence," he said.
> 
> HSBC said the Fed had now raised expectations so far that it risks setting off fresh "financial stresses" if it fails to deliver a serious shot in the arm.
> 
> "If the Fed were to cut inter-meeting, we think it would by 50 basis points, followed by another 50 basis points on the 30th," it said. The bank said this is a possibility, not a hard forecast.


----------



## rub92me

Thanks wayneL. Looks like all the experts are contradicting each other as usual, just choosing the piece of data that supports their view. Back to the dartboard


----------



## ithatheekret

I was wondering where Ashraf Laidi was , that news item , just fixed that , like that chap , good writer too , had me chuckling a few times , used to work with Korman Tan another goodun' .

Got my 5800 hard hat on , could get even scarier I suppose , 5600 and 5400 are not nice visions .

UBS pulling up stumps around the place , cash raisings into the CRR ????


----------



## ithatheekret

wayneL said:


> The PPT needs pollyanna dip buyers to be efective, but even the pollyannas are now soiling themselves.
> 
> Their job now is to ensure an orderly selloff without panic.




Panic , hmmmm .........

I suppose this means drycleaning rates are going to rise , Oroton and Davenport should be doing okay then ...........  

I walked outside a minute ago and it smells like someones emptying their septic down the valley , either that or there's an awful lot of soiled undies in town , the winds coming from that way .............


----------



## Whiskers

wayneL said:


> Re ECB comments I posted... somewhere:
> 
> http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/01/14/bcnfedcut114.xml




He's probably got his own concerns with the $US falling in the back of his mind scewing his thoughts.

I think I recall the FED earlier saying that the local economy was more important than the $US. 

They don't have much choice but to cut hard and fast if they think the latest lots of figures are trending worse than they thought since they vowed to do whatever it took to stop the country going into recession.

But as many have said before their whole economic system is way out of wack and unsustainable, so I guess it comes down to what price they are prepared to pay for another day of exuberance.


----------



## Bushman

bloggs_oz said:


> The sky is falling.  Could all lemmings please report to their brokers to part with their shares.
> 
> thank you.




Classic! 

Another week of sub prime fall out absorbed. We are now 7 months in to the subprime doom and gloom age. 12 to 15% correction so far from July highs. Give it another 5 months to wash out with less and less of an impact. 

Next hurdle is the scary RECESSION. We are about 3 months into that news story. What timeframe to give this one? 6 to 12 months? 

Then is it is onwards and upwards for those that remain solvent.


----------



## ithatheekret

The US was cutting back taxes just before it hit Iraq , this situation is so tight , I'm glad it's not my mess to clean up .

Stimulus other than taxation will stoke the flames and they can't really afford to drop taxes at a time when they have to make up for the war costs .

Bank of America is to sell it's brokerage wing ......... we could always pass the hat around and put in a bid  

I did see profit in some reports for the banks , not that it helped .


----------



## ithatheekret

Kauri mentioned the Baltic Dry Index yesterday , the Chinese shippers are reflecting the sentiment in price today .

Cathay Financial , a Life Insurer still gaining though on the KLCI though .

Awful lot of unsigned articles showing up matched by the rumours brigade a la frenzy ......


----------



## Kauri

ithatheekret said:


> Kauri mentioned the Baltic Dry Index yesterday , the Chinese shippers are reflecting the sentiment in price today .
> 
> Cathay Financial , a Life Insurer still gaining though on the KLCI though .
> 
> Awful lot of unsigned articles showing up matched by the rumours brigade a la frenzy ......



 a liitle bit aboot the BDI...
Cheers
........Kauri



> The shares of shipping companies have plummeted across the world on fears of a sharp economic slowdown as contagion from the US housing slump reaches Europe and Asia.
> China's COSCO fell 9.4pc in Far Eastern trading. Pacific Basin was off 10pc, and China Shipping Container Line fell 8pc. The selling ricocheted through European bourses and Wall Street: Belships was down 17pc in Oslo, Diana Shipping was off 8.4pc in New York, and Goldenport fell 4pc in London.
> This follows several days of sharp falls in London's Baltic Dry Index (BDI), which measures freight rates for bulk commodities, mostly iron ore, coal, and grains. The index has fallen by a third from record highs over the last two months. On Friday it suffered the biggest one-day fall since modern data began in 1985.
> The index is a barometer of the world economy. Markets fear it may be warning that China's voracious demand for commodities is cooling.
> Julian Jessop, an analyst at Capital Economics said: "There has been a lot of froth and the BDI may be suggesting the boom is coming to an end, but you need to be wary not to read too much into it."
> The index can emit false signals. It responds to the ups and downs in spare shipping capacity, which follow their own distinctive rhythm.
> Robin Bhar, a metals analyst at UBS, said the Baltic slide may be no more than a correction, reflecting a pause in bulk deliveries to China late last year. "*We believe it will bottom out and stage a recovery in due course*, underpinned by continued strength in bulk commodity markets.
> "A further sharp fall in the freight index could signal recession. *We recommend selling the rallies*," he said.


----------



## ithatheekret

I'm wondering if there will be a flow on effect in iron ore and coals , iron ore just recieved a booster through a price hike again , very hard to play the field when looking at stocks in relation to the ore prices , when contracts are the bottom line on pricing ..........


I still have a positive outlook on the ores , but this is nasty for the shippers , could see a cut back in new ships now , just when the old fleets were past their useby dates .

It's about time the financials spat it all out so we can get over it !

Especially Citi .

PS.. volumes will be important for exchanges like the ASX etc. , no volumes no fun .......... no share price happiness .


----------



## Kauri

a liitle more on the BDI..


 HK shipping stocks  have been sinking today. China Cosco, Sinotrans Shipping and China Shipping Development are all down around 10%.  The torpedoeing of freight co's matches up with the Titanic reruns of the Baltic Dry Index. 
Happy sailing
................Kauri


----------



## Kauri

Japanese exporters must be ready to start calling for BOJ intervention soon (if they are not active in the market already), the strength of the yen will be hurting them, the more they hurt the more their stock prices suffer, hurting the Nikkei, the more that hurts the more the crosses strengthen the more the exporters hurt, the more the exporters hurt..... et al.... 
Cheers
.........Kauri


----------



## numbercruncher

hehe BOJ has only got .5pc to play with then moneys free, gotta love it, Uncle Sam going down same path too, whatta world huh


----------



## Kauri

numbercruncher said:


> hehe BOJ has only got .5pc to play with then moneys free, gotta love it, Uncle Sam going down same path too, whatta world huh



 yes, there's not enough room left to swing to dead cat, let alone move the rates.. I guess that only leaves supporting the $US in the market... 
Cheers
........Kauri


----------



## lesm

bloggs_oz said:


> The sky is falling.  Could all lemmings please report to their brokers to part with their shares.
> 
> thank you.




Nah..Your standing upside down. 

Just need to be able to trade both sides of the market and make the most of the opportunities.


----------



## bloggs_oz

lesm said:


> Nah..Your standing upside down.
> 
> Just need to be able to trade both sides of the market and make the most of the opportunities.




You're right - the current market is a great environment to trade in.  I'm actually short at the moment; I purchased put options about a week ago, and sold call options to cover my shares.  It's great waking up every morning cheering when the market goes south! 

I haven't been through a bear market before, but I'm looking forward to the opportunities that come up


----------



## Kauri

More grist for the mill...
Interesting...ECB marginal facility was touched up for E2.3Bln.. no-one owning up to it... but it was on the same day that Hypo Real Estate came up with a E390mln loss in CDO's...

 Cheers
..........Kauri


----------



## numbercruncher

> TOKYO (AP) -- The dollar sank to a 2 1/2- year low against the yen Wednesday in Asia as investors sold the greenback due to concerns over the U.S. economy and *financial system*.




http://money.cnn.com/2008/01/16/markets/dollar.ap/index.htm?postversion=2008011605


I love how the reporting language slowly morphs in severity as time gos by, good to see main stream reporting concerned for the US " financial System " because its clearly in a sad state of disrepair and has been for some time !


----------



## Kauri

*RUMOUR*​Herd on the grapevine...  

 a US investment house is reportedly spreading the rumourof a 50bp Fed Funds rate cut to 3.75% today. The are saying that a cut might be delivered between the 13:30GMT release of US inflation data and the 14:30GMT US stock market open. 

Cheers
.........Kauri


----------



## Whiskers

U.S. Consumer Prices Rose 0.3% in December; Core Rate Up 0.2% 




> Traders anticipate the Fed will lower its benchmark rate by at least a half point this month, to 3.75 percent, and odds of bigger reductions have climbed.
> 
> http://www.bloomberg.com/apps/news?pid=20601068&sid=amNPWva_2dDs&refer=economy


----------



## stockwhizben

where are the dow futures on the cnn money site gone? or is my computer broke
the dow futures havnt been working for me all night


----------



## numbercruncher

stockwhizben said:


> where are the dow futures on the cnn money site gone? or is my computer broke
> the dow futures havnt been working for me all night




Heres a link for you stock ! btw hope your luck changes soon 


http://money.cnn.com/data/premarket/index.html


----------



## stockwhizben

thanks NC. and ur kind words
need some good luck - studying for a job interview for tomorrow too, not usually up so late hehe - trying to land a  job at leighton. their shares also been hit lately huh. from mid $60 to high $40's. going thru the company history and all that, they are winning contracts left right and centre. no need for a sell off of leighton imo. their problem is too much work on the books


----------



## nioka

Kauri said:


> *RUMOUR*​Herd on the grapevine...
> .........Kauri




A herd of what. I haven't heard it.


----------



## Kauri

nioka said:


> A herd of what. I haven't heard it.




If you haven't herd it then it must be a rumour... no??


----------



## Kauri

not something I have herd as such... more something that I have red... AFP

Cheers
........Kauri


> The IMF Warned late Wednesday that the Subprime crisis might produce deeper problems than expected due to* banks holding out* on revealing all of their losses. "Some analytical work modeled on conservative assumptions suggests that potential losses may be higher and further capital injections are likely," Manmohan Singh and Mustafa Saiyid wrote in an IMF report. "Most banks in the United States have not yet marked their assets to genuine transaction prices," the report said. Recent moves by financial institutions to bring off-balance- sheet structures like CDOs on the balance sheet are not at explicit "transfer prices" and thus "*may not be a full reflection of potential losses"* the report went on to say.


----------



## numbercruncher

> Gas, Food Spur Inflation Jump in 2007
> By MARTIN CRUTSINGER – 2 hours ago
> 
> WASHINGTON (AP) ”” Consumer prices rose in 2007 at the fastest pace in 17 years as motorists paid a lot more for gasoline and grocery shoppers paid higher food bills. However, falling prices for clothing and new cars offset some of those gains.
> 
> The Labor Department reported that consumer prices rose by 4.1 percent for all of 2007, up sharply from a 2.5 percent increase in 2006. Both energy and food prices jumped by the largest amount since 1990.
> 
> *Prices were also up sharply for health care, housing and education. However, these gains were offset somewhat by falling prices for clothing, new cars and computers.*
> Workers' wages failed to keep up with the higher inflation. Average weekly earnings, after adjusting for inflation, dropped by 0.9 percent in 2007, the fourth decline in the past five years. The lagging wage gains are cited as a chief reason many workers have growing anxiety about their economic futures.
> 
> Core inflation, which excludes both energy and food, rose 2.4 percent last year, slightly lower than the 2.6 percent increase of 2006. It is the performance of core inflation that the Fed closely monitors.




http://ap.google.com/article/ALeqM5jsanM66tszKz1zFq0LOG4XvWS7zAD8U78EI00


And no rising house prices to cover the gap for wages actually declining in real terms, Credit Cards getting maxed , and another round of Interest rate cuts coming to make the masses of Amerika even worse off ....



Got to love how the prices for things you MUST have are shaply up (health,housing) , but the things you can easily live with out are down ( Cars, Computers) and they call it an offset !


----------



## Kauri

*



RUMOUR​Herd on the grapevine... 

a US investment house is reportedly spreading the rumourof a 50bp Fed Funds rate cut to 3.75% today. The are saying that a cut might be delivered between the 13:30GMT release of US inflation data and the 14:30GMT US stock market open. 

Cheers
.........Kauri 

Click to expand...


*​


nioka said:


> A herd of what. I haven't heard it.




  Rumours move markets... they are a good trading tool, if you have herd the rumour early on that is...

MarketWatch note reports that traders are blaming the stock market rally, not on the Beige Book but on yet another of the now ubiquitous rumors that the Fed will move to cut rates before the January 29-30 meeting.
Cheers
.........Kauri


----------



## Kauri

Kauri said:


> Where are the Trillions of sub-prime fallout/losses hidden??? The banks are slowly owning up to some of it, I guess it's the packaged vehicles that they didn't have time to on sell for thier slice/commission. Some hedge funds have been caught, and even a few councils here in Aus.. but it falls far short of the trillions talked about. *Are hedge funds hiding it temporarily by not marking to market, are pension and or super funds sitting on a pile of it, would insurance/wealth management firms be up to thier necks in it??* Does anyone have any idea as to where it is buried, before it bloats and rises to the surface??
> Cheers
> ........Kauri




 Not really an answer... rather it poses more questions... from the SMH..

*



Stuart Washington 
January 17, 2008 

AUSTRALIAN superannuation investors have billions of dollars linked directly to US companies at the centre of the credit crisis, through the sale in recent years of unsecured "kangaroo bonds".
Potential exposures include $1.2 billion raised in 2006 for Northern Rock in Britain, $1.6 billion for US mortgage provider Sallie Mae, and $925 million for US lender Countrywide.
Kangaroo bond is a term for unsecured notes issued in Australian dollars and marketed in Australia and Asia as large offshore companies attempted to diversify their funding streams.
Last week Countrywide was forced to repeatedly deny it was facing bankruptcy before Bank of America stepped in to buy it.
Issues of kangaroo bonds also include a total of $6 billion for Citigroup and $6 billion for Morgan Stanley - among a host of other US financial institutions. Both banks have experienced billions of dollars of write-downs as a result of their exposure to US mortgages, and have been forced to accept capital injections from foreign investors. On Tuesday, Citigroup announced $US18 billion ($20 billion) in losses as a result of the credit crisis.
Exactly where the kangaroo-bond holders are located is not clear, given the hidden nature of the investors in the bond market. Some of the issues would also have been marketed offshore. "It's somewhere," a Wilson HTM banking analyst, Brett Le Mesurier, said yesterday.
"No one's going 'It's me'."
The bonds would have been bought by fixed-income managers in large funds management groups as part of a fixed-income portfolio. It is also possible the bonds are held by Australian banks, although they do not disclose their individual investments in bonds.
Mark Garrick, the head of capital markets for National Australia Bank, which was a lead manager in the sale of the Northern Rock bonds, said the bank held no investment in the bonds, which were predominantly sold to domestic investors.
"Obviously there's a lot of uncertainty about how the Northern Rock situation works its way out," he said yesterday.
"From the debt holders' perspective to date, obviously the support provided by the UK Government has been important."
Simon Maidment, the head of fixed income at UBS, which was also lead manager in the Northern Rock transaction, said the impact had been felt by bond holders but, for varying reasons, the ratings of the bonds still remained relatively strong.
"While obviously there has been a mark down in pricing or a widening of credit spreads, it has not reflected a bond that is going into default," he said.
Bond-holders, while ranking last among lenders, still rank ahead of shareholders. Prospects for default among the troubled lenders appear to be receding. Countrywide's imminent demise appears to have been halted by the Bank of America. The Bank of England appears to be standing behind Northern Rock. Sallie Mae, one of the largest lenders in the US, is regarded as too big to be allowed to fail.
The chief impact for Australian superannuation funds is that, when the bonds are priced or marked to market, this is reflected as a loss in their overall portfolio.
		
Click to expand...


*


----------



## Yeti

herd |hərd|
noun
a large group of animals, esp. hoofed mammals, that live, feed, or migrate together or are kept together as livestock : a herd of elephants | large farms with big dairy herds.
• derogatory a large group of people, typically with a shared characteristic : I dodged herds of joggers and cyclists | he is not of the common herd.
• as found in _herd on the grapevine_- A group of two-legged animals that feeds mostly on the juice of fermented grapes

verb [with adverbial of direction ]
move in a particular direction : [ trans. ] Nick herded me through the baggage claim and into his Jaguar | [ intrans. ] we all herded into a storage room.
• [ trans. ] keep or look after (livestock) : Hunter and Tripp herded sheep.
ORIGIN Old English heord, of Germanic origin; related to German Herde.


----------



## Kauri

You've got me in one ...     
*Cheers * :alcohol:
.........Kauri




Yeti said:


> herd |hərd|
> noun
> a large group of animals, esp. hoofed mammals, that live, feed, or migrate together or are kept together as livestock : a herd of elephants | large farms with big dairy herds.
> • derogatory a large group of people, typically with a shared characteristic : I dodged herds of joggers and cyclists | he is not of the common herd.
> *• as found in herd on the grapevine- A group of two-legged animals that feeds mostly on the juice of fermented grapes*
> 
> verb [with adverbial of direction ]
> move in a particular direction : [ trans. ] Nick herded me through the baggage claim and into his Jaguar | [ intrans. ] we all herded into a storage room.
> • [ trans. ] keep or look after (livestock) : Hunter and Tripp herded sheep.
> ORIGIN Old English heord, of Germanic origin; related to German Herde.


----------



## Whiskers

Kauri said:


> ​
> 
> 
> Rumours move markets... they are a good trading tool, if you have herd the rumour early on that is...
> 
> MarketWatch note reports that traders are blaming the stock market rally, not on the Beige Book but on yet another of the now ubiquitous rumors that the Fed will move to cut rates before the January 29-30 meeting.
> Cheers
> .........Kauri





I saw one story last night (not sure, think on Yahoo) where a reporter SPECULATED that the FED might move after Ben testifies before congress on Thursday.


----------



## dhukka

Given that this rate cut is the most anticipated in history is it likely to have a huge effect on sentiment? If the Fed doesn't cut this week there will be no inter meeting cut as it would then be too close to the FOMC meeting date. Then let's say the go *50 bps* on Jan 30, is the market really going to rally back to 14,000 on the DOW based on a rate cut that is more than fully priced in?


----------



## Awesomandy

dhukka said:


> Given that this rate cut is the most anticipated in history is it likely to have a huge effect on sentiment? If the Fed doesn't cut this week there will be no inter meeting cut as it would then be too close to the FOMC meeting date. Then let's say the go *50 bps* on Jan 30, is the market really going to rally back to 14,000 on the DOW based on a rate cut that is more than fully priced in?




I agree that a 50bp cut is already priced in. The futures is already saying that the chance of a 50 points cut is 100%. However, if they go for 75, then there might be a bit of a rally. But for it to go back up to 14000, we'll need good news... a lot of good news.


----------



## alankew

Think it is a case of damned if they do damned if they dont-.5 is expected any more than that and the initial euphoria will soon wear off to "didnt realise we were in such a state" will also be dependant on the spiel that goes with the cut.Still dont think it will be enough but might allow some to exit and stand back but the bad news is constant whereas the cut is soon forgotten


----------



## Yeti

I think it is time to start expecting something totally unexpected, out of left field. Maybe some political event...


----------



## Uncle Festivus

What's a doom & gloom thread without more doom & gloom - 



> Fund managers across the world have turned "super-bearish" over the last month, abandoning hope that Europe and Asia can escape contagion from the US housing crisis.
> A Merrill Lynch survey found that a fifth of big investors now expect an outright *global recession*, an occurrence not seen since the 1930s. Some 8pc think the world is already in recession.



As it is increasingly looking that the US is already in a recession, half a point here and there is window dressing. I'm not sure if zero rates will do anything either, so deep is this secular debt contagion. This is going to the core of the fiat money and fractional banking system, and exposing the glaring anomalies of unrestrained debt issuance. The Fed has lost control, so interest rates as a weapon is like firing financial blanks, only satisfying the money shufflers on Wall St with an ephemeral 'fix'.



> "Liquidity doesn't do anything in this situation,"     says Anna Schwartz, the doyenne of US monetarism and life-time     student (with Milton Friedman) of the Great Depression.
> "It cannot deal with the underlying fear that lots of firms     are going bankrupt. The banks and the hedge funds have not fully     acknowledged who is in trouble. That is the critical issue,"     she adds.



Japan, again, on the brink of deflation.



> Japan's prime minister Yasuo Fukuda has pledged to intervene if necessary to prevent a disorderly plunge of the Tokyo bourse amid fears that the country may be sliding back into recession.



Euro countries real estate imminent implosion and consequent casualties.

Aus super redemptions exacerbating the slide here.

Left field events maybe 

- General Motors finally goes into bankruptcy
- Citigroup ditto
- Homebuilders ditto
- an LTCM type bust with contagion into the real economy
- presidential candidate assassination


----------



## Bushman

Uncle Festivus said:


> What's a doom & gloom thread without more doom & gloom -
> 
> Left field events maybe
> 
> - General Motors finally goes into bankruptcy
> - Citigroup ditto
> - Homebuilders ditto
> - an LTCM type bust with contagion into the real economy
> - presidential candidate assassination




Nice Uncle - I cannot believe you have not added the bird flu pandemic to the list. So here it is... 
- A global bird flu pandemic a la the 1918 Spanish flu wipes out millions. 

Add the US attacks Iran, the arms race kicks off again, Turkey invades Kurdistan, etc etc

Yawn ad naseum. Yawning is off course the bodies way of coping with stress. 

9 days red and counting...


----------



## ithatheekret

Kauri said:


> not something I have herd as such... more something that I have red... AFP
> 
> Cheers
> ........Kauri






Sounds like the tier 2 piles are growing and the alpha is on the backburner at present . That would mean quite a few quantative analysts may be unemployed soon as well as a flock of long-short equity managers .


I'd rate that more as classified info than a rumour , who let the cat out of the bag there ..........


----------



## Kauri

ithatheekret said:


> Sounds like the tier 2 piles are growing and the alpha is on the backburner at present . That would mean quite a few quantative analysts may be unemployed soon as well as a flock of long-short equity managers .
> 
> 
> I'd rate that more as classified info than a rumour , who let the cat out of the bag there ..........




 Have I ever told you about my Budgies... :nuts:


----------



## Kauri

from WSJ  (Wall Street Journal)



> suggests the Bush administration may soften proposed controls on borrowing by Freddie Mac and Fannie Mae. Calls have risen for the two government agencies to buy more mortgages to support the housing market as other funding methods have dried up. The limits on the two agencies" mortgage portfolios could also be eased within or without the framework of a larger economic stimulus package, tipped at roughly $100 bln if not $150 bln as proposed by Larry Summers.


----------



## STRAT

Kauri said:


> from WSJ



Hi Kauri. WSJ is short for?


----------



## Nyden

STRAT said:


> Hi Kauri. WSJ is short for?




I should assume Wall Street Journal


----------



## wavepicker

Looks to me US Indices are setting up for some sort of rally here. Not saying that this is the end of the correction,  but it does look like the complettion of the last impulse(leg) down from my EW studies and TIME studies.

We have a contracting triangle wave in place in the last small consolidation before the market fell the last few days. Also very important, we have Time cycle point low due 18/01/08. (3 smaller degree cycle lows in a row = completion of next higher degree cycle), good probability  these indices should move up tonight. Subsequently have taken long positions this afternoon. I have labelled this and abc down(green) for now, with a nesting 
1-2,1-2,1-2 subdividing impulse as an alternate

Cheers


----------



## STRAT

Kauri said:


> from WSJ






Nyden said:


> I should assume Wall Street Journal



Doh!!   Cheers Nyden


----------



## ithatheekret

a US investment house is reportedly spreading the rumourof a 50bp Fed Funds rate cut to 3.75% today. The are saying that a cut might be delivered between the 13:30GMT release of US inflation data and the 14:30GMT US stock market open. 

That will move something either way , if they were to stick to the vanilla .25 the market will be quite upset , a few currencies will wobble too ..........

But , .50 basis points will certainly move the main currencies , stuff the USD , lets get USA on it's feet first .


----------



## dhukka

European markets are acting like it. FTSE up more than 1% in the opening minutes, CAC up strongly as well, US futures up, JPY being sold off.


----------



## Nyden

numbercruncher said:


> Heres a link for you stock ! btw hope your luck changes soon
> 
> 
> http://money.cnn.com/data/premarket/index.html




I seem to be having the same problem stock's having. My futures are frozen, it's been the same for 2 days. Perhaps I need to delete my cookies. Anyone else having troubles?


----------



## ithatheekret

empty your cache , or get a larger external and only clear the main cache , that way you get to keep the historical data , after all you pay to download or upload it .............


----------



## Uncle Festivus

wavepicker said:


> Looks to me US Indices are setting up for some sort of rally here. Not saying that this is the end of the correction, but it does look like the complettion of the last impulse(leg) down from my EW studies and TIME studies.




Yes, you may be right there WP, the negative momentum may have run it's course, sidelined cash looking to buy "bargains" going into the week end maybe ahead of the interest rate cut next week. Getting the hang of these cycles/momentum? A relief rally to sell into?


----------



## roland

Commsecs' latest market wrap:

com.au   13 15 19
The third week into the New Year
and the news certainly hasn’t
improved on the sharemarket.
The Australian sharemarket
posted its eighth straight daily fall
on Wednesday, making it the
longest losing streak in more than
seven years.
However it’s not all gloom and
doom. The correction has
certainly been very orderly with
declines of the order of one to two
per cent per day and in line with
similar declines overseas. In
simple terms the economic news
in the US has been downbeat with
increasing worries that the
economy is headed for – or
perhaps already in – recession.
Those fears in the US are
prompting more general concern
about the outlook for the global
economy.
Interestingly, the health of
Australian economy stands in
marked contrast to the US. Our
economy is posting solid growth,
underpinning corporate revenues
and profits. And it is that strength
in ‘fundamentals’ that will
ultimately drive the recovery in our
sharemarket when sentiment
stabilises.
Matt Comyn
General Manager
Market Wrap


----------



## ithatheekret

I've just decided my News years resolution , bit late , but chit happens ...

This year I am only buying Aussie and Septic made goods , bought enough European and Asian stuff to keep them going and they'll get by-product buying . But I must support the two important economies in my world .


----------



## benwex

roland said:


> Commsecs' latest market wrap:
> 
> com.au   13 15 19
> The third week into the New Year
> and the news certainly hasn’t
> improved on the sharemarket.
> The Australian sharemarket
> posted its eighth straight daily fall
> on Wednesday, making it the
> longest losing streak in more than
> seven years.
> However it’s not all gloom and
> doom. The correction has
> certainly been very orderly with
> declines of the order of one to two
> per cent per day and in line with
> similar declines overseas. In
> simple terms the economic news
> in the US has been downbeat with
> increasing worries that the
> economy is headed for – or
> perhaps already in – recession.
> Those fears in the US are
> prompting more general concern
> about the outlook for the global
> economy.
> Interestingly, the health of
> Australian economy stands in
> marked contrast to the US. Our
> economy is posting solid growth,
> underpinning corporate revenues
> and profits. And it is that strength
> in ‘fundamentals’ that will
> ultimately drive the recovery in our
> sharemarket when sentiment
> stabilises.
> Matt Comyn
> General Manager
> Market Wrap






Matt Comyn 
General Manger of Comsec and his credit as a market commentator is ???
Now their is a ramp if ever I heard one..
Comsuck!


----------



## Buster

G'day Ithatheekret,



ithatheekret said:


> This year I am only buying Aussie and Septic made goods , bought enough European and Asian stuff to keep them going and they'll get by-product buying . But I must support the two important economies in my world .




I made a pact similar to this many many years ago, using the AUSBUY guide as a reference.. 

You're wasting your time mate, as, you pump your cash into locally produced products all the while feeling like you're 'doing some good'. Ultimately in order for the head honcho's to send it offshore again with thier BMW's and Mercedes Benz's.. 

Regards,

Buster


----------



## Whiskers

Base metals are hanging on the edge of their seats waiting for Ben too.

There are now some concern that an early cut could further spook the markets.



> *Copper firm on weakening inventories, eyes Bernanke*
> Thu 17 Jan 2008, 10:46 GMT
> 
> By Humeyra Pamuk
> 
> LONDON (Reuters) - A fall in inventories and physical buying in Asia lifted copper prices on Thursday, but analysts expected few big moves ahead of a key speech by U.S. Federal Reserve chairman later in the day.
> 
> Base metals have been under pressure for most of this week because of growing concern about the health of the U.S. economy, which could have a knock-on effect on demand for metals.
> 
> 
> But analysts remained cautious and did not expect big gains range-bound day ahead of U.S. Federal Reserve chairman Ben Bernanke's testimony on the outlook for the U.S. economy before the House Budget Committee at 1500 GMT.
> 
> "It's probably just a pause, I can't see the market pushing higher," a London-based trader said. "People are waiting to see what Bernanke has to say about interest rates."
> 
> Markets are expecting the Fed to cut benchmark interest rates by 50 basis points before the end of January.
> 
> Analysts say an emergency cut before the meeting at the end of January could further spook markets, already under pressure from worries about recession in the United States and a global economic slowdown, which will curb demand for natural resources.
> 
> http://africa.reuters.com/business/news/usnBAN728179.html


----------



## numbercruncher

> NEW YORK (CNNMoney.com) -- Merrill Lynch reported a quarterly operating loss of over $10 billion Thursday that was much worse than expected, and the company also announced an $11.5 billion writedown related to the subprime crisis.




http://money.cnn.com/2008/01/17/news/companies/merrill_earnings/index.htm


Game on again troops ! 

And lots more Subprime resets in coming quarters ....


----------



## Whiskers

numbercruncher said:


> http://money.cnn.com/2008/01/17/news/companies/merrill_earnings/index.htm
> 
> 
> Game on again troops !
> 
> And lots more Subprime resets in coming quarters ....




Looks like it!

One little bit of good news... Boeing is getting more orders faster than it can fill them. But that will hardly get noticed in the scheme of things.

They would want to pull some pretty good news after Ben faces congress or it will be another red day all round.

Futures are still in green but have lost 2/3 of what they were a few hrs ago.

Scratch that... just turned into red: S&P -5, DOW -16.


----------



## wayneL

numbercruncher said:


> http://money.cnn.com/2008/01/17/news/companies/merrill_earnings/index.htm
> 
> 
> Game on again troops !
> 
> And lots more Subprime resets in coming quarters ....




Those of us who had this \/ view back in 2007 were mocked and ridiculed by the ridiculous perma-bulls.



			
				wayneL in my blog on 13/9/07 said:
			
		

> There are still corpses to float to the surface in this whole credit crunched scenario IMO. Bearing in mind the gravity of what happened in July-August, things are just a bit too quiet to be real.




I have something to say to those muppets, but only blogspot will allow the profanity which is appropriate. I feel a rant coming on. :batman:


----------



## Kauri

Fire Brigade Attending "Incident" at Heathrow Airport 

any ideas/news?


----------



## wayneL

Kauri said:


> Fire Brigade Attending "Incident" at Heathrow Airport
> 
> any ideas/news?




Just switched TV on... Airport shut, several appliances surrounding a passenger plane. No flames smoke or anything.

Incident on landing apparently.

Stay tuned


----------



## lesm

US Housing starts, building permits and unemployment claim announcements out at 1330 GMT, maybe another fun night.



> *UPDATE 1-First Horizon posts loss, hurt by mortgage banking*
> 17 Jan 2008 - 13:05
> 
> (Adds figures for provisions, dividends, revenue, mortgage banking; CEO comments)
> 
> WASHINGTON, Jan 17 (Reuters) - First Horizon National Corp , the largest bank in Tennessee, on Thursday posted a fourth-quarter loss, hurt by charges for restructuring operations and staff, higher loan loss provisions and mortgage banking losses.
> 
> The Memphis-based company reported a net loss of $248.6 million, or $1.97 per share, compared with a profit of $76.5 million, or 60 cents, a year earlier.
> 
> Analysts, on average, had forecast a loss of $1.06 per share, according to Reuters Estimates.
> 
> Its provision for loan losses jumped to $156.5 million in the fourth quarter from $23 million a year ago and $43.4 million in the third quarter. Provisioning was related to losses in residential construction, the company said.
> 
> Total fourth-quarter revenue slumped to $319 million from $562.3 million a year ago.
> 
> It also slashed its quarterly dividend to 20 cents per share for the first quarter of 2008 from 45 cents.
> 
> Chief Executive Jerry Baker said that company also cut back its mortgage servicing assets and national lending businesses as changes "that should improve our capital position in 2008."
> 
> Its mortgage banking business posted a pretax loss of $262.8 million, compared with a loss of $45.8 million in the third quarter, mainly due to lower values of servicing rights and the deterioration of the credit markets.
> 
> "We will continue to make further significant adjustments to our mortgage and related lending businesses, including pursuing strategic alternatives to further reduce our exposure to these areas," Baker said in a statement. (Reporting by John Poirier; editing by Brian Moss)
> 
> ((john.poirier@reuters.com; +1 202 898 8399; Reuters Messaging: john.poirier.reuters.com@reuters.net)) Keywords: FIRSTHORIZON/


----------



## Kauri

wayneL said:


> Just switched TV on... Airport shut, several appliances surrounding a passenger plane. No flames smoke or anything.
> 
> Incident on landing apparently.
> 
> Stay tuned




I heard that a BA plane on a flight from China undershot the runway???


----------



## wayneL

Not a terrorist deal. Passengers evacuated, no injuries.

Nothing to see here. ('cept a damaged plane)

Add: It missed the runway and landed on the grass. oops


----------



## dhukka

numbercruncher said:


> http://money.cnn.com/2008/01/17/news/companies/merrill_earnings/index.htm
> 
> 
> Game on again troops !
> 
> And lots more Subprime resets in coming quarters ....




Total writedowns are actually *$15 billion*



> *Merrill Posts Record Loss on $15 Billion Writedown*
> 
> The writedown included *$11.5* billion to account for the plummeting value of subprime mortgages and related bonds called collateralized debt obligations. Merrill also reduced the value of bond insurance contracts by *$3.1* billion, saying the providers' credit ratings had been slashed below investment grade, making them less reliable counterparties. It wrote down leveraged loans by *$126* million and commercial real estate by *$230* million.


----------



## Kauri

wayneL said:


> *Not a terrorist deal*. Passengers evacuated, no injuries.
> 
> Nothing to see here. ('cept a damaged plane)
> 
> Add: It missed the runway and landed on the grass. oops




 Thanks Wayne... glad everyone's OK and no-one hurt.... and i'll close my short on the pound...  
Cheers
..........Kauri


----------



## lesm

Reuters article below:



> LONDON, Jan 17 (Reuters) - A British Airways plane on a flight from China made an emergency landing at London's Heathrow Airport on Thursday, officials said.
> 
> "We can confirm that BA Flight 38 arriving from Beijing made an emergency landing at 1242 (GMT). Passengers have been evacuated. Currently there are no reports of injuries," an airport spokeswoman added.
> 
> "The south runway is closed but the north runway is still operating," the spokeswoman added.
> 
> Among the planes delayed was the flight being taken by Prime Minister Gordon Brown on an official trip to India and China.


----------



## Kauri

US ECON: Terrible Data on Starts and Permits    
Cheers
.........Kauri


----------



## Seaking

Kauri said:


> US ECON: Terrible Data on Starts and Permits
> Cheers
> .........Kauri




A 100 pt rise on the weakness of the news...


----------



## Kauri

Seaking said:


> A 100 pt rise on the weakness of the news...




Got me...   
The sharp fall in housing starts of - 14.2, much worse than -3.7% expected, was followed by a sharp revision lower in November as well but so far, is getting little attention from the market.
Cheers
...........Kauri


----------



## Whiskers

Gonna be a wild night. Market seems determined to go somewhere tonight. DOW early abt +100 to -50 back to + 80....


----------



## Seaking

Dow seems to have a bit of a Hangseng look about it tonight. Bit hard to hang onto atm..


----------



## Kauri

US bond yields have plummeted on Bernanke"s comments this morning as he vows substantive rate cuts if needed and that downside economic risks are more pronounced.
Adding to pressure is the fall in the Philly Fed index to -20.9 v. -1.5 expected, adding to the negative, recessionary outlook.

Good nightie    :sleeping:
.............Kauri


----------



## chops_a_must

Is Bernanke crying/ close to tears?


----------



## ithatheekret

Yes , he was just accused of working for Goldman Sachs , congressional insults  , he's a Princeton pauper .


----------



## Kauri

Greasing the Ski's for the downhill slalom...

An interesting theme emerging from all Fed speakers today, Pianalto, Fisher and Bernanke is a focus on the USD. Pianalto stated that the USD decline since 2002 has been *orderly* but notes that the falling dollar is an inflation risk and is not sure whether the decline is aiding US manufacturing. Bernanke stated that if the Fed does its job, that the dollar will reflect the economic strength while Fisher has stated that they will not do anything to *shake the faith in the USD*. Overall, this is not really talking the USD up and suggests little concern so far regarding overall USD weakness.


----------



## ithatheekret

At least he put the 50 bps in the bag , it's a cert , I did mention Princeton , a lot Keynesians went there , they had to pass the induction test first .


----------



## theasxgorilla

Bye bye world equity markets...of course this thread was started back in April '07, but what's it matter being a few months out?  We all knew it was coming, right??


----------



## ithatheekret

*The go team*


----------



## Uncle Festivus

theasxgorilla said:


> Bye bye world equity markets...of course this thread was started back in April '07, but what's it matter being a few months out? We all knew it was coming, right??




Well yes . We sorta had the correction (10%?), maybe now it should read _crash_? Actually, the writing was on the wall back in the _first_ correction in March 07, which signalled the credit contraction, and the start of the bear market, even though we had a dead bull bounce. If we don't get some sort of relief rally then the bull is indeed dead!?

ithatheekret - should be "The Gone Team"!


----------



## theasxgorilla

"Soft-landings are for girly men"


----------



## wayneL

An omen in today's hard landing?


----------



## Awesomandy

Ironically, that plane is just a tad older than our (ex?) bull market.


Apparently, it lost all power when the landing gear was extended. Just when you thought you are going to have a nice soft landing, it fell, and went smack into ground.


----------



## wayneL

Awesomandy said:


> Ironically, that plane is just a tad older than our (ex?) bull market.
> 
> 
> Apparently, it lost all power when the landing gear was extended. Just when you thought you are going to have a nice soft landing, it fell, and went smack into ground.



Allegorical.


----------



## explod

Uncle Festivus said:


> Well yes . We sorta had the correction (10%?), maybe now it should read _crash_? Actually, the writing was on the wall back in the _first_ correction in March 07, which signalled the credit contraction, and the start of the bear market, even though we had a dead bull bounce. If we don't get some sort of relief rally then the bull is indeed dead!?
> 
> ithatheekret - should be "The Gone Team"!




Looks as the a head and shoulders could be playing out, a short rally in the next week or so and then continue down to 10500 area, maybe.


----------



## OK2

Is the current situation still called a correction or what is the correct terminology for it? There is a term for everything else, what is this versions of what is happening.......ie, dotcom


----------



## dhukka

theasxgorilla said:


> Whether you've tried to preempt the change in sentiment as many of us have, or not, I still see this current move as sideways.




Are we still moving sideways ASXG?


----------



## Sean K

dhukka said:


> Are we still moving sideways ASXG?



Interesting question, but certainly depends on time frame. Short term down, medium term sideways, and long term up. Perhaps.


----------



## Kauri

the BDI just keeps dropping... doesn't bode well for the skippy, amonst others.. another record fall in the Baltic Dry Index which dropped 5.74% to 6,915 and six month lows and down from record highs of 11,039 on Nov. 13th. The fall bodes poorly for the global growth outlook 
Cheers
.........Kauri


----------



## mayk

Hi, Can some educated fella let me know if all the big troubled financial institutions of the USA have presented their Quarterly report? 

I think as the big ones like Citi, MER and others have written off $$Billions, Plus a Fed rate cut of .5 will initiate a small rally.

Especially some blue chips might post some odd profit ( Like HP, Dell and MSFT.. though intel posted a profit but it was below expectations..). This might create an illusion of things settling down. 

Am I slightly on track in my thinking? I am hoping for a suckers rally.


----------



## wayneL

I thought I was a bear, but this is scaaaaaary:

http://www.jsmineset.com/



> Posted On: Thursday, January 17, 2008, 5:45:00 PM EST
> 
> The Panic Starts
> 
> Author: Jim Sinclair
> 
> 
> 
> 
> Dear CIGAs,
> 
> There is no doubt the Fed and the PPT are meeting right now. A drop of over 300 points on the Dow after the Chairman of the Federal Reserve speaks publicly presages a $1000 break in gold coming quite quickly, if not tomorrow.
> 
> Unless the equity markets can be calmed, a panic is about to happen, making the statement "This is it" a horrible reality.
> 
> 
> 
> If the equity markets cannot be calmed then:
> 
> * Recognize this is the Formula happening like everything else much sooner and much bigger in its implications than anticipated.
> * Gold will rise to $1650 as an almost immediate effect of what will be done to attempt to fend off a total panic starting to take place in general equities, therein threatening to be followed by all credit markets of all kinds.
> * The funds and hotshot short term traders in gold shares will be killed by the upward explosion of the gold price about to occur.
> * The PPT and the Fed will step out of gold’s way because gold is one of the tools used in 1930 by Roosevelt and in 2000 by Bush. It will be used again now on the upside.
> * Gold is the only insurance there is against what all this means because a panic in equities will blow the financial system, already coming apart, to smithereens.
> * All country funds would shut down on any further investments in "at the wall" financial institutions.
> * The rollover in credit and default derivatives would exceed the entire foreign debt of the USA.
> * The rest of the $450 trillion dollar mountain of derivatives would start a disintegration like nothing you have every seen in your lifetime.
> * Consumer demand would slam shut.
> * The auto industry might as well go into liquidation this coming Monday, avoiding the June 2008 rush.
> * The US dollar would burn a hole in the floor going directly to .5200 or lower.
> * As the dollar disintegrates gold would rocket to and through $1650 in days.
> * The markets for general equities would all have to institute total trading halts every 100 points on the downside for 30 minutes each.
> * All commercial call loans would be called.
> * All debtors one day late on any payment, lacking grace period, would be liquidated. All debtors over one day of the grace period would be liquidated.
> * It is clearly visible to anyone with eyes or a mind to think that the PPT has lost all semblance of control in the equity markets and will soon in all remaining markets.
> * The commercial paper credit market which is almost dead will die totally.
> * Should no emergency action take place soon, you will see an old fashioned panic of the 1929 variety.
> * Just as emotional fools sell gold and gold shares, be assured that more emotional general equity fools will unload and bring the averages down more than ever in history in one day.
> * Recognize this is the Formula happening like everything else much sooner and much bigger in its implications than anticipated.
> * Emergency action will be all splash and theatrics but truthfully the cat is out of the bag. It buys some time but corrects nothing. It makes the Formula 100% correct.
> * There now must be EMERGENCY ACTION because the Chairman of the Fed has BOMBED OUT PUBLICLY and a PANIC is about to occur. Expect EMERGENCY ACTION in days, not weeks.
> 
> 
> 
> If you have not protected yourself, you may only have days to do so now.


----------



## dhukka

Just saw on BBC that fiscal stimulus package will be unveiled on Friday in the US. The speculation seems to be it will consist of tax cuts and rebates.


----------



## Trembling Hand

wayneL said:


> I thought I was a bear, but this is scaaaaaary:
> 
> http://www.jsmineset.com/




Boy what a rant! Bit of emotion bubbling up in that one.


----------



## ithatheekret

OK2 said:


> Is the current situation still called a correction or what is the correct terminology for it? There is a term for everything else, what is this versions of what is happening.......ie, dotcom




Economic distress or a financial correction , usually due to an economic contraction .


----------



## Awesomandy

trembling Hand said:


> Boy what a rant! Bit of emotion bubbling up in that one.




That person has probably watched too many TV shows lately... severly dramatised disasters... the hurrican that will flatten New York... the cold freeze that will send half of the earth into an ice age... etc, etc...


----------



## wayneL

Awesomandy said:


> That person has probably watched too many TV shows lately... severly dramatised disasters... the hurrican that will flatten New York... the cold freeze that will send half of the earth into an ice age... etc, etc...



The guy is a gold bug. They all seem to be like this.

But the scary bit is that the scenario is possible. The infuriating bit is that things have been allowed to develop to a stage where it is possible.

This wouldn't be good for anyone, even gold bugs, so let's hope it never plays out like that.


----------



## GreatPig

May as well just go and shoot myself right now... 

GP


----------



## dhukka

GreatPig said:


> May as well just go and shoot myself right now...
> 
> GP




Before you do, would you mind selling all your stock at ridiculously low prices?

thanks in advance


----------



## ithatheekret

This is the worry I would say , if it gets back near this event , trillions not billions will have been wiped from the market . But it's not just the US , I've got at least another 10% off the Hangseng B's , maybe 15 - 20% if fear grips hard .


----------



## explod

wayneL said:


> The guy is a gold bug. They all seem to be like this.
> 
> But the scary bit is that the scenario is possible. The infuriating bit is that things have been allowed to develop to a stage where it is possible.
> 
> This wouldn't be good for anyone, even gold bugs, so let's hope it never plays out like that.





"...LETS HOPE..."   Living on hope leads to no hope.    I had a read of the blurb and it makes a lot of sense.   Go through it and pick out the bits that may be wrong.  If after thinking about it you cannot, then perhaps we should at least be prepared for the worst as we are prepared for the best.

Just picked up some Oxiana at a rediculously low price.   Yep I'm a gold bug but the gold bugs have been studying the world currencies big time for years.  That's why they are gold bugs.

The seppoes have spent all the borrowed money.  I feel for the unfortunates that will be thrown out of work and into poverty


----------



## GreatPig

dhukka said:


> Before you do, would you mind selling all your stock at ridiculously low prices?



Well... the cash might be useful for the funeral expenses I suppose...

Have to consider that one some more.

GP


----------



## Kauri

The UK Guardian is reporting that a Scottish Equitable 2 BLN GBP UK property fund, was forced to shut its doors to withdrawals yesterday after the slump in commercial prices triggered panic selling by small investors. Scottish Equitable said yesterday that 129,000 small investors in its property fund will not be able to access their money for up to a year, although payments relating to regular income already being paid, retirements and death claims will not be affected. It said the fund, invested in London office blocks and shopping centres across Britain, no longer had sufficient cash reserves to meet demands from investors wanting to withdraw their money. Its "buffer fund" was down to 1% of its total assets, instead of the usual 10-15%.
   The Guardian states that the crisis in the UK"s commercial property market is now worse than at any time since the early 1990s, when Olympia & York, the company that began the Canary Wharf office development in London, went into administration. Fears that the run on these funds will spread have been fed by financial advisers continuing to recommend that investors take their cash out of the funds that remain open.


----------



## poguemahone

I am in the USA today and was told that 100 thousand Mortgage brokers are looking at flippin hamburgers for A WHILE!!


----------



## ithatheekret

Lucky Aussies eat steak sandwhiches and sausage sizzles then hey .

At least they'll get the pay levels they deserve .


----------



## explod

ithatheekret said:


> Lucky Aussies eat steak sandwhiches and sausage sizzles then hey .
> 
> At least they'll get the pay levels they deserve .




Maybe toss another shrimp on?   That's it perhaps, Hoge's led em astray.


----------



## ithatheekret

Getting close to the end of the day , the quality and value buying should be commencing .

Look for something blue and today should show how BLUE it is .


----------



## Nyden

GreatPig said:


> May as well just go and shoot myself right now...
> 
> GP




I foresee a rise in the price of Lead :


----------



## Sean K

I had a long message drafted then, but lost it.... 

In summary, we are still in a long term up trend....

ie, 1900 - 2007......

Bears will always ultimately become fur coats because the trend is UP. 

What is that gambling principle.....???

Same applies for the market. 

Bet with the trend...

I am surprised that some are betting against it actually. 

And, as always, it may depend on your personal circumstances..

Good luck punters!!


----------



## GreatPig

Nyden said:


> I foresee a rise in the price of Lead



They still use lead in bullets? Don't they know that stuffs bad for your health...

GP


----------



## >Apocalypto<

kennas said:


> I had a long message drafted then, but lost it....
> 
> In summary, we are still in a long term up trend....
> 
> ie, 1900 - 2007......
> 
> Bears will always ultimately become fur coats because the trend is UP.
> 
> What is that gambling principle.....???
> 
> Same applies for the market.
> 
> Bet with the trend...
> 
> I am surprised that some are betting against it actually.
> 
> And, as always, it may depend on your personal circumstances..
> 
> Good luck punters!!




*but Kennas this time it's different!    *

nice post I could not agree more, I have also looked at long term charts (100years back). it's one major bull run. Quite amazing to look at actually it's like a gauge of human development and advancement.

Keep it positive Kennas!


----------



## ithatheekret

Well Merrills will more than likely plunge again . I don't know why shareholders let these twits get paid millions of dollars to lose record amounts of money .

Merrills have just made a historical first for the company , a historical loss !


I knew that recession mention of theirs was the pre-emptor of baaaaad tidings .


----------



## wayneL

Trade_It said:


> *but Kennas this time it's different!    *
> 
> nice post I could not agree more, I have also looked at long term charts (100years back). it's one major bull run. Quite amazing to look at actually it's like a gauge of human development and advancement.
> 
> Keep it positive Kennas!



I'd love to see it adjusted for inflation. Might tell a different story. The only problem is that the inflation figures have been an outright lie for a bit.


----------



## >Apocalypto<

wayneL said:


> I'd love to see it adjusted for inflation. Might tell a different story. The only problem is that the inflation figures have been an outright lie for a bit.




Dame u wayne you just ruined my little dream, now all I can see is a straight line!


----------



## ithatheekret

wayneL said:


> I'd love to see it adjusted for inflation. Might tell a different story. The only problem is that the inflation figures have been an outright lie for a bit.





Well you've tick all the correct boxes there , but we don't use the word lie , it's mistake , even if it's a pack of bull .

I don't see politicians rushing to lock up any market spruikers that rattled off the BS , even the new incomers seem abundantly quiet .

They [ companies] have to sign exchange documents to say the BS , surely that's forge and utter , with conspiracy to make monetary gains from unlawful acts . 

Mandates that funds operate under , would have to be put under the microscope , especially those that borrow offshore and or don't have a proper cash reserve ratio , flaunting the laws again .

The old pollies end up as consultants to crapaholics anonymous or until we tell the market mob .


----------



## ithatheekret

Just going back over a few facsimiles signed and sent to the ASX .

I'd say there's a few federal offences under the communications act alone , stuff ASIC where's the Federal Police ...........

2008 will be a lawyers dream year .


----------



## Uncle Festivus

kennas said:


> I had a long message drafted then, but lost it....
> 
> In summary, we are still in a long term up trend....
> 
> ie, 1900 - 2007......
> 
> Bears will always ultimately become fur coats because the trend is UP.
> 
> What is that gambling principle.....???
> 
> Same applies for the market.
> 
> Bet with the trend...
> 
> I am surprised that some are betting against it actually.
> 
> And, as always, it may depend on your personal circumstances..
> 
> Good luck punters!!




Yes, but within the mega trend there were periods of wealth loss that took many, many years to recover from, so unless you jag your entry/accumulation phase for a buy & hold strategy (based on when you were born), then today's markets gyrations make it even more prudent to decide if you should hold for a rebound, which may never come in your wealth accumulation lifespan. It seems normal (to expect it to always go back up) in this cycle because of it's unprecedented run of 18 years - newcomers just don't know what a full on bear market is, let alone know how to trade it.

It is indeed this time different - records are being broken, usually with reference points back to a famous period in the late 1920's. The unregulated shadow banking system is falling apart at the seams.

It would be a brave call to hold and to see profits accumulated over the last 4 years vanish in a few short weeks on the premise that the trend is still up. Any rally should be used as opportunities to offload and take profits or short. 

Return *of* capital not return *on* capital?


----------



## motorway

some might find these interesting



> Waiting For Average
> 
> The long-term average return from the stock market is 10.4%. As the earliest baby boomers are now beginning to retire, they will be relying upon their investments for income. The latest boomers have two more decades to compound their savings into a retirement payload. At 10%, boomers young and old””so to speak””have a good chance of a secure retirement. Yet, from today, what length of time is needed to assure the long-term average return?
> 
> NEVER””investors from today will never achieve the long-term average return. Not in ten years, twenty years, fifty years, or even the almost eighty years that represent the most recognized long-term average return.




http://crestmontresearch.com/content/market.htm



motorway


----------



## ithatheekret

Only thing positive at present is Skippy on and off , the USD as it's escapes every country it been in and RIO which looks to be holding up the FTSE .

Markets hanging in momentary suspension , just before they dive , the SENSEX was a classic hung in there , then dropped .

Could a nice bounce to sell into on the US boards , before the Fast Money disappears ..............


----------



## Gundini

Uncle Festivus said:


> It would be a brave call to hold and to see profits accumulated over the last 4 years vanish in a few short weeks on the premise that the trend is still up. Any rally should be used as opportunities to offload and take profits or short.
> 
> Return *of* capital not return *on* capital?




I tend to agree with the Uncle here, especially this point, but motorway also brings up a valid point. That being the Baby Boomers are setting up for retirement, and will be withdrawing super funds to use for spending.

While I don't believe it will happen at the rate proposed by Robert Kiyosaki, http://en.wikipedia.org/wiki/Robert_Kiyosaki in "Cash Flow Quadrant", there is bound to be a consistant withdrawel all the same, and with the number of X generationers being substantially less than the Baby Boomers, money flowing in is greatly reduced. 2010 should be the start of this phenomenon.

From memory, he also predicts the greatest Bull market of all time heading into this period.

So if you can truely understand these concepts, our Bull run hasn't even started. If you believe, like I do that this is a likely senario, then you can plan. And if you think I'm full of BS, that's ok too!

But, I think we are in for a hell of a ride leading up to 2010, just like to sit this period out till the dust settles.

Just think, after we have ridden the biggest Bull market of our time, we can afford to build a Bunker, with a Moat around it, and 50 Dobermanns to protect us from what may happen beyond 2010...


----------



## theasxgorilla

dhukka said:


> Are we still moving sideways ASXG?




Yes, well, last night on the US didn't look too flash now did it??  Still, 1300 on the SPY is a support/resistance level.  How the index reacts around this level will be telling.

To answer your question...the last couple of weeks have been down, that goes without saying.  On both the SPY and the XAO.  But our market isn't the US.  We didn't trade below previous significant lows today and didn't close firmly down on the low for the day a la the SPY.  I don't know when people will wake up to the fact that the Aussie market has it's own characteristics and destiny.  I'd like to extend the defintion of 'muppet' to people who espouse rhetoric about 'we just follow the US' blah blah...clearly not true!

If you take a look at the behaviour of the Aussie market between '99 and '03 you'll see what I would describe as a more or less sideways move consisting of many reasonable up trending periods.  Contrasted against the UP-DOWN yo-yo market in the US you'll see that we can move sideways whilst the US is really 'bearing' it out.


----------



## dhukka

kennas said:


> I had a long message drafted then, but lost it....




That's unfortunate because there is not much substance in this post. 



> In summary, we are still in a long term up trend....
> 
> ie, 1900 - 2007......




Oh well spotted! I'm assuming in the drafted message that got lost in cyberspace you qualified the above statement by saying, that although the market is in a century long uptrend, it does matter when you time your entry. 

For example, if you bought *$10,000* worth of the S&P500 in *1966*, you would have had precisely $10,000 in *1982*. adjust for inflation and you lost money.


----------



## theasxgorilla

theasxgorilla said:


> If you take a look at the behaviour of the Aussie market between '99 and '03 you'll see what I would describe as a more or less sideways move consisting of many reasonable up trending periods.  Contrasted against the UP-DOWN yo-yo market in the US you'll see that we can move sideways whilst the US is really 'bearing' it out.




Does anyone not think that Australia is better positioned economically than many (even most!) countries in the world and ought to weather recession in the US, perhaps globally, rather well?


----------



## Gundini

theasxgorilla said:


> Does anyone not think that Australia is better positioned economically than many (even most!) countries in the world and ought to weather recession in the US, perhaps globally, rather well?




Of course we are, and will, but:

We still live off the sheeps back, and once demand for our goods slow, our growth will slow. When the world economies pick up, we will come good too. 

But we can't grow without demand, all we will end up with is a stockpile of wool, as we did a few years back. We couldn't give it away. 

Figure of speach of course!


----------



## dhukka

theasxgorilla said:


> Yes, well, last night on the US didn't look too flash now did it??  Still, 1300 on the SPY is a support/resistance level.  How the index reacts around this level will be telling.
> 
> To answer your question...the last couple of weeks have been down, that goes without saying.  On both the SPY and the XAO.  But our market isn't the US.  We didn't trade below previous significant lows today and didn't close firmly down on the low for the day a la the SPY.  I don't know when people will wake up to the fact that the Aussie market has it's own characteristics and destiny.  I'd like to extend the defintion of 'muppet' to people who espouse rhetoric about 'we just follow the US' blah blah...clearly not true!
> 
> If you take a look at the behaviour of the Aussie market between '99 and '03 you'll see what I would describe as a more or less sideways move consisting of many reasonable up trending periods.  Contrasted against the UP-DOWN yo-yo market in the US you'll see that we can move sideways whilst the US is really 'bearing' it out.




I've consistently brought this up on other threads. I don't know why people expect moves in ASX to mirror what happens on Wall Street. 

There is no question they have their own unique characteristics. My point is that by the time you call a bear market it would have fallen *20%+*. It's the same as getting through 2 quarters of GDP and saying, we are in recession. Not much value in that.

Also, it's pretty easy to select a period of time to support your argument. How about the Aussie market from Feb 2002 - Mar 2003? A loss of *24%* over 13 months, was that not a bear market? It's easy to make the argument that it wasn't, just pull your time frame out a bit and it looks like a sideways move. Kennas has taken this to the extreme, and pulls the time frame out to 100 years and then says that's it's a long term bull market. Conveniently if you play that game you can never be wrong.


----------



## ithatheekret

Speaking of wool , the price moves we will see will be uniformed based , the same goes for cotton . Iron ore will rebound , but first people need to realise that this is an economic genesis we are going into . The end of one extended cycle which will have a bigger bump than usual , due to the fudging of growth data , which they have chased and chased to the stage they now know it's not there .

They ignored all the new beginnings semaphores in ores 8 years ago , instead they chased oil , and in doing so have trebled its price . W've watched Europe weather a strong Euro and high oil prices and they've wobbled , but still standing , so have we , but I believe the services sector and the attached will buckle us a little more to anywhere near 5400 being a possibility , that opens all avenues below , so say your prayer this week .

Bad markets create bad times .

A country with an absent President during its market plunge , used to be a loose cannon ...............


----------



## dhukka

theasxgorilla said:


> Does anyone not think that Australia is better positioned economically than many (even most!) countries in the world and ought to weather recession in the US, perhaps globally, rather well?




On balance I'd have to agree. However every recession is different. We avoided the last US recession because we didn't have the over-investment in tech capital goods that the US had. This time round we don't have the glut of housing that the US has, that's not to say we won't have rising delinquencies and corporate defaults. Just that we don't seem to go to the extremes that the yanks do in creating bubbles. 

I think we again have a good chance of avoiding a recession. However, that is contingent on how deep and prolonged the US recession is and the knock-on effects to the developing countries that are lapping up our resources. Our greatest strength of the last decade could also turn out to be our biggest weakness if resource demand drops off.


----------



## Whiskers

Well maybe a green day this time. 

GE posts good result IBM earlier looking positive.



> AP
> GE 4Q Profit Meets Consensus
> Friday January 18, 6:46 am ET
> General Electric Reports 4th-Quarter Profit Growth of 4 Percent on Strong Global Demand
> http://biz.yahoo.com/ap/080118/earns_general_electric.html




PS: With Bush unveiling the gist of his rescue package late friday morning and US markets closed monday, if the FED were to announce an early cut it seems to me that Friday after Bush speaks is probably the last chance.


----------



## Julia

Gundini said:


> I tend to agree with the Uncle here, especially this point, but motorway also brings up a valid point. That being the Baby Boomers are setting up for retirement, and will be withdrawing super funds to use for spending.
> 
> While I don't believe it will happen at the rate proposed by Robert Kiyosaki, http://en.wikipedia.org/wiki/Robert_Kiyosaki in "Cash Flow Quadrant", there is bound to be a consistant withdrawel all the same, and with the number of X generationers being substantially less than the Baby Boomers, money flowing in is greatly reduced. 2010 should be the start of this phenomenon.



This prediction about the first of the baby boomers withdrawing their funds is made repeatedly.  It doesn't make a lot of sense.  The baby boomers are going to still require a source of income.  To suggest they are going to take all their funds out of the sharemarket takes no regard for how they are gong to derive that income.  Aren't they better to still own shares and achieve over time continued growth plus an income stream?  Surely better than seeing the funds lose value in a cash account?

I'm a baby boomer and that's what I will be doing anyway.  I don't know anyone who will simply be pulling their funds out on reaching retirement age.


----------



## >Apocalypto<

dhukka said:


> That's unfortunate because there is not much substance in this post.
> 
> 
> 
> Oh well spotted! I'm assuming in the drafted message that got lost in cyberspace you qualified the above statement by saying, that although the market is in a century long uptrend, it does matter when you time your entry.
> 
> For example, if you bought *$10,000* worth of the S&P500 in *1966*, you would have had precisely $10,000 in *1982*. adjust for inflation and you lost money.




you're on fire today/tonight Dhukka! ouch!! :burn:


----------



## ithatheekret

Well the re-ratings have started to take their toll , add bond insurers to the list now ........ yes , freaky huh ......... , WTF is the market going to do without insurers , nothing will get sold . This is not getting better it's getting worse , George best just give the money to the bond insurers and try to keep them in the game or there'll be no game .


----------



## habs

baby boomers pulling money out the market... blah...

remember, almost everyone who works has 9% of there pay going into the stock market or managed funds, cash accounts..or whatever... every month there is just more and more and more money going into the markets via this source alone... from every single working person... and every single child coming through will keep it going for years and years to come.


----------



## Gundini

Julia said:


> This prediction about the first of the baby boomers withdrawing their funds is made repeatedly.  It doesn't make a lot of sense.  The baby boomers are going to still require a source of income.  To suggest they are going to take all their funds out of the sharemarket takes no regard for how they are gong to derive that income.  Aren't they better to still own shares and achieve over time continued growth plus an income stream?  Surely better than seeing the funds lose value in a cash account?
> 
> I'm a baby boomer and that's what I will be doing anyway.  I don't know anyone who will simply be pulling their funds out on reaching retirement age.




In essence I agree with you. But you are one of the lucky few, as I, who have chosen to actively take interest in our financial future and retirement. Unfortunately, with all due respect to the majority, they were forced to contribute to super to ensure they don't become a burden on our society via a pension scheme or the like, and only consider themselves to be an investor. Add to this the individuals company contributions, and wella.... a retirement nest egg for all.

But how many of these Baby Boomers had the sence to switch their super funds into cash? I mean, Blind Freddy could see troubled times ahead if they paid any attention at all to the global economy. 

My point being, the majority may want to pay off what is left in their morgages, maybe purchase a Winnebago, do a bit of OS travel, help the grand kids with a home deposit, put in a pool, buy a holiday home... etc... whatever! All the while, there is bound to be a growing hole in the dike, being the stockmarket of course...  

There are many graghs as you would well be aware, but here is one, to show the impact that we have on society... Cheers...


----------



## Whiskers

Gundini said:


> There are many graghs as you would well be aware, but here is one, to show the impact that we have on society... Cheers...




The US certainly is in a lot of trouble with theirs... but I'm not quite sure what your graph represents and on what years data was it prepared? 

Is this supposed to show what the Gov social security bill is expected to be?

What I would say is that there is five years until the forcast deficit starts. These sorts of scenerios offen come up in cash flow planning and I'm sure in Aus a lot of things can and will happen to overcome the problem.


----------



## Kauri

Gundini said:


> In essence I agree with you. But you are one of the lucky few, as I, who have chosen to actively take interest in our financial future and retirement. Unfortunately, with all due respect to the majority, they were forced to contribute to super to ensure they don't become a burden on our society via a pension scheme or the like, and only consider themselves to be an investor. Add to this the individuals company contributions, and wella.... a retirement nest egg for all.
> 
> But how many of these Baby Boomers had the sence to switch their super funds into cash? I mean, Blind Freddy could see troubled times ahead if they paid any attention at all to the global economy.
> 
> My point being, the majority may want to pay off what is left in their morgages, maybe purchase a Winnebago, do a bit of OS travel, help the grand kids with a home deposit, put in a pool, buy a holiday home... etc... whatever! All the while, there is bound to be a growing hole in the dike, being the stockmarket of course...
> 
> There are many graghs as you would well be aware, but here is one, to show the impact that we have on society... Cheers...




Instead of pumping billions into inflation boosting tax-cuts why doesn't a forward thinking Gov. set up a future fund (investing independantly of Gov. pork-barrel inspired initiatives, in Aus infrastructure/assets) to guarantee the future social security needs. I note that they had no hesitation in setting up the 50Bln. future fund with public money to guarantee their own and public servants super into the future, or am I simply being naive...
Cheers
........Kauri


----------



## dhukka

uh oh, AMBAC has suspended plans to raise capital and is 'evaluating alternatives' to keep it's AAA rating. I posted about this the other day, these guys are evaluating any alternative to stave off bankruptcy. It's chapter 11 or a Countrywide style buyout for these guys. Between them, the monoline insurers insure something like *$2.4* trillion in municipal bonds.  Their demise could cause a rather nasty chain reaction. Yesterday Merrill Lynch took the step of writing down the value of bond insurance contracts provided by ACA Capital after it's credit rating had been slashed to junk. The Merrills and Citis of the world would be in for another round of writedowns if AMBAC and MBIA lose their AAA ratings.


----------



## Gundini

In all fairness to those interested in the Baby Boomers, there are many arguements to support both theories, and the effect they may have on the financial markets. Here is an exceptionally good piece directly related to the topic. http://www.profutures.com/article.php/448/

Rather than hijack this important thread with my opinions, that are off topic, I am happy to continue in another thread, and debate the varied reasoning.

Cheers


----------



## Whiskers

When the US housing and credit crunch resurfaced late last year I was in the   catagory for awhile, but having owned rental property I have since tempered my concern to a large degree, basically along the lines of the below article. 

People were being evicted everywhere and some TV reports showed rundown and neglected houses by the street full. My thought was that if you (the banks/lenders) can't sell the property, why let it sit there and decay into ruin. It's much smarter to have the house occupied and looked after for future sale even at reduced rates.

I think all the housing forclosure/sales/company loss figures have been a bit knee gerk. Once we get over the corporate write downs it will be pretty much back to usual business... just all the other usual US problems.

There will certainly be a severe slowdown in new house building, but as more property comes into rentals at lower rates consumer spending will probably settle down in the next month or two.

As I said earlier, Friday after Bush makes his announcement is probably the last chance for the Fed to announce an early rate cut. The Fed obviously feels that it can't stave off recession without Gov assistance. My feeling is that if the Fed acted first without some commitment from the Gov it would be akin to whittling it's only weapon down to the bone for little or no effect. 

Once Bush makes his announcement that the rescue package being proposed is to kick in urgently the Fed may be inclined to make an announcement with some confidence that the markets will respond more positively.

If I recall correctly Bush will be making his announcement abt 10.45... after the consumer sentiment and lending indicators are released at 10.00.

http://finance.yahoo.com/real-estat...enters-Gain;_ylt=AmXKHQSaZ1fnqdQQkuwxp6u7YWsA


----------



## wayneL

Gundini said:


> In all fairness to those interested in the Baby Boomers, there are many arguements to support both theories, and the effect they may have on the financial markets. Here is an exceptionally good piece directly related to the topic. http://www.profutures.com/article.php/448/
> 
> Rather than hijack this important thread with my opinions, that are off topic, I am happy to continue in another thread, and debate the varied reasoning.
> 
> Cheers



I started a new thread for discussion here ==>> https://www.aussiestockforums.com/forums/showthread.php?t=9555


----------



## chops_a_must

dhukka said:


> Before you do, would you mind selling all your stock at ridiculously low prices?
> 
> thanks in advance


----------



## ithatheekret

Gundini said:


> In all fairness to those interested in the Baby Boomers, there are many arguements to support both theories, and the effect they may have on the financial markets. Here is an exceptionally good piece directly related to the topic. http://www.profutures.com/article.php/448/
> 
> Rather than hijack this important thread with my opinions, that are off topic, I am happy to continue in another thread, and debate the varied reasoning.
> 
> Cheers





I think the boomers are part of this , it's the take the money and run theory when touching off in retirement . The cash is needed to fund new enterprises or just a lifestyle , but many would be looking at little businesses etc, to keep the brain active and maintain an income .

They been dealt a blow in most western and westernized countries with pension rorts and blow outs in fixed income funds , that should never have touched the CDOs etc. Completely out of there charter , now the boomer charters will sudside hitting many industries , cruises , airlines , caravans and motels , restaurants , coffee shops , you name it all will be affected by this , just as the collapse in the US real estate , will affect many small businesses .

They are all a part of the physical makeup in a healthy economy , the add ons , which will be cut back on .


----------



## sassa

Why the stockmarket is likely to continue its selloff.

http://www.cnbc.com/id/22730427


----------



## wayneL

FYI The sunday paper her in UK:


----------



## dhukka

This is starting to bother me wayne. Now everybody is talking about it, could be a good contrary indicator. Although we haven't seen people completely lose it and swear off stocks forever yet.


----------



## wayneL

dhukka said:


> This is starting to bother me wayne. Now everybody is talking about it, could be a good contrary indicator. Although we haven't seen people completely lose it and swear off stocks forever yet.




I'm waiting for Bubblevision to turn bear. When Art Laffer screams SELL, I'm buying with ears pinned back.


----------



## dhukka

It's been interesting watching Kudlow & Co recently, maybe we should start a thread about it? Did you see Art Laffer throw in the towel and admit a recession is under way? Also Don Luskin admitted to being totally wrong in telling people to buy all the way down in this latest market retracement/correction insert what you like here. (big of him to admit it though). Recently I think I want a US recession to materialize just to see Kudlow, Jerry Bowyer and Brian Westbury eat a little humble pie.


----------



## wayneL

dhukka said:


> It's been interesting watching Kudlow & Co recently, maybe we should start a thread about it? Did you see Art Laffer throw in the towel and admit a recession is under way? Also Don Luskin admitted to being totally wrong in telling people to buy all the way down in this latest market retracement/correction insert what you like here. (big of him to admit it though). Recently I think I want a US recession to materialize just to see Kudlow, Jerry Bowyer and Brian Westbury eat a little humble pie.



No I didn't see that!! Is this the same mocking, smirking and jeering Art Laffer who last year made fun of Peter Schiff at every opportunity? Oh how I wish I had seen that.

Anyhow, just for laughs \/ ROTFLMAO


----------



## numbercruncher

> Bond insurers offer insurance for bond issuers. The insurance encourages bond buyers. The trouble for the bond insurers is that they’ve insured a lot of credit derivatives too. Moyer says, “Ambac guaranteed $38 billion of debt linked to subprime mortgages and has exposure to $45 billion of other mortgage investments.” Yet those numbers are tiny compared to *$45 trillion *in credit default swaps *outstanding*.
> 
> Concerned with the amount of risk faced by the bond insurers, and chasing a horse that’s firmly out of the barn, the credit ratings agencies are threatening to downgrade the credit ratings on Ambac and fellow bond insurer MBIA. Ambac fell as much as 60% on Thursday. MBIA fell as much as 40%.
> 
> Who wants to be long this weekend again?




http://www.dailyreckoning.com.au/dow-asx200/2008/01/18/


----------



## dhukka

wayneL said:


> No I didn't see that!! Is this the same mocking, smirking and jeering Art Laffer who last year made fun of Peter Schiff at every opportunity? Oh how I wish I had seen that.
> 
> Anyhow, just for laughs \/ ROTFLMAO




The one and the same, here it is for your viewing pleasure

Art Laffer flip flops


----------



## wayneL

dhukka said:


> The one and the same, here it is for your viewing pleasure
> 
> Art Laffer flip flops




Damn! Won't play on this 'puter. 
******************************

Comment from The Economist

http://www.economist.com/finance/displaystory.cfm?story_id=10553166


----------



## dhukka

Sorry, wrong clip for the Art Laffer flip flop and the Don Luskin admission, although it's good to hear Gary Shilling baiting Bowyer. Here is the Luskin admission. Will have a look for the Art Laffer flip flop.


----------



## dhukka

Can't find a direct link, however if you click on this link; Art Laffer flip flops, then click on the CNBC tab and then page 5. Then click on the story that says 'Bernanke Stimulates Stock Drop' for the Art Laffer flip flop. Also of note is the polyanna Bob Stein's prediction of 3% GDP growth in *1Q08*.


----------



## chops_a_must

dhukka said:


> It's been interesting watching Kudlow & Co recently, maybe we should start a thread about it? Did you see Art Laffer throw in the towel and admit a recession is under way? Also Don Luskin admitted to being totally wrong in telling people to buy all the way down in this latest market retracement/correction insert what you like here. (big of him to admit it though). Recently I think I want a US recession to materialize just to see Kudlow, Jerry Bowyer and Brian Westbury eat a little humble pie.




"There is no recession out there!" - bahahahahaha.

Geez I hope they keep that sound bite on there for the next 2 years. Even the next couple of months would be great.


I expect mess with bond insurers to give us the next leg down, definitely. The credit crunch thus far has only really effected financial and related sectors to a large degree. But this will freeze entire markets themselves down...

Ambac were up on Friday though weren't they? Strangely. I know there are mammoth shorts on it, so following that stock will be fun and games.


----------



## sassa

Thanks to Ken1 at Marketwatch.

Market opens Tuesday with Bank of A-Bomb reporting their AMD's (Assets of Mass Destruction)----expect $5B write off and 80% reduction in revenue.


----------



## dhukka

The financials are having a truly horrible quarter, with the exception of Northern Trust, every major financial company that reported last week missed expectations and those expectations were already low. In one week S&P500 forecast operating earnings have gone from *-8.2%* to *-13.6%* for *4Q07*. We should also expect to hear some bad news from American Express when it reports this week. However bad financial results are largely expected. Also of huge interest will be Ambac which reports on Tuesday or Wednesday.

But it's not all bad with respect to US earnings. Technology companies including Apple, Microsoft, Sun Microsystems, Texas Instruments and Ebay are all scheduled to report good profit growth for the quarter. More interesting than the numbers will be the company outlooks. If there is any caution in their outlooks or the outlook does not measure up to market expectations (like Intel last week) there could be some carnage.


----------



## Bushman

dhukka said:


> For example, if you bought *$10,000* worth of the S&P500 in *1966*, you would have had precisely $10,000 in *1982*. adjust for inflation and you lost money.




That would be from the start of the Cold War (ie Vietnam) to it starting to unravel. Hope you are not trying to compare that to today's global climate.


----------



## dhukka

Bushman said:


> That would be from the start of the Cold War (ie Vietnam) to it starting to unravel. Hope you are not trying to compare that to today's global climate.




I hope you're not trying to say that the cold war, if there actually was one, caused the S&P500 to go nowhere for 16 years. 

The comment was in response to kennas observation that the stockmarket has been in a century long bull market. I was merely pointing out, that whilst that is true, it *does* matter when you enter the market. If you had entered the market in 1966 you would have been waiting more than 16 years to see any return, adjusted for inflation, even longer. 

Same if you bought an index of the S&P500 in April 1999, almost 9 years later you would be sitting on a zero return as of today.


----------



## dhukka

Interesting to go back and read posts on this thread. This one was from Kimosabi in May 2007. How wrong has Mr Kohler been?



Kimosabi said:


> Interesting read from Alan Kohler
> 
> This is the graph that wasn't on the Internet Version of this article. The file size of the scanned version was too big to be readable.






> *Market offers good history *
> 
> With the Dow Jones industrial average having passed through 13,000 points for the first time during the week, the pricing of US equities versus bonds is once again at an extreme, as it was in 2000. But not in the way you think.
> 
> And if history is any guide, the allordinaries index will also hit 13,000 in a year.
> 
> At the peak of the Dow in 2000 the US equity yield was 3.2 per cent (based on a trailing price earnings ratio of 31.3 times) and the US 10-year bond yield was 6.5 per cent. Shares were obviously expensive, bonds were cheap, and so it turned out.
> 
> Now the average p/e ratio in the US is 18 times, producing an earnings yield of 5.5 per cent. The 10-year US bond yield has fallen to 4.7 per cent.
> 
> Shares are now cheap, despite the dramatic new record on the Dow, and bonds are expensive.
> 
> Much the same is true of Australia, although we are better off using comparisons with September 1987 rather than 2000, since our market didn’t really participate in the dotcom bubble, because we didn’t have many dotcoms.
> 
> But it’s a similar story. In 1987 the trailing price/earnings ratio of the Australian market was 20.4, which produces an earnings yield of 4.9 per cent. The 10-year bond yield was then 12.5 per cent.
> 
> Today the earnings yield is 6.4 per cent and the bond yield 5.9 per cent. The so-called Fed model, which is controversial, says that the two yields should be roughly equal, so while the relationship between them in September 1987 indicated that shares were very expensive (and/or bonds were cheap), the reverse is now true.
> 
> As we stand here with the Dow at 13,000 and the all ordinaries at 6141, shares are cheap.
> 
> That might seem a strange thing to say after three years of 20-25 per cent capital gains from the Australian sharemarket, and a 10 per cent gain so far this year, and with many otherwise excitable analysts getting strangely sombre.
> 
> But today’s graph — prepared by Shane Oliver of AMP Capital Markets — proposes another view via history.
> 
> Dr Oliver has matched the two low points of the market in the 1980s and 2000s — August 1982 and March 2003 — which is when the two bull markets began.
> 
> It is now equivalent to about December 1986. History never repeats itself exactly of course, but if it did, the Australian index would hit 13,000 next January — before crashing spectacularly. The point is that the sharemarket has not yet had the price/earnings multiple “blow off” that usually marks the end of a bull market.
> 
> The 1987 blow off only took the average p/e ratio to 20.4 because inflation was 8.5 per cent and the bond yield was 12.5 per cent — more than double what it is now. But that p/e was double the then 10-year average.
> 
> Now the trailing p/e is 18 times, but inflation is 2.7 per cent and the bond yield 5.9 per cent (3.2 per cent real versus 4 per cent real in 1987).
> 
> Times change, but in my view people do not. At the end of a long bull market, with abundant cash and rampant optimism, people tend to go nuts. They start extrapolating existing growth forever and price assets accordingly. So far that has not happened: share prices have merely kept pace with earnings as they are now, not what optimistic forecasters think they might be.
> 
> I’m starting to get a lot of emails from people predicting imminent doom and gloom — one confidently predicted that the market would crash last Tuesday.
> 
> In many ways it is easy for a pundit to predict the end of a bull market because if it doesn’t happen, you just change the date. No one has really lost money believing you — they just might not have made as much.
> 
> Predicting that the market will go up takes courage, because if people invest and it crashes, they lose real money and come looking for you with a half-brick. But here goes: the market is going up from here, possibly a lot. If it does, it will end in disaster. If it’s “just” another 25 per cent, that will be fantastic.
> 
> Alan Kohler publishes Eureka Report, an investment newsletter financially backed by Carnegie Wylie & Co. The views expressed here are Kohler’s alone.


----------



## wayneL

In the Torygraph today: 






 (n.b. relates to the crash landing at Heathrow lST WEEK IF ANYONE DIDN'T HEAR ABOUT IT)


----------



## sassa

Futures opening for the DJIA,S & P 500 and Nasdaq for Tuesday(American time) are looking a tad down at this early stage.Respectively,they are 235,29.90 and 39.50.


----------



## korrupt_1

Aussie SPI future is currently 5490's.... holly $#!T!!!!!

Imminent and severe market correction (more like a imminent and severe CRASH!!)


----------



## sassa

Futures for all U.S. and Asian markets are falling appreciably for tomorrow,s opening.

http://www.bloomberg.com/markets/stocks/futures.html


----------



## Awesomandy

korrupt_1 said:


> Aussie SPI future is currently 5490's.... holly $#!T!!!!!
> 
> Imminent and severe market correction (more like a imminent and severe CRASH!!)




Make that 5460. Perhaps it's time to hide under a rock.


----------



## sam76

Has anyone ever won the monthly tipping competition with a negative result??


----------



## reece55

OK everyone, can anyone tell me what is going on tonight....

My target on the ASX 200 was met tonight, I expected to see 5400 again, but not in January. This is simply an incredible decline, another 220 points just this evening..... it's going to be a dark day tomorrow, because we are going to breach those lows established in Aug....... I have never seen so much bloodshed on the markets.....

Anyone have significant news to tell?

Cheers


----------



## MS+Tradesim

Anyone watching the European markets?

As I type:

ATX 3,708.06 190.22 (-4.88%) 
BEL-20 3,485.97  209.16 (-5.66%) 
CAC 40 4,748.31 344.09 (-6.76%) 
DAX 6,873.54 440.63 (-6.02%) 
AEX General 425.16  24.92 (-5.54%) 
OSE All Share 449.04 24.58 (-5.19%) 
MIBTel 25,691.00 1,219.00 (-4.53%) 
ISE National-100 90.13  0.39 (-0.43%) 
Madrid General 1,470.00 13.94 (-0.94%) 
Stockholm General 297.84 12.25 (-3.95%)
Swiss Market 7,318.93  373.05 (-4.85%) 
FTSE 100 5,591.90 309.80 (-5.25%)


----------



## Uncle Festivus

reece55 said:


> OK everyone, can anyone tell me what is going on tonight....
> 
> My target on the ASX 200 was met tonight, I expected to see 5400 again, but not in January. This is simply an incredible decline, another 220 points just this evening..... it's going to be a dark day tomorrow, because we are going to breach those lows established in Aug....... I have never seen so much bloodshed on the markets.....
> 
> Anyone have significant news to tell?
> 
> Cheers




Apparently this one started in France....

http://www.marketwatch.com/news/sto...x?guid={D39EF3A7-0DEB-489A-A56F-3676BCF20B1C}



> Stocks in Europe sold off massively on Monday morning, with banks in France pacing a retreat as fears of more write-downs intensified.


----------



## ithatheekret

CAC , FTSE copping it , the DAX has been hammered and the IBEX , strewth which batter got on to that one  , it's out of the grounds , new ball stuff .


----------



## habs

the very first post and the second of this thread are great reading at the moment!!!


----------



## wayneL

FWIW.. on MIRC



> <Calabia-Yau> Crammer, whom I ussualy don't care for said on cnbc that everyone is totally missing the biggest problem ahead which is the total collapse of the
> <Calabia-Yau> mortagage insurers
> <Calabia-Yau> he ways if that happens we will see the dow down 2000 points in a day
> <Calabia-Yau> for once, he maybe right


----------



## reece55

Uncle Festivus said:


> Apparently this one started in France....
> 
> http://www.marketwatch.com/news/sto...x?guid={D39EF3A7-0DEB-489A-A56F-3676BCF20B1C}




Thanks UF, the Soc Gen chart doesn't look pretty......

I tend to think things are now a little overdone, there will be some selective bargains out there, but boy the punters confidence is down...... Plus, the big gaps have caused rapid margin calls... 

Still, tremendous trading opportunities....... All the best in these volatile times..

Cheers


----------



## Awesomandy

reece55 said:


> OK everyone, can anyone tell me what is going on tonight....
> 
> My target on the ASX 200 was met tonight, I expected to see 5400 again, but not in January. This is simply an incredible decline, another 220 points just this evening..... it's going to be a dark day tomorrow, because we are going to breach those lows established in Aug....... I have never seen so much bloodshed on the markets.....
> 
> Anyone have significant news to tell?
> 
> Cheers




I wouldn't say it's going to be a dark day tomorrow; in fact, it's going to be very bright. Bright red, of course...

Well, I met this girl. Back in November, she convinced me to sell out of my double-geared strategy where I would get a margin loan to invest in a geared fund, where basically at least 75% of it is borrowed money. If I didn't listen, I would've lost that pot...


----------



## Kauri

Uncle Festivus said:


> Apparently this one started in France....
> Stocks in Europe sold off massively on Monday morning, with banks in France pacing a retreat as fears of more write-downs intensified.




The news of Soc Gen's percieved troubles was out on Fri night... from memory it was posted in the Dow thread around midnight lacal time, and Soc Gen dropped I think 7% odd immediately.
The European stock collapse comes off the back of a 500 odd-point Nikkei drop and drop of nearly 1400 points on the Hong Kong. The international investment community has been further spooked by all the talk of a U.S recession and following a mixed week of U.S data releases and mounting speculation for a half- point cut at next week"s FOMC the stock market has taken flight, carry trades have been unwound and large scale buying of the Yen . Looking ahead, weak equities look to benefit the Dollar and harm the European units so it seems that stock watching will remain the only way to go. or not..
I thunk.
Cheers
..........Kauri


----------



## ithatheekret

You want gloom , you got it , the virus has hit Europe . They look much better in code , I won't name the banks , but I'm sure many know them .

Note the average start of declines . I'd say the news was out in Feb March and May ...............


----------



## ithatheekret

Must be close to smelling salts time ...........

Looking at the finance sectors ( globally ) the declines are a mixture of balance sheets , BS and a general contraction in credit . I think people must know by now this is a bear market alright , we've just gone through a nice bounce after a muted recession period , mainly by administrations and just about every bank on the planet . Gold reserves were sold off by elected FWs , who really had no mandate to do so . Whilst they were doing that mortgages and loans were being rolled out in Yen and Francs , the appreciation in these currencies are going to force hands soon , and the repercussions will come down fast and swinging , like Brett Lee with a new ball on a pitch . 

The AAA status is now defunked this is a catastrophe . This alone has now placed us on the brink , monetary policy better be smack dab on the button , or this will go hyper on us . The sudden spike could also be the final blast financial markets and service sectors could take , this could see policy turn disinflationary at a greater scale , that in turn could change any growth left into mush and after financial mush there can always be a chance of deflationary tones setting into sectors of markets , especially where competition is fierce .


_corruptio optimi pessima_


----------



## Kauri

and theDax is down 6%... whilst...
 an unnamed German official has suggested growth in Europe"s biggest economy will be +1.7% in 2008. He quotes the latest annual economic report *to be published on Wednesday* with the jobless total expected to fall by 330K to around 3.45Mln on average.
MMMMMMMMM
Cheers
...........Kauri


----------



## Wysiwyg

ithatheekret said:


> Must be close to smelling salts time ...........
> 
> Looking at the finance sectors ( globally ) the declines are a mixture of balance sheets , BS and a general contraction in credit . I think people must know by now this is a bear market alright , we've just gone through a nice bounce after a muted recession period , mainly by administrations and just about every bank on the planet . Gold reserves were sold off by elected FWs , who really had no mandate to do so . Whilst they were doing that mortgages and loans were being rolled out in Yen and Francs , the appreciation in these currencies are going to force hands soon , and the repercussions will come down fast and swinging , like Brett Lee with a new ball on a pitch .
> 
> The AAA status is now defunked this is a catastrophe . This alone has now placed us on the brink , monetary policy better be smack dab on the button , or this will go hyper on us . The sudden spike could also be the final blast financial markets and service sectors could take , this could see policy turn disinflationary at a greater scale , that in turn could change any growth left into mush and after financial mush there can always be a chance of deflationary tones setting into sectors of markets , especially where competition is fierce .
> 
> 
> _corruptio optimi pessima_




Lovely cuppa Marge. Dorothy dear, could you pass the bikkies please.


----------



## hacheln_mice

Wysiwyg said:


> Nice work hacheln_mice, now i would like you to come away from that wall socket with the knife and tell me if you are still v.v.v.v bullish long term?
> Reason being is my eyes tell me a `continuous` slide on indices is happening with the majority swinging to a bearish  mind set.More than just a few month decline sort of thing.




Sorry I ever doubted you.  I'll go eat humble pie now.----:laser_sho:

Then again, the big ol' trading range scenario is still a possibility. (although the potential bottom of that trading range is now 4800~ instead).  To be honest, it is kinda fun to be watching a live 'crash' unfold - oops I used the c word.

opcorn:


----------



## clowboy

wayneL said:


> FWIW.. on MIRC




Im starting to feel this is going to go lower than anyone imagine's.

The only problem with that is it usually means it won't.

By now you would have thought we would have had at least a small bounce.

Hate to think if the ASX follows the european markets today....


----------



## treefrog

clowboy said:


> Im starting to feel this is going to go lower than anyone imagine's.
> 
> The only problem with that is it usually means it won't.
> 
> By now you would have thought we would have had at least a small bounce.
> 
> Hate to think if the ASX follows the european markets today....




in the macro field, the potential is huge because the US deficit problem has been propped by foreign investment in US $$ and markets for decades with the US$ being the world's unofficial currency

as the US folds, and US housing, financials and insurers lead the way, it is not hard to envisage the number of foreign investments taken with them and the effect on those "sound" economies

and don't think oilers are necessarilly a safe haven - as the worlds biggest economy applies the breaks so their total order book closes

BHP $24 and WPL $35


----------



## Kauri

There are fears that the US economic problems will spread after a *PBOC official* said that the *Chinese economy will be impacted* if the US slows down significantly.
Cheers
.........Kauri


----------



## Awesomandy

Kauri said:


> There are fears that the US economic problems will spread after a *PBOC official* said that the *Chinese economy will be impacted* if the US slows down significantly.
> Cheers
> .........Kauri




Given its current growth rate and sky rocketing inflation, it's probably not a bad thing. 

Although, before we get there, I wonder what will happen when the Americans go back to work after the long weekend, and find the dow opens 500 points lower. This is probably enough of a catalyst to set off a panic sell off by the general public.


----------



## Agentm

alan kohler has called it today..

title of his report

*The market turns grizzly *


----------



## dhukka

theasxgorilla said:


> Whether you've tried to preempt the change in sentiment as many of us have, or not, I still see this current move as sideways.




How we doin now ASXG?


----------



## ithatheekret

Wysiwyg said:


> Lovely cuppa Marge. Dorothy dear, could you pass the bikkies please.




No vovos left I'm afraid , how about a bush biscuit that should fill the space .

Here's something you can dunk though ..........


Bens got the helicopter warming up ,  and I would put a strong guess in that he’ll keep up the Santa act , the act is disinflationary tactics . Bens scared of deflation , so much so he’s willing to put us all on an inflation path . Why ? Because he’s trying his darndest to shuffle out and keep the short rate below the inflation rate .  The best indicator is the zero maturity money policy . Is the stall tactic we’ve just seen in his um ah , wait and see approach , or is it really a quasi bond market protection ? I’ve measured CPI , PPI and MZM ,  the CPI data is useless , it’s got more potholes in it than the road to town and that’s a bumpy ride even with a long wheel base . The only growth that has compared with Chinas double digits is monetary supply , Nominal GDP and Real GDP are in freefall not decline , what follows these conditions , do you know . You watch the mining boom slowdown right in front of your eyes , and if Ben is slow off the starters block with the disinflation attitude adjustments , we will see a repeat of the 90-92 drop for an entrée , what am I saying look at the market . You see there’s this rate thing they like to push just that little bit too far , then there’s the dollars exchange rate , not forgetting the strong dollar policy we are battered with weekly , but to cut that off midstream , what about the lingering depreciation in the USD , the deficit that keeps expanding and the last but not least , tax cuts , which started before the Iraq conflict and is still going strong and expected to get stronger by the latest calls of Presidental who would be’s , ( excuse the grammar ) .

Do you remember 1990 through to 1992 ?  Well what if I was to tell you we are going to see all the nasty effects . disinflation , deflation across sectors and inflation across others .

That would be new hey ? But not unheard of !

Watch as the correction yolk is released and note the advance of zero maturity as it quickly tries to fill the gaps . The only period of late the zero maturity has not advanced swiftly was after the last real estate rush in the mid 90’s ( 94,95,96 ) , that went splat ,but more interestingly the commercial lenders copped it as they are now , when lending disappeared off the screens .  Zero maturity money has not stopped rising since , it is in a zone of perpetual growth . The PPI was in steep decline starting just before 96 right through to 99 .  a couple of years after that , we had a correction or was it a crash ……

Have we or have we not listened and watched the Fed , wringing it’s hands sighing about the worry of deflation , right back through Uncle Al to Uncle Ben  ? Are they just spluttering it out for noise …..hmmm , yes and no .

It must worry some , because after each bubble pop , money has been gushed into the system , the Fed went that little bit too far on the rates and the meltdown commenced , added to it the non transparent books of the financial sector , the blossoming rise of housing after we had just seen the results of the last effect of the 95 flop . From 2000 to 2007 the level of disinflation has been at it’s highest ever , yet inflation is tame as we are reminded over and over , until you go to buy something  , that blows that off the surface .
And now …….. we have a crash , so I expect to see the repeat of 95/96 but on a much grander scale , especially when the frauds and hidings are starting to come out in the financial sectors across the globe , the skeletons in the closet don’t want to come out because they’ve blown their dough and some , now they have to replace it . How are they replacing it though ? That’s easy , they’re getting it from offshore , the same place the US relies on for that needed influx of cash to keep the ball rolling , which has grown from 53% to 61% , the last count was in the 80% region , yet with the latest sovereign funds premium buying inflows that must be bordering 90% by now . Revenue for the US comes directly from Americans , if you have revenues of 22-23% and take away the outlays of GDP which seem to be aiming at 19.4% , the conclusion I have is that the tax cuts will only see a ballooning effect in the fiscal deficit . Wait for the reflating after this mess and watch the effects . If you want to look for the cause of this mess , just go back to period from 1995 -1999 and peruse the catastrophe in the making . Like I said elsewhere , will the real Alan Greenspan please stand up . That period saw an infection set in , the infection spread , it’s called M3 . What are we seeing as a result of this ?  A collapse in Cash Reserve Ratios ,  the Feds name for it is reserve fractional , the tiniest of movements in this ratio for commercial banks will see a shortfall in the required reserve of cash needed to be held . In 1995 the reserve tradition was thrown out the window by the Fed , this was the genesis of the housing collapse we are witnessing right now . The lending rule book was burnt and unqualified borrowers moved into mansions .
Now all of the globe will pay for this stuff up , Americans will pay the most .

Now , those that orchestrated the event want to lock up those who took advantage of it .

You can’t lock kids in a sweet shop and not expect them to gorge themselves .



PS... love and kisses Marge XXXOOO


----------



## wayneL

Front Page in the UK


----------



## Kauri

wayneL said:


> Front Page in the UK




 Yep, I've always been a big believer in salt too, appreciate you posting it..   
Cheers
.........Kauri


----------



## wayneL

Kauri said:


> Yep, I've always been a big believer in salt too, appreciate you posting it..
> Cheers
> .........Kauri




I can recommend the stuff they mine in the Himalayas, full of trace minerals and a pretty pink colour too. :


----------



## wayneL

wayneL said:


> I can recommend the stuff they mine in the Himalayas, full of trace minerals and a pretty pink colour too. :




Probably good for budgies too.


----------



## Wysiwyg

ithatheekret said:


> No vovos left I'm afraid , how about a bush biscuit that should fill the space .
> 
> 
> PS... love and kisses Marge XXXOOO





Lol, you`re such a sweety. 
	

		
			
		

		
	







p.s. love your writings.(eats humble pie  )


----------



## ithatheekret

No worries Wys ,

I might dunk myself in vodka today .


I'm in there with you guys too , except the orderlies under my command are hedged . Don't think I haven't made mistakes , I've made beauties , $18K in one day once ....... once .

I wore a dunce cap for weeks over that and was delegated to the corner by the folks , but it was the best thing I ever did . 

I was a believer and not a researcher then , I don't suffer from info overload , I make the info contest its position , by cross referencing projections based on trade and other subtle measurements .

Just saw gold hit $859 , nothings sacred in a meltdown , even for pagans


----------



## rub92me

wayneL said:


> Front Page in the UK



You couldn't make that up. The man in underpants looks a little pale too!


----------



## chops_a_must

rub92me said:


> You couldn't make that up. The man in underpants looks a little pale too!




I don't know what crash they are talking about. On the front page there, the DAX are clearly up!


----------



## MS+Tradesim

WTF? US futures are bright green.  :swear:

Wouldn't that be just like America to startle the world then have an up day?! Not holding my breath but really, anything can happen in this climate.


----------



## Kauri

Latest market *RUMOURS*..
Here's a few for the day... and a good day it is for it and all...
 Emergency Fed meeting tonight...75 bps..
 BoJ and BoC have scheduled meetings today, and the BoC is looking at 50 instead of the expected 25bps..
 One of the Sov wealth funds backing C is considering backing out..
 Fears that Chinese banks need large writedowns..
 Crunch to worsen as Fitch downgrades Ambac..
 and fact... George Soros has warned that the current situation was "*much more serious than any financial crisis since the end of the war*." 

Enough for now ... I guess
Cheerfull
...........Kauri


----------



## Nyden

MS+Tradesim said:


> WTF? US futures are bright green.  :swear:
> 
> Wouldn't that be just like America to startle the world then have an up day?! Not holding my breath but really, anything can happen in this climate.




World markets are obviously ignoring it. Even if they have a rally, it'll be short lived and only delay the inevitable :


----------



## Gundini

DJIA INDEX 11,670.00 -436.00 
S&P 500 1,270.80 -54.50 
NASDAQ 100 1,782.25 -67.25 

A rise would surely be against the formguide.

This is the best the futures have looked in ages by the way.

All I say is "thank God they are asleep" 

Where are you seeing the green?

www.bloomberg.com/markets/stocks/futures.html


----------



## Nyden

Gundini said:


> DJIA INDEX 11,670.00 -436.00
> S&P 500 1,270.80 -54.50
> NASDAQ 100 1,782.25 -67.25
> 
> A rise would surely be against the formguide.
> 
> This is the best the futures have looked in ages by the way.
> 
> All I say is "thank God they are asleep"
> 
> Where are you seeing the green?
> 
> www.bloomberg.com/markets/stocks/futures.html




He's probably talking about http://money.cnn.com/data/premarket/index.html


----------



## chops_a_must

MS+Tradesim said:


> WTF? US futures are bright green.  :swear:
> 
> Wouldn't that be just like America to startle the world then have an up day?! Not holding my breath but really, anything can happen in this climate.




Don't know where you are seeing that. My screen shows YM at about 11630 ~-580, ES at about 1270, ~-58

SPI near new lows.


----------



## MS+Tradesim

Gundini said:


> Where are you seeing the green?




Here: http://finance.yahoo.com/indices?e=futures

 Is it wrong?


----------



## Gundini

MS+Tradesim said:


> Here: http://finance.yahoo.com/indices?e=futures
> 
> Is it wrong?




They are March Futures....

DJH08.CBT Dow Jones Indus. Mar 08 12,390.00 Jan 19  174.00 (1.42%) Chart 
NVH08.CME E-Mini Nasdaq 100 Mar 08 1,881.00 Jan 18 0.00 (0.00%) Chart 
ESH08.CME E-Mini S&P 500 Mar 08 1,268.00 10:35pm ET  2.50 (0.20%) Chart 
YMH08.CBT Mini Dow Jones Indus.-$5 Mar 08 11,635.00 10:35pm ET  49.00 (0.42%) Chart 
NQH08.CME Nasdaq 100 Mar 08 1,778.50 10:33pm ET  4.50 (0.25%) Chart 
SPH08.CME S&P 500 Mar 08 1,267.90 10:34pm ET  2.90 (0.23%) Chart


----------



## STRAT

MS+Tradesim said:


> Here: http://finance.yahoo.com/indices?e=futures
> 
> Is it wrong?



Not sure why it is streaming but the date says 19th Jan 

Thats a bit strange eh??


----------



## MS+Tradesim

Gundini said:


> They are March Futures....




Doh! Where can I see the current lot online?


----------



## Gundini

http://www.bloomberg.com/markets/stocks/futures.html


----------



## Uncle Festivus

Well the futures have been wrong before, and the bobble heads (traders) have been given some notice of what could transpire if the doodle heads (Bernanke etc) don't come out with some soothing reassurances. The PPT have a mandate so past experience would suggest downside limited 400 pts before the PPT get's serious. If not then it's game over?


----------



## IFocus

wayneL said:


> Front Page in the UK




A couple more front pages like this and we may see a base form, hard to see a bounce when the talk is US recession........


----------



## explod

Uncle Festivus said:


> Well the futures have been wrong before, and the bobble heads (traders) have been given some notice of what could transpire if the doodle heads (Bernanke etc) don't come out with some soothing reassurances. The PPT have a mandate so past experience would suggest downside limited 400 pts before the PPT get's serious. If not then it's game over?




Noaaooo woorrriies (was that Dame Edna or Sir Les)    The spin will be on tonight, some o'there mates need a rescue breather.   Wall Street loves to put the stamp on it all.  No one can have a correction without there say so, so up tonight but look out below by about Thursday.

But I could be wrong as I have before.

For higher impact, Unca Ben might have a coupla days off first thou.


----------



## Gundini

Uncle Festivus said:


> Well the futures have been wrong before




That's for sure, can change very quickly on some positive spin... They will have to dig deep though.



Uncle Festivus said:


> The PPT have a mandate so past experience would suggest downside limited 400 pts before the PPT get's serious. If not then it's game over?




Mmmm... Yes, I can see where you get the past experience idea, but if we knew The PPT had a percentage plan of let's say 3% fall before they would step in and save the planet, we could all benifit from that knowledge. Maybe better to say they only allow a 3% fall in any one session. That way they can step the market down, and take the heat out of it more gradually, as in now!


----------



## Kauri

all things being equal and no Burnankie surprises I see the PPT maybe lifting the futures before open to help soothe the masses, but I see their main work being done in the last 1/2 to 1 hour, after all why lift the market early to see it smashed later on.... I thunk...
if my GUESS is correct I will be looking to take a bite out of any rally late in their trading day....
Cheers
..........Kauri


----------



## Kauri

Trading stopped in Bank Of China ahead of a major announcement. Bank of China was reported to have taken a big hit in Q4 "07 on exposure to subprime investments. Other news hints at more losses at France"s SocGen, Germany"s WestLB and even some Norwegian townships with illegal exposure to subprime assets.
Cheers
........Kauri


----------



## Trembling Hand

Kauri said:


> Trading stopped in Bank Of China ahead of a major announcement.




Where did you get that from??


----------



## Sean K

Kauri said:


> .... and even some Norwegian townships with illegal exposure to subprime assets.
> Cheers
> ........Kauri



These rumours just get better and better. Have any materialised Kauri? Are you sure the budgie isn't talking to you during the evening??


----------



## >Apocalypto<

*US Futures! 15 min ago*


----------



## Trembling Hand

Kauri said:


> Trading stopped in Bank Of China ahead of a major announcement. Bank of China was reported to have taken a big hit in Q4 "07 on exposure to subprime investments. Other news hints at more losses at France"s SocGen, Germany"s WestLB and even some Norwegian townships with illegal exposure to subprime assets.
> Cheers
> ........Kauri




No halt in Bank of China up to Hong Kong's lunch. Where they halted?
Mongolian stock market?

No news from live HK ex new/alerts?


----------



## Kauri

kennas said:


> These rumours just get better and better. Have any materialised Kauri? Are you sure the budgie isn't talking to you during the evening??






> Where did you get that from??




Reuters.. screenprint has dumped so can't grab a shot of it...

SHANGHAI, Jan 22 (Reuters) - Trading in Bank of China's (601988.SS: ) Shanghai-listed local-currency A shares was suspended on Tuesday as the company failed to make comments on an "important event", the Shanghai Stock Exchange said.
"Bank of China failed to make a statement


----------



## Whiskers

Kauri said:


> Latest market *RUMOURS*..
> Here's a few for the day... and a good day it is for it and all...
> Emergency Fed meeting tonight...75 bps..
> BoJ and BoC have scheduled meetings today, and the BoC is looking at 50 instead of the expected 25bps..
> One of the Sov wealth funds backing C is considering backing out..
> Fears that Chinese banks need large writedowns..
> Crunch to worsen as Fitch downgrades Ambac..
> and fact... George Soros has warned that the current situation was "*much more serious than any financial crisis since the end of the war*."
> 
> Enough for now ... I guess
> Cheerfull
> ...........Kauri






Whiskers said:


> As I said earlier, Friday after Bush makes his announcement is probably the last chance for the Fed to announce an early rate cut. The Fed obviously feels that it can't stave off recession without Gov assistance. My feeling is that if the Fed acted first without some commitment from the Gov it would be akin to whittling it's only weapon down to the bone for little or no effect.
> 
> Once Bush makes his announcement that the rescue package being proposed is to kick in urgently the Fed may be inclined to make an announcement with some confidence that the markets will respond more positively.




Timing is everything!

If the Fed had seized the moment after Bush spoke and made a 50bp cut on Friday it would have been the best opportunity they had to appear something like an orderly early cut.

Anything they do now is going to have a much greater aire of panic or incompetance about it.


----------



## Awesomandy

Whiskers said:


> Anything they do now is going to have a much greater aire of panic or incompetance about it.




I'm not sure if any rate cuts are going to fix it this time. I would think they'll need to cut 75bp just to stablise it for a few days. But if they cut any more than that, people will probably take it as a bad news, that the economy is in very bad shape. Result: calamity.


----------



## Bushman

Awesomandy said:


> I'm not sure if any rate cuts are going to fix it this time. I would think they'll need to cut 75bp just to stablise it for a few days. But if they cut any more than that, people will probably take it as a bad news, that the economy is in very bad shape. Result: calamity.




Err have you seen the global markets at the moment. Investors are assuming the worst re the coming US recession and the impact on company EPS already. ASX is 24% off November highs. I think a 75 bp cut will be the first tangible sign US investors have that the Feds will not let the recession cut too deep. 

Now for the good news. Surely the meltdown of US financial markets and the impending US recession will ensure that the Republicans do not get re-elected in 2009? 

Dubya the worst US President in history? Iraq, sub prime, recession... I cannot think of a worse one - up there with 'Tricky Dicky' Nixon.


----------



## Gundini

DJIA INDEX 11,528.00 -578.00 
S&P 500 1,255.30 -70.00 
NASDAQ 100 1,745.50 -104.00 

To use one from Waynes scapbook:


----------



## Nyden

631 drop the futures point to, ouch. If the fed don't step in ... our markets are in for some gosh-awful pain tomorrow


----------



## Wysiwyg

Bushman said:


> Dubya the worst US President in history? Iraq, sub prime, recession... I cannot think of a worse one - up there with 'Tricky Dicky' Nixon.




Yeah for sure.Wars beget a heavy emotional burden.


----------



## ithatheekret

kennas said:


> These rumours just get better and better. Have any materialised Kauri? Are you sure the budgie isn't talking to you during the evening??




Yes , they've borrowed in Yen and Francs for mortgages , loans and speculation which has turned against them . They've not been missed , has anything not got hit ............

But they've borrowed offshore without their Treasuries permission , must be Victorians


----------



## stockwhizben

cant wait for Alan Kohlers report on the news tonight. also they need to bring back ABC's lateline business. another great show for me who doesnt have foxtel. channel 7 was saying not to panic and hang in there, hmmm


----------



## refined silver

From Jim Sinclair,

This Is It!
Posted On: Tuesday, October 23, 2007, 2:11:00 PM EST
Author: Jim Sinclair

Dear CIGAs,

Many of you have asked what exactly I mean by “This is it,” so here it is in point form:

There is a rampant, serious financial problem with terminal potential and no practical solution hidden just outside of the public’s view (OTC Derivatives). 
Because central banks have gotten so out of hand and political which cannot be controlled by investors or the man in the street, we need to adjust our actions so that each person takes on the responsibilities normal to central banks for their own finances. 
Everything we buy is getting more expensive and many assets people have, other than gold, are losing value. Because of this credit is not a proper idea regardless of the weak dollar for the majority of people reading this. 
Major financial institutions, Internet financial entities and banks operate without transparency where their derivative holdings are concerned. Losses the financial institutions are publishing are considered by media as having extinguished all the risk. I do not believe this. I believe they are still marked to model, only the model is moving slowly towards reality of worthlessness. 
There is an acceleration of bankruptcy among financial institutions. This translates to the individual needing to act as their own financial institution by having their share investments in paper form, gold in their close possession with no one in-between and available cash. The individual must be their own bank and central bank as one has failed us and both may. 
The savings rate in the US is negative while the expansion of credit is totally over the top. 
Business is turning south so the US Federal Budget Deficit will move up exponentially. 
The US dollar has become a bombed out and lost battle zone. There is nothing good anyone can say fundamentally about the US dollar. 
Non US entities are fed up with financing the US consumer and US Federal activities. This is clear from the recent TIC report, which is now down trending. 
Financial privacy is non-existent. 
There is a model for exactly what is happening now and that is the Weimar Republic. Name war retributions as OTC derivatives and you begin to see the picture. 
The US dollar has now made a clear indication of the final head and shoulders; the massive formation from the absolute top is breaking down. 
Number 12 is the item that impacts all of the above because of the dollar’s technical position now beginning to reflect the dire fundamentals. This is it

This is it because you now have to perform not only as your own bank but also as your own central bank. This is it because the US dollar has completed a major head and shoulders bear formation, pulled back to the underside of the neckline and thereafter declining below the major support line drawn from the beginning of the big dollar bull under Chairman Paul Volcker. Volcker made the dollar and Greenspan gave it all back to Asia.

The dollar break below the recent and most important major, major support line drawn from 1980 to now is the fundamental basis which will push Gold to $1650. The US dollar is without any doubt in my mind is going to .7200, followed by .6200.

Ladies and gentlemen, prepare to defend yourselves.

Posted On: Monday, January 21, 2008, 2:32:00 PM EST

Emergency Action Required Immediately To Prevent Public From Joining The Panic Tomorrow

     Author: Jim Sinclair

Posted On: Monday, January 21, 2008, 2:32:00 PM EST

Emergency Action Required Immediately To Prevent Public From Joining The Panic Tomorrow

     Author: Jim Sinclair

Dear CIGAs,

This is it.

The DJII futures are down over 500 points.

If the Federal Reserve fails to take emergency action before the US opening tomorrow, you will see the DJII open down 1000 points as the public joins this professional panic.

Everything you see happening is contained in the Formula, which will be the catalyst that takes gold again above $887.50 and to $1650.

As long as you have followed my plea to have NO MARGIN on anything gold I see no problems.

If you have margin the rule is never meet a margin call, but sell whatever is needed to meet the call or more, never less.

It is a better wager that the Fed will immediately drop rates by 1 full percentage point.

It is a slam dunk that all Western central banks will cut loose and flood the world with more liquidity than ever seen before.

If central banks fail to cause a torrent of liquidity from their unending check books then $450 trillion of derivatives will take us to the world of Mad Max.

Monetary inflation ALWAYS causes PRICE inflation even without strong business conditions.

Prices of hard and transportable assets rise regardless of business conditions.

All currencies fall and the stronger currency is the laggard in the race to the bottom of the tank.


----------



## Gundini

I saw Kauri's budgie taking a bath yesterday....

I knew there was trouble on the horizon.....

I just hope he's not polishing the bell, as we speak, in an attempt to get the best scrap price, that would be devistating!!! 

DOW down 650 on the futures, BTW....


----------



## treefrog

noted the SBS news tonight had a financial honcho in europe from an investment firm over there using not the R word but the D word for 2008 and compared potential severity to..............um...... thats right - 1929


----------



## Edwood

treefrog said:


> noted the SBS news tonight had a financial honcho in europe from an investment firm over there using not the R word but the D word for 2008 and compared potential severity to..............um...... thats right - 1929




makes sense tho Treefrog, current global debt levels as a % of global GDP are much higher than pre-1929


----------



## MS+Tradesim

Well, after large down openings a number of Europeans coming up, with FTSE 100 just turning green. Exhaustion day?


----------



## MS+Tradesim

Well, after large down openings a number of Europeans coming up, with FTSE 100 just turning green. Exhaustion day?


----------



## Nyden

MS+Tradesim said:


> Well, after large down openings a number of Europeans coming up, with FTSE 100 just turning green. Exhaustion day?




Once again, where are you seeing this?  Bloomberg shows down 130


----------



## MS+Tradesim

Nyden said:


> Once again, where are you seeing this?  Bloomberg shows down 130




http://finance.yahoo.com/intlindices?e=europe

Where are you looking on Bloomberg? It's going green too:

http://www.bloomberg.com/markets/stocks/wei.html

EDIT: And now all going red again. Bloomberg appears to be 15min delayed. Yahoo is pretty much live - at least it tracks the XAO pretty closely.


----------



## wayneL

MS+Tradesim said:


> Well, after large down openings a number of Europeans coming up, with FTSE 100 just turning green. Exhaustion day?




Yup, someone's buying.


----------



## cordelia

Kauri said:


> Latest market *RUMOURS*..
> George Soros has warned that the current situation was "*much more serious than any financial crisis since the end of the war*."
> 
> Enough for now ... I guess
> Cheerfull
> ...........Kauri






and I bet he's all cashed up


----------



## Nyden

MS+Tradesim said:


> http://finance.yahoo.com/intlindices?e=europe
> 
> Where are you looking on Bloomberg? It's going green too:
> 
> http://www.bloomberg.com/markets/stocks/wei.html




Ha, wasn't refreshing. I see the green now, it's a color I can't even recognize anymore!


----------



## sassa

According to this site,the FTSE has just entered green territory after being down 3.25% an hour ago.

http://stock.rbc.ru/demo/index.0/intraday/index.eng.shtml?sort=LAST_CHANGE_PERCENT&dir=ASC


----------



## dhukka

wayneL said:


> Yup, someone's buying.




Got any insights into the mood in old blighty today wayne?


----------



## sassa

sassa said:


> According to this site,the FTSE has just entered green territory after being down 3.25% an hour ago.
> 
> http://stock.rbc.ru/demo/index.0/intraday/index.eng.shtml?sort=LAST_CHANGE_PERCENT&dir=ASC




And has returned to red territory.


----------



## MS+Tradesim

> LONDON, Jan 22 (Reuters) - European shares swung wildly in morning trade on Tuesday and traded 0.8 percent lower after turning briefly positive on market talk of central bank interest rate cuts.
> 
> At 0914 GMT, the FTSEurofirst 300 index of top European shares was down 0.8 percent at 1,269.66 points, having fallen as much as 4.4 percent earlier in the session and then risen almost 0.5 percent as the rate talk swirled.
> 
> "Theres's rumours about concerted rate cuts... they're talking about the Fed, the ECB, the Bank of England and the SNB all cutting rates," a trader said.
> 
> Traders in Paris cited market talk of a rate cut of between 75 to 100 basis points from the U.S. Federal Reserve.




http://www.reuters.com/article/marketsNews/idCAL2217832720080122?rpc=44


----------



## wayneL

dhukka said:


> Got any insights into the mood in old blighty today wayne?



VI's are spinning their hearts out... don't panic, we won't have recession, it's a US problem, blah blah. We have the BBC whose remit from Crash Gordon is to ramp property and lie about how good the economy is.

But the horses are restless, most folks know we in for tough times.


----------



## Bushman

MS+Tradesim said:


> http://www.reuters.com/article/marketsNews/idCAL2217832720080122?rpc=44




F**ken amazing if all the Central Banks of the world cut rates simultaneously. Talk about getting the defribulator out and zapping the heart of the global economy. 

It seems to be a case of political will vs asset valuation. Bit like the fundamentalists vs the realists. If history is an indicator, the fundy's will win but at what cost to its long suffering citizens?


----------



## Nyden

MS+Tradesim said:


> http://www.reuters.com/article/marketsNews/idCAL2217832720080122?rpc=44




& when / if it doesn't happen ... :behead:


----------



## MS+Tradesim

ooops, there we go...rollercoaster back up and a bit of green showing in Europe again.


----------



## Bushman

A significant rates cut now has the potential to delay the inevitable and induce stagflation. So you get a relief rally today in turn for an even bigger calamity down the road. 

To quote an excellent article in CNN Money today: 

'But Bernanke is setting the stage for an even bigger recession down the road. Just as the ultra-low rates of the early 2000s created many of the problems we're experiencing today, pumping money into the system would probably stoke inflation, forcing the Fed to hike rates sharply in the near future. "It's better to take a small recession and kill inflation immediately instead of facing high inflation and a really big recession later," says Carnegie Mellon economist Allan Meltzer.'

Is this another case of 'notonmyshiftism'? Here is the link to the article for those who interested. 

http://money.cnn.com/2008/01/18/news/economy/cure.fortune/index.htm

So a big Fed cut now could well mean that this thread lives on for another few years. And I was so looking forward to creating the 'Imminent & Meteoric Bull Market' thread in a few months time


----------



## Whiskers

Not as bad as some headlines would portray.

But first impressions count.

As Bushmans post highlights things are not quite the same this time and Ben really doesn't want to cut more... but he opened his mouth and put it out there that he would agressively cut rates to save the economy. 

He should have kept his mouth shut if he wanted to deal with it differently, but having opened his mouth, he now has to deliver even if he has to take it back sooner than otherwise anticipated.



> *Every Major U.S. Bank Was Profitable Last Year*: John M. Berry
> 
> Commentary by John M. Berry
> 
> Jan. 22 (Bloomberg) -- With all the large writedowns and losses announced for the fourth quarter, hardly any attention is being paid to just how profitable U.S. banks really are.
> 
> That inattention has raised unnecessary concerns that the banks may be so crippled by losses that they will cut lending to the point it might undermine the U.S. economy.
> 
> Some commentators have said the banks are in the worst shape since the Great Depression. That isn't close to being correct.
> 
> Other analysts have raised the specter of the stagnant Japanese economy of the 1990s, when banks there were crippled by huge losses when a real estate price bubble burst at the beginning of that decade. This comparison also is off base.
> 
> Even Citigroup Inc., by far the hardest hit of the big U.S. banks by subprime-related problems, earned $3.62 billion last year. That was with a $9.83 billion fourth-quarter net loss and more than $22 billion in writedowns and additions to loan-loss reserves.
> 
> http://www.bloomberg.com/apps/news?pid=20601039&sid=aELWaQomFgNw&refer=columnist_berry


----------



## Wysiwyg

Uncle Festivus said:


> Blow-off top in world markets - get ready!
> 
> ~~~~~~~~~~~~~~~~~~~~~~
> Mr Murray said investors could ill afford to ignore warnings from the likes of Alan Greenspan. The former chairman of the Federal Reserve warned earlier this year that the US faced the risk of recession.




Has anyone thanked the reality of uncle ? and  the vision of waynel ?

(quietly i suppose)


----------



## bearinthere

more reading material 

http://www.economist.com/daily/news/displaystory.cfm?story_id=10555699&top_story=1


----------



## Kauri

Some very interesting _stories? _circulating re the Fed's agenda currently... however it seems the markets worldwide and FX (carries in particular) are still waiting to hear, or not, from BB, pre the open. Am positioning my trades accordingly..  
Cheers
........Kauri


----------



## MS+Tradesim

Breaking news on Bloomberg TV - emergency rate cut of 75bps


----------



## Trembling Hand

And we are Off the moon


----------



## reece55

MS+Tradesim said:


> Breaking news on Bloomberg TV - emergency rate cut of 75bps




Deflation here we come.......... Just throw money at it, it will go away....

Dow up 200 points very quickly, lets see how we go.... I would be selling into the rallies......

Cheers


----------



## Santob

US Fed resever has cut interest rates from 4.25% to 3.5%
Link


----------



## Trembling Hand

trembling Hand said:


> And we are Off the moon




Or not.


----------



## wayneL

trembling Hand said:


> Or not.



LOL

Freakin' amazing.


----------



## lesm

wayneL said:


> LOL
> 
> Freakin' amazing.




The pullback from the initial reaction has been interesting to watch


----------



## Trembling Hand

wayneL said:


> LOL
> 
> Freakin' amazing.




Did I stay up for that Fart in Cyclone?

Everything just rolled over again. US, UK, Forex, Metals.

Wayne can you ring up Ben and organise another .75 off in about an hour?


----------



## Whiskers

trembling Hand said:


> Or not.




Don't worry, the market will show some 'appreciation'.


----------



## lesm

trembling Hand said:


> Did I stay up for that Fart in Cyclone?
> 
> Everything just rolled over again. US, UK, Forex, Metals.
> 
> Wayne can you ring up Ben and organise another .75 off in about an hour?




Wayne, better ask Ben to make that 1.5, it might last a bit longer next time


----------



## ithatheekret

Now what will they do at the meeting scheduled ? 

The Fed just winced and blinked . Total stuff up , that cut should have come on Thursday or Friday last week , watching the futures retrace now .

Well at least they flattened one curve , albiet the two year .

The spikes will be sold off with all likelihood , cuts don't make up for credibility lost , not when there held back for a touch of icing , we just seen a novice and an apprentice stumble .


----------



## Kauri

interesting little story just popped up upon mine screen... make of it what you will   
Cheers
.........Kauri




> S&P Outlook; Fed Cut Leaves it Up to the Big Players     The Fed has cut the fed funds rate by 75 bps - just in time - to be able to go to Davos for some tea and crumpets with a smile. Certainly Big Ben could not have gone to the conference without cutting rates lest he might have been subject to bodily harm.
> The bounce up to 1300 for SPH has been sold into and has participants worried that much worse is yet to come. To say that sellers are in control is a laughable understatement, but at least the Fed's action has likely arrested the selling from panicked real money longs. That leaves the big specs as the only real sellers and in looking at the levels we wonder who wants to short the indices here. Indeed SPH is nearing the 2006 low of 1219, while the July 2006 low is at 1231. The big question is where are the big real money players - the mutual funds etc which do have tons of cash but no confidence right now. They have a score to settle with the aggressive hedge fund shorts who are now very, very short.


----------



## dhukka

ithatheekret said:


> Now what will they do at the meeting scheduled ?
> 
> The Fed just winced and blinked . Total stuff up , that cut should have come on Thursday or Friday last week , watching the futures retrace now .
> 
> Well at least they flattened one curve , albiet the two year .
> 
> The spikes will be sold off with all likelihood , cuts don't make up for credibility lost , not when there held back for a touch of icing , we just seen a novice and an apprentice stumble .




Yep, they look silly now, just like a pack of panic merchants.


----------



## Trembling Hand

Kauri said:


> interesting little story just popped up upon mine screen... make of it what you will
> Cheers
> .........Kauri




Not a bad sum up of where we are at.


----------



## Wysiwyg

ithatheekret said:


> we just seen a novice and an apprentice stumble .





Ben Bernanke (occupying hot seat) 



> On leaving high school in 1972 he enrolled at Harvard College, where he spent his undergraduate years in Winthrop House and graduated summa cum laude with a B.A. in economics in 1975. He received a PhD in economics from the Massachusetts Institute of Technology in 1979. He taught at the Stanford Graduate School of Business from 1979 until 1985, was a visiting professor at New York University and went on to become a tenured professor at Princeton University in the Department of Economics. *He chaired that department from 1996 until September 2002, when he went on public service **leave. He resigned his position at Princeton July 1, 2005*




Sheesh, hope he wasn`t surfin the Huntington pier in the time off.


----------



## chops_a_must

Anyone game to short AMBAC when that giant short squeeze ends?


----------



## Kauri

trembling Hand said:


> Not a bad sum up of where we are at.




and to possibly sum up the future... so to speak..

Fed fund futures and budgies are already looking for another rate cut pricing in over a 50% chance of another 50 bp  when the Fed meets this month. Strange as it may seem, if the Fed cuts, it would probably bring mortgage prices right back down to levels needed for refinancing ARMs, helping relieve the burden on the ninja mob et al. The  bulk of them ,strangely once again, come up this quarter... believe it... or not.
Cheers
..........karlu


----------



## Gundini

No rate cut can stop this....


----------



## ithatheekret

To be honest I was rather worried , today I bought LGL and OXR ..... and a tad more than the standard 10% allocation . This is not normal for me , I prefer the hard asset , it doesn't have to compete with a margin . Another 50bps would seal that entry nicely though 

VIX into 33 those options will be cranking .


----------



## ithatheekret

I'm amazed at the amount of people that think the 75bps emergency intermeeting cut is a good signal . It smacks of desperation to me and the Fed just choked at the wicket . Bring on Poole for the next Fed Head .


----------



## Gundini

ithatheekret said:


> I'm amazed at the amount of people that think the 75bps emergency intermeeting cut is a good signal . It smacks of desperation to me and the Fed just choked at the wicket . Bring on Poole for the next Fed Head .




That it does, though with all the red of late, I think the punters are just enjoy some downtime....

You must be pleased with your 15% pickups from OXR and LGL...

Ben has done you well....


----------



## ithatheekret

Yes , I'm stoked . But I think we should leave excuberance to the Fed lovers , just spotted our inflation data ......... up 1% 


The RBA will be praying ......... lead us not into temptation ........... 


Rate hike coming , so get padded up and don't forget your b.... protector .

Googly coming down the pitch and it's a wrongun' .


----------



## ithatheekret

Hong Kong rates have just done their mirror image due to the peg , 75bps cut.


----------



## Kauri

ithatheekret said:


> Hong Kong rates have just done their mirror image due to the peg , 75bps cut.




 Where does this leave the mid-east oilies.. particularly if BB goes another half at months end... they weren't too happy before this with a lot of talk of breaking away...I thunk   
Cheers
...........Kauri


----------



## Whiskers

ithatheekret said:


> I'm amazed at the amount of people that think the 75bps emergency intermeeting cut is a good signal . It smacks of desperation to me and the Fed just choked at the wicket . Bring on Poole for the next Fed Head .




It was desperation all right, but what choice did they have especially given that they earlier broadcast that they would cut to protect the economy but didn't follow up with action promptly. Regardless of whether or not it is the best way to go, this is the route they broadcast they would take and the market was getting dissapointed with the lack of action... any action.

The economy has finally got George W's full attention in his last months of office by reports that he is putting bitter differences aside to excpedite a rescue package. Both sides of congress had earlier agreed on a plan but Bush would not endorse it, consequently nothing has hit the ground yet to benifit consumers.


----------



## doctorj

Whiskers said:


> It was desperation all right, but what choice did they have



Agreed.  They had no choice.  Unlike the BOE and our RBA, the US Fed have a dual mandate - they are tasked with both stable prices and sustainable economic growth.  To me that's about as achievable as a blind guy on a tight rope.  Fortunately the RBA and BOE have a much more realistic task; price stability.   


Whiskers said:


> The economy has finally got George W's full attention in his last months of office by reports that he is putting bitter differences aside to excpedite a rescue package. Both sides of congress had earlier agreed on a plan but Bush would not endorse it, consequently nothing has hit the ground yet to benifit consumers.



His 'rescue package' is likely to have more to do with vote winning than real fiscal stimulus.  Their own forecasts suggest the US$140b will only have a 0.3% increase on growth.  If they were serious about fiscal stimulus as against vote winning, they'd have done something else.  The truth is corporations don't vote.

Last time they attempted something like this, there was a large amount of evidence the rebate was saved (or used to pay down debt) far more often than it was spent - in effect just shifting the money from the government's bank account to an individuals and thus resulting in very little real economic growth.


----------



## ithatheekret

Kauri said:


> Where does this leave the mid-east oilies.. particularly if BB goes another half at months end... they weren't too happy before this with a lot of talk of breaking away...I thunk
> Cheers
> ...........Kauri




That's a darn good question , yesterday they plunged with us , the Baltic is still weak and I watched Saudi Basic Industries Corp ( SABIC) drop just under 10% , this group are the worlds largest market valued chemical co . 

Not game to look today , but it is interesting that Kuwait has just dropped the corporate tax rate from 55% to 15% for foreign investors . 

They've got a raging inflation problem emerging as well , so I expect something to move in the Saudi zone at least .


----------



## Whiskers

doctorj said:


> If they were serious about fiscal stimulus as against vote winning, they'd have done something else.




...long before now.

I think thats the point. Bush has been asleep at the wheel re the economy for too long and almost anything will be perceived as a positive move now.


----------



## Aussiejeff

Whiskers said:


> ...long before now.
> 
> I think thats the point. Bush has been asleep at the wheel re the economy for too long and almost anything will be perceived as a positive move now.





Who's Bush???


----------



## Gundini

Aussiejeff said:


> Who's Bush???




Good ole' Gee-Dubyuh!


----------



## Whiskers

Aussiejeff said:


> Who's Bush???






George W Bush.

http://biz.yahoo.com/ap/080122/economy_stimulus.html

PS: Bludy well done Gundini!


----------



## Gundini

A man for the people...


----------



## Aussiejeff

Whiskers said:


> George W Bush.
> 
> http://biz.yahoo.com/ap/080122/economy_stimulus.html




Oh, *THAT* Bush!! Doesn't he run America (_in to the ground_) or somefink?

LOL....

AJ


----------



## insider

Gundini said:


> Good ole' Gee-Dubyuh!




The resemblance is undeniable


----------



## sassa

The FTSE,CAC & DAX all now in red territory after appreciable opening gains.
FTSE has dropped over 1% in last half hour.


----------



## nioka

Gundini said:


> Good ole' Gee-Dubyuh!



Calling someone a monkey almost caused a cricket war, ???????????????????????


----------



## MS+Tradesim

BoE holding rates steady. Might explain some of the red now in Europe, at least FTSE.



> The Governor invited the Committee to vote on the proposition that Bank Rate should be
> maintained at 5.5%. Eight members of the Committee (the Governor, Rachel Lomax, John Gieve,
> Kate Barker, Charles Bean, Tim Besley, Andrew Sentance and Paul Tucker) voted in favour of the
> proposition. David Blanchflower voted against, preferring a reduction in Bank Rate of 25 basis points.




http://www.bankofengland.co.uk/publications/minutes/mpc/pdf/2008/mpc0801.pdf


----------



## refined silver

PPT at work yesterday.

From Rick Ackerman

This is shown in the S&P futures chart above (below) -- as compelling a picture as you will ever see of what traders refer to as “strong hands.” This is not the buying of mere institutional traders second-guessing each other so as to produce a raggedy series of lows. Rather, it is a buyer whose 1255.50 bid was set in concrete, fearlessly oblivious to the selling panics that had overwhelmed the world’s bourses for two consecutive days. The bid held for long enough to exhaust sellers, as it doubtless was intended to do, causing the major averages to rally back to unchanged on the strength of the massive short-covering that followed.


----------



## numbercruncher

Yes it just makes a mockery out of free markets hey, but the alternative or perhaps even the inevitable could be total collapse, guess they just choose the lesser of two evils until they can fight no more !


----------



## Seaking

refined silver said:


> PPT at work yesterday.
> 
> From Rick Ackerman
> 
> This is shown in the S&P futures chart above (below) -- as compelling a picture as you will ever see of what traders refer to as “strong hands.” This is not the buying of mere institutional traders second-guessing each other so as to produce a raggedy series of lows. Rather, it is a buyer whose 1255.50 bid was set in concrete, fearlessly oblivious to the selling panics that had overwhelmed the world’s bourses for two consecutive days. The bid held for long enough to exhaust sellers, as it doubtless was intended to do, causing the major averages to rally back to unchanged on the strength of the massive short-covering that followed.





The ES was limit down at 1255.50 ... You could bid up from that level only until the pit session opened at 8.30am CST. Not sure who Rick Ackerman is but he maybe should check his facts...


----------



## wayneL

SYCOM doomage and Dow futs -200 an hour before open.


----------



## lesm

wayneL said:


> SYCOM doomage and Dow futs -200 an hour before open.




Wayne have you looked at the European indices tonight?

DAX -355, FTSE -207, etc...


----------



## insider

lesm said:


> Wayne have you looked at the European indices tonight?
> 
> DAX -355, FTSE -207, etc...




geeeeeez.... so much for the bounce... watch the XAO free fall again tomorrow... or should I say today... It might be just me but I think Friday will be horrendus...and Monday is a public after all so that is one extra night of potential carnage to be factored in on Tuesday from the Dow... In these conditions it is not a good idea to hold over night IMO


----------



## nomore4s

wayneL said:


> SYCOM doomage and Dow futs -200 an hour before open.




FTSE down about 3% as well

edit: lol, too slow beaten by lesm


----------



## wayneL

lesm said:


> Wayne have you looked at the European indices tonight?
> 
> DAX -355, FTSE -207, etc...




Yeah I trade Eurostoxx50. Nice intraday trend. 

We in yo-yo territory.


----------



## Kauri

lesm said:


> Wayne have you looked at the European indices tonight?
> 
> *DAX -355,* FTSE -207, etc...




 the sibilant sound of snapping sub-prime clacker valves has been resounding through the bund all morning... apparently..
Cheers
........Kauri


----------



## Whiskers

FWIW: Breakilg News from Reuters

Congressional Budget Office says does not expect economic slowdown to become a recession  9:19am EST


----------



## clowboy

Whiskers said:


> FWIW: Breakilg News from Reuters
> 
> Congressional Budget Office says does not expect economic slowdown to become a recession  9:19am EST




O well in that case im bullish again.....


----------



## lesm

Wayne..there has been a nice intraday trend 

Mainly trade the DAX and FX

A quick market snapshot.

Cheers.


----------



## Whiskers

clowboy said:


> O well in that case im bullish again.....




Yeah... and how about another 50/75bps next week! 

They might as well go straight down to 1% again and be done with it! 



> CNNMoney.com
> *More rate cuts to come?*
> Wednesday January 23, 9:32 am ET
> By Paul R. La Monica, CNNMoney.com editor at large
> 
> 
> Wall Street is still betting that the central bank will lower rates again next week.
> 
> 
> And according to futures listed on the Chicago Board of Trade, investors are pricing in a 100 percent chance of at least another half-point cut, to 3 percent, and a 48 percent likelihood of another 75 basis point cut, to 2.75 percent. http://biz.yahoo.com/cnnm/080123/012208_fed_lookahead.html?.v=9


----------



## wayneL

Todays US market has the PPT's fingerprints all over it IMO.

Compare intraday charts over the last few days.


----------



## Gundini

wayneL said:


> Todays US market has the PPT's fingerprints all over it IMO.
> 
> Compare intraday charts over the last few days.




Good.... We don't want the market to decline in one day... Spread it out... 

I need more time to get properly set.

3 months would be good, we will see....


----------



## ithatheekret

wayneL said:


> Todays US market has the PPT's fingerprints all over it IMO.
> 
> Compare intraday charts over the last few days.




I thought it was a classic text book bear rally , with a touch of over the top .
600 odd points the rally adds up to , but it was done in half a day or just under . How many shorts got caught would be good to know , they would have added to the up tick . I think the banks were buying each other from the onset , consolidation in the sector has to be on the cards across the board . I was amazed here at home to find out that a bank knew all my holdings in stocks , I was transferring accounts ( starting to ) and it was a phone enquiry , the young chap , sprouted off my share holdings , my view of privacy changed straight away , there is none and they lost the account .

The humour spot was hit when I heard that banks will be raising capital to bail out bond insurers . That makes sense ....... not . And just who will be bailing the banks out , if the capital raisings they get go off book .


----------



## Aussiejeff

insider said:


> geeeeeez.... so much for the bounce... watch the XAO free fall again tomorrow... or should I say today... It might be just me but I think Friday will be horrendus...and Monday is a public after all so that is one extra night of potential carnage to be factored in on Tuesday from the Dow... In these conditions it is not a good idea to hold over night IMO




Hmmm. The DJIA rallied strongly around 4.7% overnight in the last 3 hours of trade up to 12270 pts with no sign of the rebound wavering, right up to the close...!

Be interesting to see how our market reads between the two contrary lines...

On the one hand, we see a TANKING euro market overnight and on the other, a REBOUNDING US market overnight. Mebbe a 1-2% rise here? Gee, I'm getting dizzy from watching the dailly SP graph lines going up and down like Yo-Yo's!!! LOL


AJ


----------



## Aussiejeff

ithatheekret said:


> I thought it was a classic text book bear rally , with a touch of over the top .
> 600 odd points the rally adds up to , but it was done in half a day or just under . How many shorts got caught would be good to know , they would have added to the up tick . I think the banks were buying each other from the onset , consolidation in the sector has to be on the cards across the board . I was amazed here at home to find out that a bank knew all my holdings in stocks , I was transferring accounts ( starting to ) and it was a phone enquiry , the young chap , sprouted off my share holdings , my view of privacy changed straight away , there is none and they lost the account .
> 
> The humour spot was hit when I heard that banks will be raising capital to bail out bond insurers . That makes sense ....... not . *And just who will be bailing the banks out , if the capital raisings they get go off book *.




Us? 

When I think about it, the BIG banks can still do ok out of a tanking stock market - where does all that money from converting falling stocks to cash end up? Yup ... generally back into the BIG banks hungry vaults. They must be starting to swim in the stuff like Scrooge McDuck!!

They will be amassing oodles of cash deposits, for them to on-loan oodles out to each other... thus massaging their respective enterprises back to rosy health. Hehe.


Chiz,

AJ


----------



## dhukka

ithatheekret said:


> The humour spot was hit when I heard that banks will be raising capital to bail out bond insurers . That makes sense ....... not . And just who will be bailing the banks out , if the capital raisings they get go off book .




Talk about throwing good money after bad, ala Bank of America style. Makes the mind boggle.


----------



## dhukka

If the market rallied solely on this news then it doesn't instill much confidence. 



> *Banks pressed to bail out bond insurers*
> 
> The largest US banks are under pressure from New York State insurance regulators to provide as much as $15bn in fresh capital to support struggling bond insurers, people familiar with the matter said.
> 
> Eric Dinallo, New York insurance superintendent, has met executives at the banks and has strongly urged them to provide $5bn in immediate capital to support the bond insurers, the largest of which are MBIA and Ambac, and to ultimately commit up to $15bn. A spokesman for Mr Dinallo had no immediate comment....
> 
> ....However, Mr Dinallo’s plan has not met with uniform support among banks that have their own capital-raising issues following the collapse in value of mortgage-related securities on their books. One industry source said some banks would prefer to see the federal government coordinate some kind of rescue plan for the monolines.
> 
> The banks also still feel stung by a failed plan to have them bail out troubled structured investment vehicles


----------



## MichaelWhyte

dhukka said:


> If the market rallied solely on this news then it doesn't instill much confidence.



MBIA closed some 50%+ up from memory that I spotted on Bloomberg this morning before heading in to the office.  Ambac similar rally.  And the timing of the announcement seemed to coincide with the late rally across financials.  The market seems to have absorbed the announcement as fact that these two bond insurers will be saved by the banks.

All a bit crazy at the moment.

Cheers,
Michael


----------



## Aussiejeff

MichaelWhyte said:


> MBIA closed some 50%+ up from memory that I spotted on Bloomberg this morning before heading in to the office.  Ambac similar rally.  And the timing of the announcement seemed to coincide with the late rally across financials.  The market seems to have absorbed the announcement as fact that these two bond insurers will be saved by the banks.
> 
> All a bit crazy at the moment.
> 
> Cheers,
> Michael




Aha! So THAT'S who's left holding the leaking Sub-Prime buckets! The *Bond Insurers* huh? NOW we know where all those Billions of mysterious e-$'s have been hiding...

AJ


----------



## ithatheekret

Aussiejeff said:


> Us?
> 
> When I think about it, the BIG banks can still do ok out of a tanking stock market - where does all that money from converting falling stocks to cash end up? Yup ... generally back into the BIG banks hungry vaults. They must be starting to swim in the stuff like Scrooge McDuck!!
> 
> They will be amassing oodles of cash deposits, for them to on-loan oodles out to each other... thus massaging their respective enterprises back to rosy health. Hehe.
> 
> 
> Chiz,
> 
> AJ




Yes , but it surely must depend on how many assets have been moved from Tier 1 to Tier 2 until they start performing again , if liquidity is in constant supply the shocks can be absorbed into Tier 2 models . But the assets must be valued first much the same as in a takeover process , that means by their models that a consolidation has to occur because only a few have bigger piles of cash that were moving around their economy . That's what's been happening for years, hot money now being cooled in vaults . The model works okay but it's not infinite , there in lies the problem . The Funds that have magically appeared over the years have been like rabbits multiplying , it's just time to go wabbit hunting , a good farmer will blow the burrow too .


----------



## Gundini

I know old news, and borrowed from another thread, but:

I am still stuggling to work out what actually happened last night in the good ole US of A.

Bush convenes Plunge Protection Team
By Ambrose Evans-Pritchard, International Business Editor
Last Updated: 1:18am GMT 11/01/2008


Bears beware. The New Deal of 2008 is in the works. The US Treasury is about to shower households with rebate cheques to head off a full-blown slump, and save the Bush presidency.

On Friday, Mr Bush convened the so-called Plunge Protection Team for its first known meeting in the Oval Office. The black arts unit - officially the President's Working Group on Financial Markets - was created after the 1987 crash.

Read more from Ambrose Evans-Pritchard
Crisis may make 1929 look a 'walk in the park'
Financial outlook 2008: The experts' views
It appears to have powers to support the markets in a crisis with a host of instruments, mostly by through buying futures contracts on the stock indexes (DOW, S&P 500, NASDAQ and Russell) and key credit levers. *And it has the means to fry "short" traders in the hottest of oils.*

This last line says it all really...

Full story here:
http://www.telegraph.co.uk/money/ma...008/01/07/ccview107.xml&CMP=ILC-mostviewedbox


----------



## sassa

Could the banks' rescue of the bond insurers be the same outcome as their "get together" to alleviate the SIV fiasco?
Quote:
While $15 billion might seem like a large amount of money for banks to commit to bond guarantors at a time when many investors have lost faith in them, Mr. Haines said it would be smaller than the billions the banks might have to write down if the companies lost their top ratings or incurred major losses.

“It’s a calculated kind of risk,” he said.

A spokesman for Ambac did not return calls seeking comment. A spokeswoman for MBIA declined to comment.

Analysts say it is unclear how much money would be needed to capitalize the companies adequately. Ratings agencies have changed their requirements several times already as they update their assumptions of defaults and losses on mortgage securities.

“What is needed to do the job is to solidify the market perception of a triple-A rating,” said Sean Egan, founder of Egan-Jones Ratings, a firm that says the companies may need to raise as much as $30 billion. 

A recent effort by some banks to help a smaller bond insurer, ACA Capital, has not gone smoothly. The banks have twice agreed to give the company, which was downgraded to triple-C from single-A, more time to come up with an acceptable plan


----------



## numbercruncher

> BEIJING (AFP) - China on Wednesday issued an "urgent" call for the coal industry, electricity providers and government agencies to ensure adequate coal supplies as a nationwide power crisis loomed.
> 
> The report said the booming nation's stockpile of coal, which provides about 70 percent of China's power needs, had dwindled to a mere week's supply in recent days.




news.yahoo.com/s/afp/20080123/bs_afp/chinaelectricity

hmmmm.

So China runs out of electricity, then what happens ??? we use our imaginations


----------



## Sean K

Classic.

Not one post in here today.

The bears are back in their caves already.

(maybe just until tomorrow's 5% drop  )

I haven't got a clue what's going on here....


----------



## Captain G

Hi Hennas, I think things are taking off again because all the markets are expecting or loading in another 0.5 rate cut from the US Fed at the next meeting. Does anyone else think this ??


----------



## Flying Fish

we are out enjoying our ill gotton gains, see you on monday


----------



## Aussiejeff

Flying Fish said:


> we are out enjoying our ill gotton gains, see you on monday





You sure yer not busy washing the stains out of yer shorts?

LOL.



AJ


----------



## Aussiejeff

numbercruncher said:


> news.yahoo.com/s/afp/20080123/bs_afp/chinaelectricity
> 
> hmmmm.
> 
> So China runs out of electricity, then what happens ??? we use our imaginations




Who cares about what might happen in China in 7 days! OUR market is UP today, so ny-a-a-a-h-h-h to the future... the reality is NOW, so it's BUY, BUY, BUY!!!

Maybe TOMORROW or the next day it will be BYE, BYE, BYE if the market dives again...


----------



## Kauri

Captain G said:


> Hi Hennas, I think things are taking off again because all the markets are expecting or loading in another 0.5 rate cut from the US Fed at the next meeting. Does anyone else think this ??




Nope... I reckon after being fooled into the emergency 0.75% already.. and the market activity going on now(allowing that it continues, albeit at a more sedate pace)... why waste your powder.. they will need and be glad of everything they can muster soon enough... or not..  
Cheep cheep
........Kauri


----------



## Awesomandy

kennas said:


> Classic.
> 
> Not one post in here today.
> 
> The bears are back in their caves already.
> 
> (maybe just until tomorrow's 5% drop  )
> 
> I haven't got a clue what's going on here....




I think we are a little bit quiet today, since everything is going more or less according to plan at the moment - a rapid bounce and rally towards the 5700 - 5900 region (or at least a lower high). I'm sure posts will increase again when either 1. XAO powers past the last high, or 2. it runs out of steam at or before 5900.


----------



## explod

Kauri said:


> Nope... I reckon after being fooled into the emergency 0.75% already.. and the market activity going on now(allowing that it continues, albeit at a more sedate pace)... why waste your powder.. they will need and be glad of everything they can muster soon enough... or not..
> Cheep cheep
> ........Kauri




I tend to agree.  The volume on the Dow over the last 3 days has been considerably high.  (Last night in essence the Dow went sideways.)  We might say that some see opportunity.  For every buyer we have a seller.   What sort of thinker is the buyer when in fact on the chart the Dow was near the brink?

If the Fed does not move as anticipated could we see the raft on the edge again.   The water is rough.   Could no move now cause an second uncheduled one later next week?

We live in amazing times


----------



## Kimosabi

Awesomandy said:


> I think we are a little bit quiet today, since everything is going more or less according to plan at the moment - a rapid bounce and rally towards the 5700 - 5900 region (or at least a lower high). I'm sure posts will increase again when either 1. XAO powers past the last high, or 2. it runs out of steam at or before 5900.




Yep, the Bond insurers unravelling will trigger the next big step down which could happen as soon as early next week.

I bought ZFX at $8.55 on tuesday and got out at $10.53 today. Unfortunately, I think the next round of bloodletting is going to start next week.

I'm seeing too much stuff about the US potentially dragging the rest of the World into a World Wide Depression to have any confidence in the current markets. All of the easy credit is going to have to be purged from the system before this is over...


----------



## cordelia

I have to agree. bought ZFX then got out today.....Didn't make as much profit as you but when prices fall suddenly and then go straight  back up its smacks of panic buying. There seemed to be a lot of sell orders for ZFX which bothered me. I think the people who panic sold are now panic buying. A bit of a knee jerk reaction...


----------



## blablabla

Massive rate cut + big tax rebates + plans to bail out the subprime losers. In normal times all of this would have caused a double-digit percentage rise for the DJI, but it is only back to where it was a week ago.

The Bush administration appears willing to keep up the bombardment of interventions even if they have to use up all the ammo at their disposal. There is plenty of ammo left too. USA interest rates can still fall another 3.5% if necessary, and the financial system is able to create trillions more new dollars out of thin air. The control of inflation has been sacrificed so that the Republicans can still have a chance of winning the upcoming election. 

The price of everything will rise, including the prices of shares. Inflation is one of the worst bubbles because it affects everything. Most bubbles only affect one or a few things.

All will be fine, the Republicans will probably get re-elected ..... but eventually the bubble must burst. These irresponsible USA measures, and probably more of the same yet to come, will make economic collapse further down the track more likely, not less likely.


----------



## ithatheekret

Da daan daan daa daaadaaa ...........


----------



## Uncle Festivus

blablabla said:


> USA interest rates can still fall another 3.5% if necessary, and the financial system is able to create trillions more new dollars out of thin air. The control of inflation has been sacrificed so that the Republicans can still have a chance of winning the upcoming election.
> 
> The price of everything will rise, including the prices of shares. Inflation is one of the worst bubbles because it affects everything. Most bubbles only affect one or a few things.




The real interest rate is prob closer to zero already, depending on who's measure of inflation you have, so lowering any more is like pushing on a string of spaghetti.

The Fed is outwardly concerned with inflation, but they have shown they are willing to sacrifice the US dollar in an desperate attempt to ward off deflation. We (the US) currently have stagflation. So the cycle turns.....


----------



## Whiskers

Uncle Festivus said:


> We (the US) currently have stagflation. So the cycle turns.....




Uncle, are you a yank... err, American?  

I mean do you live in the USA? 

Just curious cos I've decided to start making some contacts there through the Golden Key inCircle network.


----------



## Uncle Festivus

Whiskers said:


> Uncle, are you a yank... err, American?
> 
> I mean do you live in the USA?
> 
> Just curious cos I've decided to start making some contacts there through the Golden Key inCircle network.




Fortunately no - I was using 'we' in general terms?


----------



## nizar

Kimosabi said:


> I bought ZFX at $8.55 on tuesday and got out at $10.53 today. Unfortunately, I think the next round of bloodletting is going to start next week.




You've got balls to have bought on Tuesday.
Thats respect.


----------



## ithatheekret

The Mibtel looks a good shorting prospect , can't get near it on my platforms 

The US drop should wobble it about a bit . Has anyone thought that the PPT could be option protection . There were a flush of 11980/12000 calls that went through last week , ranging through to March . Haven't assumed anything myself , just an observation . It would have to be serious money though ..........


----------



## sassa

CNN headline-THE BULLS THROW IN THE TOWEL
John Merrill thinks that the market hit an intermediate term bottom last week and sees it being revisited in the next 5 to 10 days.
A 365 point turnaround yesterday with the Nasdaq site giving the reasons as-
"Selling efforts were compounded by renewed concerns surrounding the likelihood of further credit losses for the financial sector, worries that a rescue plan of some sort for the bond insurers was no sure thing, and rumors that a hedge fund was in trouble."The latter rumour about the hedge fund  was commented on by other sites as was the unlikelihood of the banks rescuing the bond insurers.
The 2 sectors that were the leaders in the big turnaround on Wednesday were the hardest hit yesterday(financials and consumer discretionary)."This weakness,"said the Nasdaq site,"is apt to stir concerns that the week's rally will be short lived."


----------



## Buster

From Colin Twiggs, a free newsletter recieved by Email every couple of days..



			
				Colin Twiggs Newsletter said:
			
		

> If you see an express train coming, step off the tracks. Extending Jesse Livermore's analogy: it is also important not to step back on the tracks until the last coach has passed. Bear market rallies are typically steep and accompanied by large volume. High volumes warn that existing stockholders are taking the opportunity to sell down their remaining positions. Stocks are transferred from strong hands to weak, and the market is likely to fall sharply at the first setback.




Regards,

Buster


----------



## explod

Buster said:


> From Colin Twiggs, a free newsletter recieved by Email every couple of days..
> 
> 
> 
> Regards,
> 
> Buster




Lovit, that quote should be up on everyones wall in a gold frame.

Thank you Buster


----------



## sassa

Today's report in the London Times regarding European hedge funds.

http://business.timesonline.co.uk/t...ectors/banking_and_finance/article3256253.ece


----------



## numbercruncher

> Former U.S. Federal Reserve chairman Alan Greenspan said Thursday the odds of a U.S. recession are 50 percent or "slightly more," as he defended the risky subprime mortgages that accelerated a drop in the American housing market and subsequent economic downturn.




http://www.businessweek.com/ap/financialnews/D8UCI5U00.htm

Interesting to note that Greenspans odds of recession have grown to over 50pc, and this is despite Fed cuts and stimulus package announced !


----------



## ithatheekret

Nothing like listening to an artist describe their own canvas . Was that his pastel period ?


----------



## stormbringer

Check out my post under JMS dated 19/01/08

I feel like I'm one of the few out there who is a little more optimistic with how this story will unfold.
I was right in thinking the feds would slash interest rates, 75 points was and is a good starting point. Don't be surprised if they drop another 25-50 points after meeting this week. Drastic times calls for drastic measures. Inflation etc has been thrown out the window in favor of saving the financial and property sectors. Even though cuts in the official interest rate are not going to solve all the problems they are facing, it sure as **** is going to give them a leg up. The idea behind reducing rates is to keep the housing recession and the problems in the credit markets from spilling over more broadly into the general economy. In 07, minus the property and financial sectors, the US economy, depending on the figures your looking at, grew by some 12%. So the question everyone wants the answer to is this, How do you help those struggling with their mortgage repayments, and at the same time free up cash for the borrowers/lenders, or should that be making it more affordable? The answer is to cut rates as much as you dare, and funnily enough, it looks like Bernanke and his team have finally woken up to the fact that the problems that these sectors are facing, desperately requires their intervention. We all know that cheap cash/loans has played it's part in all of this, but to suddenly move in the opposite direction will most definitely spell the greatest fall the market has ever seen. Allow those sectors to recover before tightening the belt. Now is not the right time for those kinds of changes. Cutting rates is just the starting point, it's not the be all and end all, but it's one of the most important factors that will help these guy‘s dig themselves out of the hole they‘ve found themselves in. The market needs to fundamentally change they way they approach debt, how they assess financing options, and more importantly protecting themselves against these kinds of environments, and I’m talking about both side of the fence here, the borrowers and the lenders, both public and private. 

Then you have the stimulus package they are putting together. they are looking at 150b, but when all is said and done, don't be surprised if it's double that figure. As I understand it though, although they might inject the funds to where ever they decide, in march/april, it will be july/august before that injection flows through to the market, and has it's desired affect, hence the markets reaction to anns involving said package. A stimulus package which will probably not affect the economy for near 6 months means nothing to wall street right now, hence the importance of the feds new found willingness the slash interest rates.

Let's just say though, that they don't avoid a recession. Here’s food for thought. When we're watching the pennies, in times of hardship, do we as consumers target brand names, or do we look for the “bang for your buck“ items that allow you to buy more for less? If this is the case, then we need not worry so much about what the US economy is doing, because just about everything that is affordable has the "made in china" tag on it. We'll be reasonably cushioned from any US recession. The mining boom will continue, so we can be reasonably optimistic when considering our future. I know that our economy is made up of several sectors, I’m not that naive, but hey, the mining sector sure is a decent slice of the pie when looking at the big picture, and when you understand how this sector feeds some many others, you don’t need to be a rocket scientist to see we’re in a good position to ride out any storm that may develop out of the US. Predictability though, our markets will initially follow the US, as will the rest of the world, but eventually we will all realize that it's not all doom and gloom having the US performing badly. It's probably the last thing the markets need to do, to be able to stand alone and not follow the US like lambs to the slaughter : ))

If your currently holding positions in the mining sector, your looking good, do not fear the US downturn. China will continue to grow at or near double digit figures through 08/09, and let’s not forget India is only just beginning it’s growth phase, the next 5 yrs should be very interesting indeed.

Fear the market, but don’t be afraid of it, if that makes any sense. My advice to anyone holding positions with good prospects, in times like this, is to increase your position, if fundamentally there is no change in the particular stocks your holding, and simply increase your investment timeframe. 

Lot's of if's and but's in there, so if it all goes pear shaped, don't bother sending me your hate mail. The markets are going to remain volatile over the next 6-12 months regardless, so it’s not going to be the place for the faint hearted. 

I’m not a professional, just a guy who trades occasionally, but someone who sources as much information and peoples opinions as possible, then, and only then, do I make what I consider to be an informed decision.


----------



## Uncle Festivus

ithatheekret said:


> Nothing like listening to an artist describe their own canvas . Was that his pastel period ?




Maybe entering his van Gogh period .



stormbringer said:


> In 07, minus the property and financial sectors, the US economy, depending on the figures your looking at, grew by some 12%.




Is that like saying that inflation is low if you take out energy & food costs? We need to take a holistic veiw of the US and determine if the sum of the parts is going to impact on the whole, which at this point it will be, only the severity and collateral damage to the rest of the world is in doubt.



stormbringer said:


> If your currently holding positions in the mining sector, your looking good, do not fear the US downturn. China will continue to grow at or near double digit figures through 08/09, and let’s not forget India is only just beginning it’s growth phase, the next 5 yrs should be very interesting indeed.




Ah yes, China again, the great saviour of the world as we know it. China is a basket case waiting to implode because of corruption, poor corporate standards (banks are a mess, wait for the big write offs, if they dare make it public), zero environmental regard, and low qaulity of life (or death if you don't agree with the nouveau capitalists). It's concerning that Australia has all their eggs in the one basket (case?). Make hay while the sun shines in the meantime I spose .


----------



## numbercruncher

ithatheekret said:


> Nothing like listening to an artist describe their own canvas . Was that his pastel period ?





LOL and how could you possibly trust a creature that bleeds for so long and doesnt die


----------



## Kauri

cming through Rooters now...



> BOE"s BLANCHFLOWER SAYS
> *DOWNSIDE RISKS TO GROWTH OUTWEIGH UPSIDE RISKS TO INFLATION
> *EVIDENCE FROM HOUSING AND COMMERCIAL PROPERTY MARKETS IS "WORRYING"
> *CURRENT UK INTEREST RATES RESTRICTIVE, MPC SHOULD GET AHEAD OF CURVE
> *WORRYING ABOUT INFLATION NOW SEEMS LIKE "FIDDLING WHEN ROME BURNS"




Cheerless
..............Kauri


----------



## wayneL

Kauri said:


> cming through Rooters now...
> 
> 
> 
> Cheerless
> ..............Kauri



Blanchflower has always been a dove, even all through last year. Not a statement that would surprise anyone here.


----------



## Kauri

wayneL said:


> Blanchflower has always been a dove, even all through last year. Not a statement that would surprise anyone here.




agree on that... but it does seem to have surprised someone?? briefly anyways..??
Cheers
..........Kauri

P.S..
 wonder what Blanchflower"s comments would have done if they were from someone else on the 
MPC. Even so GBP has dipped lower on the ultra negative comments about the state 
of the world economy falling sharply from above 1.9860 to last trade on the days 
low of 1.9805.


----------



## wayneL

The biggest surprise is how dumb "they" think we are (probably true generally)

Paraphrasing Crash Gordon on TV today: "Low inflation is remarkable considering how fast prices are rising"  Interviewer didn't even pick it up.


----------



## ithatheekret

wayneL said:


> Paraphrasing Crash Gordon on TV today: "Low inflation is remarkable considering how fast prices are rising"




If it wasn't Gordo , you think you were watching the Goodies . I wish I had that burnt on a dvd . I'd send him a replay each year


----------



## stormbringer

Uncle Festivus said:


> Maybe entering his van Gogh period .
> 
> 
> 
> Is that like saying that inflation is low if you take out energy & food costs? We need to take a holistic veiw of the US and determine if the sum of the parts is going to impact on the whole, which at this point it will be, only the severity and collateral damage to the rest of the world is in doubt.
> 
> 
> 
> 
> 
> 
> Ah yes, China again, the great saviour of the world as we know it. China is a basket case waiting to implode because of corruption, poor corporate standards (banks are a mess, wait for the big write offs, if they dare make it public), zero environmental regard, and low qaulity of life (or death if you don't agree with the nouveau capitalists). It's concerning that Australia has all their eggs in the one basket (case?). Make hay while the sun shines in the meantime I spose .






LOL, you just proved my point. And yes, inflation would be low if you take out energy and food, that's a no brainer. But that wasn't my point was it Uncle, nice way to twist my words to support your argument though. The property sector starts taking a dive, which in turn affects the financials, full stop. The rest of the US economy is in good shape. So if rate cuts and stimulus packages can soften the blow for the financials and at the same time help those struggling to pay their mortgages, there's no evidence to suggest the rest of the US economy is in such a bad shape. But please, enlighten me with more bear news, I'm sure you've got a ****load stashed away for days like this : )

Hmmm, so your not buying into the china story either. What about india? Have they not entered a growth phase? I'd like to assume we're all familiar with china's policies, dito for india, but to suggest that this growth is going to come to a sudden stop is just pure scare mongering. Where else would you like us to put our eggs? Please let us all know where these other markets are that will provide us with capital growth. I'm listening, but please, don't state the obvious, be creative with your response.


----------



## Uncle Festivus

stormbringer said:


> LOL, you just proved my point. And yes, inflation would be low if you take out energy and food, that's a no brainer. But that wasn't my point was it Uncle, nice way to twist my words to support your argument though. The property sector starts taking a dive, which in turn affects the financials, full stop. The rest of the US economy is in good shape. So if rate cuts and stimulus packages can soften the blow for the financials and at the same time help those struggling to pay their mortgages, there's no evidence to suggest the rest of the US economy is in such a bad shape. But please, enlighten me with more bear news, I'm sure you've got a ****load stashed away for days like this : )



Woops, pushed the wrong button there perhaps .

"The rest of the US economy is in good shape". 

In fact, we shall see how good a shape it's in this week, with a lot of data to be released - Fed interest rate decision, Dec GDP, etc



> HONG KONG (MarketWatch) -- Asian markets took a tumble Monday in the wake of a pre-weekend slide on Wall Street, with Shanghai listed stocks suffering the steepest decline on fears a U.S. economic slowdown could hit its exports.
> 
> "People are starting to worry about what's happening around the world," said Andrew Clarke, sales trader at SG Securities in Hong Kong. "If the U.S. slows down and goes into a recession, then China isn't going to grow as fast. It may not go into a recession, but a sharp decline from a growth of 11% or more will in effect be a recession."
> China's Shanghai Composite sank 5.5% to 4,500.81 by late morning to lead the region's declines.


----------



## sassa

Some may like to read this.


Beware market rally . . . it could be a false dawn
By Tony Jackson 

Published: January 27 2008 23:38 | Last updated: January 27 2008 23:43

Those of an essentially cautious disposition, such as myself, have two recurring problems with markets. We tend to call the top too early and the bottom too late.

This is of pressing relevance at the moment. Several of the more thoughtful equity strategists think that, after the near-20 per cent fall in world markets, it is time for a bear rally. But how do you distinguish between that and the real thing – the bull market itself?

There are indeed some bulls who argue the bottom has been reached. The US Federal Reserve, they say, will cut rates by as much as it takes. The specific problem of the monoline insurers will be fixed by banks under government prompting. And, above all, the US recession will never happen.

Well, maybe. Some would argue that cutting the price of credit fails to address the central problem of credit contraction. As for the banks clubbing together to save the monolines, good luck. More likely, the plan will die a quiet death like its predecessor, the SIV superfund.

As to there being no US recession, why then did the Fed stage a massive unscheduled rate cut last week? The bulls claim it was tricked by the fall in European markets caused by the SociÃ©tÃ© GÃ©nÃ©rale fiasco. But if the Fed can be stampeded by a bad day in Europe, I am not sure that leaves us any better off.

Recession apart, it seems clear that the bank crisis is still deepening in unpredictable ways. The two are of course linked since the real fear in the markets is of a slump in corporate earnings triggered by recession, triggered in turn by the bank crisis. One way or another, though, the message is clear: things are getting worse.

But that need not mean the markets have further to fall. In Lewis Carroll’s Through the Looking-Glass, the White Queen screams violently because she is about to jab herself with a pin. Then, when she does indeed jab herself, she explains placidly that, since she has done her screaming already, there is no need for more.

This brings me back to the initial conundrum. Supposing a rally does start from here, how do we tell if it is real or not?

Let us look back for clues at the last bear/bull phase in equities. World markets peaked in March 2000, then halved in the space of 18 months. The turnround, when it came, was swift and devastating. In 15 months, the world index had doubled again.

Since I was one of the many who were slow to grasp that turnround, I am the more wary of repeating the mistake. So let us examine the comparison more closely.

One striking thing about the most recent bull phase is that it left most developed world markets almost exactly where they were back in 2000. When the S&P 500 and FTSE All-Share peaked last year, they were 2 per cent and 7 per cent respectively above their previous highs.

But in that time there had been an enormous upsurge in corporate earnings – up about 70 per cent in the US and more than doubled in the UK. In other words, between the two peaks price-earnings multiples almost halved. Is that not a bullish signal?

Not if you believe an earnings recession is upon us. The essential difference between the two peaks is that, in the first, expectations soared well ahead of earnings. This time, it is earnings that have soared. Last time, the bull market kicked in when earnings finally arrived. What will come to the rescue this time?

Another striking difference is that the peak of the last market was also that of the dotcom boom. Worthless stocks were frantically overvalued. But a number of solid stocks were remarkably cheap.

This was the product of hugely exaggerated notions of the power of the internet, which was supposed to doom bricks-and-mortar businesses to extinction. As a result, while supposed growth stocks crashed, the likes of brewers, tobacco stocks and even the banks soared.

No such anomaly exists today. By the end of the last bull run, nothing was cheap any more. And when we recall that the previous bear phase still cut market values in half, it seems odd to suppose that a mere 20 per cent drop will do the job this time.

It may be that I am wrong about all this. Maybe the markets have priced in all the bad news. It is remarkable, certainly, that SocGen’s shares fell a mere 4 per cent on an unexpected â‚¬4.9bn ($7.18bn) trading loss.

But SocGen also reminds us how many unknowns might still be out there. The market may rally but I for one will not trust it


----------



## dhukka

stormbringer said:


> The idea behind reducing rates is to keep the housing recession and the problems in the credit markets from spilling over more broadly into the general economy.





Sounds like a nice idea except that it's too late and interest rate cuts can't prevent a spillover anyway. The damage has been done and it is spreading. In fact it is more difficult to find an area of the economy where effects have not spilled over. 



> In 07, minus the property and financial sectors, the US economy, depending on the figures your looking at, grew by some 12%.




Interesting, which figures would they be?



> So the question everyone wants the answer to is this, How do you help those struggling with their mortgage repayments, and at the same time free up cash for the borrowers/lenders, or should that be making it more affordable? The answer is to cut rates as much as you dare, and funnily enough, it looks like Bernanke and his team have finally woken up to the fact that the problems that these sectors are facing, desperately requires their intervention.




Cutting rates may help some people at the margin. However thousands are in houses that are falling in value. They had no money down and now their mortgage is worth more than actual value of the house. These people have no incentive to keep paying a mortgage, it makes more economic sense for them just to walk away. 

Secondly, cutting rates won't help those lending institutions who cannot lend because their balance sheets are so impaired. Liquidity can only do so much, the problem with the current credit crunch is that it is also a solvency crisis. Banks ability to lend has been seriously curtailed. Again, cutting rates can help at the margin but it can't help the likes of Countrywide Financial, MBIA or AMBAC and there will be many more like these in the coming year. 



> Cutting rates is just the starting point, it's not the be all and end all, but it's one of the most important factors that will help these guy‘s dig themselves out of the hole they‘ve found themselves in.




Again not necessarily if your problem is one of solvency. 




> Let's just say though, that they don't avoid a recession. Here’s food for thought. When we're watching the pennies, in times of hardship, do we as consumers target brand names, or do we look for the “bang for your buck“ items that allow you to buy more for less? If this is the case, then we need not worry so much about what the US economy is doing, because just about everything that is affordable has the "made in china" tag on it.




A very simplistic argument that doesn't hold much water. Firstly, China also produces high end goods. Yes they do manufacture cheap goods. Wal-Mart is just hanging in there at the moment, take out gas and their sales are barely moving. How's Target doing? Low end retailers in the US are already feeling the pinch.



> We'll be reasonably cushioned from any US recession. The mining boom will continue, so we can be reasonably optimistic when considering our future. I know that our economy is made up of several sectors, I’m not that naive, but hey, the mining sector sure is a decent slice of the pie when looking at the big picture, and when you understand how this sector feeds some many others, you don’t need to be a rocket scientist to see we’re in a good position to ride out any storm that may develop out of the US. Predictability though, our markets will initially follow the US, as will the rest of the world, but eventually we will all realize that it's not all doom and gloom having the US performing badly. It's probably the last thing the markets need to do, to be able to stand alone and not follow the US like lambs to the slaughter : ))
> If your currently holding positions in the mining sector, your looking good, do not fear the US downturn. China will continue to grow at or near double digit figures through 08/09, and let’s not forget India is only just beginning it’s growth phase, the next 5 yrs should be very interesting indeed.




The same tired old Chindia argument. China itself doesn't even believe it will get out of a US slowdown unscathed. The decoupling theory of 2007 will be replaced by the recoupling reality in 2008.


----------



## Real1ty

dhukka said:


> The same tired old Chindia argument. China itself doesn't even believe it will get out of a US slowdown unscathed. The decoupling theory of 2007 will be replaced by the recoupling reality in 2008.




But of course you can't recouple something that was never decoupled in the first place


----------



## numbercruncher

Yes the decoupling theory pretty much lays in tatters ..... you only have to look at all Equity markets to see that!

This is the great stress test for Globilisation, and I cant help but think its working as intended, Socialising the losses across virtually the whole globe 




> Decoupling or globalisation - but not both
> Posted by: Stephen Roach, Chairman, Morgan Stanley Asia
> 
> 
> The US consumed over $9.5 trillion in 2007 - fully six times the combined consumption totals for China ($1 trillion) and India ($650 billion). It would be almost mathematically impossible for "Chindia" to fill the void that is likely to be left by a consolidation of the American consumer.




http://blogs.ft.com/davosblog/2008/01/decoupling-or-g.html


----------



## dhukka

Real1ty said:


> But of course you can't recouple something that was never decoupled in the first place




Exactly, the recoupling will occur in the minds of the decoupling cheerleaders.


----------



## numbercruncher

> IMF head in shock fiscal warning
> By Chris Giles and Gillian Tett in Davos
> 
> Published: January 27 2008 23:03 | Last updated: January 27 2008 23:03
> 
> The intensifying credit crunch is so severe that lower interest rates alone will not be enough “to get out of the turmoil we are in”, Dominique Strauss-Kahn, the managing director of the International Monetary Fund, warned at the weekend.
> 
> In a dramatic volte face for an international body that as recently as the autumn called for “continued fiscal consolidation” in the US, Dominique Strauss-Kahn, the new IMF head, gave a green light for the proposed US fiscal stimulus package and called for other countries to follow suit. “I don’t think we would get rid of the crisis with just monetary tools,” he said, adding “a new fiscal policy is probably today an accurate way to answer the crisis”.




http://www.ft.com/cms/s/106230b0-cd29-11dc-9b2b-000077b07658.html


Its kinda like living in a financial soap opera now a days, wonder when Hollywood will make the movie " Financial Armageddon " or similar


----------



## explod

numbercruncher said:


> http://www.ft.com/cms/s/106230b0-cd29-11dc-9b2b-000077b07658.html
> 
> 
> Its kinda like living in a financial soap opera now a days, wonder when Hollywood will make the movie " Financial Armageddon " or similar




He he he he       well the book came out in Jan 07 and all that is unfolding was predicted in that.


----------



## Aussiejeff

Well, well, well....

European & asian markets *TANKED* big time earlier last night, which you might have thought would have sunk the DOW too. But somehow, the Yanks said "N-Y-A-A-A-H!" to that idea and their market *SOARED* last night. Either they are CRAZY CONTRARIANS or they know something other markets don't?

So, will our puny OZ market be caught between a "rock & a hard place" today??? Picking what the DOW is going to do overnight these days is fraught with LUCK, IMO....

Chiz,

AJ


----------



## Awesomandy

Things are looking bad, but when the DOW opened, they suddenly thought that everything is going to be ok with the upcoming rate cut in a few days time. So, if we are lucky enough, we might get at least 3 days of green before the carnage eventually returns.


----------



## Kauri

Aussiejeff said:


> Well, well, well....
> 
> European & asian markets *TANKED* big time earlier last night, which you might have thought would have sunk the DOW too. But somehow, the Yanks said "N-Y-A-A-A-H!" to that idea and their market *SOARED* last night. Either they are CRAZY CONTRARIANS or they know something other markets don't?
> 
> So, will our puny OZ market be caught between a "rock & a hard place" today??? Picking what the DOW is going to do overnight these days is fraught with LUCK, IMO....
> 
> Chiz,
> 
> AJ




Sallie Mae... funded.. 
housing data... now estimated at over 70% chance of 50bps cut

I thunk..


----------



## Nyden

Kauri said:


> Sallie Mae... funded..
> housing data... now estimated at over 70% chance of 50bps cut
> 
> I thunk..




& this 50bps solves what, exactly? 

What's the lowest they can actually go? Surely they can't actually go to 0%! I mean, the only thing keeping this market afloat is the "oh they'll cut interest rates again!" But, what is going to happen when they can't?

Are they expecting people to be that stupid in their time of need, to go out and spend their $600 rebate cheques on TVs, & Stereos?

They'll put it in the bloody bank! Pay off some debt! Which equates to zero stimulus...

Not to mention a tanking dollar equates to higher prices for everything ... hmm, what's that going to affect? Oh yes, spending


----------



## Edwood

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/01/28/bcnspain128.xml

Spain in trouble by the look of this - have to wonder what value if any these MBS' have...  could cause problems for European union and euro


----------



## numbercruncher

Dubbya just had his little spiel, Im more convinced than ever that hes a 6 pack short of a carton.



> The White House has said the plan would add 500,000 jobs and put $100 billion in tax rebates into the hands of consumers. It would limit rebates primarily to individuals making less than $75,000 and couples making less than $150,000.
> 
> The plan has its critics. "It is ridiculous for the administration to claim that the stimulus package [will] create more than half a million jobs by the end of 2008." said Chris Edwards, director of tax policy studies at the libertarian Cato Institute. "If that was true, why wouldn't the government just mail $100 billion in 'rebates' to Americans every year?"




http://money.cnn.com/2008/01/28/news/economy/sotu_final/index.htm


----------



## Awesomandy

Kauri said:


> Sallie Mae... funded..
> housing data... now estimated at over 70% chance of 50bps cut
> 
> I thunk..




Futures are now suggesting that there is a 86% chance of a 50bps cut, but the chance of a bigger cut is a lot smaller.

And, funny enough, HSI and N225 are up at the moment - that is, we are the only ones in the red.


----------



## Real1ty

numbercruncher said:


> Dubbya just had his little spiel, Im more convinced than ever that hes a 6 pack short of a carton.
> 
> 
> 
> 
> http://money.cnn.com/2008/01/28/news/economy/sotu_final/index.htm




NC, Surely you are not suggesting they actually let him have an input into any decisions.....


----------



## ithatheekret

You've got to see the funny side of everything .

Uncle Al had his go , Pellet , I mean BB , um Ben is there , and now Jean Claude damn damn and damn is in the zone .......... and they're all behind the curve


----------



## Sean K

ithatheekret said:


> You've got to see the funny side of everything .
> 
> Uncle Al had his go , Pellet , I mean BB , um Ben is there , and now Jean Claude damn damn and damn is in the zone .......... and they're all behind the curve



Gotcha secret!  I think you're the only one to understand most of your posts. You're the Rubic's Cube of posters. I can usually get 2 sides out, 3 at the most. The rest is technicolour.  Cheers, kennas


----------



## ithatheekret

Are you in England Kennas ?

I didn't mention them , I want to revisit there again one day 


But anyway , They're all forced into playing the M3 game , when / if we look back for years now , there has been a stand off in monetary policy strategy .
The old fox was quite vocal about it , but he's got an entirely different European banking picture now , than he had when he made his previous statements , well rhetoric . I've referred to him as the old provincial frenchman too , this was due to his policy as set out . Yet now he has had a massive blow up in his brief , and his use of money supply data has rasped the US admin from day one . He now has to use a more sophisticated means of measuring risk in financial accounting .

He had his eye on inflation at all costs , sure he's printed a bit , but with the last round of European financial news , with more to come , he will be more worried about the accounts than inflation , he has no choice or Europe will lose it's hold in the markets , the hold the US banks tear at whenever they can . I'd say it's more precious than Danone to the French .

And Gordon , well .... pass . He had the BoE as his ward , now he has England .


----------



## wayneL

ithatheekret said:


> And Gordon , well .... pass . He had the BoE as his ward , now he has England .




Ahem.... It's Crash Gordon; if you please.


----------



## Stormin_Norman

Awesomandy said:


> And, funny enough, HSI and N225 are up at the moment - that is, we are the only ones in the red.




we had a public holiday yesterday. it would be a hangover from not trading down yesterday with the rest of asia.


----------



## ithatheekret

Yes apologies Wayne , I meant Crash . The man that sold gold for the price of a swank night out in Soho . 

How about Cable last night 

Not scared of rate cuts , would be nice if it dripped down to UK homeloans , that's a relief they need on top of coping with the ridiculous tax regime they are under , robbery .


----------



## ithatheekret

A Brown statement ..... sorry a Crash statement .


" All I believe and all I try to do comes from the values I grew up with: duty, honesty, hard work, family and respect for others. I am a conviction politician ... My conviction is that everyone deserves a fair chance in life ... that each of us has a responsibility to each other ... that when the strong help the weak it makes us all stronger. Call it the driving power of social conscience, call it the better angels of our nature, call it our moral sense, call it a belief in civic duty. I joined this party as a teenager because I believed in these values. They guide my work, they are my moral compass. This is who I am.
And because these are the values of our party, too, the party I lead must have more than a set of policies - we must have a soul. "


Heretics ! eeeek ...........


----------



## Kimosabi

ithatheekret said:


> A Brown statement ..... sorry a Crash statement .
> 
> 
> " All I believe and all I try to do comes from the values I grew up with: duty, honesty, hard work, family and respect for others. I am a conviction politician ... My conviction is that everyone deserves a fair chance in life ... that each of us has a responsibility to each other ... that when the strong help the weak it makes us all stronger. Call it the driving power of social conscience, call it the better angels of our nature, call it our moral sense, call it a belief in civic duty. I joined this party as a teenager because I believed in these values. They guide my work, they are my moral compass. This is who I am.
> And because these are the values of our party, too, the party I lead must have more than a set of policies - we must have a soul. "
> 
> 
> Heretics ! eeeek ...........





Double Speak translation of the above statement, below. I think this is what he was really trying to say...




> " All I believe and all I try to do comes from the luciferian values I grew up with: duty and hard work for my family and masters. Dishonesty, contempt and disrespect for all others. I am a malconviction politician ... My malconviction is that nobody deserves a fair chance in life ... that each of us has a responsibility to their masters ... that when the weak help the strong it makes the strong, stronger. Call it the driving power of social manipulation, call it the luciferian angels of our nature, call it our immoral sense, call it a belief in my totalitarian duty. I joined this party as a teenager because I believed in these values. They guide my work, they are my immoral compass. This is who I am.
> And because these are the values of our party, too, the party I lead must have more than a set of policies that benefit the people - we must not have a soul. "


----------



## ithatheekret

Watch out Kimosabi the Fed head hunters could be about , you could end up Fed Chairman .


----------



## Kimosabi

ithatheekret said:


> Watch out Kimosabi the Fed head hunters could be about , you could end up Fed Chairman .



If I was FED Chairman, I'd be pushing interest rates up to 20%, clean the debt puss out of the system, put the Fed back in the Hands of the People and let the market decide if they want to go back to some sort of Gold Standard where there is only a limited amount of money.

No more manipulation of the monetary system by a small group of people. Peoples savings will increase in value instead of decreasing in value because of inflation. I'd change the tax system so that people get rewarded for saving instead of getting rewarded for making a loss and borrowing money.  I'd get rid of Income Tax as well, everyone should be entitled to keep the fruits of their labour...

Basically I'd stop everyone from being enslaved to the minority control freaks...


----------



## ithatheekret

Sounds good , but I'd lock em all up too , forge and utter , felony fraud , conspiracy to felony fraud ......... and anything else I could get the Attorney Generals dept to boil them in oil with .


----------



## STRAT

Kimosabi said:


> If I was FED Chairman, I'd be pushing interest rates up to 20%, clean the debt puss out of the system, put the Fed back in the Hands of the People and let the market decide if they want to go back to some sort of Gold Standard where there is only a limited amount of money.
> 
> No more manipulation of the monetary system by a small group of people. Peoples savings will increase in value instead of decreasing in value because of inflation. I'd change the tax system so that people get rewarded for saving instead of getting rewarded for making a loss and borrowing money.  I'd get rid of Income Tax as well, everyone should be entitled to keep the fruits of their labour...
> 
> Basically I'd stop everyone from being enslaved to the minority control freaks...



You have my Vote.


----------



## Kauri

ithatheekret said:


> A Brown statement ..... sorry a Crash statement .
> 
> 
> " All I believe and all I try to do comes from the values I grew up with: duty, honesty, hard work, family and respect for others. I am a conviction politician ... My conviction is that everyone deserves a fair chance in life ... that each of us has a responsibility to each other ... that when the strong help the weak it makes us all stronger. Call it the driving power of social conscience, call it the better angels of our nature, call it our moral sense, call it a belief in civic duty. I joined this party as a teenager because I believed in these values. They guide my work, they are my moral compass. This is who I am.
> And because these are the values of our party, too, the party I lead must have more than a set of policies - we must have a soul. "
> 
> 
> Heretics ! eeeek ...........





  Sounds a bit like Bill C just before it became public that he had a bulk discount deal with the local drycleaner..
   Cheers
.............Kauri


----------



## barney

Kimosabi said:


> If I was FED Chairman, I'd be pushing interest rates up to 20%, clean the debt puss out of the system, put the Fed back in the Hands of the People and let the market decide if they want to go back to some sort of Gold Standard where there is only a limited amount of money.
> 
> No more manipulation of the monetary system by a small group of people. Peoples savings will increase in value instead of decreasing in value because of inflation. I'd change the tax system so that people get rewarded for saving instead of getting rewarded for making a loss and borrowing money.  I'd get rid of Income Tax as well, everyone should be entitled to keep the fruits of their labour...
> 
> Basically I'd stop everyone from being enslaved to the minority control freaks...





Amen !!


----------



## Uncle Festivus

Edwood said:


> http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/01/28/bcnspain128.xml
> 
> Spain in trouble by the look of this - have to wonder what value if any these MBS' have...  could cause problems for European union and euro




This is big indeed. Forget Northern Rock, this is a whole country at risk! And they have sold all their gold already - the cupboard is bare!

https://www.aussiestockforums.com/forums/showpost.php?p=150699&postcount=64


From April 07



> The current account deficit has reached 9.5pc of GDP, a sign of extreme over-heating. *Spain is now the second biggest net contributor to global demand after the US, far outstripping China,* astonishing for a country of only 40 million still living in the shadows of the Franco regime a generation ago.


----------



## ithatheekret

Are you in Davos Unc . ?

That's pastry heaven mate .


----------



## wayneL

ithatheekret said:


> Yes apologies Wayne , I meant Crash . The man that sold gold for the price of a swank night out in Soho .
> 
> How about Cable last night
> 
> Not scared of rate cuts , would be nice if it dripped down to UK homeloans , that's a relief they need on top of coping with the ridiculous tax regime they are under , robbery .



Aussies still pay more. The tax regime is ridiculous, but you have to look at the total tax take. Oz's is just rather less transparent than UK.

Re: Our Dear Leader. Will be annihilated we we get a chance to vote. We are looking forward to a brand new branch of the Bildibergers in the not too distant (but still too long) future.


----------



## numbercruncher

> The financial crisis is likely to force 20,000 City workers out of their jobs and Britain risks slipping into a 'full-blown' recession, experts have warned.
> 
> Credit ratings agency Experian has slashed its forecasts for job growth in London's financial districts. Having expected job numbers to remain static, it is now predicting a 5% fall.




http://www.thisismoney.co.uk/investing-and-markets/article.html?in_article_id=429764&in_page_id=3

Maybe Dubbya should post everyone in the World a cheque for $800 ? Globilisation after all .....


----------



## Kauri

wayneL said:


> Re: Our Dear Leader. Will be annihilated we we get a chance to vote. We are looking forward to a brand new branch of the Bildibergers in the not too distant (but still too long) future.




The next UK general election will result in a hung parliament, according to 
the latest ComRes poll for The Independent.    Slip sliding away.  :karaoke:


----------



## ithatheekret

Can't disagree with you Wayne , done public service , ground my teeth down over tax , wife still works in our State Parliament , true democratic house here , missus is union delegate and I'm a fully paid up Lib, just to stir her I call Peter Reith my hero  , we always debate taxes , her colleagues must be sick of me by now , petrol excise is plain theft , we're paying gst on it .

We do know that , we [ all of us ] , mean diddly to them . 

But the tax regime here is bogus tax upon tax , then we pay gst on the total .
The inbuilts in buying goods and timber , can get aid to manufacture on steel , not on timber . Cars , they're a joke , then there's luxury tax on a bloomin' Statesman , they made it up .

Through the whole election debate not one candidate mentioned petrol excise , must be saving that for a blue moon .

But Australians compared to UK residents aren't crammed together inner city , they haven't had to deal with decisions of swing or switching currencies and they haven't suffered the high asset inflation most of Englands gone through . We've seen a portion of it , but the UKs dynamics have a cost premium 6/10 Aussies could never afford . 

I don't mean to sound biased by this , but the Pound rose heavily , in fact it was one of my calls going back yonks , I had a 60% weighting on it pre 1.70's . I thought it would see a swarm of Poms hunt the sun out down here , don't think that quite happened as planned .  I looked upon it as a true reserve currency , and my father would tell me of how we use to have our money put away in Consols for generations . That was then though the good old days I suppose . But now London is another world a big one , if you can afford it [ London ] why would you want to leave  ? I know bias again ..........
But it's cheaper than Rome and that place is crumbling away , and their banks service stinks .

I remember the last time we were in POG heaven clearly , the AUD fetched 1.20 USD , not many realise it , but it's the strong AUD that's keeping the fuel prices within a comtemptable , but begrudgingly , acceptable range here .

The Septics complain about $3.50 a gallon , we pay $1.50 a litre , even with arbitrage we're burning liquid gold to go shopping . They should look at the arbitrage price and times it by 3.783 .

How much are you slogged in the UK now ?


----------



## Stormin_Norman

numbercruncher said:


> Maybe Dubbya should post everyone in the World a cheque for $800 ? Globilisation after all .....




150billion to fight the recession.

how many trillion were spent on the war to start it?


----------



## wayneL

Kauri said:


> The next UK general election will result in a hung parliament, according to
> the latest ComRes poll for The Independent.    Slip sliding away.  :karaoke:



Gerrymander!!!!!  Plenty of time for the economy to fall in a heap before then though.


----------



## wayneL

ithatheekret said:


> .
> 
> How much are you slogged in the UK now ?



~£1.05/lt 

But I'm spending less on juice than Oz. Most places I use are walking distance and the car I bought gets 50mpg 

I pity the status anxious consumer commuters who have hocked themselves up on 4x4s and driving 20-30 miles to work and back. That must be hurting.


----------



## Kauri

Wonder when the German  Landesbanks start declaring that they are holding E80bn in bad debt...
Guten Morgen
..........Kauri


----------



## wayneL

Kauri said:


> Wonder when the German  Landesbanks start declaring that they are holding E80bn in bad debt...
> Guten Morgen
> ..........Kauri




Mein Gott! When will it all end??

Not anytime soon I don't think.


----------



## Kauri

wayneL said:


> Mein Gott! When will it all end??
> 
> Not anytime soon I don't think.




 GW is on top of it...   
US House of Representatives  passed the $146 bln package but it still has to go through the Senate where changes are expected. The house plan raises GSE and FHA loan limits..


----------



## Kauri

The Australian newspaper warns that an economic shock has hit China with China accounting for 13.6% of Australian exports. And this after the reports that Japan may already be in a recession and accounts for 17% of Australian exports. 

Also reports that MFS has frozen redemptions on a $770 mln investment fund (Melbourne Age )

*RUMOURS* (unconfirmed!!) that broking house Tricom has seen its solvency come into question after being unable to cover the cost of trades on Tuesday.  http://business.theage.com.au/tricom-debts-cover-in-doubt/20080129-1our.html 

and another warm day in Perth...

Kauri


----------



## Trembling Hand

Kauri said:


> *RUMOURS* (unconfirmed!!) that broking house Tricom has seen its solvency come into question after being unable to cover the cost of trades on Tuesday.  http://business.theage.com.au/tricom-debts-cover-in-doubt/20080129-1our.html
> 
> Kauri





What the Hell is going on there???

They say its an admin problem not being able to access a loan. Would hope its a glitch only. That could cause a run on a brokerage house with nasty flow on effects if its in trouble.


----------



## numbercruncher

Some good reading for those after a daily fix of doom and gloom or harsh reality which ever you prefer 



> The story of the upcoming world crash is hidden in plain sight. Even mayor Bloomberg has jumped in the gloom and doom bandwagon: a global economic downturn was looming, triggered by the "lunacy" of public debt, he declared last month. Meanwhile denial continues. Although nearly 70% of the Americans do fear a recession, the possibility of a major crisis is not considered. A crisis? Not in my backyard, most of them think. It all boils down to faith. To be fair, the 'empire mentality' was born with history. Eventually people wake up to the harsh reality that the empire lied to them. The only successful government programs are wars and economic crises. When two or three decades of prosperity end with a crash and geopolitical crisis, what does this mean - frankly? Once again, the numbers tell a very different story than that we are being told. Yes dear Readers, you're not hallucinating. There is currently at least a $1,000 trillion dollar black hole in the world economy. To get the full picture, please keep on reading.




http://www.opednews.com/articles/1/opedne_sharon_k_071117_hey_buddy_2c_can_you_s.htm




> PETER CAVE: An expert on personal debt is warning that Australian households are now in a worse financial position than during the Great Depression.
> 
> Dr Steve Keen from the University of Western Sydney is the author of a monthly chronicle called Debtwatch.
> 
> He says the levels of personal debt, as a proportion of the economy are now twice what they were during the 1930s.




http://www.abc.net.au/worldtoday/content/2007/s2055693.htm



> STEVE KEEN: Excessive borrowing for house, speculation on house prices. We've encourage people - certainly in the last 15 years in particular - to borrow money to go and buy an asset which then they expect to sell to somebody else for a higher price. But it's a merry-go-round. The only way you can keep on doing it is somebody else borrows yet more money than you've done and they've got to borrow money faster than they're earning in income. And ultimately we're getting towards to crunch point where that game no longer works.


----------



## MR.

More bad news, keep it coming! 
Perhaps its time to hock the boat and the house.... before..... ???

Just joking!

It is time to hock the boat and house!   And mind my own business!


In mid 2003 I went to see a financial adviser at the Commonweath Bank's, Colonial. To my surprise the adviser talked me out of investing in shares. Shares had been falling for a couple of years and the adviser was confronted everyday by investors whom had invested their life's savings only to have them plummet. It was all too much. I wonder what happened to this adviser. Now, how easily forgotten. 

I feel sorry for all the retired Superannuation investees, although some have had it good for a few years now!

Look after your own money!


----------



## Wysiwyg

Thoughts ... not sure which way to go ... *numbers gathering at the cliff * (jump first or wait??) ... nervousness building ... what`s gonna happen ... profit cuts in U.S. ... rate cuts in U.S. ... big rebound over ... UP OR DOWN


----------



## Whiskers

Getting to the roots of the subprime fiasco.

Can't undo the damage done, but could go a long way to reassuring the public that the US economy isn't spirialling totally out of control... yet.

Apart from the numerous civil suits underway, a few criminal prosecutions and tighter credit controls may just tip consumer confidence back sooner than later.



> *FBI Probes 14 Companies Over Home Loans*
> Tuesday January 29, 7:00 pm ET
> By Alan Zibel, AP Business Writer
> FBI Says 14 Companies Under Investigation for Possible Fraud in Connection With Subprime Loans
> 
> 
> WASHINGTON (AP) -- The FBI on Tuesday said it is investigating 14 companies for possible accounting fraud, insider trading or other violations in connection with home loans made to risky borrowers.
> Agency officials did not identify the companies under investigation but said the wide-ranging probe, which began in spring 2007, involves companies across the financial services industry, from mortgage lenders to investment banks that bundle home loans into securities sold to investors.
> 
> The Federal Bureau of Investigation is working in conjunction with the Securities and Exchange Commission on the corporate-fraud probe, said Neil Power, chief of the FBI's economic crimes unit in Washington.
> 
> As the nation's housing crisis worsens, there has been a dramatic spike in the number of mortgage fraud cases under investigation. An agency spokesman said 1,210 such cases are open, up from roughly 800 a year ago.
> 
> The announcement comes weeks after authorities in New York and Connecticut said they are investigating whether Wall Street banks hid crucial information about high-risk loans bundled into securities sold to investors.
> 
> Power said the FBI is looking into the practices of so-called subprime lenders, as well as potential accounting fraud committed by financial firms that hold these loans on their books or securitize them and sell them to other investors.
> 
> Referring to certain unnamed bankrupt subprime lenders, Power said there are "some irregularities there that we're looking into," including the timing of stock sales by executives. Dozens of subprime lenders have filed for bankruptcy in the past year, most prominently New Century Financial Corp.
> 
> "We're looking at the executives to see if they were committing insider trading," Power said.
> 
> Power also said law enforcement officials are looking at whether homebuilders manipulated financial statements to inflate revenues.
> 
> An SEC spokesman declined to comment. The agency has said about three dozen investigations related to the mortgage market meltdown are ongoing.Defaults on subprime loans have risen over the past 12 months and are primarily responsible for the credit crunch that has disrupted global financial markets.
> 
> Morgan Stanley, Goldman Sachs Group Inc. and Bear Stearns Cos. all disclosed in regulatory filings Tuesday that they are cooperating with requests for information from various, but unspecified, regulatory and government agencies. Officials at the companies either declined to comment, or could not immediately be reached.
> 
> FBI officials also highlighted what they called a growing pattern of suspected mortgage loan fraud potentially committed when loans were made to shaky borrowers. They cited a surge in "suspicious activity reports" that banks are required to file with the government.
> 
> The number of those reports is projected to rise to 60,000 this year after hitting 48,000 last year, up from about 7,000 in 2003. "We're going to have to take a hard look at these things," said Assistant FBI Director Ken Kaiser.
> 
> Earlier this month, Connecticut Attorney General Richard Blumenthal said he and New York Attorney General Andrew Cuomo were looking whether banks properly disclosed the high risk of default on so-called "exception" loans -- considered even risker than subprime loans -- when selling those securities to investors.
> 
> In November, Cuomo said he issued subpoenas to government-sponsored mortgage companies Fannie Mae and Freddie Mac in his investigation into what he claims are conflicts of interest in the mortgage industry. He said he wanted to know about billions of dollars of home loans they bought from banks, including the largest U.S. savings and loan, Washington Mutual Inc., and how appraisals were handled.
> 
> http://biz.yahoo.com/ap/080129/subprime_mortgages_fbi.html


----------



## MR.

Wysiwyg said:


> Thoughts ... not sure which way to go ... *numbers gathering at the cliff * (jump first or wait??) ... nervousness building ... what`s gonna happen ... profit cuts in U.S. ... rate cuts in U.S. ... big rebound over ... UP OR DOWN




You think with those numbers gathering at the cliff the fed will cut US rates? They have to! Blackmail.... As for future profits, which set of books are we looking at?

Noticed AAPT now bill in advance (qld). So does this mean there are 13 months in this year to generate profits?  Hmmmm


----------



## Kauri

Todays West Australian...   things are really getting bad!!!
*



			<H2>Beer sales slide in Germany

Click to expand...


*


> _30th January 2008, 8:30 WST
> _
> 
> _Germany and beer go together like Porsches and the autobahn, but health-conscious residents are eschewing the country’s traditional beverage in favour of juices and bottled water, sending suds sales slipping.
> According to a government report released today, the amount of beer sold in Germany fell by 2.7 per cent in 2007 to 10.4 billion litres, a drop of 290 million litres from 2006.
> The Federal Statistics Office said the drop in beer sales came as the *demand for beer mixed with fruit juices, soft drinks and other non-alcoholic beverages rose 18.1 per cent from 2006 to 2007, with some 420 million litres quaffed by thirsty buyers.*
> _



_</H2>_


----------



## explod

Wysiwyg said:


> Thoughts ... not sure which way to go ... *numbers gathering at the cliff * (jump first or wait??) ... nervousness building ... what`s gonna happen ... profit cuts in U.S. ... rate cuts in U.S. ... big rebound over ... UP OR DOWN





The 2 year weekly of the Dow worth a look.

Jump of the last two weeks met with drop in volume.

Two weeks to the end of december the same thing, less pronounced but precipitated the correction

September the same thing, volume dropped off (even less pronounced) then correction

Two white candles start of July, this time 2nd candle is the largest and volume going up to the correction.

Interesting ambience of change.

No Fed cut, markets drop???

A fed cut, overseas banking systems and increasingly US more uneasy and starting to be vocal about it.  Wall Street mantra becoming isolated ??? 

Very interesting times.

I'm out of the market 75% today.


----------



## sassa

Opinion from CNBC-

In the end, what the Fed should do and elects to do are two very different things. What’s more critics of both persuasions and supporters alike say the market is likely to be disappointed by the Fed’s decision Wednesday. 

Both Interest rate doves – those who want a cut of at least half a percentage point – and inflation hawks – those who would like to see no change in policy and/or a change in language indicating the Fed may be nearing the end of its easing cycle – say the Fed has little credibility with the markets. As a result, it is very vulnerable to second guessing and  negative reactions in the market.

Bhagavatula says the Fed has been “introducing more volatility into the economy.” 

Rothbort thinks half a percentage point is warranted but thinks a quarter-point cut is a more likely outcome, which will only "disappoint and exacerbate the problem”


----------



## ithatheekret

Kauri said:


> Wonder when the German  Landesbanks start declaring that they are holding E80bn in bad debt...
> Guten Morgen
> ..........Kauri




Took awhile for it to dawn on me , but they had a big raising early Jan this year , in a massive covered bond release . hmmmmm ........


----------



## ithatheekret

*UBS subprime losses mount, bank deep in red
*


http://www.reuters.com/article/newsOne/idUSL3017467220080130?sp=true

Wed Jan 30, 2008 5:17am EST


By Thomas Atkins

ZURICH (Reuters) - Subprime-related problems at UBS AG mounted on Wednesday as the Swiss bank unveiled $4 billion in new write-downs in a surprise statement and sank deep into the red for the year.

The latest disclosure lifted the bank's total write-downs from the subprime debacle to $18.4 billion and will likely increase pressure on chairman Marcel Ospel, at the UBS helm during its push into risky U.S. investments, to resign.

UBS, world banking's leading wealth manager, posted a 12.5 billion Swiss franc ($11.45 billion) loss for the last three months of 2007 and a full-year loss of 4.4 billion francs, a grim closure to its worst performance in history.

UBS shares fell 1.7 percent in early trading as analysts puzzled over the new losses, but later pared most losses.

"One could become very emotional about UBS -- continuously behind the curve in write-downs and hence always topping-up, exposure disclosure is poor to new write-downs, and management leadership vacuum," said analysts at investment bank J.P.Morgan.

"This is certainly not good," said analyst Georg Kanders at bank WestLB. "I had expected less."

UBS is one of the hardest-hit banks worldwide from the credit crisis that has caused around $130 billion in losses, mangled balance sheets and forced some of the proudest institutions like UBS, Citigroup and Merrill Lynch into emergency capital-raising measures.

The surprise announcement adds to the sense of chaos in Western banking after Societe Generale last week shocked with a $7 billion loss it blamed on a lone trader -- the worst trading loss in history by far.

UBS last month announced a 13 billion franc capital injection from Singapore and an unidentified Middle East investor and hopes to convince shareholders to approve the plan at an extraordinary meeting on February 27.

RESISTANCE MOUNTING

But shareholder resistance to the capital increase is growing, with shareholder groups Actares, Profond and Ethos plus several pension funds urging others to oppose the move.

UBS is now struggling to restructure its investment bank and repair its credibility after the staggering losses, which have pushed its shares 40 percent lower over the past year.

UBS said in a statement the results reflect $12 billion in losses from the U.S. subprime market, plus $2 billion in losses from other U.S. residential mortgages and that weak trading income dragged performance lower as well.

UBS had been scheduled to report results on February 14.

The group said it managed to reduced its balance sheet and risk weighted assets during the quarter, which resulted in a loss, and that it will report a BIS Tier 1 ratio -- a measure of capital safety -- of 8.8 percent as of December 31.

The Swiss bank's huge losses, which have prompted calls for it to spin off its investment banking business and concentrate on its highly successful wealth management activities, stem from a disastrous hedge fund venture into subprime mortgages.

In a sign that the subprime disaster may drag out for some time, the FBI this week said it is investigating 14 corporations over possible accounting fraud and insider trading violations in a crackdown on subprime lending. The companies were not named.

Switzerland's banking regulator said last month it would probe major subprime losses at UBS while Merrill Lynch disclosed in November that the SEC was investigating matters related to its subprime business.

(Reporting by Thomas Atkins; Editing by David Cowell and Jason Neely)


----------



## Real1ty

lol, gotta love the phrase "mangled balance sheets"


----------



## ithatheekret

Yes , I was giggling over the whole piece . There's a good one on SocGen , but too long , members will find it on the reuters site .


"This is certainly not good," said analyst Georg Kanders at bank WestLB. "I had expected less."


UBS had been scheduled to report results on February 14.

This report will look like a whirlpool !


----------



## Whiskers

Breaking News From Reuters.

"Economy grows at 0.6 pct pace in Q4, 2007 weakest growth in 5 years  8:32am EST"
http://www.reuters.com/article/newsOne/idUSN2961379420080130

Probably set for 50bp now.

EDIT: They wouldn't hit the panic button 75bp again... would they?


----------



## numbercruncher

> NEW YORK (CNNMoney.com) -- The economy grew at a much slower pace in the last three months of the year, according to a government report Wednesday that came in well below Wall Street expectations.
> 
> The report raised fears of a recession and hopes for another significant interest rate cut by the Federal Reserve.
> 
> The gross domestic product, the broadest measure of the nation's economic activity, grew at an annual rate of 0.6%, adjusted for inflation, in the fourth quarter, according to the Commerce Department, down from 4.9% in the final reading of growth in the third quarter. Economists surveyed by Briefing.com had forecast GDP would slow to a 1.2%.




http://money.cnn.com/2008/01/30/news/economy/gdp/index.htm


Amazing how wrong the pros can get it hey.

Yes surely a 50bp cut, and even then the punters probably wont be happy.


----------



## ithatheekret

Big drop

0.6 /4.9 /1.2 /0.4 /          /1.9  ( 2.2 for year )

Core PCE  2.7 / 2.0/2.6/2.1/2.6 smells like a good cut .

Core PCE deflator tomorrow and Consumption, employer cost index , initial claims , cont.claims , personal income and Chicago PMI .

wonderful week .....


----------



## numbercruncher

> BERLIN (AFP) ”” Former Federal Reserve chief Alan Greenspan cast doubt on the ability of the central bank to prevent a US recession in an interview to appear on Thursday.
> 
> Greenspan told the German weekly Die Zeit that the Fed or political policies could "probably not" keep the world's biggest economy from sliding into recession, as financial markets widely expected the US central bank to cut its main lending rate.




http://afp.google.com/article/ALeqM5j0OgenH_mfiBmi3nxIuaU0_-Lc-w

They might not have the ability to fight off a Recession, but they certainly have the power to debase the value of the USD and instigate high Inflation !


----------



## Awesomandy

Oh, dear... The S&P 500 shot up more than 20 points when the rate cut was announced, only to have all of that sold off. The old support around 1375 is now turned into a resistance - with the index failing to break through it. Looks like that's as far as it goes in terms of the current short-term up trend.


----------



## Aussiejeff

numbercruncher said:


> http://afp.google.com/article/ALeqM5j0OgenH_mfiBmi3nxIuaU0_-Lc-w
> 
> They might not have the ability to fight off a Recession, but they certainly have the power to debase the value of the USD and instigate high Inflation !




Indeed. Latest figures show US GDP was inflated 2.7% in the last quarter. Almost at the same level as the 3% interest rates on offer now.

The point of STAGFLATION initiation is within reach, folks.

Yeccchhh! *STAGFLATION* just doesn't sound nice, does it.


----------



## explod

Aussiejeff said:


> Indeed. Latest figures show US GDP was inflated 2.7% in the last quarter. Almost at the same level as the 3% interest rates on offer now.
> 
> The point of STAGFLATION initiation is within reach, folks.
> 
> Yeccchhh! *STAGFLATION* just doesn't sound nice, does it.




If everything is going up in price/ or costing more so to speak, what is stagflation

Can someone have a good take on this ?

Should it be a thread ?               perhaps there is one


----------



## Aussiejeff

explod said:


> If everything is going up in price/ or costing more so to speak, what is stagflation
> 
> Can someone have a good take on this ?
> 
> Should it be a thread ?               perhaps there is one




STAGFLATION is a relatively rare phenomenon where an economy is experiencing increasingly uncontrollable price inflation at the same time as real economic growth is experiencing an increasingly uncontrollably decline. As a result, the people's overall income will inevitably not be able to keep up with the ever rising prices of goods and services. 

Chiz,

AJ


----------



## Sean K

explod said:


> If everything is going up in price/ or costing more so to speak, what is stagflation
> 
> Can someone have a good take on this ?
> 
> Should it be a thread ?
> 
> perhaps there is one




wiki has everything.

http://en.wikipedia.org/wiki/Stagflation


----------



## Aussiejeff

kennas said:


> wiki has everything.
> 
> http://en.wikipedia.org/wiki/Stagflation




Well said, Kennas! Now, why didn't I think of that? Senility must be setting in.....

LOL


----------



## Aussiejeff

Hahahahaha!

Just heard GWB on the radio trying to reassure his panicking citizens... somefink like..

_*"Ya'll gotta be CONFIDENT in the economy NO MATTER HOW HARD IT GITS...."*_

Yeehar George! I'll take that message on board and be HAPPY now.

 


AJ


----------



## numbercruncher

How about the new kid on the block *Stagdeflation* , worth considering 



> It's an intriguing -- many will say overly pessimistic -- take on the already raging debate about stagflation risks facing the U.S. and other major economies. If stagflation means no, or slow, economic growth combined with inflation, stagdeflation is falling prices and growth.




http://www.bloomberg.com/apps/news?pid=20601039&sid=a3VsZCSN4XgI&refer=home


----------



## Aussiejeff

numbercruncher said:


> How about the new kid on the block *Stagdeflation* , worth considering
> 
> 
> 
> http://www.bloomberg.com/apps/news?pid=20601039&sid=a3VsZCSN4XgI&refer=home





Interesting, but I think while the USD is still plunging, costs & prices for US citz will inevitably rise....inflation is the next big bogey they won't be able to handle..without putting interest rates back up!


----------



## numbercruncher

> Jan. 30 (Bloomberg) -- Standard & Poor's said it cut or may reduce ratings on $534 billion of subprime-mortgage securities and collateralized debt obligations, the most sweeping action in response to rising since home-loan defaults.
> 
> The downgrades may extend bank losses to more than $265 billion and have a ``ripple impact'' on the broader financial markets, S&P said in a statement today. The securities represent $270.1 billion, or 47 percent, of subprime mortgage bonds rated between January 2006 and June 2007. The New York-based ratings company also said it may cut 572 CDOs valued at $263.9 billion.




http://www.bloomberg.com/apps/news?pid=20601087&sid=am2Nk1VM5YsA&refer=home


Bah whats half a trillion in the house of cards (>:


----------



## Uncle Festivus

explod said:


> If everything is going up in price/ or costing more so to speak, what is stagflation
> 
> Can someone have a good take on this ?
> 
> Should it be a thread ?               perhaps there is one





https://www.aussiestockforums.com/forums/showthread.php?t=6121&highlight=stagflation


----------



## Buffettology

This is actually funny, I remember this thread ages ago, where I was holding about 50% cash waiting for this imminent correction.  Then I got greedy and only left about 10% cash.  Thank god I ended up making a decent profit even after this correction and am now holding about 60% cash again.

I agree, stagflation looks well on its way and OH WHAT A PROBLEM it would be!  Its like the ultimate problem for economists and will rout global indicies!  

Some good bargains should be coming up over the next few months!

Patience now, just patience, my worst attribute!


----------



## numbercruncher

> In fact, inflation could be contributing to the current slowdown.
> 
> "Domestic demand readings were weaker than we expected, not holding up well in the face of the inflation surge, driven mostly by energy costs," wrote Citigroup analyst Steven Wieting in a report this morning.




http://money.cnn.com/2008/01/30/markets/morningbuzz/index.htm?postversion=2008013016


Wow these guys are starting to catch on !

Consumers already maxed out on debt, so they drop interest rates, skyrocket Inflation giving the consumers of the worlds largest consumer nation even less to spend! yee-haa


----------



## dhukka

So whilst the market gets carried away with over-priced aquisitions of internet search engines the US economy continues to deteriorate:



> *U.S. Payrolls Decline 17,000; Jobless Rate at 4.9%*
> 
> The U.S. economy unexpectedly lost jobs in January for the first time in more than four years, adding to the case for the Federal Reserve to lower interest rates further next month to head off a recession.
> 
> Payrolls fell by 17,000 after an 82,000 gain in December that was larger than initially reported, the Labor Department said today in Washington. The jobless rate declined to 4.9 percent from 5 percent in December.
> 
> The drop in payrolls, in the wake of tighter credit, a deeper housing slump and a stumbling stock market, is the clearest sign yet that the U.S. expansion is at risk. Payrolls are one of the indicators, along with wages, production and sales, that help determine the start of economic contractions.




Economists again proved that they might as well throw darts to come up with their forecasts. 



> *Economists' Forecasts*
> 
> None of the 80 economists surveyed by Bloomberg had predicted the decline in payrolls, which was the first since August 2003. The median forecast in the survey projected payrolls would rise by 70,000, compared with an initially reported gain of 18,000 in December. Forecasts of an increase ranged from 5,000 to 160,000.
> 
> Revisions for November and December brought total job gains for the two months to 142,000, versus a previously reported 133,000.
> 
> Service industries, which include banks, insurance companies, restaurants and retailers, added 34,000 workers last month after an increase of 143,000 jobs in December. Retail payrolls climbed by 11,200 after a decline of 12,000 in December.
> 
> Factory payrolls dropped by 28,000 after falling 20,000 a month earlier. Economists had forecast a drop of 20,000 in manufacturing employment. Builders trimmed payrolls by 27,000 in January.
> 
> Government payrolls shrank by 18,000 during January, the first decline in six months, after rising 28,000 in December.





And check out the revisions to last years numbers. The BLS overstated job growth by more than *30,000* a month last year. 



> *Revisions for 2007 *
> 
> With today's report, the Labor Department revised the payroll numbers after reviewing more complete tax data not available earlier from state unemployment insurance programs and making adjustments to its estimates of seasonal hiring patterns.
> 
> The revision subtracted 376,000 jobs from the previous estimate for the year ended December 2007, bringing total job growth for the period to 1.137 million.





It's recession time.


----------



## wayneL

dhukka said:


> So whilst the market gets carried away with over-priced aquisitions of internet search engines the US economy continues to deteriorate:



Watching the sentiment shifts, while not surprising...predictable in fact, I still find breathtaking in their silliness. 



dhukka said:


> Economists again proved that they might as well throw darts to come up with their forecasts.



'Cause they insist on using academic economic models, rather than real world models (e.g. Austrian theory)



dhukka said:


> And check out the revisions to last years numbers. The BLS overstated job growth by more than *30,000* a month last year.







dhukka said:


> It's recession time.



Indeed, as even the most rudimentary bush/real world economist expected.

Unbelievable!


----------



## dhukka

Can't wait to see Brian Westbury's reaction today. He's already been on CNBC this morning saying how good the NFP report was going to be - moron.


----------



## wayneL

dhukka said:


> Can't wait to see Brian Westbury's reaction today. He's already been on CNBC this morning saying how good the NFP report was going to be - moron.



Gawd I wish I had pay TV here, if only to see the discomfort of these clowns.


----------



## wayneL

...and they're gonna buy it up anyway!

LOL


----------



## dhukka

wayneL said:


> ...and they're gonna buy it up anyway!
> 
> LOL




Maybe the euphoria is wearing off. Microsoft is off *5%*, as it should be for wildly overpaying for an acquisition that will be dilutive for at least 2 years. Imagine how much the market would be off without the Yahoo bid.


----------



## Real1ty

dhukka said:


> Maybe the euphoria is wearing off. Microsoft is off *5%*, as it should be for wildly overpaying for an acquisition that will be dilutive for at least 2 years. Imagine how much the market would be off without the Yahoo bid.




I can see the market re evaluating their euphoria towards this acquisition once they sit down, remove the party hats and wake up with a massive hangover.

The party goers might even decide to take notice of some economic data once the throbbing head has subsided.

Enter PPT.


----------



## Bushman

dhukka said:


> So whilst the market gets carried away with over-priced aquisitions of internet search engines the US economy continues to deteriorate.
> 
> It's recession time.





Two questions come to mind:
1. Why is it 'overpriced'? Every time a deal goes ahead these days, everyone immediately says it is 'overpriced'. Remember acquisitions are strategic as well as financial decisions and companies have longer term outlooks then a few years. Microsoft want to challenge Google in the medium (the internet) that is changing society as we know it. A search engine would be central to this bid. You cannot just say it is 'overpriced'. Yahoo would attract a significant premiem for control of its assets. However I do understand that such premiums for control are hard to value.
2. A recession is defined as two or more quarter of negative GDP growth. So yes, it is inevitable, but no, it does not have to be a disaster. The extent and depth of this recession is not known as yet. There are two contradictory trends - stress in the US and a boom in Asia. 'Recession' is an emotive word which is oft misrepresented by the mass media. I have read predictions from the next depression to a blip in the long term growth trend. I suspect that, as with everything, the truth lies somewhere in between the extremes. 

Having said that, I do, off course, understand your cynicism.


----------



## bean

Time to be in cash again maybe very close.
A testing of the lows about to occur soon?
http://www.financialsense.com/editorials/swenlin/2008/0201.html


----------



## dhukka

Bushman said:


> Two questions come to mind:
> 1. Why is it 'overpriced'? Every time a deal goes ahead these days, everyone immediately says it is 'overpriced'.




Nice try at setting up a straw man argument at the beginning of the post, however I can't let you get away with it.  CNBC got so excited by this news this morning they forgot to take an ad-break for nearly an hour. All through the day they had analysts and others praising this deal as wonderful. It is the minority that think this deal is over-valued - at least at this point in time. 



Bushman said:


> Remember acquisitions are strategic as well as financial decisions and companies have longer term outlooks then a few years.Microsoft want to challenge Google in the medium (the internet) that is changing society as we know it. A search engine would be central to this bid. You cannot just say it is 'overpriced'. Yahoo would attract a significant premiem for control of its assets. However I do understand that such premiums for control are hard to value.




Thanks for the refresher course in M&A 101.  I think we all have a grasp of the strategic and financial considerations of acquisitions.  

So a company that has failed to make a significant online presence in monetizing search acquires another company that has failed to make a dent in google's dominance in this area. Two failures don't make a success. 

As for the financials. Yahoo just reported a *-23%* decline in quarterly profit. Acquisitions are often measured by EBITDA multiples. Yahoo's FY07 EBIDTA came in at around *$1.3* billion.That means Microsoft's offer is priced at an EBITDA multiple of more than *30x*. Anyone with any experience in M&A deals will tell you that is very expensive.   



Bushman said:


> 2. A recession is defined as two or more quarter of negative GDP growth.




Actually it isn't, that is a rough rule of thumb. The National Bureau of Economic Research (NBER) is the final arbiter of recession calls. The following comes from their website;



> The NBER does not define a recession in terms of two consecutive quarters of decline in real GDP. Rather, a recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. For more information, see the latest announcement on how the NBER's Business Cycle Dating Committee chooses turning points in the Economy and its latest memo, dated 07/17/03.






Bushman said:


> So yes, it is inevitable, but no, it does not have to be a disaster. The extent and depth of this recession is not known as yet.




True. 



Bushman said:


> There are two contradictory trends - stress in the US and a boom in Asia.



 Ahh the myth of decoupling, still alive and well. 



Bushman said:


> 'Recession' is an emotive word which is oft misrepresented by the mass media.




Yes, the word recession was introduced in the 1970's because people were afraid to use the word depression. Maybe we'll soon have another word to calm those frightened by the words recession. How about a 'reduced growth phase'? 



Bushman said:


> I have read predictions from the next depression to a blip in the long term growth trend. I suspect that, as with everything, the truth lies somewhere in between the extremes.




I suspect you're proabably right. Then again, those extremes may not be extreme enough. Never discount the Black Swan theory.


----------



## Kauri

a chart I posted a whales back... the waves are placed randomly depth and time-wise... it is more the psychology that I was looking at... are we in the blue wave 4 stage now??? 
Pondering
............Kauri


----------



## ithatheekret

Looks like one of those textbook cases to me wouldn't you say Kauri ?


----------



## reece55

dhukka said:


> Nice try at setting up a straw man argument at the beginning of the post, however I can't let you get away with it.  CNBC got so excited by this news this morning they forgot to take an ad-break for nearly an hour. All through the day they had analysts and others praising this deal as wonderful. It is the minority that think this deal is over-valued - at least at this point in time.
> 
> 
> 
> Thanks for the refresher course in M&A 101.  I think we all have a grasp of the strategic and financial considerations of acquisitions.
> 
> So a company that has failed to make a significant online presence in monetizing search acquires another company that has failed to make a dent in google's dominance in this area. Two failures don't make a success.
> 
> As for the financials. Yahoo just reported a *-23%* decline in quarterly profit. Acquisitions are often measured by EBITDA multiples. Yahoo's FY07 EBIDTA came in at around *$1.3* billion.That means Microsoft's offer is priced at an EBITDA multiple of more than *30x*. Anyone with any experience in M&A deals will tell you that is very expensive.
> 
> 
> 
> Actually it isn't, that is a rough rule of thumb. The National Bureau of Economic Research (NBER) is the final arbiter of recession calls. The following comes from their website;
> 
> 
> 
> 
> 
> True.
> 
> Ahh the myth of decoupling, still alive and well.
> 
> 
> 
> Yes, the word recession was introduced in the 1970's because people were afraid to use the word depression. Maybe we'll soon have another word to calm those frightened by the words recession. How about a 'reduced growth phase'?
> 
> 
> 
> I suspect you're proabably right. Then again, those extremes may not be extreme enough. Never discount the Black Swan theory.




Dhukka, I think you are being too nice here...... Very expensive????

It's an outrages price for a Company that has rapidly contracting earnings. MSFT is paying some 61 times earnings for an entity that has reducing earnings and a business model that is losing more every day to Google..... I don't care what kind of synergies the deal makers spin up, it's just the dumbest thing I have seen MSFT do, certainly under Gates' guard the Company wouldn't have ventured into such a joust...

Put it to you this way, I am an investor and I can buy Google at 40x earnings, where there EPS growth is 50%+, or I can buy YHOO where earnings (now) are at 61x earnings at -20% growth..... Ummm.... even a teenager can do the math....

But don't worry everyone, clearly this signals that the market is now cheap, we should all wade in with the cash that we have cause it's all going to be ok, M&A is back on the agenda...... Hold on a second, what where the payroll numbers again?????

What I love is that now that the employment numbers are anemic, the pundits are saying "how can you trust them, they are always revised.. it will probably be revised up....". However, the same pundits when the NFP was good were saying " don't worry, the economy is ok".... HAHAHAHA.... gotta love it.

Cheers


----------



## porkpie324

Talking of economists and their predictions, try reading Chuck Butlers daily column on 'Kitco', he predicted the jobless rate and the payroll data. porkpie


----------



## dhukka

reece55 said:


> Dhukka, I think you are being too nice here...... Very expensive????
> 
> It's an outrages price for a Company that has rapidly contracting earnings. MSFT is paying some 61 times earnings for an entity that has reducing earnings and a business model that is losing more every day to Google..... I don't care what kind of synergies the deal makers spin up, it's just the dumbest thing I have seen MSFT do, certainly under Gates' guard the Company wouldn't have ventured into such a joust...
> 
> Put it to you this way, I am an investor and I can buy Google at 40x earnings, where there EPS growth is 50%+, or I can buy YHOO where earnings (now) are at 61x earnings at -20% growth..... Ummm.... even a teenager can do the math....
> 
> But don't worry everyone, clearly this signals that the market is now cheap, we should all wade in with the cash that we have cause it's all going to be ok, M&A is back on the agenda...... Hold on a second, what where the payroll numbers again?????
> 
> What I love is that now that the employment numbers are anemic, the pundits are saying "how can you trust them, they are always revised.. it will probably be revised up....". However, the same pundits when the NFP was good were saying " don't worry, the economy is ok".... HAHAHAHA.... gotta love it.
> 
> Cheers




Spot on Reece it is outrageous. These are the kinds of prices that people paid back in the dotcom boom and subsequently had to write them down when reality set in. We were even doing it Australia. Remember when Computershare over-payed for E-trade Australia and then had to write huge chunks of it off? 

As for the employment numbers. The pundits to a certain degree have been vindicated thus far with upwardly revised numbers. That is if you exclude the 378,000 or almost 30% of jobs the B/D adjustment revised away last year. 

I suspect in the next few months the pundits will be unable to use the upward revision cop-out as the numbers get revised down.


----------



## Bushman

dhukka said:


> That means Microsoft's offer is priced at an EBITDA multiple of more than *30x*. Anyone with any experience in M&A deals will tell you that is very expensive.
> 
> .




True - EBITDA multiple of 30x recurring profit is expensive under normal circumstances. But the internet is growing every day and a search engine, as the name suggests, is pivotal to earning income from the internet. How do you value that? I do not have experience in buying tech companies so I could not tell you what it would cost to build one of these from the ground up. 

The 'myth of decoupling'? What a funny term. For it to be a myth, you would have to be denying that India and China are modernising. 

Anyway I was not having a go. It is simply annoying when the chorus simply rings out 'it is overpriced'. I do not watch American cable so I did not realise it was met with euphoria on CNBC. It definitely does not mean that Wall St is blowing bubbles again if that is why they are excited.


----------



## Whiskers

Bushman said:


> The 'myth of decoupling'? What a funny term. For it to be a myth, you would have to be denying that India and China are modernising.




I'm inclined to think decoupling is progressing steadily. 

I heard on a news broadcast a few days ago that China and India accounted for about 1/4 of world GDP about five years ago while USA accounted for 1/3. Now the numbers are reversed with the USA accounting for about 1/4 and China and India 1/3.

I have postulated earlier about the exaggeration of the impact of a x%   downturn in the US having a similar or worse impact on China in particular... it won't happen.


----------



## wayneL

Whiskers said:


> I'm inclined to think decoupling is progressing steadily.
> 
> I heard on a news broadcast a few days ago that China and India accounted for about 1/4 of world GDP about five years ago while USA accounted for 1/3. Now the numbers are reversed with the USA accounting for about 1/4 and China and India 1/3.
> 
> I have postulated earlier about the exaggeration of the impact of a x%   downturn in the US having a similar or worse impact on China in particular... it won't happen.



China & India a third of world GDP? I seriously doubt that.


----------



## ithatheekret

Don't believe the spin , China is geared up and still positioning itself .

Whilst every spinner is concentrating on the US equation in the China theory , the true aim is India . Shipping easier , quicker and a massive population to support their goods . Japan is only afloat due to China , if China sinks , Japan is stuffed . So is the surplus they have .........


----------



## Whiskers

dhukka said:


> *So whilst the market gets carried away with over-priced aquisitions of internet search engines *the US economy continues to deteriorate:
> 
> It's recession time.




 What! I'm starting to worry that some of you are suffering from a bit of hypochondria... not happy unless it's all bad news. 




reece55 said:


> It's an outrages price for a Company that has rapidly contracting earnings. MSFT is paying some 61 times earnings for an entity that has reducing earnings and a business model that is losing more every day to Google..... I don't care what kind of synergies the deal makers spin up, it's just the dumbest thing I have seen MSFT do, *certainly under Gates' guard the Company wouldn't have ventured into such a joust...*




Isn't Gates still a major shareholder and chairman of the board!?

I fail to see how this offer could have proceeded without Gates' approval.

Apart from Gates as chairman the board includes Reed Hastings, founder, chairman and CEO of Netflix Inc. and Charles H. Noski, former vice chairman of AT&T Corporation.

When you consider the genius of Gates and a bit of Hastings and Norski expertise, I give them a bit of credibility for having a viable plan up there sleves and knowing what they are doing.


----------



## dhukka

Bushman said:


> True - EBITDA multiple of 30x recurring profit is expensive under normal circumstances.




It's not expensive, it's ridiculously expensive. 



Bushman said:


> But the internet is growing every day and a search engine, as the name suggests, is pivotal to earning income from the internet. How do you value that?




Exactly the same way you would value any business. Why would you value an internet business in a different way? 




Bushman said:


> I do not have experience in buying tech companies so I could not tell you what it would cost to build one of these from the ground up.




Neither could I, but I can tell you how much it takes to buy one. US $44.6 billion. Ridiculously high. 



> The 'myth of decoupling'? What a funny term. For it to be a myth, you would have to be denying that India and China are modernising.




No you wouldn't. You would just have to be aware that if the largest economy in the world slows significantly, the rest of the world will be affected. Simple.


----------



## Whiskers

wayneL said:


> China & India a third of world GDP? I seriously doubt that.




I'm still trying to recall which news bulletin it came from so I can get more detail. I watch some of the yank and German broadcasts too and it was only a few days ago.

Just did a google and came up with this from Treasures Costello from Dec 06, (Not sure how old the data is) which tends to support the notion. I know 2030 is a long way off, but China and India probably exceded all expectations in the last couple of years.



> By 2030, Asia’s share of world GDP is projected to reach around 45 per cent, compared with its share of global population, which is projected to remain around half. Again, this will be largely due to the continued rapid growth of China and India.
> http://www.treasurer.gov.au/DisplayDocs.aspx?pageID=&doc=speeches/2006/026.htm&min=phc


----------



## dhukka

Whiskers said:


> I'm inclined to think decoupling is progressing steadily.
> 
> I heard on a news broadcast a few days ago that China and India accounted for about 1/4 of world GDP about five years ago while USA accounted for 1/3. Now the numbers are reversed with the USA accounting for about 1/4 and China and India 1/3.
> 
> I have postulated earlier about the exaggeration of the impact of a x%   downturn in the US having a similar or worse impact on China in particular... it won't happen.




For what it's worth, I have stated on other threads that I believe decoupling will happen. However it is still way too early. Despite the oft repeated platitudes of China rapidly modernising, China's economy is more export dependent on the US and Europe than it has ever been. I have posted the evidence previously in this thread. 

*2007* GDP estimates in *$US*

USA *13.5 trillion*
China *3.1 trillion*
India *1.0 trillion*

Here's a tip, try doing you're own research rather than listen to some muppet on the radio or TV.


----------



## IFocus

I get the feeling that people just think the current growth / expansions rates will just continue on un-interrupted in China and Indian.

Any  economy growing at 10% or more year on year brings enormous problems its called a bubble, as soon as the Olympics are out of the way China will all most certainly have to get the pin out US recession or no US recession.

How this will feed back to Oz is very hard to judge IMHO but it will be nothing like the present, the future will all ways bring change good and bad.


----------



## Whiskers

dhukka said:


> For what it's worth, I have stated on other threads that I believe decoupling will happen. However it is still way too early. Despite the oft repeated platitudes of China rapidly modernising, China's economy is more export dependent on the US and Europe than it has ever been.




That may be so, but a bit of a US slowdown doesn't equate to disproportional effect on, or a collapse of the chinese economy.



> *2007* GDP estimates in *$US*
> 
> USA *13.5 trillion*
> China *3.1 trillion*
> India *1.0 trillion*
> 
> Here's a tip, try doing you're own research rather than listen to some muppet on the radio or TV.



*  IMF October 2007.*

*Country................GDP (PPP) $m *

*United States.........13,543,330 * - *19.02%* 

     China....................11,606,336 - 16.551%
     Hong Kong..................289,748  -   .402%
     China (Taiwan)............749,943  - 1.034%
     Total China.............12,646,027 - 17.987%

     India.......................4,726,537 - 6.576%

*Total China + India..17,373,164* - *24.563%*

Now as I said these are Oct 07 numbers. I reckon the numbers I heard quoted is from someone who has taken into account the recent changes in the economy. As you can see your estimates of the impact of the US economy are going to be a bit off if you ain't using the right raw data.

Dhukka, I'm not prone to personal clashes, but I reckon you earnt this one. 

Here's a tip. 

There's an old proverb that goes something like; better make sure of your facts before you start getting too .      :

http://www.imf.org/external/pubs/ft...,111&s=PPPGDP,PPPSH&grp=0&a=&pr1.x=88&pr1.y=8


----------



## ithatheekret

I hate to say this to ya Whiskers , but I wouldn't rely on the IMFs data either and data for what it is ......... is only information collected that has been allowed to be received in the first place .

There was this wonderful spin that Russia was going to sell it's platinum off like all the wetern centrals did with more than just their gold , I have seen documented statements coming from the IMF in relation to that story ..... and it was bollocks , provided a wonderful dip though , just like the Indians wedding stories and the Indian dealers , the fact is it is a very small market and when lots of people try to get into a small space , somebody usually gets squeezed out .

The UN was made to be seen as the disgusting joke it really is behind all the shadows of goodness . It getting close to clean house time just about everywhere , the IMF and the UN inclusive . Sure some of the people are doing meaningful things , unfortunately the head honchos always seem to be trouble magnets . When they get brought undone , it's an Ockhams razor theory that they've managed to upset somebody .......... somebody big . I'll give you a few clues . He doesn't speak Russian and he can't read English and he looks at pictures upside down .

PS.... If you want to see the true IMF try something simple for starters , go to Goggly Boggly search engine and type in IMF + mistakes ........ it does not make happy reading , but you will definitely need to clear your cache afterwards .


----------



## Freeballinginawetsuit

ithatheekret said:


> I hate to say this to ya Whiskers , but I wouldn't rely on the IMFs data either and data for what it is ......... is only information collected that has been allowed to be received in the first place .
> 
> There was this wonderful spin that Russia was going to sell it's platinum off like all the wetern centrals did with more than just their gold , I have seen documented statements coming from the IMF in relation to that story ..... and it was bollocks , provided a wonderful dip though , just like the Indians wedding stories and the Indian dealers , the fact is it is a very small market and when lots of people try to get into a small space , somebody usually gets squeezed out .
> 
> The UN was made to be seen as the disgusting joke it really is behind all the shadows of goodness . It getting close to clean house time just about everywhere , the IMF and the UN inclusive . Sure some of the people are doing meaningful things , unfortunately the head honchos always seem to be trouble magnets . When they get brought undone , it's an Ockhams razor theory that they've managed to upset somebody .......... somebody big . I'll give you a few clues . He doesn't speak Russian and he can't read English and he looks at pictures upside down .
> 
> PS.... If you want to see the true IMF try something simple for starters , go to Goggly Boggly search engine and type in IMF + mistakes ........ it does not make happy reading , but you will definitely need to clear your cache afterwards .




Apples..........Oranges .


----------



## ithatheekret

Is that it ..... an idiom ?


----------



## Freeballinginawetsuit

ithatheekret said:


> Is that it ..... an idiom ?




I don't see the relevance of youre comparison . On the topic of China's GDP, IMO any stats out of China should be taken with a grain of salt.

A more relevant (and accurate lol) stat would probably be US TT's..........

China Imports YTD Nov:295.8B
China Exports YTD Nov:58.3B (most to offshore invested US Co's on the mainland)
US TT's Percentile:12.4% 

Offshore invested co's suppling the essential discretionary and non discretionary (bang for ya buck) items that the narrow sighted/highly geared and illiquid yanks will least do with out in a recession.

On an I/E defeciency basis, China pegs Canada markedly for top spot although Canada largely trades on a par with the US and pegs 1st place for total trades.

Personally I feel that Canada/Germany's TT's will suffer the greatest if uncle sam indeed drowns in his muck


----------



## Whiskers

ithatheekret said:


> I hate to say this to ya Whiskers , but I wouldn't rely on the IMFs data either and data for what it is ......... is only information collected that has been allowed to be received in the first place .




Yeah ithatheekret, thats true, but we have to work with something. Do you have a better data source that I could use?

The following site link provides estimates by the IMF, World Bank and the  CIA.

They vary a bit, but they all give the US about $13 trillion. The CIA gives China (inc Taiwan & Hong Kong) $8.02 trillion and India $2.96 trillion. The World Bank gives China (inc Taiwan & Hong Kong) $6.16 trillion and India $2.34 trillion.

I 'm not sure where dhukka sourced his numbers from, but his numbers for China and India are considerably less than all three of these.

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)


----------



## Whiskers

Whiskers said:


> http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)




Looks like I missed a bit on that link. Try this.

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)


----------



## wayneL

Whiskers said:


> Looks like I missed a bit on that link. Try this.
> 
> http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)




Not exactly a third then. Not even a quarter according to some. But certainly more than I thought.


----------



## dhukka

Whiskers said:


> That may be so, but a bit of a US slowdown doesn't equate to disproportional effect on, or a collapse of the chinese economy.
> 
> 
> *  IMF October 2007.*
> 
> *Country................GDP (PPP) $m *
> 
> *United States.........13,543,330 * - *19.02%*
> 
> China....................11,606,336 - 16.551%
> Hong Kong..................289,748  -   .402%
> "     China (Taiwan)............749,943  - 1.034%
> Total China.............12,646,027 - 17.987%
> 
> India.......................4,726,537 - 6.576%
> 
> *Total China + India..17,373,164* - *24.563%*
> 
> Now as I said these are Oct 07 numbers. I reckon the numbers I heard quoted is from someone who has taken into account the recent changes in the economy. As you can see your estimates of the impact of the US economy are going to be a bit off if you ain't using the right raw data.
> 
> Dhukka, I'm not prone to personal clashes, but I reckon you earnt this one.
> 
> Here's a tip.
> 
> There's an old proverb that goes something like; better make sure of your facts before you start getting too .      :
> 
> http://www.imf.org/external/pubs/ft...,111&s=PPPGDP,PPPSH&grp=0&a=&pr1.x=88&pr1.y=8




I hope you savoured your moment of victory because it's about to be shattered. It actually helps if you understand the data you're looking at. All you need to know about the link you provide to wikipedia is the first few lines. 



> There are three lists of countries of the world sorted by their gross domestic product (GDP) (the value of all final goods and services produced within a nation in a given year). *The GDP dollar estimates given on this page are derived from Purchasing Power Parity (PPP) calculations.* Using a PPP basis is arguably more useful when comparing generalized differences in living standards on the whole between nations because PPP takes into account the relative cost of living and the inflation rates of the countries, rather than using just exchange rates which may distort the real differences in income.




PPP as suggested above is useful if you want to compare living standards but that's not what we are debating here. You'll notice that the currency they use is international dollars. I don't know anyone who owns international dollars. You know why that is? Because they don't exist, it is a fiction created by these agencies to compare general standards of living between countries. 

The figures I supplied are in $US dollars. 

Here is a link that shows China's GDP in $US at current exchange rates and GDP at PPP. Note these figures are for 2006.

GDP (US$ bn; market exchange rate)  	* 2,765.4 * 

GDP (US$ bn; purchasing power parity)  	 *9,982.5*

I took the 2006 number and applied China's current growth rate to get my approximation of *$3.1* trillion.

I am sure of my facts because I do the research and don't just cut and paste.

Here's another tip for ya,

"It's better to remain silent and thought a fool, than to open your mouth and remove all doubt."


----------



## numbercruncher

Relevent to the current discussion .....



> World Bank Report: China's Economy Overestimated By 40 Percent
> December 18, 2007 10:53 a.m. EST
> 
> Washington, DC (AHN) - A World Bank study released on Monday said China's economy was overestimated by 40 percent. Despite the less reliable methods used to measure China's gross domestic product, it still was the world's second biggest economy in 2005.
> 
> The 2005 report was the first time that China was included in the World Bank report, while India is reinstated in the report since 1985.
> 
> The World Bank used the Purchasing Power Parity tool, which removes the effect of currency exchange, to evaluate the economies of 146 nations.
> 
> The report said the world economy came up with almost $55 trillion worth of good and services in 2005. Almost 40 percent of that output were from developing nations.
> 
> Twelve nations, seven from high-income economies, accounted for two-thirds of the world's output. The seven were the U.S., Japan, Germany, the United Kingdom, France, Italy and Spain. The five others were China, India, Russia, Brazil and Mexico.
> 
> China was responsible for 9 percent of global production, while India accounted for 4 percent. India was the fifth largest economy. Asia had an overall 20 percent share in the global production pie.




http://www.allheadlinenews.com/articles/7009486566


----------



## adobee

*"It's better to remain silent and thought a fool, than to open your mouth and remove all doubt."*


I really like that - I am going to use it..


----------



## ithatheekret

Whiskers said:


> Yeah ithatheekret, thats true, but we have to work with something. Do you have a better data source that I could use?
> 
> The following site link provides estimates by the IMF, World Bank and the  CIA.
> 
> They vary a bit, but they all give the US about $13 trillion. The CIA gives China (inc Taiwan & Hong Kong) $8.02 trillion and India $2.96 trillion. The World Bank gives China (inc Taiwan & Hong Kong) $6.16 trillion and India $2.34 trillion.
> 
> I 'm not sure where dhukka sourced his numbers from, but his numbers for China and India are considerably less than all three of these.
> 
> http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)





That's what I was doing AM  on a weekend , downloading last weeks data , prices etc., sometimes when you gleen through it you find a few gems .
I've been looking for something , something out of the ordinary . But sometimes it needs to be downloaded twice and sometimes , three times as the bundles come through , I have noted little pieces missing , when finally found , let's just say to date the differences have been extreme , sometimes it's Telstra streaming and what speed wireless can acheive for poor old Telstra . Anyone noted that shareprice lately , I haven't , I have a joke on the brokers now and then , keep asking them to place a buy at 99 cents .

Lots of flattened tongues getting paid big bucks for f....ups . 
World Bank , stick your fingers in ya mouth and try to say that .
CIA ....... wasn't that why condoms were invented ?   



Why is the question , it always will be . Minties don't solve problems or everybody would be toothless . George is dishing out Minties .
No wonder kids are running around screaming hack the planet .

When you get the data look for something to prove it wrong , I just can't help myself . But when something looks too good to be true well you know .........

Didn't that run on the Dow look great 12846  cough ,cough ,cough , what not 12846 yet ........ eeeek ! I like Minties though


----------



## ithatheekret

Freeballinginawetsuit said:


> I don't see the relevance of youre comparison . On the topic of China's GDP, IMO any stats out of China should be taken with a grain of salt.
> 
> A more relevant (and accurate lol) stat would probably be US TT's..........
> 
> China Imports YTD Nov:295.8B
> China Exports YTD Nov:58.3B (most to offshore invested US Co's on the mainland)
> US TT's Percentile:12.4%
> 
> Offshore invested co's suppling the essential discretionary and non discretionary (bang for ya buck) items that the narrow sighted/highly geared and illiquid yanks will least do with out in a recession.
> 
> On an I/E defeciency basis, China pegs Canada markedly for top spot although Canada largely trades on a par with the US and pegs 1st place for total trades.
> 
> Personally I feel that Canada/Germany's TT's will suffer the greatest if uncle sam indeed drowns in his muck





FB I take it your a young adult ,  like me although I'm nearly 50 , couple more to get there , but in that time reaching that pinnacle , I have travelled in my youngers days , I have little pins and badges from every country I've visited , many of which were Commonwealth Nations or use to be ...........

I go off tangent sometimes , I noted your loss in comparison , but it was the comparisons I wasn't wanting to show . I was trying to explain that what you see in the feeds and what really happened are usually two completely different things . It takes hours to get down to the nitty gritties at times .

I apologized for flaring up at you , it was unbecoming of me and I was an ass for doing it . Your obviously an intelligent young man ( that is you in the photo ? ) But to expain myself may , to some , be arrogance at it's utmost .

I know I'm above a few , but many are much higher than me , I take a page out of their books and add it to mine , and follow their example .

I am arrogant I know that , but I also have very strong principles which you can have a laugh at if you like too , many have . I have sworn allegiance to Her Maj. and nothing on this earth even family would have me cross that allegiance . I look upon the flag with reverence , and I know this country has independent thinkers , I see them nearly everyday on this site . 

You see your second post , just proved your a thinker , so forgive me for saying this , but if I stray off tangent it's because there is something that's not right . I try to bring to the members attention . 

China Imports YTD Nov:295.8B
China Exports YTD Nov:58.3B (most to offshore invested US Co's on the mainland)

I would question this data . Can we agree that India is the next big move for growth , real growth . I made an error in a statement previously about money supply and China being the only double digits growth around , that was a faus paux on my part , because I had recently reported that another country that has been under heavy sanctions by the US , has seen double digit growth too , it doesn't rely on the US consumer .

I want to make people think , force them if I have to , but facts show that those that learn , want to learn .

China is set up to become the worlds chief nett exporter , India is it's target , they know the problems faced in the US . You can paint stagflation blue pink or red , it's still stagflation , it has taken them nearly 7 years to admit it . We could go into a mass of data out of Japan , back through 99-2006 , it was garbage . I'm sure Kauri would remember my post on the Japanese economy from years ago , it was right .

I don't actually like being right , because I know where this all end and it infuriates me to know that the public of America will have to foot the bill for all the policy mistakes ever laid to bare on the US . The same goes here , I'd say the ALP is good for at least 2% in rate rises . Bag them I may at times , but I will never forget their sacrifice for Australia in the Coral Sea , our honour says we must stand by them . I know that's difficult for some to swallow but that is the basis of it whether liked or not .

Dhukka I can only lay accollades at his feet , he ( I think D.s a he , I could be wrong I don't know ) puts in an effort to cross reference the info overload in the markets . I think he can smell chit a mile off and lets us know , that takes guts to stand your ground in a setting of growing opposition .

So Dhukka gets my kudos . I agree with you that Canada and Germany will each feel the double edge of the economic sword . But with inflation swinging about from a demand - pull to cost- push , the emerging countries will be first cabs off the rank , China will cop its share of that , it will be in your face stuff for just about very Chinese citizen as their food costs rise and rise and rise .

regards and best wishes ,

Mark

PS ..... 

A question for Dhukka : How much do you think the Chinese currency is under valued ? also .... How much do you think the Yen is under valued ?Careful it's a trick question on the Yen , because the last appreciation calculations were based on the data they put out that was bollocks for years .


----------



## Freeballinginawetsuit

ithatheekret said:


> China Imports YTD Nov:295.8B
> China Exports YTD Nov:58.3B (most to offshore invested US Co's on the mainland)




Hi ya,

The aforementioned US TT data is accurate, census sourced and the most current feed I have access too. 

Cheers


----------



## ithatheekret

Hi ,

Yes , okay I can relate to that , I do too , quite a few , that's about as far as I'm willing to go on that matter .

I have one small query .

Is the data recorded from first occurrence , I assume the scale is logarithmic as it is the easiest for me to compile it that way , as it gives me one glance information . But has the data been smoothed say using an EMA ( expotential moving average ) of say with an Alpha equivalent to 0.40 ?


----------



## dhukka

ithatheekret said:


> A question for Dhukka : How much do you think the Chinese currency is under valued ? also .... How much do you think the Yen is under valued ?Careful it's a trick question on the Yen , because the last appreciation calculations were based on the data they put out that was bollocks for years .




Good question, the Chinese currency, who knows? Could currently be as much as 50% undervalued or more. I'm with Jim Rogers on this one. I think China's currency will easily double, triple or even quadruple in the coming decades. I'm quite the China bull, the main difference between myself and others is the timing.

The Yen, jaysus! I'm a bit biased because I earn the bulk of my money in yen. Ballpark I'd say *15 -20%* undervalued. Others have pointed out how dodgy official Chinese numbers are, the Japanese are no choir boys.


----------



## barnz2k

its all gonna be ok, I had a dream last night the asx went up 12%! hahaha
now if only it would come true..


----------



## Whiskers

dhukka said:


> I hope you savoured your moment of victory




Wow, you sure are a dominant male dhukka... a real Right Fighter!  http://www.selfgrowth.com/articles/Byler1.html



> because it's about to be shattered.




Not likely. 



> It actually helps if you understand the data you're looking at.




Well we agree on one thing. 



> All you need to know about the link you provide to wikipedia is the first few lines.
> 
> 
> 
> 
> There are three lists of countries of the world sorted by their gross domestic product (GDP) (the value of all final goods and services produced within a nation in a given year). The GDP dollar estimates given on this page are derived from Purchasing Power Parity (PPP) calculations. Using a PPP basis is arguably more useful when comparing generalized differences in living standards on the whole between nations because *PPP takes into account the relative cost of living and the inflation rates of the countries, rather than using just exchange rates which may distort the real differences in income. *
Click to expand...



"All you need to know...", There's that damn dominant male Right Fighter again! 

If it's alright with you dhukka,  my mind is free and open to the big picture.



> PPP as suggested above is useful if you want to compare living standards but that's not what we are debating here.




 GDP isn't about comparing living standards!?

The GDP of a country is defined as the total _market value _of all final goods and services produced in a country in a given period of time. 

Debating... I thought this was a discussion forum, like in dialogue... Right Fighter! 



> You'll notice that the currency they use is international dollars. I don't know anyone who owns international dollars. You know why that is? Because they don't exist, it is a fiction...




 Really!



> ...created by these agencies to compare general standards of living between countries




Exactly! If you look at the definition of GDP, _market value _is the key phrase. From where I stand it's a world market... hence the need for an standard international measure. It matters nought whether you call it an international $ or widgees, so long as everyone can relate to it equitably.



> The figures I supplied are in $US dollars.




Thats ok if you assume the rest of the world revolves around the US for ever. It hasn't always been the case and most likely the US has had it's day in the sun as it is already surpassed by the EU and soon by Aisa. 

What happens when the US is long 3rd or 4th. What measure will you use then or more importantly what measure will be most relevant!?

I reckon it is much wiser to use a standardised international measure to cope better with the transition, rather than suddenly realising one day that the US$ is now insignificant... and what am I going to use now!



> I am sure of my facts...




I'm sure you are! (Right Fighter)



> ...because I do the research .





Good boy! But you should do better.

Then you would know that China's currency is artifically low, at least in the US view. If China did what the US wanted and revalued their currency against the US, wouldn't that make China's GDP appreciate significantly (in $US). So you are not recognising the intristic true value of China but literally an artifically low nominal value in $US. 




> ...and don't just cut and paste




I'll have to remember it's a cardinal sin to 'cut and paste' anything.



> Here's another tip for ya,
> 
> "It's better to remain silent and thought a fool, than to open your mouth and remove all doubt."




So you want me to shutup unless I agree with you eh, Right Fighter! :


----------



## Uncle Festivus

So say's Jim Rogers...........

"Bernanke is printing huge amounts of money. He's out of control and the Fed is out of control. We are probably going to have one of the worst recessions we've had since the Second World War. It's not a good scene."

http://money.cnn.com/2008/01/30/news/international/okeefe_rogers.fortune/index.htm

Back to my research on Kondratieff!

http://www.kwaves.com/kond_overview.htm


----------



## wayneL

Freeballinginawetsuit said:


> Hi ya,
> 
> The aforementioned US TT data is accurate, census sourced and the most current feed I have access too.
> 
> Cheers



Freeballs,

Do you really trust "census sourced" data?


----------



## treefrog

John Murphy | The Market Message
JANUARY BAROMETER PREDICTS BAD YEAR
I haven't heard anyone in the media talking about the January Barometer, which is based on the view that "as January goes, so goes the year". That's probably because they only talk about it when the market has a strong January, which predicts a good year. Unfortunately, this January was a very bad one. The 6% loss in the S&P 500 makes it the sixth worst January on record. According to the Stock Trader's Almanac, "the January Barometer predicts the year's course with a .754 batting average. It goes on to state that "every down January on the S&P since 1950, without exception, preceded a new or extended bear market, or a flat market". In addition to a bearish January Barometer, the market had a bad chart month as well. The monthly bars in Chart 1 show the S&P 500 falling -6.12% since the start of 2008 on the heaviest volume in a decade. The monthly stochastic lines (above chart) have fallen to the lowest level since mid-2003. The monthly MACD histogram has been negative for two consecutive months.


----------



## Trembling Hand

Uncle Festivus said:


> So say's Jim Rogers...........
> 
> "Bernanke is printing huge amounts of money. He's out of control and the Fed is out of control. We are probably going to have one of the worst recessions we've had since the Second World War. It's not a good scene."
> 
> http://money.cnn.com/2008/01/30/news/international/okeefe_rogers.fortune/index.htm



Uncle Festivus don't forget to quote this gem from the same artical,


> Ultimately, Rogers doesn't think that the troubles in the United States will be much of a drag on the prospects for the People's Republic. "Anybody who sells to Sears (SHLD, Fortune 500) or Wal-Mart (WMT, Fortune 500) is going to be affected, without question," he says. "Some parts of the Chinese economy are going to be untouched, however. They won't even know America's in recession. They won't care if America falls off the face of the earth."


----------



## ithatheekret

dhukka said:


> Good question, the Chinese currency, who knows? Could currently be as much as 50% undervalued or more. I'm with Jim Rogers on this one. I think China's currency will easily double, triple or even quadruple in the coming decades. I'm quite the China bull, the main difference between myself and others is the timing.
> 
> The Yen, jaysus! I'm a bit biased because I earn the bulk of my money in yen. Ballpark I'd say *15 -20%* undervalued. Others have pointed out how dodgy official Chinese numbers are, the Japanese are no choir boys.




Yes , have to agree .

Big difference in both the fundamentals and the technicals , technically the Yen should push into 96 , fundamentally ........... 136 .
Huge disparity in it , trying to think of an easier way to put it , stumbling here mate , had a few comments to bring the language down . Incongruous elements , which show a huge lack of propriety , better stop there and zip that one .

The Yuan , I have a trading figure for right now , based on the data allowed out , that shows the Yuan is at a discount of 43.488% to market .
If China successfully completes it plan ....... get out the ball park figures , the current climate in the markets are right out of whack due to this discount and I think they know it and will fight like the banshees to stop it from getting there . The average wage earner there just wouldn't be able to afford to eat , except their sweat . When we see a 4 , I'll probably pass out with shock .................


----------



## dhukka

Whiskers said:


> GDP isn't about comparing living standards!?




Didn't say it was, you're the one who is insisting that it is by using PPP. 



> Debating... I thought this was a discussion forum, like in dialogue... Right Fighter!




Argument and debate is the lifeblood of a democracy, the more of it, the more healthy a society. 



Whiskers said:


> Exactly! If you look at the definition of GDP, _market value _is the key phrase. From where I stand it's a world market... hence the need for an standard international measure. It matters nought whether you call it an international $ or widgees, so long as everyone can relate to it equitably.




You don't need an international standard. You can use US dollars, yen or any other currency , you don't need to invent one. 



> Then you would know that China's currency is artifically low, at least in the US view. If China did what the US wanted and revalued their currency against the US, wouldn't that make China's GDP appreciate significantly (in $US). So you are not recognising the intristic true value of China but literally an artifically low nominal value in $US.




Yes, acknowledged above that the Chinese currency is undervalued, I said 50% undervalued, ithatheekret says 43%. Also take into consideration previous statements that China may have overstated it's economic numbers by up to *40%*. Even if we gross China's GDP up by 50% we get *$4.5* trillion roughly a third of the US. 



> Thats ok if you assume the rest of the world revolves around the US for ever. It hasn't always been the case and most likely the US has had it's day in the sun as it is already surpassed by the EU and soon by Aisa.
> 
> What happens when the US is long 3rd or 4th. What measure will you use then or more importantly what measure will be most relevant!?
> 
> I reckon it is much wiser to use a standardised international measure to cope better with the transition, rather than suddenly realising one day that the US$ is now insignificant... and what am I going to use now!




As above, you'll still be able to use $US or any other currency, that's the beauty of having exchange rates.  

Bottom line, China's economy is currently; 

too small
too financially fragile
too export dependent
to not be affected by a significant US slowdown.


----------



## Freeballinginawetsuit

wayneL said:


> Freeballs,
> 
> Do you really trust "census sourced" data?




Yeah on trade stats I do,.......a bit like a passport really!. 

I'd lean to the higher side on China though, warehousing/maufacturing and component sourcing would slant the stats to the upside as well, in the case of Chinese derived imports.

Name a more accurate source Wayne........than customs data e-logged at the point of origin, directly into US census data.


----------



## wayneL

Freeballinginawetsuit said:


> Yeah on trade stats I do,.......a bit like a passport really!.
> 
> I'd lean to the higher side on China though, warehousing/maufacturing and component sourcing would slant the stats to the upside as well, in the case of Chinese derived imports.
> 
> Name a more accurate source Wayne........than customs data e-logged at the point of origin, directly into US census data.



Just have a healthy distrust of gu'mint stats Freebs, whether e-logged or de-logged.

Test everything. Trust No-one.


----------



## Freeballinginawetsuit

wayneL said:


> Just have a healthy distrust of gu'mint stats Freebs, whether e-logged or de-logged.
> 
> Test everything. Trust No-one.




Its not a matter of trust, more realism.

US elogged customs data logged direct into the census system is exactly the same as US elogged immigration passport data logged into the census system.

*In regard to US TT's (Census Data) it is the most accurate source available.* 

I don't trust governments............or suscribe to rabid info from obscure web sites or nexus mags. However customs/immigration yada yada would be one of the most reliable sources of info a government data source provides.


Cheers


----------



## wayneL

Freeballinginawetsuit said:


> Its not a matter of trust, more realism.
> 
> US elogged customs data logged direct into the census system is exactly the same as US elogged immigration passport data logged into the census system.
> 
> *In regard to US TT's (Census Data) it is the most accurate source available.*
> 
> I don't trust governments............or suscribe to rabid info from obscure web sites or nexus mags. However customs/immigration yada yada would be one of the most reliable sources of info a government data source provides.
> 
> 
> Cheers



OK, whatever you say. 

But Nexus is The Oracle.


----------



## Freeballinginawetsuit

wayneL said:


> OK, whatever you say.
> 
> But Nexus is The Oracle.




LOL, I thought you were a subscriber


----------



## wayneL

Freeballinginawetsuit said:


> LOL, I thought you were a subscriber



You'll never know.


----------



## Whiskers

dhukka said:


> Originally Posted by *Whiskers*
> GDP isn't about comparing living standards!?
> 
> 
> 
> 
> Didn't say it was, you're the one who is insisting that it is by using PPP.
Click to expand...



As I recall you raised the issue of GDP from my comment to Bushman post that decoupling is progressing.



dhukka said:


> For what it's worth, I have stated on other threads that I believe decoupling will happen. However it is still way too early. Despite the oft repeated platitudes of China rapidly modernising, China's economy is more export dependent on the US and Europe than it has ever been. I have posted the evidence previously in this thread.
> 
> *2007* GDP estimates in *$US*
> 
> USA *13.5 trillion*
> China *3.1 trillion*
> India *1.0 trillion*







> Argument and debate is the lifeblood of a democracy, the more of it, the more healthy a society.




To a point. Arguement and debate are intrinsictly confrontational. When it starts to get 'barbs', it is distructional. Thats why dialogue is more productice.



> You don't need an international standard. You can use US dollars, yen or any other currency , you don't need to invent one.




It's not an issue of currency... it's an issue of more equitable measurement and comparrison. While there are the currency valuation anomonoly's you mention below an existing currency will never work properly to reflect the true wealth and influence in the world. 



> Yes, acknowledged above that the Chinese currency is undervalued, I said 50% undervalued, ithatheekret says 43%. Also take into consideration previous statements that China may have overstated it's economic numbers by up to *40%*. Even if we gross China's GDP up by 50% we get *$4.5* trillion roughly a third of the US.




Two points:

Agree Chinas numbers may be a bit rubbery... but since we were talking decoupling from the US, other issues come into play such as the rate of growth and future potential.
Why just gross up Chinese GDP for one year. If you gross it up from when the US first claimed it was 'undervalued' the amplication would give a much greater number GDP. 

The point being if you use the $US as the barometer, then you must also take into account that they say the Chinese currency has been undervalued for years otherwise by definition the US actually places more value on the Chinese economy than the exchange rate reflects.



> As above, you'll still be able to use $US or any other currency, that's the beauty of having exchange rates.




The problem is that exchange rates are not set uniformly or equitably. Even the US is now using monetry policy allegedly sacrificing their exchange rate to recover their economy, which many claim is stuffed and fundamently flawed anyway.



> Bottom line, China's economy is currently;
> 
> too small
> too financially fragile
> too export dependent
> to not be affected by a significant US slowdown.





Too small; not if you measure the way most do.
Too financially fragile; that sounds more applicable to the US. Argueably in stagflation from short sighted fixes to try to keep it no 1.
Too export dependent; it seems to me that the US is hurting more in the trade war than China is or is likely too. Also you are assuming that Chinese imports will suffer in proportion to the recession. What if Americans start penny pinching and actually buy just as much Chinese cheaper products and forego more dearer local products which I think is more likely to happen.

Which brings us back to the 1/3 1/4 numbers that I mentioned I heard somewhere. I haven't done the maths yet but is it possible that some economist or agency has recalculated those GDP's to account for the US subprime crisis. I would think Investment, Consumption and Government spending, not to mention exports and imports will have different values.


----------



## Kauri

According to the World Bank, Chinese growth this year will be lower than originally forecast at 9.6% (10.8% eyed earlier) and inflation higher at 4.6% (3.8% eyed earlier). Growth looks to remain robust comparatively, however. The supra-national entity notes that weaker global growth will affect China but the trade looks to continue to support with the surplus likely similar to that seen last year. Chinese FX reserves are likely to rise to $1.987 trln.
Cheers
...........Kauri


----------



## Kauri

A washington post-abc poll shows eight out of ten Americans see the economy as either "not so good" or "poor". Six out of ten see the US economy already in recession, the other four being economists/bankers..
Cheers
.........Kauri


----------



## ithatheekret

Kauri said:


> A washington post-abc poll shows eight out of ten Americans see the economy as either "not so good" or "poor". Six out of ten see the US economy already in recession, the other four being economists/bankers..
> Cheers
> .........Kauri





a picture says a thousand words , but for the last four ..............


----------



## Buster

Hey Kauri,



Kauri said:


> A washington post-abc poll shows eight out of ten Americans see the economy as either "not so good" or "poor". Six out of ten see the US economy already in recession, the other four being economists/bankers..




Yeah, I'm with 'Ithatheekret' on this one.. I remember when I was there in '86.. a poll conducted by one of the major papers revealed that 4 out of 5 college students couldn't identify the 'United States' on a world globe and 3 out of 5 thought 'Mussolini' was an ancient Roman Emperor.. 

Speaks volumes..

Regards,

Buster


----------



## dhukka

Whiskers said:


> As I recall you raised the issue of GDP from my comment to Bushman post that decoupling is progressing.



????? whatever.




Whiskers said:


> To a point. Arguement and debate are intrinsictly confrontational. When it starts to get 'barbs', it is distructional. Thats why dialogue is more productice.




Another infected by the insidious political correctness disease. Read some Socrates. 





> It's not an issue of currency... it's an issue of more equitable measurement and comparrison. While there are the currency valuation anomonoly's you mention below an existing currency will never work properly to reflect the true wealth and influence in the world.




And a fictional one does? 




Whiskers said:


> Two points:
> 
> Agree Chinas numbers may be a bit rubbery... but since we were talking decoupling from the US, other issues come into play such as the rate of growth and future potential.
> *Why just gross up Chinese GDP for one year. If you gross it up from when the US first claimed it was 'undervalued' the amplication would give a much greater number GDP.
> *
> *
> 
> The point being if you use the $US as the barometer, then you must also take into account that they say the Chinese currency has been undervalued for years otherwise by definition the US actually places more value on the Chinese economy than the exchange rate reflects.*






Do I really need to point out why the above in bold doesn't make sense? Have a think about it.




> The problem is that exchange rates are not set uniformly or equitably. Even the US is now using monetry policy allegedly sacrificing their exchange rate to recover their economy, which many claim is stuffed and fundamently flawed anyway.




No argument from me that the US is stuffed, but exchange rates give you a short term equilibrium. Short term meaning they could change tomorrow and they will. 



Whiskers said:


> Too small; not if you measure the way most do.
> Too financially fragile; that sounds more applicable to the US. Argueably in stagflation from short sighted fixes to try to keep it no 1.
> Too export dependent; it seems to me that the US is hurting more in the trade war than China is or is likely too. *Also you are assuming that Chinese imports will suffer in proportion to the recession.*




No you're assuming I'm assuming it. I've said numerous times on this and other threads, a US recession does not imply a Chinese recession. If the US goes into a deep recession, by that I mean of the 1982 variety, it may mean China's growth slowing from 11% to 6 or 7%. Obviously that is still strong growth but it would be akin to a 'growth recession' for China to slow that much. This is not a forecast for calendar year 2008. Although I do not expect China to slow this much in 2008, if China does slow considerably it will be in late 2008 into 2009. 



Whiskers said:


> What if Americans start penny pinching and actually buy just as much Chinese cheaper products and forego more dearer local products which I think is more likely to happen.




This is another common fallacy. The Chinese make a lot of high end goods as well as cheap ones. What do you call a $200 pair of Nike's? 



Whiskers said:


> Which brings us back to the 1/3 1/4 numbers that I mentioned I heard somewhere. I haven't done the maths yet but is it possible that some economist or agency has recalculated those GDP's to account for the US subprime crisis. I would think Investment, Consumption and Government spending, not to mention exports and imports will have different values.




????


----------



## Whiskers

dhukka said:


> Another infected by the insidious political correctness disease. Read some Socrates.




Probably the most important thing about Socrates is his work in establishing the practice of philosophical dialogue.



> And a fictional one does?




Think of it like a seasonal adjusted number... like in some economic numbers.



> Do I really need to point out why the above in bold doesn't make sense? Have a think about it.




Try me, I'm interested in your perception. 



> This is another common fallacy. The Chinese make a lot of high end goods as well as cheap ones. What do you call a $200 pair of Nike's?




Sure they do, but the operative point is that China makes them cheaper than the US, so the Walmart's etc have much more scope to discount their retail prices to maintain market volume and share when consumer spending becomes tighter.



> ????




Me too. I'm just sorry I missed who the quote came from because it is probably a significant concept depending on the context.


----------



## numbercruncher

Maybe now the muppets in Washington will workout how people have managed to spend more than they earn 




> NEW YORK (Fortune) -- One of the last sources of ready cash for homeowners looking to get money from their house appears to be shutting down and the results aren't likely to be pretty for the economy.
> 
> Last week, buried deep in the ugly details of Countrywide Financial Corp.'s (CFC, Fortune 500) earnings release, was the news that its $32.4 billion portfolio of prime HELOCs - home equity lines of credit - had begun to rapidly deteriorate. The reeling Calabasas, Ca.-lender was forced to take a $704 million charge related to homeowners' inability to pay back equity they extracted from their homes.




http://money.cnn.com/2008/02/01/news/companies/Boyd_HomeEquity.fortune/index.htm


----------



## Kauri

Libor rates are up across the board on the ECB's exit from providing dollar liquidity in its regular operations, the monoline bailouts are looking shaky, and the world of private equity is still bickering over warehoused deals causing indigestion on bank balance sheets.
    With the Vix still elevated enough at 24 to provide wind-shear while flying, the aforementioned negatives are just one air-pocket away from doing some damage to the recent recovery. And I have had to look up in Wiki to recollect what rain is.. since they have forecasted it for Perth
 Apart from all that.. all's fine in the world...
   Cheering
.............Kauri


----------



## dhukka

Whiskers said:


> Probably the most important thing about Socrates is his work in establishing the practice of philosophical dialogue.
> 
> 
> 
> Think of it like a seasonal adjusted number... like in some economic numbers.
> 
> 
> 
> Try me, I'm interested in your perception.




Socrates 'method' is one of critical enquiry. Maybe you're misinterpreting the word 'argument'. I mean argument as in 'making a case' or 'trying to persuade', not a disagreement.

I understand whay PPP is trying to achieve, however I think there are huge problems with estimating PPP (base years, identifying identical products, transport costs etc, hence why 3 agencies give such differing numbers.  I'm going to stick with short run equilibrium using exchange rates.  

If a currency was prerceived to be *30%* undervalued 5 years ago. Then let's say you gross up GDP numbers from 5 years ago by 30%. In subsequent years the currency is not grossly undervalued becasue of your gross up 5 year ago and thus the compounding effect is minimised. On the other hand if I don't adjust GDP from 5 years ago but I take into account the undervaluation over the same period and gross up GDP by the cumulative effect, say 50%, the outcome will be approximately the same. 



Whiskers said:


> Sure they do, but the operative point is that China makes them cheaper than the US, so the Walmart's etc have much more scope to discount their retail prices to maintain market volume and share when consumer spending becomes tighter.




Are you claiming that cash strapped American consumers are going to reduce spend on American made products and substitute with more cheaper Chinese goods and therefore the total spend on Chinese goods will remain about the same?


----------



## dhukka

Uncle Festivus said:


> So say's Jim Rogers...........
> 
> "Bernanke is printing huge amounts of money. He's out of control and the Fed is out of control. We are probably going to have one of the worst recessions we've had since the Second World War. It's not a good scene."
> 
> http://money.cnn.com/2008/01/30/news/international/okeefe_rogers.fortune/index.htm
> 
> Back to my research on Kondratieff!
> 
> http://www.kwaves.com/kond_overview.htm




This is one area where I think Jim Rogers has it wrong. The US money supply has barely moved in 2 years. Noone is printing huge amounts of money. Temporary repos used for liquiditiy purposes are just that, temporary, they are not permanent injections of new money or increases in the money supply.


----------



## Uncle Festivus

dhukka said:


> This is one area where I think Jim Rogers has it wrong. The US money supply has barely moved in 2 years. Noone is printing huge amounts of money. Temporary repos used for liquiditiy purposes are just that, temporary, they are not permanent injections of new money or increases in the money supply.




Maybe, but when will we know if these 'temporary' repo's become permanent 'grants', or if they get paid back at all? Bernanke is on record that he would deluge with fiat to prime the system - who really knows what's going on behind the scenes, as they aproach the abyss (Gordon Browns supposed comments).


----------



## dhukka

Uncle Festivus said:


> Maybe, but when will we know if these 'temporary' repo's become permanent 'grants', or if they get paid back at all? Bernanke is on record that he would deluge with fiat to prime the system - who really knows what's going on behind the scenes, as they aproach the abyss (Gordon Browns supposed comments).




Uncle, you can read what the Fed does with it's temporary repos here every week. 

Also have a read of John Hussman's piece on this topic, written about 6 weeks ago.


----------



## numbercruncher

> ISM Services Index Fell to 41.9 in January From 54.4
> 
> By Shobhana Chandra
> 
> Feb. 5 (Bloomberg) -- U.S. service industries unexpectedly contracted in January as the housing slump deepened and consumer spending cooled.
> 
> The Institute for Supply Management's non-manufacturing index, which reflects almost 90 percent of the economy, fell to 41.9, the lowest since October 2001, from 54.4 the prior month, the Tempe, Arizona-based ISM said. A reading of 50 is the dividing line between growth and contraction. The group also issued a new composite measure.




http://www.bloomberg.com/apps/news?pid=20601087&sid=a8HCjIXeA018&refer=home

More blood letting


----------



## Kauri

numbercruncher said:


> More blood letting




Still a little bit of blood.

Overnight news had a story about a gap of GBP12.5 bln in the finances of RBS and whether it has adequate capital. The inflation fighting ECB finds itself in a tough position this morning as the Eurozone Services PMI's plunged to levels not seen in years and perhaps in history. And the early release of the ISM Services showed that the index tumbled more than a dozen index points to 41.9 in January from 54.4 in December.

Are the pigeons coming home..
Cheers
...........Kauri


----------



## numbercruncher

What cracks me up is reading this word all the time



> Feb. 5 (Bloomberg) -- U.S. service industries *unexpectedly* contracted in January as the housing slump deepened and consumer spending cooled.




Seriously, no one expected it to rise did they, or even remain unchanged ?

Why is everything so unexpected in the current climate, didnt our survival as a species depend on expecting the unexpected, seems now people dont even expect the most likely, have we evolved into lesser beings ?

/rant off


----------



## dhukka

numbercruncher said:


> What cracks me up is reading this word all the time
> 
> 
> 
> Seriously, no one expected it to rise did they, or even remain unchanged ?
> 
> Why is everything so unexpected in the current climate, didnt our survival as a species depend on expecting the unexpected, seems now people dont even expect the most likely, have we evolved into lesser beings ?
> 
> /rant off




I think the depth of the plunge was unexpected. Of more interest is that the  the bright spots in the economy that the permabulls cling to are now falling apart. A couple of weeks ago it was the job market is fine because intial jobless claims are low, that was blown out of the water last week.

We've had others such as falling residential construction has been partly offset by non-residential. As we now know, non-residential is following residential into the toilet. 

The emerging markets decoupling thesis is all but dead.

The ISM maufacturing index had already shown contraction so the permabulls pointed out that manufacturing is only a small fraction of the economy and that the services sector was much more important. After today that argument has been shattered.

All they are left with is their exports are booming argument - how long till that one dies? Then the excuses will be dolled out. The media is too pessimistic, they talked consumers into a recession, it's all psychological. 

China! China! China!


----------



## Wysiwyg

Don`t y`all reckon that Microsoft takeover scene was a good cover.A drop lurking in the shadow.I wish i was trading that American index for real.


----------



## Uncle Festivus

Time for another "Famous last words" bit - 



> Lacker stressed that a recession was not his central forecast. Instead, he projected "sluggish growth for at least half a year before a gradual firming begins."
> However, "I can also see the possibility of a mild recession, similar to the last two we have experienced -- in other words, shallow and with a slow recovery," Lacker said.
> "What I don't expect is a more severe recession, like those we saw in 1982 or 1974," Lacker said.
> 
> -Jeffrey Lacker, president of the Federal Reserve Bank of Richmond




And he's a part of the junta that is supposedly in charge of pulling the world back from the abyss?


----------



## Aussiejeff

Chins up. The mighty US FED will cut interest rates by another 1% within a week.... then another 1% after that , then another 1% after that, then........ *ooops*....

*RUN FER THA HILLS, PARDNERS!!!!"



AJ


----------



## Kauri

major US bond insurer *MBIA was put back under review for a downgrade* by Fitch Ratings less than a month after affirming the grade with a stable outlook. Fitch said the reconsideration was due to higher assumptions on MBIA"s losses on sub-prime related securities. 
   deadlines are approaching for the bond-insurers efforts to raise enough capital to retain triple-A ratings from the major ratings agencies. If it becomes apparent that more downgrades are inevitable, it will put an already stressed bond market under heavy pressure.


----------



## Kauri

there has been a rumour floating around today that a European bank is getting ready to reveal very large sub-prime related losses that could put the ECB under more pressure to shift from a hawkish bias if true. mmm, aye aye


----------



## IFocus

Kauri said:


> And I have had to look up in Wiki to recollect what rain is.. since they have forecasted it for Perth




I was in San Reno yesterday arvo fixing my mother in laws sprinklers ironically in the rain, Bali comes to Mandurah. Hoping for more today.


----------



## sassa

How about this for a theory??

Expect Fed to lower Dow to 8000 points.


Consumers should expect a deep recession, triggered by the "stealth methodology" of the Federal Reserve to "depress" the market even while lowering interest rates in an ostensible effort to stimulate economic growth, an economic analyst is charging.

"The Federal Reserve is directly involved in manipulating the stock market," said economic analyst Mike Bolser in a telephone interview with WND yesterday.

The New York Stock Exchange finished the day down 108.03 points, closing at 12,635.16, much as Bolser predicted, despite recent emergency Fed rate cuts of 1.25 percentage points aimed at stimulating the economy.

"Fed wants the Dow Jones Industrial Average and other financial indicators to descend in a managed way," Bolser said. "The Fed wants to drive the DJIA toward the 8,000 level, or below, in order to help create a deep recession which will have the effect of slowing consumption across the board, and dampening the otherwise harmful effects of inflation.

"A falling DOW is only one element of the recession effects of the excessive Fed-created housing and credit creation, whose bubbles are now bursting," he added.

"Without this recession, we would be on quick trip to hyper-inflation," Bolser, the author of an internationally followed newsletter published in conjunction with his InterventionalAnalysis.com website, said, "and the Fed wants to prevent this."

In his twice-daily subscription newsletter, Bolser has devised a quantitative methodology for utilizing Federal Reserve repurchase agreements to predict upward and downward movements of the DJIA, measured on a 30-day moving average.

"Ultimately, the government is in the business of inflating the dollar," Bolser said, "so the Fed is trying to engineer a recession, in order to cushion the pernicious effects of its own inflation."

"In my view, the government intentionally desires a deep recession not unlike that of the 1930s," he continued. "The Fed, however, dissembles, attempting to display the opposite impression with its rate cuts."

"With this strategy, the Fed hopes we won't experience the extreme 'stag-flation' we had in the late-1970s," he argues. "The Fed hopes to induce a recession to manage downward stock prices and commodity prices, including oil, gold, copper, and lumber, as well as the overall consumer demand for retail goods."

"Stag-flation" is an unusual economic situation combined when economic stagnation is combined with inflation, much as the economy is currently experiencing, such that economists fear we are entering a recession while food and energy prices continue to rise sharply


----------



## numbercruncher

That makes sense to me, prune the tree to let in new regrowth, bet the dodgy rat pack short it all the way down too


----------



## explod

sassa said:


> How about this for a theory??
> 
> Expect Fed to lower Dow to 8000 points.
> 
> 
> Consumers should expect a deep recession, triggered by the "stealth methodology" of the Federal Reserve to "depress" the market even while lowering interest rates in an ostensible effort to stimulate economic growth, an economic analyst is charging.
> 
> "The Federal Reserve is directly involved in manipulating the stock market," said economic analyst Mike Bolser in a telephone interview with WND yesterday.
> 
> The New York Stock Exchange finished the day down 108.03 points, closing at 12,635.16, much as Bolser predicted, despite recent emergency Fed rate cuts of 1.25 percentage points aimed at stimulating the economy.
> 
> "Fed wants the Dow Jones Industrial Average and other financial indicators to descend in a managed way," Bolser said. "The Fed wants to drive the DJIA toward the 8,000 level, or below, in order to help create a deep recession which will have the effect of slowing consumption across the board, and dampening the otherwise harmful effects of inflation.
> 
> "A falling DOW is only one element of the recession effects of the excessive Fed-created housing and credit creation, whose bubbles are now bursting," he added.
> 
> "Without this recession, we would be on quick trip to hyper-inflation," Bolser, the author of an internationally followed newsletter published in conjunction with his InterventionalAnalysis.com website, said, "and the Fed wants to prevent this."
> 
> In his twice-daily subscription newsletter, Bolser has devised a quantitative methodology for utilizing Federal Reserve repurchase agreements to predict upward and downward movements of the DJIA, measured on a 30-day moving average.
> 
> "Ultimately, the government is in the business of inflating the dollar," Bolser said, "so the Fed is trying to engineer a recession, in order to cushion the pernicious effects of its own inflation."
> 
> "In my view, the government intentionally desires a deep recession not unlike that of the 1930s," he continued. "The Fed, however, dissembles, attempting to display the opposite impression with its rate cuts."
> 
> "With this strategy, the Fed hopes we won't experience the extreme 'stag-flation' we had in the late-1970s," he argues. "The Fed hopes to induce a recession to manage downward stock prices and commodity prices, including oil, gold, copper, and lumber, as well as the overall consumer demand for retail goods."
> 
> "Stag-flation" is an unusual economic situation combined when economic stagnation is combined with inflation, much as the economy is currently experiencing, such that economists fear we are entering a recession while food and energy prices continue to rise sharply




Hunk and bloody fckn doooolar ..,   is not food and energy prices the substance of the whole show (economic).  In maslows Law the only other is shelter) Call it what you like technically but we are going down the tubes....  What I would like to hear about are some clue to solutions


----------



## Awesomandy

My theory this time: Chinese New Year. With the eastern half of the world basically shut (or has very minimal trading) for the next few days, and the extreme volatility of current markets, I would guess that quite a few eastern funds would just stick a fair portion of their position into bonds/cash for a little while.


----------



## Kauri

US retailers are reflecting the quick pace of the US slowdown with apparel company Polo Ralph Lauren warning today that the swift change in spending patterns in the US was "almost unprecedented." Also just announced from Macy"s is a fall in same-store sales of 7.1% in January followed by news that they will consolidate their divisions, *resulting in job losses over 2,500. 
*        In the financial sector, there are more ratings downgrades with Fitch placing 260 ABS bonds on ratings watch negative.
  Lots of these small, relatively speaking, job losses lately cumulatively don't look good projecting forward to next NFP
Cheers
.........Kauri


----------



## ithatheekret

Awesomandy said:


> My theory this time: Chinese New Year. With the eastern half of the world basically shut (or has very minimal trading) for the next few days, and the extreme volatility of current markets, I would guess that quite a few eastern funds would just stick a fair portion of their position into bonds/cash for a little while.





Except for Tokyo , .........  do they ever shut ? Tokyo and the Dow have one thing in common , both never close ......... technically speaking 

I was just thinking . 77 , 87 , 97 and 2007 were all bad years really .

Who said 7 is a lucky number ? 8's aren't much better 78, 88, 98, 2008 .

The V 8 years ?


----------



## Aussiejeff

explod said:


> Hunk and bloody fckn doooolar ..,   is not food and energy prices the substance of the whole show (economic).  In maslows Law the only other is shelter) Call it what you like technically but we are going down the tubes....  What I would like to hear about are some clue to solutions




.... some clue to "solutions"..?

So, you actually think that "someone" out there has the clout & where-withall to unravel this world-wide mess? Hmmm... the way I see it:

(1) *WE* (the world's population) have allowed this mess to be created in the first place (through basic human greed). The way I see it, the advent of hi-speed world-wide internet broadband has had the appalling effect of turning the world's finance markets into the Ultimate Casino, where Trillions of people's hard-earned $ can be gambled by lunatics (eg: the PPT) and filthy rich merchant bankers & rogue traders every day through massive bets on "hedges" and "derivatives" and "futures" and "sentiment" - all totally worthless aspirations in terms of humankinds REAL basic needs such as, "security" (both financial and personal), "shelter", "food", "sustainable environments" etc...     

(2) *WE* (the world's population) appear to have no effective power or answers to stop what is happening with the un-controlled bankrupting of the planet. If we had a clue, we wouldn't have let this whole sorry, volatile mess develop in the first place.

(3) *WE* (the world's population) will therefore likely have to endure the pain of a deep, deep, depression/recession before there is any ultimate hope of a turn-around. Even then, what powers would we have to prevent the whole messy cycle from kicking off again?

Chiz,



AJ


----------



## treefrog

Aussiejeff said:


> .... some clue to "solutions"..?
> 
> So, you actually think that "someone" out there has the clout & where-withall to unravel this world-wide mess? Hmmm... the way I see it:
> 
> (1) *WE* (the world's population) have allowed this mess to be created in the first place (through basic human greed). The way I see it, the advent of hi-speed world-wide internet broadband has had the appalling effect of turning the world's finance markets into the Ultimate Casino, where Trillions of people's hard-earned $ can be gambled by lunatics (eg: the PPT) and filthy rich merchant bankers & rogue traders every day through massive bets on "hedges" and "derivatives" and "futures" and "sentiment" - all totally worthless aspirations in terms of humankinds REAL basic needs such as, "security" (both financial and personal), "shelter", "food", "sustainable environments" etc...
> 
> (2) *WE* (the world's population) appear to have no effective power or answers to stop what is happening with the un-controlled bankrupting of the planet. If we had a clue, we wouldn't have let this whole sorry, volatile mess develop in the first place.
> 
> (3) *WE* (the world's population) will therefore likely have to endure the pain of a deep, deep, depression/recession before there is any ultimate hope of a turn-around. Even then, what powers would we have to prevent the whole messy cycle from kicking off again?
> 
> Chiz,
> 
> 
> 
> AJ




spot on AJ, spot on..........unfortunately.


----------



## ithatheekret

Hang on ...... what's with the *" WE "* ?

I'm innocent ask my barrister .


----------



## treefrog

WBC exchange release 5.2.08 - worth reading....

This pack provides an update of Westpac’s current position and provides
additional information and background on sectors that have subsequently
come under stress from the continuing difficulties in global capital
markets.

• High delinquencies in US sub-prime mortgages originated in 2006 causes sharp declines in the value of mortgage-backed securities.
• Problems spread to structured securities backed by sub-prime loans, including collateralised debt obligations (CDOs) and residential mortgage-backed securities (RMBS) and asset-backed commercial paper (ABCP) conduits. Structured investment vehicles (SIVs) holding US subprime
assets also affected.
• Investors exercising caution towards complex, risky or non-standard structured products.


• Investor risk aversion spills over to a key source of short-term funding - the commercial paper (CP) market - leading to a global tightening in liquidity.
• FX markets and equity markets also impacted by increased volatility, as investment positions were liquidated to meet investor redemptions.


• Prolonged dislocation in capital markets puts stress on corporates seeking re-financing, with the situation compounded by fears of US recession, slowing in the UK, Japanese and other economies across the globe.
• Contagion spreading to monoline insurers and the paper they support.
• Beginning to see some highly geared companies, and those requiring large refinancing come under scrutiny due to perceived difficulty in sourcing funds.
• Credit risk continuing to re-price higher.

simplified summary: T-bones will be on special for a while yet


----------



## refined silver

Posted On: Wednesday, February 06, 2008, 8:06:00 PM EST

The System Is Broken     Author: Jim Sinclair

Dear Comrades in Golden Arms (CIGAs),

There is no question about this fact regardless of the camouflage spin. The system has been derailed by the popular and profitable OTC derivatives that are now melting down, taking institutions and people along with it.

Let me explain to you why there is so much fear and distrust between financial institutions, then you will see why the one time hand out of money and interest rates dropping to zero have no hope of doing much more than giving one month of some improved statistics and a decade of hyper-inflation.

Lets assume you have entered into an OTC derivative whereby you own (long) the Dow Jones index at 10,000. You are still in the position. Today’s action is your last straw. You decide to take your $1 billion profit.

There is no OTC derivative clearinghouse. You do not get paid every day as a winner, nor do you pay out every night when losing. No one in an OTC derivative has a margin maintenance requirements. You just hold a special performance contract upon which the financial integrity depends on the loser in the arrangement.

Lets assume you have an OTC derivative that results in owning the profit between the Dow index at 10,000 and tonight's closing of that index. Tomorrow you inform the party obligated to deliver you the Dow index at 10,000 that you wish to close the obligation. You would anticipate the other side would simply buy you out of the obligation, having hedged their obligation somewhere else.

The problem arises when the party to the arrangement required to perform simply cannot because of outrageous markdowns and the flight of capital. They have quite simply lost the ability to make good on these many obligations.

So there you are with a one billion dollar profit, marked to model, taken into your earnings statement that does no exists.

As a result both you and your counter-party have problems financially with the need to restate your financials.

I have simplified this so that it is understandable.

As a result of this problem with derivatives triggered by the meltdown of real-estate structured products, no financial institutions trust any other or their paper.

The OTC derivative merchants have turned out to be the merchants of financial death, hidden carefully from the eyes of the public.

Now everyone holding a derivative contract either with a profit or loss fears for its consequences. The loser fears the bankruptcy judge. The winner fears his winnings are phantom gains never to be realized. Every financial entity fears every other financial entity to the tune now of a notional value of over $500 trillion.

I recently did an article that demonstrated when a derivative fails, notional value becomes total value. That means the potential problem is over $500 trillion.

No reduction of interest rates, even to zero, can make those that distrust each other believers again.

No one-time gift of money to the hypnotic public will make those that distrust each other believers again.

The CDO market no longer exists. The commercial paper marker is in shambles.

The credit markets are trembling over the needful reduction in the rating of the entities that have guaranteed trillions of dollars of debt in many forms. These entities granted OTC derivatives named default derivatives that are soon to be publicly worthless.

Today it was announced rating companies are considering their methods of rating to distinguish firms that granted derivative products. That might fool the public, but not the skeptical international banking firms. Therefore this game will not make those that distrust each other believers again.

The problem has no practical solution. The methods to make the hypnotic public think the problem is now solved or will be soon will solve nothing and will, without regard for the level of business activity, bring hyper-inflation. 

I have told you for months that “This is it” and it certainly is.

Gold will go to $1650 and the US dollar to .5200.


----------



## refined silver

ithatheekret said:


> Hang on ...... what's with the *" WE "* ?
> 
> I'm innocent ask my barrister .




Amen!


----------



## numbercruncher

refined silver said:


> I recently did an article that demonstrated when a derivative fails, notional value becomes total value. That means the potential problem is over $500 trillion.





Bah whats half a quadrillion , next theyll move up to quintillion onto duodecillion and novemdecillion then bust their calculators and declare the planet insolvent 

Seriously they say free markets are the best, but look at this mess , its what happens when things go unregulated I guess !


----------



## refined silver

numbercruncher said:


> Bah whats half a quadrillion , next theyll move up to quintillion onto duodecillion and novemdecillion then bust their calculators and declare the planet insolvent
> 
> Seriously they say free markets are the best, but look at this mess , its what happens when things go unregulated I guess !




Yeah 500 trillion thats the BIS number for OTC derivatives. And its still increasing exponentially. The pack of cards is coming down and paper money is burning. Weimar Republic anyone??


----------



## numbercruncher

News from that last Bastion of Consumerism, Walmart .....



> Wal-Mart (WMT, Fortune 500), the world's largest retailer, said January sales at its stores open at least a year rose just 0.5% versus its own forecast for a 2% increase for the month.




http://money.cnn.com/2008/02/07/news/economy/Jan_retailsales/index.htm

Wonder if that growth even exceeeded Inflation for the month ? 

Surely they can offically call recession now !


----------



## Kauri

FRB Atlanta's Lockhart (non-voter, moderate to hawkish) says what 
doesn't *kill *the financial sector will make it stronger.   

signs of a global slowdown increase. Fuelling the pressure was the news after-hours yesterday evening from Cisco that a marked slowdown in US and European orders had emerged. The news underpins the view that the slowdown is not isolated to the US. Further pressuring stocks is the poor news from same-store sales, initiated by the poor Macy's report yesterday. The bad news has continued with Wal-Mart reporting a 0.5% rise in sales compared to expectations of a 2.0% rise. Nordstrom sales dropped sharply by 6.6% compared to analysts estimates of -0.7% and Dillard"s fell 12% against estimates of 5.3%.


----------



## ithatheekret

Bob Pisani I think that's his name just labelled us all closet analysts .
So he's a closet specialists now , just cost CNBC a subscription .


----------



## wayneL

ithatheekret said:


> Bob Pisani I think that's his name just labelled us all closet analysts .
> So he's a closet specialists now , just cost CNBC a subscription .



I have only one thing to say about the likes of Bob Pisant:

Pfffffffffffffft!


----------



## ithatheekret

Silly comment by him really , it's a stock market channel . Watched by techs and fundies , but to insult them is plain stupid .

The customer is not always right , but you don't insult them on a global tv channel , just because all your calls are wrong .

He needs a nice corner with a pointy hat and something big shoved down his gob ......... like the beige book .


----------



## wayneL

ithatheekret said:


> Silly comment by him really , it's a stock market channel . Watched by techs and fundies , but to insult them is plain stupid .
> 
> The customer is not always right , but you don't insult them on a global tv channel , just because all your calls are wrong .
> 
> He needs a nice corner with a pointy hat and something big shoved down his gob ......... like the beige book .



But thats what they do... insult our intelligence on a daily basis. 

I would never willingly pay for that crap. Had it when I was trading (briefly) at a firm and ended up turning that sh*t off; just asinine.


----------



## theasxgorilla

ithatheekret said:


> Bob Pisani I think that's his name just labelled us all closet analysts .
> So he's a closet specialists now , just cost CNBC a subscription .




What a moron...closet infers the wrong thing.  Is anyone here ashamed to admit to being an analyst?  Hack, amateur, wanna-be maybe...but closet?  Not I.


----------



## Kauri

Moody"s had cut the AAA rating of SCA"s bond insurance units(monoline). As has been a typical ploy of ratings agencies in recent sessions, the ratings changes all seem to come in the last minutes of trading.   
Cheeers
...........Kauri


----------



## treefrog

theasxgorilla said:


> What a moron...closet infers the wrong thing.  Is anyone here ashamed to admit to being an analyst?  Hack, amateur, wanna-be maybe...but closet?  Not I.




gotta sound more academic than analyst gor, so need to do what the academics do - take a word with a clear simple meaning and add "ology" to it, so fer us traders who use t/a, fundamentals, and media sentiment a good one is *equitologist* - which means the study and trading of equities or *equitology*
how do I know this? - because I made it up!


----------



## dhukka

For those that believe Fed interest cut rates are a cure-all for the economy. Check out this excerpt from Philadelphia Fed President Charles Plosser's speech yesterday;



> "Although it might be tempting to think that monetary policy is the solution to most, if not all, economic ills, this is not the case. I think it is particularly important, for example, to recognize that monetary policy cannot solve all the problems the economy and financial system now face. It cannot solve the bad debt problems in the mortgage market. It cannot re-price the risks of securities backed by subprime loans. It cannot solve the problems faced by those financial firms at risk of being given lower ratings by rating agencies because some of their assets are now worth much less than previously thought. The markets will have to solve these problems, as indeed they will. But it will take some time."


----------



## sam76

anyone had a look at the Futures in Europe 




DJStoxx 600 314.14 -6.21 -1.94 
FTSE 100 5,724.10 -151.30 -2.58 
DAX 30 6,733.72 -113.79 -1.66 
CAC 40 4,723.80 -92.63 -1.92 
S&P/MIB 33,227.00 -629.00 -1.86


----------



## nomore4s

sam76 said:


> anyone had a look at the Futures in Europe
> 
> 
> 
> 
> DJStoxx 600 314.14 -6.21 -1.94
> FTSE 100 5,724.10 -151.30 -2.58
> DAX 30 6,733.72 -113.79 -1.66
> CAC 40 4,723.80 -92.63 -1.92
> S&P/MIB 33,227.00 -629.00 -1.86





Aren't they last nights figures?


----------



## Buffettology

dhukka said:


> For those that believe Fed interest cut rates are a cure-all for the economy. Check out this excerpt from Philadelphia Fed President Charles Plosser's speech yesterday;




Good post Dhukka.

This is why I am sitting on the sidelines.  A lot of things have to settle before we can get back to the bullmarket ways, but there are sure to be some good buys as this plays out.  However, just how long will that take, a year, two?

Monetary policy can also not cure a slow growth, high inflationary economy.  Which makes it a catch 22.

Here is a good fact also:

It is estimated output growth falls by 1/3 of a percent in the first and second years, and 1-6 of a percent in the third year, after a 1 percent increase in the short term interest rate (IR) and vice-versa.

Therefore, most of the effects of these recent cuts in the US wont be seen until a full year +.


----------



## ithatheekret

theasxgorilla said:


> What a moron...closet infers the wrong thing.  Is anyone here ashamed to admit to being an analyst?  Hack, amateur, wanna-be maybe...but closet?  Not I.





It also sounded like ......" trust us not yourselves ". Yeah right Bob .

Amazing when we are witnessing the demise of the US financial system due to a thorough breach of integrity . That breach of integrity has seen an entirely new wave of persons looking at charts , trying to find a trade they can trust . 

Strewth if the bloke can't figure out the entire ordeal is about  _TRUST & PROPRIETY_ , then he's a sorry excuse ,  because therein lies his answer .

The closet is where he belongs , he's been reporting the events and it just hasn't registered with him and he needs to reassess the situation with proper regard . Not insult the broad base of CNBCs clientele .

If money talks and BS walks , he'd best start running . He wants limelight fine but we only have quicklime for him , hang on a tic , I'll just get a bucket of water too .


----------



## numbercruncher

Just another little tidbit of recessionary evidence 



> NEW YORK ”” Here's a sign of how shaky the economy has become: Wal-Mart says its shoppers are redeeming their holiday gift cards for basic items ”” pasta sauce, diapers, laundry detergent ”” instead of iPods or DVDs.




http://www.chron.com/disp/story.mpl/headline/biz/5524018.html


----------



## Real1ty

numbercruncher said:


> Just another little tidbit of recessionary evidence
> 
> 
> 
> 
> NEW YORK — Here's a sign of how shaky the economy has become: Wal-Mart says its shoppers are redeeming their holiday gift cards for basic items — pasta sauce, diapers, laundry detergent — *instead of iPods or DVDs.*
> 
> 
> 
> 
> http://www.chron.com/disp/story.mpl/headline/biz/5524018.html
Click to expand...



Oh the horror


----------



## Wysiwyg

numbercruncher said:


> Just another little tidbit of recessionary evidence




Good find,


----------



## Kauri

*rumour* is that there is a large CDO unwind going on, *perhaps  * at a 
French bank.  The German bank IKB too is in the news as it seeks up to EUR 2 bln in capital. life is hard if you don't weaken...
Cheers
.........Kauri


----------



## chops_a_must

Kauri said:


> *rumour* is that there is a large CDO unwind going on, *perhaps  * at a
> French bank.  The German bank IKB too is in the news as it seeks up to EUR 2 bln in capital. life is hard if you don't weaken...
> Cheers
> .........Kauri



Looks like it's Sock Gen.

Another trader or ten are under investigation. Playing pin the loss on the trader. Little do they know the donkey in this case is Sock Gen.

Did anyone find it very suspicious they were one of the ones wanting to bail out to bond insurers?


----------



## numbercruncher

> Bear Stearns Is `Short' Subprime Mortgages $1 Billion (Update2)
> 
> By Bradley Keoun
> 
> Feb. 8 (Bloomberg) -- Bear Stearns Cos., the U.S. securities firm that posted its first-ever loss last quarter on mortgage writedowns, has more than $1 billion of trades that profit if subprime home loans and bonds continue to deteriorate.
> 
> The ``short'' positions on subprime mortgage securities increased from $600 million at the end of November, Chief Financial Officer Sam Molinaro said today at an investor conference in Naples, Florida. The company also reduced its holdings of so-called collateralized debt obligations and underlying bonds, Molinaro said.




http://www.bloomberg.com/apps/news?pid=20601087&sid=a.2mZwwn1WtU&refer=home


You can understand why, still tons more resets (amd carnage) coming


----------



## Kauri

increasing liquidity crisis with banks in Russia with officials downplaying the talk but reports that the government may have to use the Pension Fund to maintain liquidity.

the broad-based emergence of more credit concerns over Fitch warnings and fresh GMAC ResCap jitters, let alone the rumors and speculation over European assets . Adding to the ongoing barrage of credit news is the move by S&P to cut 63 ratings of $5.218 bln of US CDOs of ABS


----------



## ithatheekret

Kauri said:


> *rumour* is that there is a large CDO unwind going on, *perhaps  * at a
> French bank.  The German bank IKB too is in the news as it seeks up to EUR 2 bln in capital. life is hard if you don't weaken...
> Cheers
> .........Kauri




Nothing worse than not knowing what the subsiduaries have done , especially for a bank . I remember them hoisting the profit flag last year , in November I think . To be somewhere in the precinct of $400M if I recall ..........

Then Deutsche Industriebanks shares fell when the news hit the floors and the shares hit the fans . Utterly amazing when we consider the pile of reforms that have been rubber stamped all the way . 

A German State bank came to the rescue , I don't know who going to rescue the State bank . To say the matter is complex is an understatement in the least . This financial tsunami has spread across the pond and hit every target along the way . The derivative exposure faced has never been seen before it's a first in scale , whilst not within the realms of dynamics , the sheer size of the exposure is massive . Sure we have seen a spout of pure absorbtion of the risk, but we must also consider that we have never seen the risk levels such as we have ........ ever before .

The structuring plans have crumbled , but the spinners keep on making their wool , the banks knit it into knots . Northern Rock is now No Rocks . The Asian players , learnt some lessons in the 90's , Japan had it's semaphores in the 80's and ignored all calls to let it crash and burn , many of those calls from the same people now , trying to advert the current crisis in the same way as they told Japan not to . Japan went deaf then , it seems the US is now going one better on each count , going deaf dumb and blind to reality .

Derivatives I thought were used to divert risk , they have become the risk now . 

So how did they get in such a mess of tangles ? 

They relied on ratings ! 

The motto do your own research was tossed out the window and with it went the profits and the safety nets that were strung up to protect them .

The last century is full of examples , but nobody seems to have noticed , well those that work in the top floors of banks anyway .

If so many lessons are out there to take heed from , how could they possibly not have noticed ?

I think it's a matter of transparency and denial . IKB is a prime example .


----------



## Kauri

alls well with the world.. time to plow back in with your ears pinned back...

President Bush commented that a recent report that has just been completed by his staff reveals that the economy is *"structurally sound*", but is facing short term uncertainties. It's one in the eye for the doom and gloomsters coming from that widely accepted economists economist...
Cheers
.........Kauri


----------



## GreatPig

Kauri said:


> the economy is "structurally sound"



Just like the twin towers were...

GP


----------



## explod

GreatPig said:


> Just like the twin towers were...
> 
> GP




Yer lucky dat Big Chief Burnin Bush aint pally wid de sherrif of yo'd hav'ta leave town with comments like dat paal.

Becomin a bit cracked, "wees all saved agin"


----------



## Whiskers

GreatPig said:


> Originally Posted by Kauri
> the economy is "structurally sound"
> 
> 
> 
> 
> 
> Just like the twin towers were...
> 
> GP
Click to expand...



What isn't structurally sound is what's between his ears!

If for nothing else I like watching Letterman for the famous moments in presidential speeches segment. Can't believe the 'absent-minded moments' this bloke has!


----------



## ithatheekret

The problem is idiopathic to them . 
Just like they never really understood Y2K , again they don't understand the situation in the credit markets . Many holding structured vehicles don't know what they are worth , or how much they have lost yet . The unknown factor just keeps being avoided by spinners that would have us believe it's all under control .

If it doesn't have a low Beta , I don't want to know personally , if I want risk , I can get that with forex .


----------



## Kauri

To be ann. at US a.m by US treasury
Six major U.S. banks are to take part in a program to help borrowers in the U.S. called project lifeline. The plan will allow seriously overdue borrowers to suspend foreclosures for 30 days, to enable lenders to work out a viable repayment option. Buys a bit of time... for the banks... avoid those dreaded writedowns.. temporarily... untill they take the new ball and it doesn't spin as well... but hey.. the Dow and S+P will probably fly.. for a while..
Now to work out and position in FX.. gold et al...
Cheers
..........Kauri


----------



## numbercruncher

> Feb. 11 (Bloomberg) -- American International Group Inc., the world's largest insurer by assets, fell the most in 20 years in New York trading after its auditor found faulty accounting may have understated losses on some holdings.
> 
> So-called credit-default swaps issued by AIG, which protect fixed-income investors against losses, declined by $4.88 billion in value in October and November, four times more than previously disclosed, the company said today in a regulatory filing. AIG's auditors found ``material weakness'' in its accounting for the contracts, *and the firm doesn't know what they were worth at the end of 2007*, the filing said.




http://www.bloomberg.com/apps/news?pid=20601103&sid=axfNBsHVBagY&refer=news


Seems noone knows whats anythings worth now-a-days !


----------



## Whiskers

Kauri said:


> To be ann. at US a.m by US treasury
> Six major U.S. banks are to take part in a program to help borrowers in the U.S. called project lifeline. The plan will allow seriously overdue borrowers to suspend foreclosures for 30 days, to enable lenders to work out a viable repayment option. Buys a bit of time... for the banks... avoid those dreaded writedowns.. temporarily... untill they take the new ball and it doesn't spin as well... but hey.. the Dow and S+P will probably fly.. for a while..
> Now to work out and position in FX.. gold et al...
> Cheers
> ..........Kauri




This is one of the initiatives that I saw coming when I said some people are suffering from a bit of hypochondria with the subprime fallout. There will be more to come, because people do whatever they have to do to mitigate bad consequences as much as they can. 

It's all in the mindset. I see so many people able to recite all manner of statistics and information, but are effectively oblivious to the mindset of the people who affect their circumstances. One thing I have found about the most successful people is their natural or learnt psychology skills, (intuition) as in being able to perceive the mindset of other people to meet their needs or get a step ahead of them whatever the situation is.

Back on topic; sure it doesent resolve the intrinsic problems in the US, but initiatives like this and more interest rate cuts ( geez I can feel dhukka climbing all over me already ) will effectively deminish any severe knock-on consequences for the rest of the world and Aus in particular.

http://biz.yahoo.com/ap/080211/mortgage_mess_rescue.html


----------



## Kauri

Whiskers said:


> This is one of the initiatives that I saw coming when I said some people are suffering from a bit of hypochondria with the subprime fallout. There will be more to come, because people do whatever they have to do to mitigate bad consequences as much as they can.
> 
> It's all in the mindset. I see so many people able to recite all manner of statistics and information, but are effectively oblivious to the mindset of the people who affect their circumstances. One thing I have found about the most successful people is their natural or learnt psychology skills, (intuition) as in being able to perceive the mindset of other people to meet their needs or get a step ahead of them whatever the situation is.
> 
> Back on topic; sure it doesent resolve the intrinsic problems in the US, but initiatives like this and more interest rate cuts ( geez I can feel dhukka climbing all over me already ) will effectively deminish any severe knock-on consequences for the rest of the world and Aus in particular.
> 
> http://biz.yahoo.com/ap/080211/mortgage_mess_rescue.html




  The planned mini-bailout of the monolines seems to have failed, possibly because the real sums needed were beyond the bailees who were/are desparately seeking bailouts themselves... this is just something to replace that in the "talking heads" spin arsenal... but really it is only delaying tactics.. putting off the day of reckoning... but hey... if one was ahead of the game it gave an opportunity to get set..  I hope.. 
  now... what comes next??? any takers???
Cheers
........Kauri


----------



## dhukka

Whiskers said:


> Back on topic; sure it doesent resolve the intrinsic problems in the US, but initiatives like this and more interest rate cuts ( geez I can feel dhukka climbing all over me already ) will effectively deminish any severe knock-on consequences for the rest of the world and Aus in particular.




Whiskers,

I have no objection to people making statements like these if they can support them. However you supply absolutely no evidence for such a claim. You may well be right, but without any support it just sounds like wishful thinking. 

Someone posted earlier on another thread a link to Nouriel Roubini's latest piece on the *The Twelve Steps to Financial Disaster* which paints a pretty grim picture of the global economy, much worse than I expect. However regardless of whether you agree with him you have to admire the depth of his arguments.


----------



## sassa

Warren Buffet's "lifeline" to the muni-bond market had nervous investors grabbing his offer and shooting the market up.But when looked at,commentators have different ideas-

People weren't fleeing [the market] because of problems in the muni-bond business. Default rates are less than 1%, so reinsuring the muni-bond business is a no-brainer for anybody," he said, calling into question the longevity of enthusiasm over Buffet's bid.

As a potential way out of the bond-insurance mess, this buoyed investor optimism and boosted stocks ahead of the opening bell," commented analysts at Action Economics. 
'I really don't think this does much for anyone but Warren Buffett.'
”” Kevin Giddis, Morgan Keegan & Co. 
While helping lift sentiment, Boockvar and others said that, in reality, Buffett's move would do little to stem the damage in the credit markets. 
"I really don't think this does much for anyone but Warren Buffett, as the thought of an insurer 'giving away' its best business and only means of surviving this mess in return for the rest of its 'junk in the trunk' should leave them cold," said Kevin Giddis, fixed-income analyst at Morgan Keegan & Co.


----------



## Kauri

With its normal impeccable timing and determination to not spoil a good party, just after the stock market closed, S&P came out with mostly "unfavorable" actions on US mortgage insurers and subsidiaries. These include revising the outlook for Genworth Financial from stable to negative. PMI Group has been placed on CreditWatch with negative implications and has lowered its rating on Radian Group and may cut further. S&P has also put Triad Guaranty Insurance Corp on CreditWatch with a negative outlook with a negative outlook for United Guarantee Corp as well. 

Cheers
...........Kauri


----------



## Kauri

Kauri said:


> With its normal impeccable timing and determination to not spoil a good party, just after the stock market closed, S&P came out with mostly "unfavorable" actions on US mortgage insurers and subsidiaries. These include revising the outlook for Genworth Financial from stable to negative. PMI Group has been placed on CreditWatch with negative implications and has lowered its rating on Radian Group and may cut further. S&P has also put Triad Guaranty Insurance Corp on CreditWatch with a negative outlook with a negative outlook for United Guarantee Corp as well.
> 
> Cheers
> ...........Kauri





and a latecomer to the sales party.. in comes  S&P who is cutting 66 ratings on US CDO of ABS transactions worth $6.751 bln.


----------



## Kauri

HoHum... the market will fly...
 UBS Q4 Net Loss CHF12.45 Bln, $13.7 Bln Subprime Losses


----------



## numbercruncher

Heres the story for those Interested 



> Feb. 14 (Bloomberg) -- UBS AG posted the biggest ever loss by a bank in the fourth quarter after $13.7 billion in writedowns on securities infected by U.S. subprime mortgages.
> 
> Europe's largest bank by assets had a net loss of 12.5 billion Swiss francs ($11.3 billion), compared with a profit of 3.4 billion francs a year ago, the Zurich-based company said today. UBS reported on Jan. 30 a preliminary loss of about 12.5 billion francs for the period, after increasing writedowns.
> 
> The company reiterated that it expects 2008 will be ``another difficult year.'' Rising U.S. subprime-mortgage defaults led to more than $145 billion in writedowns and loan losses at the world's biggest financial companies. The Group of Seven nations estimates the markdowns may swell to $400 billion, German Finance Minister Peer Steinbrueck said on Feb. 9.
> 
> ``The rot is spreading to other residential areas,'' ABN Amro Holding NV analysts Kinner Lakhani and Omar Fall said in a note to clients on Feb. 6. They recommend investors ``avoid'' UBS shares and forecast as much as $10.8 billion of possible further writedowns at the bank




http://www.bloomberg.com/apps/news?pid=20601087&sid=ahfcVB8YJ80Q&refer=home

Will be interesting to see the markets reaction to this toxic blowup  ( apparently Jan 30 had already announ. Prel. loss, so maybe no reaction ? )


----------



## Real1ty

numbercruncher said:


> Heres the story for those Interested
> 
> 
> 
> http://www.bloomberg.com/apps/news?pid=20601087&sid=ahfcVB8YJ80Q&refer=home
> 
> Will be interesting to see the markets reaction to this toxic blowup  ( apparently Jan 30 had already announ. Prel. loss, so maybe no reaction ? )




The futures aren't showing any adverse reaction........yet


----------



## ithatheekret

Of course ABN is straight out with a bit of jargon . Mob of crumbed patties they are ............ got a flat tyre ? Need a heart pump ? ABN is a one stop shop .


----------



## CamKawa

numbercruncher said:


> Heres the story for those Interested
> 
> 
> 
> http://www.bloomberg.com/apps/news?pid=20601087&sid=ahfcVB8YJ80Q&refer=home
> 
> Will be interesting to see the markets reaction to this toxic blowup  ( apparently Jan 30 had already announ. Prel. loss, so maybe no reaction ? )



Maybe not that much of a reaction because according to MarketWatch "The fourth-quarter loss and total write-down were in line with a warning the bank issued in January." so this might already be priced in.
http://www.marketwatch.com/news/sto...x?guid={437BE769-2441-45AB-AD82-D0890D31FC6A}


----------



## Whiskers

Kauri said:


> The planned mini-bailout of the monolines seems to have failed, possibly because the real sums needed were beyond the bailees who were/are desparately seeking bailouts themselves... this is just something to replace that in the "talking heads" spin arsenal... but really it is only delaying tactics.. putting off the day of reckoning... but hey... if one was ahead of the game it gave an opportunity to get set..  I hope..
> now... what comes next??? any takers???
> Cheers
> ........Kauri




I agree all initiatives will not work, but impotantly it is only human nature to delay impending disaster where one can to buy time to find relief or remedies. It can only give people, particularly those most affected time to more rationally (less panic) assess their situation and make better decisions about their future.



dhukka said:


> Originally Posted by Whiskers
> Back on topic; sure it doesent resolve the intrinsic problems in the US, but initiatives like this and more interest rate cuts ( geez I can feel dhukka climbing all over me already ) will effectively deminish any severe knock-on consequences for the rest of the world and Aus in particular.
> 
> 
> 
> 
> Whiskers,
> 
> I have no objection to people making statements like these if they can support them. However you supply absolutely no evidence for such a claim. You may well be right, but without any support it just sounds like wishful thinking.
Click to expand...



The operative word being severity, I would have thought that avoiding a rushed panic sell off of financial markets with monetry policy, intervention and or regulation to give businesses a chance to restructure and home owners better opportunities to refinance or a chance to make-up their late payments would be obvious evidence of deminishing the severity of knock-on effects. 

It was the banks and other financial organisations who were essentially the cause of this problem with their poor economic judgement. I happen to believe that the banks always anticipated a high number of foreclosures as seen in the almost non-existant options borrowers had once a default occurred. Banks expected to recover their mortgage and then some with extreme penalties and fees. 

With banks ramping up interest rates slugging customers to recover losses for their own bad financial management, as their borrowing costs were being substantially cut was always going to be seen as unconscionable and get up the ire of people and flow onto consequences for politicans if they didn't rein in the greedy banks.

An example of market failure that I mentioned earlier in the gold thread, where government intervention is necessairy to support average consumers from excessive profit gouging by these institutions abusing the recognised custom of Reserve Bank interest cuts.

The knock-on effect from banks increasing rates and forcing millions into immediate homelessnes and hardship is far less severe than the banks wearing the responsibility for their own greed and/or mismanagement.  

Buffet foreshadowed what could/would happen. His offer while dismissed by many similar thinking commentators as the banks, will help resolve the financial crisis. The problem is that these insurers want to keep their cake and eat it too like the banks. The sale of their better quality assets wil go a good way to meeting their obligations with the lower assets and maintain their credit rating so they can live to grow another day.

If their credit rating gets cut they will be worse off. If they fold an administrator may well take Buffets offer anyway. In any case time and intervention inititiaves works to lessen the severity of the consequences outside the US.

The banks always knew they were in a unique position to be a price setter to maintain their margains.

I had an example with an Aus bank who substantially increased certain fees. The bank put a little notice on the statement and back dated the fees. I immediately phoned and insisted they be refunded. They refunded the next fee as a 'jesture of goodwill' but refused to refund the previous. I emailed insisting they provide in writing the reasons why they refused to refund the fees and to state which law or clause in the terms or conditions they relied upon to increase the fees.

A few days later they refunded the full amount without any refenence to their justifiable right to claim them.

The Rudd gov is also getting more proactive with banks breaking the custom with reserve interest rates. A sign that if these financial institutions don't stick to conventional interest rate custom and continue gouging customers in the so called right to offset their investment losses with increased fees and interest charges, then more severe intervention will come.


----------



## Kauri

Yikes.. early US market slip is being put down to UBS writedowns...


----------



## Kauri

and of course Uncle Ben weighing in hasn't helped... much

there is definitive bearish tilt to the latest Bernanke comments that the economic outlook is worse and that Bernanke sees no end to the housing market downturn.  Bernanke says the Fed has been aggressive but is ready to do more.


----------



## ithatheekret

Would have to put the Swissie in the 1.11 zone  just to confuse the POG traders ........ fiats who said they weren't vehicles


----------



## dhukka

Whiskers said:


> I agree all initiatives will not work, but impotantly it is only human nature to delay impending disaster where one can to buy time to find relief or remedies. It can only give people, particularly those most affected time to more rationally (less panic) assess their situation and make better decisions about their future.




Project 'lifeline' as it is unfortunately named will do very little except maybe at the margin for some people who want to stay in their homes. For others it will just postpone the pain. It will do nothing for the jingle mail crowd who find themselves hopelessly underwater as home prices continue to fall and they owe more than their house is worth. The only benefit to these people as this article suggests is that they can get a months free rent and then mail in their keys. 




Whiskers said:


> The operative word being severity, I would have thought that avoiding a rushed panic sell off of financial markets with monetry policy, intervention and or regulation to give businesses a chance to restructure and home owners better opportunities to refinance or a chance to make-up their late payments would be obvious evidence of deminishing the severity of knock-on effects.




No doubt Helicopter Ben helped avoid a nasty equity market sell-off but all that effectively did was delude Wall Street into thinking the Fed is/can play backstop. I agree that timely and effective policy response from government and central banks can help mitigate the severity of an economic crisis. However I would argue that in the case of the US it is too little too late and it is going to be very difficult to make a significant difference.

Interest Rate cuts makes lending more attractive for the banks but you can't make them lend. The Fed's Term Auction Facility in concert with the European banks repo actions worked a treat in bringing LIBOR down. However credit spreads continue to widen.

The US labor market is starting to lose jobs and yesterday for the first time in 5 years US retail sales turned negative on an inflation adjusted basis. Here is a list of retailers that plan to close stores. 

    * Movie Gallery closing another 400 stores
    * Charming Shoppes (CHRS) closing 150 stores and cutting expansion plans by 50%
    * Starbucks (SBUX) closing 100 stores and slowing expansion plans by 34%
    * Ann Taylor (ANN) shuttering 117 stores and slowing store growth
    * Boston Market evaluating its real estate opportunities
    * Buffet Holdings sorting out its underperformers
    * Sprint Nextel (S) closing 125 stores and 4,000 distribution points
    * Cost Plus World Market closing 18 stores
    * Liz Claiborne (LIZ) closing 54 Sigrid Olsen stores
    * New York & Company (NWY) axing the Jasmine Sola brand and its 32 stores
    * Ethan Allen (ETH) closing 12 stores
    * PacSun (PSUN) closing all of its 173 demo stores
    * Talbots (TLB) exiting its kids and men's lines through closure of 78 stores
    * Rite Aid (RAD) exiting Nevada by closing 28 stores
    * Macy's (M) closing nine stores
    * Krispy Kreme (KKD) expecting many franchisees to close stores
    * Kirkland's Home (KIRK) likely closing 130 stores
    * CompUSA's remaining 103 stores being disposed of
    * Rent-A-Center (RCII) closing 280 stores
    * Sofa Express closing 44 stores in bankruptcy
    * 84 Lumber closing 12 stores
    * Home Depot (HD) closings some call centers
    * Levitz Furniture disposing of 76 stores in bankruptcy
    * Pep Boys (PBY) closing 31 stores
    * Lifetime Brands (LCUT) closing 30 stores
    * Big A Drugs liquidating its 21 stores 

This list is just the beginning, there will be many more. At least the companies listed here are aware of the problems and starting to cut back. Rob Plaza, Senior Equity Analyst for retail stocks at Zacks Investment Research   had this to say in the same article:



> ... probably for the next decade, retailers are not going to have to open a brand new store because there's going to be so many empty ones that need to be filled. It's not going to be like before where retailers were fighting to get the best location in the new strip mall that opened up.




You don't need to be Einstein to see what this portends for Commercial Real Estate in the US. Speaking of Real Estate, US housing is a disaster and getting worse. House prices are forecast to drop *20 -30%* nationally over the course of the next few years. That would put about 10 million households into negative equity making them ideal candidates for the jingle mail crowd.   

Corporate default rates are still at record lows in the states but they will escalate sharply in the next 12 -18 months. The expectations of US small businesses, which employ the bulk of US workers, have hit recessionary levels according to a report released a couple of days ago. 

ISM services sector indicators are all in contraction mode, the services sector makes up more than *80%* of the US economy.  Industrial production is flat to negative. 

Europe doesn't need knock-on effects to hurt them.They have similar housing bubbles, waning retail sales and persistent (although I think the fear is overblown) inflation. Growth rates for Asia including the world saviour China are being revised down. 

Effects are being felt now, mailing checks to people is poor policy response, it could jolt GDP up for a quarter or two or it could be like the early 80's when the US had a short recession in 1980, recovered briefly and then plunged into a deep protracted one just 12 months after the previous one finished. 

I still believe the damage has largely been done and if the US government policy response continues in the same vain it won't make much difference. I fully expect fiscal stimulus number *2* to be on the table by the second half of this year when they wake up to how bad things actually are. Maybe they'll come up with something more constructive however for me the glass is half empty on the outlook. I think Nouriel Roubini's sums it up well:



> Can the Fed and other financial officials avoid this nightmare scenario that keeps them awake at night? The answer to this question - to be detailed in a follow-up article - is twofold: first, it is not easy to manage and control such a contagious financial crisis that is more severe and dangerous than any faced by the US in a quarter of a century; second, the extent and severity of this financial crisis will depend on whether the policy response - monetary, fiscal, regulatory, financial and otherwise - is coherent, timely and credible. I will argue - in my next article - that one should be pessimistic about the ability of policy and financial authorities to manage and contain a crisis of this magnitude; thus, one should be prepared for the worst, i.e. a systemic financial crisis.


----------



## ithatheekret

You want nightmares ........ Hanks on tele .


----------



## dhukka

ithatheekret said:


> You want nightmares ........ Hanks on tele .




Mr containment consistently looks out of his depth whenever he's on TV.  It's hilarious how they pay so much attention to what these muppets have to say. You know exactly the kind of platitudes they are going to come out with before they even open their mouths,

Bernanke - the Fed will continue to cut if needed (Of course they will, what else can they do?)

Paulson - The economy will grow slower than it has in recent years ( ahh yeah, thanks for pointing out the obvious Hank)


----------



## ithatheekret

dhukka said:


> Mr containment consistently looks out of his depth whenever he's on TV.  It's hilarious how they pay so much attention to what these muppets have to say. You know exactly the kind of platitudes they are going to come out with before they even open their mouths,
> 
> Bernanke - the Fed will continue to cut if needed (Of course they will, what else can they do?)
> 
> Paulson - The economy will grow slower than it has in recent years ( ahh yeah, thanks for pointing out the obvious Hank)




If Hank wants to be useful , he should throw Ben out of the helicopter .

Sniffling for a month now , bad cold Hanks got ........ plague more like it .


----------



## chops_a_must

ithatheekret said:


> Sniffling for a month now , bad cold Hanks got ........ plague more like it .




He could just be coming down with depression perhaps?


----------



## ithatheekret

Hope not Chops , they don't make enuff Xanax for him .


----------



## ithatheekret

That's it , Ben used the worsening word . Now they'll have nightmares .


----------



## ithatheekret

Hanks just asked how do they avoid blah blah .....?

proactive blah blah ....

I'd of thought the Feds ( not his dept. ) Cash reserve ratio rulings would be a good start ....................

Reassessment of FICO scores . Reassessment of Fanny and Freddie . Reassessment of the oversight committee . Reassessment of the act re: GSE reform bill ...........


----------



## ithatheekret

*ASX probes hedge collusion*


http://www.news.com.au/business/story/0,23636,23216433-462,00.html

By Glenda Korporaal and Adele Ferguson
February 15, 2008 01:00am


*THE Australian Securities Exchange yesterday signalled that it would investigate allegations that hedge funds are colluding to push down the shares of major Australian companies.

*


ASX head of supervision Eric Mayne yesterday said he would be investigating market rumours that hedge funds were working together in packs to target specific companies. 

Mr Mayne also signalled that the ASX was keen for more regulation of the increasingly common practice of short-selling in the market, and would be looking at greater regulation of company directors who had big margin loans against their shares. 

Mr Mayne's comments come after great volatility in the share market in recent months. 

Some companies have complained that they have been victims of concerted action by hedge funds to push down their share prices, allowing the funds to make money by buying them back at artificially low levels. 

"Anecdotally, that has been what has been suggested to me - that they are doing just that," Mr Mayne told a press conference yesterday. "As a consequence, we will be investigating it." 

But one hedge fund manager lashed out at Mr Mayne's comments last night. "It's all crap. The basic point is that short-selling contributes to market efficiency," he said. 

"For every hedge fund that is short-selling, there will be another hedge fund that will be buying because they believe it's been over-sold. 

"If they (ASX) try to crack down on it (short-selling) they will actually destroy market efficiency. Hedge funds are notthis collusive mob where they all get together and follow one strategy." 

The ASX, which yesterday reported a strong 35 per cent rise in net profit to $187.4 million for the six months to the end of December on the back of record market trading, defended itself from criticism that it had mishandled the recent problems with stock broker Tricom. 

Chief executive Robert Elstone insisted the ASX still had the confidence of the market. 

He said expectations that the ASX would give a "ball by ball" public commentary when it was handling issues such as Tricom's inability to meet its market settlement obligations last month were misplaced. 

Mr Elstone said the ASX was not immune to criticism but said he believed investors had confidence that it could handle the pressures of operating and supervising the share and futures markets in the current volatile environment. 

He rejected heavy criticism that the exchange should not be involved in providing an official market for the highly risky contracts for difference (CFDs). 

Also known as "spread betting", CFDs allow investors to borrow money to bet on the short-term movement of share prices, exposing investors to potentially unlimited losses if the market moves against them. 

The Australian Securities and Investments Commission has warned investors in CFDs that they are "effectively gambling a much larger amount of money than if they went to the casino or a race track". 

Mr Mayne said the fact that the ASX had taken over the role of trading CFDs late last year should give investors some comfort. The market was now being properly supervised, instead of the unregulated off-market trading in CFDs that had been going on in the past. 

Mr Elstone also signalled that the ASX was looking at introducing a "second generation" of CFDs, which would be listed in the first six months of next year. 

He said ASIC supported the idea of the ASX offering CFD products, which were also being offered by stock markets around the world, including the London Stock Market. 

But the ASX executives did call for more regulation to force the disclosure of the increasing degree of short-selling in the Australian share market. 

They said this was an area that could be more closely supervised by ASIC if it were given greater control over the regulation of stock brokers. Mr Elstone called on the federal Government to set up an inquiry to look at new laws and regulations needed to cope with massive changes in financial markets in Australia in the decade since the Wallis inquiry. 

The controversy comes amid some of the most volatile trading seen on the Australian share market. January had more than double the level of turnover as the same month last year. 

The record turnover on the market saw the ASX yesterday report a 35 per cent rise in net profit for the six months to the end of December to $187.4 million - slightly above market expectations. But concerns about the future outlook for the market and new stock market listings saw investors mark the ASX's shares down by 34c to close at $45.13. 

Analysts said the possibility of fewer new share market listings later this year, the big rebates the ASX was now giving to brokers, and concerns that the big cost savings from the merger of the ASX and the SFE were for a top-20 stock is extraordinary," said Allan Furlong, manager of private client services at stockbroker Joseph Palmer & Sons. 

Mr Furlong said the recent volatility was not related to the fundamentals of the market, with hedge funds likely to be behind some of the big moves. 

"I'm looking through the fabric of the market and the sort of volatility that is going on ... it's not my clients selling bank shares, because I'm telling them to hold long-term," he said. 

Banking stocks regained some ground yesterday with NAB moving 3.3 per cent higher while the ANZ gained 2.7 per cent. The Commonwealth closed 1.8 per cent ahead. 

"Fundamentally there are some good stocks that are on sale right now," Mr Furlong said. 

"We may not pick the very bottom but why would you not buy the Commonwealth Bank or NAB on the yields they're displaying and put them away? 

"Even if we have six months where the market is flat, you still know that your super fund is going to be doing all right in three years' time."




*Bit fn late*


----------



## IFocus

I just love it when brokers make quotes like this




ithatheekret said:


> Mr Furlong said the recent volatility was not related to the fundamentals of the market


----------



## Trembling Hand

ithatheekret said:


> But one hedge fund manager lashed out at Mr Mayne's comments last night. "It's all crap. The basic point is that short-selling contributes to market efficiency," he said.




That sums that up perfectly. Populous Crap.


----------



## numbercruncher

I love it when the Bearish (realist) commentators use the term Tsunami, has a certain ummph about it 



> The fallout from losses on subprime lending may result in a ``tsunami'' for the US economy extending beyond financial markets, New York Governor Eliot Spitzer told lawmakers in Washington.
> 
> Inadequate federal regulation of the mortgage market led to losses that hurt bond insurers, threatening their AAA credit ratings, and banks, Spitzer said in prepared testimony to the House subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises.
> 
> Insurers' woes have hurt the municipal bond market by raising borrowing costs and reducing the value of debt held by investors, said Spitzer, a first-term Democrat. Municipal bond difficulties, highlighted by failures in the auction-rate market, will be far-reaching, he said.
> 
> ``It will affect the cost of college loans,'' the governor said. ``It will affect museum budgets. It will affect state and local taxes.''




http://business.smh.com.au/subprime-fall-may-trigger-tsunami-spitzer-says/20080215-1sf9.html


----------



## Kauri

Now that Moodys have downgraded one of the top 3 monos,FGIC, from AAA to A3, with the likelyhood of other agencys following suit, and the precarious standing of Ambac and MBIA, will this lead financial instos to writing off more,and not only sub-prime this time?? BB stated that more write downs were likely in his address last night. Will global banks that have been reassuring us that they have no, or very little, exposure to sub-prime, now be caught up with exposure to the "_more prime_" vehicles?? Will wealth management type firms get caught up in having to revalue some of their interest investments?? Will we get more than one day of rain in Perth this summer??
 Thinking
............Kauri


----------



## dhukka

Kauri said:


> Now that Moodys have downgraded one of the top 3 monos,FGIC, from AAA to A3, with the likelyhood of other agencys following suit, and the precarious standing of Ambac and MBIA, will this lead financial instos to writing off more,and not only sub-prime this time?? BB stated that more write downs were likely in his address last night. Will global banks that have been reassuring us that they have no, or very little, exposure to sub-prime, now be caught up with exposure to the "_more prime_" vehicles?? Will wealth management type firms get caught up in having to revalue some of their interest investments?? Will we get more than one day of rain in Perth this summer??
> Thinking
> ............Kauri




Seems the Monolines have 4-5 days to get their houses in order according to Spitzer;



> *Bond insurers have days to re-capitalize, Spitzer says
> *
> Bond insurers have four to five business days to re-capitalize themselves enough to keep their crucial AAA credit ratings, New York Governor Eliot Spitzer said during a Congressional hearing on the $2.4 trillion industry on Thursday. If that doesn't happen, regulators will have to step in and separate bond insurers' municipal businesses from their more troubled structured finance units. "We will need to move in that direction. It is not our first choice but time is short," Spitzer said. "In the next for or five bus days we would like to see a resolution," Spitzer added. "It's time for deals to get done."




should be an interesting few days for the Bond Insurers.


----------



## blablabla

ithatheekret said:


> ASX head of supervision Eric Mayne yesterday said he would be investigating market rumours that hedge funds were working together in packs to target specific companies.
> 
> Mr Mayne also signalled that the ASX was keen for more regulation of the increasingly common practice of short-selling in the market, and would be looking at greater regulation of company directors who had big margin loans against their shares.




To maintain a sense of perspective it needs to be noted that Mr Mayne is employed by the ASX who market a CFD product that allows short-selling. It also needs to be noted that the ASX is perfectly free to regulate itself as much as it likes. So presumably Mr Mayne is referring to being keen for more regulation of non-ASX-controlled shortselling, which would tend to disadvantage competitors relative to the ASX. 

If we are to have a level playing field then market supervision and regulation should be taken out of the hands of the ASX and should be performed by an independent body with no vested interests who would have the power to extract any information held by the ASX. Then there would be no perception of conflicts of interest and we would at least be able to take ASX statements seriously.


----------



## explod

blablabla said:


> To maintain a sense of perspective it needs to be noted that Mr Mayne is employed by the ASX who market a CFD product that allows short-selling. It also needs to be noted that the ASX is perfectly free to regulate itself as much as it likes. So presumably Mr Mayne is referring to being keen for more regulation of non-ASX-controlled shortselling, which would tend to disadvantage competitors relative to the ASX.
> 
> If we are to have a level playing field then market supervision and regulation should be taken out of the hands of the ASX and should be performed by an independent body with no vested interests who would have the power to extract any information held by the ASX. Then there would be no perception of conflicts of interest and we would at least be able to take ASX statements seriously.




Your post is to be applauded.  Have felt that the ASX, ATSIC etc have not been operating towards the fair interests of the average investor for some years.  Of course the previous (following the Thatcher idea of deregulation) seemed to be supporting the big end of town at every turn. 

Hope the new Government, Conroy, Tanner et. al. are tuned in.

Cheers explod


----------



## Whiskers

blablabla said:


> To maintain a sense of perspective it needs to be noted that Mr Mayne is employed by the ASX who market a CFD product that allows short-selling. It also needs to be noted that the ASX is perfectly free to regulate itself as much as it likes. So presumably Mr Mayne is referring to being keen for more regulation of non-ASX-controlled shortselling, which would tend to disadvantage competitors relative to the ASX.
> 
> If we are to have a level playing field then market supervision and regulation should be taken out of the hands of the ASX and should be performed by an independent body with no vested interests who would have the power to extract any information held by the ASX. Then there would be no perception of conflicts of interest and we would at least be able to take ASX statements seriously.




I wouldn't go so far to say it is perfectly free to regulate itself, after all it is still an Australian public company subject to the same laws as everyone else. 

ASIC has been mentioned and obviously has higher control of all public companies.

It doesn't take that great man Einstein to see that certain sector indexes are hit badly on some days when the rest of the market has performed well.

This is a clissic example of (free) market failure where some participants are colluding against ASX listing rules and Corporations Law to artifically manipulate price volitility to gouge back some losses, similar to some banks breaking custom with reserve interest rates.

The US has been talking about tightening up regulation of the financial industry and Rudd signalled an intention to closely scrutenise certain aspects of commerce before the election. 

It's a logical chain of consequences when people abuse trust, ethics and customary protocol, in the self righteous guise of, there is no (statute) law against it, and we have to look after the best interest of our shareholders... err themselves. 

By definition by saying this these people are demonstrating (and advertising)no moral or ethical capacity or inclination to abide by codes of conduct, interpreting caviet emptor as open season, so they themselves are peeving the community and law makers off to the point of prosecution of companies and executives and imposing more statuary regulation annd controls to reign them in.

More evidence of lessening the global impact and repercussions of market participants who insist on testing the limits.

I should be fairly obvious to most people that the change of gov in Aus was essentially about a shift back to a more marxian position of a better balance in the economy and society generally. I expect the US to follow suite.

Do unto others as you wish them to do unto you. Natural justice prevails. Something traders and investors loose sight of in their narrow vision of economics.


----------



## Bushman

It is bollocks to say it is an 'efficient market' if you have hedge funds colluding to artificially collapse share prices. If that is not cartel behaviour, I don't know what is. Dick Pratt should simply have set up a hedge fund and he would still simply be Carlton's saviour.  

I say to the ASX start to provide meaningful disclosure to Joe Average on hedge fund behaviour or investors will start to lose faith in the equities market.Long term they will all be f**ked if the mum's and dad's pull their money out. Look at the US housing market. It is now a TSUNAMI *shock horror*.


----------



## Whiskers

explod said:


> Your post is to be applauded.  Have felt that the ASX, ATSIC etc have not been operating towards the fair interests of the average investor for some years.  Of course the previous (following the Thatcher idea of deregulation) seemed to be supporting the big end of town at every turn.
> 
> Hope the new Government, Conroy, Tanner et. al. are tuned in.
> 
> Cheers explod




I think a good part of the reason (sic) ATSIC err ASIC have been hamstrung is due to the failure of the Howard gov to give it more teeth.

The other thing to remember about ASX it is a listed company bound by articles of association as well as oversight by ASIC and ACCC. These fundies have to abide by the rules, ethical, common law and statute, like everyone else. 

If these fundies have a gripe about anti competitive behaviour there are avenues to deal with it, but I have never heard a complaint like this before.

I think it's just a case of certain people throwing up red herrings to distract attention from their collective extreme caveat emptor attitude and behaviour.


----------



## Uncle Festivus

Re: market manipulation

It goes on all the time, both officially & unofficially. So long as all the big players are doing ok nothing is going to change. It's the insiders club!

I can't see any difference to when a broker (or their high net worth clients) loads up on a stock then puts out a research note or whatever with a buy rec or vice versa (officially sanctioned manipulation eg Rivkin type etc), to when the large funds have data, computer power & software at their disposal (that the majority of traders don't have) to ramp up or down. 

If you study daily index or sector patterns you can see most days have definate 'action' periods eg around 11 o'clock or 1:30pm. This is when the computer orders are engaged for index or sector wide ramping or dumping

The ASX is the ultimate goal of capitalism - a monopoly on the capitalist capital system - I can't see the old boys school giving it up that easily.


----------



## ithatheekret

Whiskers said:


> I wouldn't go so far to say it is perfectly free to regulate itself, after all it is still an Australian public company subject to the same laws as everyone else.
> 
> ASIC has been mentioned and obviously has higher control of all public companies.
> 
> .




You have to see the funny side of that Whiskers .

Subject to what laws , all ever see is a noncompliance and no policing .

ASIC should be put back in the test tube until they've matured and can walk .


----------



## Whiskers

ithatheekret said:


> You have to see the funny side of that Whiskers .
> 
> Subject to what laws , all ever see is a noncompliance and no policing .
> 
> ASIC should be put back in the test tube until they've matured and can walk .




I think you are being a bit unfair ithatheekret.

HIH is a good example of ASIC doing it's job, another current example below.

But you have to remember APRA had the first line of responsibility that failed. ASIC cleaned up the mess.

What Laws... Well as they are saying in this extract from your post, and I pointed out earlier, the howard gov sat on their hands and watched new products and trading behaviour develop.

The regulators can't do much if the law makers don't give them the tools and power to deal with those who push outside the envelope. As I said earlier I think we are in a new more marxian gov enviornment and the changes will come, but at the end of the day it was against the philosophy of Howard and Bush to interfere much with like minded business people.



> But the ASX executives did call for more regulation to force the disclosure of the increasing degree of short-selling in the Australian share market.
> 
> They said this was an area that *could be more closely supervised by ASIC if it were given greater control over the regulation of stock brokers.* Mr Elstone called on the federal Government to set up an inquiry to look at new laws and regulations needed to cope with massive changes in financial markets in Australia in the decade since the Wallis inquiry.







> *08-23 Former Sydney financial advisers guilty of ASIC charges*
> 
> Wednesday 13 February 2008
> 
> 
> Two Sydney men have appeared in the Sydney District Court, New South Wales, following an investigation by ASIC into Progressive Investment Securities Pty Ltd (Progressive) and Capital Investments Group (Aust) Pty Ltd (CIG).
> 
> On 30 November 2007, Mr Tunde Doja, of Sydney, New South Wales, was found guilty by a jury in the District Court before Judge Goldring of eight fraud charges following a three-week trial. Mr Doja was found guilty of six charges under the NSW Crimes Act following allegations he fraudulently obtained a financial advantage for investors by arranging 100% Investment Loans through Macquarie Bank. The funds were invested on behalf of the investors in products known as ORB 1, ORB 2 and OMIP 15 – 7. The investors were required to enter into agreements with Macquarie Bank for up to $300,000 in investment loans on each product.
> 
> Mr Doja was found to have submitted loan applications to Macquarie Bank on behalf of investors which contained false information in relation to their financial position. The jury found that Mr Doja had completed the Statements of Financial Position in the loan applications without obtaining those details from investors. The jury also found that Mr Doja was guilty of obtaining a financial advantage for Progressive and CIG by fraudulently obtaining commissions totalling $740,025 from Capital Guaranteed Investments Limited and $341,352 from MAN Investments Australia Ltd, who were the sponsors of the ORB and OMIP products respectively. It was found that Mr Doja had made false statements to Capital Guaranteed Investments Limited and MAN Investments Australia Limited about holding a valid financial services licence.
> 
> Mr Mohammad Zareei, of Baulkham Hills, New South Wales, pleaded guilty yesterday to one count of unlawfully providing financial advice on behalf of Progressive which failed to hold an Australian financial services licence. He also pleaded guilty to two counts of inducing investors to apply for 300,000 shares in OMIP 15 – 7 by making false, misleading or deceptive statements regarding the product.
> 
> Mr Doja is currently in custody awaiting sentence on 28 March 2008. Mr Zareei’s bail has been continued until sentencing on 11 April 2008.
> 
> The matters have been prosecuted by the Commonwealth Director of Public Prosecutions.
> 
> ASIC Website: Printed 15/02/2008 http://www.asic.gov.au/ASIC/asic.ns... advisers guilty of ASIC charges?opendocument


----------



## ithatheekret

_Sorry Whiskers , you hit my hidden agenda right on the head _


What Laws... Well as they are saying in this extract from your post, and I pointed out earlier, the howard gov sat on their hands and watched new products and trading behaviour develop.

The regulators can't do much if the law makers don't give them the tools and power to deal with those who push outside the envelope. As I said earlier I think we are in a new more marxian gov enviornment and the changes will come, but at the end of the day it was against the philosophy of Howard and Bush to interfere much with like minded business people.




_EXACTLY_

_We are all answerable , so they should be too _

_If Administrations openly allow this type of behavior , we are in a state of anarchy _

_Chaos and Anarchy walk hand in hand _

PS... the word we are looking for is " undermined "


----------



## numbercruncher

We probably dont need anymore recession " proof " ..... but .....




> US consumer confidence has slumped to 'recession' levels
> 
> 
> By Sean O'Grady, Economics Editor
> Saturday, 16 February 2008
> 
> 
> Consumer confidence in the United States has slumped to levels usually associated with the onset of a recession.
> 
> 
> The Reuters/University of Michigan Survey of Consumers index of sentiment for this month dropped to its lowest reading since February 1992. With a 1985 base of 100, yesterday's figure of 69.6 was well below the 78.4 level reached at the end of January and was also shy of analysts' expectations.
> 
> Consumer spending accounts for around 70 per cent of the US economy and, as the world's "consumer of first and last resort" Americans' buying habits affect every major economy. American consumers spent about $9.5 trillion (£4.5 trillion) last year, while Chinese could only manage $1 trillion and the Indians $650bn. China, often cited as being "decoupled" from the US economy derives 8 per cent of its national income directly from US consumption.
> 
> American households are seeing the worst squeeze on their disposable income since 1980, with higher fuel prices, food bills and the cost of servicing their record debts proving an increasingly heavy burden. The amount Americans must spend each month on debt service, housing, medical care, food and energy rose to 66.9 per cent of their spending in December, the highest since record-keeping began in 1980, according to figures supplied by Bloomberg.
> 
> The gloomy picture was confirmed by the latest news on American industrial output. Production rose by just 0.1 per cent for a second straight month, matching economists' forecasts, the Federal Reserve reported yesterday, with production largely supported by the cold weather, which increased demand for energy. Manufacturing, which accounts for four-fifths of US industrial production, was unchanged from December after a 0.2 per cent gain. The figures pushed stocks lower on Wall Street, though only marginally as most analysts took the view that the bad news would encourage the Federal Reserve to continue its aggressive policy of cutting interest rates. The Fed's chairman Ben Bernanke said last week that he was prepared to take "timely" action to aid the economy.
> 
> Even so, the verdict of economists viewing events was unanimously despairing. Brian Gendreau, an investment strategist at ING in New York said: "These figures reflect how consumers are heavily influenced by the uncertainties with regards to the economy, gasoline prices, upcoming elections – everything. This is a pretty bad, pretty dismal number. *We look at 14 indicators of recession, and 10 out of the 14 are signalling that we are either about to go in to a recession or are in one already." *




http://www.independent.co.uk/news/business/news/us-consumer-confidence-has-slumped-to-.htmlssion-levels-783075.html


----------



## explod

numbercruncher said:


> We probably dont need anymore recession " proof " ..... but .....
> 
> 
> 
> 
> http://www.independent.co.uk/news/business/news/us-consumer-confidence-has-slumped-to-.htmlssion-levels-783075.html




Pretty amazing, with the figures and arguments clear enough the end of the article still hangs on partly in or in a recession.   And Bernanke "timely rate cuts"   the assertive among the pensive.

it all just cracks me up.

Its time to just party,   roulette this arvo.


----------



## numbercruncher

explod said:


> Its time to just party,   roulette this arvo.





Good luck on the tables, hope your blessed with a Bias wheel or a section spinner 

Are you a section player ? orphans , tiers etc ?

Im a raw luck gambler when I rarely play, remember once at Treasury cas, simulatneously placed $5 on no 4 and $5 on 23/1 on the big wheel, they both came in at the same time, $290 return on a $10 wager, now what are the odds of that!


----------



## numbercruncher

> The beginning of a messy endgame to the bond-insurance crisis may be underway, and the industry that emerges could look very different from the one that bet big on subprime mortgages.
> 
> On Friday, FGIC Corp., holding company for the nation's third-largest bond insurer, told the New York State Insurance Department that in effect it wants to split up the business. The idea would be to create a new company to insure safe municipal bonds and for the existing one to keep responsibility for riskier debt securities already insured, such as those tied to the housing market.





Neat plan huh ? Now imagine if every company did that, split the profitable debt free bit off, and leave the debt ridden bankruptcy in waiting bit behind  more creative capitalism


----------



## ithatheekret

That's exactly what the funds do with bad bets , roll them into tier two and wait for them to start performing again . Tier one has the performers running somewhat to script , anything else is put on the backburners of tier two .
Managing large amounts of money may seem like someones perfect job , but it's no party nowdays . Everything has it's limitations . If we look back at banks performances , the beacon that was , is now dimming . 
I for one am still waiting for AMPs double digit growth promises to come about , been a few swipes at that glowing line , can't see it eventuating in a tight credit climate , especially now that banks have hit their peak profitablity and are more likely to start declining . Just another round of misquotes to the ASX and the public ......... 

here's an interesting piece from Bloombergs Paris desk :

http://www.bloomberg.com/apps/news?pid=20601039&sid=aB2QLMpsHn_c&refer=home


*Fed Heavy Lifting, SocGen Fallout, China Trade Tension: Timshel 
*

_Commentary by Michael R. Sesit_


Feb. 16 (Bloomberg) -- Like the proverbial horse who refuses to drink when dragged to water, banks are resisting lending while the U.S. Federal Reserve lowers official interest rates. That underscores the biggest question in global financial markets: Can the Fed and other central banks rescue the world economy? 

The Fed has lowered rates by 2.25 percentage points to 3 percent since last September. Elsewhere, the Canadian and U.K. central banks have cut rates; markets are betting that the European Central Bank will eventually have to lower borrowing costs and that the Bank of Japan will at least back off from raising them. 

Nonetheless, lowly rated companies and investment-grade ones are having to pay more to borrow than before the Fed knocked 125 basis points off its federal-funds rate in January. Likewise, rates on so-called jumbo mortgages -- those above $417,000 -- have risen in the past month. 

In the Fed's January Senior Loan Officer Opinion Survey covering the previous three months, a poll of 56 domestic banks and 23 foreign institutions showed they had ``tightened their lending standards and terms for a broad range of loan types.'' 

The comparable ECB survey, released in late January, painted a similar picture. The message from Europe may be even more worrisome because euro-area companies depend more on bank lending than their U.S. counterparts, which satisfy most of their funding needs in the capital markets. 

Loan Policies 

The tougher loan policies reflect the fallout from the subprime crisis as banks take more assets onto their balance sheets, eroding their capital ratios. Lenders are also wary of the worsening economic outlook and the prospect of increased delinquencies and defaults. 

``The longer the banks wait to join the Fed by easing credit standards, the more the Fed will have to ease in order to stimulate growth,'' says Bob Prince, Westport, Connecticut-based co-chief investment officer at Bridgewater Associates Inc. 

Regardless, this doesn't imply monetary policy is impotent, optimists contend. Central-bank rate cuts still keep the cost of capital lower than otherwise, cushion the fall in asset prices, reduce default and foreclosure rates on adjustable-rate mortgages and encourage more bank lending by widening the margin between banks' interest costs and lending rates, Deutsche Bank AG economists Peter Hooper, Thomas Mayer and Torsten Slok said in a recent report. 

Money Supply, Cost 

Pessimists contend that central banks couldn't control the supply and cost of money as liquidity flooded global economies and markets in the 1990s and early part of this decade. So there's no reason to expect them to have any more influence when world liquidity is shrinking. Derivatives and securitized debt account for 93 percent of the world's liquidity, while bank loans represent 6 percent and central banks make up a mere 1 percent, according to London-based consulting firm Independent Strategy. 

Although the combination of monetary and fiscal easing ``can still prevent a cataclysmic recession, it may not be able to save industrial countries from a rather protracted period of sluggish growth,'' Deutsche Bank said. 

* * * 

Do French companies believe in meritocracies where the most deserving get the biggest rewards and best opportunities? According to reports from headhunters, Jerome Kerviel's trading scandal at Societe Generale SA has wrecked the chances of back- office clerks being promoted to traders. 

Compliance and Control 

Kerviel initially worked in the bank's compliance and control operations, and French prosecutors and SocGen executives allege he drew on his knowledge of clearing and settlement systems to mask fictitious transactions backed by falsified documents. But not promoting clerks because of their know-how makes as much sense as refusing to hire government officials or ex-paratroopers, respectively the former vocations of Societe Generale Chief Executive Officer Daniel Bouton and Jean-Pierre Mustier, head of SocGen's corporate and investment bank. 

By contrast, U.K. banks were famous for hiring rough characters from London's poorer East End neighborhoods to work as traders. They didn't have Harvard MBAs or advanced degrees in mathematics. They did have street smarts. When asked what skills made for a good trader, the head of foreign-exchange trading at a big New York bank once replied, ``the ability to scalp tickets outside of Madison Square Garden.'' 

No wonder lower-class English longbowmen crushed the flower of French nobility at the battles of Crecy, Poitiers and Agincourt in 1346, 1356 and 1415. 

* * * 

The last thing the ailing world economy needs right now is a trade war. Yet recent revelations that China last year overtook Canada as the biggest exporter to the U.S. is sure to raise protectionist sentiment in the American heartland, not to mention Washington. After all, it is an election year, and the Democrats, who have a good chance of capturing the White House and keeping control of both legislative branches, have never been gung-ho advocates of free trade. 

U.S. imports from China last year totaled $321.5 billion, while those from Canada were $313.1 billion. And with the Chinese buying a mere $65.2 billion of American goods, the U.S. bilateral trade deficit widened to a record $256.3 billion. 

It might be time for China to consider taking more effective steps to reduce its burgeoning trade surplus with the U.S. These might include letting the yuan appreciate more quickly, cutting or eliminating export subsidies, stepping up imports from America and taxing exports. The tools are all there. All China has to do is use them. 

Best not to wait until some grand-standing congressman or senator calls for a boycott of the Olympics.


----------



## GreatPig

ithatheekret said:


> It might be time for China to consider taking more effective steps to reduce its burgeoning trade surplus with the U.S



Hmm... so the problem is China's trade surplus with the US and not the US's trade deficit with China.

Obviously it's all China's fault, as of course the US can't do anything to stop themselves importing too much - even if many of the businesses there are US-owned to take advantage of the cheap labour rates. 

GP


----------



## sassa

Do the figures produced by the economic arms of the U.S government sometimes not tell the real truth?

"The Bush administration has a long and comical history of going to great lengths to hide bad news from the public. Today, Amanda at TP reports on the latest gem:

The U.S. economy is faltering. Family debt is on the rise, benefits are disappearing, the deficit is skyrocketing, and the mortgage crisis has worsened. Conservatives have attempted to deflect attention from the crisis, by blaming the media’s negative coverage and insisting the United States is not headed toward a recession, despite what economists are predicting.

The Bush administration’s latest move is to simply hide the data. Forbes has awarded EconomicIndicators.gov one of its “Best of the Web” awards. As Forbes explains, the government site provides an invaluable service to the public for accessing U.S. economic data: 

“This site is maintained by the Economics and Statistics Administration and combines data collected by the Bureau of Economic Analysis, like GDP and net imports and exports, and the Census Bureau, like retail sales and durable goods shipments. The site simply links to the relevant department’s Web site. This might not seem like a big deal, but doing it yourself–say, trying to find retail sales data on the Census Bureau’s site ”” is such an exercise in futility that it will convince you why this portal is necessary.”

Alas, as the economic conditions worsen, the administration decided to shut down this “necessary” website, citing “budgeary constraints.”


----------



## STRAT

GreatPig said:


> Hmm... so the problem is China's trade surplus with the US and not the US's trade deficit with China.
> 
> Obviously it's all China's fault, as of course the US can't do anything to stop themselves importing too much - even if many of the businesses there are US-owned to take advantage of the cheap labour rates.
> 
> GP




LOL, Perhaps the US can do what is done with all examples of over indulgence. They can simply label over spending a disease there by alleviating themselves from any blame just as they have done with eating too much or getting pissed too often.

How about 
Deficity or 
Deficitism


----------



## ithatheekret

GreatPig said:


> Hmm... so the problem is China's trade surplus with the US and not the US's trade deficit with China.
> 
> Obviously it's all China's fault, as of course the US can't do anything to stop themselves importing too much - even if many of the businesses there are US-owned to take advantage of the cheap labour rates.
> 
> GP




I'd swear a hint of sarcasm was at the end of his finger tips , the formal class distinction tones .

and here , just pessimists huh 

Pessimists contend that central banks couldn't control the supply and cost of money as liquidity flooded global economies and markets in the 1990s and early part of this decade. So there's no reason to expect them to have any more influence when world liquidity is shrinking. Derivatives and securitized debt account for 93 percent of the world's liquidity, while bank loans represent 6 percent and central banks make up a mere 1 percent, according to London-based consulting firm Independent Strategy. 


MOOHAAHAAAHAAA

_He started out with factual data , then ended it all with wah wah _


_I did say it was interesting , and from the Paris desk _ 


I should have put Bloombergs vanilla disclosure clause up with it


----------



## explod

numbercruncher said:


> Good luck on the tables, hope your blessed with a Bias wheel or a section spinner
> 
> Are you a section player ? orphans , tiers etc ?
> 
> I,m a raw luck gambler when I rarely play, remember once at Treasury cas, simulatneously placed $5 on no 4 and $5 on 23/1 on the big wheel, they both came in at the same time, $290 return on a $10 wager, now what are the odds of that!




Thanks for the good wish Numbercruncher

Nah, not a good day, think Jamie Packer must be feeling the pinch from market correction too.  Dealers very tight and changing very much more often here at Crown of late.  Public relations of Crown Staff very much down the tubes.  A lot of people starting to say that Government Regulators may need a shake up.

I play a pocket count system which follows the hottest sector/s.  Only go in when the percentage is at a certain point so on bad days lose little.  Takes a good deal of patience though.   But not being the gambling type it is good entertainment whilst the Missus feeds the pokies.


----------



## ithatheekret

Little snippets of data that are sometimes missed by the mainstream can mean quite a lot to us ground dwellers .

Japanese monthly earnings are down from last years data , from Dec , so imagine the lag effect the data has in formulating solutions , down on the ground wears it . Dec to Dec they are down 1.7%  and it takes into account bouses etc. av mthly earnings now 597546 Yen ..... $1500.00 AUD a week .

Bit under $80K a year , may sound okay , but it's well off the glory days .

Team it up against the Services sector decline , that would have to be at reduced staffing levels , the pinch must be being felt and is starting to drip out in the data . My bet is that wage level is really hurting Japanese industry and has already help the services and financial sectors to wobble without having to cope with write downs in the wings .

Japan is well equipped to build anywhere , but the latest round of ore rises will effect contracted prices on major projects . This is an area the Japanese compete in regularly . I doubt they haven't thought ahead , but whether they can keep the monsters contained is another matter altogether .

Look at it from a global perspective and ponder how it has effected lower economies down the ladder , especially the ones that rely on Japanese trade .

I haven't exactly noted a flurry of Japanese investment into any forward projects in mining really , only a few big names . The majority has been Chinese . I would have thought , there would be more ..............


----------



## ithatheekret

There was something else I wanted to added but lost it in a thought track .

The Japanese a perfectly situated to take on huge infrastucture projects in India , they have equipment ,steel etc., close at hand , the distance is nothing for them , it can be said they are in better shape to take advantage than Chinese firms . 
But the trade agreements that have been in place with Australia for decades and the dialogue between previous governments can be used to benefit both economies , too many are competing for China , a longer term view , with foundations built now would be far more beneficial in the dynamics of growth .

Japanese heavy equipment companies are very hard to match in technology and the practical application side of their work is hard for many nations to compete with , Germany inclusive .

It grated me to see Sony delegated back a few pegs , but that's the climate , and Sony have a fantastic product range . Kyocera , I love that company , pioneers they be .


----------



## explod

ithatheekret said:


> There was something else I wanted to added but lost it in a thought track .
> 
> The Japanese a perfectly situated to take on huge infrastucture projects in India , they have equipment ,steel etc., close at hand , the distance is nothing for them , it can be said they are in better shape to take advantage than Chinese firms .
> But the trade agreements that have been in place with Australia for decades and the dialogue between previous governments can be used to benefit both economies , too many are competing for China , a longer term view , with foundations built now would be far more beneficial in the dynamics of growth .
> 
> Japanese heavy equipment companies are very hard to match in technology and the practical application side of their work is hard for many nations to compete with , Germany inclusive .
> 
> It grated me to see Sony delegated back a few pegs , but that's the climate , and Sony have a fantastic product range . Kyocera , I love that company , pioneers they be .




They may have other things on their mind, following is an extract from the Weekend's Privateer newsletter:-

"Japan's machine orders dropped 2.8 percent in December.  January housing starts fell to the lowest in 40 years, down 18 percent on the year.  Tokyo property was off 22 percent.  Historically, when Japan acts to contract its internal investments in its export industries, that has always been the signal that it is preparing for a global downturn.  The reported two month contraction of 6 percent in total new machinery orders tells this story.  Why invest in new plant and machinery and equipments when Japan's external export markets are on the verge of a very large contraction? "...


The bigger picture of course is that not only the US but China are in trouble now too, with lack of fuel and the Govt imposing price controls, India seem to be OK but overall times ae becoming grim indeed.


----------



## sassa

Interesting article to those into charts regarding the SPY.

http://srsfinance.blogspot.com/


----------



## dhukka

For a bit of interactive market pr0n to start your day, click here


----------



## macca

Sell the banks !!

This is from Macquarie's free research email today

<The Australian credit markets have deteriorated more in the past eight weeks than they have in the past six months. Credit spreads are widening rapidly for all asset qualities including AAA. MRE believe the bad debts must inevitably rise as the cost of debt spirals and the availability declines. Corporates with extended balance sheet ratios will increasingly find the debt markets are simply closed to them.

For the Australian banks, even though overall credit quality at present remains good, the scope for asset carrying values to deteriorate over the medium term is rising rapidly. Forced selling of assets from financially distressed companies is likely to accelerate over coming months as banks move aggressively to access the cash. Accordingly MRE have moved their model portfolio to underweight Australian banks and removed ANZ from the portfolio completely.>

When a banks says sell the banks should we all run and hide ?


----------



## dhukka

macca said:


> Sell the banks !!
> 
> This is from Macquarie's free research email today
> 
> <The Australian credit markets have deteriorated more in the past eight weeks than they have in the past six months. Credit spreads are widening rapidly for all asset qualities including AAA. MRE believe the bad debts must inevitably rise as the cost of debt spirals and the availability declines. Corporates with extended balance sheet ratios will increasingly find the debt markets are simply closed to them.
> 
> For the Australian banks, even though overall credit quality at present remains good, the scope for asset carrying values to deteriorate over the medium term is rising rapidly. Forced selling of assets from financially distressed companies is likely to accelerate over coming months as banks move aggressively to access the cash. Accordingly MRE have moved their model portfolio to underweight Australian banks and removed ANZ from the portfolio completely.>
> 
> When a banks says sell the banks should we all run and hide ?




Geniuses, now that every major bank has fallen around *25%* they come out with a sell. Analysts horribly behind the 8-ball as usual.


----------



## wavepicker

dhukka said:


> Geniuses, now that every major bank has fallen around *25%* they come out with a sell. Analysts horribly behind the 8-ball as usual.




They are good at telling you what has already happened and what caused it. Unfortunately too few can give you warning before hand.

If the market rallies 10% from here they will come out with buy signals and bullish reasons why it rallied and the bull is back!!

That's the time to sell the market again.


----------



## josjes

wavepicker said:


> They are good at telling you what has already happened and what caused it. Unfortunately too few can give you warning before hand.
> 
> If the market rallies 10% from here they will come out with buy signals and bullish reasons why it rallied and the bull is back!!
> 
> That's the time to sell the market again.




How can the average investor have any hope of beating the market if she follows broker house recommendation by buying high and selling low ? 
The average investor will get burned by all of these developments.  He or she was likely a buyer last year near the top of market (Oct 07), and will suffer from the current correction.  He/she will probably do some selling in a panic near the January 2008 low.  In the middle of Mar 2008 when market bounces 10%, this same poor bloke will buy again near the peak, just in time to get wiped out by the subsequent bear market crash.  Our bloke will shift most of his/her money into safe bank deposit near the bottom in April and May 2008, after which in May 2008 market will soar and he/she will get wiped out a second time when he/she could have participated in the one of the greatest come back of the bull markets through 2008 -2009.

Would you like to be this imaginary person. Do yourself a favour prepare thoroughly in advance for all of these developments through rational proactive strategy rather than reacting emotionally.


----------



## dhukka

I noted on my blog yesterday that according to Aspect Huntley, of the 16 brokers covering ANZ, *5* have *STRONG BUYS *on the stock, *4* have *BUYS* and *7* have a *HOLD*. I don't know what their recommendations were prior to the declines in the banks, but I'm willing to bet they were very similar if not identical. Same story with the other majors.


----------



## dhukka

josjes said:


> How can the average investor have any hope of beating the market if she follows broker house recommendation by buying high and selling low ?




They can't. Being an 'average investor' implies average returns. Besides, we need average investors if we are going to beat the market. A better question is, how do I become an above average investor?


----------



## Uncle Festivus

dhukka said:


> I noted on my blog yesterday that according to Aspect Huntley, of the 16 brokers covering ANZ, *5* have *STRONG BUYS *on the stock, *4* have *BUYS* and *7* have a *HOLD*. I don't know what their recommendations were prior to the declines in the banks, but I'm willing to bet they were very similar if not identical. Same story with the other majors.




It probably applies to all the tipster services but I remember the Huntley advert in the AFR in particular back last November/December, basically telling all to hold the line, buy & hold etc etc.

Buy & hold is dead for all intents in this climate.

Now we will see who's been swimming naked as the tide goes out. I see Warren Buffet is out there looking for flotsam; what he doesn't know is that the tide is out because a tsunami is building.  Maybe all those bull market jocks will actually have to work for their bonuses this year, if they _still_ have a job.


----------



## Whiskers

Was looking at some US mid qtr results earlier. Apart from financials, many companies are doing Ok to quite well.

BREAKING NEWSWal-Mart reports fourth-quarter earnings from continuing operations of $1.02 a share; sales rise to $106.3 billion. Details soon.
http://money.cnn.com/

Could make for a bright start for the US week.


----------



## sam76

Feb. 19 (Bloomberg) -- Wal-Mart Stores Inc., the world's largest retailer, said fourth-quarter profit rose after it stepped up holiday discounts and added more brands of computers and flat-screen televisions. 

Net income climbed to $4.1 billion, or $1.02 a share, from $3.94 billion, or 95 cents, a year earlier, the Bentonville, Arkansas-based merchant said today in a regulatory filing. Excluding one-time items, profit exceeded analysts' estimates by 2 cents. Revenue increased to $107.4 billion.


----------



## dhukka

Whiskers said:


> Was looking at some US mid qtr results earlier. Apart from financials, many companies are doing Ok to quite well.
> 
> BREAKING NEWSWal-Mart reports fourth-quarter earnings from continuing operations of $1.02 a share; sales rise to $106.3 billion. Details soon.
> http://money.cnn.com/
> 
> Could make for a bright start for the US week.




If the US market goes up tonight it won't be because of Wal-mart. Earnings were bang on expectations, however their outlook was at the lower end of expectations.  

Thomson est  Q1 *74c*, FY *$3.44* 

Wal-Mart forecast Q1 seen *70c to 74c*, FY *$3.30 to $3.43*


----------



## Whiskers

dhukka said:


> If the US market goes up tonight it won't be because of Wal-mart. Earnings were bang on expectations, however their outlook was at the lower end of expectations.
> 
> Thomson est  Q1 *74c*, FY *$3.44*
> 
> Wal-Mart forecast Q1 seen *70c to 74c*, FY *$3.30 to $3.43*




I think the main thing was that Wal-Mart's last year income DID come in slightly above the average forecast of $1.02 to beat last year, ie that there were no surprises.

Overall though, as I said above, a number of other companies are reporting positive mid qtr results to help dampen recession fears. A couple of further bank write downs I think were dissapointing but not unexpected.


----------



## wayneL

Due to the lagging effect of crunched credit, next quarter might be more telling for retailer stocks like ChinaMart.


----------



## dhukka

Whiskers said:


> I think the main thing was that Wal-Mart's last year income DID come in slightly above the average forecast of $1.02 to beat last year, ie that there were no surprises.




The market is not particularly interested in the past. Google and a number of other techs had great earnings last quarter but their outlooks disappointed and their shares got slammed. Wal-mart is looking OK, margins holding up well but for how long? *0.5%* same store sales in January versus *2.0%* expected. 



Whiskers said:


> Overall though, as I said above, a number of other companies are reporting positive mid qtr results to help dampen recession fears. A couple of further bank write downs I think were dissapointing but not unexpected.




This platitude has been doing the rounds for the last 3 months. "If you take out financials, homebuilders and retailers corporate earnings look strong." Problem is you can't exclude them. If I exclude the 6 hours it rained today the weather was fine. Does everyone expect earnings to fall for all sectors in unison?  If there is a recession in the US and it is deeper than economists currently expect, then other sectors will follow.


----------



## chops_a_must

Well... the futures are certainly going nuts.

Can't see a correction happening tonight at least.

Looks like we are going to get some kind of rally due to the bond insurers dodging a bullet. Can't see that happening forever, they look to be stuck in a bit of a crossfire....

Time to get back on the commodity train with everything I feel.

Kiss of death. Lol!


----------



## Whiskers

wayneL said:


> Due to the lagging effect of crunched credit, next quarter might be more telling for retailer stocks like ChinaMart.




Quite possibly wayne. Not into Wal-Mart too much but seems like maybe some expansion plans going on hold or changing.



> The most recent quarter's results included charges of 3 cents per share for dropped real estate projects and a restructuring charge for its Japanese operations, and a 1 cent per share benefit from the sale of certain real estate properties.
> 
> Excluding the items, Wal-Mart reported earnings of $1.04 per share, above analysts' average estimate of $1.02 per share, according to Reuters Estimates
> http://www.reuters.com/article/ousiv/idUSWEN398620080219




Dhukka, I think last years results exceeding the previous and on target is more about credability. The market is sorting out whose forecasts they can believe and rely on. Obviously some positive mid qtr results, Bush's rescue passing and hitting the floor running, the bond insurers getting some time to work out something in an orderly fashion and the fed interest rate cuts  collectively restoring a bit of confidence.

The day is not lost just because it rains for awhile, similarly US consumers and economy doesn't drop dead just because some elements of it's economy went bad. Afterall this problem was essentially to do with the certain lending practices by financials and the home building industry. That doesn't necessairly equate to problems with all sectors of the economy or a recession. 

I told you earlier that poeple strive to be happy and avoid disaster however they can. I'm wondering whether you are very cynical or just won't be happy until the worst eventuates. :


----------



## ithatheekret

chops_a_must said:


> Looks like we are going to get some kind of rally due to the bond insurers dodging a bullet.





Strewth if that's a bullet I'd hate to see one of the bombs ..........


----------



## dhukka

Whiskers said:


> Dhukka, I think last years results exceeding the previous and on target is more about credability.




There was never any doubt Wal-mart would beat last years numbers. As stated previously the numbers were in line, margins held up, inventories low. Wal-mart are price leaders and should do better than most retailers in the current environment. Going forward is what matters, their guidance was on the low end. 



> Obviously some positive mid qtr results, Bush's rescue passing and hitting the floor running, the bond insurers getting some time to work out something in an orderly fashion and the fed interest rate cuts  collectively restoring a bit of confidence.




Bush's resuce plan is a dud, the bond insurer drama has to end badly for somebody. Fed rate cuts.... whatever. However I have undying faith in stockmarket participants into deluding themesleves that everything is fine in the short term. 



> The day is not lost just because it rains for awhile, similarly US consumers and economy doesn't drop dead just because some elements of it's economy went bad.




Of course it doesn't, it never does. In a recession, economic activity does not come to a grinding halt, consumers do not stop spending, the rate of growth slows, and may dip into negative territory. We have recessions and we get through them. Just because someone is bearish on the economic outlook does not mean they think the end of world is nigh. 



Whiskers said:


> Afterall this problem was essentially to do with the certain lending practices by financials and the home building industry.




Essentially you're grossly oversimplifying, there was much more at play than lax lending standards and a few too many planned commnuities.  




Whiskers said:


> I told you earlier that poeple strive to be happy and avoid disaster however they can. I'm wondering whether you are very cynical or just won't be happy until the worst eventuates. :




I just prefer not to plant my head firmly up my arce and hope everything turns out just peachy.


----------



## Whiskers

You sure are in an irritable mood again tonight dhukka! 

Don't worry so much. I promise... it aint gonna be that bad.


----------



## dhukka

Whiskers said:


> You sure are in an irritable mood again tonight dhukka!
> 
> Don't worry so much. I promise... it aint gonna be that bad.




On the contrary, I'm in a great mood, I'm not worried about things getting bad, bring it on I say.


----------



## chops_a_must

Why do I always get the distinct impression that bears would be the sort of people that would go beserk in a war and kill piles of enemy troops in a last ditch effort while laughing at the situation?


----------



## Whiskers

See, there are still some companies pleasently surprising the market. 



> (Reuters) - Oil refiner Holly Corp (HOC.N: Quote, Profile, Research) reported fourth-quarter profit that beat Wall Street's expectations, helped mainly by stronger sales of refined products and higher prices, sending its shares up more than 6 percent in trading before the bell.
> 
> The company reported net income of $49.8 million, or 90 cents a share, compared with $47.7 million, or 84 cents a share in the year-ago quarter.
> 
> Sales and other revenue rose 54 percent to $1.44 billion.
> 
> Analysts on average were expecting earnings of 63 cents a share, before special items, on revenue of $1,083.2 million.http://www.reuters.com/article/hotStocksNews/idUSBNG32855620080219




and another :


> NEW YORK (Reuters) - Shares of General Mills Inc (GIS.N: Quote, Profile, Research) rose 1.6 percent in trading before the opening bell on Tuesday, after the maker of brands such as Cheerios cereal raised its 2008 earnings forecast.
> 
> Shares rose to $57.30 from a close of $56.39 on the New York Stock Exchange




and another :


> NEW YORK (Reuters) - OfficeMax Inc (OMX.N: Quote, Profile, Research) posted a better-than-expected quarterly profit on Tuesday, helped by cost-cutting measures amid declining sales, and its shares rose more than 11 percent.
> 
> The nation's third-largest office supplies retailer said fourth-quarter profit rose to $71.5 million, or 92 cents a share, from $58 million, or 76 cents, a year earlier.


----------



## ithatheekret

Yeah oilers are travelling , I sold my XOM for $84.20 thought I did okay , till it jumped another $3 . VLO and CVX travelling okay , MON doing well too .


----------



## Whiskers

Probably getting a bit exuberant with my enthusiastm but fwiw the State Street Investor Confidence Index is up from 68.8 to 73. A bit more apetite for risk.

Financials with brokerage arms are going to get a nice injection from increased share trading in the US and UK.

Interesting that they reckon hedge funds account for 1/4 of all transactions. Thats a bit of clout if they all decide to trade the same direction.



> Feb. 19 (Bloomberg) -- The biggest surprise on Wall Street this year is proving to be the record $16.3 trillion of shares traded in the U.S. as stocks show no sign of rebounding from the first bear market since 2002 and the economy teeters on the brink of a recession.
> 
> Daily trading in December and January averaged 7.44 billion shares, 13 percent more than the previous quarterly peak, New York Stock Exchange data show. The pace is a boon to Goldman Sachs Group Inc., Morgan Stanley, Merrill Lynch & Co., Lehman Brothers Holdings Inc. and Bear Stearns Cos., whose equity- trading revenue will slip just 6.1 percent in 2008 from last year's record $36.7 billion, according to Sanford Bernstein & Co. The same income-stream shrank almost 40 percent in 2001 and 2002, after the Internet bubble burst. http://www.bloomberg.com/apps/news?pid=20601109&sid=anc5uXSV7_lY&refer=exclusive


----------



## blablabla

Whiskers said:


> Financials with brokerage arms are going to get a nice injection from increased share trading in the US and UK.




If there is a recession then guess where heaps of retrenched former workers will end up with their payouts? As share traders of course. Brokers will probably be winners nomatter what happens to the economy.


----------



## GreatPig

blablabla said:


> guess where heaps of retrenched former workers will end up with their payouts



Down at the pub playing the pokies?

GP


----------



## ithatheekret

" The biggest surprise on Wall Street this year is proving to be the record $16.3 trillion of shares traded in the U.S. as stocks show no sign of rebounding from the first bear market since 2002 and the economy teeters on the brink of a recession ".

Massive spin , massive . 

What they didn't think the Sovereign funds would go unnoticed in the numbers ? 

If they didn't set records one would be extremely worried , that it's even more worse that we can get them to admit on each round of closet cleaning .

Sorry but , I have seen better story telling in the Sunday Telegraph .......
 at least they have a page three glamour shot .

Of course it comes from Micheal Bloombergs Westinghouse special .....  The man who would be king ..... of the lillies .


----------



## Kauri

OH Oh...   
Watch  out beloooowww

reports that noted US fund KKR could not roll-over billions in CPs which have already come due.
Cheers
...........Kauri


----------



## chops_a_must

Kauri said:


> OH Oh...
> Watch  out beloooowww
> 
> reports that noted US fund KKR could not roll-over billions in CPs which have already come due.
> Cheers
> ...........Kauri




Nasty stuff. Glad I didn't close out my AMP short.

But what actually happened? I was out all day and the charts just fell off a cliff after 3. SPI fell off a cliff earlier though...

US futures not indicating big problems... yet...


----------



## dhukka

Kauri said:


> OH Oh...
> Watch  out beloooowww
> 
> reports that noted US fund KKR could not roll-over billions in CPs which have already come due.
> Cheers
> ...........Kauri




Took a while to find this in the mainstream media



> *KKR arm in restructuring talks after repayment delay - report*
> 
> (Thomson Financial delivered by Newstex) -- KKR Financial (NYSE:KFN) Holdings (KFN) has delayed repayment of billions of dollars of commercial paper for the second time, the Financial Times reported.
> 
> The listed affiliate of the private equity group has also begun a new round of restructuring talks with creditors less than six months after a rescue rights issue, the newspaper added, citing a regulatory filing.
> 
> KFN said it began talks with creditors and deferred repayment of a chunk of debt due last Friday. It put off February repayments until March 3, but warned that most investors had the right to demand their money back with one day's notice.
> 
> KFN also said it had given some note-holders the option of taking a slice of the underlying mortgages in lieu of repayment. It declined to comment further, the newspaper said.


----------



## chops_a_must

Oh oh... With inflation up, there is no way this can be stopped by the fed now:


> Corporate Bond Risk Soars to Record on CDO Loss Speculation
> 
> By Abigail Moses and Hamish Risk
> 
> Feb. 20 (Bloomberg) -- The cost of protecting corporate bonds from default soared to a record as investors purchased credit-default swaps to hedge against mounting losses in the $2 trillion market for collateralized debt obligations.
> 
> ``Investors are accumulating losses,'' said Andrea Cicione, a credit strategist at BNP Paribas SA in London. ``It makes sense to reduce risk and cut losses.''
> 
> Securities known as constant proportion debt obligations that package indexes of credit-default swaps may be forced to sell about $44 billion of assets because of a decline in the value of their holdings, UniCredit SpA analyst Tim Brunne in Munich said today. The value of the so-called CPDOs has fallen to as low as 40 percent of face value, according to Morgan Stanley.
> 
> Credit-default swaps on the Markit CDX North America Investment-Grade Index of 125 companies with investment-grade ratings jumped 9 basis points to 163 at 7:44 a.m. in New York, according to Deutsche Bank AG.
> 
> Credit-default swaps are financial instruments based on bonds and loans that are used to speculate on a company's ability to repay debt. They pay the buyer face value in exchange for the underlying securities or the cash equivalent if a borrower fails to adhere to its debt agreements. A rise indicates deterioration in the perception of credit quality; a decline, the opposite.
> 
> The CDX index of credit-default swaps doubled this year as bank losses and writedowns on debt investments soared above $145 billion worldwide. The equivalent iTraxx index in Europe rose 14.5 basis points today to a record 132.5, according to JPMorgan Chase & Co., up from 51 basis points on Jan. 2.
> 
> Bank Losses
> 
> CDOs package assets and use the income to pay investors. Securities made up of credit-default swaps are known as synthetic CDOs. The notes are losing money as the cost of credit-default swaps rises. CPDOs are based on the CDX and ITraxx indexes.
> 
> Moody's Investors Service downgraded 1.1 billion euros ($1.62 billion) of CPDOs arranged by ABN Amro Holding NV, Lehman Brothers Holdings Inc. and BNP Paribas SA last week as asset values fell. CPDOs arranged in 2006 by banks including Amsterdam-based ABN Amro may be forced to unwind if the iTraxx Europe index rises to 140, according to UniCredit's Brunne and BNP's Cicione.
> 
> ``Different CPDOs have different trigger levels, but once one is triggered the negative technical pressure that is created may well cause other triggers to be hit,'' Willem Sels, a credit analyst at Dresdner Kleinwort in London, said in note to investors today.
> 
> CPDO Unwinds
> 
> Banks would seek to unwind CPDOs by buying credit-default swap indexes to offset their bets.
> 
> ``What seems to be clear in both Europe and the U.S. is that the continued unwind of leverage and structured products has continued to lead to underperformance in investment grade,'' Nick Burns, a London-based credit strategist at Deutsche Bank, wrote in a note today.
> 
> Contracts on U.K. mortgage lender Alliance & Leicester Plc jumped 40 basis points to 245 after the bank slashed its profit target for this year and next, citing rising borrowing costs and declining valuations on asset-backed securities because of the U.S. subprime mortgage slump.
> 
> A basis point on a credit-default swap contract protecting $10 million of debt from default for five years is equivalent to $1,000 a year.
> 
> Contracts on Standard Chartered Plc rose 3 basis points to 112 after the London-based bank abandoned a plan to refinance its $7.15 billion Whistlejacket Capital Ltd. structured investment vehicle, the largest SIV run by a bank to collapse.
> 
> KKR Financial
> 
> KKR Financial Holdings LLC, the $18 billion publicly traded credit fund run by Kohlberg Kravis Roberts & Co., delayed repaying some of its asset-backed commercial paper and started restructuring talks with its creditors, according to a regulatory filing yesterday.
> 
> Contracts on the Markit iTraxx Crossover Index of 50 companies with mostly high-risk, high-yield credit ratings jumped 21 basis points to 606, according to JPMorgan prices. Contracts on the benchmark Markit iTraxx Asia Ex-Japan index rose by 24 basis points to 295, according to ICAP Plc.
> 
> The risk of defaults on European LBO loans is the highest recorded by the benchmark Markit iTraxx LevX Senior Index of loan credit-default swaps. The index fell to 90, according to Bank of America Corp. prices, the lowest since it started in October 2006. A level below 100 indicates loans are valued below par.
> 
> To contact the reporter on this story: Abigail Moses in London Amoses5@bloomberg.net



Last Updated: February 20, 2008 08:00 EST


----------



## dhukka

chops_a_must said:


> Oh oh... With inflation up, there is no way this can be stopped by the fed now:
> 
> Last Updated: February 20, 2008 08:00 EST




Great stuff, the market has a new acronym to crap themselves over - CPDO.

Uncle Ben won't like those inflation numbers, doesn't square well with dropping money out of helicopters.


----------



## chops_a_must

Woooo! Stagflation is good!

Buy!! Buy !! Buy!!

Rofl.


----------



## dhukka

Yeah, you wonder what will happen when the market actually gets some good news.


----------



## dhukka

Interesting artilce in the WSJ by Martin Feldstein. Feldstein is the President and CEO of National Association of Economic Research (NBER), the organzation that officially calls economic cycles in the U.S.



> *Our Economic Dilemma*
> 
> Although it is too soon to tell whether the United States has entered a recession, there is mounting evidence that a recession has in fact begun. Key measures of economic activity stopped growing in December and January or actually began to decline. The collapse of house prices and the crisis in the credit markets continue to depress the real economy.
> 
> The sharp reduction in the federal funds interest rate and the new fiscal stimulus package may, of course, be enough to avert a downturn. Many forecasters still predict that the economy will just slow in the first part of this year and then rebound after the summer. But the hope that monetary and fiscal policies would prevent continued weakness by boosting consumer confidence was derailed by the recent report that consumer confidence in January collapsed to the lowest level since 1992.
> 
> If a recession does occur, it could last longer and be more painful than the past several downturns because of differences in its origin and character. The recessions that began in 1991 and 2001 lasted only eight months from the start of the downturn until the beginning of the recovery. Even the deeper recession of 1981 lasted only 16 months.
> 
> But these past recessions were caused by deliberate Federal Reserve policy aimed at reversing a rise in inflation. In those cases, the Fed increased real interest rates until it saw the economic slowdown that it thought would move us back toward price stability. It then reversed course, reducing interest rates and bringing the recession to an end.
> 
> In contrast, the real interest rate in 2006 and 2007 stayed at a relatively low level of less than 3%. A key cause of the present slowdown and potential recession was not a tightening of monetary policy but the bursting of the house-price bubble after six years of exceptionally rapid house-price increases. The Fed therefore will not be able to end the recession as it did previous ones by turning off a tight monetary policy.
> 
> The unprecedented national fall in house prices is reducing household wealth and therefore consumer spending. House prices are down 10% from the 2006 high and are likely to fall at least another 10%. Each 10% decline cuts household wealth by about $2 trillion, and this eventually reduces annual consumer spending by about $100 billion. No one can predict the extent to which the coming fall in house prices will lead to defaults and foreclosures, driving house prices and wealth down even further. Falling house prices also discourage home building, with housing starts down 38% over the past 12 months.
> 
> But the principle cause for concern today is the paralysis of the credit markets. Credit is always key to the expansion of the economy. The collapse of confidence in credit markets is now preventing that necessary extension of credit. The decline of credit creation includes not only the banks but also the bond markets, hedge funds, insurance companies and mutual funds. Securitization, leveraged buyouts and credit insurance have also atrophied.
> 
> *The dysfunctional character of the credit markets means that a Fed policy of reducing interest rates cannot be as effective in stimulating the economy as it has been in the past. Monetary policy may simply lack traction in the current credit environment.*




click on the link for the full article. The part in bold is the key take away for me. The Fed was never tight on monetary poilcy to begin with and therefore loosening will not have the desired effect that it had in the past.


----------



## ithatheekret

The dysfunctional character of the credit markets means that a Fed policy of reducing interest rates cannot be as effective in stimulating the economy as it has been in the past. Monetary policy may simply lack traction in the current credit environment. 



That makes sense now ............ at least we know why they greased the tracks now .


----------



## Aussiejeff

ithatheekret said:


> The dysfunctional character of the credit markets means that a Fed policy of reducing interest rates cannot be as effective in stimulating the economy as it has been in the past. Monetary policy may simply lack traction in the current credit environment.
> 
> 
> 
> That makes sense now ............ *at least we know why they greased the tracks now* .




Why, oh why, have these fools greased the DOWNHILL tracks heading for the _Grande Canyone_ drop off??

Oh, I get it. Some one stands to make a LOT OF MOOLAH out of the ashes..... *grrr*.

AJ


----------



## MRC & Co

Whiskers said:


> *  IMF October 2007.*
> 
> *Country................GDP (PPP) $m *
> 
> *United States.........13,543,330 * - *19.02%*
> 
> China....................11,606,336 - 16.551%
> Hong Kong..................289,748  -   .402%
> China (Taiwan)............749,943  - 1.034%
> Total China.............12,646,027 - 17.987%
> 
> India.......................4,726,537 - 6.576%
> 
> *Total China + India..17,373,164* - *24.563%*




Whooaaaaaa.  Isnt PPP just a theory binded by economic assumptions, of which do not apply in reality?  Last time I checked.  A simple look at the BigMac index would agree.


----------



## Whiskers

No doubt a lot of head aches to come in the bond insurance business... self interest of the rating agencies... a change of rating system or splitting up of insurers. Be interesting to see who wins out there. The Rating agencies have 'threatened' action ages ago but interestingly have not followed through. I guess it would not be very pleasent in their shoes if a subsequent inquiry found the stalemate or disaster of rating downgrades had a smell of unjustified anomolies and self-interest.

Interesting to note the muni bonds are safer than the bond insurers. Get a reasonable fix here and most of our worries go away for now.



> *Common sense fix for muni bonds*
> 
> _If muni bonds got the ratings they deserve, we wouldn't need to bail out the bond insurers. We wouldn't need bond insurers at all_.By Jon Birger, senior writer
> 
> NEW YORK (Fortune) -- What the municipal bond market needs most is not an injection of capital into the bond insurance companies. What it needs is an injection of common sense into its credit rating system.
> 
> The simple truth is that the overwhelming majority of tax-exempt bonds issued by states and cities deserve a triple-A credit rating without any bond insurance, given their historically miniscule default rates.
> 
> ....
> 
> So why then do the rating agencies maintain separate rating scales for munis? Fabian contends the rating agencies are simply serving their own interests. If everything were rated double-A or triple-A, there would be little need for bond insurance. And no bond insurance would mean the rating agencies wouldn't be able to charge for two ratings per bond issue an insured rating in addition to the underlying rating instead of just one.
> 
> ...
> 
> Municipal bonds have always been substantially better credit risks than the bond insurance companies insuring them. That made no sense a year ago, and with the credit markets hanging in the balance, it makes even less sense today.
> http://money.cnn.com/2008/02/20/mag...ings.fortune/index.htm?postversion=2008022104


----------



## Whiskers

MRC & Co said:


> Whooaaaaaa.  Isnt PPP just a theory binded by economic assumptions, of which do not apply in reality?  Last time I checked.  A simple look at the BigMac index would agree.




Yeah, agree to some extent MRC &Co. 

The PPP thing came up out of a bit of a tiff I had with dukka about... not sure how it started now. You'll have to read back the thread.


----------



## treefrog

> What it needs is an injection of common sense into its credit rating system



arrr, well now, the problem is that common sense is not all that common


----------



## Whiskers

treefrog said:


> arrr, well now, the problem is that common sense is not all that common




Agree there... self interest far more common.


----------



## MRC & Co

Whiskers said:


> Yeah, agree to some extent MRC &Co.
> 
> The PPP thing came up out of a bit of a tiff I had with dukka about... not sure how it started now. You'll have to read back the thread.




ha ha, I think I will leave it, cant be bothered reading that many pages!

But PPP is more a long-run concept, interest parity a more short-term concept.  Then you have the problems trade barriers, transport costs and different taxation systems in various countries.  Another reason pointing to the restrictions of economics, but its still an interesting concept and does show to some extent a standard of living.  However, Real GDP is a fare more useful measure IMO.  

Cheers


----------



## dhukka

Whiskers said:


> No doubt a lot of head aches to come in the bond insurance business... self interest of the rating agencies... a change of rating system or splitting up of insurers. Be interesting to see who wins out there. The Rating agencies have 'threatened' action ages ago but interestingly have not followed through. I guess it would not be very pleasent in their shoes if a subsequent inquiry found the stalemate or disaster of rating downgrades had a smell of unjustified anomolies and self-interest.
> 
> Interesting to note the muni bonds are safer than the bond insurers. Get a reasonable fix here and most of our worries go away for now.





Muni bonds are not the problem. the problem is the billions of worthless CDO crap that the monolines have insured. They don't have the capital to cover the potential losses and keep their AAA rating. If they lose their rating, it would mean billions in writedowns for the likes of Citi, Merrill etc. 

The muni bonds are easy to take care of. Buffet and a dozen others would be glad to step in and reinsure them. The muni business is money for jam. 

The rating agencies have given the monlines until the end of Feb to come up with more capital or some other plan. However the rating agencies hardly want to be blamed for a more massive writedowns so they'll do anything to avoid downgrading. Will be an interesting week for the monolines next week.


----------



## Whiskers

dhukka said:


> Muni bonds are not the problem. the problem is the billions of worthless CDO crap that the monolines have insured.




Yeah, I get that dhukka. 

I should've reversed my last two sentences and into seperate paragraphs. It would have been clearer. 

But in a sense the muni bonds seem to be a problem in that they are far more secure and deserve a higher rating than a lot of the stuff they are rated along side. Obviously part of the dilema in trying to get value for and determine what to split off and or sell.

The other issue that has been brewing for awhile and might be coming to a head re further intervention/regulation is poiniently outlined below.



> February 21, 2008, 7:36 am
> *Muni mess: Another black eye for Wall Street*
> The mess in an obscure corner of the municipal bond market is turning into another black eye for the banking industry. Bloomberg reports that the collapse of the $342 billion market for so-called auction rate bonds “demonstrates that regulators are no match for Wall Street.” Dealers such as Goldman Sachs (GS), Citi (C) and Merrill Lynch (MER) previously propped the market up by bidding for bonds that otherwise would have gone unsold, but they are now walking away from this once-lucrative niche in a bid to preserve their own strained balance sheets. Auctions failed on between $80 billion and $85 billion of auction-rate debt failed last week alone, The Wall Street Journal reports. As a result, even high-quality bond issuers such as the Port Authority of New York and New Jersey and the University of Pittsburgh Medical Center have ended up paying interest rates as high as 20 percent after the auctions for their bonds failed to draw any bidders.
> 
> The government hasn’t been totally blind to the possible conflicts of interest in the auction rate market: An earlier SEC probe of possible bid-rigging ended with 15 banks agreeing in 2006 to a $13 million settlement. Now, however, taxpayers are left footing the bill as Wall Street seeks to save its own hide. Meanwhile, understatement remains the order of the day in Washington. Referring to the possibility of bid-rigging in the auction rate market, an SEC official tells Bloomberg that the recent collapse of demand at auction “appears to indicate those concerns were well founded.”
> http://dailybriefing.blogs.fortune.cnn.com/2008/02/21/muni-mess-another-black-eye-for-wall-street/


----------



## dhukka

Whiskers said:


> Yeah, I get that dhukka.
> 
> I should've reversed my last two sentences and into seperate paragraphs. It would have been clearer.
> 
> But in a sense the muni bonds seem to be a problem in that they are far more secure and deserve a higher rating than a lot of the stuff they are rated along side. Obviously part of the dilema in trying to get value for and determine what to split off and or sell.
> 
> The other issue that has been brewing for awhile and might be coming to a head re further intervention/regulation is poiniently outlined below.




The problem with the muni bonds is for the muni bond holders. If the monolines get downgraded the muni bond ratings get downgraded and then the muni bond holders have to sell because they aren't allowed to hold anything but AAA. 

It's really a stupid situation when you think about it.  The state of New York, which is already a top class credit, pays for insurance from a bond insurer that has a lower credit rating thatn the credit it is insuring.


----------



## Kauri

Well the Philly fed turned into Philly cream cheese,,, giving the Dow futures a bit of a knock... but if it's bad news it won't take long to pick up... after all bad news is good news.. 
Cheers
..........Kauri


----------



## Whiskers

Kauri said:


> Well the Philly fed turned into Philly cream cheese,,, giving the Dow futures a bit of a knock... but if it's bad news it won't take long to pick up... after all bad news is good news..
> Cheers
> ..........Kauri




Well... they almost got over it... having another think about it!

Turning back to that China 'decoupling' thing...:hide: 

The're clever little critters. This one's a bit out of left field, but just might work. 



> *China farmers to get fridges, TVs to boost consumption*
> 
> "This is like free food falling from the sky!"
> 
> Yuan was the beneficiary of a pilot scheme entitling each rural family in Shandong and two other provinces to a 13 percent government rebate on the purchase of up to two television sets, two refrigerators and two mobile handsets.
> 
> The subsidies are part of a battery of policies by Beijing aimed at spurring domestic consumption and improving the lot of the country's roughly 740 million rural residents, who make up 56 percent of the population but have not benefited nearly as much from the economy's roaring growth as people in cities.
> 
> The concept is enticingly simple: give farmers the same tax rebates long given to exporters of home appliances, removing a policy bias towards exports and helping manufacturers tap a potentially huge pool of consumers in rural China.
> http://www.reuters.com/article/ousiv/idUSPEK26642620080221?pageNumber=1&virtualBrandChannel=0


----------



## Kauri

Whiskers said:


> Well... they almost got over it... having another think about it!
> 
> Turning back to that China 'decoupling' thing...:hide:
> 
> The're clever little critters. This one's a bit out of left field, but just might work.





now all they need is the power to make them more than ornaments..   

Cheers
.........Kauri


----------



## Whiskers

Kauri said:


> now all they need is the power to make them more than ornaments..
> 
> Cheers
> .........Kauri




Coming into spring summer there soon... they'll be right for a little while, so long as they don't start giving out air conditioners.


----------



## Kauri

life is hard at the top....


> the Fed's predicament is pretty hair-raising, with Bernanke and co willing to risk a battle with inflation over the medium to longer-term if it means keeping the housing-led credit crisis from sending the US economy into a tailspin in the near-term. That bet leaves the dollar vulnerable, particularly if the Fed is seen as losing both bets simultaneously, which recent data appear to suggest. Of course there is a 2-3 qtr lag between monetary stimulus and the economic payoff, so some are still betting on better US economic performance by mid-year, which may help the buck.


----------



## Uncle Festivus

Have a bet or stick to the facts?.........Mmmmmm, perhaps I'll toss a coin.

Perhaps it will become known as the 'Upsize My Derivatives' period? Do you want recession with your fried financials?


----------



## dhukka

Whiskers said:


> Well... they almost got over it... having another think about it!
> 
> Turning back to that China 'decoupling' thing...:hide:
> 
> The're clever little critters. This one's a bit out of left field, but just might work.




This has go to be one of the stupidest things I've seen for a while. The government desperately encouraging people to buy crap they don't need to keep people in jobs. Yeah there's a viable economic model.


----------



## Whiskers

dhukka said:


> This has go to be one of the stupidest things I've seen for a while. The government desperately encouraging people to buy crap they don't need






Crap they don't need... wow, I'd have thought everyone needs a fridge, TV and phone these days. Common dhukka your're not being very charitable. 



> to keep people in jobs.




And you have to agree if they can pull it off it will enpower the rural poor to be more productive and efficient, to bridge the povety gap, probably enable more to stay in the country resulting in less conjestion and pollution in the cities. 

The bit I like... it will reduce their increasing reliance on exports for their GDP and, as I say if they can pull it off, will be great for the continued prosperity of China and further decoupling from the US. 



> Yeah there's a viable economic model.




Too right  :


----------



## ithatheekret

The Phily caught them at the trough .

That's the third successive number below zero , the fourth decline in a row ......... there's no recession out there , and pigs fly .

The ISM readings  ......... well . apart from thinking the data is being squashed and moulded into something sheeple can swallow , is starting to sempahore that they can't hold back the numbers now .

Let's just have a look at the last round before we hit oh I don't know , say around 45 this go , but this was discussed a couple of months ago , I know couldn't find where so I thought I rehash it .

50.4 blip
50.0
48.4
50.7 blip
47.0 last reading 

???? next ?


----------



## dhukka

Whiskers said:


> Crap they don't need... wow, I'd have thought everyone needs a fridge, TV and phone these days. Common dhukka your're not being very charitable.




A fridge they need, 2 they don't, although it's debatable whether the rural poor need a mobile phone or even a TV for that matter. 



Whiskers said:


> And you have to agree if they can pull it off it will enpower the rural poor to be more productive and efficient, to bridge the povety gap, probably enable more to stay in the country resulting in less conjestion and pollution in the cities.




Please tell me you're joking. I would completely disagree, how does a TV make you more productive and efficient? The whole policy screams of inefficiency, using government money to artificially stimulate demand for discretionary items (fridge excluded). It's no better than the US's fiscal stimulus package of mailing checks to people. It's a clumsy inefficient use of government funds, 



Whiskers said:


> The bit I like... it will reduce their increasing reliance on exports for their GDP and, as I say if they can pull it off, will be great for the continued prosperity of China and further decoupling from the US.




It just doesn't get any funnier than this. I admit - you got me, hook, line and sinker.


----------



## dhukka

ithatheekret said:


> The Phily caught them at the trough .
> 
> That's the third successive number below zero , the fourth decline in a row ......... there's no recession out there , and pigs fly .
> 
> The ISM readings  ......... well . apart from thinking the data is being squashed and moulded into something sheeple can swallow , is starting to sempahore that they can't hold back the numbers now .
> 
> Let's just have a look at the last round before we hit oh I don't know , say around 45 this go , but this was discussed a couple of months ago , I know couldn't find where so I thought I rehash it .
> 
> 50.4 blip
> 50.0
> 48.4
> 50.7 blip
> 47.0 last reading
> 
> ???? next ?




Leading economic indicators, (which ironically are mostly lagging) fell for the fourth straight month. The index has fallen 2% from July 2007 to January 2008 making it the largest six-month decline in the index since early 2001.


----------



## Trembling Hand

dhukka said:


> although it's debatable whether the rural poor need a mobile phone or even a TV for that matter.
> 
> I would completely disagree, how does a TV make you more productive and efficient? The whole policy screams of inefficiency, using government money to artificially stimulate demand for discretionary items (fridge excluded).




You would have to be kidding. Any form of communication especially phones but also Yes the idiot box is known to increase health and education for the disadvantaged. Which plainly increases productivity and efficiency?

Wealth distribution to the rural poor with targeted subsidies is a tactic that virtually every western governments uses. And its ultimately a very cheap way to decrease the gap between rural and urban disadvantage. A Fridge is a huge help to families thus increasing their productivity. You cannot see the disadvantage in not being able to store food??


----------



## dhukka

Trembling Hand said:


> You would have to be kidding. Any form of communication especially phones but also Yes the idiot box is known to increase health and education for the disadvantaged. Which plainly increases productivity and efficiency?
> 
> Wealth distribution to the rural poor with targeted subsidies is a tactic that virtually every western governments uses. And its ultimately a very cheap way to decrease the gap between rural and urban disadvantage. A Fridge is a huge help to families thus increasing their productivity. You cannot see the disadvantage in not being able to store food??




Maybe you could read my post again, I wholeheartedly agree that a fridge is a necessity. A phone improves communication but who needs two mobiles in rural China?

How do you increase health exactly? Or do you mean improve health? Americans are the biggest watcher's of TV in the world and how's their health? The poorest and least healthy in the US, also watch the most TV, go figure. Most in the western world could improve their education if they turned off the TV and picked up a book or logged in to an informative discussion board like ASF.


----------



## Trembling Hand

dhukka said:


> Americans are the biggest watcher's of TV in the world and how's their health? The poorest and least healthy in the US, also watch the most TV, go figure. Most in the western world could improve their education if they turned off the TV and picked up a book or logged in to an informative discussion board like ASF.




By that logic as the Americans are also the biggest users of cars and the fattest in the world China shouldn't have cars??

Governments spread important health education messages via media.(mostly now TV). Many that have missed the boat with reading will only be able to learn and be informed via radio or TV. And are you saying that a TV has NO roll in informing the disadvantaged?



dhukka said:


> Most in the western world could improve their education if they turned off the TV and picked up a book or logged in to an informative discussion board like ASF.




Most in the developing world would improve their education if they didn't have to live a subsistence life while government invested surplus foreign income in the likes of Blackstone Group at a market top while they haven't the most basic necessities.

A Rural family I imagine would greatly welcome two phones as most have to leave home to find work elsewhere. As they receive no other help from a socialist government the idea that they can help communicating
is great for the family as well as the society. Strong family units add to the economy while broken family units cost the economy.


----------



## theasxgorilla

dhukka said:


> Most in the western world could improve their education if they turned off the TV and picked up a book or logged in to an informative discussion board like ASF.




Here, here!

The two-way flow of information at a forum like ASF encourages people to give their grey matter a workout...that's got to be a good thing!

ASX.G


----------



## dhukka

Trembling Hand said:


> By that logic as the Americans are also the biggest users of cars and the fattest in the world China shouldn't have cars??




 



Trembling Hand said:


> Governments spread important health education messages via media.(mostly now TV). Many that have missed the boat with reading will only be able to learn and be informed via radio or TV. And are you saying that a TV has NO roll in informing the disadvantaged?




Do they? I must have missed them. So if someone hasn't learned to read they can thankfully be educated from the TV. What a horrible vision, sounds like some Orwellian nightmare. 

No doubt there is link between education and health, however the TV as purveyor of education and nutritional advice is laughable. Although I guess it's good if you can get a community health announcement in between an add for Coke, and McDonalds. 



Trembling Hand said:


> Most in the developing world would improve their education if they didn't have to live a subsistence life while government invested surplus foreign income in the likes of Blackstone Group at a market top while they haven't the most basic necessities.
> 
> A Rural family I imagine would greatly welcome two phones as most have to leave home to find work elsewhere. As they receive no other help from a socialist government the idea that they can help communicating
> is great for the family as well as the society. Strong family units add to the economy while broken family units cost the economy.




So don't address the issue of great droves of people leaving the rural lifestyle, just give them phones so they can communicate when they go off to the big city. 

I always find it interesting that those of us in the developed world feel the need to lift everybody else out of their so called poverty. No doubt there are people in the world who would benefit from better sanitation, electricity access to education etc. However I bet there are plenty who actually enjoy a subsistence lifestyle, have no desire to go to cities, are happy and content.  

The fallacy that we know what's good for others because we drive cars, have flat screen TV's and credit cards just attests to our arrogance. An interesting excerpt from John Raulston Sauls, "The Collapse of Globalism"



> The private sector's industrialised vision of agriculture - which is all about mass production, large machines, and a great deal of artificial additives - is in in the same optimistic tradition. Curiously enough, this vision has always included large public subsidies. What those who live in the west have seen is that this industrialised approach to agriculture can produce food surpluses, but drives the farming population off the land, bankrupts smaller communities and, at the end of the day, leaves even the largest producers struggling to break even. The real profits of the last quarter-century have gone to the managerial organisations - the middlemen -wholesalers and large retail distributors of machinery, additives and bulk food.
> 
> In low income countries, 70 percent of employment is agricultural, in middle-income 30 percent. In the West it is 4 percent, and, even at that, the sector has been in permanent financial and human crisis since the 70's. The application of industrial agricultural methods to the low- and middle-income countries is a recipe for social catastrophe. Yet that is the dream of open markets. The most efficient will win out. Food will be seen as a secondary outcome of an industrial method. Or to say the same thing another way, this is a determinist approach towards agriculture as an industry, not a food source. Yet with 70 percent of the population in low-income countries on smaller holdings, efficiency is a very minor consideration. Food security for people without cash incomes, rural viability, natural disaster prevention, biodiversity, employment of older farmers- this is a short list of much more important issues that the United Nations Development Programme (UNDP) puts forward. The message may be understated but it is clear: agriculture "performs various non-commodity roles."
> 
> Such a layered, subtle approach is now so far away from our urban understanding in the West that our typical political answer to those societies operating outside the industrial agriculture model is to block the import of their goods. Why? Well mysteriously, their products are said to be unfairly cheap, even though we also say they are inefficiently produced. Even more curious, we simply don't want to have any serious conversation about the _big solution, highly modern industrial agriculture_ that functions inside our own societies. Nobody wants to talk about it's contradictions. For example, even  with ten to fifteen thousand acres of good grain-producing land in Western Canada or the United Sates and all the best equipment and chemicals, a farmer will have difficulty making a solid and predictable profit.


----------



## ithatheekret

Awe Dhukka I thought at least you would have got my little pokes with the blip tags .


----------



## Trembling Hand

dhukka said:


> Do they? I must have missed them. So if someone hasn't learned to read they can thankfully be educated from the TV. What a horrible vision, sounds like some Orwellian nightmare.



That statement simply ignores the fact that a lot of people learn about the world from TV either News or factual (loosely)based programs. Whether they are to your taste or not is not the point. Most people through out the world get news from TV. Are you disputing this??

If you have missed some of the health and education programs that Gov and NGOs fund let me outline some Aussie examples, Anti-Smoking,
Anti-Drinking, skin cancer, Bush fire info and prevention. Storm info in the top end, Driving education, Save sex etc. These kind of things are rolled out through out the world. The people that have most to learn from these are the ones on the bottom of the social ladder.


dhukka said:


> So don't address the issue of great droves of people leaving the rural lifestyle, just give them phones so they can communicate when they go off to the big city.
> 
> I always find it interesting that those of us in the developed world feel the need to lift everybody else out of their so called poverty. No doubt there are people in the world who would benefit from better sanitation, electricity access to education etc. However I bet there are plenty who actually enjoy a subsistence lifestyle, have no desire to go to cities, are happy and content.
> 
> The fallacy that we know what's good for others because we drive cars, have flat screen TV's and credit cards just attests to our arrogance. An interesting excerpt from John Raulston Sauls, "The Collapse of Globalism"




So governments should not try with their tax surpluses to level the gap between haves and desperately have nots. Why then should they tax anything?

My point was that your criticism of a subsidy of a large portion of community left behind in a fast growing country is simply complaining for the sake of complaining. Like most comments on this thread when any move is made by any Gov. 

To bring up the extract from "The Collapse of Globalism" as If that was my argument is ridiculas. When did I say that I want the " industrialised vision of agriculture " That article has nothing to do with anything I wrote about.


----------



## Bushman

dhukka said:


> However I bet there are plenty who actually enjoy a subsistence lifestyle, have no desire to go to cities, are happy and content.
> QUOTE]
> 
> Dhukka - you sound like a modern version of Rousseau.
> 
> 'Men in a state of nature do not know good and evil, but their independence, along with “the peacefulness of their passions, and their ignorance of vice”, keep them from doing ill (A Discourse..., 71-73).'
> 
> Maybe we can alter the colonial concept of the 'noble savage' to that of the 'noble rural poor', far removed from the 'corrupting' influences of Western civilisation.
> 
> Remember that according to World Bank estimates 88m rural Chinese live under the poverty line. Government initiatives to improve their plight in life can only be a good thing. Nutrition, health, literacy, opportunity. Do not let your Western romantic notions of a 'simple' life cloud your judgement here. Hunger and disease ain't no fun.
> 
> As for televisions, well they are perfect mediums for political propaganda too. The televisions seem politically expedient to me.


----------



## ithatheekret

As for televisions, well they are perfect mediums for political propaganda too. The televisions seem politically expedient to me. 

I bet CNBC and any other republican platform will be severely curtailed and a few rocks pelted at them , if the Dems get in .


Come to think of it , it would be worth it .

Nah ..... we know they're twits anyway , worldwide , worldwide ... and worldwide . 

Come on Sidney


----------



## >Apocalypto<

Bushman said:


> dhukka said:
> 
> 
> 
> 
> However I bet there are plenty who actually enjoy a subsistence lifestyle, have no desire to go to cities, are happy and content.
> QUOTE]
> 
> Dhukka - you sound like a modern version of Rousseau.
> 
> 'Men in a state of nature do not know good and evil, but their independence, along with “the peacefulness of their passions, and their ignorance of vice”, keep them from doing ill (A Discourse..., 71-73).'
> 
> Maybe we can alter the colonial concept of the 'noble savage' to that of the 'noble rural poor', far removed from the 'corrupting' influences of Western civilisation.
> 
> Remember that according to World Bank estimates 88m rural Chinese live under the poverty line. Government initiatives to improve their plight in life can only be a good thing. Nutrition, health, literacy, opportunity. Do not let your Western romantic notions of a 'simple' life cloud your judgement here. Hunger and disease ain't no fun.
> 
> As for televisions, well they are perfect mediums for political propaganda too. The televisions seem politically expedient to me.
> 
> 
> 
> 
> 
> I have been to rural Cambodia and China and I agree they are very disadvantaged. I lived i a rural cambodian village for 1.5 months. the standard of living was shocking not only to westerner but to a normal Khmer. they really need help in health education and the basics, running water, electricity.
> 
> Dhukka,
> 
> some do enjoy the way of life expesaliy the older generations but i can assure you the middle and younger generations all crave the great oppertuities their city country men enjoy. some are lucky to make 300$us a month.
Click to expand...


----------



## Trembling Hand

Bushman said:


> As for televisions, well they are perfect mediums for political propaganda too. The televisions seem politically expedient to me.




Yep that is without doubt.


----------



## >Apocalypto<

ithatheekret said:


> As for televisions, well they are perfect mediums for political propaganda too. The televisions seem politically expedient to me.
> 
> I bet CNBC and any other republican platform will be severely curtailed and a few rocks pelted at them , if the Dems get in .
> 
> 
> Come to think of it , it would be worth it .
> 
> Nah ..... we know they're twits anyway , worldwide , worldwide ... and worldwide .
> 
> Come on Sidney




Yep TV is a media to push agendas and scare the crap out of u. I don't know about u guy's but how depressing is the news! I hardly watch Tv now.

On the political side of Tv, last years election campaign ad's were quite funny! but my favorit of all was the liberal attack on Kim with the collins class subs rub in's.


----------



## dhukka

Trembling Hand said:


> That statement simply ignores the fact that a lot of people learn about the world from TV either News or factual (loosely)based programs. Whether they are to your taste or not is not the point. Most people through out the world get news from TV. Are you disputing this??




No, my point is that it is not, as you believe, education. It is largely a device for corporate shills to ram their twisted version of reality down your throat in the hope that you'll buy some more crap you don't need.   



Trembling Hand said:


> If you have missed some of the health and education programs that Gov and NGOs fund let me outline some Aussie examples, Anti-Smoking,
> Anti-Drinking, skin cancer, Bush fire info and prevention. Storm info in the top end, Driving education, Save sex etc. These kind of things are rolled out through out the world. The people that have most to learn from these are the ones on the bottom of the social ladder.




I need the TV to tell me that smoking is bad for me? Have we become that stupid we need the idiot box to tell us what's good for us? How many anti-drinking ads are on TV for every pro-drinking add?



Trembling Hand said:


> So governments should not try with their tax surpluses to level the gap between haves and desperately have nots. Why then should they tax anything?




I never said governments shouldn't try to bridge income inequality, just that encouraging people to buy TV's and mobile phones isn't a good way of doing it. 



Trembling Hand said:


> My point was that your criticism of a subsidy of a large portion of community left behind in a fast growing country is simply complaining for the sake of complaining. Like most comments on this thread when any move is made by any Gov.




Here we go again, you're left behind because you don't have a mobile phone and a TV. Real progress would be if we all turned our TV's off for a year. 



Trembling Hand said:


> To bring up the extract from "The Collapse of Globalism" as If that was my argument is ridiculas. When did I say that I want the " industrialised vision of agriculture " That article has nothing to do with anything I wrote about.




Didn't say it was your argument, but it has plenty to do with what you wrote about.


----------



## dhukka

Apocalypto said:


> I have been to rural Cambodia and China and I agree they are very disadvantaged. I lived i a rural cambodian village for 1.5 months. the standard of living was shocking not only to westerner but to a normal Khmer. they really need help in health education and the basics, running water, electricity.
> 
> Dhukka,
> 
> some do enjoy the way of life expesaliy the older generations but i can assure you the middle and younger generations all crave the great oppertuities their city country men enjoy. some are lucky to make 300$us a month.




Congratulations on 'roughing it' for 45 days, I lived in rural Thailand for over a year and have traveled extensively through Laos, and parts of Cambodia and Myanmar. I know there are plenty of poor people out there in desperate need of the basic necessities. 'Necessities' being the operative word.  A TV and mobile isn't a necessity.


----------



## Whiskers

How do you see a good way to bridge the gap between the have's and have nots in China dhukka?... assuming some degree of social equality is part of your economic master plan. 

Otherwise what should China do?... in your opinion.


----------



## dhukka

Bushman said:


> dhukka said:
> 
> 
> 
> 
> However I bet there are plenty who actually enjoy a subsistence lifestyle, have no desire to go to cities, are happy and content.
> 
> 
> 
> 
> 
> Dhukka - you sound like a modern version of Rousseau.
> 
> 'Men in a state of nature do not know good and evil, but their independence, along with “the peacefulness of their passions, and their ignorance of vice”, keep them from doing ill (A Discourse..., 71-73).'
> 
> Maybe we can alter the colonial concept of the 'noble savage' to that of the 'noble rural poor', far removed from the 'corrupting' influences of Western civilisation.
> 
> Remember that according to World Bank estimates 88m rural Chinese live under the poverty line. Government initiatives to improve their plight in life can only be a good thing. Nutrition, health, literacy, opportunity. Do not let your Western romantic notions of a 'simple' life cloud your judgement here. Hunger and disease ain't no fun.
> 
> As for televisions, well they are perfect mediums for political propaganda too. The televisions seem politically expedient to me.
Click to expand...



Funny that you use statistics from the World Bank, which has been one of the biggest disasters ever foisted upon developing countries in the last 25 years. 

I am totally in support of programs that promote Nutrition, health and literacy,  all far more important than giving rebates for mobile phones and TV sets which is the original bone of contention.


----------



## dhukka

Whiskers said:


> How do you see a good way to bridge the gap between the have's and have nots in China dhukka?... assuming some degree of social equality is part of your economic master plan.
> 
> Otherwise what should China do?... in your opinion.




Why don't you open up a new thread Whiskers? This one seems to be getting a little off track don't you think?


----------



## Trembling Hand

dhukka said:


> It is largely a device for corporate shills to ram their twisted version of reality down your throat in the hope that you'll buy some more crap you don't need.




Last word from me. That's a good one coming from someone who has a blog jammed full of Adsense and Amazon Ass. links. 

Anyway back to trading the severe market correction. Got any good ones dhukka.


----------



## Whiskers

dhukka said:


> Why don't you open up a new thread Whiskers?




No! 

I liked the financial initiatives mentioned so rural folk can more easily acquire a fridge, TV and phone. For me it has potential to significantly improve the Chinese economy to further decouple it from the effects of the US. 

Conversely, if China collapses then the 'Imminent and severe market correction' of the US will most likely be compounded. And since China is playing an increasingly important role in Australias economy it's important to look at whether it's initiatives are benificial, and if not what is better.



> This one seems to be getting a little off track don't you think?



No. Unless this thread is reserved for criticism of foreign policies!

Isn't a TV and phone powerful communication tools to enable people to lobby and or work together for better health and sanitry services, among other things?

Com'on dhukka, you're quick to criticize, that's easy. Show me that you have better economic alternatives.


----------



## ithatheekret

Isn't a TV and phone powerful communication tools to enable people to lobby and or work together for better health and sanitry services, among other things?


_Eeeer , No_



_Fridges can do all that now_

_Good luck finding a frozen food service ISP in Laos_


----------



## dhukka

Trembling Hand said:


> Last word from me. That's a good one coming from someone who has a blog jammed full of Adsense and Amazon Ass. links.




Yeah I feel really conflicted because I advertise books, not as educational as the TV I guess but someone might learn something if they buy one. Also I advertise high interest savings accounts, yeah I guess people don't need those. For the record I don't have any adsense advertisements on my blog.



Trembling Hand said:


> Anyway back to trading the severe market correction. Got any good ones dhukka.




Got any good what?


----------



## Whiskers

ithatheekret said:


> Isn't a TV and phone powerful communication tools to enable people to lobby and or work together for better health and sanitry services, among other things?
> 
> 
> _Eeeer , No_
> 
> 
> 
> _Fridges can do all that now_




Very good ithatheekret, they can too.


----------



## dhukka

Whiskers said:


> No!
> 
> I liked the financial initiatives mentioned so rural folk can more easily acquire a fridge, TV and phone. For me it has potential to significantly improve the Chinese economy to further decouple it from the effects of the US.
> 
> Conversely, if China collapses then the 'Imminent and severe market correction' of the US will most likely be compounded. And since China is playing an increasingly important role in Australias economy it's important to look at whether it's initiatives are benificial, and if not what is better.
> 
> 
> No. Unless this thread is reserved for criticism of foreign policies!
> 
> Isn't a TV and phone powerful communication tools to enable people to lobby and or work together for better health and sanitry services, among other things?
> 
> Com'on dhukka, you're quick to criticize, that's easy. Show me that you have better economic alternatives.




Well if you believe it's important I'll let you argue with yourself about it. I've said all I need to on the subject.


----------



## Trembling Hand

ithatheekret said:


> Isn't a TV and phone powerful communication tools to enable people to lobby and or work together for better health and sanitry services, among other things?
> 
> 
> _Eeeer , No_




Actually yes. My partner works in the health and development philanthropic field. Specializing in information and communication technologies. They have a big budget but ultimately the communities they help ask for the most basic of communication devices.

They use the simplest things to achieve great jumps in Community development. They have funded stuff like buying a video recorder for remote communities so they can produce messages and deliver them to other communities across the river or across the world. Which of course you need a TV to watch.

And a phone is one of the first things that they will subsidise.


----------



## Kauri

may be orf topic but..
  despite continued rumours of a looming large writedown.. and Merrills downgrading fred and fannie... apparently thhe market downturn is due to a snow storm in NY...   
enough already...
Cheers
..........Kauri


----------



## Kauri

sorry to be orf subject again.... but...

Spanish real estate company Habitat may have to declare bankruptcy if it cannot get at least six bank lenders signed up by Wednesday. Equity traders have taken the news as a sign that the economic sickness is spreading, an omen of more pressure on global equity markets.

 Cheers
...........Kauri


----------



## sassa

A spirited turnaround in the American markets overnight in the last hour due to a favourable report about the bond insurer Ambac!!

http://www.ridingthedax.com/2008/02/22/cnbc-saves-the-weekend-smells-like-manipulation/


----------



## dhukka

sassa said:


> A spirited turnaround in the American markets overnight in the last hour due to a favourable report about the bond insurer Ambac!!
> 
> http://www.ridingthedax.com/2008/02/22/cnbc-saves-the-weekend-smells-like-manipulation/




I find it hard to believe the sources claim that CNBC deliberately manipulated the market on Friday afternnon by releasing this story. I think the FT has a better article on the story. 



> *Banks to aid Ambac with up to $3bn*
> 
> A group of banks is preparing to inject $2bn to $3bn into the troubled bond insurer Ambac, which is racing against time to come up with fresh capital to avoid a sharp cut in its triple-A credit rating that could trigger wider financial market turmoil.
> 
> The money from banks would be part of a plan to split Ambac’s operations, people involved in the discussions said.
> 
> Ambac is also considering raising equity from shareholders and it is not yet clear how much capital it will need, or what credit ratings the split businesses will have. Talks between Ambac and the banks will continue this weekend, with a view to finalising a deal by early next week.
> 
> The banks looking at supporting Ambac include Citigroup, Wachovia, Barclays, Royal Bank of Scotland, Société Générale, BNP Paribas, UBS and Dresdner. They have the most exposure to guarantees supplied by Ambac on structured bonds and derivatives, the value of which could fall sharply, resulting in billions of dollars of writedowns if the insurer’s credit ratings drop far below the triple-A level.
> 
> Bond insurers have for decades guaranteed debt issued by municipal borrowers, lending them, in effect, triple-A credit ratings in exchange for a fee. Bond insurers, or monolines, have ventured into structured finance guarantees, including guarantees on complex debt instruments such as collateralised debt obligations. The subprime mortgage crisis has led to a jump in losses in this sector, threatening the triple-A credit ratings of Ambac and MBIA, the biggest monolines.
> 
> Municipal borrowers are being hit by the crisis of confidence in the insurers, whose guarantees back $2,400bn of bonds. With interest rates for some municipals rising sharply, regulators have called for a solution that will ensure the municipal business retains its triple-A rating.
> 
> Last month, banks were called in to meet Eric Dinallo, the New York insurance superintendent, who urged them to discuss possible action to prevent downgrades. Federal policymakers did not arm-twist banks to take part in a rescue. But a senior Treasury official said it had to “blow some smoke away” so market participants understood their “indirect interest”.




It's hard to understand why this didn't happen sooner. At the risk of oversimplifying, why not put up *$2 -$3 billion *in capital now, to save *$50 billion * in writedowns in the future? 

Are the banks that capital impaired they can't afford to stump up the money? At the end of the day it's throwing good money after bad, but if they can prevent a downgrade in the insurers credit rating by stumping up a few billion, surely that is preferable than tens of billions in writedowns. 

Also of interest in a story which may affect the other major Bond Insurer MBIA



> The ratings agency also stripped Channel Reinsurance, which provides reinsurance of policies written by bond insurer MBIA, of its triple-A rating yesterday.
> 
> The three-notch downgrade to “Aa3” may negatively impact the value of the reinsurance policies it has written for MBIA, its only customer, Moody’s said.
> 
> Moody’s expects Channel Re’s insurance policies to incur losses of $230m compared with its current claims-paying ability of about $930m




This story seems to have gotten lost amidst the euphoria of the AMBAC rescue.


----------



## reece55

The biggest problem with the Bond insurers is that it is impossible to tell (at least at this stage) if the capital provided will be sufficient to maintain a liquid operation for them...

Imagine how many different tranche's of mortgages, with varying quality (albeit a lot of them poor), they have exposure to and then trying to mathematically work out, based on current delinquencies, what the insurers have to pay out in the future. Then add into the equation that there may be the ability for the manager to actually to foreclose on the houses in the pool and varying legalities based on the way that the notes were assigned the underlying cash flow, trigger clauses etc. Then multiply that by the number of different instruments they insured.......... There is just no way of being able to tell if this will be enough. Makes you wonder why in the hell they did it in the first place, surely any sane risk manager would have said "this is just impossible for us to be able to tell how we can ensure we have enough reserves to cover worst case scenario"....

America is just living in the fallacy that the financials wizards will be able to maintain their (the insurers) going concern status - the reality is that neither the bear or bull camp for the insurers truly know, because it could take years to find out the truth!!!!

Cheers


----------



## ithatheekret

The line up in the bank bail out list tells it all .

The storyline would have us believe that there will be no rerating .

Wouldn't that be just dandy for those banks caught out holding the dunny paper ?


More Goldilocks stuff , or is it Cinderella this time .......... ?


----------



## dhukka

reece55 said:


> The biggest problem with the Bond insurers is that it is impossible to tell (at least at this stage) if the capital provided will be sufficient to maintain a liquid operation for them...
> 
> Imagine how many different tranche's of mortgages, with varying quality (albeit a lot of them poor), they have exposure to and then trying to mathematically work out, based on current delinquencies, what the insurers have to pay out in the future. Then add into the equation that there may be the ability for the manager to actually to foreclose on the houses in the pool and varying legalities based on the way that the notes were assigned the underlying cash flow, trigger clauses etc. Then multiply that by the number of different instruments they insured.......... There is just no way of being able to tell if this will be enough. Makes you wonder why in the hell they did it in the first place, surely any sane risk manager would have said "this is just impossible for us to be able to tell how we can ensure we have enough reserves to cover worst case scenario"....
> 
> America is just living in the fallacy that the financials wizards will be able to maintain their (the insurers) going concern status - the reality is that neither the bear or bull camp for the insurers truly know, because it could take years to find out the truth!!!!
> 
> Cheers




Exactly, and this is why I started off the previous post by asking why this didn't happen sooner. If it is just as simple as stumping up $2-3 billion to prevent $50 billion in writedowns why didn't they do this a month ago?

Precisely because as you say, how can the banks be sure that it will be enough? If this gets done there will not only have to be a cash injection but lines of credit to back up further potential losses. The banks don't want to do it because it ties up capital at a time when they are severely capital constrained.  

However the banks seem to have decided that propping up AMBAC is preferable to letting it lose it's AAA rating.


----------



## chops_a_must

dhukka said:


> Exactly, and this is why I started off the previous post by asking why this didn't happen sooner. If it is just as simple as stumping up $2-3 billion to prevent $50 billion in writedowns why didn't they do this a month ago?
> 
> Precisely because as you say, how can the banks be sure that it will be enough? If this gets done there will not only have to be a cash injection but lines of credit to back up further potential losses. The banks don't want to do it because it ties up capital at a time when they are severely capital constrained.
> 
> However the banks seem to have decided that propping up AMBAC is preferable to letting it lose it's AAA rating.




There are a couple of issues I see. Like you guys have stated, how do they know anything will be enough to cover the trillions of dollars of crap out there? 2 billion is a piss in a river when it comes to that surely.

Secondly, how can banks that own the securities backed by the insurer and the rater of that security, then become the major stakeholder in the business doing the insuring and rating? It's a gigantic conflict of interest, that a retarded chicken could see through.

I don't think they can stop the whole thing coming down eventually, without splitting them up. Because these insurers for want of a better term, are cluster fukced. But even with splitting the insurers up, they are stuffed anyway, perhaps just slightly less so.

All that the bail out parties provide is a very handy watchlist for stocks to short when the whole thing comes down. It's not hard to see who is bound to lose most, by the actions of some...


----------



## ithatheekret

There has to be a twist here , the wads of paper the banks hold will still have to be rerated . If that's the case , how are they going to acheive investment standard cash reserve ratios and bail the bond insurers out .

If they bail them out , how do they know the likes of AMBAC won't get rerated anyway ? The capiltization is only one of the problem . What about legals from all that will eventually sue ?

There has to be a side issue on all the structured financing and municipal bonds , other than a bail out .

Unless they don't want to look that far forward ......... again .

The issues are global not just on Wall and State Street , there will be comeback for those rated instruments ticked off and rubber stamped , but of course then it was certain banks that traded these heavily , exporting them .

Look around , where didn't they find suckers ?


Some of those suckers will be able to afford mega legal teams to swipe back with .


----------



## sassa

A slight change of theme.This article is from Stephanie Pomboy of MacroMavens.

"The occasion is the sixth anniversary of MacroMavens. Stephanie is unorthodoxy personified, wonderfully adept at puncturing myths and popping bubbles with pointed fact, whether originating in Wall Street, Washington or other louche locales. The credit crisis has provided a great stomping ground for her from its incipiency through the seizing up of the SWAPS market; invariably, she's a step or two ahead of the actual disaster.

All the grandiose plans to prop up the sinking homeowner appear absurd to her in the face of the obvious question: With $6 trillion of the $8 trillion in residential mortgage debt securitized, how do you get a lender to renegotiate a mortgage when you don't know who the lender is?

Most interesting in her latest screed, we thought, were her candidates for the next serious casualties of the credit collapse, credit cards and commercial real estate. For a spell now, Stephanie has been predicting that to make up the void in home-equity lending, consumers will shift to plastic, foreshadowing a bumper crop of credit-card delinquencies. And she observes that "while smiley-faced pundits laud 'still low' delinquency rates," such figures conceal the fact that explosive growth in credit-card borrowing has been accompanied by a "massive increase" in dollar amount of delinquencies.

The other terrible accident waiting to happen, Stephanie cautions, is commercial real estate. Eager to make up for lost residential mortgage volume, banks have been pouring dough hand over first into the commercial real-estate market, creating, naturally, a huge and swiftly inflating bubble. Such profligate lending has swollen commercial real-estate loans to 14% of all bank loans, the largest slice since data first was collected 13 years ago.

Inevitably, delinquencies are starting to rise apace with the burgeoning loans and have reached their highest level in a decade. The problem is a dead certainty to get worse, as troubles in Wall Street spill over into the commercial real estate market. Stephanie cites a report by CB Richard Ellis that 42% of commercial real estate in lower Manhattan and 28% in midtown is tied to the financial sector.

Ruminating on the frantic scurrying about in Washington to come up with some palliatives for distressed homeowners (especially those who vote) and stretched-to-the-limit lenders (especially those who chip into campaign coffers) Stephanie views the efforts with something between wonder and mild incredulity.

Contrary to the conventional wisdom and the traditional lack of any kind of wisdom in Washington, she avers, "The current credit bust is not simply a function of reckless real-estate lending -- residential and commercial. It is a function of interest rate 'resets' across the entire U.S. economy."
Consumers aren't the "only ones who haplessly heeded Greenspan's call to ARMS." Everyone, she explains, switched to borrowing short. Municipalities, for example, as we've just had unhappy reason to discover. 

And so did Corporate America with a vengeance: Floating-rate paper now accounts for 54% of its overall issuance, up from 26% in 2002, and a tidy $565 billion in corporate bonds have to be rolled over this year, 34% greater than last year.

Hey smiley face, what's so funny?"


----------



## dhukka

Nothing really new there sassa, could you provide links when you quote articles?


----------



## sassa

dhukka said:


> Nothing really new there sassa, could you provide links when you quote articles?




My apologies.Certainly.

http://www.itulip.com/forums/showthread.php?p=28291#poststop


----------



## dhukka

sassa said:


> My apologies.Certainly.
> 
> http://www.itulip.com/forums/showthread.php?p=28291#poststop




Thanks,

A good summary of the situation with AMBAC was posted on Naked Capitalism yesterday. It seems that the banks are not stumping up cash but rather providing a back stop to a rights issue. 



> *Will Ambac Have a Deal Next Week?*
> 
> We aren't in a position to answer the question posed in the headline, but following a leak that lead to a 250 point rally in the Dow, the noises coming from the team trying to rescue the troubled number two bond insurer have suddenly taken an optimistic tone. While the initial reports were vague, the Wall Street Journal, the Financial Times and the New York Times carry broadly similar reports.
> 
> Ambac and the rating agencies received a proposal from eight banks (Citigroup, UBS, Royal Bank of Scotland, Wachovia, Barclays. Societe Generale, BNP Paribas, and Dresdner) on Friday afternoon. As the Times reports, the proposal involves both providing an equity infusion and splitting the company:
> 
> 
> Under Ambac’s plan, one part of the company would guarantee relatively safe municipal bonds, while the other would insure more complex securities backed by mortgages and other debt. In all, Ambac guarantees about $556.2 billion of securities.
> 
> The company also hopes to raise $2.5 billion through a rights offering to its existing shareholders; the sale will be backed by banks. Ambac also plans to raise roughly $500 million in new debt, according to the person who has seen the plan, who was not authorized to talk about it.
> 
> The banks, which include Citigroup and UBS, delivered a draft of the plan to Ambac and credit ratings agencies on Friday, and the company is expected to give its formal consent soon. Officials involved in drafting the plan hope the two new subsidiaries will both receive triple-A ratings, though the firm backing mortgage-related bonds could be rated slightly lower.​
> Note the artful phrasing: this is Ambac's plan, but the document came from the eight banks, as stated in the Wall Street Journal, "committing to the equity and debt participation."
> 
> Note: the banks aren't making an equity infusion. As I read this, they are merely backstopping a public offering by Ambac. This is the most lukewarm form of support they could provide.
> 
> Why haven't the banks stepped forth more wholeheartedly? Analyst James Bianco of Bianco Research, in an e-mail this evening, goes through the history and is mystified as to why a deal hasn't been wrapped up long ago:
> 
> The Monoline bailout hysteria started January 23.
> The New York Times - (January 24) Next on the Worry List: Shaky Insurers of Bonds​
> Regulators fear a possible chain of events in which the troubled bond insurers, MBIA and Ambac, might be unable to keep their promise to pay investors if borrowers default on their debt.....the talks focused on raising as much as $15 billion for the companies … Eric R. Dinallo, the New York insurance superintendent who regulates MBIA..... suggested that the group move in as little as 48 hours to get a deal done ahead of any downgrading of the bond guarantors by credit ratings firms.​
> So the bailout was suppose to be done by Janaury 26 and total $15 billion. We have been told that a monoline downgrade is critical to the entire financial system. UBS estimates it will cost the banking system $203 billion in additional writedowns. Barclays estimates it will cost $143 billion in writedowns. Oppenheimer estimates that it will cost Merrill, Citi and UBS $40 to $70 billion alone.
> 
> Today we learn that a bailout is again very close.​
> The Financial Times - (February 22) Banks to aid Ambac with up to $3bn
> A group of banks is preparing to inject $2bn to $3bn into the troubled bond insurer Ambac.... The money from banks would be part of a plan to split Ambac’s operations, people involved in the discussions said. Ambac is also considering raising equity from shareholders and it is not yet clear how much capital it will need, or what credit ratings the split businesses will have.
> 
> Let me get this straight.
> 
> If the monolines get downgraded, the banking system is at risk for $143 billion to $203 billion of losses. This is why they were 48 hours from a $15 billion deal on January 23. Now on February 22, they are again 48 hours away from a $3 billion deal for just Ambac spread among eight banks. So the longer they talked the smaller the number got.....
> 
> My questions - If the fate of the financial system only needs $3 billion to get “fixed,” why did it take eight banks a month to negotiate coughing up $300 million each? Don’t they pay Robert Rubin more each year? B of A took less much less time to bailout Countrywide with a $4 billion deal all by itself.
> 
> Something just doesn’t make sense here. If they are staring at hundred of hundreds of billion in losses, and $300 million each stops all this, why was their even a negotiation? Just write the check and move on to the next issue.
> 
> What am I missing?​
> I think Citi paid Rubin only $15.2 million, but point well taken.
> 
> Personally, I am surprised too that he banks are stepping up now as opposed to a month ago, since as we discussed earlier, the idea of a split makes it vastly less attractive for the banks to provide support. Any break-up plan is likely to be biased in favor of shoring up the muni operations. Dinallo's head would be on a pike if after all these machinations, a newly established muni operation didn't get a triple A rating. If the banks faced a free rider problem a month ago (which was presumably one reason not to stump up cash) when it was merely the structured finance businesses that appeared to be in trouble, that issue got magnified by now that the muni business is looking like the higher priority.
> 
> And FT Alphaville pointed out, as we have, that multiple businesses will require more equity than a single one:
> 
> So MBIA is paying lip service to the idea that they can’t favour one class of claimant over the other. But how they’ll do that remains unclear. For a start, as its chief executive hinted at above, two (or three or four) separate businesses will require greater capital underpinning than in one combined entity. And what has always been rather unclear in the bond insurer split plan is where the reserves go.​
> So reason 1. for not doing a deal may have been a free rider problem. To continue the list:
> 
> 2. Writing a check may not make the problem go away. Remember, the worst outcome for the banks is not that the monolines are downgraded; it's that they throw scarce cash at the problem and the downgrade threat resurfaces in six months to a year. That means they have wasted money and will still face the damage inflicted by a downgrade, or face an ongoing sinkhole of having to put funds in every time the monolines look shaky.
> 
> 3. Not all the banks may be that badly exposed. One thing that is nasty about these deals is that everyone at the table is assumed to stump up the same amount. Some may not regard their exposure as that bad. They have their numbers; the analysts don't. Remember, even though Citi and Merrll have large CDO positions, they also have taken large writeoffs. They may not think they have further downside. And one big name not participating, or demanding a lesser role, could poison the negotiating dynamic.
> 
> 4. They may have believed the monolines' prior statements. Ambac and MBIA have both been maintaining that Bill Ackman is all wet, that his mark to market analysis is wrong. Apparently the CDS contracts the insurers wrote do not have to be paid out until the CDOs liquidate, and for some contracts, apparently, a liquidation does not trigger a payout on the principal portion of the deal; they aren't required to pay until the underling assets reach final maturity, which can take as long as 30 to 45 years. That means the payouts are spread out over a longer time period than Ackman assumed.
> 
> Note I'm not entirely sure I buy this argument, simply because the insurers have never been very forthcoming when pressed. If the bulk of their agreements worked this way, the downgrade worries should have gone away. The fact that they didn't suggests matters aren't quite that simple. Yet the S&P and Moody's downgrade threats would seem to make this moot. It doesn't matter who is right; what matters is what it takes to placate the ratings agencies.
> 
> 5. The banks are in vastly worse shape than they dare admit. Maybe contributing $300 million is a big deal for them, and they have been pressing behind the scenes for a government bailout or (more likely) that official pressure be applied quietly to get the rating agencies to back down. Remember, as we said before, the rating agencies are the part of the equation that is the most malleable. Maybe the banks took a month to play that strategy out.
> 
> So I may very well be proven wrong and Ambac will be rescued and split up, which seemed a particularly implausible outcome. If the press has this right, the banks and Ambac are largely on the same page. The wild card in theory is the rating agencies, but in fact, they are desperate not to downgrade the monolines. They've moved back their deadline any time an excuse cropped up. So I'd expect them to fall in line unless there is something deficient in the plan, such as inadequate detail as to how the split will be put into effect. But that may lead to further negotiation rather than a flat-out rejection.


----------



## chops_a_must

Thought this might give people a bit of a laugh. A couple of videos relating to the sub-prime mess. Posted them on the blog as well.

The first is John Fortune & John Bird, which is very very funny, and great if you are having trouble following how this fiasco happened.

The second is a little easier to follow.


----------



## Kauri

ithatheekret said:


> There has to be a twist here , the wads of paper the banks hold will still have to be rerated . If that's the case , how are they going to acheive investment standard cash reserve ratios and bail the bond insurers out .
> 
> If they bail them out , how do they know the likes of AMBAC won't get rerated anyway ? The capiltization is only one of the problem . What about legals from all that will eventually sue ?
> 
> There has to be a side issue on all the structured financing and municipal bonds , other than a bail out .
> 
> Unless they don't want to look that far forward ......... again .
> 
> The issues are global not just on Wall and State Street , there will be comeback for those rated instruments ticked off and rubber stamped , but of course then it was certain banks that traded these heavily , exporting them .
> 
> Look around , where didn't they find suckers ?
> 
> 
> *Some of those suckers will be able to afford mega legal teams to swipe back with* .




The Sunday Times reports that HSH Nordbank, one of Germany"s biggest financial institutions is to sue UBS, the Swiss banking giant, claiming it was mis-sold hundreds of millions of dollars worth of subprime securities. The action is expected to trigger a wave of similar lawsuits across world financial centres as institutions seek recompense for losses incurred from buying complex financial instruments that are now worth a fraction of their original price.legal experts say action against investment banks that sold these products will drag on for years, and up to 500 BLN USD will have to be written off against the value of sub-prime mortgages.


----------



## GreatPig

Kauri said:


> The action is expected to trigger a wave of similar lawsuits across world financial centres



Great, so all the losses are going to be magnified by massive legal costs.

How to profit from a credit crunch: become a lawyer.

GP


----------



## Aussiejeff

GreatPig said:


> Great, so all the losses are going to be magnified by massive legal costs.
> 
> How to profit from a credit crunch: become a lawyer.
> 
> GP




Too specific.

How to profit FROM ANY SITUATION IMAGINABLE: become a lawyer.

Now, that's more like it.....


AJ


----------



## Kauri

Aussiejeff said:


> Too specific.
> 
> How to profit FROM ANY SITUATION IMAGINABLE: become a lawyer.
> 
> Now, that's more like it.....
> 
> 
> AJ




it seems a lot of them have found ways to profit from the current problems.. investment banks are "secretly" profiting from emergency ECB funding by acting as brokers to funnel billions of euros to Britain"s banks and building societies re: "much needed liquidity". On Friday, Lloyds TSB chief executive Eric Daniels confirmed that the bank had used the ECB to "fund at the best rate we can".
Cheers
..........Kauri


----------



## Kauri

*Rumours* that a Goldman analyst in a report has said that large additional write downs are still possible going forrard. The report purportedly says that Citi will have $12 bln in additional write downs, Merrill $4 bln, Lehman $3.5 bln, JPM $3.4 bln, MS $3.1 bln, and BSC $1.4 bln. Good to see that they haven't mentioned themselves..   

   Cheers
...........Kauri


----------



## wayneL

Kauri said:


> *Rumours* that a Goldman analyst in a report has said that large additional write downs are still possible going forrard. The report purportedly says that Citi will have $12 bln in additional write downs, Merrill $4 bln, Lehman $3.5 bln, JPM $3.4 bln, MS $3.1 bln, and BSC $1.4 bln. Good to see that they haven't mentioned themselves..
> 
> Cheers
> ...........Kauri



Maybe Merrills will fill in the blanks about Goldman Sucks.


----------



## dhukka

Meredith Whitney getting stuck into Citi again. She thinks the stock can go below *$16*. You'd be brave to bet against her, she's been right on the ball  on Citi for the last 6 months. 


> *
> Oppenheimer slashes Citi EPS outlook, sees big asset sales*
> 
> NEW YORK (MarketWatch) -- Oppenheimer analysts on Monday slashed their earnings estimate for Citigroup Inc's. (C)  full year 2008 earnings per share estimate by 70%, to 75 cents from $2.70, and said the bank may have to sell $100 billion of assets to put its balance sheet right. Analyst Meredith Whitney said Monday that Citi shares could fall below $16 a share as they retreat to valuations from the last difficult credit cycle of 1990-1991. "The three largest problems for Citigroup are further writedowns to their carrying values of CDOs related to sub-prime mortgages, further writedowns from leverage lending commitments, and further writedowns associated with on balance sheet consumer loans," Whitney wrote in her report.


----------



## Whiskers

Anyone notice! 

Ambac and MBIA surged after Standard & Poor’s affirmed Ambac’s triple-A rating and decided not to downgrade rival MBIA. 

Who said not to worry too much, it aint gonna be that bad!? ::

http://dailybriefing.blogs.fortune.cnn.com/2008/02/25/ambac-almost-out-of-the-woods/

Woooh... I can feel dhukka coming again. :couch


----------



## ithatheekret

What no mention of Fitchs or Moodys ? Well at least Fitchs 

Or have they started AA's of their own ?

Who'd think that two stocks that came out of obscurity would hold a knife to the markets throat . Sure they're the mesh in the concrete foundations , but the gist of this entire affair is integrity . Who has and who hasn't , who does who doesn't and why not .

But it's not just the markets ...............


The election year effects are coming around , the admin will be doing their utmost to leave their watch with some degree of dignity and at least set it up nicely for the next nominee , proposed for their change of guard .

I see Democrats swinging at one another , Republicans standing aside for the best hope and now the old wild card is back ........... Ralph .

I can turn on the tv , watch an election show and daren't go to sleep in case I wake up in the 60's again . That's all I hear is 60's quips , sayings and rhetoric . Those Dems are good , must have all the reruns .

It pays to dig ( pardon the pun ) , you see the cakes ingredients are still being sought , the makings of the new cycle are underway , just a few don't want to go there . Why is a good question .

Looking at the coal rush it sure feels like the 60's , except that now the US has gone from exporter to importer on the old bread and butter incomings like coal . Add that to China and India as importers , it puts a new outlook on economies like Australia . Must be a few coal fire plants about by now hey ?

So who's supporting who ? I see South America and Australia providing all the future growth initiatives for the mega economies at present , refining is still an Asian catch me if you can , it's still cheaper to land products than refine them here . Given the wage constraints the economy will have to go through here , I'd say that could be the backbone of Asian economies for years and years to come , especially with at least another decade of the mining boom to go .

In the US markets the only good thing I see is the incoming waves of new ETFs , that open up more access into emerging markets and other exotic futures etc.


----------



## reece55

Whilst the headlines were about the bond insurers, most simply ignored another very important rating confirmation this afternoon... read below:

"S&P confirmed its AAA rating on S. Claus Inc. today, the Delaware Corporation that has provided the US economy with healthy profits from it's multiple SIV's with leading retailers, including Wall Mart and Bed Bath and Beyond. It's business model is to trade directly with that good ole father of christmas, St Nick, and whilst the cash flow statements have so far not yielded anything significant, the P&L is chocked full of warm healthy profits. Concerns were raised when it's bonds were priced at junk equivalents by traders, but VP Jeffrey Skilling claimed their financially model told them that there were still healthy profits to be made this Christmas, regardless of what that pesky Bethany McLean had to say. When queried about why the bond market effectively priced them for bankruptcy, S&P said that the bond market never was particularly sophisticated anyway and that quite clearly their employees had a better grasp of the underlying fundamentals. The Wall Street journal asked a more fundamental question however, asking S&P if they actually believed in Father Christmas. S&P replied that their role was not to provide comment on business models, but rather to assess the businesses credit worthiness based on financials and that it expressed no assurance on the numbers it was relying on to provide the AAA rating"

Anyone else think that the confirmation of AAA ratings for Ambac and MBIA is the biggest crock of you know what??????????


----------



## dhukka

Whiskers said:


> Anyone notice!
> 
> Ambac and MBIA surged after Standard & Poor’s affirmed Ambac’s triple-A rating and decided not to downgrade rival MBIA.
> 
> Who said not to worry too much, it aint gonna be that bad!? ::
> 
> http://dailybriefing.blogs.fortune.cnn.com/2008/02/25/ambac-almost-out-of-the-woods/
> 
> Woooh... I can feel dhukka coming again. :couch




The banks have been successful in kicking the can down the road a bit. Interestingly Citi closed down *1.5%* today. 

Emelda Marcos' shoe cupboard is tipping over, this is just one pair that managed to be caught. Even then it looks a bit worse for wear. Plenty more set to fall.


----------



## Kauri

Just when the market was getting excited about some good news for the monoline bond insurers, the UK Times online is running a story that suggests a $3bn bailout package being considered by Barclays and RBS, may not be enough. 
    The Times continued, "some of the banks in the consortium are thought to share Wall Street"s concern that Ambac could need far more than an extra $3 billion and are moving to ensure that the rescue does not open them up to unlimited liabilities. Tamara Kravec, an analyst for Banc of America Securities, said: "Is $3 billion enough? Our worst-case scenario puts losses at around $8 billion." The trade looks like it will have to wait until next week for any firm details about a rescue package for AMBAC. In the meantime, the Times reported that MBIA is being sued " allegedly issuing false and misleading statements about its exposure to CDOs."


----------



## ithatheekret

Growth prospects according to the IMF are not exactly joyful for advanced economies . Growth and earnings go hand in hand . Quarterly results are no cheering matter from what I can see , Japan doubled the US growth last quarter , and they're in horrid shape .


http://www.imf.org/external/pubs/ft/weo/2008/update/01/index.htm


----------



## dhukka

reece55 said:


> Whilst the headlines were about the bond insurers, most simply ignored another very important rating confirmation this afternoon... read below:
> 
> "S&P confirmed its AAA rating on S. Claus Inc. today, the Delaware Corporation that has provided the US economy with healthy profits from it's multiple SIV's with leading retailers, including Wall Mart and Bed Bath and Beyond. It's business model is to trade directly with that good ole father of christmas, St Nick, and whilst the cash flow statements have so far not yielded anything significant, the P&L is chocked full of warm healthy profits. Concerns were raised when it's bonds were priced at junk equivalents by traders, but VP Jeffrey Skilling claimed their financially model told them that there were still healthy profits to be made this Christmas, regardless of what that pesky Bethany McLean had to say. When queried about why the bond market effectively priced them for bankruptcy, S&P said that the bond market never was particularly sophisticated anyway and that quite clearly their employees had a better grasp of the underlying fundamentals. The Wall Street journal asked a more fundamental question however, asking S&P if they actually believed in Father Christmas. S&P replied that their role was not to provide comment on business models, but rather to assess the businesses credit worthiness based on financials and that it expressed no assurance on the numbers it was relying on to provide the AAA rating"
> 
> Anyone else think that the confirmation of AAA ratings for Ambac and MBIA is the biggest crock of you know what??????????




Absolutely it's a crock, the ratings agencies have waited for two months for these companies to get their house in order to prevent downgrades. They should have been downgraded months ago. 

This won't be the last we hear about the bond insurers, with anywhere from *$70 - $150 billion *in CDO losses (according to who you believe) *$3* billion is hardly going to do the trick. Interestingly Chief Executive Officer Jay Brown  said he has "questions'' about the company's 2007 preliminary results released last month and hasn't yet signed off the statements. 

Also consider that the banks have NOT injected capital into AMBAC as a lot of the media has falsely reported. They are backstopping a rights issue, which means they don't have to get their hands dirty unless the rights are not taken up by existing sharehloders. This to me is a vote of no confidence on behalf of the banks.


----------



## ithatheekret

I think the facts from Elliot Spitzer address has got a few head honchos worried , really like him too , shame he's a democrat .

But he cuts to the quick .


----------



## dhukka

Could it be, the golden boy of Wall Street is going to disappoint in the first quarter? Had to happen sooner or later.



> *Goldman Estimates Slashed by Merrill's Moszkowski *
> 
> Goldman Sachs Group Inc.'s first- quarter earnings estimates were cut by Merrill Lynch & Co. partly because of slumping equity markets.
> 
> The earnings-per-share forecast was lowered to $2.31 from $3.97, analyst Guy Moszkowski wrote in a research note to investors today. Goldman is expected to earn $3.34 a share in the first quarter, down from $6.67 a year earlier, according to the average of 17 analyst estimates compiled by Bloomberg.
> 
> ``Based on recent market movements, we are trimming our first- quarter forecast,'' Moszkowski wrote. ``Market action in February has been such that we need to take another look.''
> 
> Analysts are slashing estimates for banks amid market declines following the U.S. subprime mortgage crisis. The world's biggest banks and securities firms have reported $163 billion of writedowns and credit losses since the beginning of 2007 amid the worst U.S. housing-market slowdown in a quarter century.
> 
> Moszkowski also lowered his first-quarter net revenue estimate for Goldman, the world's biggest securities firm, to $7.5 billion from $9.6 billion. The analyst said he recently met Goldman executives including co-President Jon Winkelried and David Viniar, the chief financial officer.
> 
> ``Goldman Sachs continues to benefit from relatively better navigation of the troubled environment,'' Moszkowski wrote in the note. ``However, with market problems extending beyond residential mortgages to commercial property, corporate debt, and global equity valuations, Goldman Sachs is not unscathed.''


----------



## dhukka

This week's acronym for the financial markets to crap themselves over; VIE's Variable Interest Entities, just another name for dodgy Enron style vehicles that enable banks to keep assets of their balance sheets. 



> *Goldman, Lehman May Not Have Dodged Credit Crisis *
> 
> Even Goldman Sachs Group Inc. and Lehman Brothers Holdings Inc. may find they haven't dodged the credit crisis.
> 
> The new source of potential losses: so-called variable interest entities that allow financial firms to keep assets such as subprime-mortgage securities off their balance sheets. VIEs may contribute to another $88 billion in losses for banks roiled by the collapse of the housing market, according to bond research firm CreditSights Inc. Goldman, which hasn't had any of the industry's $163 billion in writedowns, said last month it may incur as much as $11.1 billion of losses from the instruments.
> 
> The potential for a fire-sale of the assets that would bring another round of charges has ``always been our greatest fear,'' said Gregory Peters, head of credit strategy at New York-based Morgan Stanley, the second-biggest securities firm behind Goldman in terms of market value.
> 
> VIEs, known as special purpose vehicles before Enron Corp.'s collapse in 2001, finance themselves by selling short- term debt backed by securities, some of which are insured against default.
> 
> Now that Ambac Financial Group Inc. and other guarantors have started to lose their AAA financial-strength ratings, Wall Street firms may be forced to return those assets to their books, recording the declining value as losses. MBIA Inc., the biggest insurer, said yesterday it plans to separate its municipal and asset-backed businesses, a move Peters said would likely result in a lower credit rating for the types of assets owned by VIEs.
> 
> `Significant Consequences'
> 
> Wall Street's writedowns stem from a surge in mortgage delinquencies among homeowners with the riskiest subprime-credit histories. The industry's VIEs, also known as conduits, had $784 billion in commercial paper outstanding as of last week, according to Moody's Investors Service and the Federal Reserve.
> 
> ``There's a big number at work here and it will have significant consequences,'' said J. Paul Forrester, the Chicago- based head of the CDO practice at law firm Mayer Brown. ``The great fear is that a combination of subprime CDOs, SIVs and conduits result in a flood of assets into an already-stressed market and there's a price collapse.''
> 
> CreditSights has one of the highest projections for additional losses. Moody's says the fallout from VIEs, collateralized debt obligations, and other deteriorating assets may run to $30 billion. CDOS are packages of debt sliced into pieces with varying ratings.
> 
> `Lightning Rod'
> 
> One type of VIE that's already been forced to unwind or seek bank financing is the structured investment vehicle, or SIV. Like SIVs, VIEs often issue commercial paper to finance themselves and may have multiple outside owners that share in the profits and losses. Because banks agree to back VIEs with lines of credit, they have to buy commercial paper or notes when no one else will.
> 
> Ambac, the world's second-biggest bond insurer, and two smaller competitors lost a AAA rating from at least one of the three major ratings companies in recent months. Standard & Poor's yesterday affirmed the AAA ranking of MBIA, the largest ``monoline,'' though it said the outlook is ``negative.'' MBIA yesterday eliminated its quarterly dividend and said it won't write new guarantees on asset-backed securities for six months.
> 
> The more widespread the downgrades, the more likely the assets in the VIEs will be cut. Some buyers of the debt demand the highest ratings, giving banks a vested interest in helping the insurers salvage their ratings.
> 
> Ambac Financing
> 
> New York-based Ambac may get $3 billion in new capital with the help of Citigroup Inc. and Dresdner Bank AG as early as this week, the Wall Street Journal reported yesterday. MBIA raised money by selling common shares and warrants to private-equity firm Warburg Pincus LLC and issuing $1 billion of surplus notes.
> 
> ``The lightning rod of the monoline fix is so important to so many banks,'' said Thomas Priore, chief executive officer of New York-based Institutional Credit Partners LLC, which manages $12 billion in CDOs.
> 
> Accounting rules allow financial firms to keep VIEs off their balance sheets as long as they're not the ones that stand to gain or lose the most from the entity's activities. A bank would also have to account for its portion of a VIE if prices for the debt owned by the fund fall too far or if the bank is forced to provide financing.
> 
> Goldman, Lehman
> 
> Goldman, the most profitable Wall Street firm, and Lehman, the biggest commercial-paper dealer, have avoided much of the pain so far.
> 
> Goldman, which earned a record $11.6 billion in the year ended in November 2007, said it avoided writedowns by setting up trades that would profit from a weaker housing market. Now the threat is $18.9 billion of CDOs in VIEs, the firm said in a regulatory filing on Jan. 29. Goldman spokesman Michael DuVally declined to comment.
> 
> Lehman, which wrote down the net value of subprime securities by $1.5 billion, guaranteed $7.5 billion of VIE assets as of Nov. 30, according to a filing also made on Jan. 29.
> 
> ``We believe our actual risk to be limited because our obligations are collateralized by the VIE's assets and contain significant constraints,'' Lehman said in the filing. Spokeswoman Kerrie Cohen wouldn't elaborate.
> 
> Citigroup, which has incurred $22.1 billion in losses from the subprime crisis, has $320 billion in ``significant unconsolidated VIEs,'' according to a Feb. 22 filing by the New York-based bank. New York-based Merrill Lynch & Co., which recorded $24.5 billion in subprime writedowns, has $22.6 billion in VIEs, according to CreditSights.
> 
> Merrill spokeswoman Jessica Oppenheim declined to comment, as did Citigroup's Danielle Romero-Apsilos.
> 
> `Alphabet Soup'
> 
> The securities in the VIEs may be worth as little as 27 cents on the dollar once they're put back on balance sheets, according to David Hendler, an analyst at New York-based CreditSights. Hendler based his estimate on the recent sale of $800 million of bonds by E*Trade Financial Corp.
> 
> Predictions for losses vary widely because banks aren't required to specify the type of assets being held in the VIEs or how much they are worth, said Tanya Azarchs, managing director for financial institutions at S&P.
> 
> ``The disclosure on VIEs is hopeless,'' Azarchs said. ``You have no idea of the structure or how that structure works. Until you know that you don't know anything. It's like every day you come into the office and another alphabet soup has run off the rails.''


----------



## sassa

How come the Ambac deal has not yet been finalised?After all,it is only $3b and there are now more banks and private equity firms involved(according to the Nasdaq site).With these added to the financials mentioned on Friday involved in the bailout,perhaps they may only have to throw in $20-$30m each.

On another topic-the rating agencies.Mike Shedlock has a damning report about the downgrade of Pfizer and the triple AAA rating maintained by MBIA.

http://www.minyanville.com/articles/GE-PFE-MBI-xom-JNJ/index/a/16052


----------



## Trembling Hand

Here is a article I will repeat in near intirety (Not something I normally do but V.interesting) This is from Doug Kass @ thestreet.com. He is a Bear that pre-warned and traded short big time the recent Fin implosion, always a good factual read by someone who runs a dedicated short only hedge fund.



> Case in point: Recent evidence suggests that some of the huge financial writeoffs and writedowns of a variety of credits at our leading financial institutions might have been exaggerated. This could lead to financial writeups over the next one or two years.
> 
> If this supposition is correct, there is a fortune just waiting to be made in the financial sector.
> 
> 
> On page M14 in this weekend's Barron's, levered loans are trading at about 88 cents on the dollar. By contrast, the market is expecting a 10% to 15% default rate, a level that has never been seen according to KDP Advisors. In fact, says KDP, "The loan market is trading with a higher default rate than the junk bond market, very bizarre given that leveraged loans are secure debt and are senior to bonds in corporate capital structures." So, levered loans are trading well below fundamentals.
> 
> The same holds true for high-yield bonds, in which the current default rates stand at 1.5%, implied by spreads are 8% defaults, and expected by ratings agencies (like Moody's) is only 5%.
> 
> The same holds true for commercial real estate loans, in which the current default rate is 0.3%, implied by CMBX is 8%, and the expected default rate, according to credit professionals I rely on, is expected at only 2%.
> One could conclude from the above that there is a mistaken pricing of debt that is causing larger-than-necessary financial sector writeoffs, similar to when portfolio insurance kicked in and forced investors to sell stocks during the October 1987 market crash.
> 
> If my observations are correct, a mistaken pricing of debt is serving to constrain bank lending, slow the economy and has produced artificially low stock prices (especially of a financial sector-kind) as investors could be overreacting to the huge financial writedowns at some of the world's largest financial institutions.




http://www.thestreet.com/story/10404723/1/kass-were-writedowns-exaggerated.html


----------



## dhukka

Trembling Hand said:


> Here is a article I will repeat in near intirety (Not something I normally do but V.interesting) This is from Doug Kass @ thestreet.com. He is a Bear that pre-warned and traded short big time the recent Fin implosion, always a good factual read by someone who runs a dedicated short only hedge fund.
> 
> 
> 
> http://www.thestreet.com/story/10404723/1/kass-were-writedowns-exaggerated.html




Kass is obviously very confused. On Kudlow & Co a month he said the banks had taken most of their write-offs related to subprime exposure and said there would still be some to go but it would be more like $40 billion or so. Then last week he came on and said that he had underestimated further writedowns and that they could be much higher than the $40 billion he estimated just a month ago. Now he's talking about write-ups. Just admit it Dougy, like the rest of us, you haven't got a clue.


----------



## dhukka

That the ratings agencies have no credibility left after their affirmation of the monoline insurers *AAA* ratings should be obvious. However, for those in doubt, the debt market is pricing the the monolines as *BB+* despite what the ratings agencies say.



> *Moody's, S&P Say MBIA Is AAA; Debt Market Not So Sure*
> 
> Moody's Investors Service and Standard & Poor's say MBIA Inc. has enough capital to withstand losses and justify its AAA rating. MBIA's debt investors aren't so convinced.
> 
> Credit-default swaps indicating the risk that Armonk, New York-based MBIA's bond insurance unit won't be able to meet its obligations are trading at similar levels to companies such as homebuilder Pulte Homes Inc., which is rated 10 steps lower.
> 
> The discrepancy illustrates the skepticism debt investors have about the safety of MBIA's rating after the company posted $3.4 billion of losses on subprime mortgages last quarter. Moody's and S&P both said that while at least $4 billion of writedowns lie ahead, MBIA's management has made enough changes to warrant the top rating.
> 
> ``Pardon me if I find this a little hard to believe,'' said Richard Larkin, director of research at municipal-bond brokerage Herbert J. Sims & Co. in Iselin, New Jersey. ``This is basically the same management that put MBIA into this hole in the first place.''
> 
> Moody's yesterday ended a five-week review of MBIA, the world's largest bond insurer, removing the threat of an imminent downgrade. S&P did the same a day earlier and also affirmed the top rating of New York-based Ambac Financial Group Inc., the second-biggest. Ambac is still under review from both S&P and Moody's.
> 
> Credit-Default Swaps
> 
> Credit-default swaps tied to MBIA's insurance unit rose 3 basis points today to 363 basis points, according to London-based CMA Datavision. The contracts, which rise as investors see increased risk and fall when confidence improves, have dropped 24 basis points the past three days. That's still up from less than 100 as recently as October. The contracts rose above 720 last month as banks, securities firms and investors used them to hedge against the risk that the firm wouldn't be able to make good on its insurance obligations.
> 
> Contracts on Bloomfield Hills, Michigan-based Pulte are trading at about 370 basis points, CMA price show. *The BB+* rated homebuilder has reported five straight quarterly losses. The company is considered junk, or below investment grade.


----------



## Kauri

dhukka said:


> Kass is obviously very confused. On Kudlow & Co a month he said the banks had taken most of their write-offs related to subprime exposure and said there would still be some to go but it would be more like $40 billion or so. Then last week he came on and said that he had underestimated further writedowns and that they could be much higher than the $40 billion he estimated just a month ago. Now he's talking about write-ups. Just admit it Dougy, like the rest of us, you haven't got a clue.




Like any analyst worth his salt he has backed both horses to win in a two horse race.... regardless of the outcome he gets to be an instant guru.. and in case you missed it he will not be backward in coming forward to let yo know....   aaahhhh.. life's hard and then you die...
Cheers
..........Kauri


----------



## wayneL

> "(Update) Jitters return to the banking sectors amid rumours of an emergency Bank of England meeting with one of the clearing banks in trouble and a cautious outlook from mortgage giant HBOS."




Being strenuously denied, but "The City" is abuzz apparently.


----------



## dhukka

wayneL said:


> Being strenuously denied, but "The City" is abuzz apparently.




Time for Gordon to nationalise the banking system wayne?


----------



## Kauri

Just nationalise the lot..    In the WSJ website ..a story that "the cities" Richmond Capital has seen off about half its money in January......


----------



## wayneL

dhukka said:


> Time for Gordon to nationalise the banking system wayne?




I think it's time for Gordo to slip quietly into the ether.


----------



## dhukka

Kauri said:


> Just nationalise the lot..    In the WSJ website ..a story that "the cities" Richmond Capital has seen off about half its money in January......




Thanks for the heads up Kauri, couldn't read the whole article as I'm not a subscriber but from the first few paragraphs it sounds like another hedge fund genuis who turned out not to be, surprise, surprise, not a genius. 



> *U.K. Hedge Fund Plunges*
> 
> London-based hedge fund Richmond Capital LLP has stumbled badly this year, losing about half its money in January alone, according to investor groups briefed on the results.
> 
> That makes Richmond, launched by Luca Bechis, an experienced trader with a track record of posting strong gains, among the biggest losers in a year that is already proving challenging for a number of funds.
> 
> January was one of the worst months for hedge funds in recent years, with funds down an average of 1.8%, according to data tracker Hedge Fund Research ...


----------



## Uncle Festivus

A good market commentary from Share Cafe - this bit caught my eye - sums it (the contagion/panic) up nicely.

http://www.sharecafe.com.au/fnarena_news.asp?a=AV&ai=7550



> A bagel seller interviewed on CNBC on Friday (bagels are the staple diet of cosmopolitan Americans) noted that last year he was paying US$12 for a bag of wheat. On his latest price enquiry he was offered US$68.


----------



## Kauri

I hear that someone in the Peleton of the Tour De Hedgefunds has taken a tumble... I wonder if the some of the others in the group will be brought down or will manage to avoid the spill???
Cheers
>>>>>>>>Kauri


----------



## ithatheekret

UK Consumer inflation barometer up 86% , yikes there's a record .

What's the BoE gunna do now , hold 5.25 ?

Hmmm , safest bet . 

Stuff having their job , better off working for the FSA , less rocks .


----------



## wayneL

ithatheekret said:


> UK Consumer inflation barometer up 86% , yikes there's a record .
> 
> What's the BoE gunna do now , hold 5.25 ?
> 
> Hmmm , safest bet .
> 
> Stuff having their job , better off working for the FSA , less rocks .



Link?


----------



## ithatheekret

Feed on broker platform . copyrighted .


----------



## wayneL

ithatheekret said:


> Feed on broker platform . copyrighted .




A little more info would be more helpful then, otherwise we don't know WTF your referring to

FYI: http://www.forbes.com/markets/feeds/afx/2008/03/02/afx4719422.html



> AFX News Limited
> UK consumers' fears of inflation rise to record levels - Lloyds TSB
> 03.02.08, 7:16 PM ET
> 
> LONDON (Thomson Financial) - UK consumers' fears about rising prices are worsening rapidly, according to a survey by a leading bank.
> 
> The Lloyds TSB (nyse: LYG - news - people ) Consumer Barometer for February found perceptions of current inflation and expectations for prices both at record highs, although consumers' worries about job security eased a touch.
> 
> The balance of consumers who believe inflation is higher now than at the same point last year jumped 8 percentage points to 86 pct -- a survey record.
> 
> The balance of consumers expecting inflation to rise in the coming year also hit a record, of 87 pct.
> 
> Consumers' rising inflation expectations reflect soaring energy bills, which the BoE acknowledges will probably push the consumer price index (CPI) above 3 pct this year, from 2.2 pct in January.


----------



## ithatheekret

Noted .


Your on the ground there Wayne , where do you think the rate will be this time next year ?


----------



## wayneL

ithatheekret said:


> Noted .
> 
> 
> Your on the ground there Wayne , where do you think the rate will be this time next year ?




Haha! I can tell you where I think it *should* be, but where they will actually be is probably more the subject for a comedy sketch.

Merv the Swerve in now in between a rock and a hard place (as we all knew he would eventually be). Will the MPC exercise their independence and actually set rates according to their remit of targeting inflation? Or will they remain at the beckon of McBean & Daaaaaaaahhling?

The Doves have the likes of the ludicrous David Beltchflower (WTF is he doing on the MPC anyway?) and the imbecilic Rachel Lowbrow who can always be relied on to vote for a cut, and they have Gordo stamping his feet, shaking his fist and frightening the hawks with his considerable ugliness. So a raise will be pushing the brown stuff uphill.

To be honest, I'll take a straight out punt and say they'll be roughly where they are now, give or take 3%.


----------



## MRC & Co

wayneL said:


> To be honest, I'll take a straight out punt and say they'll be roughly where they are now, give or take 3%.




ha ha ha ha ha.

Looks like we might be getting caught up in this staglation also.  

Makes policy writing a nightmare!

Anybody could have as good guess as the next person.  3% margin for error probably puts you in a 99% probability range.


----------



## Kauri

wayneL said:


> Haha! I can tell you where I think it *should* be, but where they will actually be is probably more the subject for a comedy sketch.
> 
> Merv the Swerve in now in between a rock and a hard place (as we all knew he would eventually be). Will the MPC exercise their independence and actually set rates according to their remit of targeting inflation? Or will they remain at the beckon of McBean & Daaaaaaaahhling?
> 
> The Doves have the likes of the ludicrous David Beltchflower (WTF is he doing on the MPC anyway?) and the imbecilic Rachel Lowbrow who can always be relied on to vote for a cut, and they have Gordo stamping his feet, shaking his fist and frightening the hawks with his considerable ugliness. So a raise will be pushing the brown stuff uphill.
> 
> To be honest, I'll take a straight out punt and say they'll be roughly where they are now, give or take 3%.




 Now there is some innovative thinking..     salvation is at hand....

the Sunday 
Times reports that PM Brown will move to prevent second home ownership to stop 
rural houses prices from soaring.  

Cheers
.........Kauri


----------



## ithatheekret

Yeah but that MPC rep Goodhart , could end up with the voting numbers soon , tipping the inflation jug over further . He's a pour it on kind of chap , got Rachel in his corner , yeah , cut after cut , sounds more like an execution . Quarter here , quarter there .......

What's Crash on , no second home ownership motions ? 

How will he legislate that one ? 


Anti productive twit he is . The only growth he's got is on his brain at this rate . 

Next he'll be telling everyone how much ten years of no-fly zones cost Britain .


----------



## Uncle Festivus

Meanwhile, back in middle 'muni' America.....

Snips..


> Feb. 29 (Bloomberg) -- U.S. municipal bonds are headed for their worst month in more than four years after collapsing demand for securities with rates set at periodic auctions sent debt costs for state taxpayers and hospitals as high as 20 percent.




Apparently a lot of otherwise successful, and conservative, business people have already gone into bankruptcy because of high cost's of funding imposed/demanded by their lenders. 


> The municipal market in the last week and a half or so has been in a free fall,'' Warren Pierson, vice president and municipal portfolio manager at Robert W. Baird & Co., said in an interview from Milwaukee




So they are or will be finding that it is increasingly difficult to fund local government projects & services eg health, transport, colleges. The bedrock of modern US society is being rattled, with possibly ominous consequences. This is not good. Is Bushs' middle name Nero? Riots in the streets.....



> Almost 200,000 newly constructed single-family homes are sitting empty in the U.S., the most since Commerce Department statistics began in 1973. Partially completed developments reduce revenue for cities and towns and hurt businesses, said Nicolas Retsinas, the director of Harvard University's Joint Center for Housing Studies. Rising foreclosures and falling property values may cut tax revenue by more than $6.6 billion for 10 states, including New York, California and Florida, the U.S. Conference of Mayors said in a November report.



This will be an interesting week, maybe the tipping point?


----------



## Aussiejeff

Uncle Festivus said:


> Meanwhile, back in middle 'muni' America.....
> 
> Snips..
> 
> 
> Apparently a lot of otherwise successful, and conservative, business people have already gone into bankruptcy because of high cost's of funding imposed/demanded by their lenders.
> 
> 
> So they are or will be finding that it is increasingly difficult to fund local government projects & services eg health, transport, colleges. The bedrock of modern US society is being rattled, with possibly ominous consequences. This is not good. Is Bushs' middle name Nero? Riots in the streets.....
> 
> 
> *This will be an interesting week, maybe the tipping point?*




Seems it can only get worse.... Hmmm. I seem to remember reading about how many of the down-trodden poor and middle class folk in the Great Depression pushed their barrows of worldy possessions from 'burb to 'burb, town to town, city to city in the never-ending quest for...

(a) a job, 
(b) a feed, 
(c) accomodation or,
(d) all of the above.

We all know we are much smarter and more civilised now and would NEVER let that situation develop... could we? Oh well, being cleverer, we can always avert our gaze and bury our heads in the quicksand if "it" starts looking "ugly"...

AJ


----------



## Kauri

*Wall Street Gears for Its New Pain*

Commercial Real Estate 
To Yield Write-Downs; 
Defaults Slim So Far

http://online.wsj.com/article/SB120450569895406511.html?mod=hpp_us_whats_news


----------



## ithatheekret

What will they spin out of the fact that consumer liquidity levels have reached their pinnacle and are now in decline ?

At a macro level , this is a rare and significant event , yet nada is said about it by Bill and Ben Inc . Gross Domestic Investment Rates will show the same tell tale signs if this is correct .

When did it happen before ? 19 what ...... ? 

1928 ring any bells ?


----------



## Kauri

swiss UBer bank under pressure... again... over more writedowns...  (-4% already)  

Links..... Blumisberg
and reuters


----------



## Miner

Folks

Not sure if this is the right thread for posting the following message from Alan Kohler which I am sure many of the readers have read and acted on. Market will be probably further worsen with Reserve Bank and other Banks announcement.
Excepting few rays of light it all appear to be opaque .

Any way :

"*That’s it. I’m cashing in 
By Alan Kohler   * 


PORTFOLIO POINT: *There’s a good chance the market will head below the depths of November 22. It’s time to get defensive. *


Last week I sold enough shares in my super fund to increase the level of cash to more than 50%. I sold Woodside, Oil Search, Clive Peeters, Mitchell Communications, FKP, some Transurban and some BHP Billiton. My portfolio has now been narrowed down mainly to BHP and Wesfarmers, with smaller investments in Transurban, Zinifex, Oncard and Freshtel. 

Nothing personal against the stocks I sold – just that I think they are likely to be most affected by global and Australian economic downturn and I’m looking for cash. 

Wesfarmers is a turnaround story I happen to believe in (while having some qualms about its level of debt) and BHP will probably get Rio Tinto and step up to a new level of scale and pricing power. Zinifex is very cheap and zinc looks set to rise (especially with a takeover offer on the table from Oxiana lodged today). Transurban is my long-term infrastructure investment and Oncard and Freshtel are the punts. To see my portfolio, click here. 

Today’s column is not about those stocks, but about why I have switched to 55% cash. 

To cut* to the chase: I think there is now a better than even chance of the market going below its January 22 lows. *

Another rate increase in Australia tomorrow appears to be a done deal and the pundits are only arguing about whether there will be one or two more, as the redoubtable Reserve Bank wrestles the rampant Australian economy to the mat. 

Anyone would think things are going great. And indeed for the past six years, official interest rate increases have been sharemarket buy signals as the economy has sailed on. That was certainly true of May 2005 and May 2006, although last year’s two rises, in August and November, were clarion sell signals, as it turned out, but not because of anything happening in Australia. 

But let’s face it, the *Reserve Bank’s violin practice on the balcony as the orange glow of Rome’s flames lights the night sky has become just another big reason to worry. * (*My commentary : Yes, it is true for RBA, ASIC  as well as Fed in USA since Mr Greenspan has left the power *) 

Bank bill rates have surged again and mortgage rates are going up more than the cash rate. The standard variable rate would already be sitting at 9% no matter what the cash rate was now, and seems to be heading for 10%. Putting up the official rate tomorrow will simply provide cover for the banks doing what they would have done anyway. 

The idea that inflation is going to remain above 3% for another two years is based on a very narrow view of Australia’s place in the world. In my view, it is wrong. As I said on the 7.30 Report a couple of weeks ago, we’ll be lucky not to be in recession by then _("

Miner is  bloody pessimistic to say I agree with Alan. No bull story - see the largest population states are keen to migrate WA. Overseas Visa 457 from some countries are gettng cleared in 2 weeks, some companies are paying $20000 bonus upfront to get a medium category engineer at the same time some organisations : DO NOT HAVE ANY WORK - LOT OF STUDIES WITH NO OUTCOME. Who will pay for them ? Some where money is earned to keep the hope to win the tnders. But with credit crisis every one at teh same story - shortage of cash. With high dollar thngs becoming more difficult. Only on China dependance. That is a big mistake like putting all eggs in one basket. By July 08 all demand for Olympic will be curtailed and the snow balling effect will be affecting most of us . Please  remember I am not a day or night trader. Share market is not my lively hood but the 'hands on ' work miners  like me do  probably  provides the impetus for companies to make money and hence the market to behave accordingly. Share market performance however governs my super fund   _


----------



## Trembling Hand

Miner said:


> Not sure if this is the right thread for posting the following message from Alan Kohler which I am sure many of the readers have read and acted on. Market will be probably further worsen with Reserve Bank and other Banks announcement.
> Excepting few rays of light it all appear to be opaque .




Bloody hell so after the whole thing has tanked his switched his tune from raving bull to Bear. After the market drops 20%. His words are worth nothing.


----------



## Awesomandy

Trembling Hand said:


> Bloody hell so after the whole thing has tanked his switched his tune from raving bull to Bear. After the market drops 20%. His words are worth nothing.




Although, early last year, he did say something about selling into stupidity and greed (or something to that effect). That was a reasonable article, but given his commercial arrangments, I would think that it is his job to keep raving on with the bull until the very last second. 

My views are similar, to a certain degree - I liquidated half of my (remaining) investments a couple of weeks ago.


----------



## numbercruncher

We must be due to see some work from the PPT tonight ?


----------



## Trembling Hand

Awesomandy said:


> Although, early last year, he did say something about selling into stupidity and greed (or something to that effect). That was a reasonable article, but given his commercial arrangments, I would think that it is his job to keep raving on with the bull until the very last second.




What about this one from today,



> Yes, it’s true that last year we said equities would likely outperform cash in 2008; however with 2008 now two months old, cash is looking better and better.



http://www.eurekareport.com.au
And he charges people for this. will he be giving any refunds on a defective product??


----------



## josjes

One aspect of the bear to bull transition (and I am not predicting when) is that equities should turn up before the smart funds, commentators, smart analysts charging money for forecasting market, (like Alan Kohler ?? ) etc imply they should.

Stock is a leading indicator. They will just turn up for seemingly no reason and it will catch most people off guard and most people will think it is a head fake.
Will it go down another 10%, heck I don't know. But I know that a lot of the bad news and more bad news have been priced in.  

This is why I don't want to be completely out ever. I won't have to be right about the bottom--worst case I will lag not miss, also usually the move from the real bottom would likely be big and fast.


----------



## ithatheekret

numbercruncher said:


> We must be due to see some work from the PPT tonight ?




You know when I first saw this acronym , it had me stumped , apart from Perpetual trustees , Putnams and parts per trillion I was lost .

Now I know it refers to the working capital group , I think the parts per trillion matches well too .


----------



## Kauri

US construction spending down 1.7%,...
ISM under the majic 50.. down to 48.3 from 50.7,...
Yehaa..it's all good... lets have a 50 point rally???   
Baffled
..........Kauri


----------



## chops_a_must

Kauri said:


> US construction spending down 1.7%,...
> ISM under the majic 50.. down to 48.3 from 50.7,...
> Yehaa..it's all good... lets have a 50 point rally???
> Baffled
> ..........Kauri




Hey, I'm not complaining. I bought some POT the other week.

First time since my teenage years... takes me back...


----------



## Whiskers

Kauri said:


> US construction spending down 1.7%,...
> ISM under the majic 50.. down to 48.3 from 50.7,...
> Yehaa..it's all good... lets have a 50 point rally???
> Baffled
> ..........Kauri




New orders 49.1, only slightly lower than 49.5 for January.

Looking foreward, looking not to bad.


----------



## dhukka

numbercruncher said:


> We must be due to see some work from the PPT tonight ?




Looks like you nailed it NC, a 100 point rally into the close.


----------



## dhukka

Occasionally CNBC does do some good interviews. Last night they interviewed the Oracle from Omaha and he had some interesting things to say about business and the economy. Below are some highlights;



> *Buffett Interview on CNBC*
> 
> Warren Buffett was interviewed for three hours on CNBC today. Here is the transcript and a brief excerpt on housing prices (hat tip cord):
> 
> *LIESMAN:* One of the most striking things in this poll is for the first time--we've done this for four quarters now--Americans now look for a decline in their home values. What's the significance of that from an economic point of view, Mr. Buffett?
> 
> *BUFFETT:* Well, it has a huge effect because, you know, with 60 percent-plus of the American people being homeowners, as being a huge asset--and in many cases it's a leverage asset--it obviously is going to be on their mind big time. And I get the figures every month. We have a number of real estate brokerage operations around the country, and I get the--I get the figures from many markets on listings and sales, and I've seen something like Dade and Broward County go from 6,000 listings and 3600 sales a month to where they're now, I think, 82,000 listings and about 1500 sales a month. So unless there's some major intervention by the government in some way, or something of the sort, home prices have not stopped going down. Now, they will at some point.
> 
> *QUICK:* Any of the intervention plans we've seen from the government strike you as being a good idea?
> 
> *BUFFETT:* Well, that--I haven't seen the details on many of them, but I think it's very hard to start interfering with markets without having a whole lot of unintended consequences.
> 
> And on a recession:
> 
> *QUICK:* Let's move on to David from Defiance, Ohio. He asks, `How would you define a recession?' This is something we talk an awful lot about on the show, but he says, `I've been listening to a lot of discussions on CNBC, some of which can be very annoying because they tend to be so outrageously vocal and the experts believe two quarters of negative growth qualifies as a recession.' Is that the surest definition of it? Or do you think it's broader than just that?
> 
> * BUFFETT:* Well, it's the standard definition, but if you think about it, population grows 1 percent of year. So you could have growth of GDP of a 1/2 a percent, but GDP per capita would be going down. So the very definition, you might say, is a little bit flawed if it--if it doesn't allow for the fact that GDP per capita can go down while growth GDP's going up. Beyond that, I would say by any common sense definition, we are in a recession. And...
> 
> *QUICK:* You would?
> 
> *BUFFETT:* Yeah, we wouldn't--we haven't had two consecutive quarters of GDP growth, but I will tell you that, on balance, most people's situation, certainly their net worth has been heading south now for a considerable period of time. And if you owned a house, and you had an 80 percent mortgage on it, and so you had 20 percent equity a year ago, you might not have any equity now. And millions of people are in positions somewhat similar to that, and people would--people that own municipal bonds feel poorer today than they did a few months ago.
> 
> *QUICK:* Mm-hmm.
> 
> *BUFFETT:* So business is slowing down. We have--we have retail stores in candy and home furnishings and jewelry; across the board I'm seeing a significant slowdown and, of course...
> 
> *QUICK:* That's the first time I've heard you say you think we're actually in a recession right now.
> 
> *BUFFETT:* Yeah, well, I think, when we talked earlier, I said we might be.
> 
> *QUICK:* Right.
> 
> *BUFFETT:* But it--no, I would--I would say that--but when I say we're in a recession, it doesn't meet the technical definition. We aren't in the second quarter of--we can't be because we don't know what the fourth quarter of last year was. But I think that, from a commonsense standpoint, we're in a recession now.​


----------



## dhukka

The headline says Merrill has cut Citi's earnings forecasts, slahsed would be more appropriate IMO as they cut FY08 earnings estimates by *88%*.


> *Merrill Lynch cuts Citigroup earnings estimates*
> 
> LONDON (MarketWatch) -- Merrill Lynch analyst Guy Moszkowski took a knife to Citigroup (C) earnings estimates, forecasting the bank will earn 24 cents for the year and lose $1.66 a share during the first quarter, compared to a previous forecast for $2.74 per share in annual earnings and 55 cents a share in first-quarter earnings. Citigroup may report a $15 billion hit on its subprime/CDO exposure and another $3 billion hit from commercial real estate, leverage lending and consumer lending provisions. But he kept Citi's rating at neutral, saying it trades near proforma book value adjusted for the expected loss this quarter and recent capital raising.


----------



## Whiskers

Good to see a positive light for a change... after all adversity is the seed of opportunity. 



> *Housing: Best time to buy in four years*
> Home values have declined across the country, giving homebuyers the best buys they've had since 2004.
> 
> http://money.cnn.com/2008/03/04/real_estate/markets_less_overvalued/index.htm?postversion=2008030413




Worth noteing this so called subprime crisis could turnaround into fast foreward again relatively easily. But while Bush fumbles and farts around it will probably take a change of gov to get things rolling. I can see a lot of sentiment for the below proposals sweeping the democrats into office come november.

Bush hates the idea of no. 1, but I'd reckon a lot of people, particularly subprime home buyers would support it on the basis that it was lax gov supervision and regulation of the finance markets that allowed the problem to develop, so it should shoulder more of the solution. 



> *Housing rescue: What you need to know*
> There are so many plans being floated to stem the subprime crisis and avert foreclosures, it's hard to keep track. A cheat sheet on the major proposals.
> 
> Government fix: Uncle Sam buys mortgages
> Wall Street's plan: Freddie, Fannie to the rescue
> Community funds: Fix neighborhoods
> State-issued bonds: Tax-exempt solution
> http://money.cnn.com/galleries/2008/real_estate/0802/gallery.government_funded_rescues/index.html


----------



## dhukka

Whiskers said:


> Good to see a positive light for a change... after all adversity is the seed of opportunity.
> 
> 
> 
> Worth noteing this so called subprime crisis could turnaround into fast foreward again relatively easily. But while Bush fumbles and farts around it will probably take a change of gov to get things rolling. I can see a lot of sentiment for the below proposals sweeping the democrats into office come november.
> 
> Bush hates the idea of no. 1, but I'd reckon a lot of people, particularly subprime home buyers would support it on the basis that it was lax gov supervision and regulation of the finance markets that allowed the problem to develop, so it should shoulder more of the solution.




A more accurate title for the first article would be _'Least Worst Time To Buy in 4 Years'_ Interesting that they site DeKaser who called a bottom in housing 6 months ago. 



> Worth noteing this so called subprime crisis could turnaround into fast foreward again relatively easily.




Apart from the spelling , this has to be one of the funniest things I've read in a while. The subprime market has basically disappeared, lending standards have tightened across the board. Getting a loan with nothing down and a low FICO is extremely difficult if not impossible, not to mention that Fed rate cuts have barely budged mortgage rates.

Yes I'm sure taxpayers are going to leap at the idea of using their money to bail out idiots who can't manage their finances. One issue I'm glad to be in agreement with Bush on. Of course, there is every reason to expect that some type of taxpayer bailout will happen when it becomes clear there is really no other alternative. Privatize the profits, socialize the losses.  

Time for effective policy response has passed, a serious deleveraging is underway. Sure, new policies will no doubt be implemented but as usual, government was late on the scene and policy response will have limited effects.




> *Rapid deterioration
> Housing in deepest decline since the Great Depression, economist says
> *
> 
> Housing is in its "deepest, most rapid downswing since the Great Depression," the chief economist for the National Association of Home Builders said Wednesday, and the downward momentum on housing prices appears to be accelerating.
> 
> The NAHB's latest forecast calls for new-home sales to drop 22% this year, bringing sales 55% under the peak reached in late 2005. Housing starts are predicted to tumble 31% in 2008, putting starts 60% off their high of three years ago.
> 
> "More and more of the country is now involved in the contraction, where six months ago it was not as widespread," said David Seiders, the NAHB's chief economist, on a conference call with reporters. "Housing is in a major contraction mode and will be another major, heavy weight on the economy in the first quarter."
> 
> A home-sales measure tracked by the association that includes data on cancellations from 30 large U.S. builders that account for one-quarter of all sales shows sales down 65% from their peak in 2005, Seiders said. Government measures of home sales do not include numbers from contracts that were signed but buyers later backed out.
> Vacant homes for sale in the U.S. now number about 2 million, Seiders said, an increase of 800,000 from 2005. That inventory overhang is bedeviling builders, who have been forced to cut prices and write down the value of their holdings. Read more on the builders' plight.
> "Weak demand and oversupply naturally put downward pressure on prices," Seiders said.
> 
> Citing the Case-Shiller index, Seiders noted that home prices nationally have fallen nearly 10% from their peak in early 2006 and that prices were declining at a 19% annual rate in the fourth quarter. "The downward momentum was building at the end of the year," he said. Read the latest Case-Shiller numbers.
> 
> Home sales may bottom out later this year, Seiders predicted, but housing starts are not likely to rebound until 2009. Housing, which took 1.25 percentage points off GDP in the fourth quarter, looks like it will continue to be a major drag on gross domestic product at least through the end of 2008, he said.


----------



## Whiskers

dhukka said:


> A more accurate title for the first article would be _'Least Worst Time To Buy in 4 Years'_ .




Well doesn't that mean the same thing... except that positive language is easier to comprehend and respond positively too. I did say *adversity is the seed of opportunity.* Heck man even Buffet is looking out for good buys atm. 



> Apart from the spelling ,




Gee I love it when you start nit-picking dhukka... What was it you are doing now... something about teaching english!? From your previous paragraph... :


> A more accurate title for the first article would be 'Least Worst Time To Buy in 4 Years' Interesting that they site DeKaser who called a bottom in housing 6 months ago.




I've only got one eye, been up early cos couldn't sleep, suffering from more ailments than you can poke a stick at... what's your excuse! 



> this has to be one of the funniest things I've read in a while. The subprime market has basically disappeared, lending standards have tightened across the board. Getting a loan with nothing down and a low FICO is extremely difficult if not impossible, not to mention that Fed rate cuts have barely budged mortgage rates.




Exactly, why do you think I said... 'so called' subprime crisis. 



> Yes I'm sure taxpayers are going to leap at the idea of using their money to bail out idiots who can't manage their finances.



I dare you to stand in a crowd of US home owners and say that. Anyway for the most part the problem was laxed regulation of the finance industry as you have just acknowledged and very shonky contracts and preditory marketing practices. 



> One issue I'm glad to be in agreement with Bush on. Of course, there is every reason to expect that some type of taxpayer bailout will happen when it becomes clear there is really no other alternative. Privatize the profits, socialize the losses.




I think it's more like privatize the losses and socialise the profits in case 1.
_The government buys at-risk mortgages from lenders at steep discounts, restructures the loans to reduce payments and resells the loans in secondary markets. Investors in mortgage-backed securities take a loss, but get most of their investment back. Borrowers get refinanced mortgages_

The way I see it the gov has them over a bit of a barrel here. If they refuse to voluntary refinance the mortgages en mass, either directly with the mortgagor or by selling the mortgage to a gov agency, they run the risk of driving more people out of their houses, adding more downward pressure to the housing market and continuing losses for longer. I'd reckon the huge volume of abondaned deterioting houses already should tell the mortgagees there is no future in continuing to increase rates and foreclose on property to sit idle and decay away.

As far as new home building is concerned, it doesn't matter if that stays stagnant for awhile. The recovery of the US economy will come more from restructuring those at risk mortgages and getting all the vacant housing resold or rented at reasonable, affordable rates without all those undisclosed, shonky hidden detail contracts. Then they are back to some form of normality.


----------



## dhukka

Whiskers said:


> Well doesn't that mean the same thing... except that positive language is easier to comprehend and respond positively too. I did say *adversity is the seed of opportunity.* Heck man even Buffet is looking out for good buys atm.




Positive language in this case obscures the truth and has the postential to lead to detrimental action IMO.




> Gee I love it when you start nit-picking dhukka... What was it you are doing now... something about teaching english!? From your previous paragraph... :
> 
> 
> I've only got one eye, been up early cos couldn't sleep, suffering from more ailments than you can poke a stick at... what's your excuse!




Haha, that's a shocker of mine. I was woken by a powerpoint exploding in my bedroom at 4.30 am this morning. Still that's no excuse, there is no excuse for poor spelling. 



> I've only got one eye, been up early cos couldn't sleep, suffering from more ailments than you can poke a stick at




That must be a permanent state you're in. Your spelling is generally poor. All that positive thinking is obviously not working too well for you. 



> Exactly, why do you think I said... 'so called' subprime crisis.




Let me get this straight, the subprime crisis, housing meltdown call it whatever you like, according to you, can be turned around quite easily. Surely you are the only person on the planet that believes this at the moment?




> I dare you to stand in a crowd of US home owners and say that.



Would love to, just had lunch with a US friend yesterday and he agreed that most such people are morons. 



> Anyway for the most part the problem was laxed regulation of the finance industry as you have just acknowledged and very shonky contracts and preditory marketing practices.




Way over-simplified, many more issues have combined to bring about the current state of affairs.   



> I think it's more like privatize the losses and socialise the profits in case 1.
> _The government buys at-risk mortgages from lenders at steep discounts, restructures the loans to reduce payments and resells the loans in secondary markets. Investors in mortgage-backed securities take a loss, but get most of their investment back. Borrowers get refinanced mortgages_




So let's get this straight, the US government is going to use taxpayers money to buy distressed mortgages cheaply and then sell them at a profit. Sounds brilliant, looks like problem solved. 




> The way I see it the gov has them over a bit of a barrel here. If they refuse to voluntary refinance the mortgages en mass, either directly with the mortgagor or by selling the mortgage to a gov agency, they run the risk of driving more people out of their houses, adding more downward pressure to the housing market and continuing losses for longer. I'd reckon the huge volume of abondaned deterioting houses already should tell the mortgagees there is no future in continuing to increase rates and foreclose on property to sit idle and decay away.
> 
> As far as new home building is concerned, it doesn't matter if that stays stagnant for awhile. The recovery of the US economy will come more from restructuring those at risk mortgages and getting all the vacant housing resold or rented at reasonable, affordable rates without all those undisclosed, shonky hidden detail contracts. Then they are back to some form of normality.




A lot of people don't need to be forced out of their homes, there is no incentive for people to stay in their houses with negative equity. Walking away makes far more economic sense for such people.

Housing is not the stockmarket, it deos not turn on a dime, it is a slow motion event. House prices in some areas of the United Sates declined for 5 consecutive years in the last downturn between 1989 - 1994 and by any metric the current housing crisis is worse than that one. On top of that, US consumers actually had a positive savings rate back in the early 90's. They have never been more in debt than they are now. A viable recovery in US housing is still years away.


----------



## Whiskers

Geez dhukka, I'm glad they haven't got you trying to manage them a solution to the problem. You really are acting like a hypochondriac... wandering off the point, wallowing in crititism.

Listen up... you might learn something here mate. 

While you believe the problem is overwhelming and out of control, it always will be in your minds eye. For those of us that know, the way to go is to break the problem down into little bits that are more manageable and start to do one thing at a time, praise good work and one eventually gets the problem solved. If you don't think positive you'll never act positively.

Now ignoring your super macro hysteria, three of the four options mooted in the article already have instruments in place that can be modified and or expanded to help releive the cash flow stress mortgagors find themselves in and eventually get consumer spending in the US back to something like normal. That has got to be a key necessity to avoid or quickly recover from a recession. 

Since you mention moron... don't you think it's moronic to dwell in visions of doom and gloom and critism and not even acknowledge some merit in, let alone praise the implimentation of schemes to help relieve the problem.

Btw, since you are so hypercritical...

Have a look at your spelling again, and 
I really do have one prosthetic eye and loosing sight in the other etc... I meant that in jest earlier, but since you seem unable to resist taking 'moronic' swipes at people... I still do my best to deal in reality, to turn adversity into opportunity by working with the best in people. I reckon even when I'm totally blind and bed-ridden, I'd still have a better outlook on life and contribute more to a positive society by finding solutions to problems than you... mate.


----------



## explod

Whiskers said:


> Geez dhukka, I'm glad they haven't got you trying to manage them a solution to the problem. You really are acting like a hypochondriac... wandering off the point, wallowing in crititism.
> 
> Listen up... you might learn something here mate.
> 
> While you believe the problem is overwhelming and out of control, it always will be in your minds eye. For those of us that know, the way to go is to break the problem down into little bits that are more manageable and start to do one thing at a time, praise good work and one eventually gets the problem solved. If you don't think positive you'll never act positively.
> 
> Now ignoring your super macro hysteria, three of the four options mooted in the article already have instruments in place that can be modified and or expanded to help releive the cash flow stress mortgagors find themselves in and eventually get consumer spending in the US back to something like normal. That has got to be a key necessity to avoid or quickly recover from a recession.
> 
> Since you mention moron... don't you think it's moronic to dwell in visions of doom and gloom and critism and not even acknowledge some merit in, let alone praise the implimentation of schemes to help relieve the problem.
> 
> Btw, since you are so hypercritical...
> 
> Have a look at your spelling again, and
> I really do have one prosthetic eye and loosing sight in the other etc... I meant that in jest earlier, but since you seem unable to resist taking 'moronic' swipes at people... I still do my best to deal in reality, to turn adversity into opportunity by working with the best in people. I reckon even when I'm totally blind and bed-ridden, I'd still have a better outlook on life and contribute more to a positive society by finding solutions to problems than you... mate.




With respect I do think that you should examine the problems in the US a little closer as the implications are huge.   Just to take a look at one angle; the sub-prime aspect, the bad loans have been wrapped and sold around the traps and one of the big owners of the subprime (nearly worthless) loans are the US pension funds.  Not only is a large part of middle America going to lose their abodes but the pensions as well.

GWB is good at the speeches, and the aid of lower interest rates is just to help bank liquidity (which has not worked) so I would be pleased to hear of your take on how they will sort it all out.

I was warned of the looming problems some years ago and rather than take the word of others I purchased all the books I could on the looming economic outlook.    Full and intensive research is rewarded.   Off the cuff from the daily news is financial suicide.

Having said that there are some very wise and experienced mentors on this website who are worth identifying; a work through their threads will reward.


----------



## TheAbyss

Cmon guys. You both are passionate about what you do and do it very well. I would not like to see one of you pack your bat and ball and start sulking.

If we ran a spelling and and grammar checker on this site it would implode. Lets not be to harsh and try and take some positives from the thread. Sure the positive may well be that there is no good news at the moment but respect the input.


----------



## explod

TheAbyss said:


> Cmon guys. You both are passionate about what you do and do it very well. I would not like to see one of you pack your bat and ball and start sulking.
> 
> If we ran a spelling and and grammar checker on this site it would implode. Lets not be to harsh and try and take some positives from the thread. Sure the positive may well be that there is no good news at the moment but respect the input.




The take on the news is in the eye of the beholder.

I believe it is dreadful what is happening to ordinary people because of the financial mess and I do not like the idea that I am profiting from it either.

However because of the mess I am invested in physical gold, gold, oil and food stocks.  That is a positive and in those areas the outlook is bright.  No doom and gloom.

One needs to take a critical look at what is going on and take action accordingly.   When some of us point out how bad some things are it is to indicate caution and to show the way to alternate directions.

And yes, little in-fights are a negative that takes us to the level of the lowest denominator.  Or a chain is only as strong as the weakest link. 

Cheers and be happy.   Oxiana has just become a good buy again, look at the chart, just love this swing trading caper.


----------



## dhukka

Whiskers said:


> Geez dhukka, I'm glad they haven't got you trying to manage them a solution to the problem. You really are acting like a hypochondriac... wandering off the point, wallowing in crititism.
> 
> Listen up... you might learn something here mate.
> 
> While you believe the problem is overwhelming and out of control,  it always will be in your minds eye.




The classic straw man argument to any negative or critical points. Make it out like those who offer criticsm see the end of the world. I see this entire deleverging process in housing, credit markets, stock markets and probably soon to be, commodities as a huge opportunity.  I am becoming more optimistic about investing the more negative things get. I didn't buy a single stock last year but began buying on January 22nd this year. How's that for positive action?




> For those of us that know, the way to go is to break the problem down into little bits that are more manageable and start to do one thing at a time, praise good work and one eventually gets the problem solved.




Hilarious stuff, absolutely priceless. 




> If you don't think positive you'll never act positively.




If I want any more of these nuggets of wisdom I'll get myself a refrigerator magnet. 



> Now ignoring your super macro hysteria,




Point out the hysterical parts.



> three of the four options mooted in the article already have instruments in place that can be modified and or expanded to help releive the cash flow stress mortgagors find themselves in and eventually get consumer spending in the US back to something like normal. That has got to be a key necessity to avoid or quickly recover from a recession. .




Who cares about cashflow stressed mortgagors that that built their business model on ponzi financing? Let them reap the rewards of their flawed business models.  Let cashflow stressed morons who borrowed more than they could pay back file for chapter 11 or walk away from their homes. In short, let the market do its job.



> Since you mention moron... don't you think it's moronic to dwell in visions of doom and gloom and critism and not even acknowledge some merit in, let alone praise the implimentation of schemes to help relieve the problem.




I don't think it's moronic to point out negatives, especially if you can back up your arguments. I'll praise schemes that I think are worthy of praise. Contrary to popular belief I think Bernanke's unusually candid admissions of possible bank failures and more writeoffs to come are admirable despite what nervous trigger fingers on Wall Street think.  



> Btw, since you are so hypercritical...
> 
> Have a look at your spelling again, and
> I really do have one prosthetic eye and loosing sight in the other etc... I meant that in jest earlier, but since you seem unable to resist taking 'moronic' swipes at people... I still do my best to deal in reality, to turn adversity into opportunity by working with the best in people. I reckon even when I'm totally blind and bed-ridden, I'd still have a better outlook on life and contribute more to a positive society by finding solutions to problems than you... mate.




Boo f**king hoo, I find self-pity pathetic. As above, I am salivating at the the prospect of turning adversity into opportunity in the coming months and years.


----------



## Whiskers

TheAbyss said:


> Cmon guys. You both are passionate about what you do and do it very well. I would not like to see one of you pack your bat and ball and start sulking.
> 
> If we ran a spelling and and grammar checker on this site it would implode. Lets not be to harsh and try and take some positives from the thread. Sure the positive may well be that there is no good news at the moment but respect the input.




Don't worry about me Abyss, I won't be going anywhere. I'll continue to call the positive iniatives as they come to keep a bit of balance and perspective on the topic.

Explod, I see your point. I've known the US economy is fundamentally flawed for years and all the other problems they have ahead of them. I mentioned the retirement savings issue somewhere not long ago along with a looming health care crisis.

The simple point of my original post (before dhukka got his t!ts in a tangle again) was that consumer sentiment is an important and powerful effect on the economy and I believe it is a positive step in the right direction that at least in some quarters people are starting to get over the gloom and doom to see oportunities to make some positive steps to get over the housing affordability problem. 

It's obviously not going to fix all the problems, but I challenge anyone to deny that the housing affordability issue is not an urgent and important place to get fixed for the US economy to have any hope of turning around. I'm open to suggestions of a better place to start.

Dhukka, Just grow up man. 

Other people dissagree with me at times, and I with them, but you really have trouble handling your emotions and responding with decorum.


----------



## dhukka

Whiskers said:


> The simple point of my original post (before dhukka got his t!ts in a tangle again) was that consumer sentiment is an important and powerful effect on the economy and I believe it is a positive step in the right direction that at least in some quarters people are starting to get over the gloom and doom to see oportunities to make some positive steps to get over the housing affordability problem.




Allow me to disagree. The comprehensive household survey recently conducted by CNBC found that only *16%* of US homeowners think the value of their home will go down in the coming year. *17%* believe it will rise. I don't think sentiment has got nearly negative enough. I'd say more than a few US homeowners expecting their home value to remain unchanged or rise in the coming year will be disappointed. 

Yes consumer sentiment surveys have dipped recently but not to doom and gloom proportions. The stock market continues to hover on hope and way out of whack earnings forecasts. We had a glimmer of real panic in late January but that quickly subsided. 

Consumer spending is the most stable part of the US economy. In nominal terms, US consumer spending has never registered year over year declines, even in recessions. 



Whiskers said:


> It's obviously not going to fix all the problems, but I challenge anyone to deny that the housing affordability issue is not an urgent and important place to get fixed for the US economy to have any hope of turning around. I'm open to suggestions of a better place to start.




I agree that housing and anything associated with debt is the most urgent concern and will be the big losers during the current recession. I doubt there will be deep contractions in output.  





Whiskers said:


> Dhukka, Just grow up man.
> 
> Other people dissagree with me at times, and I with them, but you really have trouble handling your emotions and responding with decorum.




Seems you are projecting again. I'll continue to call comments as I see them.


----------



## IFocus

explod said:


> With respect I do think that you should examine the problems in the US a little closer as the implications are huge.   Just to take a look at one angle; the sub-prime aspect, the bad loans have been wrapped and sold around the traps and one of the big owners of the subprime (nearly worthless) loans are the US pension funds.  Not only is a large part of middle America going to lose their abodes but the pensions as well.
> 
> GWB is good at the speeches, and the aid of lower interest rates is just to help bank liquidity (which has not worked) so I would be pleased to hear of your take on how they will sort it all out.
> 
> I was warned of the looming problems some years ago and rather than take the word of others I purchased all the books I could on the looming economic outlook.    Full and intensive research is rewarded.   Off the cuff from the daily news is financial suicide.
> 
> Having said that there are some very wise and experienced mentors on this website who are worth identifying; a work through their threads will reward.




With a US FED dropping the rate from a low base rapidly in a possible inflationary environment to me shows some one with their hands on the levers  thinks there is screaming major risk.....


----------



## pepperoni

http://www.telegraph.co.uk/money/ma...1YourView&xml=/money/2008/03/03/ccview103.xml


----------



## IFocus

Michael West from todays SHM

'Watch out below!' is the best investment advice




http://business.smh.com.au/watch-out-below-is-the-best-investment-advice/20080305-1x1p.html


----------



## Whiskers

Well thank you for the change of demeanour, dhukka.

I'm sure you can prattle off all manner of macro statistics, but as I said before, sometimes one has to get down to the micro stuff and take a bit at a time to get things rolling. 

The property market is quite variable across the country as is the mortgage issue. There are obviously going to be some areas/states that will bottom out and start to recover before others. Therein lays the opportunity to get those proactive schemes going as they present. 

Assuming the ideas take off in a reasonably substantial way, which I expect it will especially on a democrat win in november, and the mortgages are off loaded and renegotiated to more acceptable terms, it follows that a lot of pressure is taken off the banks and insurers re future losses... and another problem or two starts to unwind and so it goes.


----------



## dhukka

Whiskers said:


> Well thank you for the change of demeanour, dhukka.
> 
> I'm sure you can prattle off all manner of macro statistics, but as I said before, sometimes one has to get down to the micro stuff and take a bit at a time to get things rolling.
> 
> The property market is quite variable across the country as is the mortgage issue. There are obviously going to be some areas/states that will bottom out and start to recover before others. Therein lays the opportunity to get those proactive schemes going as they present.
> 
> Assuming the ideas take off in a reasonably substantial way, which I expect it will especially on a democrat win in november, and the mortgages are off loaded and renegotiated to more acceptable terms, it follows that a lot of pressure is taken off the banks and insurers re future losses... and another problem or two starts to unwind and so it goes.




So you're talking early 2009 before these so-called intiatives get going. I can live with that. What happens in the meantime? Let me give you a sneak preview.

Helicopter boy continues to cut rates to no avail, The stock market rides the slope of hope lower. Banks continue to take more writedowns and go begging for more capital. Analysts drastically cut earnings forecasts. House prices decline further, retail sales go negative in real terms, unemployment rises, the ISM's continue in contraction mode, consumer sentiment deteriorates further. The economy does not recover with the aid of fiscal stimulus number 1. Fiscal non-stimulus no 2 is proposed. Taxpayer bailouts of mortgage originators and households gain popular support. The monolines get bailed out ...........again. Corporate bond defaults rise, Bankruptcies rise. Commercial real estate slumps. More people walk away from their negative equity homes. This is going to be fun.


----------



## explod

IFocus said:


> With a US FED dropping the rate from a low base rapidly in a possible inflationary environment to me shows some one with their hands on the levers  thinks there is screaming major risk.....





Not sure I understand your thrust but the bloke on the lever is pushing it the wrong way from my view.

As in Aus., interest rates need to go up to reign in the debt orgy.


----------



## chops_a_must

explod said:


> Not sure I understand your thrust but the bloke on the lever is pushing it the wrong way from my view.
> 
> As in Aus., interest rates need to go up to reign in the debt orgy.




I agree.

All the US fed is doing is punishing those who have been sensible and frugal.

There is no incentive to save, if the cash rate is below inflation.

But that maybe their point... force everyone to spend continuously.


----------



## IFocus

explod said:


> Not sure I understand your thrust but the bloke on the lever is pushing it the wrong way from my view.
> 
> As in Aus., interest rates need to go up to reign in the debt orgy.




Sorry Explod  I was being vague I was agreeing with your point about there being major problems and they run deep so much so that the FED is willing to drop rates in a desperate attempt to provide liquidity etc while in a rising inflation environment really dangerous stuff but they think its worth the risk because the other option is possible melt down.

I think dhukka is on the money


----------



## dhukka

Here's an example of people taking some positive action. 4 thousand of them filing for bankruptcy a day in the US. Click on the link for the full story. 



> *Filings for Bankruptcy Up 18% in February*
> 
> Americans filed for bankruptcy in growing numbers in February, buckling under the combined weight of rising energy prices, a weakening housing market and sky-high personal debts.
> 
> An average of 3,960 bankruptcy petitions were filed per day nationwide last month, up 18 percent from January and up 28 percent from a year earlier, according to Automated Access to Court Electronic Records, a bankruptcy data and management company.
> 
> February was the busiest month for filings since Congress overhauled the bankruptcy law in 2005. Bankruptcy experts said the rise was particularly worrisome because those changes made filing for bankruptcy more complicated and expensive.
> 
> “This number of bankruptcies may be under-representative of the true financial distress consumers are feeling because of the steps Congress has taken,” said Jack Williams, a scholar in residence at the American Bankruptcy Institute and a professor at Georgia State University.
> 
> The latest figures show the financial pain is spreading from states like California and Florida, which exemplified the housing boom and subsequent bust, to those along the Eastern Seaboard like Maryland, Virginia and Delaware, which were among the 10 states with the largest percentage increase in filings in January and February. “You are seeing a good-size uptick everywhere,” said Mike Bickford, president of Automated Access.
> 
> Bankruptcy experts caution, however, that data from just one or two months can be misleading.


----------



## Trembling Hand

dhukka said:


> Here's an example of people taking some positive action. 4 thousand of them filing for bankruptcy a day in the US. Click on the link for the full story.




Out of 300 odd mil that is not that many?

Would equate to about 280 a day in Oz. Wonder how many we have.


----------



## dhukka

And that makes 3 downgrades of Citi in 10 days. What's the bet Citi fails to break even for the full year in 2008?



> *Punk Ziegel trims Citigroup Q1 EPS outlook*
> 
> Punk Ziegel analyst Dick Bove on Wednesday trimmed his first quarter earnings outlook for Citigroup Inc (C) to account for the likelihood of sizable write-offs in the period. "It now appears that Citigroup may lose $1.42 per share in the quarter. This will bring down 2008 results to an estimated $0.50 per share," Bove said in his report. Bove said his target price on the stock remains $34 per share and the rating stays at a buy.


----------



## dhukka

Trembling Hand said:


> Out of 300 odd mil that is not that many?
> 
> Would equate to about 280 a day in Oz. Wonder how many we have.





Sounds like a lot to me, especially with an economy that has a *5%* unemployment rate and is the home of capitalism and the greatest country on earth..........sorry got carried away, been watching too much Kudlow & Co.


----------



## insider

Trembling Hand said:


> Out of 300 odd mil that is not that many?
> 
> Would equate to about 280 a day in Oz. Wonder how many we have.




I read some where it was 4 a day or 28 a week


----------



## ithatheekret

I think Benny Boy has shown his hand and called . Apart from passing the reigns back to the Treasury Dept ., he has also shown that he is determined to save the home *prices* and reinflated them if at all possible . It can be seen in the forwarding of the Thrift Supervision plan whilst making his address . 

quote : "Ultimately, though, real relief for the mortgage market requires stabilization, and then recovery, in the nation's housing sector"  : unquote .

With that plan , there will be a lot of refinacing of homes , although those that do may have to go on a baked beans diet for some considerable time , if they can afford the tins of baked beans .................


There's alot of running about being done as well , running around looking for homeowners that don't exist , strawbuyers and invisible buyers that have been foreclosed on and not found . The frauds will only deepen the problems of the lenders , who will pass it on to borrowers if at all possible , just as insurers do , make everyone else pay for others mistakes , booboos and criminal activities .


----------



## Whiskers

I think your pretty right there, ithatheekret. 

Arguements about the right or wrongs of it aside, my previous post about the various options and moves being attempted and contemplated by the congress suggested to me pretty clearly that settling the houseing situation was a priority. As you say the buyers aren't there yet in all areas, because the circumstances aren't right yet.

The community housing option which is already in place and can be expanded, but the ability of the local authority to borrow to buy properties poses some problems at the moment. 

I just get the feeling that sooner or later a higher proportion of those vacant houses will go back to more affordable rentals. Probably gov owned in some form and a good chunk of the rest refinanced through gov intervention again.

Again, not interested in the economic correctness or otherwise... just making the obversation that assuming these observations are correct, there could well be a mini exponentional unwravelling of part of the big problem and the bottom of the share market could be in sooner than many expect.


----------



## ithatheekret

The housing situation will come about eventually  , when ....... , well if we were to guesstimate that on historical grounds , we'll be waiting 10-15 years .

Say when the world can afford $100 at a wallet level , not a balance sheet level . At present only some balance sheets can afford high oil .

Nobodys saying what's really happening , probably because 98% of the market have never experienced it , myself included . But I've seen high oil before and know what it does all by itself .

The only thing that is different this time is the amount of monies that need to be stashed by Sovereign funds .

We see Chinas markets under the whip . Is it a Japanese whip , lashed to a strong surplus with China ?

The money has to do something other than stand still .

Do we see any of that money rushing into houses ?

I think that one was meant for the masses !

Lots more Mugs there to skim and lock in .


----------



## Kauri

ithatheekret said:


> The money has to do something other than stand still .
> 
> Do we see any of that money rushing into houses ?
> 
> I think that one was meant for the masses !
> 
> Lots more Mugs there to skim and lock in .




  I hear utes are going cheep though...   
Cheers
.........Kauri


----------



## ithatheekret

depends on what you call cheap ........ 

$50K  handball stuff .



that's a lot of bathroom and kitchen .


----------



## Kauri

has something happened in Times Square???


----------



## dhukka

Yeah tanks rolling over students, oh sorry got my squares mixed up. Whatcha hearing Kauri?


----------



## Kauri

dhukka said:


> Yeah tanks rolling over students, oh sorry got my squares mixed up. Whatcha hearing Kauri?





 possible explosion at a US Army recruitment office in Times Square, NY.

  look at some of the crosses in safe haven FX... bit of a jump...


----------



## dhukka

Just came up on marketwatch.com



> *AP: Cordon around Times Square on 'small explosion'*
> There was a police cordon around Times Square as police investigated a small explosion at a military recruiting station, the Associated Press reported. The explosive device caused minor damage, and no one was injured, police said, according to the AP report


----------



## chops_a_must

dhukka said:


> Just came up on marketwatch.com




Don't worry, Captain Bernanke! will save the day!









It will have to be after Captain Bernanke takes on the evil Ron Paul and his economically and fiscally sensible ways though!


----------



## Kauri

Might give the Dow a bit of a shake... for a whiles anyway..

Carlyle Group has failed to meet small margin calls and has received default notices as a result. UBS is also the focus with reports that it has sold up to $24 bln of Alt-A mortgages at heavily-discounted levels, similar to the talk yesterday that it sold $20 bln of such mortgages to Pimco. 


Cheers
...........Kauri


----------



## Kauri

Judging by the latest state of the credit scene... if the credit markets move before stocks...  S+P back to 1260's sooner rather than later... will those lows hold.. depends on MorStan, Lehm, GolSac, and Bears.. due to report in 2 weeks..   :axt:   

also still a lotta speculation that the commodities are in a stretched state  
 (above is all a lotta speculation on my part)

Cheers
............Kauri


----------



## Kauri

WaMu getting the wammo from S+P in a rating downgrade..
Carlyle not meeting margin on mortgage bonds...
Lehman under investigation re London equity derivative trading...
UBS selling anything that isn't in a vault...
Thornburg Mortgage facing possible bankruptcy...
Q4 delinquencies at record 5.82%...
pending home sales -20% over 12 months...
Stories of Treasury backing Fannie + Fred are just that.. stories... and tall ones at that...
$US Index not looking good...

Gold heading for $1000.. ( only sold down today on margin liquidation..I thunk)...

just another day in paradise..
Cheers
............Kauri


----------



## sassa

An excellent article on credit markets in 2008 with opening reference to the troubled mortgage bond fund of the Carlyle group and their margin call problems.

http://money-sage.com/content/are-credit-markets-2008-equivalent-stock-market-1929


----------



## ShareIt

does anyone think the Fed will step in before their meeting?


----------



## sassa

ShareIt said:


> does anyone think the Fed will step in before their meeting?




"Some have lately taken to calling the Treasury market a bubble, because of the frenzied buying of government bonds amid all of the rest of the credit market turmoil. After all, the two-year Treasury note was lately at 1.52%, which hasn’t been seen since the middle of 2003. But to attribute the buying here to a “bubble” psychology seems off the mark, as it isn’t as if anyone is declaring government bonds to be the new new thing, or something. “Bubble is maybe not the right word,” says William Hornbarger, chief fixed income strategist at A.G. Edwards. “There’s so much uncertainty in the world right now that people are looking for any asset that is perceived as the safest…people who are just worried about everything, who would not ordinarily buy Treasurys.” The rush to government debt was particularly prominent in the short-term markets, where the yield on the three-month bill fell as low as 1.30% during the day, putting it about 1.70 percentage points below the federal-funds rate. Lance Lewis, writing on Minyanville.com, says that this type of condition does not occur often ”” and generally only during instances when the Federal Reserve is about to surprise markets with an interest-rate cut. “Could the Fed ease tomorrow morning after the release of the jobs data? It’s a distinct possibility in my view,” he writes."
http://blogs.wsj.com/marketbeat/


----------



## Kauri

and then you get this...   
The St Louis Fed president has come out via Rooters and said *policy makers should not stifle market innovation*, and added that *current woes are rooted in bad risk management and that valid financial innovation often brings instability*. He also says that current problems have a ways to run yet. 
  This lame apology for subprime investments sounds like something one would hear from those actively selling investments based on subprime mortgages to investors, including some of the major US money center and investment banks, not something voiced by a current regional Fed president.
 Ye Gods and little fishes...   
Cheers
...........Kauri


----------



## dhukka

Kauri said:


> and then you get this...
> The St Louis Fed president has come out via Rooters and said *policy makers should not stifle market innovation*, and added that *current woes are rooted in bad risk management and that valid financial innovation often brings instability*. He also says that current problems have a ways to run yet.
> This lame apology for subprime investments sounds like something one would hear from those actively selling investments based on subprime mortgages to investors, including some of the major US money center and investment banks, not something voiced by a current regional Fed president.
> Ye Gods and little fishes...
> Cheers
> ...........Kauri




Good point, just substitute the word alchemy for innovation. As said before calling **** sugar doesn't make it taste any better.

IMO it shows how much trouble the US is in when leading officals come out with crap like this. When it;s all said and done, the costs of this so-called financial innovation will far outweigh benefits.


----------



## Kauri

sassa said:


> "Some have lately taken to calling the Treasury market a bubble, because of the frenzied buying of government bonds amid all of the rest of the credit market turmoil. After all, the two-year Treasury note was lately at 1.52%, which hasn’t been seen since the middle of 2003. But to attribute the buying here to a “bubble” psychology seems off the mark, as it isn’t as if anyone is declaring government bonds to be the new new thing, or something. “Bubble is maybe not the right word,” says William Hornbarger, chief fixed income strategist at A.G. Edwards. “There’s so much uncertainty in the world right now that people are looking for any asset that is perceived as the safest…people who are just worried about everything, who would not ordinarily buy Treasurys.” The rush to government debt was particularly prominent in the short-term markets, where the yield on the three-month bill fell as low as 1.30% during the day, putting it about 1.70 percentage points below the federal-funds rate. Lance Lewis, writing on Minyanville.com, says that this type of condition does not occur often ”” and generally only during instances when the *Federal Reserve is about to surprise markets with an interest-rate cut. “Could the Fed ease tomorrow morning after the release of the jobs data? It’s a distinct possibility in my view,” he writes*."
> http://blogs.wsj.com/marketbeat/




    Rumours started up at the end of the US session last night of an emergency meeting/cut, and are circulating around Asia now, but are based only, in my onion, on the fact that the scene looks similar to the last time they rushed in and then found out the French had suckered them... if they have an emergency cut everytime the market drops on credit worries they will soon be giving money away, like dropping lollies for a kids lollie scramble from a helicopter...  come to think of it...  nahh..   
Cheers
.........Kauri


----------



## Whiskers

Kauri said:


> Rumours started up at the end of the US session last night of an emergency meeting/cut, and are circulating around Asia now, but are based only, in my onion, on the fact that the scene looks similar to the last time they rushed in and then found out the French had suckered them... if they have an emergency cut everytime the market drops on credit worries they will soon be giving money away, like dropping lollies for a kids lollie scramble from a helicopter...  come to think of it...  nahh..
> Cheers
> .........Kauri




Exactly.

Some speculation of a 75bp cut. 

My estimate is they will wait for the normal meeting and not go so severe prob 50 maybe 25... since Ben has pretty much told the Bush admin to pull there socks up and do more.


----------



## sam76

dhukka said:


> Just came up on marketwatch.com





a video of the explosion for those who are interested

http://www.nypost.com/video/?vxSite...el=NY Post&vxClipId=1458_249625&vxBitrate=700


----------



## Kauri

a few interesting reads... if you have time..   
Cheers
............Kauri


----------



## chops_a_must

Censorship dodging hey Kauri?


----------



## ithatheekret

Just off topic , sorry .

But I must state that I think the RBA did the right thing as always , whilst the data coming in shows it has started to work , it now has the swing in inflation to contend with  . They have to use the lagging data and take into account international events and will more than likely ( IMO ) raise another 25 at the next meeting  . They are well within their rights too , inflation must be pushed down in other sectors than where it has started to swing away from first , this will usually lower the cost push swing , whilst only a temp solution , it will contain any further build up . The ECB should be raising rates , just like the US should be , but they won't , I'd be surprised if they went .75 bsp and think they suffice with .25 .  rather than stoke the inflations at hand and send them into hyper mode , which is definitely on the cards . They will cut again , the numbers say they have to drop at least .75 before the end of the year . Then hold them there as long as they can until a bottom evolves . March the 18th , if they waited till then most indexes would have tested the lows or be very close to ( having done so would be better ) , before they act .


----------



## numbercruncher

US Jobs post biggest drop in five years.

Futures down accordingly


----------



## dhukka

numbercruncher said:


> US Jobs post biggest drop in five years.
> 
> Futures down accordingly




Yep, no positives here, take out government jobs and Feb payrolls would have been down more then -100k. Also 46k worth of downward revisions to previous months. Look out below.


----------



## chops_a_must

Financials up 2%

Buy, buy buy!!! 

Screw these trader affects, bear markets now go up!


----------



## wayneL

chops_a_must said:


> Financials up 2%
> 
> Buy, buy buy!!!
> 
> Screw these trader affects, bear markets now go up!



Fade all news! 

That's the new rule of thumb.


----------



## Whiskers

Interesting little poll result!

Slightly more bullish than me... but fwiw, I like it. 

Although, just out of curiosity I voted twice just to see if I could. 

Ramping!?


----------



## Kauri

Not having an ounce of fundamental economic sense to my name I have been pondering the latest from the mighty US of A...
does the fact that increased TAF with relaxed requirements of asset backing indicate that 
a) the Fed is now/will be attacking with more than just rate cuts... taking out the likelihood of near term deep cuts...
b) which in turn will support the greenback to some extent but not necessarily the share market..
c) gold may not shine as brightly for a little whiles...
d) my basic reading of it is way off track...
 
Pondering
............Kauri


----------



## explod

Kauri said:


> Not having an ounce of fundamental economic sense to my name I have been pondering the latest from the mighty US of A...
> does the fact that increased TAF with relaxed requirements of asset backing indicate that
> a) the Fed is now/will be attacking with more than just rate cuts... taking out the likelihood of near term deep cuts...
> b) which in turn will support the greenback to some extent but not necessarily the share market..
> c) gold may not shine as brightly for a little whiles...
> d) my basic reading of it is way off track...
> 
> Pondering
> ............Kauri




Very good questions.   Proabaly all they have got left is spin and rates cuts.  They will try to support the Dow at all costs.   Lower interest rates relieve the Fed of debt burden and the gold price? well most Americans do not know it exists at this time so it doesn't figure.

All that is left is the Presidential election, it is political.  The system will do everything in its power to spin out nice stuff and try to protect the Dow.   The Fed is private enterprise and the greatest ally they have is Republican Governments.

The real crash will come in 2009.


----------



## Whiskers

I think you're pretty right with a, b and c kauri.

With the Fed earlier giving the Bush admin a shunt into gear, I think they are now contemplating standing off a bit with rate cuts, especially with the ECB and BOE causing them some angst by not coming to the cutting party. 

It looks to me like the rest of the world has stood their ground refusing to cut heavy and China not being intimidated into revaluing its currency, and leaves the US little option but to get their own house in better order and let the $ rise back a bit.

It also makes sense to start letting/assisting the $ recover a bit to reduce the cost of imports and preserve disposable income and get a bit of a head start on inflationary pressures. 

Gold price growth may slow, but I'm not sure that new production will meet demand anyway and can't see massive CB selling happening soon.

I think that strategy will pretty much look after the sharemarket as well insofar as it will help negate recessionary fears.

It's the recovery of the $US in the near future that I think will help not just the Aus market but the world generally... but having said that, I think the long term trend will still be a weakening of the $US.


----------



## Kauri

more grist for the mill.....

http://www.theaustralian.news.com.au/story/0,25197,23340283-643,00.html 

Cheers
..........Kauri


----------



## Uncle Festivus

There is still a huge disconnect between the financial economy and the real economy (as indicated by the above poll???)  so I don't think the fireworks, for the money shufflers, have even started yet. The Dow has only just cracked 12k going down, ie from the 14k peak it's not yet factored in a recession, let alone a deep and protracted one. Either that or all that pump priming money has only gone into spec investments.

My trading strategy still holds I think - Gold & Silver - buy the dips (possibly even wait for _the_ correction)
For the pleb shares ie the rest of 'em - short the rallies - they are shot.
Trading oil, not investing in the equities?

The is an increasing possibility that demand destruction is taking place with general commodities too (most notably oil), with some estimates of a 30% 'topping' speculative premium. A number of commodities charts are showing the start of a megaphone set up, so I would expect we are entering a period of high (daily price) volatility, followed by a correction of sorts?

Because this won't be a normal recession, commodities may not be the counter trend play that some may think. As for currencies, gold should be a good play on the retracement lower?

_____________________________

The muni market keeps getting whacked, the contagion is nearly down to bedrock of the US system - just waiting to see the depth of the sh*t now, and how long it takes all the high paid doodle head suits to realise it. The negative feedback loop keeps getting bigger.



> ZURICH -- Swiss wealth manager EFG International took a hit from the credit crisis, saying a US municipal bond fund it was distributing had to be liquidated, sending its shares sharply lower.
> The Akos fund, which was launched in November 2004, was liquidated after a sell-off in municipal bonds last week, causing losses for investors, an EFG spokesman said. He declined to give a figure for the losses.


----------



## ithatheekret

The message looks pretty clear for myself , NFP number was bad , unemployment rate now at 4.8% . The variety of job losses was from every sector , the writing on the wall already for some I'd say . retails shed jobs , bad numbers coming in ???

I think the numbers from NFP are just the door opener for what's to come , as far as employment goes , we've seen it worse a few years ago , but what real meaningful employment has been created ??? I think we are going for a repeat program session with US employment .

The Yen looks like it a piece of tin being pulled to a magnet called 100 and Eurogal is wanting to dance with anything above 1.55 for a fling .

I had 75bp set down before June , I think we'll see that on the 18th now , the US rate look like it has no option but to flirt with 1.5% or even 1.25% .

We've just seen negative back to back payroll numbers , a semaphore of its own of a recession . A housing crisis , which historically lead to recessions .
A high oil price , nay a historical high oil period , which always precedes a recession . 
Persistent inflation across the board , every single one of the categories . We now await hyperinflation , it's hitting smaller countries already , a clear entree to recession .

To top it all off we have a financial crisis , which is yet to spread to currencies of certain nations in a much different way .

Anyone seen Kudlow lately ?


----------



## Uncle Festivus

ithatheekret said:


> Persistent inflation across the board , every single one of the categories . We now await hyperinflation , it's hitting smaller countries already , a clear entree to recession .
> 
> To top it all off we have a financial crisis , which is yet to spread to currencies of certain nations in a much different way .
> 
> Anyone seen Kudlow lately ?




Or should that be hyper stagflation???

Some new phrases perhaps 

- "The Global Margin Call" - the buck stops here - credit card carnage about to start?

- "Trickle Down Contagion" - who owns Qantas' jets?


----------



## Whiskers

Bearing in mind kauri's point about "_increased TAF with relaxed requirements of asset backing_"... ithatheekret and Uncle Festivus, do you not think the fallout from the credit poblems are starting to get under control, at least insofar as tighter regulations and the insurers are not likely to fold, and would you not think there is room for the Fed to only cutting 25 or 50 to help reinforce the $US. 

Just on the point of insurers I saw it reported that a couple of smaller operators who had little exposure to subprime are expanding business considerably to fill the void left by the lame Ambac and MBIA. http://money.cnn.com/2008/03/07/markets/bond_insurers/index.htm?postversion=2008030708

It seems to me that a stronger $US would translate into lower domestic US oil prices in particular, that would significantly allay fears of rising costs of production across the country, particularly the farm sector, which is about to crank up employment and cropping activities.

Wouldn't it also translate into slightly slower growth in commodity prices in $US terms but more profitable operations for the like of Aus due to currency conversion?

Or do you think the speculator element in commodity prices is enough to collapse them if the $US starts to appreciate?


----------



## sassa

Whiskers said:


> ... do you not think the fallout from the credit poblems are starting to get under control




This is part of an article posted at Minyanville on 05/03/08-

Despite the move today in equities, credit market issues are not going away.  In fact, they may be worsening.  Almost 70% of the auctions in the $330 billion Auction Rate Securities (ARS) market failed this week, according to Bloomberg.  

There were 521 failed auctions in the market for the floating-rate securities yesterday, amounting to a rate of 66 percent, according to data compiled by Bloomberg.  These are mostly municipal related bond issues and the failures are crimping states around the country.  According to the article, the yields on the debt are average more than6.5%, compared to 3.6% in early January.  

Goldman Sachs (GS) , Citigroup (C) and other brokers began allowing the auctions to fail last month, their refusal to step in to provide clearing bids effectively shutting down the market.  The large banks apparently controlled the market both coming and going.  During the good ol' days, back in 2006, before the widespread auction failures the SEC fined Citigroup, Goldman and 13 other banks $13 million after alleging they manipulated the market by giving some clients information about rival bids in the supposedly blind auctions. 

For perspective's sake, between 1984 and 2006, only 13 auctions failed, according to Bloomberg.  Meanwhile, one fixed income trader told Bloomberg that the risk is not that municipalities will default, but that the market has collapsed due to subprime mortgage market losses.  "It's still a liquidity issue, not a credit issue,'' the trader said.  Well, perhaps not yet.
http://www.minyanville.com/articles/GS-C-bac-UBS-BJS-COST/index/a/16158


----------



## Whiskers

sassa said:


> This is part of an article posted at Minyanville on 05/03/08-
> 
> Despite the move today in equities, credit market issues are not going away.  In fact, they may be worsening.  Almost 70% of the auctions in the $330 billion Auction Rate Securities (ARS) market failed this week, according to Bloomberg.
> 
> ---
> "It's still a liquidity issue, not a credit issue,'' the trader said.  Well, perhaps not yet.
> http://www.minyanville.com/articles/GS-C-bac-UBS-BJS-COST/index/a/16158




Yeah, I agree there are still liquidity problems there sassa, but it does look as though this was exaggerated by the hedge funds. How long can they cause that impact or have they pretty well finished? 

What I anticipate will happen is some reallignment and reorganising of the way busines is done as people in sound positions move in to fill the void. 

I guess the question is if there are enough to fill the void and how long it will take to transform, because there were obviously (corruption) problems with the way it was before.

Getting back to kauri's original point about increased TAF with relaxed requirements of asset backing... won't that sooner or later help resolve the liquidity issue?



> The declines accelerated at month-end on selling by hedge funds squeezed by rising floating rates on notes they issued and declining values on long-term bonds used as collateral.
> 
> `Complete Turnaround'
> 
> The carnage caught the eye of Ross, who invests in distressed companies, and Gross, manager of the world's biggest bond fund. Gross, chief investment officer of Pacific Investment Management Co., said last week he bought municipal bonds when they were at their worst, while Ross said his purchases included California bonds with a yield of 5.5 percent.
> 
> The Bond Buyer 20 index of long-term yields fell 0.19 percentage point in the week ended March 6, after rising 0.45 percent the previous week, the most since February 1980. At 4.92 percent, the index is 0.52 percentage points above its average for 2007.
> http://www.bloomberg.com/apps/news?pid=20601170&refer=home&sid=ayu_rz4zxnt8


----------



## sassa

Whiskers said:


> Getting back to kauri's original point about increased TAF with relaxed requirements of asset backing... won't that sooner or later help resolve the liquidity issue?




Whiskers,love or hate Paul Krugman,agree or disagree?He certainly has created food for thought in this article regarding the TAF.

http://krugman.blogs.nytimes.com/2008/03/08/whats-ben-doing-very-wonkish/


----------



## Uncle Festivus

Whiskers said:


> Bearing in mind kauri's point about "_increased TAF with relaxed requirements of asset backing_"... ithatheekret and Uncle Festivus, do you not think the fallout from the credit poblems are starting to get under control, at least insofar as tighter regulations and the insurers are not likely to fold, and would you not think there is room for the Fed to only cutting 25 or 50 to help reinforce the $US.




In a word, no. 

"starting to get under control" - I can't see this at the moment? If anything, getting worse. All the rule & regulation changes in the world won't stop what's happening now as these things take on a life of their own once started ie contagion. _It will only stop when the fear of lending subsides and the system starts to get money velocity back again I think._

These periods present once in a lifetime opportunities for those who have discipline and money - captains of industry of the future.

The one left of centre event might come if there is a massive short covering equity rally coinciding with a release of a large block of pump priming funds or such? But it may be confined to equities as the real economy will take several years to 'adjust' to these conditions.

My bias is to prepare for all outcomes (increasingly bearish?), or at least be aware of them & be ready to adjust as appropriate. I've actually gone long a few stocks recently eg CBA & WPL, but just as fast gone short again. So trade the momentum now?

My 2c worth?


----------



## chops_a_must

Kauri said:


> Not having an ounce of fundamental economic sense to my name I have been pondering the latest from the mighty US of A...
> does the fact that increased TAF with relaxed requirements of asset backing indicate that
> a) the Fed is now/will be attacking with more than just rate cuts... taking out the likelihood of near term deep cuts...
> b) which in turn will support the greenback to some extent but not necessarily the share market..
> c) gold may not shine as brightly for a little whiles...
> d) my basic reading of it is way off track...
> 
> Pondering
> ............Kauri



It's all the same as far as I can see. Increasing liquidity, printing money. Same ****, different bucket.

Whiskers... I'm pretty staggered by what you are saying... how anyone can think that this is just a small hiccup and things will go on like "normal" is beyond me.


----------



## Kauri

I hear that Trichet, after a meeting with his G10 cohorts, has a press call later today... wonder if it will be similar to the last time this happened last year and they had a co-ordinated cash pump ...
 It almost seems certain that more hedge funds are poised to default and go belly up... but a lot of talk suggests a major financial insto will get broken in this round of credit pressure... interesting times..

... it seems it pays to be prepared for anything...

Cheers
...........Kauri


----------



## Whiskers

chops_a_must said:


> Whiskers... I'm pretty staggered by what you are saying... how anyone can think that this is just a small hiccup and things will go on like "normal" is beyond me.




Chops, are you smoking that weed again! 

I don't recall using 'small hickup' anywhere. On the contrary I was out there noticing the problems last year too... but I am also acknowledging that the landscape will not return to the same as before, and noticing signs of a changing of the guard, so to speak. Change of strategy and new operators poised to take advantage of the situation and in time forge a new dynamic of the world economy.

Correst me if I'm wrong, but the last time I used the word "normal" was in reference to the next 'normal' Fed meeting. 



> It's all the same as far as I can see. Increasing liquidity, printing money. Same ****, different bucket.




Just as a matter of interest, are you saying that liquidity should not be increased and or that there should never be new money printed?


----------



## explod

Whiskers said:


> Chops, are you smoking that weed again!
> 
> I don't recall using 'small hickup' anywhere. On the contrary I was out there noticing the problems last year too... but I am also acknowledging that the landscape will not return to the same as before, and noticing signs of a changing of the guard, so to speak. Change of strategy and new operators poised to take advantage of the situation and in time forge a new dynamic of the world economy.
> 
> Correst me if I'm wrong, but the last time I used the word "normal" was in reference to the next 'normal' Fed meeting.
> 
> 
> 
> Just as a matter of interest, are you saying that liquidity should not be increased and or that there should never be new money printed?




I think what Chops is saying in no uncertain terms is that the Septic Tank Powers that be have stuffed it big time and they all and sundry are heading for the exits and the sinking ships.

As with the great Rome and Germany of the 1920's the US are gone.

The Fed as we see it is not normal and could not have a normal honest go at it in a fit.   GWB would not stand for it, he wants Republicans back in the White House.  He even vetoed a move by Congess to stop the torture of prisoners just this weekend.   The good old us-o-a is a crooked as a taxi trip from Flinders Street Station to the Casino on Satdy night.

Economic sensiblities, spare us.........


----------



## IFocus

Todays Australian



> Australia faces recession: analyst




Based on profit figures back to 1970, earnings are 44 per cent above their long-term trend.



> In the three recessions since then, real earnings per share fell by between 36 and 65 per cent from peak to trough






> The view that Australia will be saved by China and the resources boom underestimates the magnitude of the forces ranged against us.
> 
> China’s growth may continue to require large flows of commodities, but commodity markets at present are being driven by speculative money that can flee as quickly as it came.




Full article 

http://blogs.theaustralian.news.com...n/comments/australia_faces_recession_analyst/


----------



## Whiskers

Explod, I agree with what you say.

I think the issue may be that chops isn't recognising my devils advocate inquiry approach... whereas some people are very matter-of-fact.

I just saw that Ifocus. Not quite sure what to make of it yet.

One problem I have with a lot of the commentary especialy from economists is they tend not to foresee changing dynamics in the future... ie to use a quote by Fred Rodell (Professor of Law, Yale) albeit he was referring to 'The Law' as an analogy, economists are a bit like _the Killy-loo bird, a creature that insisted on flying backwards because it didn't care where it was going but was mightily interested in where it had been_.

The caution being that measurement tools, standards and values from the past don't necessairly project the future. M3 is one fad that didn't last long.


----------



## Kauri

Credit markets worldwide look to be nervous with rumors rampant of imminent hedge fund collapses on inability to find funding.   Spreads on the Australian money market also look to be widening considerably with one major investment bank noting that the rates market there is virtually in collapse.   

Cheers
........kauri


----------



## dhukka

No doubt the extended Term Auction Facility provides extra liquidity. However there are a couple of points people should remember about them. They are *NOT* injections of new money. They are just temporary repos, that is, the money is drained back out again in a month or so. 

Secondly, although the Fed has relaxed standards on the type of collateral that can be offered up, remember that they are still only offering this liquidity to authorised banks. That doesn't mean those banks will necessarily lend it out. Take Thornburg Mortgage (not an authorised institution) for example, which is about to go belly-up, noone is willing to extend them credit. In fact banks are making calls on hedge funds and the like to stump up more collateral because they don't want to get left holding the bag. 

That leads to the most important issue which is solvency. Here the Fed can do practically nothing. They can provide all the liquidity they want but they can't prevent large scale bankrupticies.

Looking ahead I think the end game is either the Fed or some other government sponsored institution comes in and buys these bad credits at some discounted price putting a floor under some of these assets. I'm not a supporter of this idea, just that I think this is where it is headed.  

Credit spreads are still widening, libor is starting to creep out again, mortgage rates are the same or higher than they were a year ago after 225 bps of Fed easing, ABX, CMBX and CDX keep plunging new lows, the percentage of home foreclosures reached an all time since 1945 and are set to go higher as the major wave of mortgage resets has just begun, employers have stopped hiring and are about to start firing in earnest, corporate bankrupticies are about to ratchet up.

To suggest that we are closer to the end than the beginning of this deleveraging process is nothing more than wishful thinking.


----------



## chops_a_must

Whiskers said:


> I think the issue may be that chops isn't recognising my devils advocate inquiry approach... whereas some people are very matter-of-fact.




Hmmm.... excuse me if I've been wrong, but you genuinely seem to have been bullish this whole way down...



dhukka said:


> No doubt the extended Term Auction Facility provides extra liquidity. However there are a couple of points people should remember about them. They are *NOT* injections of new money. They are just temporary repos, that is, the money is drained back out again in a month or so.




Thanks for that Dhu... I was hoping you would clear it up for us plebs.

Surely then, the TAF is akin to rolling up or down on options to a later date, and just magnifying those problems anyway. Didn't know the fed was into trading.  Oh that's right... all those puts!

Maybe Wayne can come in with the dangers of doing that. 

What happens if the banks default to the feds on those TAFs?


----------



## dhukka

chops_a_must said:


> Hmmm.... excuse me if I've been wrong, but you genuinely seem to have been bullish this whole way down...
> 
> 
> 
> Thanks for that Dhu... I was hoping you would clear it up for us plebs.
> 
> Surely then, the TAF is akin to rolling up or down on options to a later date, and just magnifying those problems anyway. Didn't know the fed was into trading.  Oh that's right... all those puts!
> 
> Maybe Wayne can come in with the dangers of doing that.
> 
> What happens if the banks default to the feds on those TAFs?




Chops, 

I think the best way to think about the Fed's liquidity injections are to use the analogy of a pawnbroker. I first wrote about this back in August when everyone was getting hysterical about the Fed pumping huge amounts of cash into the banking system to supposedly 'bail out' troubled banks. That simply is not the case. Below is an excerpt of what I wroote in August but click on the link for a thorough explanation. 



> *Central bank bailout or acting as pawnbroker?*
> 
> It may be helpful to use the analogy of a pawnbroker. Let's say my monthly rent of $1,000 is due on the 20th of this month. However I only have $700 in the bank and I don't get paid until the 25th. I'm $300 short for my rental payment and I also need to eat and pay for basic living expenses until I get paid.
> 
> So I take my Rolex down to the local pawnbroker. It's worth $2,500, the pawnbroker gives me $500 for it and keeps it as collateral in case I can't pay him back. I use $300 of the pawnbrokers loan to help pay the rent and use the remaining $200 for basic living expenses.
> 
> Then on the 25th I get paid, I go down to the pawnbroker pay him his $500 back plus some interest and he gives me my watch back.
> 
> Think of the Fed as a pawnbroker to the banks and other institutions that need to fund their short term liquidity requirements. Of course the Fed's terms will be much more generous than your average pawnbroker.


----------



## sassa

Just reported on www.247wallst.com-

March 10, 2008
Corporate Earnings Growth Disappearing, Could Go Negative
A survey of analysts taken recently indicates that they believe earnings will be flat in the first and second quarters of this year when compared to the same periods in 2007. The poll, by Reuters Estimates, sees Q1 earnings for the S&P 500 moving up only .4% and Q2 by .9%. Both numbers are worse than those gathered the previous week.

Oddly enough, the same survey showed Q4 2007 earnings for the S&P 500 dropped over 20%.

The information is an example of how securities analysts will hold their estimates high as long as possible. Perhaps to keep managements happy or keep shareholders invested in equities. It is hard to stay employed as a stock-picker when everyone is in bonds or cash.

In reality, earnings are likely to fall in each of the next two quarters. Certainly the financial companies in the S&P could see more huge write-offs due to subprime and consumer credit problems combined with falling value of LBO loans. With oil prices high it is hard to imagine that the auto and airline industries will do well. Retailers are already posting drops in same-store sales. The housing and construction industries will have another bad run.

Even technology may do badly. Recent information from Taiwan Semiconductor (TSM) and Intel (INTC) show slowing in the shipments of chips used for PCs and servers.

Oil companies and consumer goods operations which sell soap, toothpaste, and razors may fair well, but they cannot offset the drops in other industries.

A doubled-digit drop in the earnings of the firms in the S&P is more likely than flat year-over-year performance.

Douglas A. McIntyre


----------



## chops_a_must

Thanks Dhu. Cash converters now lend money as well...
...

WTF? 



> TIPS' Yields Show Fed Has Lost Control of Inflation (Update1)
> 
> By Sandra Hernandez and Deborah Finestone
> 
> March 10 (Bloomberg) -- *Bond investors have never been so sure that the Federal Reserve will lose control of inflation. They're so convinced that they're giving up yields just to buy debt securities that protect against rising consumer prices. *
> 
> The yield on the five-year Treasury Inflation-Protected Security due in 2012 has been negative since Feb. 29, ending last week at minus 0.16 percent. The notes, which were first sold in 1997, have never before traded below zero. Even so, firms from Deutsche Asset Management to Vanguard Group Inc., the second-biggest U.S. mutual fund company, say TIPS are a bargain.
> 
> For the first time in a generation, money managers must come to grips with a central bank that's more intent on spurring the economy than restraining price increases. With oil above $100 a barrel, gold approaching $1,000 an ounce and the dollar at a record low against the euro, TIPS show investors aren't convinced Fed Chairman Ben S. Bernanke will be able to tame inflation once policy makers stop cutting interest rates.
> 
> ``The way TIPS are trading now, investors believe headline inflation will stay lofty and are willing to give up the real yield for that,'' said Brian Brennan, a money manager who helps oversee $11 billion in fixed-income assets at T. Rowe Price Group Inc. based in Baltimore. Prices for the securities indicate ``a real concern of a recession and high headline inflation,'' he said.
> 
> Because TIPS pay a principal amount that rises in tandem with the consumer price index, buyers accept lower yields in a bet the inflation adjustment will make up the difference.
> 
> Volcker Fed
> 
> Investors typically determine what they are willing to receive in interest by deducting the rate of inflation expected over the life of the securities from the rate on a comparable Treasury. Investors can still earn money from TIPS with sub-zero rates because the principal rises with the CPI.
> 
> Five-year TIPS yielded 2.35 percentage points less than similar-maturity Treasuries as of 2:45 p.m. in Tokyo. The so- called breakeven rate has risen from a four-and-a-half-month low of 1.89 percent on Jan. 23, the day after policy makers cut their target lending rate by three-quarters of a point to 3.50 percent in an emergency move.
> 
> The last time investors were so worried about faster inflation amid slowing growth, Paul A. Volcker presided over a Fed that would raise rates as high as 20 percent to end the stagflation crisis of the 1970s, according to Seth Plunkett, a bond fund manager at American Century Investment Management in Mountain View, California. The firm manages $20 billion.
> 
> Fed Forecast
> 
> Inflation ``is going to be higher than the Fed's targeted area,'' said Plunkett, whose fund owns a greater percentage of TIPS than contained in the index he uses to measure performance.
> 
> In forecasts released last month, the Fed said it expects inflation to accelerate 2.1 percent to 2.4 percent this year, and 1.7 percent to 2 percent in 2009.
> 
> TIPS have returned 6.2 percent this year, compared with 3.7 percent from regular Treasuries, according to indexes compiled by Merrill Lynch & Co. Mutual funds that specialize in inflation-linked debt attracted a net $2.87 billion in January, boosting their assets to $47.6 billion, according the latest data available from Financial Research Corp. in Boston. In all of 2007, the funds added a net $3.54 billion.
> 
> ``TIPS are a really good buy,'' said Bill Chepolis, a money manager who helps oversee $9 billion at Deutsche Asset Management in New York. He bought five-year TIPS in the last six months. ``They're cheap with the Fed continuing to emphasize growth over inflation and inflation continuing to come in higher.''
> 
> ...
> 
> http://www.bloomberg.com/apps/news?pid=20601087&sid=aE3uq61ajc.4&refer=home


----------



## Kauri

*JP Morgan* warns that banks face up to $325 bln in "systemic margin calls". The* UK Times* warns today that the Fed"s TAF moves on Friday were due to fears of systemic risk. Margin calls against Carlyle and Thornburg are still headlines today and bond traders are eyeing the *Bloomberg* article that hedge funds are reeling from margin calls. 

 Sorry, no links... too busy trading...
Cheers
..........Kauri


----------



## Kauri

One of the key arguments for AUD bulls, supporting their optimistic view for the currency, and theXAO, has been expectations that Chinese growth will underpin Australian resource demand and the AUD. But, cracks in that view emerged overnight with a sharp slump in China"s trade surplus reported last night at $8.6 bln and well under the $22.2b bln expected. China Feb imports of copper were down 5%, which is partly blamed on the Chinese New Year though some still see waning demand as well. China"s stock index fell to a seven-month low last night, adding to the more negative outlook for China with the Nikkei reporting today that some Japanese companies are already rethinking China strategies and looking to shift production elsewhere to cheaper places like Vietnam and India. *The Nikkei* also reports that half of Japanese manufacturers see a sharper slowdown in China after the Olympics. 
Cheers
...........Kauri


----------



## Kauri

Michael West in *the Age* even talks about rumours of large margin calls due on McQuarie Bank which *McQuarie denied* overnight but highlights the current local market concerns. 
Cheers
...........Kauri


----------



## wayneL

Cognitive dissonance from The Times LOL :


----------



## Kauri

*Numerous news services *reporting Lehman will lay off 5% of its staff which is seen underpinning US recession fears and highlighting the financial market woes.


----------



## Kauri

at last... the US reacts to the batch of bad news coming out ... risk control to the fore###


----------



## Kauri

if a US investment bank was caught sniffing glue would it qualify to be called  in-solvent??    
Cheers
............Kauri


----------



## chops_a_must

Kauri said:


> if a US investment bank was caught sniffing glue would it qualify to be called  in-solvent??
> Cheers
> ............Kauri




Lol!

And even with that amount of protection, the US is still infected seven ways from Sunday.

But the markets aren't coming off nearly enough for my greedy liking atm. Want to see 11,000 on the dow at least by the end of the week...

As for the fed having this anywhere near control:



> Bear Stearns Shares Fall on Liquidity Speculation (Update1)
> 
> By Jeff Kearns
> 
> March 10 (Bloomberg) -- Bears Stearns Cos. fell 13 percent in New York trading, the most since the 1987 stock market crash, on speculation the company lacks sufficient access to capital.
> 
> Bear Stearns, the second-biggest underwriter of mortgage- backed bonds, declined $8.53 to $61.55 in composite trading on the New York Stock Exchange at 11:55 a.m., the lowest level since March 2003. Earlier today it traded as low as $60.26.
> 
> ``There's an insolvency rumor and concerns on liquidity, that they just have no cash,'' said Michael Mainwald, head of equity trading at Lek Securities Corp. in New York. ``There's been rumors of this for the past week or two.''
> 
> Russell Sherman, a spokesman for New York-based Bear Stearns, didn't immediately return a call for comment.
> 
> To contact the reporter on this story: Jeff Kearns in New York at jkearns3@bloomberg.net.




As I was saying on another thread today, you're going to have to expect to see some of these majors go under...


----------



## Kauri

chops_a_must said:


> Lol!
> 
> And even with that amount of protection, the US is still infected seven ways from Sunday.
> 
> But the markets aren't coming off nearly enough for my greedy liking atm. Want to see 11,000 on the dow at least by the end of the week...
> 
> As for the fed having this anywhere near control:
> 
> 
> 
> As I was saying on another thread today, you're going to have to expect to see some of these majors go under...




   what sparked the ... ahhh... rumours..  







> Moody"s has downgraded a number of ratings on 163 tranches of Bear Stearns Alt-A deals.




   I don't think there is anything to it... the liquidity that is.. I hear its a spray can...

  on another tack... 







> for whom the bell TOLLS!!




 of course there is another mob who are *Lehing men* off... about 5% I think..
Cheers
.........Kauri


----------



## skating101

this entire discussion reminds me of the january doom and gloom phase just before the big bounce the dead cat is looking a little twitchy again

out of interest who actually feels that a recession in the US could already be priced into the market?


----------



## explod

skating101 said:


> this entire discussion reminds me of the january doom and gloom phase just before the big bounce the dead cat is looking a little twitchy again
> 
> out of interest who actually feels that a recession in the US could already be priced into the market?




Not me, the US market is still over inflated, held up by the Wall Street spin doctors.   Do the numbers.  Read back over this thread on the businesses going to the Wall in the US over the last few weeks.

The doom and gloom analysts of 4 or 5 years ago have turned out to be spot on.   Maybe they are worth following so that you can approach the market with optimism.

Food, oil, gold


----------



## brty

At some point, probably soon, there will be a large correction to this move down. It has been one way traffic since November. Whether or not it is the ultimate market bottom is a moot point. 

We should be very close to a tradeable rally, especially given the D+G in some of these threads.

bye

brty


----------



## Trembling Hand

brty said:


> At some point, probably soon, there will be a large correction to this move down. It has been one way traffic since November. Whether or not it is the ultimate market bottom is a moot point.




Thanks for that. I am sure that's a fresh view that no one has thought about. That one day soon we may rally and it may or may not be the bottom.


----------



## Real1ty

brty said:


> At some point, probably soon, there will be a large correction to this move down. It has been one way traffic since November. Whether or not it is the ultimate market bottom is a moot point.
> 
> We should be very close to a tradeable rally, especially given the D+G in some of these threads.
> 
> bye
> 
> brty




And what do you actually base that theory on?

I wouldn't rule out a small bounce sometime soon, but a "large correction"....you're kidding yourself


----------



## motorway

brty said:


> At some point, probably soon, there will be a large correction to this move down. It has been one way traffic since November. Whether or not it is the ultimate market bottom is a moot point.
> 
> We should be very close to a tradeable rally, especially given the D+G in some of these threads.
> 
> bye
> 
> brty




Some times that were  similar

roughly

02 to 03
92 to 93
94 to 95
89 to 91

and so on

motorway


----------



## Uncle Festivus

Trembling Hand said:


> Thanks for that. I am sure that's a fresh view that no one has thought about. That one day soon we may rally and it may or may not be the bottom.




Aw.. come on TH, it's the first post, we should encourage wider discussion .

There could be something in it as one last flip out of spec commodities and back into equities could occur; just not sure what the trigger would be though, it looks shot to me.


----------



## brty

Hi all,

Thanks for the warm welcome.

Let's see if there is any argument with the following examples. 

Will ANZ bank will make $1.6B less this year than last year?

Likewise for each of the other banks.

That is what the market is currently pricing in.

All it would take is for the Fed in the US to drop rates a little more than expected, as well as increasing liquidity in tandem with other CB's and you have the recipe for a rally. Taken with short covering, and those who are looking for a bargain, when it comes it will be explosive.

I may be a new poster on this forum, but I first traded share and commodities in 1981. This gloom and doom stuff that is portrayed here has been talked about for a year now, with subprime problems being known about since then.

The downward momentum in prices is declining, yet the news and the D+G get worse. Come to your own conclusions, I'm just stating my opinion.

bye

brty


----------



## Whiskers

brty said:


> Hi all,
> 
> Thanks for the warm welcome.




Hi there brty. :bekloppt:

Good to have some like minded company on here.
:bananasmi:jump: 



> The downward momentum in prices is declining, yet the news and the D+G get worse. Come to your own conclusions, I'm just stating my opinion.
> 
> bye
> 
> brty




:iagree:

Motorway, glad you mentioned those dates.

I was thinking of mentioning that one of these so called bear rallies will in fact be the bull bolting out the gate.

Chops, not (blindly) bullish, but positive thinking insofar as there are always opportunities in a changing landscape and one needs to notice the suttle changes to pick the bottom closer. If one takes the 'normal' 'follower' principle the market will have turned and got up a head of steam before most people are confident enough to get on board.


----------



## Uncle Festivus

brty said:


> I may be a new poster on this forum, but I first traded share and commodities in 1981. This gloom and doom stuff that is portrayed here has been talked about for a year now, with subprime problems being known about since then.
> 
> The downward momentum in prices is declining, yet the news and the D+G get worse. Come to your own conclusions, I'm just stating my opinion.
> 
> bye
> 
> brty




I too have been trading for about the same time, except I have never seen conditions as bad as they are now - this cannot be understated/ignored. The sub prime problems have also been known to many for more than a year (longer if you have done some simple research), and each month some person in authority would proclaim a bottom was near or that it would be contained etc, and it would promptly get worse. 

Any rally to come out of this would indeed be a suckers bull trap, building up & then promptly dumping the last few gullibles and relieving them of their cash. It is a possibility that we will get a sympathy rebound but what we are dealing with is a secular negative financial credit/derivative contagion - it's not going to get fixed overnight at least. This is not _normal_.


----------



## josjes

Whiskers said:


> Hi there brty. :bekloppt:
> 
> Good to have some like minded company on here.
> :bananasmi:jump:
> 
> 
> 
> :iagree:
> 
> Motorway, glad you mentioned those dates.
> 
> I was thinking of mentioning that one of these so called bear rallies will in fact be the bull bolting out the gate.
> 
> Chops, not (blindly) bullish, but positive thinking insofar as there are always opportunities in a changing landscape and one needs to notice the suttle changes to pick the bottom closer. If one takes the 'normal' 'follower' principle the market will have turned and got up a head of steam before most people are confident enough to get on board.



Yeah Welcome onboard BRTY. Just trying to infuse some positive thinking in this thread. Hopefully I won't get kicked out  

What I see is this:

Ben Bernanke does not want an election year recession as otherwise he will be a Fed chairman one term only and be out of a job in January 2010. The US politicians will do all in their power to avert recession in this election year no matter what. (After election year, let the market forces talk). Therefore expect interest rate comes down to 1% if necessary. And US consumers do respond to rate cut. 

Congress has enacted $160 billion tax cut package. $100 billion for consumers in June and July, $630 billion for business depreciation allowance.

So we've had several actions in the last month to try and revive the economy. Federal Reserve policy, tax cuts, and getting borrowing powers.
And if all else fails, bailout by the Fed is not imposible. 

As an aside, notice that there is a distinct rotation of sectors in ASX today:

Materials down -5%
Energy down -1.8%
Utilities up 1.3%
Banks/Insurance up 2.9%

Since Banks/Insurance is what brought this market down in the first place, perhaps the market is trying to tell us something here ???


----------



## sam76

Japan's certainly finishing strongly  

http://www.bloomberg.com/index_asia.html


----------



## Kauri

josjes said:


> As an aside, notice that there is a distinct rotation of sectors in ASX today:
> 
> Materials down -5%
> Energy down -1.8%
> Utilities up 1.3%
> Banks/Insurance up 2.9%
> 
> Since Banks/Insurance is what brought this market down in the first place, perhaps the market is trying to tell us something here ???





  In the *WSJ *there ia an article suggesting the Fed may try new measures..  i.e bailing fred and fan... and repo's for a wider range of financial instos besides banks... may have put a spark under our financials??
 Materials reacting to drop on LME and Chinas latest outlook...
 I thunk...

Cheers
.........Kauri


----------



## dhukka

brty said:


> Hi all,
> 
> Thanks for the warm welcome.
> 
> Let's see if there is any argument with the following examples.
> 
> Will ANZ bank will make $1.6B less this year than last year?
> 
> Likewise for each of the other banks.
> 
> That is what the market is currently pricing in.




I would be interested to see how you arrive at that calculation


----------



## dhukka

I posted this before in another thread about 2 months ago but I think it is worth repeating here. 



> *Allow for "clearing rallies" without speculating on them*
> 
> It is crucial to recognize that the market downturns associated with recessions are never one-way movements. The basic feature of bear markets is that they maintain the hope of investors all the way down. The stock market often “rides the Bollinger band” lower, becoming more and more oversold, but will then unpredictably clear those oversold conditions by producing explosive advances that are “fast, furious, and prone-to-failure.” The 2000-2002 bear market, which took the S&P 500 down by half and the Nasdaq down by more than three-quarters, included three separate 20% trough-to-peak advances in the S&P 500, and many more 5-7% rallies. We did capture a portion of those, but "clearing rallies" are always prone to failure, so we could remove only a fraction of our hedges. Unless we observe a very broad improvement in market action, that sort of trade would require more modest valuations than we see at present. Generally speaking, when valuations are stretched (on normalized earnings) and both market action and economic measures have turned negative (as they have now), you can expect that “buying-the-dip” will result in a brief feeling of genius and success followed by profound regret


----------



## explod

dhukka said:


> I posted this before in another thread about 2 months ago but I think it is worth repeating here.




Now you are talking (and you did way back then)  Got to hand it to you.   

Just buy some gold and silver bulllion to protect your cash then blue chip  property when that exhausts and you family will love you


----------



## Kauri

A lot of hedgies are coming under pressure... hope they don't have some of their better performing assets seized and sold out from underneath them...  NYT...
Cheers
.........Kauri


----------



## sassa

josjes;269621
Since Banks/Insurance is what brought this market down in the first place said:
			
		

> Wouldn't have anything to do with the expiration of the SPI futures on March 30?Manipulating?


----------



## Kauri

the Fed announced coordinated central bank liquidity adds with the Fed providing $30 bn to the ECB and $6 bln to the SNB. The Fed will also increase swap lines with the ECB and SNB and will lend $200 bln in USD treasuries for 28 days. 
 That should fire the markets up... for a whiles..
 Source... *the Fed *
Cheers
..........Kauri


----------



## ithatheekret

I'm happy , the ASX200 tested 5200 so has the ORDS , could go a touch lower , the financials are those I want to see cheaper , even though earnings are in single digits mode . Few more shuffles and we should be able to get back to linear projections .

There's still problems offshore and more to come , so I'm only looking at local banks etc. , I expect some consolidation soon too .

The ASX50 could get softer as well . But I'm looking at Gas plays right now .


----------



## brty

Hi all,

Bit of a no brainer, a rally has started. S&P up over 30 in overnight market, fed and other CB's offering great liquidity. The perma bears are about to get a fright.

Who would have thought it possible??

And no Real1ty, I'm not kidding myself at all.

bye

brty


----------



## Kauri

Kauri said:


> the Fed announced coordinated central bank liquidity adds with the Fed providing $30 bn to the ECB and $6 bln to the SNB. The Fed will also increase swap lines with the ECB and SNB and will lend $200 bln in USD treasuries for 28 days.
> That should fire the markets up... for a whiles..
> Source... *the Fed *
> Cheers
> ..........Kauri




Guess work on my part.... but...
The Fed may have to indicate less aggressive rate cuts ahead, *if at all*, in order to cool US inflation fears but also *contain the commodities bubble* which has been getting up speed from low US cash rates and less than aggressive inflation stance from the Fed. A more hawkish Fed tone is a risk to commodities and to the $USD crosses as well, and is* more likely after the current liquidity measures.* until the next disaster of course  
 ......or not???
looking to short the skip??     if and when things settle
Cheers
...........Kauri


----------



## chops_a_must

Whiskers said:


> Chops, not (blindly) bullish, but positive thinking insofar as there are always opportunities in a changing landscape and one needs to notice the suttle changes to pick the bottom closer. If one takes the 'normal' 'follower' principle the market will have turned and got up a head of steam before most people are confident enough to get on board.




It's subtle. I notice subtle things.

Blind... hmmm... a lot of your comments seem to remind me of the CNBC perma brigade.

But I dispute the positive thinking. I'll continue to take trades as they appear. Bias in thinking should only be reflected in the sectors you choose to analyse, not what individual trades you should take. I have positive thinking on the hot rocks stocks, but that attitidue wouldn't have stopped people losing 30-50% recently.

The leverage out there is unparallelled in history. And the individual leverage of people is unparallelled. To think that positive thinking will stop the charts from looking bad is crazy.

It looks like the fed is softening everyone up for an eventual massive bailout. Dig dig, chop chop, print print, money money.

Certainly all I see is a large pop in gold, silver and agri. And I think that says it all there. No positive thinking, no negative thinking, just what I see, just what is there to trade for the longer term.

FWIW I'll look to go long some banks for the next little while. A trade for a week or so... See, no thought bias required to put on a trade.


----------



## dhukka

brty said:


> Hi all,
> 
> Bit of a no brainer, a rally has started. S&P up over 30 in overnight market, fed and other CB's offering great liquidity. The perma bears are about to get a fright.
> 
> Who would have thought it possible??
> 
> And no Real1ty, I'm not kidding myself at all.
> 
> bye
> 
> brty




Who would have thought we would get a rally? Basically anyone with a brain in their head. Rallies are part and parcel of bear markets. The Fed is injecting 'great' liquidity, what does that mean exactly? As opposed to the not so great liquidity they've been injecting for 6 months? Once again, the Fed is not injecting new money, it is temporary in nature...as this rally will be.


----------



## explod

dhukka said:


> Who would have thought we would get a rally? Basically anyone with a brain in their head. Rallies are part and parcel of bear markets. The Fed is injecting 'great' liquidity, what does that mean exactly? As opposed to the not so great liquidity they've been injecting for 6 months? Once again, the Fed is not injecting new money, it is temporary in nature...as this rally will be.




Could not agree more, in fact they are most often created so that the smart money can unload at a better price to the mugs.  That's why they are called sucker rallies.

The Fed is private enterprise at work looking after the interests of the multinational money sucking off fees.


----------



## explod

The ramper headlines on Wallstreet this morning per Bloomberg is unbelievable.  The last desperate thrusts of a dying serpent;





> "
> Fed to Lend Up to $200 Billion, Taking Private Mortgage Debt as Collateral
> 
> Stocks in U.S. Surge on Fed's Measures to Counter Freeze in Credit Markets
> 
> Dollar Rises Most in Three Months Versus Yen as Fed Unveils Loan Measures
> 
> Trade Deficit in U.S. Expands Less Than Forecast as Dollar Boosts Exports ..."
> 
> 
> In fact the statement of the dollar rise is wrong, but I suppose truth should not get in the way of a feel good ramper story.


----------



## KIWIKARLOS

mate this is just the first part of the great solution, The FED will have to bail out these securities I bet my @ss on it. You can't run a miltary industrial complex with a crook economy this is life or death for US hegemony and military expansion.

First they are lending using worthless paper as collateral, so what value will they give theis collateral ? real value which keeps declining week after week as the system melts down ? Or 80-85% of the Balance sheet value the value the companies reakons it is. Ill bet you it turns out to be the later. 

They will end up bypassing the current laws which stipulate that these banks must decrease the value of the securities in real time as the market goes down. They are foolsihly believing that by providing this auction money "temporarily" the market for the securities will improve and they will stop loosing value. If it works it will be a false economy if it doesn't the FED will end up having to buy overpriced garbage


----------



## skating101

The Fed really are trying to delay the inevitable recession and associated bear market I suppose they really dont want the economic trouble to start while the republicans are still in charge let alone in an election year  should've bought up yesterday for a sell today as planned lol


----------



## Real1ty

brty said:


> Hi all,
> 
> Bit of a no brainer, a rally has started. S&P up over 30 in overnight market, fed and other CB's offering great liquidity. The perma bears are about to get a fright.
> 
> Who would have thought it possible??
> 
> And no Real1ty, I'm not kidding myself at all.
> 
> bye
> 
> brty




LOL.

So you orginally predicted a "correction" but now it's a rally and you are chock full of confidence and are rubbing our noses in it.



> Originally Posted by *dhukka *
> Who would have thought we would get a rally? Basically anyone with a brain in their head. Rallies are part and parcel of bear markets.




dhukka has summed it up very well, as he usually does.

I don't see that many on here as being perma bears but moreso traders/investors with both eyes open and prepared to move in which ever direction is obvious, and for most, that direction is blatantly obvious....


----------



## brty

Hi all,

Correction, rally, call it what you like. The direction for a period of time will be up. 

When you look at history, how often do you get one way traffic for months on end, with major stocks like the banks losing 40%. My answer is not very often.

If you look at the huge bear market in banks from late 89 through to November 92, there was a 60-66% price fall. However in the middle of this fall there was a huge rally/correction of over 50%, very tradeable.

Whether we continue to have a bear market is not the question. There could be trouble for years as all this works through the system. 
For now though given the continuing gloom and looking for places to enter shorts by many, the bottom is more than likely in for a few months.

I will be looking at entry points from here to continue going long and I am basically long the world.
Being short the world with doom and gloom has been around for years. To my knowledge all that has happened is an opening of opportunities to go long.

Of course this time it could be different

bye

brty


----------



## Awesomandy

My question is, what's next?
Just because they have pumped in $200b, it doesn't mean people somehow magically will be able to start repaying their debts which they couldn't pay back in the past few months.
It's a bit like "here you go. Stick this money on to your balance sheet for the month." I'm not quite sure how this will help solve the underlying problem.


----------



## dhukka

KIWIKARLOS said:


> mate this is just the first part of the great solution, The FED will have to bail out these securities I bet my @ss on it. You can't run a miltary industrial complex with a crook economy this is life or death for US hegemony and military expansion.
> 
> First they are lending using worthless paper as collateral, so what value will they give theis collateral ? real value which keeps declining week after week as the system melts down ? Or 80-85% of the Balance sheet value the value the companies reakons it is. Ill bet you it turns out to be the later.
> 
> They will end up bypassing the current laws which stipulate that these banks must decrease the value of the securities in real time as the market goes down. They are foolsihly believing that by providing this auction money "temporarily" the market for the securities will improve and they will stop loosing value. If it works it will be a false economy if it doesn't the FED will end up having to buy overpriced garbage




Spot on kiwi. This is just one step closer to what I called yesterday the 'end game' where the Fed or some other government institution ends up buying crappy mortgage paper that noone else wants. No doubt the primary dealers have to take a haircut on the collateral.

However notice that they have extended the collateral types to privately labelled AAA/Aaa RMBS and that they will not take anything that is on review for downgrade. Now we know that private rating labels from Moody's Fitch and S&P are not worth the paper they are written on but it should be understood that the Fed is not accepting any old crappy mortgage paper. Each week, the ratings agencies have been downgrading hundreds of tranches of RMBS and CDO's, none of these are eligible. 

As you say kiwi, the Fed is just postponing the inevitable. I wonder how long it will take before the euphoria wears off this time?


----------



## sassa

dhukka said:


> Spot on kiwi. This is just one step closer to what I called yesterday the 'end game' where the Fed or some other government institution ends up buying crappy mortgage paper that noone else wants. No doubt the primary dealers have to take a haircut on the collateral.



" The FED reportedly is hoping to restore the willingness of banks to lend, and thereby contain the intensifying credit contraction. According to news account the FED is also seeking to restore confidence to the mortgage-backed markets, where the buying freeze, initially limited to non-Agency mortgage-backeds, has in recent days shown signs of spreading to the ultra-important Fannie and Freddie mortgage-backed bonds.

Now, what are we to make of all this? In the first place, the imperative of containing the credit market panic before it infects the Fannie/Freddie market is crystal clear. If Fannie and Freddie cannot securitize and sell their mortgages, they cannot make any more loans. This will raise the lending freeze to the level of calamity. In the second place, the reality is that no matter how many mortgage-backeds -- Fannie/Freddie and/or non-agency, the FED accepts as collateral, and no matter what percentage of the market value, or presumed market value, of the mortgage-backeds it accepts in exchange for Treasuries, even a "market value" which is entirely fictive -- the balance sheet of the banks is NOT IMPROVED ONE IOTA. After all, the banks still own the mortgage-backeds, not the Treasuries they have "borrowed" from the FED. And the value of the mortgage-backeds MUST continue to decrease as the income stream of mortgage payments upon which the market value of the bonds rests DIMINISHES in consequence of rising defaults and foreclosures. Moreover, any RISE in market rates for long-date, high quality bonds (Treasuries, for example) in consequence of growing inflation hysteria, fed by rising oil prices ($109/bbl. and counting) and other commodity prices -- and fed as well by endless central bank references to, and hence legitimation of, inflationary fears -- translates to a DECLINE IN THE MARKET VALUE OF ALL LONG-DATED BONDS REGARDLESS OF, AND SEPARATE FROM, THEIR DEGREE OF CREDIT RISK.

There is a profound difference between REMOVING the deteriorating mortgage-backed bonds from bank balance sheets and TEMPORARILY SHIFTING THIS JUNK TO THE FED."
http://www.money-sage.com/content/fed-sleight-hand


----------



## dhukka

Awesomandy said:


> My question is, what's next?
> Just because they have pumped in $200b, it doesn't mean people somehow magically will be able to start repaying their debts which they couldn't pay back in the past few months.
> It's a bit like "here you go. Stick this money on to your balance sheet for the month." I'm not quite sure how this will help solve the underlying problem.




Good question Andy, the short answer is that it does not address the underlying problems. It does not prevent banks from taking more writedowns on worthless financial instruments, it does not mean banks will begin lending again in earnest to financial institutions that are perceived to be credit risks. It does not prevent home prices from falling. The Fed has just kicked the can down the road again.


----------



## sassa

Can or will someone explain the implications of this statement by Wang Lao,chief economist of the Bank of China,in reply to the injection of the $200b
by the Fed?
"It will make the RMB competition softer."


----------



## sassa

Part of an excellent article-

The Short Bus Rolls Again 

Let's do The Fed's action today.

The ostensible reason was to "liquefy" agency and other "AAA" securities.

Really?

Let's talk about reality.

Reality is this:

You short something it is to sell it to someone else. One of the ways the primary dealers make their money is by shorting Treasuries into the market, borrowing them from The Fed and then generating carry off the money. 

Over the last six months the primary dealers have borrowed an insane amount in Treasuries and are short in aggregate close to $100 billion of them!

What's worse, they're long all the other debt instruments, lots of it involuntarily! Like, for example, LBO debt and mortgage securities they can't sell into the market.
http://market-ticker.denninger.net/


----------



## Real1ty

brty said:


> Hi all,
> 
> Correction, rally, call it what you like. The direction for a period of time will be up.
> 
> When you look at history, how often do you get one way traffic for months on end, with major stocks like the banks losing 40%. My answer is not very often.
> 
> If you look at the huge bear market in banks from late 89 through to November 92, there was a 60-66% price fall. However in the middle of this fall there was a huge rally/correction of over 50%, very tradeable.
> 
> Whether we continue to have a bear market is not the question. There could be trouble for years as all this works through the system.
> For now though given the continuing gloom and looking for places to enter shorts by many, the bottom is more than likely in for a few months.
> 
> I will be looking at entry points from here to continue going long and I am basically long the world.
> Being short the world with doom and gloom has been around for years. To my knowledge all that has happened is an opening of opportunities to go long.
> 
> Of course this time it could be different
> 
> bye
> 
> brty







> Correction, rally, call it what you like.




You stated that we would have a "large correction"



> The direction for a period of time will be up.




How long is that period of time?

A day, 2 , a week, it's a far cry from a large correction.
We all acknowledged a bounce/rally was likely.



> I will be looking at entry points from here to continue going long and I am basically long the world.




Good luck with that.



> Being short the world with doom and gloom has been around for years. To my knowledge all that has happened is an opening of opportunities to go long.




That's funny as i thought with the excellent returns over the last few years people were making money being long, not short


----------



## Gundini

brty said:


> Hi all,
> 
> I will be looking at entry points from here to continue going long and I am basically long the world.
> 
> bye
> 
> brty




Hmmm... Long on the world eh? You might be waiting for a while...


----------



## ithatheekret

What's to argue ?

The local bourses have tested their lows , we've just plowed the paddocks .

The multples on the banks are very attractive , that can't be argued , but there will be patches of softness . The economy here is growing albiet at a held back pace , due to infrastructure bottle necks and tightening in the market . The RBA has injected a touch of stimulus to bolster the financials stuff ups , but we are in good shape . Banks will get hot and cold , we can point the bone at the US and Europe for that , but we are now approaching the good times . I don't mean a mega bull market , but cheap stocks that are heavily undervalued ......... and we are still in a bear market , so expect sideways action for sometime .

Gold is still going to rise further along with oil and the best two grwoth sectors on the planet , inflation and M3 supply .

We are in a unique situation , that has only occurred in the last two hundred years to my knowledge . First in 1938 where tighten and consumer spending and declined together and now , housing is a key factor , oil adds some spice , but credit tightening and high inflation all pushing over cost spikes and asset devaluations all at once offers excellent oppurtunities .

We've just had a low test could get there again though , as alot of shares were going CD XD for the last few weeks . But this is healthy to me , and where you make good money for investing and trading . I'd still like to see the boards touch below 5000 , but am prepared to do without it , it's ( the market ) has gone by the textbook lately and squeezed all the BS buyers out ( pumpers ) , cheers for margin calls , money talks BS walks or gets liquidated . If they owned the stocks freehold they could have written puts ........ w...a...n...k...e...r...s    haha


----------



## Real1ty

ithatheekret said:


> What's to argue ?
> 
> The local bourses have tested their lows , we've just plowed the paddocks .
> 
> but we are now approaching the good times . I don't mean a mega bull market , but cheap stocks that are heavily undervalued ......... and we are still in a bear market , so expect sideways action for sometime .






> The local bourses have tested their lows




The bourses have tested their lows, but that's not to say they won't test, or break them again




> *but we are now approaching the good times* . I don't mean a mega bull market , but cheap stocks that are heavily undervalued ......... and we are still in a bear market , *so expect sideways action for sometime*




Can you explain what you mean please?

We are now approaching good times but you expect sideways movement for sometime?


----------



## explod

explod said:


> The ramper headlines on Wallstreet this morning per Bloomberg is unbelievable.  The last desperate thrusts of a dying serpent;
> 
> 
> 
> 
> 
> 
> "
> Fed to Lend Up to $200 Billion, Taking Private Mortgage Debt as Collateral
> 
> Stocks in U.S. Surge on Fed's Measures to Counter Freeze in Credit Markets
> 
> Dollar Rises Most in Three Months Versus Yen as Fed Unveils Loan Measures
> 
> Trade Deficit in U.S. Expands Less Than Forecast as Dollar Boosts Exports ..."
> 
> 
> In fact the statement of the dollar rise is wrong, but I suppose truth should not get in the way of a feel good ramper story.
> 
> 
> 
> 
> 
> 
> And all of the $US index gain of last night reversed in the last few minutes.  What will they come up with this morning US time.
Click to expand...


----------



## Kauri

Looks like the Doxepin and Elavil aren't helping the Fed...  
Cheers
........Kauri


----------



## wayneL

Kauri said:


> Looks like the Doxepin and Elavil aren't helping the Fed...
> Cheers
> ........Kauri



Buyers Remorse?


----------



## Kauri

wayneL said:


> Buyers Remorse?





Panic attacks....
   Icey bank under pressure... Dutch Hedgie labouring... US banks reporting when???  and BB realises he hasn't got a lotta A1 jet-fuel left....

 whenever I feel a bit of remorse I just look to my platform...  
Cheers
..........Kauri


----------



## Kauri

a bit more remorse??

  Drake has a lot of people jumping ship..
  Irish banks are looking for a leprachaun..
  Countrywide downgraded but still on _positive watch_??..
  Economists predict rate drops in Aus in Sept....
  Iceland bank feeling the cold...
  Impasse over BOJ governor not sending a good message to markets..
  BOC says expect more writedowns...
  ING suspends a couple of funds..
  and GW says he absolutely wants a stronger dollar, and a big easter egg, and more people to understand him, and.....
 Sources..  WSJ.. FT.. Australian.. Nikkei.. NZ Herald...
Cheers
............Kauri


----------



## sassa

A plethora of short covering in the 3.5% rise on Tuesday.Traders decide to take profits today(the old dictum works-"Sell on the rally").The major banks begin reporting next week.Retail sale figures and jobless claims out tonight.Oil to $110 a barrel.Where's the good news coming from?
Treasurys are now called trashuries in the good old US of A.
And here's a link to a graph of the Bloomberg investigation which shows that 74 of the 80 AAA bonds in the ABX Index fail tests for investment grade.
http://www.bloomberg.com/apps/data?pid=avimage&iid=iQUy2GaasArs
This begs the question.How is anyone supposed to know if a given institution is solvent or not if the debt they are holding is rated well above its actual credit quality?


----------



## Uncle Festivus

Speaking of Irish banks.....and wider implications for the EU's continued existence.......



> The Irish banking system faces acute strains and may require a phase of temporary nationalisation as the property slump leads to a wave of defaults, according to a leading Irish economist.



Temporary nationalisation..... is that like only for a few years or sumfing?



> The establishment has pretended it's business as usual. But the mood is now changing. The Irish Independent warned this week that the country is sliding into a serious slump.
> 
> "Look at all the signs: every single one is screaming that the economy is in big, big trouble. Housing market dead, new car sales dead, consumer confidence is dead, record job losses, exporters being killed off by a strong euro, fuel prices spike, housing repossessions increase," it said.



http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/03/11/cnirish111.xml

The strong Euro......the second last alternative to the green back.....what happens when no one wants that either?


----------



## Kauri

Some interesting reading to wile away the day...
Cheers
...........Kauri


----------



## sassa

Kauri said:


> Some interesting reading to wile away the day...
> Cheers
> ...........Kauri




Too right Kauri.The Bear Stearns rumoured troubles have been circling on some American blog sites for the last few days.Perhaps the pigeons are coming home to roost.


----------



## Kauri

sassa said:


> Too right Kauri.The Bear Stearns rumoured troubles have been circling on some American blog sites for the last few days.Perhaps the pigeons are coming home to roost.




 A Claytons bailout.. the one you have when you are not having one... explains the $200Bln panic attack...  
Cheers
.........Kauri


----------



## ithatheekret

Real1ty said:


> The bourses have tested their lows, but that's not to say they won't test, or break them again
> 
> 
> 
> 
> Can you explain what you mean please?
> 
> We are now approaching good times but you expect sideways movement for sometime?




The good times are more volatility , the ups , downs and trading ranges . 

It's ........ marvellous . Banks ......  watch them get cheaper .

Been waiting for this little period in the market for weeks , I have a level below 5200 pegged out , we've seen the technical levels trashed on many stocks , now it's time to crumble the fundamental levels . 

I would like to see more of a pullback like todays after yesterdays rally/covering .......... and I wouldn't discount 5100 on the 200 , that could open the door to 4800 and we'd be redoing the late 90's . 

I'm yet to see the double digit growth semaphored by many funds , my bookwork says they are struggling to bring in 8-9% and they've spruiked the same waffle for the last decade . 

The funny side is that now they complain that Hedge Funds are the ones distorting market information .................... ha ha ha . They'd best read the last ten years of ASX releases first  there's some classics in there .


----------



## Real1ty

ithatheekret said:


> The good times are more volatility , the ups , downs and trading ranges .
> 
> It's ........ marvellous . Banks ......  watch them get cheaper .
> 
> Been waiting for this little period in the market for weeks , I have a level below 5200 pegged out , we've seen the technical levels trashed on many stocks , now it's time to crumble the fundamental levels .
> 
> I would like to see more of a pullback like todays after yesterdays rally/covering .......... and I wouldn't discount 5100 on the 200 , that could open the door to 4800 and we'd be redoing the late 90's .
> 
> I'm yet to see the double digit growth semaphored by many funds , my bookwork says they are struggling to bring in 8-9% and they've spruiked the same waffle for the last decade .
> 
> The funny side is that now they complain that Hedge Funds are the ones distorting market information .................... ha ha ha . They'd best read the last ten years of ASX releases first  there's some classics in there .




Thanks for clearing that up, as i couldn't work out what you were saying.

Pretty much agree with all of the above and the further it drops for me, the better atm.

Apparantly, we were going to get a "major correction" and it was a "no brainer"


----------



## Real1ty




----------



## sassa

What do fellow members think of this statement?


As we reached the nadir of sentiment, its worth to remind to our fellow investors(happily shorting the markets) that we reached historically record sentiment levels comparable to (or even worse in some indicators) Feb 01, Sept 01, or March 03. The short covering alone will produce a powerful pop in equities worldwide. The effect could be short lived but very powerful nevertheless.[/COLOR]


----------



## Uncle Festivus

sassa said:


> What do fellow members think of this statement?
> 
> 
> As we reached the nadir of sentiment, its worth to remind to our fellow investors(happily shorting the markets) that we reached historically record sentiment levels comparable to (or even worse in some indicators) Feb 01, Sept 01, or March 03. The short covering alone will produce a powerful pop in equities worldwide. The effect could be short lived but very powerful nevertheless.[/COLOR]





If you were short 2 days ago and were not stopped out or margined then you must have deep pockets. If that's the best they can do for a short covering rally then it's failed.

_______________________________

*LONDON (MarketWatch) -- Carlyle Capital, the bond fund affiliated with private equity firm The Carlyle Group, is on the verge of collapse after failing to agree a new financing deal with lenders.*

                      The fund  said late Wednesday that it expects lenders will soon take possession of "substantially all" its remaining assets after it was unable to meet surging margin calls on its portfolio of residential-mortgage-backed securities.

So far, Carlyle said it's defaulted on $16.6 billion of its debt and its remaining borrowing is expected to go into default soon.


http://www.marketwatch.com/news/story/carlyle-capital-verge-collapse-talks/story.aspx?guid=%7B16193889%2D7248%2D4C9E%2DAE91%2D7D6D61C6EB80%7D


----------



## Kauri

That veritable icon of modern economic assessment, S&P, while warning of more writedowns (making $285Mln.total) says that the end of the writedowns is in sight. So up spikes the US markets, yen et al..
  Meantime a Norwegian hedgie seems set to be clipped.. along with all the others.. I wonder what affect selling out the assets of distressed funds en masse will do to the various markets...
 It seems, to me, that a major bankruptcy of a financial insto .. or even maybe a Plaza accord.. is needed to get the seized financial system cranking again.. I thunk...
Cheers
.........Kauri


----------



## Kauri

Kauri said:


> That veritable icon of modern economic assessment, S&P, while warning of more writedowns (making $285Mln.total) says that the end of the writedowns is in sight. So up spikes the US markets, yen et al..
> Meantime a Norwegian hedgie seems set to be clipped.. along with all the others.. I wonder what affect selling out the assets of distressed funds en masse will do to the various markets...
> It seems, to me, that a major bankruptcy of a financial insto .. or even maybe a Plaza accord.. is needed to get the seized financial system cranking again.. I thunk...
> Cheers
> .........Kauri




Well, that didn't quite get the market back to square so... the modern master of ratings now offers another gem to the "_re-euphoriated_" punters...
  S&P states that it has affirmed ratings on 504 ABS ratings and removed them from CreditWatch negative. The insured US ABS classes are linked to Ambac..
  Now if that doesn't do the job there is always the promise of a free easter egg with every long contract... but I think that is their ace-in-the-hole... they don't want to play it unless it is really necessary... :bunny:  
Cheers
...........Kauri


----------



## chops_a_must

Kauri said:


> Well, that didn't quite get the market back to square so... the modern master of ratings now offers another gem to the "_re-euphoriated_" punters...
> S&P states that it has affirmed ratings on 504 ABS ratings and removed them from CreditWatch negative. The insured US ABS classes are linked to Ambac..
> Now if that doesn't do the job there is always the promise of a free easter egg with every long contract... but I think that is their ace-in-the-hole... they don't want to play it unless it is really necessary... :bunny:
> Cheers
> ...........Kauri



I think this is what Paulson called "industry cooperatives".

Well... it looks like I'll be off to the Gulags tomorrow!

Ahahahaha!

And Rick Santelli aka God, said we might as well put a hammer and sickle on the flag.

I've been saying we should do that since I was 16!

But anyone with any understanding of Marxism must be having a not so quiet chuckle right about now. All of a sudden Marxists are the experts on economics! I might have to get out my Che shirt and start giving lectures.

The new communists have just been shorting capitalism. I wonder who is winning?

I just can't wait 'til GWB's next report on the market. Surely can't beat his last one:

"Markets are a place where people buy and sell goods.
Money may be exchanged, or goods may be bartered for.
Sometimes the villagers have a feast after a day at the market.
The end."

Very good George. A+

What an age we live in...


----------



## wayneL

Kauri said:


> "_re-euphoriated_" punters...
> 
> ...Now if that doesn't do the job there is always the promise of a free easter egg with every long contract... but I think that is their ace-in-the-hole... they don't want to play it unless it is really necessary... :bunny:
> Cheers
> ...........Kauri




 &


----------



## Kauri

Kauri said:


> Now if that doesn't do the job there is always the promise of a free easter egg with every long contract... but I think that is their ace-in-the-hole... they don't want to play it unless it is really necessary... :bunny:
> Cheers
> ...........Kauri




 Well, ye Gods and little fishes... just had a word to my budgie... he just had a word with a hooting owl... they reckon that GW can't get anyone to take counter-party risk on a loan for the eggs, even Bears won't play ball... so the punters euphoria is tipped to fade by NY PM unless Uncle Ben bails him out....  
Cheers
..........Kauri


----------



## Kauri

Kauri said:


> Well, ye Gods and little fishes... just had a word to my budgie... he just had a word with a hooting owl... they reckon that GW can't get anyone to take counter-party risk on a loan for the eggs, even Bears won't play ball... so the punters euphoria is tipped to fade by NY PM unless Uncle Ben bails him out....
> Cheers
> ..........Kauri




There you go... good ole GW..he's tipped to announce a package of ^^@** tomorrow night at a speech  for the Economics Club of New York, helping the re-packaging of sub-prime loans, and further increasing government agencies warehousing loans. .. Pity that young Johnny isn't still running the country... he'd be in their with his eyebrows pinned back begging to take some sub-prime... 
 Now ..the bag is empty... the S+P had better rally or GW will get angry...
Cheers
...........Kauri


----------



## Sean K

Kauri said:


> There you go... good ole GW..he's tipped to announce a package of ^^@** tomorrow night at a speech  for the Economics Club of New York, helping the re-packaging of sub-prime loans, and further increasing government agencies warehousing loans. .. Pity that young Johnny isn't still running the country... he'd be in their with his eyebrows pinned back begging to take some sub-prime...
> Now ..the bag is empty... the S+P had better rally or GW will get angry...
> Cheers
> ...........Kauri



LOL  Eyebrows pinned back.....

Not sure about the empty bad though. Zimbabwe keep printing it....


----------



## Aussiejeff

Of course, when the Men In Black of the vaunted S&P spake, the Wise Worlde doth listen...

_"All's well, Sleep Tight, Nighty Night....."  _


----------



## sassa

Time for a laugh??

"Now markets, consisting of people, pay varying amounts of attention to the duly anointed soothsayers of our materialist society. The problem with soothsaying as a vocation, of course, is that it is a tricky business indeed. Consequently, soothsayers are prone, for reasons of occupational safety, to follow the path traditionally trod by the priestesses of the Oracle of Delphi, the Roman priests who read ox entrails to predict the future, and the Witch of Endor, who claimed to be able to "summon spirits from the vasty deep," but, as MacBeth noted: "Aye, but the question is, will they come?"

Now people being people, and markets being markets, all search for clues, predictions, trends, prognostications which, it is devoutly hoped, will provide an early -- and financially serviceable -- glimpse into the future. Inevitably, people look to the soothsayers, beginning with the high priests of soothsaying, the FED, and trickling down to the class B, C, and D soothsayers residing on Wall Street, the big cities, your hometown, or on the internet.

This chronic addiction to soothsayers, and the eagerness with which not only the Great Unwashed, but even the SPANKING CLEAN will buy their goods, sets the markets up for THE INEVITABLE DISAPPOINTMENT when the prophecies fail to materialize. Indeed, all too often, it seems like the counter-prophecies (to coin a phrase) seem to emerge triumphant. The more universal, and the more intense, the prophetic wisdom, the more severely negative the market reaction when it proves false.

This endlessly recurring phenomenon is, we believe, at least partly responsible for the threatening severity of current and perhaps forthcoming financial market punishment for those who have been sufficiently witless as to conform their behavior to the WORD OF THE SECULAR PROPHETS."
http://www.money-sage.com/content/markets-and-expectations


----------



## Kauri

It seems that Bears were right after all... they are not under pressure liquidity-wise..... not now anyways... seeing as  JPM Chase and the Fed Bank of NY have decided to give them some financing...  
Cheers
..........Kauri


----------



## dhukka

Funny, Schartz was on CNBC the other day saying everything was just fine and dandy.


----------



## chops_a_must

chops_a_must said:


> I think this is what Paulson called "industry cooperatives".
> 
> Well... it looks like I'll be off to the Gulags tomorrow!
> 
> Ahahahaha!
> 
> And Rick Santelli aka God, said we might as well put a hammer and sickle on the flag.
> 
> I've been saying we should do that since I was 16!
> 
> But anyone with any understanding of Marxism must be having a not so quiet chuckle right about now. All of a sudden Marxists are the experts on economics! I might have to get out my Che shirt and start giving lectures.
> 
> The new communists have just been shorting capitalism. I wonder who is winning?






Kauri said:


> It seems that Bears were right after all... they are not under pressure liquidity-wise..... not now anyways... seeing as  JPM Chase and the Fed Bank of NY have decided to give them some financing...
> Cheers
> ..........Kauri




I just love the audacity of the Bear Stearns management in them saying things were fine. You would be packing yourself if you were long this. Totally rooted credibility in the industry... but... was there any left anyway?

And the fed has made it pretty clear. "We're just gonna bail everyone out!"

But effectively, BS, not only full of BS, is trading insolvent today. And congrats to Dhu for picking this some time ago. Puts on BSC are trading at an absurd premium today. May be the first in many many investment bank blow ups. I have eventual targets for MacBank below $10 and BNB below 0. Crazy... but true.

I just love it how the free markets love communism to begin with. And who would have thunk it, neo-cons becoming the biggest socialist state in the world? Start a revolution today... vote republican.

Cheers.

P.S. BSC now down close to 25%, and you'd have to think people are trading this into bankruptcy. And rightly so.


----------



## wayneL

Check our Bear's option IVs:

AHAHAHAHAHA!


----------



## chops_a_must

wayneL said:


> Check our Bear's option IVs:
> 
> AHAHAHAHAHA!



Thanks for putting them up for me Wayne.

Absolute classic.

Have you ever seen the volatility like that?

Would it be worth writing calls in this instance?

Hilarious.


----------



## dhukka

chops_a_must said:


> I just love the audacity of the Bear Stearns management in them saying things were fine. You would be packing yourself if you were long this. Totally rooted credibility in the industry... but... was there any left anyway?
> 
> And the fed has made it pretty clear. "We're just gonna bail everyone out!"
> 
> But effectively, BS, not only full of BS, is trading insolvent today. And congrats to Dhu for picking this some time ago. Puts on BSC are trading at an absurd premium today. May be the first in many many investment bank blow ups. I have eventual targets for MacBank below $10 and BNB below 0. Crazy... but true.
> 
> I just love it how the free markets love communism to begin with. And who would have thunk it, neo-cons becoming the biggest socialist state in the world? Start a revolution today... vote republican.
> 
> Cheers.
> 
> P.S. BSC now down close to 25%, and you'd have to think people are trading this into bankruptcy. And rightly so.




Seems Dick Bove of Punk Zeigel was on the money with his comment that the Fed's actions on Tuesday were to bail out BSC



> *Bove: Fed Rescue for Bear*
> 
> "The Federal Reserve's actions today may have been strongly influenced by Bear Stearns' problem."
> -Dick Bove, Punk Ziegel & Co.
> 
> 
> 
> Go figure: This morning's announcement by the Fed seemed to be designed to help the brokers and their fixed-income hedge fund clients who were struggling -- so said Brad Hintz, Bernstein Research covering the Financials. (we noted similar sentiment here)
> 
> He's not the only one. Influential Bank/Broker analyst Dick Bove of Punk Ziegel (quoted above) specifically mentioned Beat Stearns (BSC) as the beneficiary of the Fed's largesse.
> 
> According to Marketwatch: _"Bear's stock dropped 11% on Monday on concern that its borrowing costs are rising. For a brokerage firm, which relies on steady access to financing, such disruptions can restrain its businesses and leave it at a disadvantage to financially stronger rivals."_
> 
> Pretty wild stuff -- $200 Billion in Fed lending against junk paper, to bail out one mid-size investment bank.
> 
> And the market's reaction: Dow up 3.55% (417 points), Nasdaq +4% or more than 86 points, S&P500 up 3.7% or 47 points
> 
> _Ain't Socialism grand?_




Of course Schwartz will say none of these problems were evident when he gave his rosy interview to CNBC just 24 hours earlier. You just can't trust anything management says with these large financial companies.


----------



## Kauri

some pretty heavy (and irrational) rumours doing the rounds... prompted by Bears....  later maybe when it's in the press.. meantime a nice little rebound play on the Yen on the back of them, true or not.....    
Cheering
...........Kauri


----------



## wayneL

chops_a_must said:


> Thanks for putting them up for me Wayne.
> 
> Absolute classic.
> 
> Have you ever seen the volatility like that?
> 
> Would it be worth writing calls in this instance?
> 
> Hilarious.




Not on a "blue chip" I haven't. The interesting thing is that IVs are staying high after the gap. That means the market is expecting massive volatility into the near future.

The rewards are there, but they are signalling RISK in superbold capitals.

Don't quite know how I'd play this yet, but short vega appeals.


----------



## Sean K

Watching GWB give a speach on the economy at the moment on CNN and gee he's inspiring. 

Surprised the DJI isn't tumbling with every word...

Embarrassing really.


----------



## Kauri

wayneL said:


> Not on a "blue chip" I haven't. The interesting thing is that IVs are staying high after the gap. That means the market is expecting massive volatility into the near future.
> 
> The rewards are there, but they are signalling RISK in superbold capitals.
> 
> Don't quite know how I'd play this yet, but short vega appeals.





the VIX agrees..
CCCCCCCCCCCC
......................KKKKKKKKKK


----------



## treefrog

Deja vu

liked the post on another thread that its stupid to attempt to predict the future - how true, but nevertheless, just had a play with the S&P500 over the last couple of decades and; well, a picture is worth a thousand words so;

notes:
1. momentum indicates we still have a way to go before relative (over this period) oversold conditions materialise - only one seriously o/s and one o/b apparent
2. the bull run of the 90's ended with a very distinct topping pattern - king crown
3. the 90's correction's first major bounce was at 38% (blue) fib level - we are at that point now 38% (white) fib on the current correction (green arrows)
4. The correction ended at 62% fib area with a clear inverted H&S
5. should the current correction (started from a distinct H&S) also dip to 62% of the recent bull run, we are looking at june 2009 for the end of this correction assuming we retace at a similar rate (which I have assumed)
6. the current downer is amazingly similar to Y2000 (well so far)
7. cyclitologists and wavepickerologists may have some input on this


----------



## treefrog

Thoughts from the Frontline Weekly Newsletter
by John Mauldin
March 14, 2008   

The Muddle Through Economy:
The Future of the Market and Your Investments

It is increasingly widely agreed that we are now in a recession as I predicted this time last year. The good news is that much of the underlying economy is not in that bad a shape, but it has had two serious body blows administered by the twin collapsing bubbles of the housing market and the credit crisis. 

My position is that the recession will be rather long and relatively shallow, and the inevitable recovery will be longer and more drawn out than is typical, resulting in what I call The Muddle Through Economy for a period of several years. I define a Muddle Through Economy as one which grows below normal trend GDP growth of 3% for a period of time, typically in the 2% range.

So, one of the key questions is: "When does the recovery start and how long will it take to get back to 3% GDP?"

I think the answer is that it will not be before the latter half of the year and will take at least two years to get back to trend growth. The reason for such a drawn out recovery is simple. The twin causes (housing and the credit crisis) will take at least two years and possibly longer to normalize, and that process is going to negatively effect several other sectors of the economy.

But then I am an optimist. Duke University released a survey yesterday of Chief Financial Officers of major corporations. This is a gloomy bunch. 54% think we are already in a recession. My friend Duke Professor Campbell Harvey said: "In contrast, 90 percent of the CFOs do not believe the economy will turn the corner in 2008. Indeed, many of them believe it will be late 2009 before a recovery takes hold."

full letter available free - link is:
http://www.accreditedinvestor.ws/


----------



## mayk

Kauri, are you talking about these rumors..

http://www.marketwatch.com/news/sto...x?guid={22EBF3B7-9A31-4255-818F-90F7BE776BC5}


> Scales tip toward big Fed cut this week
> Experts see three-quarters percentage point, massive 1% drop not ruled out


----------



## explod

Sorry Treefrog, but I think that Mauldin is way out.   As Kauri says we are looking at a .75 or 1 point drop in the Fed rate this week.  GWB's PPt get together this week to stave off disaster for the Dow and a huge surge in the gold Price and as the Privateer Newsletter concludes this week, "they have got their job cut out for them"

The US economy is facing absolute disaster and the $us is headed for the scrap heap.   Manufacturing is down, unemployment is up, forclosures on housing increasing exponentially and is now into the leveraged financial sector, and on, and on ,and on.

They are done and it will hurt us all


----------



## Aussiejeff

explod said:


> Sorry Treefrog, but I think that Mauldin is way out.   As Kauri says we are looking at a .75 or 1 point drop in the Fed rate this week.  GWB's PPt get together this week to stave off disaster for the Dow and a huge surge in the gold Price and as the Privateer Newsletter concludes this week, "they have got their job cut out for them"
> 
> The US economy is facing absolute disaster and the $us is headed for the scrap heap.   Manufacturing is down, unemployment is up, forclosures on housing increasing exponentially and is now into the leveraged financial sector, and on, and on ,and on.
> 
> They are done and it will hurt us all




Each further step they take towards 0% interest rate is certainly one small step for a recovery and one giant leap towards the abyss. 

Actually, GWB and his trusty Feds remind me of King Canute and his minions, trying to turn back the sea tide...... atm there seems to be just as much hope of success.

Will this be a good news week?



AJ


----------



## prawn_86

The deeper and deeper it gets, the more im just wanting it to happen.

Personally a crash now and a real harsh but quick 2 yr recession would suit me, because then i will be coming out of uni 

There are so many hypocritical situations, but what do you expect with politics...

Lets just have a recession and get it over with


----------



## Bushman

chops_a_must said:


> I
> 
> I have eventual targets for MacBank below $10 and BNB below 0. Crazy... but true.
> 
> .




BNB below $0? Impossible comes to mind given limited shareholder liability. 

So you are expecting the motherships to run out of fuel with BNB crashing to earth. I would be interested to hear your assumptions in those valuations. What is a given is that BNB and MQC will get hammered today as the Australian listed entities most likely to 'do a Bear Stearns'.


----------



## treefrog

explod said:


> Sorry Treefrog, but I think that Mauldin is way out.   As Kauri says we are looking at a .75 or 1 point drop in the Fed rate this week.  GWB's PPt get together this week to stave off disaster for the Dow and a huge surge in the gold Price and as the Privateer Newsletter concludes this week, "they have got their job cut out for them"
> 
> The US economy is facing absolute disaster and the $us is headed for the scrap heap.   Manufacturing is down, unemployment is up, forclosures on housing increasing exponentially and is now into the leveraged financial sector, and on, and on ,and on.
> 
> They are done and it will hurt us all




do think in this article he has turned very optimistic after an interesting track record so far
also his current predictions give me the impression he has made a few runs on the board but now is more concerned how to maintain the record and so picks the middle road - brings to mind a banker brother in law of mine who was invited to some hi-powered financial advisor's workshop 15 years ago with all attending having to call several financial parameters at the end of the two weeks (A$, inflation, sector growths etc etc) for 3 years hence with many fancy prizes on offer - won it, photo on front of glossy oz fin mag and article etc etc 3 years later after getting >80% right: but never gave any more projections. I asked him why after being so good - replied "If I do, I am on a hiding to nothing; it is almost pure chance; horoscope stuff"


----------



## treefrog

Bushman said:


> BNB below $0? Impossible comes to mind given limited shareholder liability.
> 
> So you are expecting the motherships to run out of fuel with BNB crashing to earth. I would be interested to hear your assumptions in those valuations. What is a given is that BNB and MQC will get hammered today as the Australian listed entities most likely to 'do a Bear Stearns'.




I understand you chops - chart projection values based on prior - got a few of those myself where zero on the Y axis bobs up before your line finishes - share tries hard to complete the line sometimes


----------



## sassa

Fed has cut rate by 25 basis points efffective immediately.J P Morgan to buy bear stearns at $2 a share.
Futures go from -25 to plus +136 in 23 minutes in America.


----------



## Bushman

treefrog said:


> I understand you chops - chart projection values based on prior - got a few of those myself where zero on the Y axis bobs up before your line finishes - share tries hard to complete the line sometimes




Ah so it is a chart thingy. 

In news just out, JP Morgan is purchasing Bear Stearns at $2 USD per share. No further details of the deal as yet. Talk about a firesale. 

This should 'delay' BS dumping $40 odd billion mortgage backed securities on an already distressed market for these toxic products. Now that eventuality would have made things very interesting for no 4 on the list, Lehman Bros. 

They keep shifting a bit here, stashing a bit there to keep the house of valuation cards teetering on the brink. Good watching this.


----------



## Aussiejeff

sassa said:


> Fed has cut rate by 25 basis points efffective immediately.J P Morgan to buy bear stearns at $2 a share.
> Futures go from -25 to plus +136 in 23 minutes in America.




But how long will the nervous *positive* knee-jerk sentiment last?

I guess the next Fed cut of .5%? in two days time will get another short-term reaction, then what? 

Maybe the US needs to open up it's borders to a flood of new immigrants (rather than building the Great Wall of America) to help buy up all those empty houses and significantly boost internal demand for goods and services.....


AJ


----------



## wayneL

sassa said:


> Futures go from -25 to plus +136 in 23 minutes in America.



...punters still in faeryland.

Unbelievable.


----------



## explod

Aussiejeff said:


> But how long will the nervous *positive* knee-jerk sentiment last?
> 
> I guess the next Fed cut of .5%? in two days time will get another short-term reaction, then what?
> 
> Maybe the US needs to open up it's borders to a flood of new immigrants (rather than building the Great Wall of America) to help buy up all those empty houses and significantly boost internal demand for goods and services.....
> 
> 
> AJ




I'm sure if you got a bit of dough to buy some up you would be most welcome.  But I dont' think too many would want to go at the moment


----------



## Seaking

wayneL said:


> ...punters still in faeryland.
> 
> Unbelievable.




I think that's all the punters back from fairyland now.... Could be a few still left behind...


----------



## wayneL

Seaking said:


> I think that's all the punters back from fairyland now.... Could be a few still left behind...



The faeries must have all been bearish.


----------



## sassa

wayneL said:


> ...punters still in faeryland.
> 
> Unbelievable.




So true.Futures have dropped back from +136 to -164 in an hour


----------



## Aussiejeff

sassa said:


> So true.Futures have dropped back from +136 to -164 in an hour




Ahhhhh .... the smell of Ozzie dollars burning in the morning...


----------



## Kauri

I don't know much about hedge funds but was wondering if anyone would know...
  Do they go in for FX much..if so the violent moves in the FX pairs   today may have caused  more damage to those caught on the wrong side??
  Maybe even Banks trading rooms??...  
    Maybe even the %5...

  after all the COT suggests there were quite a lotta longs on some of the most punished crosses...

 Cheers
..........Kauri


----------



## reece55

Kauri said:


> I don't know much about hedge funds but was wondering if anyone would know...
> Do they go in for FX much..if so the violent moves in the FX pairs   today may have caused  more damage to those caught on the wrong side??
> Maybe even Banks trading rooms??...
> Maybe even the %5...
> 
> after all the COT suggests there were quite a lotta longs on some of the most punished crosses...
> 
> Cheers
> ..........Kauri




Don't know myself Kauri, but you could have a look at the stats in Barclays hedge site for an idea (www.barclayhedge.com).......

Whatever the case, the FX markets are completely out of whack with absolutely huge moves across the board..... I mean, I thought we would see below 100 in USD:YEN, bu the swissy going past parity with the Dollar??? I don't think it has occurred in measured FX history....

Cheers


----------



## Awesomandy

Kauri said:


> I don't know much about hedge funds but was wondering if anyone would know...




It depends on the funds. For a lot of funds, they would enter into forward contracts as a hedge against currency movements. However, there are quite a few funds that actively trade currencies as well. I don't know how many there are, but from my knowledge, I would guess that hedge funds have a substantial amount of involement in the fx market, although I'm only basing this on what I've seen from my work - which is not even the tip of the iceberg.


----------



## >Apocalypto<

wayneL said:


> ...punters still in faeryland.
> 
> Unbelievable.




i am not complaining I took 100 pips off the eur/usd today. God bless the FED :grinsking


----------



## Kauri

mmmmmm.. whats uo Doc...  :bunny:  

two members of the European Central Bank"s 
Governing Council have canceled their prior speaking engagements. Axel Weber 
will not be attending an event organized by the European Union Chamber of 
Commerce while Christian Noyer has also canceled his attendance. Both the BdF 
and the Bundesbank suggest personal reasons are behind the moves but speculation 
has since mounted that various emergency meetings and talks are looming.


----------



## chops_a_must

wayneL said:


> Not on a "blue chip" I haven't. The interesting thing is that IVs are staying high after the gap. That means the market is expecting massive volatility into the near future.
> 
> The rewards are there, but they are signalling RISK in superbold capitals.
> 
> Don't quite know how I'd play this yet, but short vega appeals.




Bludy hell!

People were selling $5 puts at 10c. Even those writing puts at 5 for $2.40 are going to lose. **** me!

The trading was obviously concluding it was going to the ground... but I don't think even the most bearish people expected that catastrophic end.

Also... I don't think it was insider trading. Didn't you hear those geniuses in the senate enquiry saying it was just for retirement? Personally, I think it was money for an Angelo Mozilo fake tan fund. Must cost him a fortune.


----------



## Kauri

Bush is set to make a statement on economy after  meeting ....  He is meeting his economic advisers this morning... 

  more eyes on the wheel and hands on the road stuff???   
Cheers
..........Kauri
.......................*Reuters *


----------



## treefrog

Kauri said:


> mmmmmm.. whats uo Doc...  :bunny:
> 
> two members of the European Central Bank"s
> Governing Council have canceled their prior speaking engagements. Axel Weber
> will not be attending an event organized by the European Union Chamber of
> Commerce while Christian Noyer has also canceled his attendance. Both the BdF
> and the Bundesbank suggest personal reasons are behind the moves but speculation
> has since mounted that various emergency meetings and talks are looming.




reackon that would be a strategy to shore up the US$ kauri which may have started already with today's move on $A


----------



## wayneL

chops_a_must said:


> Bludy hell!
> 
> People were selling $5 puts at 10c. Even those writing puts at 5 for $2.40 are going to lose. **** me!
> 
> The trading was obviously concluding it was going to the ground... but I don't think even the most bearish people expected that catastrophic end.



IV spikes are not often wrong on individual spots. It might not tell you the direction, but it give a strong clue to the magnitude.

Such is the case that Adam Warner often suggests that that sort of volatility should be bought, rather than sold. A dangerous game for sure, but often profitable.

As for me, unless I can get a minimal risk profile, I'll just stand aside.


----------



## chops_a_must

I expect Aussie banks to get absolutely shellacked tomorrow, as their mortgage insurer looks like it will go broke within the year.

But thanks to IB, I couldn't short left right and centre like I had planned.

Anyone reading my blog would know the significance of this news:


> PMI Posts $1.01 Billion Loss
> Amid Housing, Credit Woes
> By DONNA KARDOS
> March 17, 2008 7:15 a.m.
> 
> PMI Group Inc. swung to a fourth-quarter loss as the company recorded huge losses due to its stake in Financial Guaranty Insurance Co., as well as losses at its U.S. mortgage insurance operations amid turmoil in the housing and credit markets.
> 
> The company also slashed its quarterly dividend 76% as the nation's largest mortgage insurer looks to conserve capital.
> 
> PMI reported a net loss of $1.01 billion, or $12.51 a share, compared with prior-year net income of $100.5 million, or $1.19 a share.
> 
> The latest results include $776.1 million in after-tax losses due to the company's equity in Financial Guaranty Insurance Co., and a loss of $236 million in PMI's U.S. mortgage insurance operations amid an increased reserve for losses.
> 
> Revenue edged down 0.2% to $281.5 million.
> 
> The mean estimates of analysts polled by Thomson Financial were for a loss of $2.42 a share on $177 million in revenue.
> 
> The firm's consolidated net premiums rose 12% to $263.5 million, reflecting increases in new insurance written in the U.S. mortgage-insurance operations and an increase in international operations' net premiums written combined with favorable Australian foreign-exchange rates.
> 
> Consolidated losses and loss-adjustment expenses jumped soared fivefold to $574.7 million as a result of higher losses and loss-adjustment expenses in U.S. mortgage-insurance operations as a result of the significant deterioration of the U.S. housing, mortgage and capital markets.
> 
> FGIC -- in which PMI has a 42% stake -- resulted in a $776.1 million after-tax loss for PMI as a result of higher losses and loss-adjustment expenses. PMI said last week that it expected to the segment to have "significant" loss driven by FGIC. The release of PMI's results had been postponed several times in the past month due to delays in obtaining results from the bond insurer.
> 
> FGIC, the fourth-largest bond insurer, has lost its key AAA rating from all three major ratings firms on worries it might fail to raise $1 billion in capital to cushion possible losses on complex securities that have plunged in value.
> 
> While some banks were talking with FGIC to bolster the firm, the company surprised them in February when it made a request to regulators to split its profitable municipal bond business from its subprime credit-default-swap business. It was said that the move could possibly serve as an incentive to get the banks to step up to the plate on a cash infusion for the company. In the past, regulators have said dividing the insurers is a last resort and urged the banks to put in fresh capital. But PMI said last week that while it will work to stabilize its equity investments in FGIC, it will not be contributing any additional capital to it.
> 
> PMI said in its U.S. mortgage-insurance operations it added $434.8 million to its reserves for losses and loss adjustment expenses and paid $114.5 million in claims. Its international operations also fell into the red as European operations had $29.6 million loss. Australia and Asia were profitable.
> 
> As for the dividend, the reduction to 1.25 cents a share is due to "the current challenges in the U.S. housing and mortgage markets" and "one component of the company's overall capital management strategy."
> 
> Looking forward, PMI said it expects its paid claims for 2008 in its U.S. mortgage-insurance operations to be between $825 million to $975 million.
> 
> Mortgage insurers such as PMI cover potential lender losses on loans to borrowers who can't come up with a 20% down payment. The companies have seen claims skyrocket over the last year as the lack of liquidity in the housing market makes it difficult for borrowers to refinance or for lenders to resell foreclosed properties at profitable prices, forcing mortgage insurers to pay up. The current problems are also cutting into insurers' available capital.


----------



## Trembling Hand

chops_a_must said:


> I expect Aussie banks to get absolutely shellacked tomorrow, as their mortgage insurer looks like it will go broke within the year.
> 
> But thanks to IB, I couldn't short left right and centre like I had planned.
> 
> Anyone reading my blog would know the significance of this news:




Chops they can't borrow what is already 100% loaned


----------



## chops_a_must

Trembling Hand said:


> Chops they can't borrow what is already 100% loaned




It wasn't even coming up with the shortable at all light, on anything. Not one thing. Not even the allowed to be shorted if located light. It was on and off like that last week as well.

There are no longer any stocks allowed to be shorted on the Aus market through IB.

And they better not close the short I do have.


----------



## Kauri

Leemons are copping a hiding... all sorts of stories of credit contagion fears with reports of banks pulling lines that will only add to liquidity  lockup in the market. If she stumbles, it's not a cold that the US has, it will be full blown SARS...  

UBS has downgraded a number of US bank stocks today including Lehman, State Street and BNY reflecting the lack of confidence in the US banking system.
not a good outlook for our lot....

The fall in the Fed NY Empire State mfg index along with the larger-than-expected drop just announced in U.S. industrial production.... not a good sign for the metals complex.... or miners????

Cheers
...........Kauri


----------



## treefrog

sure this should be on a different thread but.......

"Since July the dollar index has tumbled, down another 10% in the last 8 months. It's the spiraling downward dollar that is fueling crude oil's continuing advance. It has been that same weak dollar that has helped to fuel other commodities like gold, silver and copper. I'm not saying it's solely responsible, but the extremely weak showing of the dollar is, at a minimum, aiding the commodity bulls. I believe the one event that could turn the tide on commodities is the lowering of interest rates by the European Central Bank (ECB). World markets are suggesting that the economic weakness felt here in the U.S. is not isolated. To date, the ECB has been adamant that inflation is the primary concern and rates abroad have remained elevated. The interest rates here in the U.S. are heading lower, so until the ECB changes its policy stance, commodity bulls will likely reap the rewards.

At the hint of an ECB rate cut, we'd lock in any and all commodity profits.

Happy trading! 

- Tom Bowley "


----------



## Kauri

Sharp falls in Lehman Brothers stock and MF Global have the rumour mill clambering all ove r t hem...  if they don't h ave prob lems then they s oon will
Ch eers
...........Kauri


----------



## theasxgorilla

treefrog said:


> To date, the ECB has been adamant that inflation is the primary concern and rates abroad have remained elevated.




[rant] Love it how the US refers to Europe in the blanket statement 'abroad' and how the word elevated is used to convey a sense of something being above what is normal, yet ECB rates are fracin' 4%[/rant]


----------



## Bushman

Kauri said:


> Sharp falls in Lehman Brothers stock and MF Global have the rumour mill clambering all ove r t hem...  if they don't h ave prob lems then they s oon will
> Ch eers
> ...........Kauri




Another self fulfilling prophecy in the making. Confidence is the ultimate fundamental for a bank that trades on reputation it would seem. 

So it continues. Some would claim the whole credit crunch has been a self fulfilling prophecy....capitalism eating itself.


----------



## Kauri

The Nikkei newspaper.... reports that some investment trusts are risk-hedged and conditionally guarantee principal. But, the funds have knock-in provisions, often 30% below the Nikkei levels when they were created according to the newspaper report. Some of these funds hit their triggers on Monday and more are expected to hit their triggers, adding to pressure on Japanese stocks....
Cheers
...........Kauri


----------



## numbercruncher

Could the fed run out of money ? 



> Sub-prime collapse 'beyond the US Federal Reserve'
> 
> FEARS are growing that the US Federal Reserve may soon find itself short of the funds needed to continue propping up the nation's financial system.
> 
> The central bank yesterday used its financial muscle to back the bail-out of the stricken Wall Street investment banking giant Bear Stearns, which will be taken over by rival JPMorgan Chase at a fraction of its worth last week.
> 
> But analysts believe the threat to the financial system, which continues to flow from the collapse of the sub-prime mortage market last year, is getting too big for the Federal Reserve.
> 
> "This is now beyond the Fed," ANZ international economist Amy Auster said.
> 
> "It is not going to be able to deal with this situation on its own."
> 
> Cash reserves drying up
> 
> She said the US central bank had already extended support of about $US400 billion ($426 billion) to the US financial system, compared with its assets of $US800 billion.
> 
> She said financial system losses yet to be reported could easily exceed another $US400 billion.
> 
> "What is missing at the moment is the US Treasury," she said.
> 
> But Treasury Secretary Hank Paulson has already declared his hostility to federal measures to help the sinking financial sector.
> 
> "Let me be clear: I oppose any bail-out," he said in a speech 10 days ago.
> 
> "Most of the proposals I've seen would do more harm than good - bailing out investors, lenders or speculators who, instead of getting a free pass, should be accountable for the risks they took," he said. "
> 
> I believe our efforts are best focused on helping homeowners who want to stay in their homes."
> 
> More could follow Bear Stearns
> 
> There remains a vast quantity of financial assets of doubtful value that will expose banks and other financial institutions to the kind of panic that brought investment bank Bear Stearns to the brink of disaster on the weekend.
> 
> "When the fifth-largest investment bank is in trouble, you have to become concerned about the solvency of the system and the banks in the system," Ms Auster said.
> 
> In 2006 alone,  there were $US550 billion of "collateralised debt obligations" issued, she said.
> 
> These are the bundles of mortgages and other securities that have been at the heart of the sub-prime crisis.
> 
> Ms Auster said the market for these securities depended upon the ratings agencies, bond insurance and collateral.
> 
> "All three elements of this infrastructure - the three bands of the bridge  have collapsed," she said.
> 
> When the Federal Reserve announced its extraordinary Sunday afternoon bail-out of Bear Stearns, it also extended a lifeline to all the other major investment banks, offering them access to emergency funding for the first time since the 1930s.
> 
> As in Australia, the central bank is assumed to be the lender of last resort for the commercial banks, which take deposits from the public, but not for investment banks and stockbroking firms.
> 
> But the tangled web of counter-party arrangements that has developed between financial institutions over the past decade means that allowing Bear Stearns to go broke would have jeopardised major banks.
> 
> "If Bear Stearns defaulted on their paper, it would pull at least another bank down," senior economist with finance broker ICAP, Matthew Johnson, said.
> 
> Drop in the ocean
> 
> Mr Johnson said he estimated the Federal Reserve was halfway through the ammunition it had to deal with the crisis.
> 
> "The $US450 billion remaining is a drop in the ocean compared to the asset classes in trouble," he said, noting that in addition to mortgage-related debt, some of the big private equity deals were beginning to unravel.
> 
> The biggest risk to the real economy is that credit dries up, as bankers become scared to lend.
> 
> Morgan Stanley chief economist Gerard Minack said while the Federal Reserve was cutting interest rates, its efforts were being neutralised by the banks.
> 
> "Nobody is enjoying easier financial conditions," he said.
> 
> Mr Minack said there were no grounds for equating the coming recession in the US to the Great Depression, but it could still be as nasty as the downturn in 1974.
> 
> Ms Auster said Australia would not escape the effect of the recession, with its share market having already fallen further than US markets.




http://www.news.com.au/business/story/0,23636,23393912-462,00.html


Now if they did run out of assigned money, one would assume they will begin creating more and this will surely unleash massive inflation and a collapsing USD


----------



## Aussiejeff

numbercruncher said:


> Could the fed run out of money ?
> 
> http://www.news.com.au/business/story/0,23636,23393912-462,00.html
> 
> Now if they did run out of assigned money, one would assume they will begin creating more and this will surely unleash massive inflation and a collapsing USD




Wot? A **Banana-rama Republic** scenario for the US? Oh, _the Horror_!

Even more pertinent, could our very own RBA run out of money if one of OUR major banks collapsed too? Would Preside.... err .... PM Rudd bail out the RBA if it ran out of *puff* - with cash from the future fund?? (hmmm... just how IS the capital in the future fund travelling atm, btw?).

How much dosh does our own "Treasury" have salted away?

Hmmm.


AJ


----------



## Uncle Festivus

numbercruncher said:


> Could the fed run out of money ?
> 
> 
> 
> http://www.news.com.au/business/story/0,23636,23393912-462,00.html
> 
> 
> Now if they did run out of assigned money, one would assume they will begin creating more and this will surely unleash massive inflation and a collapsing USD




 Mmmm..... nice one nc......I think you know it's happening now


----------



## Dezza

Goldman Sachs News - http://www.reuters.com/article/ousiv/idUSWNAS527620080318

Lehman Bros News - http://www.bloomberg.com/apps/news?pid=20601087&sid=aBdqPHWUilCY&refer=home

Falls, but not as big as expected by analysts. Must've been really pessimitic analysts when a 53% fall is considered alright. Good start for tomorrow though!!!


----------



## Kauri

Kauri said:


> I don't know much about hedge funds but was wondering if anyone would know...
> Do they go in for FX much..if so the violent moves in the FX pairs today may have caused more damage to those caught on the wrong side??
> Maybe even Banks trading rooms??...
> Maybe even the %5...
> 
> after all the COT suggests there were quite a lotta longs on some of the most punished crosses...
> 
> Cheers
> ..........Kauri




Seems so...  
*Sydney Morning Herald* ..  Rubicon Japan Trust is expecting a $30 mln margin call due to the recent fall in AUD/JPY. The trust has warned that it is not in a position to meet the call and risks a default. Shares in Rubicon fell 57%


----------



## mayk

A short bubble of DOW burst after Fed dissapoints with only a 75bp rate cut. I just hope that DOW stays positive for the day , it's just short of 25bps....


----------



## Aussiejeff

The only imminent and severe market correction ATM is the one about to hit the All Ords at 10am this morning.... time to take air sickness pills.... prepare for takeoff!

Oh, and _"All-Ords Airways makes no guarantees that you will arrive safely.... please ensure you have filled out your insurance forms. 

Thankyou"_

Hehe.


AJ


----------



## skating101

This may sound like a stupid question but still I can't figure out the answer. How come inflation is such a worry in Australia with our interest rates being raised to avoid it while in america inflation doesnt seem to be an issue (or at least appears that way with their huge interest rate drops)


----------



## treefrog

skating101 said:


> This may sound like a stupid question but still I can't figure out the answer. How come inflation is such a worry in Australia with our interest rates being raised to avoid it while in america inflation doesnt seem to be an issue (or at least appears that way with their huge interest rate drops)



IS an issue in USA - featured prominately in the interest rate decission and appears to be behind why they only went -.75% not the 1%, but they are doing nothing about it while they try to entice the financials back in the jar


----------



## dhukka

Click here for a timely reminder of what a dead cat bounce looks like:


----------



## sassa

A timely fillip for the markets the 75 basis points cut,but if one is to read the press release from the FOMC -

http://www.federalreserve.gov/newsevents/press/monetary/20080318a.htm

-they are only delaying the inevitable.The release is packed with concern about the state of the economy.Inflationary measures are showing up in prices,commodities and currency markets.They are concerned about the slowing consumer spending and the weakening labour market.
I guess it is a case of "give today and take away tomorrow."The markets may bounce for a while but reality has to win.


----------



## treefrog

sassa said:


> A timely fillip for the markets the 75 basis points cut,but if one is to read the press release from the FOMC -
> 
> http://www.federalreserve.gov/newsevents/press/monetary/20080318a.htm
> 
> -they are only delaying the inevitable.The release is packed with concern about the state of the economy.Inflationary measures are showing up in prices,commodities and currency markets.They are concerned about the slowing consumer spending and the weakening labour market.
> I guess it is a case of "give today and take away tomorrow."The markets may bounce for a while but reality has to win.




well that's me disappointed fer the day - ready to take a few ST long positions on the US news / action and no follow through at all - financial sector trying to hold but think it too will succumb

back to the gloom and doom positions I hold and add a few more

must be a lot of cows out there bullin', the bulls just can't make any worthwhile contribution


----------



## ithatheekret

Aussiejeff said:


> Wot? A **Banana-rama Republic** scenario for the US? Oh, _the Horror_!
> 
> Even more pertinent, could our very own RBA run out of money if one of OUR major banks collapsed too? Would Preside.... err .... PM Rudd bail out the RBA if it ran out of *puff* - with cash from the future fund?? (hmmm... just how IS the capital in the future fund travelling atm, btw?).
> 
> How much dosh does our own "Treasury" have salted away?
> 
> Hmmm.
> 
> 
> AJ




Capital shortfalls are generally made up through an increase in leveraging .

Makes one wonder how much leverage there is out there .

Kev did tell the RBA to use any other means at their disposal , other than a rate rise . Unfortunately they didn't order enough wine for that meeting .

We got the rate rise anyway , another on the way , but has any leverage been created elsewhere ???

Interventions ???

The low rate currencies are still viewed as funding vehicles , it's just now that the US has joined the global team , once it's rate goes clearly negative at 1% as inflation remains at higher altitudes , it will get a guernsey and a helmet .

Then Treasury just needs a permission slip from the Treasurer and one from the Senate to apply for a platinum card at discount rates .


----------



## Trembling Hand

Bit of a no vote going on in Europe to Uncle Ben's efforts. Ftse & Dax back to flat. Honkers didn't have a great finish either. SPI is down 1% to open the night session. Probably nothing to worry about. :


----------



## Kauri

HBOS spokesman says the bank continues to access wholesale markets whenever appropriate, and has a diversified business with an "exceptionally strong" balance sheet* (Reuters).* (_now where have I heard that bearfore???...)_The latest rumour : HBOS... is that another UK bank might ride to the rescue if needed...
  not the old lady surely..... she must surely _Rock_..  :band  

Cheers
...........Kauri


----------



## wayneL

Kauri said:


> HBOS spokesman says the bank continues to access wholesale markets whenever appropriate, and has a diversified business with an "exceptionally strong" balance sheet* (Reuters).* (_now where have I heard that bearfore???...)_The latest rumour : HBOS... is that another UK bank might ride to the rescue if needed...
> not the old lady surely..... she must surely _Rock_..  :band
> 
> Cheers
> ...........Kauri




I'm getting RUMOURS of an emergency BOE meeting over the matter pending an emergency bailout. Lloyds are are the bank implicated as the rescue rider (according to rumour.


----------



## chops_a_must

wayneL said:


> I'm getting RUMOURS of an emergency BOE meeting over the matter pending an emergency bailout. Lloyds are are the bank implicated as the rescue rider (according to rumour.




What about the money from the VISA float being used to bail the whole financial system out? Shall the world become permanently indebted to VISA?


----------



## Kauri

wayneL said:


> I'm getting RUMOURS of an emergency BOE meeting over the matter pending an emergency bailout. Lloyds are are the bank implicated as the rescue rider (according to rumour.




   A mod posting rumours.. I feel better now..      ...
  as i have stated before.. whether the rumour is true or not is surprisingly irrelevant.. it is the _immediate _affect it has on the market and the pre-knowledge to be able trade it that is important... for me at least

incidentally....   ..
  MPC Canceling Easter Break Is "Absolute Rubbish" - BoE   

Cheers
..........Kauri


----------



## wayneL

I might nip down to the High Street later on and see if there any queues outside The Halifax.


----------



## wayneL

BTW, Doesn't HBOS own Bank West?


----------



## reece55

wayneL said:


> BTW, Doesn't HBOS own Bank West?




You're on the money Wayne...... the link is here

Cheers


----------



## Uncle Festivus

wayneL said:


> BTW, Doesn't HBOS own Bank West?



Is that the very same bank that was recently trying to expand into the Eastern states with high deposit rates & 'accommodative' lending criteria. And here I was thinking the local banking system would have it's first casualty, but it turns out the damage might be inflicted from above???

_____________________________________________________

     March 19 (Bloomberg) -- U.S. regulators may reduce capital requirements imposed on Fannie Mae and Freddie Mac, the world's largest mortgage companies, to help them expand their combined $1.5 trillion in investments and revive the market for home loan securities, according to people with knowledge of the transaction.

_Mmm.....something frenetic happening behind the scenes here?

______________________________________________________

_                                         Chrysler is trying to cut its way back to significance. It's going to hurt.

The automaker's 71,000 employees will be on "mandatory vacation" for two weeks in July when all operations across the country are shut down, the company said Thursday.








                                                                                                                            A forced break is drastic, though for Chrysler perhaps not surprising considering its financial straits.

After losing $1.6 billion last year, it announced plans to shutter offices, reduce its workforce, eliminate dealerships and do away with redundant models. But with one of the least fuel-efficient fleets on the road, inventory piling up on dealer lots and the popularity of its top seller -- the Dodge Ram pickup -- slumping along with the housing market, there's reason to suspect that cutting alone won't be the solution.

Unless Chrysler figures out how to increase sales and build cars and trucks that people want, the 83-year-old company's prospects will be dim.

_But will it be Chrysler? Will Ford or GM be the first to go under, or will the Fed bail them out too?_

_____________________________________________________


----------



## Kauri

the latest rumour is...(.._insert here_....) after Barker, a  BoE MPC member, is slated to stand in for Gieve, the BoE Deputy Governor responsible 
for financial stability, at a Newmarket lunch tomorrow 

Cheers
...........Kauri


----------



## reece55

I know UF posted the news flash, but I have to repeat it...... 

Fannie, Freddie Surplus Capital Requirement Is Eased

Hell, whilst we are at it, why don't we reduce the capital requirements down to nil and Father Christmas can guarantee the business write?????


----------



## wayneL

LOL @ The muppets index.

When will they learn?


----------



## sassa

Extract from an interesting article on the Fed and the "liquidity" it is pumping into the financial system.

"A whole lot of misinformation has been floating around about how the Fed is adding so much liquidity to the market, much of it slyly fostered by the Fed itself. But when you look closely at the Fed's language and, more importantly, its actions over the past week, it just is NOT so. The Fed has apparently cut its asset base by $4.5 billion over the past 5 days, not including whatever amount is fed out through the Discount Window today for the rescue of Bear Stains. Over the past two weeks it looks like they have cut about $12 billion. (For those who want to verify, you can find the data on the NY Fed website for the SOMA and the FRB website for the TAF.)More...."
http://wallstreetexaminer.com/discuss/index.php?topic=4.0


----------



## sassa

"When the Fed dropped the Discount Rate in August and wanted to encourage the commercial banks, it staged a ceremonial borrowing by C, JPM, BAC and WB.  Remember that?  They each borrowed $500 million to show others how to do it.  Most importantly, they said they didn’t really need the money but were showing support for the Fed’s actions and to reduce the stigma associated with borrowing from the Discount Window.  Within a few days, the $2 billion of ceremonial money was returned and we know what happened after that - almost no one else borrowed for months.  And by the way, consider what we ended up learning over the next few months about the four banks that stepped up to the plate.   According to them at the time, they didn’t need the liquidity.  Okay - whatever you say!  So forgive me if I am not impressed by Goldman and Lehman testing out the Fed’s new play thing and showing up for the PDCF ceremonies.  According to them, their liquidity is excellent, maybe even “the best it’s ever been”.  And by the way, they didn’t need the facility but were trying to support the Fed and help reduce the stigma.  Okay - whatever you say!"
Thanks to Mike at Hedgefolios.


----------



## Aussiejeff

wayneL said:


> LOL @ The muppets index.
> 
> When will they learn?




When they have lost their pants, wandering destitute in Downtown USA.... and only then.


----------



## Aussiejeff

Uncle Festivus said:


> ..._But will it be Chrysler? Will Ford or GM be the first to go under, *or will the Fed bail them out too?*_




But more importantly, _*WHO WILL BAIL OUT THE FED?????*_


----------



## dhukka

A platitude that continues to do the rounds among pollyannas is that if you take out financials the rest of the US market is doing fine. However there is increasing evidence that the 'contained' credit crisis is leaking over into other parts of the economy. This is what Howard Schultz, CEO of Starbucks had to say yesterday:



> "You have an economy that really is in a tailspin, and many would say the consumer is in a recession,'' Schultz told more than 6,000 shareholders at the company's annual meeting in Seattle. "We are dealing with things that we haven't seen before in terms of how people are responding to how tough it is.''




Click here for the full story.


----------



## Seaking

wayneL said:


> I'm getting RUMOURS of an emergency BOE meeting over the matter pending an emergency bailout. Lloyds are are the bank implicated as the rescue rider (according to rumour.




Look out Wayne... There coming for you..

http://www.news.com.au/business/story/0,23636,23408151-31037,00.html


----------



## explod

Aussiejeff said:


> But more importantly, _*WHO WILL BAIL OUT THE FED?????*_




Love the great short one liners and that's a beauty A. J.

Time to start the Easter party, anyone for4 roulette at Crown this Sat.tdy arvo.

He died so mankind could prosper, so we should give some away.

cheers explod


----------



## Whiskers

Seaking said:


> Look out Wayne... There coming for you..
> 
> http://www.news.com.au/business/story/0,23636,23408151-31037,00.html




Good post... and point, Seaking.

No reflection on Wayne... is there!  

'Tis all getting a bit boring now, all this economic woes.

The counter wave of all the gloom and doom... a bit of a return to favour of the USD should smooth things out in the next month or so.


----------



## dhukka

Whiskers said:


> Good post... and point, Seaking.
> 
> No reflection on Wayne... is there!
> 
> 'Tis all getting a bit boring now, all this economic woes.
> 
> The counter wave of all the gloom and doom... a bit of a return to favour of the USD should smooth things out in the next month or so.





Time to put the shorts on, the best contrary indicator for the direction of the market has spoken.


----------



## explod

Whiskers said:


> Good post... and point, Seaking.
> 
> No reflection on Wayne... is there!
> 
> 'Tis all getting a bit boring now, all this economic woes.
> 
> The counter wave of all the gloom and doom... a bit of a return to favour of the USD should smooth things out in the next month or so.




Are you stirring, or honestly believe there is any value in the Fed play money.

On then trend that has been in progress since about 2001 and steepening down this last year the US dollar will be 10% lower in a month or two on the doom and gloom emanating now.   The bit of rubbish coming out of Wall Street the last few days to cover the bad stuff will soon peel away.  But that's just my opinion.


----------



## Whiskers

explod said:


> Are you stirring, or honestly believe there is any value in the Fed play money.




A bit of both, explod.  The ever circling nesting magpie didn't waste any time swooping to protect his turf. : 

Consider the doom and gloom indicator like a blood pressure monitor... it has gone a bit off the scale at times. 

D&G has taken on the guise of reality for many. A point I make is... as the hysteria of the raging bull waned the D&G meter counteracted similarly. 

The market should come back to more 'normality' in the coming month or so... ie the US is still an economic basket case, but it has been for a decade or two now. Lets just say, using the above analogy, whereas people thought all there xmas's had come at once in 06-07, people now will realise they will live a normal life and die some other day... just not tomorrow or the day after.

But seriously, I do think a rebound of the USD is the order of the short to medium term... and that will do a lot to settle all markets for awhile and give ours a bit of a leg up once the asset class juggling has settled.

btw, I thought you had gone off to give away some of your winnings to Crown.


----------



## sassa

You traders are an unsavoury lot(oh,well,some).In The Times online tonight you have been branded as malicious and price rigging(as in the following headlines)-

Malicious traders attempt to topple major bank(HBOS) &
Price rigging traders hit Credit Suisse profits.

The relevant overseeing authorities must be on holidays when these transactions are going on.
Is it a new spin for the blame of some of the problems in the credit markets?


----------



## sassa

Finally,the crisis is over-

``This is the time to go back into the equity markets, particularly the U.S. market,'' said Komal Sri-Kumar, who oversees $147.2 billion as chief global strategist of TCW Group. ``The U.S. equity market will outperform the rest of the world.'' 
Other banks and brokerage firms also advanced after Punk Ziegel & Co. analyst Richard Bove wrote in a research note that ``the financial crisis is over'' and it is a ``once in a generation opportunity to buy."
http://www.bloomberg.com/apps/news?pid=20601057&sid=atXXRRBJI.QA&refer=futures


----------



## sassa

But on the other hand-

"There's a lot of things cooking in this market," said James Park, managing director with Rodman & Renshaw. "I think right now people are still digesting all the recent news. There's still a lot of malaise on the Street. With this kind of volatility, it's very difficult to really have conviction, especially when you're seeing your stocks move up and down on a daily basis."

Robert Pavlik, chief investment officer with Oaktree Asset Management, said the rally could merely be the effect of people buying into the prior session's dip, but he also believes that much of the upward pressure and volatility stemmed from the expiration of options and futures.

Park concurred. "The Fed actions seem to have put a Band-Aid on the market, at least for the time being," he said, noting that a great deal of short-covering also is in play. "This is the last day of the week, and a lot of people have been dealing with a lot of bad news. I would say this kind of strength was expected." 
http://www.thestreet.com/story/10408635/1/data-cheer-up-market.html


----------



## GreatPig

sassa said:


> This is the time to go back into the equity markets, particularly the U.S. market,'' said Komal Sri-Kumar, who oversees $147.2 billion as chief global strategist of TCW Group.



Perhaps that because Komal has a pile of stocks he wants to sell off at reasonable prices...

GP


----------



## sassa

And here is someone who really "loves" CNBC-

I know, I know, the market was up big today with Options Expiration. Its all ok, and you should buy bank stocks. All of them. So says Dick Bove, and lots of people are today, with all of them up 5%, 10% or more.

You did not hear the truth about the Treasury complex on CNBC today, not even from Rick Santelli. Why not?

The Truth: The people with a working brain in their head know what's coming and that it is going to be extraordinarily ugly. They are prepared for it and have moved their billions of dollars into cash where they know they will get it back - the short end of the US Treasury Curve.

The Truth: In the last recession at the depths of it in the summer of 2003, just before the market turned, the lowest the 13-week bill yield reached was 0.774%. We are now trading at 30-50% below that level.

The Truth: People who know this for a fact including CNBC won't tell YOU because it is critically important to them that they get through the door before the fire starts burning the curtains, as the door is only so wide and there are a lot of people in the room. If you don't get your butt through the door your financial assets will be consumed in what's coming.

The Truth: CNBC should be SHUT DOWN as NOTHING MORE THAN A CONDUIT FOR INSIDER TRADING AND ILLEGAL MARKET MANIPULATION. Their "commentators" from various funds who are almost certainly trying to unload shares they are stuck with into YOUR HANDS should be locked up and/or sued into oblivion AS THEY ARE WELL AWARE OF WHAT IS GOING ON AND ARE USING CNBC AS NOTHING MORE THAN A WAY TO SCREW YOU WHILE THEY PROFIT. THERE IS NO BALANCE AND NO DISCLOSURE BY THESE COMMENTATORS OF THEIR POSITIONS, INCLUDING PIMCO, BOVE AND OTHERS. CRAMER IS THE WORST OF ALL OF THEM, telling people to leave money at Bear Stearns (if you believe that was about "deposits" when Bear isn't a Deposit Bank, you're dumber than a rock) and alternating between a "Caution" sign when we're down 300 and then "BUY EVERYTHING" when we're up 400 - only to see you lose 3/4 of the gains the next day! We do not have "financial TV" in this country. We have blatant market manipulation in the guise of "news" on a daily basis, 12 hours a day, AND THE SEC DOESN'T GIVE A DAMN.
http://market-ticker.denninger.net/2008/03/fed-will-do-whatever-it-wants-and-raise.html


----------



## trillionaire#1

phew! take that
you make some excellent observations, 
but i sense your car wont start to take you away for easter holidays


----------



## sassa

Are Lehman Brothers being honest about their balance sheet?

"After the collapse(BSC), Wall Street’s attention naturally turned to the other investment banks, especially Lehman Brothers, perceived as the most vulnerable. So, investors were thrilled when Lehman topped earnings expectations on Tuesday””as the firm took pains to reassure the markets that it has plenty of cash to ride out the turbulence.

Yet aside from a smattering of attention here and there, investors and the media mostly overlooked the balance sheet. In other words, they forgot what happened mere hours earlier with Bear Stearns. Wall Street’s short-term memory is notoriously lousy, but this must set a record. (Could Jimmy Cayne be sharing his stash with his hedge fund buddies?)

What actually happened to Lehman’s balance sheet in the first quarter? Assets rose. Leverage rose. Write-downs were suspiciously minuscule. And the company fiddled with the way it defines a key measure of the firm’s net worth. Let’s look at the cautionary flags."
And the flags are here-
http://www.portfolio.com/news-markets/top-5/2008/03/20/Lehmans-Debt-Shuffle


----------



## explod

sassa said:


> Are Lehman Brothers being honest about their balance sheet?
> 
> "After the collapse(BSC), Wall Street’s attention naturally turned to the other investment banks, especially Lehman Brothers, perceived as the most vulnerable. So, investors were thrilled when Lehman topped earnings expectations on Tuesday””as the firm took pains to reassure the markets that it has plenty of cash to ride out the turbulence.
> 
> Yet aside from a smattering of attention here and there, investors and the media mostly overlooked the balance sheet. In other words, they forgot what happened mere hours earlier with Bear Stearns. Wall Street’s short-term memory is notoriously lousy, but this must set a record. (Could Jimmy Cayne be sharing his stash with his hedge fund buddies?)
> 
> What actually happened to Lehman’s balance sheet in the first quarter? Assets rose. Leverage rose. Write-downs were suspiciously minuscule. And the company fiddled with the way it defines a key measure of the firm’s net worth. Let’s look at the cautionary flags."
> And the flags are here-
> http://www.portfolio.com/news-markets/top-5/2008/03/20/Lehmans-Debt-Shuffle





The use of debt as part of equity has been part of the game for years.  I have noted this before on ASF.  I picked it up first in a book by Prechter Jr, Conquer the Crash 2002.   This bloke was out with his timing on the crash itself but not the overall warning of fundamentals.  Many on here boo-hood me big time so I went into my shell on it.

When some of us have been accused of being doomsayers we close up.  It is good  to see the sceptics now come on board.  

Price earnings ratio's on Wall Street are worthless.  Macquarie and others here in my view may be in a similar situation.  Not things I measure but others may have a view.

Will be interesting to see what pans out.


----------



## Uncle Festivus

*N*oises coming from almost every central bank head, who's currency appreciation against the USD has increasingly made their economies less competitive, (even recessionary), indicating/hinting that some sort of intervention should be used to stop the rot and start manipulating the USD higher.

*S*o it has started, the rotation back to equities being paid for with the special repo's amendments & the artificial support for the USD. By George I think they may have pulled this one off. Not. The money shuffling can play this out for a while but when the real economy finally catches up with the shufflers, or to the point that no amount of spin can ignore the real facts of the real economy eg the _global_ housing depression, the start of the end game will begin in earnest?


----------



## sassa

Much is being said lately about treasuries and this person has a very valid concern.
"The stock market might not be reflecting a state of panic out there. But Treasury bills sure are. Three-month T-bills are now yielding roughly 52 basis points. Yes, I mean roughly one-half of one percent ... against a federal funds rate of 2.25%. Bloomberg calls today's low yield (0.387%) the lowest going all the way back to at least 1954. That means we have undercut the "deflation scare lows" from 2003.
Now, if you want to see a REALLY scary chart, check out this one juxtaposing 3-month T-bill yields against S&P futures. Bill yields are the white line ... S&Ps the red. If bill yields are a leading indicator of stock prices on the way down, like they were on the way up (notice how bill yields topped out before stocks did in the recent rally off the 2002-2003 bear market low), we're in BIG trouble."
Chart is at-
http://www.interestrateroundup.blogspot.com/


----------



## dhukka

These guys got the recession call right back in 2001 whilst the Wall Street lemmings were looking through their rose-coloured glasses. 



> *Leading index shows US economy in recession, ECRI says*
> 
> The United States is "unambiguously" in a recession, a New York-based forecasting group said on Thursday, citing a nine-month decline in its weekly measure of the economy.
> 
> The Economic Cycle Research Institute, which correctly predicted the 2001 recession at a time when many on Wall Street still maintained a rosy outlook, said their numbers indicate the economic contraction is already under way.
> 
> Extending its weakening trend, the firm's Weekly Leading Index fell to 130.8 in the week of March 14 from 132.1 in the prior week, revised down from 132.2.
> 
> "It is exhibiting a pronounced, pervasive and persistent decline that is unambiguously recessionary," said Lakshman Achuthan, managing director at ECRI.
> 
> At last glance, the WLI's drop due to unfavorable moves in most of its components including lower stock prices, higher jobless claims and interest rates, and weaker housing, said Achuthan. The index's annualized growth rate was steady at minus 10.4 percent.
> 
> The recession call puts ECRI in line with a growing number of economists who believe the U.S. is already in recession, with some citing December as the likely start date of the downturn.
> 
> Martin Feldstein, who heads the highly-regarded National Bureau of Economic Research, has said not only that contraction is under way but also that it could be severe.
> 
> "The risks are that it could get very bad," he said last Friday.


----------



## brty

Hi,

I first posted in this forum several weeks ago, around the bottom for the financials, with the following...



> Hi all,
> 
> Thanks for the warm welcome.
> 
> Let's see if there is any argument with the following examples.
> 
> Will ANZ bank will make $1.6B less this year than last year?
> 
> Likewise for each of the other banks.
> 
> That is what the market is currently pricing in.
> 
> All it would take is for the Fed in the US to drop rates a little more than expected, as well as increasing liquidity in tandem with other CB's and you have the recipe for a rally. Taken with short covering, and those who are looking for a bargain, when it comes it will be explosive.
> 
> I may be a new poster on this forum, but I first traded share and commodities in 1981. This gloom and doom stuff that is portrayed here has been talked about for a year now, with subprime problems being known about since then.
> 
> The downward momentum in prices is declining, yet the news and the D+G get worse. Come to your own conclusions, I'm just stating my opinion.
> 
> bye




Just as markets do not go straight down for extended periods very often, the same can be said for rises. Hence I will be taking profits of about 20% in only 2 weeks.

bye

PS good luck to those permabears who thought I would lose all my money as well as my marbles. I hope they have not suddenly turned into bulls today.

brty


----------



## Trembling Hand

brty said:


> Just as markets do not go straight down for extended periods very often, the same can be said for rises. Hence I will be taking profits of about 20% in only 2 weeks.
> 
> bye
> 
> PS good luck to those permabears who thought I would lose all my money as well as my marbles. I hope they have not suddenly turned into bulls today.
> 
> brty




Great brty your the man. 
So you have got a bounce but the point that you are dumping them just highlights what many people hear think. No bear who is actual in the market expects them to go straight down. There will be plenty of rips higher but risk to the down side remain. If you aren't concerned with all the D & G why are you selling??


----------



## sassa

Gold,grain futures up.Dollar falling.
http://futuresource.quote.com/
DJIA,S & P and Nasdaq futures in the red slightly.
http://www.bloomberg.com/markets/stocks/futures.html
Change tonight?


----------



## brty

Hi,

TH


> If you aren't concerned with all the D & G why are you selling??




er, because my short term signals have indicated time to take profit and move on to the next opportunity?

There is likely to be some type of pullback and further opportunities to go long. This market could go sideways to up for a couple of months, but still be bearish overall. It is just not going to be straight oneway traffic, it virtually never is.

bye

brty


----------



## dhukka

brty said:


> Hi,
> 
> I first posted in this forum several weeks ago, around the bottom for the financials, with the following...
> 
> 
> 
> Just as markets do not go straight down for extended periods very often, the same can be said for rises. Hence I will be taking profits of about 20% in only 2 weeks.
> 
> bye
> 
> PS good luck to those permabears who thought I would lose all my money as well as my marbles. I hope they have not suddenly turned into bulls today.
> 
> brty




Actually as I remember it everyone basically agreed that we would get a rally as we always do in bear markets. Are you claiming some kind of amazing insight into market direction by pointing out the obvious?

Also in relation to your claim that:



> Let's see if there is any argument with the following examples.
> 
> Will ANZ bank will make $1.6B less this year than last year?
> 
> Likewise for each of the other banks.
> 
> That is what the market is currently pricing in.




I posted the following response:



> I would be interested to see how you arrive at that calculation




I'm still waiting for that one.


----------



## kransky

Read this as a comment to a article on the daily telegraph.. i wonder if its true?



> a)Bear Stearns was the only major Wall Street Investment Bank not to contribute to the bail-out fund of Long-Term Capital Management..
> 
> There are some long hard memories in Wall Street, and what satisfaction there must be in some quarters to witness their fall.
> 
> b) Bear Stearns was practically the Daddy of sub-prime (cradle to grave of getting it started and sold on).




If true then it suggests they may have been a target.. 

???


----------



## wayneL

FYI

From The Economist









> *Executive confidence*
> *Free fall*
> 
> Mar 25th 2008
> From Economist.com
> 
> “A LONG, ugly, deep recession.” That was how Chrysler's chief financial officer Jerry York described his outlook for America's economy at a recent gathering of fellow finance executives. The latest poll of over 1,000 chief financial officers conducted by Duke University, Tilburg University and CFO, a sister publication of The Economist, largely supports this view. In America economic confidence is in short supply, with pessimists outnumbering optimists by a nine-to-one margin in the first quarter of 2008. In Europe, pessimists outnumber optimists by six to one. And to add to the gloom, finance chiefs in Asia are now more pessimistic than optimistic for the first time in five years.


----------



## Bushman

wayneL said:


> FYI
> 
> From The Economist




CFO's are paid to be pessimists. That is what controlling a balance sheet requires. Worst case scenarios like, err, a credit crunch.  Centro is what happens when they become optimistic. Why oh why Romano did you not see the CMBS markets closing down? Boo hoo...

Anyway if I was a CFO at the moment, I would be seeing a yawning chasm about to decimate American GDP growth, and my company's profitability with it, for a few years to come. That's why it is called risk management. Will this happen is the question? Maybe ask the CEOs - surely they can be trusted at the bottom. 

Just don't go asking an economist or anything silly like that...


----------



## wayneL

Bushman said:


> CFO's are paid to be pessimists. That is what controlling a balance sheet requires. Worst case scenarios like, err, a credit crunch.  Centro is what happens when they become optimistic. Why oh why Romano did you not see the CMBS markets closing down? Boo hoo...
> 
> Anyway if I was a CFO at the moment, I would be seeing a yawning chasm about to decimate American GDP growth, and my company's profitability with it, for a few years to come. That's why it is called risk management. Will this happen is the question? Maybe ask the CEOs - surely they can be trusted at the bottom.
> 
> Just don't go asking an economist or anything silly like that...




I think the chart disproves your hypothesis.


----------



## explod

Bushman said:


> CFO's are paid to be pessimists. That is what controlling a balance sheet requires. Worst case scenarios like, err, a credit crunch.  Centro is what happens when they become optimistic. Why oh why Romano did you not see the CMBS markets closing down? Boo hoo...
> 
> Anyway if I was a CFO at the moment, I would be seeing a yawning chasm about to decimate American GDP growth, and my company's profitability with it, for a few years to come. That's why it is called risk management. Will this happen is the question? Maybe ask the CEOs - surely they can be trusted at the bottom.
> 
> Just don't go asking an economist or anything silly like that...



]
Yeh, they cant be trusted and we are not at the bottom

But we will see


----------



## Kauri

explod said:


> ]
> Yeh, they cant be trusted and we are not at the bottom
> 
> But we will see





*FT* ... suggesting that the current optimism in the equity markets towards the financial sector may be premature. Bank"s borrowing costs continue to rise, despite the new actions of the central banks last week. Spreads climbed in London, and auctions were highly over subscribed in Europe and the U.S. Unless the situation eases, the recent gains in the financial sector in the equity markets may be short lived....
Cheers
.........Kauri


----------



## wayneL

Here is a rather excellent article written by Todd Harrison of Minyanville.com regarding the "privatize profits and socialize losses" policy of the current Fed.

*Chasing liberty
Commentary: Facing a critical juncture in financial engineering*
http://www.marketwatch.com/news/sto...x?guid={22E814E7-51D9-430C-A955-89A3287BD009}

It's an excellent article in that it not only dovetails neatly with the views of the more sober bears on this site, but also it contains rare balance for an article written by an American.

Worth following this chap. IMO


----------



## wayneL

Along the same lines, this article from Jeff Randall of the UK Telegraph takes a more cynical, though no less accurate look at the bankers obnoxious duplicity.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/03/26/ccjeff126.xml



> *When the going gets tough, banks yelp for nanny
> *
> By Jeff Randall
> Last Updated: 8:16am GMT 26/03/2008
> 
> Bank customer: "What's the difference between a recession and a depression?"
> 
> Bank manager: "In a recession, you lose your job. In a depression, I lose mine."
> 
> Remarkable, isn't it, just how quickly champions of laissez-faire solutions can become advocates for state intervention. All it takes is for their gravy-train to break down.
> 
> When freedom to play with barely any restrictions was making them rich beyond imagination, big-shot financiers applauded "light-touch" regulation. The looser the rules, the louder they cheered.
> 
> Now, however, as credit is crunched, losses mount and prospects for lucrative employment come under threat, many titans of unfettered enterprise are suddenly crying out for nanny.
> 
> Not for them the tough love of supply and demand. No, sir. These are desperate times, requiring generous measures of tender, loving care.
> 
> The essential plumbing of commerce, it is alleged, has become dysfunctional. Or, as Josef Ackerman, chief executive of Deutsche Bank, said: "I no longer believe in the market's self-healing power."
> 
> Why ever not? Nowhere on the tin does it say that markets will correct themselves without someone being hurt. Indeed, for markets to function properly, pain, somewhere along the chain, is inevitable.
> advertisement
> 
> Markets work because they create winners and losers, not jobs-for-life security. Financial Darwinism doesn't just underpin the survival of the fittest, it ensures the extinction of pea-brained dinosaurs.........http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/03/26/ccjeff126.xml


----------



## ithatheekret

Yes , they're still struggling and we haven't even touched base with domestic debt as yet . In fact it seems to have been sidelined . High inflation has a distinct affiliation with defaults . As inflation creeps higher the regions with the highest will show greater ranges in defaults . 

The quirk in the plans set to play by the Fed and Co. are pointless in many ways , but the easiest way to show the ignorance of the basic facts , is to use their own theories to show the blindness of perception . The Keynesians are ignoring their bible .

You see when rates are pushed low , monetary policy is useless and the enviroment turns into a massive liquidity trap . That's what's happening in financials now , but the relevance of what it will become has largely gone unnoticed .

The no recession out there call could very well be true . It could be a depression .


----------



## explod

wayneL said:


> Here is a rather excellent article written by Todd Harrison of Minyanville.com regarding the "privatize profits and socialize losses" policy of the current Fed.
> 
> *Chasing liberty
> Commentary: Facing a critical juncture in financial engineering*
> http://www.marketwatch.com/news/sto...x?guid={22E814E7-51D9-430C-A955-89A3287BD009}
> 
> It's an excellent article in that it not only dovetails neatly with the views of the more sober bears on this site, but also it contains rare balance for an article written by an American.
> 
> Worth following this chap. IMO




Yep its al there.

Wayne, your take on a "sober bear" ?


----------



## wayneL

explod said:


> Wayne, your take on a "sober bear" ?



Ones that agree with me. 

No, just a joke.

A sober bear is one that has come to his or her view based on actual analysis/experience etc... a bit of hard graft so to speak, rather than those motivated by jealousy of those who have done well in the boom.


----------



## ithatheekret

When the credit spreads between the lower rated bonds and treasuries start to hug and keep hugging the financial crisis will be on the way to being over . 

The leveraging missions being carried out will become costly , and they had better understand it soon . The width of the spread is wide enough to put a semi though sideways rig and all , so say the corp. bondholders anyway .

I can't remember yields this high , so risk demand for cash is an expensive ask nowdays , but bondholders look to demanding even higher yields yet again .

The last readout I saw had one set pinging well above 300 and rising , which for myself signals no let off or barleys for financials yet . 

Treasuries have just seen their rough patch , most look to be trending south , bar the Aussie 10yr , which whilst volatile , looks to still be trending north .

Now watch inflation get hyperactive .


----------



## chops_a_must

As soon as I saw Rick Santelli on again this morning, I knew the market would be down.

Bludy downrampers!


----------



## Aussiejeff

ithatheekret said:


> ....
> The no recession out there call could very well be true . It could be a *depression* .




*GASP*

Isn't there a world-wide forum BAN on the use of the dreaded "_*De*_-Word"??

Double-*GASP*


AJ


----------



## ithatheekret

Aussiejeff said:


> *GASP*
> 
> Isn't there a world-wide forum BAN on the use of the dreaded "_*De*_-Word"??
> 
> Double-*GASP*
> 
> 
> AJ




Must be my bad then ,  I missed that memo


----------



## wayneL

ithatheekret said:


> Must be my bad then ,  I missed that memo



Get with the program itha.... it's "slow-down". Depressions and recessions only ever happen in history books. LOL


----------



## ithatheekret

I'm too busy watching other indicators like the VTI ( core stock index ) , lovely V between two peaks , looks like a double top whatever they call it nowdays , not a blow off , had formed and is now in decline , which we'd expect under the current build up of movie scripts , I mean financial crisis dilemas . I think it's an MSCI index , but I can't get it up in the format I have it in . Anyway a double something , and the trend looks to be pointing to a long term sequence in matching data . 

I know you can get the VTI up elsewhere though .


----------



## ithatheekret

I forgot to ask ...... does anyone else think we'll have a 4800 retest on the ASX200 ?


----------



## chops_a_must

ithatheekret said:


> I forgot to ask ...... does anyone else think we'll have a 4800 retest on the ASX200 ?




Of course.

The only question is when.

Looking for at least 4300 to be honest...


----------



## Kauri

I hear that S+P has dropped GMAC's rating... a bit more confidence whittled away... until the "_Talking Heads_" get cranking again..

 and Iceland playing Icarus may cause more than thier ice-sheets to melt... 


and from the Guardian..  http://www.guardian.co.uk/ 
*Nationwide raises mortgage rates *


UK's biggest building society to add almost 0.6% to cost of some fixed-rate and tracker deals 


No crunch for banker paid £36m
and the ever-present rumour mill in the US....  *Rumours* of a US banking wobble have returned with L*%^^@**s**   Bank* noting a share price fall of over 8%. Stock options are cited behind the speculation but amid the current conditions any trigger could force a whippy short-term reaction. However, whether any positions are in fact open to take advantage of the chop remains the more interesting question.

WSJ...  http://online.wsj.com/article/SB120660493325368265.html?mod=hpp_us_whats_news 
  being eyed by the derivatives market is a blowout in Clear Channel credit default spreads after a Texas judge ruled that the consortium of investment banks must back the $19.4 bln buyout. The consortium includes Citi, Morgan Stanley, Deutsche, Credit Swiss, RBA and Wachovia. With current market conditions, the decision is seen as a negative for the financials. 

Cheers
..........Kauri


----------



## wayneL

Kauri said:


> until the "_Talking Heads_" get cranking again..
> Cheers
> ..........Kauri



That'd be the PPT's _Psych Ops_, right? :


----------



## Kauri

wayneL said:


> That'd be the PPT's _Psych Ops_, right? :




I think he's called the Chairman of the First Directorate... or is that my wifes title??

 also re L*%^^@**s Bank... *from Rooters..

Cheers
.........Kauri


----------



## Kauri

something that my imsoniac acrophobiac budgie just whispered to me... hedge funds buying bonds today, accounting for the bond market rally, and buying puts on financial stocks, which is behind the pressure on those stocks and decline in the DJIA. Combined, it points to continued credit concerns . 
Cheers
.........Kauri


----------



## Kauri

keeping a lazy eye on the $US index... far too early yet but possibly the makings of another coily... in EW ...after the last big coily which looks like a large W4.. we would be getting close to a 5th of a 5th... *if it forms up* .

  Just thinking allouwd... and looking beyond the  tetragon

Cheers
........Kauri


----------



## sassa

http://www.bonddad.blogspot.com/
"market sold-off hard at the end. End of the day sales are never a good thing. It means traders are taking money off the table at the end of the day, or they are nervous that a bad overnight event could hit the markets."


----------



## RichKid

wayneL said:


> Here is a rather excellent article written by Todd Harrison of Minyanville.com regarding the "privatize profits and socialize losses" policy of the current Fed.
> 
> *Chasing liberty
> Commentary: Facing a critical juncture in financial engineering*
> http://www.marketwatch.com/news/sto...x?guid={22E814E7-51D9-430C-A955-89A3287BD009}
> 
> It's an excellent article in that it not only dovetails neatly with the views of the more sober bears on this site, but also it contains rare balance for an article written by an American.
> 
> Worth following this chap. IMO




Thanks Wayne, great views as usual. 

Below are some comments by Colin Twiggs on this topic from his newsletter: 


> Trading Diary-
> Don't Blame The Free Market
> 
> By Colin Twiggs
> March 27, 2008 2:00 a.m. ET (6:00 p.m. AET)
> http://www.incrediblecharts.com/free/trading_diary/trading_diary.htm
> These extracts from my trading diary are for educational purposes and should not be interpreted as investment advice. Full terms and conditions can be found at Terms of Use.
> 
> Free Market
> 
> The Financial Times features an article pronouncing the end of a three decade move towards market-driven financial systems and quotes Joseph Ackermann as saying: "I no longer believe in the market's self-healing power". The Deutsche Bank CEO appears to have forgotten that financial markets are the exact opposite of a free market. Instead of allowing the market to establish its own equilibrium rate of interest, matching supply of credit with demand, the Fed and other central banks impose artificial rates for political ends.
> 
> The current financial crisis was wrought by the Fed imposing just such an artificially low rate. The resulting mis-match between supply of credit and demand encouraged poor lending practices and fuelled a housing bubble of epic proportions. Financial markets require greater policing, but precisely because they are not free — and there is no market mechanism to prevent the resulting excesses.


----------



## RichKid

wayneL said:


> Along the same lines, this article from Jeff Randall of the UK Telegraph takes a more cynical, though no less accurate look at the bankers obnoxious duplicity.
> 
> http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/03/26/ccjeff126.xml




This quote, alluded to in the article, was ascribed to Harry S Truman, 33rd US President, 1884-1972:
It's a recession when your neighbor loses his job; it's a depression when you lose yours.


----------



## sam76

2331 GMT [Dow Jones] S&P/ASX 200 feels like its seen its bottom, so institutions will soon come back in buying, with many holding "obscene" amounts of cash, says Goldman Sachs JBWere afternoon report. Says if markets can withstand more subprime losses, tight credit markets, downgrading of U.S. EPS estimates, plus U.S. recession signs, that will confirm bottom, says broker. ""When all the instos feel a bit more comfortable, the mother of all rallies will hit and we'll see the upper end of the trading band reached fairly quickly." Tips trading band range of 5000 to 5500-5800. Index last 5301.7. (DWR) 


Well duhhhhhhhhh


----------



## Aussiejeff

sam76 said:


> 2331 GMT [Dow Jones] S&P/ASX 200 feels like its seen its bottom, so institutions will soon come back in buying, with many holding "obscene" amounts of cash, says Goldman Sachs JBWere afternoon report. Says if markets can withstand more subprime losses (*How much more?*), tight credit markets (*How much tighter?*), downgrading of U.S. EPS estimates (*How much more downgraded?*, plus U.S. recession signs (*How many more signs can their be?*), that will confirm bottom, says broker. ""When all the instos feel a bit more comfortable (*How much is "A bit more comfortable"?*, the mother of all rallies will hit and we'll see the upper end of the trading band reached fairly quickly." Tips trading band range of 5000 to 5500-5800. Index last 5301.7. (DWR)
> 
> 
> Well duhhhhhhhhh




LOL...

I've added the (unspoken) questions to that vague-quoted gem.....


----------



## ithatheekret

Ah ....... but are they holding obscene amounts of cash to bolster the none existent cash reserve ratios that led them all into the bear pit ?


----------



## wayneL

A bloody interesting article in the UK Daily Mail that applies equally to all Anglo economies. In it, he asks the hard questions that some of us economic numpties, trading at home in our pyjamas have been asking:



> *TOM UTLEY: Even an economic dunce like me foresaw the credit crunch*
> 
> SNIP:
> Indeed, as far as I remember, only once before have I dared venture an opinion about economics in these pages - and that was 16 months ago, when I said it was utter madness for banks and building societies to go on lending housebuyers as much as seven times their annual salaries.
> 
> With personal debt in Britain then estimated at £1.3 trillion, I mused: "Can we really go on living like this, without risking the most catastrophic fall when the economy turns downwards, the creditors start calling in their money - and the never-never becomes the now-now?"
> 
> *If even an economic ignoramus like me could grasp such an obvious truth, then why did it escape the board of Northern Rock, the Financial Services Authority and the chief economists of just about every big financial institution involved in the American housing market?*
> 
> What worries me is that if we economic illiterates predicted the credit crunch, long before we'd even heard the term, might we not be right, too, to be deeply concerned about the flight of manufacturing jobs abroad?
> 
> FULL ARTICLE


----------



## reece55

wayneL said:


> A bloody interesting article in the UK Daily Mail that applies equally to all Anglo economies. In it, he asks the hard questions that some of us economic numpties, trading at home in our pyjamas have been asking:




Thanks for link Wayne, a very interesting read....

Almost exactly what ASF was discussing the other day.......

Australia is lucky to have a crap load of dirt the emerging economies need to expand that cushions our service based economy, because we have to provide the assistance to the mining sector.... But I thing I am worried about is how long before China owns half of our dirt? Not long if the rate they are acquiring exploration ground and producing mines is anything to go by!!!!!

Cheers


----------



## ithatheekret

What worries me is that if we economic illiterates predicted the credit crunch, long before we'd even heard the term, might we not be right, too, to be deeply concerned about the flight of manufacturing jobs abroad?


He's never heard of same page mentality in public service by the looks either ...... obviously never played Simon says as a kid .


----------



## dhukka

Signs that the US consumer is feeling a little tapped out.



> *J.C. Penney cuts first-quarter outlook*
> 
> J.C. Penney Co.  (JCP) on Friday warned that its first-quarter profit will come in at about 50 cents a share, compared to previous guidance of 75 to 80 cents a share. Citing weaker-than-expected sales through the Easter holiday, the retailer also forecast a low-double-digit decline in same-store sales for March and a high-single-digit decline for the first quarter. Its prior expectation was for low-single-digit declines for both periods. J.C. Penney's Chairman and Chief Executive Myron Ullman said, "Consumer confidence is at a multi-year low." Analysts surveyed by FactSet Research expected J.C. Penney to report first-quarter earnings of 75 cents a share. Shares of J.C. Penney fell more than 13% in premarket trading to $34.90.


----------



## Kauri

dhukka said:


> Signs that the US consumer is feeling a little tapped out.



 also... KB Homes also reported a loss, missing expectations. 

  also... discussions earlier this morning on CNBC from ex-Treasury Snow and Ex-Fed Lindsey over concerns for credit for the automotive market and fears of a broader downturn in car sales. 

  also... news from Fremont General this morning that it has received a directive for its bank subsidiary, from the FDIC and California Dept of Financial Institutions, to recapitalize in 60 days or accept an offer to be acquired with Fremont General to divest themselves of the bank.

  Ho Hum... just another day in paradise...   

Cheers
..........Kauri


----------



## Kauri

interesting read in the FT...


----------



## dhukka

Kauri said:


> also... KB Homes also reported a loss, missing expectations.
> 
> also... discussions earlier this morning on CNBC from ex-Treasury Snow and Ex-Fed Lindsey over concerns for credit for the automotive market and fears of a broader downturn in car sales.
> 
> also... news from Fremont General this morning that it has received a directive for its bank subsidiary, from the FDIC and California Dept of Financial Institutions, to recapitalize in 60 days or accept an offer to be acquired with Fremont General to divest themselves of the bank.
> 
> Ho Hum... just another day in paradise...
> 
> Cheers
> ..........Kauri




Did you see Meredith Whitney's latest interview? For 1Q08 She's predicting *$50* billion in writedowns *$8* billion in additional loan loss provisions and thinks that Citigroup has to completely eliminate it's dividend to preserve capital. Will be plenty of carnage if she's right and she's been nothing but right over the last 6 months.


----------



## wayneL

Kauri said:


> interesting read in the FT...




Here's the link for those who want to read it


----------



## Kauri

wayneL said:


> Here's the link for those who want to read it



 ooops,,, sorry bout that... is that a link to the 2nd item in the blue box??  
Cheers
..........Kauri


----------



## Kauri

BayernLB are said to be "*mulling over guarantees*" for the bank. now what does that mean, I wonder???  Fact or Hedgie fiction?? whatever..Gold has pulled up..   
Cheers
.........Kauri


----------



## Wysiwyg

Some more firewood .... 



> German Banks Could Hemorrhage 70 Billion Euros
> Spiegel ^ | March 28, 2008
> 
> Posted on 03/29/2008 7:22:29 AM PDT by DeaconBenjamin
> 
> The fallout in Germany from exposure to America's subprime crisis may be far bigger than previously feared. One major newspaper puts estimated losses at a whopping 70 billion euros, while a prominent politician warns that the US recession has already arrived in Germany. On Friday, Bavarian governor Günther Beckstein said the state's *BayernLB* bank would announce losses related to the credit crisis of up to €4 billion -- double the €1.9 billion figure the bank had previously disclosed




http://www.freerepublic.com/focus/f-news/1993595/posts


----------



## sassa

"This is just beginning. Somewhere been 40 and 100 hedge funds will liquidate shortly. It's a bloodbath and it will get worse."

Already investors are showing their fury. One said: "I thought volatility was what hedge funds lived for? Making money, or at least preserving cash, during volatile times is certainly what we pay them for. They have been poncing around during the good times and are now found wanting at the first sign of trouble. It's a debacle out there."....

Suddenly, there's a new fear surrounding the sector. Just a few months ago these were the best brains in finance. Now they are being exposed as average fund managers at best, and potential market manipulators at worse. How many more pretenders are there out there and how much more chaos will their demise bring to the rest of the markets?."
http://www.nakedcapitalism.com/2008/03/hedge-funds-its-bloodbath.html


----------



## kransky

with all this going on, equity markets are going to tank, gold and commodities will tank as funds sell up to try to survive..

so how can we take advantage of the goings on? get on gold once the fund selling stops?

assume huge volatility and thus stick to short term trades?


----------



## wayneL

kransky said:


> assume huge volatility and thus stick to short term trades?



That's my strategy FWIW.


----------



## explod

kransky said:


> with all this going on, equity markets are going to tank, gold and commodities will tank as funds sell up to try to survive..
> 
> so how can we take advantage of the goings on? get on gold once the fund selling stops?
> 
> assume huge volatility and thus stick to short term trades?




Please tell, where will the funds put the money from the sell up.  Not into US dollars because they are (as they are) going to tank also.   Where is the safe haven for the chaos now.  South East Asia just this last week have decided they want nothing more of US treasuries.   

So please tell


----------



## wayneL

explod said:


> Please tell, where will the funds put the money from the sell up.  Not into US dollars because they are (as they are) going to tank also.   Where is the safe haven for the chaos now.  South East Asia just this last week have decided they want nothing more of US treasuries.
> 
> So please tell




Just a thought, but could "all this money" not be all that much, due to the enormous leverage at play?


----------



## explod

wayneL said:


> Just a thought, but could "all this money" not be all that much, due to the enormous leverage at play?




Yep an implosion of almost naught.   40 to 100 hedge funds ????

And on the other foot that was thought to be tangible, we have chanted for some time on another thread that "cash is trash"


----------



## Awesomandy

explod said:


> Please tell, where will the funds put the money from the sell up.  Not into US dollars because they are (as they are) going to tank also.   Where is the safe haven for the chaos now.  South East Asia just this last week have decided they want nothing more of US treasuries.
> 
> So please tell




As an educated guess, I would think that most of the cash will end up as cash sitting in an account somewhere or in some sort of fixed interest instruments. 

There are definitely some hedge funds under a lot of stress at the moment, (collapse is probably imminent) - including some that are equity based (which does not have a direct exposure to the sub-prime problem).


----------



## Wysiwyg

$500,000 plus     7.25% p.a.


----------



## wayneL

http://www.dailymail.co.uk/pages/li...tml?in_article_id=549650&in_page_id=1770&ct=5

God Save The Queen


----------



## qmanthebarbarian

Ouch!



> March 30 (Bloomberg) -- UBS AG, the European bank with the highest losses from the U.S. subprime crisis, may ask shareholders to approve a capital increase of as much as 16 billion Swiss francs ($16.1 billion), Sonntag newspaper said, citing people it didn't identify.




http://www.bloomberg.com/apps/news?pid=20601087&sid=a7OD4I9MoGVU&refer=home


----------



## ithatheekret

explod said:


> Please tell, where will the funds put the money from the sell up.  Not into US dollars because they are (as they are) going to tank also.   Where is the safe haven for the chaos now.  South East Asia just this last week have decided they want nothing more of US treasuries.
> 
> So please tell




Infrastucture still has plenty of room for growth , there's a few resource bottlenecks that could attract some deep pockets . 

........ and there's a choice of areas too , for the risk reward ratios .

China , Australia ...... Russia .


----------



## Kauri

the rumours are now getting some press... but the figures being bandied about seem a tad over the top???..I thunk..

http://www.spiegel.de/international/business/0,1518,543932,00.html 

Cheers
..........Kauri


----------



## Uncle Festivus

Awesomandy said:


> As an educated guess, I would think that most of the cash will end up as cash sitting in an account somewhere or in some sort of fixed interest instruments.
> 
> There are definitely some hedge funds under a lot of stress at the moment, (collapse is probably imminent) - including some that are equity based (which does not have a direct exposure to the sub-prime problem).




Pity the yanks - sell your shares and park it in an account getting 2.5%. Going backwards but at least not loosing the lot. At least for Oz we can get 7% plus no sweat, but not for long I think. Lock it in?

Did somebody mention hedge funds? Is now the time to deride the previous high flyers and financial wiz pretenders now that they are having to work for a living, and their investors loosing possibly their life savings in the process?



> One industry expert told The Sunday Telegraph: "This is just     beginning. Somewhere been 40 and 100 hedge funds will liquidate     shortly. It's a bloodbath and it will get worse."



http://www.telegraph.co.uk/money/ma...08/03/30/cchedge130.xml&CMP=ILC-mostviewedbox

I think markets are still in shocked denial about what's going on here, as it appears that we are entering some sort of new phase (the calm before the storm??) in the contagion whereby the hedgies, derivitives, credit cards, auto subs etc are not only feeding on themselves in a negative feedback, but the problems are now substantially worse in a global sense, at least in the typically 'western' economies.

These same economies won't be taking the same sort of volumes from the Asian slave labour states, so I would envisage a slow but steady flow on effect to our economy, looking forward some 9 -12 months? Super is showing a negative return for the last qtr - get used to it. I dropped my contributions to the bare minimum 12 months ago.

Yet before that arrives our market has to deal with it's own insidious meltdown from within ie brokers going bust and forced stock liquidation.

But there are some big winners out of all this, just have to know how to play the game . And be patient while sitting on a war chest of cash.

Global market meltdown stage 2 imminent?


----------



## Whiskers

sassa said:


> "This is just beginning. Somewhere been 40 and 100 hedge funds will liquidate shortly. It's a bloodbath and it will get worse."




Just out of curiosity, with all the alarmist headlines, how many companies/funds have gone down and out as a direct result of the 'credit crisis'?

A lot of egos and balance sheets have been hurt along with many home buyers, but unless I'm missing something I reckon I can easily count them on one hand.


----------



## Uncle Festivus

Whiskers said:


> Just out of curiosity, with all the alarmist headlines, how many companies/funds have gone down and out as a direct result of the 'credit crisis'?
> 
> A lot of egos and balance sheets have been hurt along with many home buyers, but unless I'm missing something I reckon I can easily count them on one hand.




You might have to grow some more fingers Whiskers 

It remains to be seen if all this is just part of the 'normal' cycle ie a natural purge of the excesses or something more ominous?

In fact, sites such as Implode O Meter are chock full of casualties which says something in itself ie these are not 'normal' times.



> Hedge funds are collapsing. This is a new occurrence. Over 31 major hedge funds have imploded taking billions of dollars down with them.
> 
> Peloton Partners
> Focus capital
> Falcon
> CSO
> Sailfish
> Polar
> Deephaven
> Absolute Capital
> Cooper Hill
> Pirate
> and the list continues...and more are to fall...



(US only?)

Mortgages -  
http://ml-implode.com/

Banks - 
http://bankimplode.com/

Hedge Funds - 
http://hf-implode.com/


----------



## Trembling Hand

Luv it!!

Implode -O-meter.

Classic!


----------



## RichKid

Uncle Festivus said:


> You might have to grow some more fingers Whiskers
> 
> ......................
> Banks -
> http://bankimplode.com/
> 
> Hedge Funds -
> http://hf-implode.com/




Thanks! roflao, you've made my day, check this out, via the bankimplode site, brokers and banks are an odd bunch: 







> Citi upgrades Lehman?
> 
> To start your weekend off with a good laugh, this morning a very troubled Citigroup “upgrades” Lehman another VERY seriously troubled company to “Buy”. It’s like one loser patting the other loser on the back! Wait until next week when Lehman “upgrades” Citigroup to “Buy”.
> It’s like the two CEO’s were having their two-martini lunch at the local pub talking about how troubled their credit lines are and how desperate they are for cash. They are both afraid of being the next Bear Stearns……then one of them, in a drunken stupor, says…… “Hey, what if we UPGRADE each other to BUY?” …….. “Brilliant” – says the other CEO.
> They give each other a hug – “But wait” says the other…. “What about getting MORE needed money to stay liquid?”…… “Well, we can use the UPGRADE to convince our Middle East investors that things are not so bad. Also – our good buddy Ben will continue to lower the standards at the Discount Window, and if all that doesn’t work – we can always get him to bail us out or negotiate a deal! – but for NOW – lets “Upgrade” each other!”…… they exit the bar…..the Citi CEO makes one last statement “Make SURE you’ve got your Golden Parachute strapped on tight!”
> 
> http://marketpreview.blogspot.com/2008/03/mp-32808.html


----------



## Whiskers

Uncle Festivus said:


> You might have to grow some more fingers Whiskers
> 
> It remains to be seen if all this is just part of the 'normal' cycle ie a natural purge of the excesses or something more ominous?
> 
> In fact, sites such as Implode O Meter are chock full of casualties which says something in itself ie these are not 'normal' times.
> 
> (US only?)




Hey Uncle, I don't think this implode O Meter thing qualifies as 'down and out'.   

Did you see the qualification?

I'm gunna have to look into this further. :

I might still have enough fingers. 



> Mortgages -
> http://ml-implode.com/
> 
> Imploded" lenders: The "imploded" status is somewhat subjective and does not necessarily mean operations are ceased permanently: it can mean bankruptcy filing, temporary but open-ended halting of major operations, or a "firesale" acquisition. The Companies include all types (prime, subprime, or a mix of both; retail or wholesale; subsidiaries and entire companies). Note: Companies listed here may still be operating in some capacity; check with them before making assumptions.


----------



## dhukka

Whiskers said:


> Hey Uncle, I don't think this implode O Meter thing qualifies as 'down and out'.
> 
> Did you see the qualification?
> 
> I'm gunna have to look into this further. :
> 
> I might still have enough fingers.




Let me save you the trouble Whiskers. I've been reading this site for the best part of a year. All the companies or subsidiaries of large companies on the list have gone out of business or been taken out. The only exception are some of the recently listed whihc may not have been officially confirmed.


----------



## Whiskers

dhukka said:


> Let me save you the trouble Whiskers. I've been reading this site for the best part of a year. All the companies or subsidiaries of large companies on the list have gone out of business or been taken out. The only exception are some of the recently listed whihc may not have been officially confirmed.




Thanks for that dhukka, but I'm still not sure that they all represent 'real' casualities.

For example the Rupert Murdock's of the world are (in)famous for milking cash out of subsidiaries and hanging them out to struggle or die.


----------



## chops_a_must

I think you have missed the point again Whiskers. 

Anyway, FWIW, as I wrote on the blog, Australian financials, and I assume world financials, were close to multi year support. And I entered accordingly first thing last week as said here. Not wanting to count chickens yet, but...

Have a breakout from the S&P and Dow by the looks. Regardless of the funnymentals, we are breaking short term resistance, probably clearing out shorts at the same time.

Same time that commodities are breaking down, we are getting definitive, tradeable rallies in the other areas by the looks.

Catastrophe over for the time being...


----------



## Whiskers

chops_a_must said:


> I think you have missed the point again Whiskers.




How do you mean Chops?

The point I was making is that, while I haven't checked all the detail, I'm pretty confident that a lot of the subsidiaries have become or always been sacrifical cash cows for parent companies to take advantage of the excesses of the last few years... not necessairly true operating casualties.



> Catastrophe over for the time being...




Yes the worst is over or as I prefer to say it was not going to be as bad as many feared... but now there will be the usual big sigh of relief... look at todays headlines... and no doubt over-do the euphoria a bit, then a modest nervous nellies retrace probably around May in anxiety about the June quarter results before things start to settle into a new world bull.


----------



## ithatheekret

Only professional investors have started to be desensitized to the bad news , it's whether they can stand it on the following quarters . 

I was happy here we tested the lows , and have dragged out most of the exposed / ure , whether certain lenders can be renegotiated with at present is another thing market wise , on some issues I suppose .

But I would imagine any effects would be absorbed by side lined cash burning holes in pockets .

I do understand that it will take a few more years for the US to expose the rest of the housing market exposure , but we know that there , it's the unknown that could pop up that could see record lows on swaps etc. once again move ,  for a couple of good hits to get bat to ball on  .

Someone called a DCB , I was thinking more of a DDCB for a retest .


----------



## wayneL

ithatheekret said:


> Only professional investors have started to be desensitized to the bad news , it's whether they can stand it on the following quarters .
> 
> I was happy here we tested the lows , and have dragged out most of the exposed / ure , whether certain lenders can be renegotiated with at present is another thing market wise , on some issues I suppose .
> 
> But I would imagine any effects would be absorbed by side lined cash burning holes in pockets .
> 
> I do understand that it will take a few more years for the US to expose the rest of the housing market exposure , but we know that there , it's the unknown that could pop up that could see record lows on swaps etc. once again move ,  for a couple of good hits to get bat to ball on  .
> 
> Someone called a DCB , I was thinking more of a DDCB for a retest .




"It's the economy stupid" now. As goeth Earnings and employment etc, so doth the SM. But that will take some quarters to start revealing itself.

(The biblical lingo looks really authoritative hey.)


----------



## dhukka

Whiskers said:


> Thanks for that dhukka, but I'm still not sure that they all represent 'real' casualities.
> 
> For example the Rupert Murdock's of the world are (in)famous for milking cash out of subsidiaries and hanging them out to struggle or die.




Regardless of whether they fit your definition of 'real casualties' the fact is there have been significantly more than a handful of companies that went out of business in the last 12 months and thus your attempts to dress mutton up as lamb has again been shot full of holes.


----------



## kransky

wayneL said:


> "It's the economy stupid" now. As goeth Earnings and employment etc, so doth the SM. But that will take some quarters to start revealing itself.
> 
> (The biblical lingo looks really authoritative hey.)




SM?


----------



## wayneL

kransky said:


> SM?




*S*tock *M*arket


----------



## kransky

righto LOL

I think the market is getting ahead of itself... it thinks the economy is going to skirt a recession... and if that is the case then fine.. markets recover before recessions (or downturns) are over... but most likely more negative economic news is going to come in the next few weeks...


----------



## Whiskers

dhukka said:


> Regardless of whether they fit your definition of 'real casualties' the fact is there have been significantly more than a handful of companies that went out of business in the last 12 months and thus your attempts to dress mutton up as lamb has again been shot full of holes.




Hey dhukka I'm not dressing anything up. It is the companies (through their subsidiaries) who exploited the circumstances that caused the mess that dressed up the mutton as lamb. 

To use your analogy, all I'm saying is that a lot, probably most of the wrecks left behind (old mutton) was always part of the instruments used to exploit the circumstances, rollout the cash, keep risk at arms length from the principals and disposable if the worst came to the worst.

Those sort of companies/funds were not 'normal' long term operating busineses. If they were they would have held onto the dodgy mortgages... albeit some still were holding more than they wanted too. That is why I don't count them as true/real operating casualties. 

If you recall the thing that triggered the crisis, was that these entities were making knowingly wreckless loans, even preditory loans to bundle into packages and offload to someone else who offloaded them again. The whole purpose of the activity was to use a vehicle to make a quick buck.

Real casualties would be businesses not involved in the original raquet such as retail stores, general manufacturing, agriculture etc. I'm not aware of many busnisses not involved in the original raquet that were operating normally that have gone bust. 

Your accounting is like a burgler getting hurt trying to make a fast getaway from a break-in and counting him and his injuries as a victim of crime. 

You have to know which side of the law/ledger to account for things,  dhukka.


----------



## Kauri

Thats a new one on me... Halifax has been placed on(*for* *mortgages*) "_withdrawl watch_", following on from First direct.... hard times ahead for the UK homeowner/homeowner to be???

http://business.timesonline.co.uk/tol/business/money/property_and_mortgages/article3666670.ece 

Cheers
...........Kauri


----------



## dhukka

Whiskers said:


> Hey dhukka I'm not dressing anything up. It is the companies (through their subsidiaries) who exploited the circumstances that caused the mess that dressed up the mutton as lamb.
> 
> To use your analogy, all I'm saying is that a lot, probably most of the wrecks left behind (old mutton) was always part of the instruments used to exploit the circumstances, rollout the cash, keep risk at arms length from the principals and disposable if the worst came to the worst.
> 
> Those sort of companies/funds were not 'normal' long term operating busineses. If they were they would have held onto the dodgy mortgages... albeit some still were holding more than they wanted too. That is why I don't count them as true/real operating casualties.
> 
> If you recall the thing that triggered the crisis, was that these entities were making knowingly wreckless loans, even preditory loans to bundle into packages and offload to someone else who offloaded them again. The whole purpose of the activity was to use a vehicle to make a quick buck.
> 
> Real casualties would be businesses not involved in the original raquet such as retail stores, general manufacturing, agriculture etc. I'm not aware of many busnisses not involved in the original raquet that were operating normally that have gone bust.




No doubt this was a racket but the idea that they were just in it to make hay while the sun shone is false. However misguided, the assumption was that the sun would never go down. 

Fitch Ratings admitted publicly that the assumptions underlying their ratings assumed that house prices would never fall. Again, however misguided this racket was, the vast majority were true believers. 

To say that an independent mortgage broking company is not a 'real casualty' is nonsense. I bet the employees working at these companies feel like real casualties. Were internet companies with nothing but an idea, no business model and no revenues not real casualties of the dot com bubble? Were they not cashing in on a racket that was assumed to continue indefinitely?




> Your accounting is like a burgler getting hurt trying to make a fast getaway from a break-in and counting him and his injuries as a victim of crime.
> 
> You have to know which side of the law/ledger to account for things,  dhukka.




Your accounting is being affected by your bad eye, it appears that you can only see the debits.


----------



## sassa

Well,there you go.Bernanke has 'fessed up.Unemployment to rise,no bottom to the housing market,hopes that major trading partners will help keep the U.S.economy afloat have faded,possibility of recession.
And the market fell slightly.Others(UBS et al)'fessing up made the market rise.
Is this a green light for the bears??A red light for the bulls?An amber light for both?


----------



## sassa

http://www.minyanville.com/articles/index.php?a=16528
"In fact, we've reached the point where banks and dealers in the financial system are forced to suck at the teat of the central bank credit machine in order to survive. Banks literally have no capital to support their declining asset values: the harder they suck at the teat, thus devaluing the dollar more and more, the more the collateral value declines. But even the teat isn't enough. Dealers and banks are having to raise longer term capital at egregious rates, thus diluting future earnings even more, and this despite record low treasury rates. Lehman (LEH) raised about $4 billion through a preferred stock offering at 8.5%. This may seem low relative to Citigroup (C) raising money at 13%, but in reality it is fairly comparable because the preferred is not tax deductible. 

Yesterday some very large European dealers wrote off vast sums of debt. There will be more to come. But the market took it as the last write-down, just as it has in the past, and a vicious short covering rally ensued with the help of government hands behind the scenes. Desperation is everywhere. But don’t confuse a short covering rally in a bear market with a bottom in a bull market correction: the news will continue to get worse and the manufactured rallies will be fewer and fewer as deflation takes hold."


----------



## ithatheekret

wayneL said:


> "It's the economy stupid" now. As goeth Earnings and employment etc, so doth the SM. But that will take some quarters to start revealing itself.
> 
> (The biblical lingo looks really authoritative hey.)





  They could have a stack of bibles to quote from , not that it will make any difference . 

Without growth , how can there be earnings of true substance ?

This will be revealed each quarter , for the financials that could look like the old thousand cut torture session . But ...... secretive margin facilities that have pumped stocks up , will now need a high performance pump to match the leaks in the market and economy . That's what happens when you place a bandaid on a gapping wound , it needs sutures and some timely coagulation , not the basic formation of coalesce tactics set in motion , in an attempt at cohesion . The only cohesion seen to date is a circling of wagons to fight off the onslaught .


----------



## brty

Hi,

I love this thread, all the doom and gloom.

We have had a 'imminent and severe market correction' of 20%+ in many large stocks as well as the indices.

We are getting more and more bad news, yet the market may have already factored this in. The news coming out is not sinking the market anymore (not to the effect it was)

When I step into the real world, people are still shopping, they are buying houses, they are buying cars, they are investing, they are putting money into super. Basically the world as we know it is continuing. 

The powers that be will do everything possible to avoid the type of meltdown many posters here think is imminent.
The probabilities lie in the market going higher in both the median and long term.

Go ahead and knock yourselves out being short the world, after all, someone has to take the otherside of the bet. 

bye

brty


----------



## sassa

brty said:


> Hi,
> I love this thread, all the doom and gloom.
> We are getting more and more bad news, yet the market may have already factored this in. The news coming out is not sinking the market anymore (not to the effect it was)
> brty



But has this been factored in yet.
"Before I get to tonights feature article, I wanted to clarify a few things from my previous post concerning JP Morgan, who now control nearly a $100 trillion derivative portfolio. While a trillion is truely a very large number, please keep in mind that World notional value of all derivatives is estimated to be $516 trillion. Now 1/5th of all world derivatives is under the control of just one entity, JP Morgan. That alone should send shivers up your financial spine for two important reasons: One is the fact that so much risk is concentrated with the trading expertise of just one firm. Look at what happened when geniuses managed Long-Term Capital Management or the super-quants at Bear Stearns. Second, since our Federal Reserve has made it clear that it intends to intervene and support major banks & financial centers, JP Morgan and their $100 trillion is a ticking timebomb that US taxpayers should not be unnecessarily exposed to.

When I said that "experts" claim that 2% of any derivative trading portfolio notional value is truely at risk of loss, what they mean is that 2% is at risk during normal market volatility. If our current environment was low volatility and pretty much an all around "normal" market, then I would be only somewhat concerned. But perhaps the most important variable fed into derivative pricing models (such as Black-Scholes, etc) is volatility. Our current environment is anything but normal, volatility is well above normal. This means to me that the 2% loss figure is way understated.

But does this really matter? I mean if you shoot and kill someone with a 357 magnum pistol, does then stabbing them with a knife make them any more dead? If JP Morgan was already over-leveraged such that a "normal volatility environment" loss of their $84 trillion portfolio meant they could wipe out their entire assets of $1.24 trillion ($84T x 2% = $1.68T), then how much more damage will an extra $13.4 trillion do? ($97T x 2% = $1.94T) Hey, in finance, someone ends up having to pay for the loss. If a 2% event occurs, take $1.94T minus JPM assets of $1.24T and the Fed ends up forking over $700 billion! That is bad... but what if market volatility increases such that a 2.5% loss occurs, or even a 3% loss? In a 3% scenario the Fed's ante is $1.67 trillion.

Now that is really bad... but the worst is that the derivative portfolio is still not dead yet... derivatives are not dead until the contracts maturity date. A 2%-3% loss could occur on the short-term securities, but the longer-term securities that have not expired yet, still have potent toxic venom as they near maturity -- meaning that additional losses are still possible.

If you think you have a good grasp of the situation now, there is still more to contemplate. JP Morgan does not operate in a financial vacuum... there are thousands of counterparties that regularly trade derivative products with JPM. There are many banks and financial centers that trade derivative products similar to JP Morgan's. If JPM goes belly up, each of these partys are also vulnerable and it can cascade all the way down the financial food chain.

The Fed will have to throw in the towel somewhere... meanwhile, US taxpayers (and JPM employees) will suffer the consequences."
http://www.geocities.com/WallStreet/Exchange/9807/Charts/SP500/Outlook.htm


----------



## Aussiejeff

A Fairytale ...

Maybe the big derivatives players could get together (maybe at a Monaco Casino?) and make a "gentleman's agreement", whereby they gather in a circle and tear up each others derivatives IOU's, thereby cancelling out their combined debt and profit positions for no net gain, thereby ensuring the ongoing viability and security of the Worlds Stock Markets?

**POP**

Huh? Oh, wow ..... I had a dream.....


LOL


AJ


----------



## Bushman

brty said:


> Hi,
> 
> 
> When I step into the real world, people are still shopping, they are buying houses, they are buying cars, they are investing, they are putting money into super. Basically the world as we know it is continuing.
> 
> 
> brty




Are you suggesting internet stock forums correspondents show a detachment from reality? Brty you are a bad cat! 

It was 'imminent' and now it has been 'severe'. Those that sold locked in losses, those that held will be rewarded when the long term trends once more take over from the short term panic. Unless, off course, you had held financially engineered fluff in which case you are now sobbing into your beer glass. 

The combination of the media and the internet will mean that this 'correction, and those in the future, will be more 'imminent' and more 'severe', but not necessarily as 'extended', as those in the past.  Ditto the rallies. Sharpen those 'pencils' doomers, gloomers and optimists. Just don't look out the window!


----------



## ithatheekret

With inflation running at 3% for , what the last ten years or so , let's call it ten for the equation .

Take out that C note and realise that $100 is now really only worth $73.89 .

Now repeat the equation for the next ten years .

Right now as we retest lows in sectors , long term investors that have horizons to match would be selecting certain stocks , but for myself when they call a recesssion and not the possibilities and the stocks are low enough to match all the asthetic attractives that should still be in place , as they are somewhat now , then will be a nice time to start accumulating .

We've had fun with the technicals , slapped them about a beauty , fundamentals have been attacked , but it still means selection is a key factor for myself . 

When it get's to the stage I don't have enough money to buy everything I like , well then I will know the market is running smoothly . But I think a few things like regulation will shake out some cowboys , in a sector that is self regulated .......

Inflation has me concentrating on areas that can sustain growth under its effect .


----------



## brty

Hi,

Sassa,

Do you understand derivatives? They are a zero sum game (negative including brokerage). For every buyer there is a seller.

If one institution loses vast sums of money, someone else makes it, it is not destroyed.

If company A loses $50b and company B is on the otherside of the contracts, company B wins.

If company A goes bust and cannot pay company B, company B has only lost the gains, it is not going to go bust.

If you are talking about the mortgage instruments they are not derivatives.

bye

brty


----------



## doctorj

brty said:


> When I step into the real world, people are still shopping, they are buying houses, they are buying cars, they are investing, they are putting money into super. Basically the world as we know it is continuing.



Yes, consumers are still consuming... there's not much else consumers do.
What I'm seeing is companies suffering ever tightening cash flow, declining margins, companies cancelling IPOs, delaying investments and revising their forecasts downward.  

Consumers aren't the story here in my opinion.  It's the deleveraging thats the killer.  

Maybe we're seen a short term low (wave A?) put in, but I suspect we've got a wave c to come once the flow on effects to the service sector and support industries plays out.


----------



## Real1ty

Interesting how brty is conspicuous by his absence when the market is falling but suddenly becomes quite active as the market rises.


----------



## Whiskers

dhukka said:


> No doubt this was a racket




Yes, well... I just got home from a few drinks and dinner with friends and family when I thought  I might check to see if my old sparring mate dhukka had returned serve yet... serve, raquet!  



> ...but the idea that they were just in it to make hay while the sun shone is false. However misguided, the assumption was that the sun would never go down.
> 
> Fitch Ratings admitted publicly that the assumptions underlying their ratings assumed that house prices would never fall. Again, however misguided this racket was, the vast majority were true believers.
> 
> To say that an independent mortgage broking company is not a 'real casualty' is nonsense.




But. you make my point, dhukka. To assume the prices would never fall was irresponsible and reckless... the point I originaly made to qualify my 'normal operating' businesses. That was part of the problem for some. 'Normal' implies reasonable sustainable business practices.



> I bet the employees working at these companies feel like real casualties.




Sure some of the employees are, as are many responsible home owners who suffered a bit extra hardship... but my original point was about business entities that had gone down and out... DEAD and gone. People haven't died... have they? 



> Were internet companies with nothing but an idea, no business model and no revenues not real casualties of the dot com bubble? Were they not cashing in on a racket that was assumed to continue indefinitely?



Ancient history... not going there.



> Your accounting is being affected by your bad eye, it appears that you can only see the debits.




You have a lot to learn, particularly about people and dissabilities. Even totally blind people can think and reason out and function with their 'minds eye' better than many with two physical eyes. I'll let you in on a little secret, dhukka. Naa, you need to discover it for yourself to truly appreciate what you don't know. 



brty said:


> The powers that be will do everything possible to avoid the type of meltdown many posters here think is imminent.
> brty




Thanks for that line at this point in time brty... I said the same thing ages ago and some have PM'd me to the same effect rather than cop the wrath of ....


----------



## Bushman

Doc - are you in an advisory role?

Anyway that is what I am now gainfully employed to do. As you say, everyone is delaying projects as capital is scarce, interest costs are high and the immediate outlook is uncertain. We review property trusts and the thinking is why kick that project off today when you can wait until tomorrow. 

Hey that is the prudent thing to do today and the impact of this will translate through to the real economy at some stage. However I believe what we are seeing is a crisis of confidence rather than a 'real' crisis for want of a better word. All the fundies I am talking to still want to buy property in key demographics to cash in on longer term trends. Its just why do it today when you know others aren't buy, leading to a softening of yields, leading to higher LVRs, leading to grumpy bankers, leading to asset sales, leading to unhappy investors... 

But, and this is my view based on what I have seen , heard, read and thought about, this will be a shorter term 'manufactured' crisis which will give way to the longer term trends that have been fuelling growth - China, India, growth of Australia cities, world population explosion, resources, infrastructure, consolidation and the lenders who allow this to happen (once they come out of their caves that is). I don't want to go into it too much. It has been done to death on this thread on both sides of the coin. But that is the beauty of the current situation - no two will see eye to eye because there is just too much information out there! So therefore it is now a quesiton of making the right choice within your preferred time horizon. Happy hunting!


----------



## Whiskers

sassa said:


> Now that is really bad... but the worst is that the derivative portfolio is still not dead yet... derivatives are not dead until the contracts maturity date. A 2%-3% loss could occur on the short-term securities, but the longer-term securities that have not expired yet, still have potent toxic venom as they near maturity -- meaning that additional losses are still possible.
> 
> If you think you have a good grasp of the situation now, there is still more to contemplate. JP Morgan does not operate in a financial vacuum... there are thousands of counterparties that regularly trade derivative products with JPM. There are many banks and financial centers that trade derivative products similar to JP Morgan's. If JPM goes belly up, each of these partys are also vulnerable and it can cascade all the way down the financial food chain.
> 
> The Fed will have to throw in the towel somewhere... meanwhile, US taxpayers (and JPM employees) will suffer the consequences."
> http://www.geocities.com/WallStreet/Exchange/9807/Charts/SP500/Outlook.htm




Well, brty beat me to the main point here, sassa. But referring to the cash flow problems for those (banks etc) on the loosing side... that issue is already being addressed. 

The second point is about risk management... not just the worst case scenario, but the probabalities of a worst case scenario.

To that question I have previously emphasised the worst case scenario just won't happen as has, brty and thatheekret now points to the main reason why that risk is significantly more reduced into the future.



ithatheekret said:


> But I think a few things like regulation will shake out some cowboys , in a sector that is self regulated .......
> 
> Inflation has me concentrating on areas that can sustain growth under its effect .


----------



## Trembling Hand

brty said:


> Do you understand derivatives? They are a zero sum game (negative including brokerage). For every buyer there is a seller.
> 
> If one institution loses vast sums of money, someone else makes it, it is not destroyed.
> 
> If company A loses $50b and company B is on the otherside of the contracts, company B wins.
> 
> If company A goes bust and cannot pay company B, company B has only lost the gains, it is not going to go bust.




This ain't true if a company defaults the zero sum game becomes one of loses all round. The margin or assets put up by both sides is gone in loses or to creditors. Not sure how you figure the counterparty only loses paper profit.


But in any case a fear of defaults is just as bad. If the :fan then banks take their bat & ball and go home. Markets disappear then companies fall over.


----------



## refined silver

brty said:


> Hi,
> 
> Sassa,
> 
> Do you understand derivatives? They are a zero sum game (negative including brokerage). For every buyer there is a seller.
> 
> If one institution loses vast sums of money, someone else makes it, it is not destroyed.
> 
> If company A loses $50b and company B is on the otherside of the contracts, company B wins.
> 
> If company A goes bust and cannot pay company B, company B has only lost the gains, it is not going to go bust.
> 
> If you are talking about the mortgage instruments they are not derivatives.
> 
> bye
> 
> brty




You are talking about normal exchange traded derivatives such as options and futures.

All the mortgage CDOs SIVs etc etc ARE derivatives but they are over the counter derivatives or OTC derivatives, (the media has been careful to avoid using these words, as have industry spokesmen, instead preferring to use continually changing euphemisms such as "exotic financial instruments" etc. 

These OTC derivatives (of different sorts) are all essentially private contracts between 2 parties. They are unregulated, not backed by a  clearing house, without a market, and therefore unable to be valued accurately, they are unfunded, and depend on the balance sheet of the loser for performance of the contract. There are over $500 trillion of them.

If Company A cannot pay, company B on the other side cannot pay its bills which were the other side of the hedge taken with company A, thus the whole domino chain can fall apart if company A fails, as it is counterparty on so many other deals.

Wealth can most certainly be destroyed.


----------



## dhukka

Whiskers said:


> Yes, well... I just got home from a few drinks and dinner with friends and family when I thought  I might check to see if my old sparring mate dhukka had returned serve yet... serve, raquet!
> 
> 
> 
> But. you make my point, dhukka. To assume the prices would never fall was irresponsible and reckless... the point I originaly made to qualify my 'normal operating' businesses. That was part of the problem for some. 'Normal' implies reasonable sustainable business practices.




As I said, regardless of whether it was reasonable or sustainable, the assumption by those conducting the business was that it was sustainable. According to Nasim Taleb, author of the black swan, most businesses that were around 75 years ago are not today. I bet the vast majority that disappeared thought they had sustainable business models. Take a snap shot of the publicly listed companies on the stockmarket today, most of them won't be there 75 years from now but I bet most of them think they will be. 

You original contention that there have only been a few casualties is patently false and the evidence is obvious for anyone who wants to open their eyes. You have simply tried to redefine the argument  on your own terms to fit some narrow definition that bolsters your case. 



> Sure some of the employees are, as are many responsible home owners who suffered a bit extra hardship... but my original point was about business entities that had gone down and out... DEAD and gone. People haven't died... have they?




What a ridiculous line of reasoning, you really are struggling to come up with a sensible argument here. 



> Ancient history... not going there.




Pathetic, you won't go there because you know it makes perfect sense and you can't come up with a counter argument. 



> You have a lot to learn, particularly about people and dissabilities. Even totally blind people can think and reason out and function with their 'minds eye' better than many with two physical eyes. I'll let you in on a little secret, dhukka. Naa, you need to discover it for yourself to truly appreciate what you don't know.




Not from you I don't, I've got a big enough collection of bumper stickers already thanks.


----------



## dhukka

brty said:


> Hi,
> 
> I love this thread, all the doom and gloom.
> 
> We have had a 'imminent and severe market correction' of 20%+ in many large stocks as well as the indices.
> 
> We are getting more and more bad news, yet the market may have already factored this in. The news coming out is not sinking the market anymore (not to the effect it was)
> 
> When I step into the real world, people are still shopping, they are buying houses, they are buying cars, they are investing, they are putting money into super. Basically the world as we know it is continuing.
> 
> The powers that be will do everything possible to avoid the type of meltdown many posters here think is imminent.
> The probabilities lie in the market going higher in both the median and long term.
> 
> Go ahead and knock yourselves out being short the world, after all, someone has to take the otherside of the bet.
> 
> bye
> 
> brty




brty, 

Ever thought of changing your username to 'Mr Points out the obvious?'


----------



## refined silver

brty said:


> Hi,
> The powers that be will do everything possible to avoid the type of meltdown many posters here think is imminent.
> The probabilities lie in the market going higher in both the median and long term.
> 
> Go ahead and knock yourselves out being short the world, after all, someone has to take the otherside of the bet.
> 
> bye
> 
> brty




They will do everything possible you are right. But unless you understand what that means it doesn't help, because every action will have side effects sometimes with the cure worse than the sickness.

There is a $500t derivative problem. If one big domino falls and its OTC derivatives hit the market, it will mean price discovery, which will then both 1) decimate the value of other similar derivs on other balance sheets, 2) decimate all its counterparties. In yesterday's testimony to Congress Bernanke essentially said this, as said if the Fed hadn't bailed out people so far, the counterparty risk would bring the whole system down. 

This means the Fed monetising bankrupcy. This means MASSIVE money supply increase. It means better study the Weimar Republic to learn how to prepare. 

The US has the Great Depression burned on its memory and wants to avoid this at all costs. In Germany in the Weimar Republic and two more currency failures. Without realising it, the US is choosing the Weimar model. There will be a new world order at the end of this.


----------



## brty

Hi,

Real1ty, 

What a short memory you have. My first post was at the low for the financials, but don't let the facts get in the way of a good story.

Dhukka, 

With some of the drivel that passes for knowledge on this thread, the bleedingly obvious needs to be stated.

For those who still don't want to get it, you only have to go and read the book Market Wizards for your answers. The parts I'm referring to are when JS asked the wizards their thoughts about the future for the economy,markets etc. Virtually all of them could see immediate huge problems with debt,deficits,America losing its leadership in the world etc, basically financial armageddon. 

That was written 20 years ago, and after the recession of '89-91 their world continued. These were multimillionaires with vast information resources, but their view of the future was totally wrong. 
Anyone here think they have better resources and are more accurate than those wizards in predicting the future???

I will hazard a guess that in 20 years time we will still be debating the COMING financial meltdown, because of the huge debt problems etc. 
In the meantime there will be severe corrections, huge rises, recessions and booms, just like there always have been.

With the derivatives, if they are unwound slowly, there is not the huge losses to all. By the fed guaranteeing against bankruptcies, these can be unwound.

Yes there will be big losers, but there will also be big winners.

Despite what many have written in this thread, it is still a zero sum game, the money is not created nor destroyed by them. 

bye

brty


----------



## sassa

Whiskers said:


> Well, brty beat me to the main point here, sassa. But referring to the cash flow problems for those (banks etc) on the loosing side... that issue is already being addressed.
> 
> The second point is about risk management... not just the worst case scenario, but the probabalities of a worst case scenario.
> 
> To that question I have previously emphasised the worst case scenario just won't happen as has, brty and thatheekret now points to the main reason why that risk is significantly more reduced into the future.




" The market is totally unregulated and those who hold the contracts do not know whether their counterparties have adequately protected themselves. If and when defaults occur, some of the counterparties are likely to prove unable to fulfil their obligations. This prospect hangs over the financial markets like a sword of Damocles that is bound to fall, but only after some defaults have occurred.
The biggest problem which all dealers have known about since Day 1 is that there is no way to hedge a CDS."
http://www.nakedcapitalism.com/2008/04/soros-lambasts-paulson-call-for.html


----------



## Trembling Hand

brty said:


> With the derivatives, if they are unwound slowly, there is not the huge losses to all. By the fed guaranteeing against bankruptcies, these can be unwound.
> 
> Yes there will be big losers, but there will also be big winners.
> 
> Despite what many have written in this thread, it is still a zero sum game, the money is not created nor destroyed by them.




WRONG a default in a derivative both sides lose.


----------



## Real1ty

brty said:


> Hi,
> 
> Real1ty,
> 
> What a short memory you have. My first post was at the low for the financials, but don't let the facts get in the way of a good story.




My memory is quite good actually.

While that was your first post, every post since then in this thread, including the one predicting a large correction, has been on days when the market is rising.



brty said:


> Hi all,
> 
> Bit of a no brainer, a rally has started. S&P up over 30 in overnight market, fed and other CB's offering great liquidity. The perma bears are about to get a fright.
> 
> Who would have thought it possible??
> 
> And no Real1ty, I'm not kidding myself at all.
> 
> bye
> 
> brty






brty said:


> *At some point*, *probably soon*, there will be a *large correction* to this move down. It has been one way traffic since November. Whether or not it is the ultimate market bottom is a moot point.
> 
> We should be very close to a tradeable rally, especially given the D+G in some of these threads.
> 
> bye
> 
> brty




Most agreed with you that there would be a bounce, including myself, but you only come back on here, as i stated, when the market is up.

Still waiting for the *large correction*....*at some point*, *probably soon*


----------



## brty

Real1ty,



> every post since then in this thread, including the one predicting a large correction, has been on days when the market is rising.




Umm, your kidding. I wonder if it is because the market has been up most days since then. :

TH, If you are correct, could you please explain where the money has gone?? 
You know that it is zero sum game, the money goes somewhere, both sides cannot be losers unless the money goes somewhere else.

Granted that some may have spent theoretical profits they don't have, but that does not change the fact that the money is not destroyed.

bye

brty


----------



## sassa

brty said:


> Hi,
> 
> Sassa,
> 
> Do you understand derivatives? They are a zero sum game (negative including brokerage). For every buyer there is a seller.
> 
> brty



brty,
My apologies.I missed your reply.I would like to think that I have a basic understanding of the various derivatives.Most replies to your posts seem to back up my assumption.
I must disagree that derivatives are a zero sum game.What if the counterparty files for bankruptcy leaving the holder with defaulted bonds?
Bonds in such bankruptcies are subject to what is known in legal circles as "cramdown,"whereby bondholders lose any voice in the outcome because there will not be enough residual value.The chances of total loss are very high.


----------



## wayneL

refined silver said:


> They will do everything possible you are right. But unless you understand what that means it doesn't help, because every action will have side effects sometimes with the cure worse than the sickness.
> 
> There is a $500t derivative problem. If one big domino falls and its OTC derivatives hit the market, it will mean price discovery, which will then both 1) decimate the value of other similar derivs on other balance sheets, 2) decimate all its counterparties. In yesterday's testimony to Congress Bernanke essentially said this, as said if the Fed hadn't bailed out people so far, the counterparty risk would bring the whole system down.
> 
> This means the Fed monetising bankrupcy. This means MASSIVE money supply increase. It means better study the Weimar Republic to learn how to prepare.
> 
> The US has the Great Depression burned on its memory and wants to avoid this at all costs. In Germany in the Weimar Republic and two more currency failures. Without realising it, the US is choosing the Weimar model. There will be a new world order at the end of this.




'zactly right.

The "powers" are not immune to The Law of Unintended Consequences. These clowns are just clowns like the rest of us after all. Too much intelligence is assigned to clowns in high positions in my opinion.

After all, there are a lot of us plebs, sitting at home in our pyjamas, with a 3 day growth and scratching our balls in front of a screen, foresaw this whole mess. 

Not that we are that smart, but we do have different imperatives that let us see things differently.


----------



## GreatPig

wayneL said:


> we do have different imperatives that let us see things differently



Right, we're worried about _our own_ money, not someone else's. 

GP


----------



## sassa

Bayern LB(Germany's second largest bank) has just announced writedowns of $6.7b.This should be worth a 1-2% rise in European markets tonight as the bank has come clean.Shares to rise 6-8%?Not joking,if the market follows the script.


----------



## BBand

Hey Wayne,
You have a way with words - you just have to laugh 

You can put everything into perspective in just a few well chosen lines

Keep up the good work


----------



## wayneL

sassa said:


> Bayern LB(Germany's second largest bank) has just announced writedowns of $6.7b.This should be worth a 1-2% rise in European markets tonight as the bank has come clean.Shares to rise 6-8%?Not joking,if the market follows the script.



All we need now is a couple of high profile bankruptcies, say Citibank or similar, and it's new all time highs baby!

LOL

(NB, Why does "Nineteen Eighty Four" keep coming to mind?)


----------



## prawn_86

wayneL said:


> (NB, Why does "Nineteen Eighty Four" keep coming to mind?)




Man, i have thought that so many times myself in the last 6 months or so.

Such a classic book, but scary at the same time... :bad:


----------



## Trembling Hand

brty said:


> TH, If you are correct, could you please explain where the money has gone??
> You know that it is zero sum game, the money goes somewhere, both sides cannot be losers unless the money goes somewhere else.
> 
> Granted that some may have spent theoretical profits they don't have, but that does not change the fact that the money is not destroyed.




OK. As I said,


> This ain't true if a company defaults the zero sum game becomes one of loses all round. The margin or assets put up by both sides is gone in loses or to creditors. Not sure how you figure the counterparty only loses paper profit.




Company A is a Bank.
Company B are Widget makers.

Company A is Bullish Widgets.
Company B is needing cash to cover the loss making Widgets factory.
Company A buys a 100 widgets contract (Derivative) from Company B at $100

Company A expects to sell Widget contract later for $110.
Company B needs to supply 100 Widgets or buy back the contract.

Company B gets $100 cash.
Company A gets a contract that is valued @ $100.

Company B directors are idiots and piss that $100 by paying old dept and then declare bankrupt.
Company A doesn't get the widgets and cant sell the contract back to company B.

Where did the money go? to the suppliers of widget company B for products already delivered.

What can the bank do?? Nothing write off the money. 

Not a two party zero sum game the money had already been spent. To get your Zero sum game you must add the third party.


----------



## brty

Hi,

Thanks for the explanation TH, but I hope you can see my point that the money is not destroyed in your example, it has just been spent elsewhere. It is also a contract, not a derivative.

At some estimations the world GDP is around $55 trillion give or take a few 't'. If the derivative exposure is the $500 trillion claimed by some, where is the money? 
Simple answer is it does not exist in the first place, therefore it is very hard to 'lose'.

Let's look at a simple futures contract $A/$US. With my margin I buy $100,000 at 91cents. Someone (say a bank) takes up the other side with their margin.

This is a new $100,000 derivative. $100,000 has not been created. If the other side goes bust, what they lose is not $100,000 but the difference in value between their sell price and their buy price. If they or their liquidator has to buy back at 92 cents, they only lose $1,000.

I only gain $1000. The clearing house gives me my margin back and my $1000 out of the other sides margin. I have not lost anything.

Looking at bigger derivatives contracts outside of the markets, say between 2 banks, for $100 billion (say a currency swap), there is no difference, except that there is no clearing house, therefore when one bank goes bust, there is no profit for the other side to collect, but they don't lose.

There is a definate lack of understanding both in this forum and by journalists as to what derivatives are. They seem to be bundled together with/as bad debts, when they are totally separate.

bye

brty


----------



## Whiskers

dhukka said:


> As I said, regardless of whether it was reasonable or sustainable, the assumption by those conducting the business was that it was sustainable.




But dhukka, you are not getting the point. I've already said the assumption of the business owners was already flawed. The point is not what they thought, but rather an objective assessement (by a third party - conventional wisdom or text book management if you like) of the way they managed their business. 

Whether or not the business lasts for 75 years is accedamic for a host of reasons including takeovers, mergers and progress... eg 75 years ago blacksmiths were common, but you will struggle to find one today. Conversely, computer programers and IT companies are everywhere today... 75 years ago they were unheard of.

I've already said the whole objective of most of the 'subsidiary' companies was to bundle up the financial products and pass them on quickly for a quick buck, but the music stopped and some were caught still holding before they were dispersed enough to minimise/spread the risk. They knew the true value and risks and that they could not hold them long term as a sustainable business model.



> Not from you I don't, I've got a big enough collection of bumper stickers already thanks.




Yes well, you are hostile to me. Not an enviornment conducive to learning. That is why I highlighted that you will have to discover for yourself... because you have an emotional block to what I say.



sassa said:


> " The market is totally unregulated and those who hold the contracts do not know whether their counterparties have adequately protected themselves. If and when defaults occur, some of the counterparties are likely to prove unable to fulfil their obligations. This prospect hangs over the financial markets like a sword of Damocles that is bound to fall, but only after some defaults have occurred.
> The biggest problem which all dealers have known about since Day 1 is that there is no way to hedge a CDS."
> http://www.nakedcapitalism.com/2008/04/soros-lambasts-paulson-call-for.html




I see your concern sassa. But I do believe that the articles author's assumption that a fall in house prices is virtually a bottomless pit is excessive and a bit far outside the range of probabilities for my estimation. 

Plumeting house values are not nation wide. I believe California and Florida are the worst affected. Parts of the NE are not near as bad and some, I think Manhatten was one that has been reported rising.

For me the steps taken to stabalise the markets will pay dividends in returning stocks and commodities to growth and provide some degree of cash flow and asset protection against CDS's. In the main the concern for CDS defaults are contingent on house prices continuing to fall and high/increasing rates of mortgage defaults. There is no doubt a risk, but as I said for me the probabilities of catastrophic CDS failures is becoming less likely. 

A point re apparent higher savings to meet mortgage commitments I made in the gold thread recently...



Whiskers said:


> In summary there has been a lot of focus on what is wrong with the US economy and the fear of what if this and that collapsed, but little focus on the main macro international influences that also play a part in driving or turning the USD and consequently the flight for safety in gold.
> 
> PS. Probably a lot has to do with what people see in the numbers. As an example, recently US personal income rose a healthy bit but consumer spending didn't rise in proportion. The headlines were doom amd gloom that consumers weren't spending and the economy will get worse because they aren't spending. For me it was a good sign that people were starting to save a bit more which would give them the ability to service their existing debts better and lessen the amount of foreclosures, bankruptcies etc... which would have far stronger positive impact on the direction of the economy/markets than a bit less consumer spending would have a negative effect. https://www.aussiestockforums.com/forums/showthread.php?p=279044#post279044


----------



## Kauri

sassa said:


> Bayern LB(Germany's second largest bank) has just announced writedowns of $6.7b.This should be worth a 1-2% rise in European markets tonight as the bank has come clean.Shares to rise 6-8%?Not joking,if the market follows the script.




 and are bapparently casting about for a  white knight to help them out..


----------



## dhukka

Whiskers said:


> But dhukka, you are not getting the point. I've already said the assumption of the business owners was already flawed. The point is not what they thought, but rather an objective assessement (by a third party - conventional wisdom or text book management if you like) of the way they managed their business.




On the contrary, I understand your point completely, its just that you don't have a valid one. There has been no objective assessment, just your opinion that mortgage brokers going out of business doesn't constitute real casualties of the credit crunch in which they followed the conventional wisdom that house prices would continue to rise indefintely.   



> Whether or not the business lasts for 75 years is accedamic for a host of reasons including takeovers, mergers and progress... eg 75 years ago blacksmiths were common, but you will struggle to find one today. Conversely, computer programers and IT companies are everywhere today... 75 years ago they were unheard of.
> 
> I've already said the whole objective of most of the 'subsidiary' companies was to bundle up the financial products and pass them on quickly for a quick buck, but the music stopped and some were caught still holding before they were dispersed enough to minimise/spread the risk. *They knew the true value and risks and that they could not hold them long term as a sustainable business model.*




It's precisely because noone knows the true value that we continue to go through this protracted process of price discovery. 



> Yes well, you are hostile to me. Not an enviornment conducive to learning. That is why I highlighted that you will have to discover for yourself... because you have an emotional block to what I say.




That's hilaroius, I'll have to show that to my boss who hired me a couple of years ago as a learning advisor. More likely that you have an emotional block to reality.


----------



## Whiskers

dhukka said:


> On the contrary, I understand your point completely, its just that you don't have a valid one. There has been no objective assessment, just your opinion that mortgage brokers going out of business doesn't constitute real casualties of the credit crunch in which *they followed the conventional wisdom that house prices would continue to rise indefintely*.




Not conventional wisdom, I'm afraid. Certainly not held by everyone. That they followed, rests my case.



> It's precisely because noone knows the true value that we continue to go through this protracted process of price discovery.




But the original mortgage brokers and companies initiating the financial products and the pass the parcel racket certainly knew at the time the mortgages were valued at 100% and then some of valuation and at that point in time were of dubiuous value.



> That's hilaroius, I'll have to show that to my boss who hired me a couple of years ago as a learning advisor. More likely that you have an emotional block to reality.




As I said dhukka, my sparring partner mate , you have an emotional block with me. I didn't say or imply anyone else or everyone... your emotionalism misconstrued/misinterpreted what I said. 

D & G re jobless claims rising a bit last week, but shouldn't have been too surprising for a little longer yet.

ISM Non-Mfg Survey came in at 52.2, much higher than expected.


----------



## dhukka

Whiskers said:


> Not conventional wisdom, I'm afraid. Certainly not held by everyone. That they followed, rests my case.




You never had a case to rest. 



> But the original mortgage brokers and companies initiating the financial products and the pass the parcel racket certainly knew at the time the mortgages were valued at 100% and then some of valuation and at that point in time were of dubiuous value.




I've read this garbled paragraph 4 times and still cannot make out anything coherent. You shouldn't drink and type. 




> As I said dhukka, my sparring partner mate , you have an emotional block with me. I didn't say or imply anyone else or everyone... your emotionalism misconstrued/misinterpreted what I said.




There you go thinking that you're special again, you get no special treatment from me.  



> D & G re jobless claims rising a bit last week, but shouldn't have been too surprising for a little longer yet.
> 
> ISM Non-Mfg Survey came in at 52.2, much higher than expected.




Rising jobless claims shouldn't be a surprise but they will be to the plethora of myopic Wall Street economists who can't look past last week's data. 

Non manufacturing ISM came in at 49.6. slightly higher than expected.  Time to put down the bottle Whiskers.


----------



## refined silver

Remember the stock market went up in the Weimar Republic, and the fastest rising stock market in the world currently is Zimbabwe.


----------



## Whiskers

dhukka said:


> I've read this garbled paragraph 4 times and still cannot make out anything coherent. You shouldn't drink and type.




Keep at it mate... you'll get it soon.

How on earth did you get the idea I was drinking! I rarely drink for your information. 



> There you go thinking that you're special again, you get no special treatment from me.




Of course I'm special. There's a book by Bert Weir, _You were born specialbeautiful and wonderful - What Happened?._ See if you can get hold of a copy for a read.



> Rising jobless claims shouldn't be a surprise but they will be to the plethora of myopic Wall Street economists who can't look past last week's data.
> 
> Non manufacturing ISM came in at 49.6. slightly higher than expected.  Time to put down the bottle Whiskers.




Not drinking dhukka, but now that you mention it I might pop a cork on some champayne on the weekend. :

Yeah dhukka, sure the services sector didn't out perform, but on balance it was more good news. The business activity component rose 1.4 points to 52.2, the second consecutive month of growth and the new orders index increased modestly. A gain is a gain is better than a kick in the pants any day. 

There is still a bit of a concern with rising costs. Inventories, employment and deliveries are generally running down. Thats predictable and prudent and will probably turn around sharply when the economy turns out to be in less imminent trouble than wide believed, to build up inventories again.


----------



## Whiskers

refined silver said:


> Remember the stock market went up in the Weimar Republic, and the fastest rising stock market in the world currently is Zimbabwe.




Thanks for that little piece of trivia RS. 

I wonder what the currency conversion is now?

Ironically if Mugabbe is rolled then it most likely will fall... even though the country will be in (hopefully) better hands.


----------



## Whiskers

Digressing for a moment, to an area I have previously ticked as an imminent problem for the US economy is a survey currently on CNNMoney asking... Are you in favor of universal health care? 

55% say yes.

If politicans are forced to take it up, there goes another big hole in the budget.


----------



## Trembling Hand

brty said:


> I only gain $1000. The clearing house gives me my margin back and my $1000 out of the other sides margin. I have not lost anything.




Brty you are assuming the small margin that retail traders put up to their broker and/or clearing house is the end story. But that is where you have it wrong. In futures trading clearing happens at the end of the day for trading from brokers and in the case of the ASX T3.

What happens if MF global goes bust tonight. 50% of the funds/margin for today's SPI contracts will be locked up by administrators. The SFE will have to but up the $$ diff to counter parties or the system collapses. There is your zero sum game gone wrong.

That's why a bank going belly up stuffs up the zero sum game. Why GSachs couldn't of been let go bust. 

For another example see what happened when Tricom couldn't settle asx trading. Counter-parties would of lost assets or $ unless they could of fixed it.

Your confusing retail margins swapping for a banking system. 

Even if the system doesn't collapse the problem with defaults is working capital, mostly from the banks, that the economy needs to pay for tomorrows work gets spent on previous economic activity. Without a return to and a loss to the bank. Sure it doesn't disappear but its in the wrong hands.


----------



## ithatheekret

Whiskers said:


> Thanks for that little piece of trivia RS.
> 
> I wonder what the currency conversion is now?
> 
> Ironically if Mugabbe is rolled then it most likely will fall... even though the country will be in (hopefully) better hands.




It would add a twist to it all , better add vodka too though .

I noted Archbishop Desmond Tutu and his rolling comments on Muganybody , stating he should be remembered for the good he did .

I didn't know he'd jumped under a bus . 

I think the Archbishops on some good whoopy weed , if not something more colourful .


----------



## dhukka

Whiskers said:


> Keep at it mate... you'll get it soon.
> 
> How on earth did you get the idea I was drinking! I rarely drink for your information.




The only explanation for the previous paragraph is that you were drinking, that you are a non-native English speaker, that you are just not that bright or a combination of the above 3 factors. I know which one I think it is.



> Of course I'm special. There's a book by Bert Weir, _You were born specialbeautiful and wonderful - What Happened?._ See if you can get hold of a copy for a read.




This could be the source of your delusion. You aren't special, never were and never will be. That's nothing to do with you, we're all in the same boat. 



> Yeah dhukka, sure the services sector didn't out perform, but on balance it was more good news. The business activity component rose 1.4 points to 52.2, the second consecutive month of growth and the new orders index increased modestly. A gain is a gain is better than a kick in the pants any day.




You are ridiculous, you state in a previous post that the Non Mfg ISM was 52.2. It was not, it was *49.6*, that is the headline number. The components were:

Business Activity Index at 52.2%
New Orders Index at 50.2%
Employment Index at 46.9%

Misrepresenting data just erodes your credibility even further. 



> There is still a bit of a concern with rising costs. Inventories, employment and deliveries are generally running down. Thats predictable and prudent and will probably turn around sharply when the economy turns out to be in less imminent trouble than wide believed, to build up inventories again.




Again just wish washy supposition supported by nothing but a false sense of optimism.


----------



## Bushman

ithatheekret said:


> It would add a twist to it all , better add vodka too though .
> 
> I noted Archbishop Desmond Tutu and his rolling comments on Muganybody , stating he should be remembered for the good he did .
> 
> I didn't know he'd jumped under a bus .
> 
> I think the Archbishops on some good whoopy weed , if not something more colourful .




Mugabe, as a younger man, was the heroic guerilla leader who freed Zimmers from the yoke of Ian Smith's puppet colonial government, thus 'eliminating' the evil legacy of Cecil John Rhodes (founder of 'Rhodesia', what a meglamaniac) amongst others. 

He was a god to the ordinary folk but he promised the world to those who waged the guerilla war, a brutal affair by all accounts, and hence the land redistribution that has crippled the Zim economy, leading to the printing presses running hot. 

So it is fair to say that Tutu and Mugabe were brethren back in the heady activist days of the 70s. No boozing and coke sniffing like Dubya for these fighters. 

Back to Zim, if they ever manage to rid themselves of Robert and their land assets of his corrupt croneys, they should be thriving as they truely were the bread basket of Africa back in the day. It is a sad country to visit these days. I remeber as a kid that Harare was thriving and that was in the mid to late 80s.  

I wonder how long before South Africa slips into the abyss. Another country where attaining the 'fruits of the revolution' have been delayed? Ironically the poverty has been excacerbated by a flood of Zimbabwean refugees. Would be good for good old Aussie gold and agricultural stock if the Rainbow Nation finds a pot of lead at the end of its promise laden and well trodden path. 

Will that lead to an 'imminent and severe' correction? Probably not so maybe this should be on the 'Old Fighters Gone Daft' or 'Tin Pot Dictators in the Making' thread.  Zuma, the Zulu warrior, certainly has dictator written all over him.


----------



## Whiskers

dhukka said:


> You are ridiculous, you state in a previous post that the Non Mfg ISM was 52.2. It was not, it was *49.6*, that is the headline number. The components were:
> 
> Business Activity Index at 52.2%
> New Orders Index at 50.2%
> Employment Index at 46.9%
> 
> Misrepresenting data just erodes your credibility even further.




Er hum. This is what I said.



Whiskers said:


> D & G re jobless claims rising a bit last week, but shouldn't have been too surprising for a little longer yet.
> 
> ISM Non-Mfg Survey came in at 52.2, much higher than expected.




This is what my sources said.



> *Bloomberg* http://www.bloomberg.com/markets/ecalendar/index.html
> 
> ISM Non-Mfg Survey
> 
> Consensus - 49
> 
> Actual - 52.2






> *Econoday* http://fidweek.econoday.com/reports...facturing_napm/year/2008/yearly/04/index.html
> 
> ISM Non-Mfg Survey
> 
> Consensus - 49
> 
> Actual - 52.2
> 
> The business activity index from the ISM non-manufacturing survey surprisingly showed some moderate improvement in February, reaching back up into positive territory at 50.8 from January's 41.9.
> 
> New orders posted a similar gain but just falling short of breakeven at 49.5,


----------



## brty

Hi,

TH, Good choice of broker, just happens to be mine.

MF would have put up the margin for yesterdays new positions, and the day befores etc. 


The new positions today (or changes to margin requirements) that a sudden bankruptcy would not cover, is not a huge percentage of the total. The clearing house can and would cover it, or as you say the system would collapse.

How safe is the clearing house? With the following from the asx site, I would say pretty safe.



> SFE Clearing, ASIC and the Reserve Bank of Australia (RBA) are co-regulators of the clearing and settlement facility operated by SFE Clearing.




Also remember that if I opened a new position today through MF, that the funds for margin come from the cash management trust account, not from MF funds, hence they should not be frozen by the sudden appointment of an administrator to MF (but I think I will go check that).
Of course if MF are trading their own account and have another rogue trader, then it will be messy, but not the end of the world.

bye

brty


----------



## dhukka

Whiskers said:


> Er hum. This is what I said.
> 
> 
> 
> 
> *Originally Posted by Whiskers*
> D & G re jobless claims rising a bit last week, but shouldn't have been too surprising for a little longer yet.
> 
> ISM Non-Mfg Survey came in at 52.2, much higher than expected.
> 
> 
> 
> 
> This is what my sources said.
Click to expand...



Yes I know what you said and it was wrong. It might pay to look beyond the media headlines and go straight to the source -  The Institute of Supply Management.


----------



## explod

Family just back from the States.   Houses for sale signs everywhere and people losing their jobs en masse.

The doom we are picking up is the reality.  And it must have its effects here as we go down the track a bit.


----------



## IFocus

brty said:


> Hi,
> 
> Thanks for the explanation TH, but I hope you can see my point that the money is not destroyed in your example, it has just been spent elsewhere. It is also a contract, not a derivative.




This confuses me as I cannot think of any derivatives traded through any exchange that are not contracts....

Also cannot see your point re money, if you are talking perceived value that would make sense at least to me



brty said:


> At some estimations the world GDP is around $55 trillion give or take a few 't'. If the derivative exposure is the $500 trillion claimed by some, where is the money?
> Simple answer is it does not exist in the first place, therefore it is very hard to 'lose'.




Again surely this is perceived valuation not hard currency? Until the position is closed its an open contract so you are talking about valuation there is no "money" it hasn't gone any where, if the position is closed then you are talking about money and its when money flows.



brty said:


> Let's look at a simple futures contract $A/$US. With my margin I buy $100,000 at 91cents. Someone (say a bank) takes up the other side with their margin.
> 
> This is a new $100,000 derivative. $100,000 has not been created. If the other side goes bust, what they lose is not $100,000 but the difference in value between their sell price and their buy price. If they or their liquidator has to buy back at 92 cents, they only lose $1,000.
> 
> I only gain $1000. The clearing house gives me my margin back and my $1000 out of the other sides margin. I have not lost anything.




I remember an interview with Linda Linda Bradford Raschke where she was down $100K as she traded the 87 crash but was confident she was on the right side of the market which she was and made profits in the end.

At the time she was married to a market maker who later explained to Linda the enormous risk she took as as it was likely she could have done the lot due to counter party risk......I do not know the details but believe its not all so secure as you believe. 

You also give an example on what appears to be a low volatility event




brty said:


> Looking at bigger derivatives contracts outside of the markets, say between 2 banks, for $100 billion (say a currency swap), there is no difference, except that there is no clearing house, therefore when one bank goes bust, there is no profit for the other side to collect, but they don't lose.
> 
> There is a definate lack of understanding both in this forum and by journalists as to what derivatives are. They seem to be bundled together with/as bad debts, when they are totally separate.
> 
> bye
> 
> brty




Now I am really confused as I haven't seen this

I use MF to if they fall over then there would be chaos world wide......


----------



## Whiskers

dhukka said:


> Yes I know what you said and it was wrong. It might pay to look beyond the media headlines and go straight to the source -  The Institute of Supply Management.




Yes dhukka I'm aware of the ISM site. I don't want to get into a nit-picking arguement. What you say is right to a point (technically), but the most important aspect of the survey which is most widely followed is as I posted and as explained by the reference in both bloomberg and (below) from Econoday.



> The ISM non-manufacturing survey does not compile a composite index like its manufacturing cousin. *The business activity index, which is actually akin to the production index in the manufacturing survey, is widely followed as the key figure from this survey*.




Misnomer maybe, but that's just how it is. The business activity index 52.2 has become the main number from the survey that the market is looking for and the ISM Non-Mfg Survey is known for.


----------



## Uncle Festivus

Whiskers said:


> I see your concern sassa. But I do believe that the articles author's assumption that a fall in house prices is virtually a bottomless pit is excessive and a bit far outside the range of probabilities for my estimation.
> 
> Plumeting house values are not nation wide. I believe California and Florida are the worst affected. Parts of the NE are not near as bad and some, I think Manhatten was one that has been reported rising.
> 
> For me the steps taken to stabalise the markets will pay dividends in returning stocks and commodities to growth and provide some degree of cash flow and asset protection against CDS's. In the main the concern for CDS defaults are contingent on house prices continuing to fall and high/increasing rates of mortgage defaults. There is no doubt a risk, but as I said for me the probabilities of catastrophic CDS failures is becoming less likely.
> 
> A point re apparent higher savings to meet mortgage commitments I made in the gold thread recently...
> 
> PS. Probably a lot has to do with what people see in the numbers. As an example, recently US personal income rose a healthy bit but consumer spending didn't rise in proportion. The headlines were doom amd gloom that consumers weren't spending and the economy will get worse because they aren't spending. For me it was a good sign that people were starting to save a bit more which would give them the ability to service their existing debts better and lessen the amount of foreclosures, bankruptcies etc... which would have far stronger positive impact on the direction of the economy/markets than a bit less consumer spending would have a negative effect.




Whiskers, it's good to have the positive logic bias but the data coming out doesn't support the above (assumptions?). Without going over all the facts again, it's getting pretty obvious to all but the Wall St hacks that the US is in reccession.

We just got the 3rd month of job declines, so a quarterly trend is developing there. Manufacturing jobs declined by 48,000, the biggest drop since July 2003. Construction jobs fell by 51,000. These are the backbone sectors, with flow on effects for the entire economy.

Personal incomes? Up 0.5% and working longer for it. Price inflation eg food and fuel, easily exceeds wage growth, so effectively going backwards at a rate of knots, hence consumer spending subdued to put it mildly.

Be careful how you interpret housing data. "Brown Harris Stevens report: Sales volume in Manhattan… dipped 1% in Q1’08 from Q1’07. But showed a jump in median price due to a fourfold increase in the number of sales over $10M". Even the financial firms on Wall St are feeling the pinch.

Those who used their homes as ATMs, withdrawing cash via home equity loans, are now maxing out their credit cards just to make ends meet. Food stamp ques are growing.

I think the main reason why stock prices are going up is because the Fed is paying for it - both indirectly and via the extended repo's etc. The extra liquidity doesn't look like it is making it to the real world (as in lower mortgages), just getting churned back in on itself with equity money shuffling _again_.

And the fact that investors have developed negative news numbness - any negative news is greeted as a clearing of the decks and or ignored even. This is the denial phase? The UK is starting to look even worse, if that's possible.

The bear is still in control, as per the monthly SP500 chart. Benny Bullwinkle will have to pull more than rabbits out of his hat to get out of this one .


----------



## Uncle Festivus

And an _undeniable_ trend emerging for Employment. Similar to that other 'R' period.


----------



## dhukka

Uncle Festivus said:


> And an _undeniable_ trend emerging for Employment. Similar to that other 'R' period.




Certainly is and has been obvious for a while now. It will interesting to see the spin from the CNBC permabulls to these numbers.


----------



## dhukka

Fitch Ratings has decided to end its part in the ruse of the AAA ratings attached to the Monoline Insurers or at least one of them.



> *MBIA Loses AAA Insurer Rating From Fitch Over Capital *
> 
> April 4 (Bloomberg) -- Fitch Ratings cut MBIA Inc.'s insurance unit to AA from AAA, saying the bond insurer no longer has enough capital to warrant the top ranking.
> 
> MBIA, the world's largest financial guarantor, would need as much as $3.8 billion more in capital to deserve an AAA, New York-based Fitch said today in a report. The outlook is negative, Fitch said.
> 
> Fitch issued the new, lower rating even though Armonk, New York-based MBIA asked the ratings company last month to stop assessing its credit worthiness. The two companies disagree over how much capital MBIA needs to absorb losses on the bonds it insures. Moody's Investors Service and Standard & Poor's both affirmed their AAA ratings earlier this year.
> 
> ``It will be difficult for MBIA to stabilize its credit trend until the company can more effectively limit the downside risk'' from collateralized debt obligations, Fitch said.
> 
> The long-term rating of MBIA Inc. was cut to A from AA, Fitch said.
> 
> ``We respectfully disagree with Fitch's conclusions,'' MBIA Chief Financial Officer Chuck Chaplin said today in a statement. ``MBIA has a balance sheet that is among the strongest in the industry with over $17 billion in claims-paying resources, and has a high quality insured portfolio.''
> 
> MBIA shares closed down 68 cents, or 4.8 percent, to $13.61 in New York Stock Exchange Composite trading. The stock has declined 27 percent this year.
> 
> Capital Raising
> 
> MBIA raised $2.6 billion in capital through a bond offering and the sale of a stake to Warburg Pincus LLC, eliminated its dividend and stopped guaranteeing asset-backed securities for six months.
> 
> Those decisions prompted Moody's and S&P to keep their top ratings for MBIA. Fitch continued its review. Fitch has rated MBIA's insurance unit since at least 2000, according to data compiled by Bloomberg. S&P and Moody's have rated the company since at least 1987, the data show.
> 
> MBIA last month asked Fitch to stop rating the company because it disagreed with the ratings company's requirement that MBIA hold more capital.
> 
> MBIA, which started as the Municipal Bond Insurance Association in 1974, and the rest of the bond insurers stumbled after expanding into CDOs that caused losses of more than $7 billion. CDOs repackage pools of assets into securities with varying degrees of risk. The company previously recorded at least 15 years of consecutive profits insuring bonds sold by schools, hospitals and municipalities.
> 
> ``It's tough for a rating agency to downgrade a bond insurer, to take away the AAA rating,'' said Mark Adelson, founding member of Adelson & Jacob Consulting in Long Island City, New York.
> 
> Holding Company
> 
> The capital MBIA raised has yet to be contributed to its insurance company and could be diverted to meet obligations at the holding company, Fitch said in its report. MBIA's holding company engages in transactions that may require it to post collateral, creating a rising demand for cash, Fitch said.
> 
> MBIA's suspension of its structured finance business, which includes CDOs and asset-backed securities, may help to boost the company's rating back to AAA in the future, Fitch said today.
> 
> MBIA will have losses on CDOs backed by subprime mortgages of as much as $4.9 billion after taking into account that they will be paid over time, Fitch said.
> 
> The analysis assumes that subprime mortgages backing securities sold in 2006 will experience losses of 21 percent and those originated in 2007 will lose 26 percent, Fitch said. Subprime mortgages are given to borrowers with poor credit.


----------



## reece55

dhukka said:


> Fitch Ratings has decided to end its part in the ruse of the AAA ratings attached to the Monoline Insurers or at least one of them.




Hrmm..... well it's a about time someone finally put a pen through MBIA....

Lets see if S&P will finally submit to the pressure. By the way, their bonds are effectively pricved at junk -I still don't understand how a AAA company prices it's debt like a cash burning tech company!!!!

Cheers


----------



## dhukka

A few 'real' casualities in the last couple of weeks courtesy of MGETA

Firstly 3 Airlines



> *ATA seeks bankruptcy protection*
> Low-fare carrier ATA Airlines Inc. said Thursday it has filed for bankruptcy- court protection, grounding all flights and stranding thousands of passengers.
> 
> Indianapolis-based ATA operated 44 flights a day. The carrier stopped serving Denver International Airport in 2006, but it had a code-share agreement with Southwest Airlines that allowed Southwest customers to book flights to Hawaii and other destinations on ATA.
> 
> "We deeply regret the disruption and hardship caused by the sudden shutdown of ATA, an outcome we and our employees had worked very hard and made many sacrifices to avoid," Doug Yakola, the airline's chief operating officer, said in a statement.
> 
> ATA said it was forced to ground operations because it lost a key military charter contract. In addition to scheduled airline service, ATA also provided charter service for the Pentagon. Denver Post staff and wire reports
> 
> 
> *Skybus ceasing operations, plans to file for bankruptcy*
> 
> The celebrated discount airline is ceasing all operations today and plans to file for bankruptcy protection next week, becoming the latest of the nation's airlines to fall because of rising fuel costs and a slowing economy.
> 
> The shutdown deals a major blow to the Pease Development Authority as it strives to tap the potential of Portsmouth International Airport.
> 
> "Skybus struggled to overcome the combination of rising jet fuel costs and a slowing economic environment," the Ohio-based company said in a statement on its Web site. "These two issues proved to be insurmountable for a new carrier."
> 
> 
> *Aloha Air halting passenger service*
> 
> HONOLULU ”” Aloha Airlines said Sunday it will halt all passenger service after Monday, signaling the end of an airline that has served Hawaii for more than 60 years.
> 
> Aloha, which filed for bankruptcy for Chapter 11 bankruptcy protection on March 20, was a casualty of fierce competition and rising fuel prices. The airline said it will stop taking reservations for flights after Monday.
> 
> "We simply ran out of time to find a qualified buyer or secure continued financing for our passenger business," said Aloha President David Banmiller in a statement. "We had no choice but to take this action."
> 
> Aloha has suffered since Phoenix-based Mesa Air Group Inc. launched a new interisland carrier called go! airlines in 2006, triggering a local airfare war.
> 
> In January, go! reported a $20 million operating loss in its first 16 months of operations. Meanwhile, Aloha and Hawaiian Airlines ”” the other major interisland carrier ”” reported combined losses of nearly $65 million since go! began operating.





How about a chain of jewelery stores?



> *Friedman's begins bankruptcy liquidation sale*
> 
> Addison-based Friedman's Inc., operator of 455 jewelry stores in 23 states, begins a bankruptcy court-ordered liquidation today.
> 
> Friedman's, which also operates stores under the Crescent brand, filed for bankruptcy in January.
> 
> The 88-year-old retailer was founded in Savannah, Ga., and moved to Texas two years ago.
> 
> About $400 million in inventory in 377 stores will be liquidated while Friedman's is negotiating to sell 78 locations to an unnamed buyer.
> 
> It operates stores in 24 Texas cities.





A restaurant chain?



> *Bankruptcy declared for restaurants*
> 
> Vicorp Restaurants Inc. has filed for Chapter 11 bankruptcy to restructure its debts and closed 56 Bakers Square restaurants, including nine in Illinois.
> 
> The Denver-based company closed Bakers Square restaurants in Lake in the Hills, St. Charles and Oswego on Wednesday. The company’s location in Crystal Lake remains open.
> 
> Vicorp spokeswoman Amy Moynihan said 1,700 of the restaurants’ 13,000 employees would be laid off as part of the cost-savings effort.





Or a bunch of nursing homes?



> *Marathon Healthcare files for bankruptcy*
> 
> Marathon Healthcare Inc, an East Hartford-based nursing home company that operates six facilities in Connecticut, including in Waterbury, Torrington and Prospect, filed for bankruptcy protection late Thursday.
> 
> The filing comes about three months after the state Department of Social Services launched an investigation of the company over concerns that it was struggling to meet its financial obligations, and about a month after a state audit said Marathon's finances should be closely monitored.


----------



## Kauri

I just read that Barclays is considering a bid for the uberbank... thought it was in the FT but can't find it to post a link...   

Cheers
.........Kauri


----------



## sassa

Posts are slowing in this thread due to -nothing to offer?can't believe what is happening in the markets with all the bad news?the bulls have finally taken over?all the bad news is out?

"U.S. benchmark indexes closed little changed on Monday, but analysts said the failure of the Dow Jones industrial average .DJI to breach the 12,700 level for the third time in two months did not bode well for further rises in the index.
"What really means something is AMD coming out and cutting yesterday and what is significant is we came off yesterday after zooming higher on all stocks and closing at the lows of the day," said City Index analyst Tom Hougaard.

"At this point, the news out there is pretty bearish across the board and (any rises) are just a question of a correction in a market that is deeply, deeply oversold," he said.
http://www.reuters.com/article/mark...408?rpc=44&pageNumber=2&virtualBrandChannel=0


----------



## Whiskers

sassa said:


> Posts are slowing in this thread due to -nothing to offer?can't believe what is happening in the markets with all the bad news?the bulls have finally taken over?all the bad news is out?




I think you have pretty well summed it up there sassa, albeit a bit inquisitively. 

There are always company collapses, restructures, employee lay-off's etc, but a point I have been trying to make is too much, in fact pretty much anything that happens has been bundled into the same 'credit crisis' 'housing crunch' 'recession' or whatever D & G basket.

Sure, the housing price bust and credit crunch has had flow on effects right across the US economy and most of the world, but to attribute that as the main cause of all the changing dynamics in the world, for me is nonsense. A lot of dynamics change over time. Certain situations may speed up the enviornment for change.

For exampe, the US airline industry is a fragile industry because of lots of players trying to carve a hole in the market where players have been cutting costs, by minimising maintaince etc. Rising costs such as a more than doubling of aviation fuel is the main cause of problems there. Higher oil prices was always going to happen regardless of the housing or credit situation. 

Sure the credit crisis has an effect and the falling USD has increased oil costs a bit more, but as I said above it is not the driving factor with the problems in the airline industry and much of the US or world economy.



Uncle Festivus said:


> Whiskers, it's good to have the positive logic bias




Thanks uncle... of course it is. 



> but the data coming out doesn't support the above (assumptions?).








> Personal incomes? Up 0.5% and working longer for it. Price inflation eg food and fuel, easily exceeds wage growth, so effectively going backwards at a rate of knots, hence consumer spending subdued to put it mildly.




But the point I was making was that personal spending went up .5% and consumer spending only increased .1%. So even allowing for price inflation consumers saved more than the previous month. I see your point that costs are increasing and people are working longer... but in the short term for me the combination of working longer and saving more is a good sign for stabalising or reducing the rate of mortgage defaults and bankruptcies.

Isn't it probable that any recession will be short and shallow before darting into inflation before we know it? What will be the inflationary effect when the housing industry turns around?



> I think the main reason why stock prices are going up is because the Fed is paying for it - both indirectly and via the extended repo's etc. The extra liquidity doesn't look like it is making it to the real world (as in lower mortgages), just getting churned back in on itself with equity money shuffling _again_.




I agree there, well for the most part ... and I don't think the Fed had any choice but to buy time to allow things to pan out less disruptdly.

I am currently of the view that all the problems in the US economy won't fall out in this correction. I think the markets (including the USD) will recover moderately over the coming months in the natural cycle of things because the US has made or in the process of making the most substantial overhaul of their economy and finance laws since the great depression. 

Having said that, I don't doubt they will experience more economic issues in the future, but I expect they will be less of an economic force in the world economy.


----------



## Kauri

sassa said:


> Posts are slowing in this thread due to -nothing to offer?can't believe what is happening in the markets with all the bad news?the bulls have finally taken over?all the bad news is out?
> 
> =0




 Didn't thunk that bad news was welcomed.... aahh well.. heres some.. potentially..  The Euro is unlikely to be buoyed by the news another German bank may be in trouble. Speculation in the market at present suggests a smaller bank has been closed by the BAFIN. (Will post a link when.. and if... it hits the wires...) 

  Also I don't know how long the Eurozone is going to be propped up by Germany, without them the bottom would fall out of their pants.. I thunk..
 and I still thunk German banks in general are a big risk going forrard.. 

Cheers
..........Kauri


----------



## explod

Kauri said:


> Didn't thunk that bad news was welcomed.... aahh well.. heres some.. potentially..  The Euro is unlikely to be buoyed by the news another German bank may be in trouble. Speculation in the market at present suggests a smaller bank has been closed by the BAFIN. (Will post a link when.. and if... it hits the wires...)
> 
> Also I don't know how long the Eurozone is going to be propped up by Germany, without them the bottom would fall out of their pants.. I thunk..
> and I still thunk German banks in general are a big risk going forrard..
> 
> Cheers
> ..........Kauri




In fact from what is coming through in the last week, and what is being accepted as OK ( the crap) is making us so gobsmacked that we are speechless.


----------



## sassa

Kauri said:


> Didn't thunk that bad news was welcomed.... aahh
> ..........Kauri



Well, maybe it is time to have a bit of a laugh.
It's within the probability spectrum that we've turned the corner and the market will climb the wall of worry. To truly appreciate that potential reward, however, we must understand the magnitude of the attendant risk.
In our never-ending effort to provoke thought and provide smiles, we offer 35 reasons why the March lows were an excellent trading opportunity but not the ultimate bottom.(I have included a few-rest available at link below.)
.Maltese dogs are still favoured over Rottweilers by the elite Park Avenue crowd.
.Hank Paulson has yet to melt a reporter's face with his cold, hard stare.
.Homebuilders have yet to offer two-for-one deals.
.Alan Greenspan is still getting paid to speak.
.If the market can't rally with a weaker dollar, what's it going to do when the greenback rallies.
.Traders are buying upside calls like they're going out of style.
http://www.marketwatch.com/news/story/35-signs-market-hasnt-hit/story.


----------



## dhukka

sassa said:


> Posts are slowing in this thread due to -nothing to offer?can't believe what is happening in the markets with all the bad news?the bulls have finally taken over?all the bad news is out?




On the contrary, the bad news is just clicking into gear. If transports are considered a good leading indicator of economic activity, what is UPS telling us?



> *UPS Lowers 1Q 2008 Guidance*
> 
> _Deteriorating U.S. Economic Conditions Restrain Domestic Volume _
> ATLANTA--(BUSINESS WIRE)--UPS (NYSE: UPS) today announced it had lowered its first quarter earnings expectations to $0.86 or $0.87 per diluted share from a previously anticipated range of $0.94-to-0.98.
> 
> At UPS’s investor conference on March 12, Chief Financial Officer Kurt Kuehn stated that UPS’s earnings guidance for the quarter would be difficult to achieve if lower volume trends experienced in February continued through March. The U.S. economy has continued to weaken, causing a reduction in domestic package volume and a shift away from premium products. Significantly increased fuel costs in the quarter also contributed to the lower-than-expected results.
> 
> On April 23, the company will discuss first quarter results and its outlook for the year.


----------



## Whiskers

*Bold Headlines * Rates on 30-, 15-year mortgages rise.

By a miniscule, but they are still lower than a year ago.



> *However*, rates on shorter term mortgages dipped this week
> 
> For five-year adjustable-rate mortgages, rates dropped to 5.59% this week, from 5.67% last week. And, rates on one-year, adjustable-rate mortgages averaged 5.19% this week, down from 5.24% in the prior week.
> 
> The mortgage rates do not include add-on fees known as points. For 30-year and 15-year mortgages as well as one-year adjustable-rate mortgages the nationwide average fee was 0.5 point. Five-year mortgages carried a 0.6 point average fee.
> 
> A year ago: A year ago, rates on 30-year mortgages stood at 6.17%, 15-year mortgage rates averaged 5.87%, five-year adjustable-rate mortgages were 5.92% and one-year adjustable-rate mortgages were at 5.44%.
> 
> http://money.cnn.com/2008/04/03/real_estate/Mortgage_rates.ap/index.htm?postversion=2008040316




So where are the massive interest rate rises that were supposed to happen!

Is this a sign of mortgage rate rises running out of puff... demand dropping, holding back and consumers telling banks where to stick their rate rises?

A point I made earlier, Banks should soon wake up that forgoing interest rate rises to recoup their losses will be a better proposition than raising rates aggressively, forcing forclosures and having to write down their balance sheets agressively.

I wonder how many are thinking lower profits will be less disasterous than massive continuing write downs.


----------



## Kauri

Whiskers said:


> *Bold Headlines *Rates on 30-, 15-year mortgages rise.
> 
> By a miniscule, but they are still lower than a year ago.
> 
> 
> 
> So where are the massive interest rate rises that were supposed to happen!
> 
> Is this a sign of mortgage rate rises running out of puff... demand dropping, holding back and consumers telling banks where to stick their rate rises?
> 
> .




 In the US... probably...   
Cheers
.........Kauri


----------



## dhukka

Whiskers said:


> *Bold Headlines * Rates on 30-, 15-year mortgages rise.
> 
> By a miniscule, but they are still lower than a year ago.
> 
> So where are the massive interest rate rises that were supposed to happen!
> Is this a sign of mortgage rate rises running out of puff... demand dropping, holding back and consumers telling banks where to stick their rate rises?
> 
> A point I made earlier, Banks should soon wake up that forgoing interest rate rises to recoup their losses will be a better proposition than raising rates aggressively, forcing forclosures and having to write down their balance sheets agressively.
> 
> I wonder how many are thinking lower profits will be less disasterous than massive continuing write downs.




Who was expecting massive interest rate rises? Creating straw men again Whiskers? Are you suggesting that because the interest rate on a 30 year mortgage is 50 bps lower than a year ago, after the Fed has cut 300 bps that that is a positive? Or that the rate on a 30 year mortgage is 50bps higher than it was just 3 months ago despite 225 bps of cuts over the same period?


----------



## sassa

dhukka said:


> On the contrary, the bad news is just clicking into gear.



News on MarketWatch suggests that Citi is close to selling $12b.worth of bad debt to private equity firms for less than 90c in the dollar.IF the report is correct,it should be kind to the financials.Another rumour propagated by..????
http://www.marketwatch.com/news/sto...?guid={9FEC1075-89D6-4B1B-A672-A60A89EF2C09%7


----------



## Whiskers

dhukka said:


> Who was expecting massive interest rate rises? Creating straw men again Whiskers? Are you suggesting that because the interest rate on a 30 year mortgage is 50 bps lower than a year ago, after the Fed has cut 300 bps that that is a positive? Or that the rate on a 30 year mortgage is 50bps higher than it was just 3 months ago despite 225 bps of cuts over the same period?




Certainly better than the rate rises that some headlines and people were speculating would/might happen when mortgages reset in the first qtr. 

I mean we all know how greedy those bludy banks are.


----------



## Whiskers

sassa said:


> .Homebuilders have yet to offer two-for-one deals.




I'm waiting for something like this... to dash over there and buy a few.


----------



## sassa

Could be a turnaround in overseas markets tonight against the poor news.European markets have come off their lows and are in the green with swings of 1%+.Futures for the American Market have also risen from -59 to +4.Anybody savvy with reason/s for turnaround?


----------



## sam76

I noticed this as well.

Kauri is usually pretty quick with international news.

Sam76 to Kauri, you got your ears on?


----------



## Whiskers

sassa said:


> Could be a turnaround in overseas markets tonight against the poor news.European markets have come off their lows and are in the green with swings of 1%+.Futures for the American Market have also risen from -59 to +4.Anybody savvy with reason/s for turnaround?




I think there has been a good rise in the MBA Purchase Applications. Trying to find some detail.

PS:



> WASHINGTON, D.C. (April 9, 2008) — The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending April 4, 2008.  The Market Composite Index, a measure of mortgage loan application volume, was 725.6, an increase of 5.4 percent on a seasonally adjusted basis from 688.3 one week earlier.  On an unadjusted basis, the Index increased 5.7 percent compared with the previous week and was up 10.9 percent compared with the same week one year earlier.
> 
> http://www.mortgagebankers.org/NewsandMedia/PressCenter/61777.htm


----------



## wayneL

sassa said:


> Could be a turnaround in overseas markets tonight against the poor news.European markets have come off their lows and are in the green with swings of 1%+.Futures for the American Market have also risen from -59 to +4.Anybody savvy with reason/s for turnaround?



Probably the Citi deal: http://www.marketwatch.com/news/sto...x?guid={9FEC1075-89D6-4B1B-A672-A60A89EF2C09}


----------



## Whiskers

Rate-cutting cycle may be over. Sell Gold. 

I better post it for the gold geeks too. :



> *FED RATE-CUTTING CYCLE MAY BE OVER
> RBC Capital Markets says summer gold correction doldrums are coming*
> In a research report, RBC Capital Markets analysts feel that investors should consider taking profits in gold ahead of the traditionally weak summer season and then take advantage of an anticipated rise later in the year.
> 
> Author: Dorothy Kosich
> Posted:  Wednesday , 09 Apr 2008
> 
> RENO, NV -
> 
> RBC Capital Markets Tuesday urged investors to crystallize profits now and "take advantage of gold at lower levels within the June-July period."
> 
> In his analysis, Michael Curran noted, that over the past 28 years, gold has typically outperformed during the months of April and May, usually followed by a seasonal slowdown in the summer months, "and an upsurge in the early fall."
> 
> "We believe investors should take profits ahead of the end of a Fed rate cutting cycle and ahead of the seasonally quiet period for gold and gold equities in June, July and early August," Curran wrote. "Since the broader market began to react to the uncertainty over the US subprime mortgage crisis on August 14th, and the sell-off of all financial securities began, we believe that gold has discounted in the uncertainty in financial markets and the implied inflation expectation associated with rising commodity prices. We think recent news of possible IMF gold sales up to 400 tonnes are priced in at current levels, and would have limited impact on the market."
> 
> "On the back of this rationale, we advise clients to sell into the typically strong April-May timeframe, ahead of the seasonal slowdown usually observed in the early summer months," he said.
> 
> ‘Combining our view that a seasonal slowdown for gold demand is around the corner in the summer months, and the possibility that the U.S. fed rate cutting cycle may come to an end shortly, we believe the timing is right for investors to take profits in the short term in gold and gold equities.
> 
> http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=50435&sn=Detail


----------



## Kauri

Kauri said:


> Didn't thunk that bad news was welcomed.... aahh well.. heres some.. potentially.. The Euro is unlikely to be buoyed by the news another German bank may be in trouble. Speculation in the market at present suggests a smaller bank has been closed by the BAFIN. (Will post a link when.. and if... it hits the wires...)
> 
> Also I don't know how long the Eurozone is going to be propped up by Germany, without them the bottom would fall out of their pants.. I thunk..
> *and I still thunk German banks in general are a big risk going forrard..*
> 
> Cheers
> ..........Kauri





German Economy Minister Michael *Glos* urges concerted C/B action to *Avert A Big Bank Collapse* ..  no link... yet...  

Cheers
..........Kauri


----------



## dhukka

wayneL said:


> Probably the Citi deal: http://www.marketwatch.com/news/sto...x?guid={9FEC1075-89D6-4B1B-A672-A60A89EF2C09}




Interesting sleight of hand on this deal that makes it seem much better than it actually is. *$0.90* on the dollar doesn't sound too bad, but not when you factor in that Citi will indemnify the first 20% of losses. Why do it that way? So they don't have to write down as much....at least not initially. Read _Less Than Meets The Eye_ for more.


----------



## IFocus

At some point(to state the obvious) the global markets will price in the risk for financial chaos / losses but IMHO we are not there yet

SMH today

T







> HE US financial crisis is spilling across Western Europe and into developing Asia, dragging the world economy closer to the brink of recession, the International Monetary Fund warned overnight.




http://business.smh.com.au/oneinfour-chance-of-recession/20080409-24wk.html

2 X Sub-prime losses still to come, profit down grades still to get into swing


----------



## Kauri

$US index daily...on the verge of breaking???  with ramifications for the US pairs, stocks et al?? 

Cheers
..........Kauri


----------



## Kauri

Kauri said:


> $US index daily...on the verge of breaking??? with ramifications for the US pairs, stocks et al??
> 
> Cheers
> ..........Kauri




It would seem that the MAS changing the bands on the SGD NEER is not doing the US any favours...
Cheers
..........Kauri


----------



## sassa

The Fed has tried,is trying,but things don't seem to be working out as they would have hoped.

"Money markets in the US and Europe are signalling renewed fears about the financial strength of banks, with key confidence barometers almost returning to the levels that preceded the collapse of Bear Stearns.

The concerns are being highlighted by the difference between overnight lending rates set by central banks and three-month Libor, the rate at which banks lend to each other. This spread, known as the overnight index swap rate, has been rising in the US and remains elevated in Europe, indicating that banks are reluctant to lend to each other.

“Libor is still dysfunctional and, for whatever reason, banks still appear unwilling to lend funds,” said Dominic Konstam, head of interest rate strategy at Credit Suisse.

The difference between the overnight central bank rates and three-month Libor was typically about 12 basis points before global credit turmoil grew worse last summer.

In the US on Wednesday, that spread rose rose 2bp to 77.5bp. The difference had climbed above 80bp on concerns about Bear, then fell back to 60bp in mid-March after the investment bank was sold to JPMorgan Chase.

In the UK, the swap rate gained 2.45bp to 95.45bp on Wednesday. In Europe, the swap rate was up 1.29bp at 74.68bp. It had been 67bp after the Bear sale.

Investors also sought the safety of government debt on Wednesday, pushing the yield on the two-year Treasury down 12bp to 1.75 per cent.

Tensions are rising in the money markets in spite of the injection of huge amounts of liquidity into the banking system by central banks. Traders say market conditions suggest the Bear rescue has not completely alleviated worries about counterparty risks. Until confidence is restored, the availability of credit to investors and companies will be restricted, potentially hurting the broader economy."
http://www.nakedcapitalism.com/2008/04/stress-returns-to-interbank-lending-it.html


----------



## josjes

sassa said:


> The Fed has tried,is trying,but things don't seem to be working out as they would have hoped.
> 
> "Money markets in the US and Europe are signalling renewed fears about the financial strength of banks, with key confidence barometers almost returning to the levels that preceded the collapse of Bear Stearns.
> 
> The concerns are being highlighted by the difference between overnight lending rates set by central banks and three-month Libor, the rate at which banks lend to each other. This spread, known as the overnight index swap rate, has been rising in the US and remains elevated in Europe, indicating that banks are reluctant to lend to each other.
> 
> “Libor is still dysfunctional and, for whatever reason, banks still appear unwilling to lend funds,” said Dominic Konstam, head of interest rate strategy at Credit Suisse.
> 
> The difference between the overnight central bank rates and three-month Libor was typically about 12 basis points before global credit turmoil grew worse last summer.
> 
> In the US on Wednesday, that spread rose rose 2bp to 77.5bp. The difference had climbed above 80bp on concerns about Bear, then fell back to 60bp in mid-March after the investment bank was sold to JPMorgan Chase.
> 
> In the UK, the swap rate gained 2.45bp to 95.45bp on Wednesday. In Europe, the swap rate was up 1.29bp at 74.68bp. It had been 67bp after the Bear sale.
> 
> Investors also sought the safety of government debt on Wednesday, pushing the yield on the two-year Treasury down 12bp to 1.75 per cent.
> 
> Tensions are rising in the money markets in spite of the injection of huge amounts of liquidity into the banking system by central banks. Traders say market conditions suggest the Bear rescue has not completely alleviated worries about counterparty risks. Until confidence is restored, the availability of credit to investors and companies will be restricted, potentially hurting the broader economy."
> http://www.nakedcapitalism.com/2008/04/stress-returns-to-interbank-lending-it.html




As soon as I saw Gold jump from $905-$930 yesterday and it's now making ascent to $940 I knew that there are more skeletons in the closet from the banks coming out .....


----------



## sassa

And from the same site,a damning report if correct.

1. A rumor is circulating that Lehman sold $2.5 billion in CLOs, but the buyer insisted Lehman retain 25% of the worst tranches. Oh, and that buyer was the Fed.

2. The quality of Lehman's first quarter earnings was terrible. It recorded a gain on widening debt spreads. That means the marker value of its debt fell because the market thought Lehman was less creditworthy. That reduction in market value of debt was a gain that flowed though its income statement. 

In addition, "LEH recorded a gain of $695 million in the category of level 3 Corporate equities. That’s ten times the levels recorded in the last 2 quarters of 2007, and it’s not some first quarter of the year aberration either””the year-ago quarter yielded a gain of $13 million. This during a quarter when the major equity indexes took significant hits."

Aren't unaudited financial statements just wonderful.

http://www.nakedcapitalism.com/2008/04/buyout-clos-used-for-fed-loans.html


----------



## sassa

Further on the Citi deal to sell $12b. of debt to private equity firms.

" Exactly how does this confirm the value of anything? What this did was muddy the waters. Citi had to indemnify the buyers from the first 20% of the loss so Citi effectively got somewhere between 70 and 90 cents on the dollar for those loans. We will not know the exact amount until a later date.

The deal was made in this manner specifically to muddy the waters. It appears that Citi is setting up a con game in which they may pretend they got 90 cents on the dollar when they really didn't. That 20% indemnification clause in the sale is like a PUT option. That option has a value and it's a huge mistake to pretend otherwise.
"It demonstrates that there is a market for this paper," said Marshall Front, Chairman of Front Barnett Associates in Chicago, which owns about 450,000 Citi shares. "This whole process of credit unfreezing, which started with the Federal Reserve opening the discount window to investment banks, is beginning to play out."
 Yes there is a market, at the right price. There's a market for anything, anytime, at the right price. And the price in this case was a 10% guaranteed markdown plus a free PUT option that has the potential to make the total markdown as high as 30%. And Citi had to agree to finance that! That's quite a market. If I was Marshall Front I would not be talking up that market too loudly. This whole setup smacks of desperation. Citi's dividend can't last long at this rate.

http://globaleconomicanalysis.blogspot.com/


----------



## Kauri

sassa said:


> And from the same site,a damning report if correct.
> 
> 1. A rumor is circulating




  Whaaaat... rumours..   What about the one about the Dutch set-up... and also about further US writedowns.... after the German rumours last night proved up with Weserbank.. well.. who knows..   
Cheers
..........Kauri 

 and the $US index doesn't look too flash for some reason..


----------



## explod

Kauri said:


> Whaaaat... rumours..   What about the one about the Dutch set-up... and also about further US writedowns.... after the German rumours last night proved up with Weserbank.. well.. who knows..
> Cheers
> ..........Kauri
> 
> and the $US index doesn't look too flash for some reason..




It hasnt' looked too flash for 7 years, it hit the top of the down trend channel last week or so, just the normal bounce off to head lower, I expect below 70 in the next few days, previous all time low 70.6

Will put a rocket under gold too (oops wrong thread)


----------



## Kauri

explod said:


> It hasnt' looked too flash for 7 years, it hit the top of the down trend channel last week or so, just the normal bounce off to head lower, I expect below 70 in the next few days, previous all time low 70.6
> 
> Will put a rocket under gold too (oops wrong thread)




My charts only go back four years...  is this the channell that it is bouncing off?? 
Cheers
...........Kauri


----------



## Kauri

and further to the dump on the $US, Former MoF Sakakibara reiterated USD/JPY has further to fall to JPY 90.00 overnight, he expects Fed to cut Fed Funds to 1.00% and suggests EUR/JPY has long way to fall to Y130 within 6-months on basis ECB will start cutting rates.
Cheers
..........Kauri

 P.S.. the overnight applys to his statement inUS time, not the yen falling to 90 overnight...  I thunk..


----------



## Kauri

sassa said:


> And from the same site,a damning report if correct.
> 
> 1. A rumor is circulating that Lehman sold $2.5 billion in CLOs, but the buyer insisted Lehman retain 25% of the worst tranches. Oh, and that buyer was the Fed.
> 
> 2. The quality of Lehman's first quarter earnings was terrible. It recorded a gain on widening debt spreads. That means the marker value of its debt fell because the market thought Lehman was less creditworthy. That reduction in market value of debt was a gain that flowed though its income statement.
> 
> In addition, "LEH recorded a gain of $695 million in the category of level 3 Corporate equities. That’s ten times the levels recorded in the last 2 quarters of 2007, and it’s not some first quarter of the year aberration either””the year-ago quarter yielded a gain of $13 million. This during a quarter when the major equity indexes took significant hits."
> 
> Aren't unaudited financial statements just wonderful.
> 
> http://www.nakedcapitalism.com/2008/04/buyout-clos-used-for-fed-loans.html





Lehman has dissolved three funds, taking over the assets.

Cheers
............Kauri


----------



## explod

Kauri said:


> My charts only go back four years...  is this the channell that it is bouncing off??
> Cheers
> ...........Kauri




Yep, that's about it. (The INO charts wont copy I'm afraid)   I see 73 the top and 70.5 the bottom as at this time and a drop to 69.5 due soon.  A drop in the Fed rate will certainly push that along.

Money is losing purchasing power by the day now.  Oil price will hit pockets hard but is just one of many basics compounding the calamity exponentially.


----------



## Whiskers

Well, the Boe has finally cut... 25bp.

Looks like the ECB is gonna hold... until the Fed cuts again? They will have to cut eventually though, won't they? 


I think I predicted big Wal would hold it's own... actually might out perform a bit. 

Those tight inventory controls!

See... even the weather and timing of easter affect the economy. It's not all 'sub primes' fault! :



> *Wal-Mart sales soft, but ups profit forecast*
> No. 1 retailer's March sales at the lower end of its guidance, but tighter inventories help boost earnings outlook for current quarter.
> 
> CNNMoney.com senior writer
> Last Updated: April 10, 2008: 7:55 AM EDT
> 
> NEW YORK (CNNMoney.com) -- Wal-Mart Stores on Thursday blamed an early Easter and weather woes for March sales that were at the lower end of its guidance.
> 
> However, the world's largest retailer upped its fiscal first-quarter profit guidance, citing tighter inventory levels that helped it to reduce additional discounts in the period.
> 
> Wal-Mart (WMT, Fortune 500) said sales at its stores open at least a year, a key measure of retail performance known as same-store sales, rose 0.7%, which was at the lower-end of its guidance of being flat to up 2% for the month.
> 
> The retailer said a shift in the holiday calendar, which resulted in the Easter holiday coming about a month earlier than last year, negatively hurt sales last month.
> 
> "[With] Easter coming much earlier this year, the traditional selling period for the holiday was shorter," the company said in a statement.
> 
> Wal-Mart also blamed cooler weather in March for weak sales of spring and summer clothing. But the retailer said sales of grocery, health and wellness and entertainment products were stronger in the month.
> 
> For April, the company expects same-store sales to be up 1% to 3%. "This guidance is slightly higher than our comparable sales guidance of the previous two months, which has been flat to 2%," said Wal-Mart chief financial officer Tom Schoewe.
> 
> Wal-Mart also raised its first-quarter profit forecast to between 74 to 76 cents a share from its previous estimate of 70 to 74 cents a share.
> 
> Analysts polled by earnings tracker Thomson Financial had expected the retailer to earn 72 cents a share for the quarter.


----------



## Whiskers

> CNN Money BREAKING NEWS: The U.S. trade deficit surprisingly rises to $62.3 billion. More soon.




Surprisingly!


----------



## Kauri

Whiskers said:


> I think I predicted big Wal would hold it's own... actually might out perform a bit.
> 
> Those tight inventory controls!
> 
> See... even the weather and timing of easter affect the economy. It's not all 'sub primes' fault! :




I think that Big Wally is amongst the 20% that have managed not to dissapoint of the chains that have reported so far.. meanwhile to add to the 80% that have come up short, Gap"s 18% decline in March and the fall in Nordstrom of 9.1% for same store sales as consumer demand continues to collapse. Target sales fell 4.4%, much more than the market expected.
Cheers
.........Kauri


----------



## wayneL

Whiskers said:


> Well, the Boe has finally cut... 25bp.




What is now evident is that the intention of the BoE MPC is diametrically opposed to their official remit of targeting inflation. The MPC is now directly targeting house prices. A 180% rise is quite OK, but a 2.5% drop is totally unacceptable.

Savers screwed again.


----------



## Whiskers

Kauri said:


> I think that Big Wally is amongst the 20% that have managed not to dissapoint of the chains that have reported so far.. meanwhile to add to the 80% that have come up short, Gap"s 18% decline in March and the fall in Nordstrom of 9.1% for same store sales as consumer demand continues to collapse. Target sales fell 4.4%, much more than the market expected.
> Cheers
> .........Kauri




Yeah, wasn't surprised with Target. They're not as 'hungry' and adaptive to market conditions as big Wal. Luxury brands also not surprising.

Be interesting to see the market shares of the 20% and 80%. Probably give a better picture of the state of chain retail sales.


----------



## Kauri

wayneL said:


> What is now evident is that the intention of the BoE MPC is diametrically opposed to their official remit of targeting inflation. The MPC is now directly targeting house prices. A 180% rise is quite OK, but a 2.5% drop is totally unacceptable.
> 
> Savers screwed again.




Maybe they read (and believe what they read) the papers..   
Cheers
...........Kauri

http://business.timesonline.co.uk/tol/business/


----------



## dhukka

Kauri said:


> I think that Big Wally is amongst the 20% that have managed not to dissapoint of the chains that have reported so far.. meanwhile to add to the 80% that have come up short, Gap"s 18% decline in March and the fall in Nordstrom of 9.1% for same store sales as consumer demand continues to collapse. Target sales fell 4.4%, much more than the market expected.
> Cheers
> .........Kauri




These Chain store sales comps are mostly pretty nasty. 

Saks..................*-2.9%* vs *+3.5%* expected
JC Penney........ *-12.3%* vs *-11.7%* expected
Nordstrom.......... *-9.1%* vs *-8.0%* expected
American Eagle.. *-12.0%* vs *-8.9%* expected
Target...............*-4.4%* vs *-2.7%* expected

Even Wal-mart disappointed *+0.7%* vs *+1.0%* expected

On the positve side:

Costco.......... *+7.0%* vs *+5.9%* expected 
Aeropostale... *+2.5%* vs *+0.6%* expected


----------



## wayneL

Kauri said:


> Maybe they read (and believe what they read) the papers..
> Cheers
> ...........Kauri
> 
> http://business.timesonline.co.uk/tol/business/



I don't have a lot of time for Anatole Kaletski, even though he has now joined the bear camp... he's a t0sser of the first order.

This clown, up until about six weeks ago was an uberbull, treating bears as heretics, tin foil hatters and doom-mongers. He has only jumped the fence in the face of looking like the jerk he truly is.

Note how he hedges himself in the article with the old "small island, and limited supply" nonsense.

Should give the livestock a bit of a start though.


----------



## Kauri

wayneL said:


> I don't have a lot of time for Anatole Kaletski, even though he has now joined the bear camp... he's a t0sser of the first order.
> 
> This clown, up until about six weeks ago was an uberbull, treating bears as heretics, tin foil hatters and doom-mongers. He has only jumped the fence in the face of looking like the jerk he truly is.
> 
> Note how he hedges himself in the article with the old "small island, and limited supply" nonsense.
> 
> Should give the livestock a bit of a start though.




Couldn't agree more, most of the media could pull off a U-Turn on the M3 in rush hour without breaking wind, .....butt... inthe modern age the media shapes our perceptions a lot more than peeple realise.. and as such, I sit, and observe... and wait.. and.. aaahh, my glass is empty, I can see the de bouton.
Cheers
............from me.. and hymn..


----------



## brty

Hi,

Nothing but doom and gloom in the headlines, billions lost in banking, housing and consumer sales, the world as we know it is coming to an end. It is as clear as the nose on my face....

But the SPoos go up......  hmm. ( at present anyway)

bye

brty


----------



## wayneL

Kauri said:


> Couldn't agree more, most of the media could pull off a U-Turn on the M3 in rush hour without breaking wind, .....butt... inthe modern age the media shapes our perceptions a lot more than peeple realise.. and as such, I sit, and observe... and wait.. and.. aaahh, my glass is empty, I can see the de bouton.
> Cheers
> ............from me.. and hymn..



Yep agree there. That's why I still read him. There are able analysts who I like to read as food for thought.. and then there are the sentiment markers. Sometimes it's hard to tell the difference.... sometimes not. :

I reckon Jeremy Clarkeson has a better idea than Anatole... and is amusing to boot.


----------



## wayneL

brty said:


> Hi,
> 
> Nothing but doom and gloom in the headlines, billions lost in banking, housing and consumer sales, the world as we know it is coming to an end. It is as clear as the nose on my face....
> 
> But the SPoos go up......  hmm. ( at present anyway)
> 
> bye
> 
> brty




Eat, drink, be merry and... uhh, buy stocks; for tomorrow we die.


----------



## Kauri

wayneL said:


> Yep agree there. That's why I still read him. There are able analysts who I like to read as food for thought.. and then there are the sentiment markers. Sometimes it's hard to tell the difference.... sometimes not. :
> 
> *I reckon Jeremy Clarkeson has a better idea than Anatole... and is amusing to boot*.




unless you drive a volvo... :knightrid


----------



## brty

Hi,

The media is telling us one thing, the market is saying another. Which one is usually correct??

bye

brty


----------



## wayneL

brty said:


> Hi,
> 
> The media is telling us one thing, the market is saying another. Which one is usually correct??
> 
> bye
> 
> brty



Never fight the tape... just don't nail the scrip to the bottom drawer.


----------



## Kauri

brty said:


> Hi,
> 
> The media is telling us one thing, the market is saying another. Which one is usually correct??
> 
> bye
> 
> brty




  BofA has come out and said that big fella's bottom is in and has recomended .. in their words.. overweight...

 and GS has also come out (closet??)  and said that the crisis is in the 3rd or even 4th Qtr.. and that they can see the light at the end of the tunnell.. (the last time I saw a light at the end of the tunnell it made quite an impression, there was a 6000horse English Electric sitting right behind it!!).
  So don't think... just buy, buy. bye, bye.
Cheers
............Frontiersman


----------



## IFocus

Kauri said:


> I think that Big Wally is amongst the 20% that have managed not to dissapoint of the chains that have reported so far.. meanwhile to add to the 80% that have come up short, Gap"s 18% decline in March and the fall in Nordstrom of 9.1% for same store sales as consumer demand continues to collapse. Target sales fell 4.4%, much more than the market expected.
> Cheers
> .........Kauri





Would it be fair to say Wal has the cheaper products over all....


----------



## Whiskers

Looks like Merrill Lynch is topping up the cash kitty.

Geez, I'm glad I didn't get involved in margin lending! 



> *Fresh collapse hits finance industry*
> Michael Sainsbury | April 11, 2008
> 
> THE nation's financial sector has suffered a fresh blow with administrators appointed to boutique lending group Lift Capital.
> 
> The appointment last night follows the $1.3 billion collapse of Melbourne stockbroker Opes Prime and continuing woes of another broking firm, Tricom.
> 
> Tony McGrath and Joseph Hayes of corporate recovery and advisory firm McGrathNicol were appointed as voluntary administrators of Sydney-based Lift Capital Partners Pty Ltd as well as Lift Capital Nominees No 1.
> 
> The scale of the latest collapse is not yet clear. Lift operates as a margin lender, with about 1600 clients owning investments predominantly in listed shares and managed funds.
> 
> A secured creditor, understood to be Merrill Lynch, has a fixed charge over the listed shares secured against funds advanced to Lift Capital...
> 
> http://www.theaustralian.news.com.au/story/0,25197,23522184-5014006,00.html


----------



## Whiskers

> *US consumers hit the brakes*
> April 11, 2008
> 
> CONSUMER spending drives the US economy, and latest sales figures show retail sales at stores that have been open for at least a year fell by 0.5 per cent in March, compared with a year ago.
> 
> The results, the weakest March showing in 13 years, are based on reports from 37 national retailers.
> 
> Consumer spending represents 70 per cent of the gross domestic product in the US - and is the largest contributor to economic growth, according to the National Retail Federation.
> 
> Consumers have bailed out the US economy in the past, but yesterday’s numbers are more evidence that the US shopper is tapped out.
> 
> http://www.theaustralian.news.com.au/story/0,25197,23522276-5014006,00.html




Well, they are supposed to be tightening their belts to keep up with debt repayments, aren't they! 

The lesser of two evils I think. Got to be better than maintaining consumer spending and perpetuating more loan defaults. 



> The results, the weakest March showing in 13 years...




Hmmm. Probably more like easing back to moderation after years of excess eh!


----------



## ithatheekret

brty said:


> Hi,
> 
> The media is telling us one thing, the market is saying another. Which one is usually correct??
> 
> bye
> 
> brty




Not at simple as that though , ones being fed , the other climbs a wall of worry or digs a deep enough hole to hide from it .

It would also depend on whether the herd is in with the market .


----------



## sassa

To say this isn't an interesting piece of news would be an understatement.

"Moreover, there are plenty of shoes yet to drop. Interbank cash hoarding is on the rise despite the Fed's heroic efforts; a bottom of the housing market is nowhere in sight (and we won't know how low it will go in the mortgage market until we know the end game for residential real estate); commercial real estate losses have only started. But scariest by far is the credit default swaps market.

I happened to meet with a hedge fund yesterday (unlevered, BTW) and it comments in passing were telling. They are seeing very large volumes of mortgage paper even though, this fund has not bought a single mortgage and expect that there is even more that would be offered if buyers were stepping forward. In addition, credit default swaps traders tell them that that market is in perilous shape. A great deal of the protection was written by hedge funds, who were typically levered. When they get into trouble, their problems will redound to the investment banks, both through their exposure as CDS counterparties and as lenders to failed hedge funds.

The fact that CDS traders are discussing such a grim viewpoint with people outside their firms (let's fact it, most businesspeople don't go around saying their product is about to implode) suggests that it is a common knowledge in the dealer community. I wonder if this topic is getting short shrift for a reason. The media has been known to overlook the foibles and failings of public figures until they are on the ropes. There may be similar self-censorship operating here, since the press probably does not want to be accused of fomenting panic."
http://www.nakedcapitalism.com/2008/04/investment-bank-demand-for-fed.html


----------



## sassa

A bloggers gut feeling on the market at the moment.
" After seeing big gain on Tuesday 4/1, we've seen the markets barely budge. While the news has been pretty negative since then, we haven't seen a huge drop. My best guess is the Fed's backstop of opening up the discount window to investment banks is really backstopping the market as a whole right now. I have to proof for that; it's just a gut level feeling."

http://www.bonddad.blogspot.com/


----------



## wayneL

"It's the economy stupid"

GE disappoints - pulls the rug from under the futures. As the Austrians forecast, it will be earnings that take the SM on the next leg down.

Technicals don't count for S###, the fundamentals (plus a hyper dose of sentiment...) propel the market.

NB (Don't go thinking I've gone F/A on you all, I'm still a techie... just realize TA merely tracks the market)



> LONDON (MarketWatch) -- General Electric on Friday stunned the market with by reporting a 6% drop in first-quarter profit and cutting its 2008 outlook, blaming trouble in its financial services businesses.
> General Electric (GE:
> General Electric Company
> News, chart, profile, more
> Last: 36.75+0.31+0.85%
> 4:00pm 04/10/2008
> Delayed quote data
> Add to portfolio
> Analyst
> Create alert
> Insider
> Discuss
> Financials
> Sponsored by:
> GE 36.75, +0.31, +0.9%) said first-quarter net income dropped 6% to $4.3 billion, or 43 cents a share, while revenue rose 8% to $42.24 billion.
> From continuing operations, the component of the Dow Jones Industrial Average earned 44 cents a share, below FactSet-compiled analyst estimates of 51 cents a share.
> "Demand for our global infrastructure business remained strong, but our financial services businesses were challenged by a slowing U.S. economy and difficult capital markets," GE Chairman and CEO Jeff Immelt said.
> GE also lowered 2008 guidance to a range of $2.20 to $2.30 a share, with second-quarter earnings seen at 53 cents to 55 cents a share. Analysts had expected annual earnings of $2.43 and second-quarter earnings of 58 cents a share.
> GE shares dropped 3.8% in pre-open trade, and also sent U.S. stock futures into the red. *Full story*


----------



## happyjack

Would this be the correction you are talking about
check the DOW and the NASDAQ they are i n free fall this thing wont accept my charts but I don't have time to mess around


----------



## wayneL

happyjack said:


> Would this be the correction you are talking about
> check the DOW and the NASDAQ they are i n free fall this thing wont accept my charts but I don't have time to mess around




SP 500 as of 12:13 PM GMT (7:13 AM NY)


----------



## happyjack

Thanks wayneL


----------



## wayneL

Ahhhh bad news is bad news again. 

Europe liked it even less:


----------



## Miner

*Time to cull the portfolio *

*By Robert Gottliebsen   * 

extract from Eureka Report _(My only commentary is I have little faith on the illuminary Robert Gottliebsen. Please DYOR. His portfolio in Eureka Report was disaster and now quietly he has stopped it to be published. Probably will do so when market revives after 12 months. He constantly predicted CNP at a very high price and so ANZ at $27. Now it is different tune. So once again DYOR. Do not get me wrong RG is well known in the industry but probably so is investment bankers like Goldman etc who lost lot of money now from advise of top notched experts !!! ) _

PORTFOLIO POINT: *Sectors that rely on discretionary spending will feel the first pain of the downturn, but that pain will spread. *
Myer Group chairman Bill Wavish did not pull his punches when he told Reserve Bank governor Glenn Stevens and Treasurer Wayne Swan that rising interest rates were “hollowing out” the economy, depressing consumer spending and condemning many companies to a difficult future.

Most commentators immediately dismissed Wavish's message, pointing out that Myer was highly leveraged as a result of the private equity buyout. That's rubbish. The private equity financiers secured Myer for a song and will do extraordinarily well, even if there is a downturn. 

Significantly, Wavish’s call was backed by David Jones managing director Mark McInnes, and by the chairman of Brickworks, Robert Millner, who said New South Wales housing starts had sunk to levels not seen since the Great Depression of the 1930s. 

Link those remarks to the sharp deterioration in consumer and business confidence data, higher petrol prices and the forecast by the National Australia Bank that the Reserve Bank will slash interest rates in 2009, and there is no doubt that large areas of Australia – particularly Sydney and to a lesser degree Melbourne – are beginning to experience a severe contraction in consumer spending. 

The overall national figures will be boosted by the effects of the resources boom on Western Australia and Queensland and the looming tax cuts, but Australian consumers have been borrowing extensively to maintain their spending levels and now the costs of those borrowings have skyrocketed. What’s more, the value of the average consumer’s highly mortgaged house is either stagnant or falling. They might be feeling secure in their jobs, but their personal debts mean they will be very nervous about the downturn touching their employer's business. 

To top it all off, the Australian downturn comes at the same time as a US recession, which will heighten the level of anxiety. 

All investors now need to look at their share portfolios to assess the vulnerability of their stocks, bearing in mind that as well as being hit by the consumer spending downturn, many companies will be affected by the higher interest rates. I will run through my thinking on a few stocks, but it’s an exercise that should be undertaken by all investors and their advisers.


----------



## dhukka

wayneL said:


> "It's the economy stupid"
> 
> GE disappoints - pulls the rug from under the futures. As the Austrians forecast, it will be earnings that take the SM on the next leg down.
> 
> Technicals don't count for S###, the fundamentals (plus a hyper dose of sentiment...) propel the market.
> 
> NB (Don't go thinking I've gone F/A on you all, I'm still a techie... just realize TA merely tracks the market)




Spot on wayne, the fundamentals eventually assert themselves. The earnings bogey has been looming for months for those who bothered to take notice. The claim that the stockmarket has already discounted the bad news is nonsense. There has been and still is a fairytale belief that everything will be fine come the second half of 2008, the recession will be short, Fed rate cuts will start to work and corporate earnings will again begin to rise.  If only reality were that simple.


----------



## dhukka

It seems another US airliner has succumbed to the credit crisis;



> *Frontier Airlines files for Chapter 11 bankruptcy*
> 
> *Carrier hopes to continue operating as normal*
> 
> Frontier Airlines Holdings Inc. said Friday that it's filed for Chapter 11 bankruptcy protection but -- in contrast to the rest of the recent spats of collapsed carriers -- hopes to continue operating normal service.
> 
> The low-cost airline, based in Denver, said the decision was taken after its principal credit-card processor unexpectedly said it would start withholding "significant proceeds" received from the sale of tickets.
> 
> Frontier (FRNT) joined a growing list of airlines filing for bankruptcy amid rising fuel prices and a slowing economy. In recent days, Skybus Airlines, Aloha Airlines and ATA Airlines have all shut down. Charter carrier Champion Air will cease flying at the end of May.
> 
> But Frontier said it expects to continue operating its full schedule of flights, adding it will honor tickets and reservations as well as providing refunds and exchanges as usual. The carrier, with a fleet of 62 aircraft, operates routes across the U.S. as well as to Mexico and Canada from its Denver hub.
> 
> "We felt that Frontier would be able to withstand the challenges confronting the U.S. airline industry, which include unprecedented and significant increases in the cost of jet fuel and the impact of the credit crisis in the financial markets, without seeking bankruptcy protection," said CEO Sean Menke in a statement.
> 
> He said, however, that the credit-card processor's decision to withhold more cash had left it with little choice.
> 
> "This change in established practices would have represented a material change to our cash forecasts and business plan. Unchecked, it would have put severe restraints on Frontier's liquidity and would have made it impossible for us to continue normal operations," Menke added.
> 
> Bankruptcy rules will prevent the planned increase in holdback by the card processor, and Frontier said it is prepared to litigate the issue if necessary.
> Shares of Frontier have fallen over 70% since the start of the year and closed Thursday at $1.57.
> 
> The airline said it filed for Chapter 11 in U.S. bankruptcy Court for the Southern District of New York. It's also seeking interim relief to ensure the company can continue to pay employees and honor existing contracts.
> 
> According to documents filed with the court, Wells Fargo (WFC) is by far the airlines biggest unsecured creditor and is owed $93.5 million.
> 
> U.S. carriers aren't the only ones in difficulty as the global economy slows. On Wednesday, Oasis Hong Kong Airlines grounded its aircraft and asked for the appointment of a liquidator.


----------



## reece55

wayneL said:


> Ahhhh bad news is bad news again.
> 
> Europe liked it even less:




OWWWWW........... Looks like the end of our little bounce me thinks......

I just don't understand why the market is surprised that GE has lowered its forecast.... its basically got a stake in everything, it makes sense they would have lower earnings going forward if the US is going in recession....

Cheers


----------



## refined silver

reece55 said:


> OWWWWW........... Looks like the end of our little bounce me thinks......
> 
> I just don't understand why the market is surprised that GE has lowered its forecast.... its basically got a stake in everything, it makes sense they would have lower earnings going forward if the US is going in recession....
> 
> Cheers




Don't forget GE is a major player in the financial world, a major dealer in credit and earnings smooting derivatives. So far there has been very little from non-financial firms owning up to their OTC derivs meltdown. Many more will come. And the losses will get much bigger. Everything is still marked to fantasy model. SInce there is no mkt for most of these OTC derivs that have gone bad, the true value is zero. Everyone is desperate to stop true price discovery by a liquidation.

http://www.bloomberg.com/apps/news?pid=20601087&sid=akzHhrEzO6hU&refer=home

The largest US minicipal bankrupcy ever looms -  because of OTC derivs

http://www.bloomberg.com/apps/news?pid=20601039&sid=ahSJgzIBbboA&refer=home

Mizunho admits $4.4b loss on OTC derivs, the first Japanese player to finally fess up to losses

http://www.theaustralian.news.com.au/story/0,25197,23525279-20142,00.html

About $250b in losses from from subprime have been announced, most analysts estimate total losses $1-2trillion, meaning about 75% of losses still announced.

According to Soros, the next OTC deriv domimo is credit default swaps (CDS), which at around $44trillion in notional value are waaaay bigger than the CDOs.

http://www.theaustralian.news.com.au/story/0,25197,23519654-643,00.html

And the IMF are saying the world economy is trapped between "fire and ice". Starting to sound like biblical language and proportions...

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/04/11/cnimf111.xml


----------



## sassa

There are two sides to a bank's balance sheet - the left side and the right side.

The problem is that, on the left side, there is nothing right,
and on the right side, there is nothing left!


----------



## happyjack

Sassa  said
"There are two sides to a bank's balance sheet - the left side and the right side.

The problem is that, on the left side, there is nothing right,
and on the right side, there is nothing left!"

That Sassa is a qreat quote I shall put it in my little book

Happyjack

the meek may very well inherit the earth, but it is always going to be run by Accountants,


----------



## sassa

"Look, there's no way to sugarcoat the import price figures that were released today. They stunk to high heaven. Some details:

* Overall import prices surged 2.8% in March, well above the 2% rise that was expected. If you strip out petroleum, you still get a very large 1.1% rise. Strip out all fuels? Prices were up 0.9%, the biggest since this data category started being reported in 2001.

* The year-over-year rate of import inflation is up to a whopping 14.8%. That is up from 13.4% a month earlier and the highest rate in U.S. history (data goes back to 1982; chart above).

* Another key reading buried in the figures: Chinese import prices were up 0.7%. That continues a multi-month string of increases after persistent declines. In other words, emerging markets and countries like China have gone from exporting deflation to exporting inflation. The Wall Street Journal had a good story to this effect yesterday.

We keep hearing from the Ivory Tower economics crowd that inflation is a lagging indicator, that we shouldn't care about the increases, blah, blah, blah. Yet almost every month, the dollar loses more value, commodity prices climb, and import price inflation surges. Eventually, the Fed may be forced to pick its poison -- keep targeting growth by cutting rates and flooding the system with money or putting its foot down and targeting inflation. Alternatively, the dollar will need to bottom out and turn around -- something we haven't seen happen yet (the Dollar Index is down another 32 bps as I write)

UPDATE: Wall Street has been talking about an improved tone to the market lately. But consumers apparently aren't seeing it in their everyday lives. The University of Michigan's consumer confidence index dropped even further in April -- to 63.2 from 69.5 a month earlier. That's the worst reading going all the way back to March 1982.

Moreover, inflation expectations are rising. Consumers expect inflation to come in at 4.8% over the next year, the highest reading since October 1990 (a tie at 4.8%). Consumers haven't expected a higher inflation rate since July 1982. More proof of stagflation? Sure looks like it."
http://www.interestrateroundup.blogspot.com/


----------



## Whiskers

sassa said:


> * The year-over-year rate of import inflation is up to a whopping 14.8%. That is up from 13.4% a month earlier and the highest rate in U.S. history...
> 
> * Another key reading buried in the figures: Chinese import prices were up 0.7%. That continues a multi-month string of increases after persistent declines. In other words, emerging markets and countries like China have gone from exporting deflation to exporting inflation...
> 
> ...*the dollar will need to bottom out and turn around *-- something we haven't seen happen yet (the Dollar Index is down another 32 bps as I write)




My main arguement why this downturn will not be as severe as some expect. 

The residue will carry over for another day.


----------



## Uncle Festivus

Whiskers said:


> My main arguement why this downturn will not be as severe as some expect.
> 
> The residue will carry over for another day.




ROFLOL. That's a classic Whiskers - one to be trotted out in the near future 

A question. With oil @ $110, _if_ the US starts to recover, would not that imply a higher price due to the increasing demand?. If oil @ $110 is hurting them now, what then? Classic demand destruction.


----------



## wayneL

More poisons hatching from the mud - from The Times:



> CITIGROUP and Merrill Lynch will heap further pain on Wall Street this week as they reveal additional sub-prime* write-downs totalling $15 billion (£7.6 billion) or more.*
> 
> In another sign of the intense pressure on leading banks, Deutsche Bank is attempting to offload some of its â‚¬35 billion (£28 billion) of toxic debt to a consortium of private-equity firms.
> 
> Huge exposure to American mortgages is expected to result in Citi taking a $10 billion hit to its accounts, dragging the bank to a first-quarter loss of almost $3 billion. Some analysts believe Citi’s write-downs could stretch to as much as $12 billion.
> 
> Merrill will suffer $5 billion of write-downs, analysts say, which would push the bank $2.7 billion into the red.
> 
> FULL STORY


----------



## explod

wayneL said:


> More poisons hatching from the mud - from The Times:




Yep and on the open today the $US index goes up, figure that ???


----------



## Kauri

explod said:


> Yep and on the open today the $US index goes up, figure that ???




G7 rhetoric??


----------



## explod

Kauri said:


> G7 rhetoric??




ten out of ten again Kauri,  wonder how long it will sustain.   Could be some broken glass this week I think ??    

dangerous to think


----------



## Whiskers

Uncle Festivus said:


> ROFLOL. That's a classic Whiskers - one to be trotted out in the near future




Sure thing, uncle. 



> A question. With oil @ $110, _if_ the US starts to recover, would not that imply a higher price due to the increasing demand?. If oil @ $110 is hurting them now, what then? Classic demand destruction.




On face value it would uncle. With US oil consumption running at about 20m bpd, they have cut back about .5m bpd. They have a lot of potential to reduce demand for oil just by buying fuel efficient cars, a trend that has started and I expect will accelerate once all US vehicle manufacturers start making more fuel efficient models. 

It might have to stay at these levels for awhile though, to convince many yanks that the days of gas guzzling vehicles are over. 

But having said that, there are some massive shale (or was that sand) oil reserves, in Canada for example, that I believe are now economically viable and are in the process of being developed.


----------



## Kauri

explod said:


> ten out of ten again Kauri, wonder how long it will sustain. Could be some broken glass this week I think ??
> 
> dangerous to think




  The widely shared view in the Asian narket is that the change in the 
G7 message  will not support the USD for very long and the USD/JPY remains vulnerable due to rising risk aversion ahead of a busy event week.

Cheers
........Kauri


----------



## Whiskers

I know I've said it before :hide:... but an observation I made a while ago and reiterated below by a couple of leading intellectuals  ... is that many businesses are not burdened with debt, nor is the ability to raise debt a problem for them.

But as these fine gentlemen point out it's a bit of a see-saw battle to see who is winning, ie how much damage the financials will do in the meantime.



> *Recession Has Bernanke, Greenspan Agreeing Companies Have Cash *
> 
> By Rich Miller
> 
> April 14 (Bloomberg) -- The U.S. economy has what Alan Greenspan calls one ``major advantage'' as it falls into a recession: Businesses are in far better financial shape than they were entering the past two contractions.
> 
> Corporations outside of financial services -- from Cisco Systems Inc. to Coca-Cola Co. -- have collectively socked away more than half a trillion dollars in cash. They have also reduced short-term debt and cut inventories to record-low levels in relation to sales, leaving them better prepared than in the past to weather a contraction.
> 
> ``We still have what, at the moment at least, appears to be a reasonably good real economy, as distinct from finance,'' the former Federal Reserve chairman said at an April 8 conference...
> 
> ...
> 
> The current Fed chief, Ben S. Bernanke, sees it much the same. On April 2, he told lawmakers that aside from the banking and securities industries, corporate balance sheets are sound -- a ``positive'' for the economy.
> 
> ...
> 
> Debt as a percentage of net worth for non-financial companies outside of farming was 61.3 in the fourth quarter of last year, compared with 68 at the start of the 2001 recession and 93.6 in the 1990- 91 contraction, Fed figures show.
> 
> ``Cash flows are more than adequate, and the amounts of monies that they need are very readily financed in the weakened credit markets,'' Greenspan said at the April 8 conference.
> 
> http://www.bloomberg.com/apps/news?pid=20601109&sid=aUv3WCFs__qw&refer=exclusive


----------



## explod

Whiskers said:


> I know I've said it before :hide:... but an observation I made a while ago and reiterated below by a couple of leading intellectuals  ... is that many businesses are not burdened with debt, nor is the ability to raise debt a problem for them.
> 
> But as these fine gentlemen point out it's a bit of a see-saw battle to see who is winning, ie how much damage the financials will do in the meantime.





And why the cutting down, or more to the point batterning down?  to be ready for the mother of all recessions.

Intellectuals, yes, but what they are saying and what they do not want you to know are very different.

Every day big conglomerates are going to the wall, the money and productivity is one thing but add to that the job losses and the rising costs of living.   One could go on.

Whiskers I usually ignore your posts and move on but feel you should be warned to have a deeper look at the facts.  The Greenspans and Bernarkes of this world are puppets playing tunes to the sheeple.  

Those in denial and dream world unfortunately, are in for a torrid time.


----------



## dhukka

Some interesting comments from Wachovia's CEO:



> "The precipitous decline in housing-market conditions and unprecedented changes in consumer behavior prompted us to update our credit-reserve modeling and rely less heavily on historical trends to forecast losses. As a result, we have substantially increased our reserves," said Ken Thompson, Wachovia's chief executive officer, in a statement.




Translation - this is off the charts, like nothing we've ever seen. That's why we are raising *$7* billion in new capital and slashing our dividend by more than *-40%* 2 months after raising *$3.5* billion and at that time assuring shareholders that dividend payments would not be cut to conserve cash. 

Interesting times


----------



## Whiskers

explod said:


> Whiskers I usually ignore your posts and move on...




 Oh well. 



> ...but feel you should be warned to have a deeper look at the facts.




Facts are interesting... but when dealing essentially with human ego, vested interests, emotions etc... the facts count for little as you allude to in your next sentence.



> The Greenspans and Bernarkes of this world are puppets playing tunes to the sheeple.




I totally agree here, explod. 

I don't know if you saw my 'column' in the XAO thread, but I'm monitoring people and their behaviour, not just the economic facts... cos as you highlight, people have vested interests, biases and sometimes are just stubornly ignorant and don't always do a rational thing let alone the right thing.


----------



## spectrumchaser

http://www.reuters.com/article/marketsNews/idCNTSIN16290420080414?rpc=44

SINGAPORE, April 14 (Reuters) - Equity markets have found a bottom and are poised to hit new highs in the second half of this year, according to a senior chartist at Dutch-Belgian bank Fortis.
He also said many stock markets have given up about 38 percent of their gains since the start of the latest rally, which based on Fibonacci charts, suggested the markets have found a bottom.
Some investors use charts rather than economic fundamentals predict movements in financial markets.

One of the most popular charting methods involves the use of Fibonacci numbers, based on the work of a 13th century Italian mathematician, which suggest markets tend to find support or resistance at certain "golden ratios" commonly found in nature.


 Next the banks will disclose they have been using   gypsies and crystal balls !


----------



## wayneL

spectrumchaser said:


> http://www.reuters.com/article/marketsNews/idCNTSIN16290420080414?rpc=44
> 
> SINGAPORE, April 14 (Reuters) - Equity markets have found a bottom and are poised to hit new highs in the second half of this year, according to a senior chartist at Dutch-Belgian bank Fortis.
> He also said many stock markets have given up about 38 percent of their gains since the start of the latest rally, which based on Fibonacci charts, suggested the markets have found a bottom.
> Some investors use charts rather than economic fundamentals predict movements in financial markets.
> 
> One of the most popular charting methods involves the use of Fibonacci numbers, based on the work of a 13th century Italian mathematician, which suggest markets tend to find support or resistance at certain "golden ratios" commonly found in nature.
> 
> 
> *Next the banks will disclose they have been using   gypsies and crystal balls !*




LOL



> Paul Nesbitt, London-based technical analysis director at Fortis Private Bank, told Reuters on Monday that the Dow Jones industrial average .DJI may rally to 15,781 points this year, a gain of more than a quarter from Friday's close of 12,325.42.



Not 15,782 or 15,780, but exactly 15,781. 

I use Capricciosa numbers, and they say that anchovy prices will rise to exactly double the price of tomato paste.


----------



## Porper

spectrumchaser said:


> One of the most popular charting ...t of people will be bleating they were right.


----------



## explod

Porper said:


> Yes, but  38.2% isn't the only fib no spectrumchaser.
> 
> If we go through 38.2% there is a good chance we will get to 50%, then even 61.8% although highly unlikely.
> 
> There are dozens of scenarios and even more predictions, so a lot of people will be bleating they were right.




The nonsense (not yours Porper) further confirms the denial of the very dire economic fundamentals in the world economy.    If we find the truth hard to swallow we look for a way out.   

Why not accept the facts and invest accordingly, there a some great opportunities.    Of course one has to do a bit of research and follow new paths but that has always been the case for success.


----------



## Kauri

explod said:


> The nonsense (not yours Porper) further confirms the denial of the very dire economic fundamentals in the world economy. If we find the truth hard to swallow we look for a way out.
> 
> Why not accept the facts and invest accordingly, there a some great opportunities. Of course one has to do a bit of research and follow new paths but that has always been the case for success.





 I accept the facts, *both* _fundemental_ *and* _technical_, to do otherwise is denying the truth, if one ignores either one or the other they are choosing to ignore something that drives the markets, after all one has to do a bit of research and follow new paths but that has always been the case for success.
Cheers
..........Kauri


----------



## Kauri

> UK PM, Brown (*Reuters*) says we must prevent what is happening in US from being repeated in Britain. He goes on to say the challenge is to prevent rising unemployment and Mortgage repossessions



.

 Now who said that he wasn't on the ball, ...  
Cheers
...........kauri


----------



## wayneL

Kauri said:


> .
> 
> Now who said that he wasn't on the ball, ...
> Cheers
> ...........kauri




 

"Too late!" she cried. 

Gordo and nulabor are toast; rabbits in the spotlight.

http://www.timesonline.co.uk/tol/news/politics/article3746918.ece


----------



## GreatPig

Porper said:


> If we go through 38.2% there is a good chance we will get to 50%, then even 61.8% although highly unlikely.



Then 100%.

Should be some good bargains around then...

GP


----------



## Kauri

Can't track it down but a report doing the rounds suggests that the odds of an Aussie recession are increasing... so tis would be a rumour, if the powers that be.. in bold blue.. let it through...

A mass of Uridashi's going through recently... can the real powers that be see the top of the Aud cycle...

ECB reserves levels continue to be very volatile due to USD liquidity swap actions with reserves rising EUR9.5 bln in the week to April 11th due to the latest swap with reserves at EUR153.5 bln as a result. One central bank is still having problems with its balance sheet and has failed to provide a new update for the last six weeks....

Gold reserves declined by EUR38 mln due to sales from one Eurosystem central bank with net gold sales now seen for 177 out of the last 184 weeks.... 

Lingering in the background however remains the slowdown in the US economy with the reports of US foreclosures jumping 57% and the news that Linens N" Things has postponed a $16 mln interest payment with the press focusing today on a number of bankruptcies for US retailers...

Must dash, off to the off-license just realised the grog cupboard is empty and I have decided to limit myself to drinking only on days that end with a *Y *.. and I think today is one of them..

Slanty
.............kauri


----------



## Kauri

I hear State Street has been caught Jay-walking and fined $US 3.2Bln... may take the edge off the Dow.. for a whiles..

Cheers
............Kauri


----------



## Kauri

Is Intel due today???
  no doubt after the bell...  
     bit of a fade on the S+P... 
           in anticipation.... 
 
Cheers
...................Kauri


----------



## wayneL

Kauri said:


> Is Intel due today???
> no doubt after the bell...
> bit of a fade on the S+P...
> in anticipation....
> 
> Cheers
> ...................Kauri




Due at midday Kauri...


----------



## Whiskers

Well, now we know what the yanks have been doing when they're depressed and can't got out to the Mall's! 



> *J&J Posts 40 Percent Jump in 1Q Profit*
> Tuesday April 15, 10:21 am ET
> By Linda A. Johnson, AP Business Writer
> 
> *Strong Sales, Exchange Rates Help Boost Johnson & Johnson's Profit by 40 Pct in 1st Quarter *
> 
> 
> TRENTON, N.J. (AP) -- Health products maker Johnson & Johnson reported a 40 percent jump Tuesday in its first-quarter profit, due to higher sales of consumer products, favorable exchange rates and a research charge a year ago.
> 
> 
> The New Brunswick, N.J.-based *maker of contraceptives, medical devices, baby care items* and prescription drugs reported net income of $3.6 billion
> 
> http://biz.yahoo.com/ap/080415/earns_johnson_johnson.html


----------



## Kauri

Kauri said:


> Can't track it down but a report doing the rounds suggests that the odds of an Aussie recession are increasing... so tis would be a rumour, if the powers that be.. in bold blue.. let it through...
> 
> .............kauri





It is a _US investment bank_ report saying that new Zealand was likely to go into recession while Australia faced a 40% chance of doing so... 
Cheers
...........Kauri


----------



## chops_a_must

Whiskers said:


> Well, now we know what the yanks have been doing when they're depressed and can't got out to the Mall's!
> 
> "Strong Sales, Exchange Rates Help Boost Johnson & Johnson's Profit by 40 Pct in 1st Quarter"




Nah, I'd say it's got to do with a new product line, and a new customer base. I mean, which high end employee from a US bank wouldn't want no more tears?

But apparently, this is the favourite of the new product line:


----------



## Whiskers

chops_a_must said:


> Nah, I'd say it's got to do with a new product line, and a new customer base. I mean, which high end employee from a US bank wouldn't want no more tears?
> 
> But apparently, this is the favourite of the new product line:




Well, yeah... I'll pay that too.


----------



## Uncle Festivus

Are they just talking it down or are they actually being realists? The Dow etc have yet to factor in the recession, let alone company downgrades - a generational short trade.


> Wall Street faces the growing risk of an equities bloodbath in coming months as the credit crunch spreads to the wider economy and earnings crumble, according to a pair of grim reports issued by Goldman Sachs and Wells Fargo.
> 
> David Kostin, the chief US investment guru for Goldman Sachs, expects the S&P 500 index of Wall Street equities to plummet a further 15pc over the "near term" as companies scramble to lower their outlook for this year.
> "Although only a few firms have reported first quarter results, early signs are awful. We expect a swath of lowered profit guidance," he said in a research note published today, entitled 'Fasten Seatbelts'.
> 
> Scott Anderson, chief economist at Wells Fargo, is equally pessimistic, describing the bullish views of some market players as "bordering on delusional".
> "The equity markets have not yet priced in a prolonged downturn in economic growth in my opinion. We are still in the early stages of the credit crunch. Earnings estimates for the second half of the year are likely still far too high," he said.



http://www.telegraph.co.uk/money/ma...08/04/14/bcngold114.xml&CMP=ILC-mostviewedbox


----------



## dhukka

Whiskers said:


> Well, now we know what the yanks have been doing when they're depressed and can't got out to the Mall's!




The comparables look good because last year J&J took a one-off charge of *$807m*. Strip out the one-off and eps was up *8%* from a year ago. Strip out currency gains from a weak dollar and earnings are closer to flat.


----------



## refined silver

says it all


----------



## Kauri

Hey, Citi only scrubbed out 6Bln... all systems go for a rally on that great news...   
Cheers
..........Kauri


----------



## wayneL

Kauri said:


> Hey, Citi only scrubbed out 6Bln... all systems go for a rally on that great news...
> Cheers
> ..........Kauri



LOL Great news, that's chicken feed (apparently), let's crack open a bottle of Dom.


----------



## Kauri

wayneL said:


> LOL Great news, that's chicken feed (apparently), let's crack open a bottle of Dom.



 Just off to the local to buy one... I hope they take my Citi Card..  :  

Cheers
...........Kauri


----------



## CamKawa

I found this chart at http://www2.standardandpoors.com/spf/pdf/index/032508_homeprice_webcast.pdf which was released on the 25/03/2008 by S&P.
Some questions I’m contemplating at the moment are: Is the worst of the sub-prime mess behind us? How much bad news has the market already factored in? There's bottom pickers aplenty saying the worst is behind us. Should I be buying in? Is Wall St going to spill over to Main St? GE's results weren't good but Google's were.


----------



## explod

CamKawa said:


> I found this chart at http://www2.standardandpoors.com/spf/pdf/index/032508_homeprice_webcast.pdf which was released on the 25/03/2008 by S&P.
> Some questions I’m contemplating at the moment are: Is the worst of the sub-prime mess behind us? How much bad news has the market already factored in? There's bottom pickers aplenty saying the worst is behind us. Should I be buying in? Is Wall St going to spill over to Main St? GE's results weren't good but Google's were.





Untill there is clear evidence of a bottom I would stay clear.   Some would say we are still holding up which directly opposes the other.   

The sub-prime mess is only one single aspect of other issues to play out.   $117 dollar oil, increasing interest rates.  In Australia higher currency deterring overseas holiday makers, less money in pockets, descreationary spending will curtail, leasure centres will close, more job losses.  ete. etc and so on we could go with an expanding list of repercussions.

It is a time to watch and wait, reduce debt and at least preserve cash.


----------



## Uncle Festivus

“This is the time to buy stocks.” - _R. W. McNeal, market analyst, New York Herald Tribune, October 30, 1929

_Meanwhile, back in the real world, if that still exists???


----------



## ithatheekret

I was impressed by the little burst of activity on the 200 just after lunch the other day . Nice little spike for a blink , perhaps the starting point for next week .

I saw an interesting side piece on a Swiss bank withdrawing from FX , fixed interest and card activities in the US last week . But it seems this type of activity is proving to be distressful for a few European Banks with regards to US spending habits , it's quite possible this will be the next string of news to start the bear spins off again . 

Personally I like to see the US regurgitating and getting rid off the muck out of its system , the purge may take a little longer , but if it gets out , they could avert having to stay in constant offence / defence mode . Banks will drag out the news and hold the fort if they go by the usual script .

Even if extimates of 20 the 30 Trillion are off a few , it's an awful amount of money to have to revalue with the current Fed policies in place , the has to be a dilutionary effect in products traded against its reserve status .

It may be a crude point , but world food aid is adding to price increases , something not generally brought out , the supply there can't keep up and will need refunding to manage the same quantities it has in previous years .

Instead of planting corn , they'd be better of planting chic peas ...........

Then Ben could use his helicopter to drop fertilizer instead .


----------



## Whiskers

Uncle Festivus said:


> “This is the time to buy stocks.” - _R. W. McNeal, market analyst, New York Herald Tribune, October 30, 1929
> 
> _Meanwhile, back in the real world, if that still exists???




Hey Uncle, are you still having doubts!? 



ithatheekret said:


> Even if extimates of 20 the 30 Trillion are off a few , it's an awful amount of money to have to revalue with the current Fed policies in place , the has to be a dilutionary effect in products traded against its reserve status .




Here's a good exercise for some enthuseastic economist. 

How much of that 'estimated' debt and or losses goes away over time as the stock market recovers and when the US property market recovers?



> Then Ben could use his helicopter to drop fertilizer instead




Hasn't Ben been spreading 'economic' fertiliser... at least to some?


----------



## CamKawa

This is one of the best articles I've read in a while, thought I'd share it.

*Five signs the stock market has bottomed*
http://www.marketwatch.com/news/sto...x?guid={EB79E9EC-DD5F-4884-A75C-17B9F907D48E}


----------



## treefrog

CamKawa said:


> This is one of the best articles I've read in a while, thought I'd share it.
> 
> *Five signs the stock market has bottomed*
> http://www.marketwatch.com/news/sto...x?guid={EB79E9EC-DD5F-4884-A75C-17B9F907D48E}




the article pushes the consumer discretionary as a leading market indicator (do not disagree there) and a pic is worth a thousand words so.......


----------



## Uncle Festivus

Whiskers said:


> Hey Uncle, are you still having doubts!?




Doubts about the end of the 'crisis' & the resumption of 'good times'? 

Actually no, if anything it (negative news numbness) will only make things worse. It's clear the prime money is not going where it's intended but to continued money shuffling - some new deckchairs for the Titanic perhaps.

You have to remember that for the Dow to just be breaking even in inflation adjusted terms it should be several thousand points higher than where it is now. So investing in the US has been and will be an atrocious investment for foreigners, and is now an even worse proposition.

So not only do we have the recession not priced _in_ but the possibility of more bad news is also getting priced '_out_'. The real economy will start to re-exert itself soon enough.

We can still play the game & go long, I'm just not blindly bullish.
Oil = $117


----------



## Uncle Festivus

treefrog said:


> the article pushes the consumer discretionary as a leading market indicator (do not disagree there) and a pic is worth a thousand words so.......




https://www.aussiestockforums.com/forums/showpost.php?p=227177&postcount=819

Not sure if it's the start of a new trend but some retailers saying they are doing it tough eg Pauls Warehouse and a few others resulting in job losses. Unemployment will be the best market indicator for AUS, so far holding up?


----------



## treefrog

Uncle Festivus said:


> https://www.aussiestockforums.com/forums/showpost.php?p=227177&postcount=819
> 
> Not sure if it's the start of a new trend but some retailers saying they are doing it tough eg Pauls Warehouse and a few others resulting in job losses. Unemployment will be the best market indicator for AUS, so far holding up?




top call back in august there uncle, top call


----------



## numbercruncher

Uncle Festivus said:


> https://www.aussiestockforums.com/forums/showpost.php?p=227177&postcount=819
> 
> Not sure if it's the start of a new trend but some retailers saying they are doing it tough eg Pauls Warehouse and a few others resulting in job losses. Unemployment will be the best market indicator for AUS, so far holding up?





My Brother works in the Car business, sales have nose dived apparently, His employer is blaming the credit crunch/market crash, whatever we are calling it now.


----------



## bolsatrading

The severe market correction is in 2009. In 2008 the insiders shell the big packets of stocks.

The next year the markets crash correction.

www.europe-markets.tk


----------



## reece55

bolsatrading said:


> The severe market correction is in 2009. In 2008 the insiders shell the big packets of stocks.
> 
> The next year the markets crash correction.
> 
> www.europe-markets.tk




Bolsa
Rather than giving us a link to your blog, would you mind expanding here on ASF why you make this bold prediction......... I, as I am sure many here, would be interested on how you come to this assessment.

Cheers


----------



## ithatheekret

In reply to Whiskers question.

How much of that 'estimated' debt and or losses goes away over time as the stock market recovers and when the US property market recovers?



Only the amount that has been repaid or written off . The stock market has nothing to do with the debt recovery , also recovery of the housing market has nothing to do with the debt , recovery is a demand matter related to price and availability to finance .

A loss if declared is just that , a loss and is unrecoverable as it has generally been written off or dealt with by a court .

If the debt is secured then the liability can remain , unsecured and the hope is not in the recovery of monies , but in the percentage of monies available to be placed in the retrieval zone , ie. 10cents to the $1 etc. 

The debts in the US cases is under the realm of the FDCPA ( fair debt collection practises act ) or the Consumer Credit Protection Act . The offices that police this do so under the Federal Trade Commission Act .

None of which are linked to any stockmarket activity .


----------



## Whiskers

ithatheekret said:


> In reply to Whiskers question.
> 
> How much of that 'estimated' debt and or losses goes away over time as the stock market recovers and when the US property market recovers?
> 
> 
> 
> Only the amount that has been repaid or written off . The stock market has nothing to do with the debt recovery , also recovery of the housing market has nothing to do with the debt , recovery is a demand matter related to price and availability to finance .
> 
> A loss if declared is just that , a loss and is unrecoverable as it has generally been written off or dealt with by a court .
> 
> If the debt is secured then the liability can remain , unsecured and the hope is not in the recovery of monies , but in the percentage of monies available to be placed in the retrieval zone , ie. 10cents to the $1 etc.
> 
> The debts in the US cases is under the realm of the FDCPA ( fair debt collection practises act ) or the Consumer Credit Protection Act . The offices that police this do so under the Federal Trade Commission Act .
> 
> None of which are linked to any stockmarket activity .




Hi ithatheekret.

Yeah, I understand the accounting principles... I majored in accounting and law. 

I interpreted the meaning of 'estimated' as 'provision' for losses. What I was trying to get to was to qualify and quantify, 'estimated', as in bad debts, future trading losses or asset write downs 

I have seen some of the numbers you refer to floating around, but I'm unsure of exactly what they refer too. Assuming they are provisions for losses against mortgages and related products, leveraged investments or whatever, and the market stabalised or even rose again, less people would be walking away from or reposessed out of their homes or be getting margin calls etc, so my question was meant to be how much of those (estimated) provisions for losses would go away?

If they are not 'provisions' for losses accumulated from reporting entities, how are they arrived at and by whom?


----------



## doctorj

ithatheekret said:


> A loss if declared is just that , a loss and is unrecoverable as it has generally been written off or dealt with by a court .



Think about the entry they're likely to raise that results in the loss:
Dr Bad Debt Expense X
Cr Provision for bad debts X

This entry will need to be done for each specific loan asset which isn't likely to be recoverable as the reasonable doubt arises.

The bad debt expense would probably be the amount loaned less the estimated recoverable amount (eg from the sale of the property).  As these things resolve you'd write off loan asset against the provision.  

Thing is, if house prices change in the interim, they may find they've either over or under provided.

Hopefully, they've been ultra conservative with the provisions for now, so any surprises will be to the upside.


----------



## Whiskers

doctorj said:


> Hopefully, they've been ultra conservative with the provisions for now, so any surprises will be to the upside.




That's what I was thinking, because as I recall (but the GAAP rules may have changed since) the US write down rules were more severe than Aus and the US rules don't allow for upward revaluation near as generously as Aus either.


----------



## ithatheekret

It's the creativity that get's them in the boilers pot in the first place .

I always assumed they allowed for the provisions at a rate at which they deemed to be legally acceptable . Of course this isn't always the case and the taxman a cometh happens quite often . So what they say and what the really achieve at a bottom line levels are two seperate issues , usually dragged out by a tax audit  .

A bad debt and a provision for a bad debt are again completely seperate issues , one is a fact the other a hope .
Once again it's the taxman that changes it back to reality .

The ones he/she ......IT hasn't got to yet , are still either dreaming or have the book/s in order . 

Because every set of books has a stuff up or two whited out somewhere . It the ones running different sets of books for their tiered structuring , that usually end up against the wall , they haven't generally got enough to open an account for provisions . That's when the market tends to get a huge round of raisings to bolster the empty coffers , chuck in another company name change to hide the old skeletons and bingo , back in operation , new name , new accounts and new suckers to milk along with a few old ones .

But then when it gets to credit swaps , the suckers were generally buying the same crud they'd off loaded to someone else , that's just repackaged it and added a ribbon . 

It's called creative financing meets creative accounting .

Anyone studying the field would no it's perfectly legal .... until you get caught .

The funny thing is they still don't know exactly how much they are liable for , if that is the case , then just perhaps they don't know how much they are really worth as a company , yet alone as a going interest .

In theory that would also mean that for years now , the financial statements have been fiction .


----------



## Uncle Festivus

Talking about provisions, seems like the *mark to market* bit is hurting too many so the talk is that they will change the way a loss from MTM is defined, somthing along the lines of if it was a forced MTM ie like we have just seen, then it is not a valid MTM because it is or would be not be at the control of the entity, so therefore shouldn't take place. Changing the goal posts again for the Work that one out. I will try to find the story again.


----------



## adriverb

An article with a view there is a more to come of the credit crisis in America.

Posted for interest sake only - I do not endorse or take responsibility for material from this site.

From: http://www.moneyandmarkets.com/Issues.aspx?A-Monumental-Change-1686

A Monumental Change!  
by Martin D. Weiss, Ph.D.   04-21-08

While most investors are focused on the latest stock market rally, hidden from view is a monumental change that few recognize and fewer understand: Unprecedented amounts of old debts are coming due in America, and many are not getting refinanced.

Even worse, borrowers are going into default, lenders are taking huge losses, and outstanding loans are turning to dust.

The numbers are large; the government’s response is equally massive. So before you look at one more stock quote or any other news item, I think it behooves you to understand what this means and what to do about it ...

New Evidence of
A Credit Crack-Up

Until recently, economists have had only anecdotal evidence of credit troubles.

They knew that individual banks were taking losses. They knew that many banks were tightening their lending standards. And they realized that there were hiccups in the credit markets.

So they called it the “credit crunch” ”” essentially a slowdown in the pace of new credit growth.

But we didn’t buy that. Earlier this year, we warned that America’s credit woes involved much more than just a slowdown. We wrote that it was actually a credit crack-up ”” an outright contraction of credit the likes of which had never been witnessed in our lifetime.

Wall Street scoffed. No one had seen anything like this happen before, and almost everyone assumed that it would not happen now.

They were wrong.

Indeed, three new official reports are now telling us, point blank, that the credit crack-up is already beginning!

First, the Federal Reserve is reporting
a big contraction in short-term debts.

The specifics: Based on its Flow of Funds Report (pdf page 18), we can clearly see that ...

    * Just in the third quarter of last year, “open market paper” (mostly short-term commercial loans) was slashed at the annual rate of $682 billion ...

    * In the fourth quarter, it shrunk again ”” at the rate of $337 billion per year, and ...

    * This shrinkage doesn’t even begin to reflect the impact of the Bear Stearns failure or the huge additional bank losses announced so far this year. 

I repeat: This is not a mere “slowdown” in new lending, which would be relatively routine. This is an actual reduction in the short-term loans outstanding, which is anything but routine ... which implies a rupture in the nation’s credit spigots ... and which could deliver a new shock to the U.S. economy.

If this represented a planned and voluntary effort by lenders to begin trimming America’s debt excesses, it might actually be a good thing.

But that’s not the case here, not even close. Rather, this debt reduction is almost exclusively forced on lenders by the pressure of events ”” the plunging value of mortgages, the surging defaults by debtors, and the huge losses that have caught both banks and regulators off guard.

Second, the Comptroller of the Currency (OCC)
is reporting havoc in the derivatives market.

Derivatives are bets and debts placed by banks and others.

In recent decades, derivatives have grown far beyond any semblance of reason. But in its latest report, the OCC reveals that in the fourth quarter of 2007 ...

    * For the first time in history, the notional value of derivatives held by U.S. commercial banks plunged dramatically ”” by $8 trillion ...

    * For the first time in history, U.S. banks suffered a massive overall loss on their derivatives ”” $9.97 billion, and, again ...

    * These numbers do not yet reflect this year’s disasters at Bear Sterns and other institutions. 

The OCC’s chart below illustrates the magnitude and drama of the decline:

The chart shows that, until the third quarter of last year, U.S. commercial banks had been making consistent profits from their derivatives quarter after quarter.

Their total revenue from these and related transactions (red line) never dipped into negative territory ... rarely suffered a significant decline ... and was even making brand new highs through the first half of 2007.

Then, suddenly, in the fourth quarter of last year, we witnessed a landmark game-changing event: For the first time ever, U.S. commercial banks lost big money in derivatives in the aggregate (as you can plainly see by the sharp nosedive of the red line).

Again, if this were part of a planned retreat by the banks to more prudent trading approaches, it would be a positive. But it’s anything but!

Indeed, the OCC specifically states in its report that the sudden and unusual reduction in derivatives was due entirely to the turmoil in the credit markets.

And ironically, nearly all of that turmoil was concentrated in “credit swaps” (blue line in the chart) ”” the one sector that was designed to protect investors from this precise situation.

These credit swaps were supposed to act as insurance policies that big banks and others bought to help cover their risk in the event of defaults and failures. But they’re not working out as planned: Just in the fourth quarter, U.S. banks had a net loss (after all profitable trades) of $11.8 billion on credit swaps alone, according to the OCC.

Those losses helped wipe out all the profits they made in other derivatives, leaving a net overall loss of $9.97 billion.

Third, the International Monetary Fund (IMF)
predicts that this crisis is barely ONE-THIRD over!

In its Global Financial Stability Report(see Executive Summary), the IMF predicts that the total losses from the subprime and related credit crises could reach $945 billion, or more than triple the already-huge losses that have been announced so far.

The IMF further warns that ...

    * “There has been a collective failure to appreciate the extent of the leverage taken on by a wide range of institutions ”” including banks, monoline insurers, government-sponsored entities, and hedge funds ”” and the associated risks of a disorderly unwinding.” Now, both the OCC and the Fed reports confirm that this “disorderly unwinding” is already beginning.

    * “The transfer of risks off bank balance sheets was overestimated. As risks have materialized, this has placed enormous pressures back on the balance sheets of banks.” Now, the OCC report confirms that “the transfer of risk” (with credit swaps) has often failed.

    * “Notwithstanding unprecedented intervention by major central banks, financial markets remain under considerable strain, now compounded by a more worrisome macroeconomic environment, weakly capitalized institutions, and broad-based deleveraging.” This is precisely what we have been warning you about. Now, it’s happening! 

Looking ahead, the IMF also warns about...

    * “Deep-seated balance-sheet fragilities and weak capital bases, which mean the effects [of the crisis] are likely to be broader, deeper and more protracted.”

    * “A serious funding and confidence crisis that threatens to continue for a significant period.”

The U.S. Government’s Response

You’ve seen what the Fed has already done ”” six rate cuts since August of last year ... unprecedented broker bailouts ... and massive new amounts of liquidity pumped into the banking system.

You’ve seen where a lot of that money has gone ”” into foreign currencies, gold and oil.

And you’ve seen the dramatic market surges which that money can generate. Case in point: The latest jump in crude oil to $117 per barrel.

Now, get ready for more of the same:

    * More rate cuts, with the next expected as soon as April 30 ...

    * More Fed bailouts ...

    * Even wilder money printing, and ...

    * Larger surges in foreign currencies and commodities, despite intermediate setbacks.

But also start preparing for the day when the credit crack-up temporarily overwhelms the Fed, driving the U.S. economy into a far deeper recession than most people expect.

The Bottom Line for You Right Now

The three official reports support several related conclusions:

First, whether the stock market goes up or down in the near term, this crisis is far from over ”” and it’s likely to get a lot worse.

    Bottom line: It’s far too soon to waver from a path of safety. 

Second, credit is already scarcer and is probably going to be even harder to get as this crisis progresses.

    Bottom line: If you’re looking forward to a future day when you can buy properties at bargain prices, don’t count on doing so with a lot of borrowed money. Instead, be prepared to put up substantial amounts of cash. 

Third, some banks won’t survive this crisis.

    Bottom line: Be sure to keep your bank accounts ”” including principal, accrued interest and checks outstanding ”” under the FDIC’s $100,000 insurance limit. (Amounts that run above the limit could be at risk.) Plus, for maximum safety, use U.S. Treasury bills or money market funds invested exclusively in short-term Treasuries. 

Fourth, for protection and profit from a falling dollar, invest in the strongest foreign currencies plus other assets that naturally rise with the falling dollar.


----------



## rub92me

Uncle Festivus said:


> Talking about provisions, seems like the *mark to market* bit is hurting too many so the talk is that they will change the way a loss from MTM is defined, somthing along the lines of if it was a forced MTM ie like we have just seen, then it is not a valid MTM because it is or would be not be at the control of the entity, so therefore shouldn't take place. Changing the goal posts again for the Work that one out. I will try to find the story again.



Classic, but seems to be a bit of a half-measure. Why not re-define debit as credit and everyone is making massive profits again. Problem solved,


----------



## explod

rub92me said:


> Classic, but seems to be a bit of a half-measure. Why not re-define debit as credit and everyone is making massive profits again. Problem solved,





That is exactly what many companies on Wall Street have been doing for years.   Debt wraps have been counted as assets when calculating price eranings ratios.

It is this knowledge which has been available for some time that marks some of us doomsayers.   But in fact just looking at reality.


----------



## sassa

I think "Imminent and Severe Market Correction"readers will be interested in this article.Part of-
The Credit Crunch is Dead! Long Live the Credit Crunch!
 What a difference five weeks makes.
Around the ides of March, we had the mind-focusing spectacle of the possible implosion of Bear Stearns, which was feared to take down a lot of the financial system. But Fed and JP Morgan to the rescue, Lehman presents earnings that depend entirely on accounting rather than business activity, namely, widening credit spreads that made its own outstanding debt worth less, and everything is hunky dory. Oh, yes, UBS announces losses equal to 5% of Swiss GDP, but that too is rationalized as a sign that the Swiss giant has gotten past its bad patch. And while the earnings reports from Bank of America and National City were less than stellar, the Bank of England has thrown in the towel, and following the Fed, will accept £50 billion of mortgage debt as collateral (actually, they are on-upping the Fed; the BoE's loans have an one-year term). And while critics in the UK say this program won't revive the housing market, that may not be the point of this exercise. 

Most observers have deemed the credit crisis to be over, and are now focusing on such pressing questions as how fast the recovery will be and how bad inflation might get. 

Perhaps I am inflexible and unable to adapt to new information, but I don't see what has been accomplished beyond kicking the can down the road three to nine months. As reader Scott noted:

Basically what's happened is that we've moved bad paper from the banks, where it needed to get marked to market, at least at some point, to the Fed, where that doesn't have to happen. It's a sort of out of sight out of mind phenomenon. But all those CDOs and MBS and CLOs are made up of individual mortgages, and of hung LBO loans. They will either be paid off in the end, or they'll go into default. Assuming, as I think seems right, that some of them default, the Fed will have another line item on its balance sheet, REO. So as I see it, it's absurd to say the credit risk has been "disappeared"; it's just been moved from the banks to the public.

Let's consider just a few unpleasant realities. The Journal today points out that banks are increasing reserves, which means they need more capital (um, guess regulators are riding them to provide for likely losses ex ante rather than when they can no longer avoid taking them). The US consumer at some point is going to have to reduce spending as a percent of GDP; the open question is whether that happens in time to avert a dollar crisis (given the Fed determination to reflate assets and preserve demand, we seem to have an answer as far as the intent of policy is concerned). But then again, as reader Steve pointed out, Fed governor Frederic Mishkin testified before Congress last week that small businesses, the big engine of job growth, are starting to have trouble getting credit (they are heavily dependent on loans collaeralized by real estate and credit card borrowing, both of which are scarce and costly now). 

And our old litany of woes has merely retreated from the fore rather than gone away: we still have the monolines almost destined to come apart at some point, the fact (as John Dizard pointed out) bigger GSEs are systemically destabilizing due to their pro-cyclical hedging, the not trivial problem that the housing market won't bottom till 2010 at the earliest, with more writedowns resulting, and my pet worry, CDS. As I understand it (and better informed readers can chide me if I am wrong), the CDS market basically has to keep growing to stand still. Again, perhaps I am too old school, but with inadequate margining/equity provisions, it seems guaranteed to go into crisis. You don't get happy endings with ever mushrooming bets on underlying equity that fails to show corresponding growth. 

Today, we had the biggest bank fundraising announced to date, RBS's hugely dilutive £12 billion equity sale (and that's in addition to £4 billion of asset sales). Reader Steve pointed us to a key item from the press release: the Scottish bank's writedowns are markedly deeper than those taken by US banks to date, suggesting that the worst is not over on this side of the Atlantic. They have marked their US Alt-As at 50% of face, subprime at 38%, and CMBS at 83%. 

Eeek. Steve's remarks:
{The] RBS summary is damn sobering and is likely the first example of the greater transparency that BOE/Treasury are demanding from UK banks in exchange for the new borrowing facility. RBS may have exaggerated the marks to give themselves wiggle room, since they really can't go back to the cap markets for a while. But still, the difference from marks at US banks (particularly commercial banks) is sobering and a sign that the crisis is going to drag on `in full opacity' in the US for quite some time.
The rest of the article is available at-

http://www.nakedcapitalism.com/2008/04/credit-crunch-is-dead-long-live-credit.html


----------



## wayneL

Perusal of the financial medja at the closing bell reveals much gnashing of teeth over earnings. 







> U.S. stock indexes end lower as earnings below expectations
> By Kate Gibson
> Last update: 4:11 p.m. EDT April 22, 2008
> 
> NEW YORK (MarketWatch) -- U.S. stocks slumped Tuesday in the face of a slew of financial reports, including technology bellwether Texas Instruments Inc., which offered results below expectations.




The USD$64,000,000 is whether there are enough Polly-Annas to shrug off reality and push the market further. The delusion factor is still high, so who knows.


----------



## Whiskers

wayneL said:


> Perusal of the financial medja at the closing bell reveals much gnashing of teeth over earnings.
> 
> The USD$64,000,000 is whether there are enough Polly-Annas to shrug off reality and push the market further. The delusion factor is still high, so who knows.




I'm watching the 'crowd'. 

It seem they're thinking the worst is over... lets get optimistic. 

In any case the FOMC meet next week, so they have to play down their enthusiasm a bit into the lead up to that, before they show their appreciation for another cut.  

PS: Be a bummer if they don't cut this time! 



> *A strong case for market optimism*
> *Believe it or not - you have several good reasons to believe the sky isn't falling. In fact, it may be clearing up.*
> 
> By Michael Sivy, Money Magazine editor-at-large
> Last Updated: April 22, 2008: 4:40 AM EDT
> 
> 
> (Money Magazine) -- The economy is in trouble and fear rules Wall Street. No wonder. Banks and other financial companies are posting huge losses. The Federal Reserve has had to engineer a rescue of investment bank Bear Stearns. Home prices are sinking.
> 
> The Fed is cutting interest rates to battle recession, but the stock market refuses to be calmed. The Dow swings wildly even as it teeters on the edge of a bear market. And oil keeps rising while the dollar keeps falling. It's all unsettling in the extreme.
> 
> But the really scary question is, What's next? Are we at the start of a deep recession and a crushing decline in stock prices? And however serious the problems, how can you best protect your investments?
> 
> I'd argue that if you apply a little long-term thinking to the worries that are keeping you up at night, you may well conclude that the outlook for your portfolio isn't so bad - and in fact, that it may even be mildly encouraging.
> 
> ---
> 
> *That sounds awful. Why on earth should I be optimistic?*
> First, remember that predictors of doom make headlines precisely because their positions are so extreme. Most forecasters are more positive. The UCLA Anderson Forecast still anticipates that the slowdown won't even be severe enough to rank as an official recession. (To qualify, the economy has to actually shrink for at least six months, not just stagnate.)
> 
> Edward Yardeni of Yardeni Research is one of many economists who expect a short, shallow recession during the first half of the year with a recovery starting by fall, and he projects that S&P 500 operating earnings will rise 7% for the year. Yardeni also notes that the price/earnings ratios of big value stocks are quite low and that growth stocks are the cheapest they've been in more than a decade.
> 
> Even Warren Buffett, who has said we're now in a recession, is bullish longer term. His Berkshire Hathaway has sold a variety of options basically betting that the stock market is close to a bottom.
> 
> I'm inclined to agree that the outlook for the economy is more encouraging than most investors seem to think. For one thing, it appears likely that most of the damage has been done and that stock prices today reflect what are now widely recognized problems. Moreover, while you can find similarities between the three big shocks of the past 80 years and today's situation, none really matches present circumstances. Let's look at them in more detail.
> 
> ---
> 
> http://money.cnn.com/2008/04/21/pf/mad_market.moneymag/index.htm


----------



## explod

The so called reports trotted out above have no substance.   Michael Sivy, the nearest he gets to any sort of qualification is that Buffet is optomistic long term.  Wow, we all are, but how long.

Yardeni states P/E's are low, of course they look low but a proper examination shows that a growing number of US companies on the Dow include so called assets with up to 90% debt.   (Financial Armageddon, M Panzer)

One of the things I like most about ASF is that reasoning and qualification is uppermost and whilst we maintain that, our Forum will remain ahead of the pack.   It is in fact a great and growing learning centre.   Off topic, but go Joe.


----------



## treefrog

Whiskers said:


> I'm watching the 'crowd'.
> 
> It seem they're thinking the worst is over... lets get optimistic.
> 
> In any case the FOMC meet next week, so they have to play down their enthusiasm a bit into the lead up to that, before they show their appreciation for another cut.
> 
> PS: Be a bummer if they don't cut this time!




maybe whiskers; maybe not.
FN Arena article promo today "Quotes & Shorts: It's The End Of The Bear Market Rally, Says Morgan Stanley, And More... 
Morgan Stanley strategists call for phase two of the bear market, while CBA's Ralph Norris and the ECB's Trichet believe this financial crisis is far from over. "


----------



## explod

The ole Fed abrigating its responsibility, or is it, from Chuck Butler's daily report:



> A reader sent me a story that appeared in the Washington Post, and written by George F. Will... In the article, George Will takes the Fed to the woodshed for coming to the aid of Bear Stearns... He had lots to say, but I had to cut it down to a couple of snippets that apply to us... Here's George Will from the Washington Post...
> 
> "The Fed's mission is to preserve the currency as a store of value by preventing inflation. Its duty is not to avoid a recession at all costs. The Fed should not try to produce this or that rate of economic growth or unemployment."
> 
> And this: "A surge of inflation might mean the end of the world as we have known it. Twenty-six percent of the $9.4 trillion of U.S. debt is held by foreigners. Suppose they construe Fed policy as serving an unspoken (and unspeakable) U.S. interest in increasing inflation, which would amount to the slow devaluation – partial repudiation – of the nation's debts. If foreign holders of U.S. Treasury notes start to sell them, interest rates will have to spike to attract the foreign money that enables Americans to consume more than they produce.
> 
> Having maxed out many of their 1.4 billion credit cards, between 2001 and 2006 Americans tapped $1.2 trillion of their housing equity. Business Week reports that the middle-class debt-to-income ratio is now 141 percent, double that of 1983."
> 
> [unquote]


----------



## Uncle Festivus

Love these quotes - more for the almanac? Some of these bull market stars are finding it a bit harder to come to terms with a bear market, let alone trade it.



> *SAN FRANCISCO (MarketWatch) -- The "panic phase" of the credit meltdown is over -- ending with the collapse last month of brokerage Bear Stearns -- and stocks are poised to post strong gains in coming months, veteran mutual-fund manager Bill Miller says.*
> 
> In a letter Wednesday to shareholders of Legg Mason Value Trust, Miller said he expects the battered financial sector to improve and that the rebound in housing shares should continue.




With a record like that, hope springs eternal....



> In a quarterly letter to shareholders released yesterday, Miller said his fund is turning a page on its "awful" performance. The Value Trust fund lost 19.7 percent in the first quarter, the worst three-month span compared with the S&P 500 index in its 26-year history. That continued a slump that began in 2006, when Miller's record 15-year streak of beating the benchmark index was broken.
> 
> The fund's weak performance - it was ranked last among peers in a recent tally - has contributed to financial struggles at Baltimore-based Legg Mason, where investors have pulled money from the company's mutual funds in recent months.
> 
> The company's stock has fallen 19 percent since the beginning of the year, on top of the 25 percent decline last year.


----------



## sassa

Fact or fiction?Some of both!!
"America, of course, is already in recession – although the cascade of defaults, business closures, and job losses has barely begun.

Japan is in recession too, according to Goldman Sachs. It is still the world’s second biggest economy by far, lest we forget.

Britain, Ireland, Spain, Italy, and New Zealand, are tipping into housing slumps and demand implosions of varying severity.

Ontario and Quebec have stalled. Canada’s growth is the weakest in fifteen years, hence the half point cut by the Bank of Canada yesterday.

Australia is on borrowed time, whatever the price of coal and iron ore. Household debt is 175pc of disposable income, up in La La Land with England, Ireland, Denmark, and the Dutch. The wholesale funding market for mortgages that underpins this nonsense remains frozen.

Together these countries and regions make up roughly 45pc of the global economy, and over half global demand. My hunch is that this bloc will be sliding towards full-blown deflation within a year as the commodity bubble pops and job losses set off a self-feeding downward spiral."
http://www.nakedcapitalism.com/2008/04/this-bear-growls-on.html


----------



## Whiskers

explod said:


> Having maxed out many of their 1.4 billion credit cards, between 2001 and 2006 Americans tapped $1.2 trillion of their housing equity. Business Week reports that the middle-class debt-to-income ratio is now 141 percent, double that of 1983."






sassa said:


> Australia is on borrowed time, whatever the price of coal and iron ore. Household debt is 175pc of disposable income, up in La La Land with England, Ireland, Denmark, and the Dutch. The wholesale funding market for mortgages that underpins this nonsense remains frozen.




I wonder about expressions like these sometimes. *Often a bit ambiguous and easy to presume too much into them* like some of the other numbers splashed about in the press such as the trillions of 'estimated' debts that jurno's don't specify whether it's 'provisons' for debt or just some arbitary figure conjured up from somewhere that they usually don't specify.

Do they mean debt to income ratio (DTI) as a percentage of gross or disposable monthly income that goes toward paying debts?

The Aus case specifies 'disposable' income. Is the US case talking about gross or disposable income?

The US case implies a number specific to 'middle class' America. The Aus numbers refer to 'household' debt. So you have single income households and dual or multiple income households which obviously can carry more debt, but when you bundle them all together it gives a distorted picture of 'household' finances. A relatively small number of reckless, irrisponsible people can run up quite a large amount of debt that reflects badly on a lot of others when they are aggregated.

Are they talking about total debt, regular debt repayments or regular debt repayments plus outstanding repayments.

Or are they some other ratio, ie total debt to annual gross income? 

Are they an aggregate of total national debt to total national personal income... again gross or net, including those who have no debt?

It's all very confusing and unreliable data unless they specify better what they are talking about. Can be like a fishmonger talking about 'fish' without specifing whether he is talking about salmon or sardines. 

In any event, debt to income is a bit of a dubious ratio when an increasing number of people have other assets and or periodic capital gains income of various sorts these days to supplememt their day job.

I would place more emphasis on debt to equity ratio's, net worth anytime.

Sure a few bad apples can spoil the barrel. That's why I much prefer to know more about each apple so that you can root out the source of the bad ones quickly without loosing the whole barrel... throwing the baby out with the bath water so to speak.

In the Agriculture industry there is technology to track all the inputs and production from individual blocks, sub-blocks down to individual trees, ie to be able to track a case of bad apples back to a specific block, often sub-block and sometimes individual trees so a poorly performing tree or small part of the block can be remied or removed as the case may warrant.

You would think economists and or economic jurno's could do a much better job of inentifying there apples and oranges!


----------



## Kauri

Ye Gogs... what does that mean..
 Paulson has been talking and saying that the strong US is in the US interest and that G7 language speaks for itself. He notes that though* the US economy is in a rough patch, that fundamentals are strong* and will be reflected in the USD.

  There is none so blind as those that have had their eyes punched out...  ooops.. mispent youth reasserting itself..

   Y
       ME


----------



## Uncle Festivus

Kauri said:


> Paulson has been talking .......




Reason enough to be cautous about what is happening in this reactionary 'lull'. It is pretty obvious that what is unfolding is based on a lot of rhetoric, a lot of targeted 'stimulus' at opportune timing, a general plan involving other central banks in collusion, and a willingness of the general investing populace to want the correction/contagion to end and resume an bullish bias.

Normally, as in the past, it would work, and we would all be back to onwards and upwards based on creative debt creation and manipulation.

But, as is being exposed in the LIBOR scandel, dig a little deeper and all will be revealed, in due course, of course. Make some hay, but stand close to the farm gate for a quick exit. Still no sign of the fat lady .


----------



## Uncle Festivus

Whiskers said:


> You would think economists and or economic jurno's could do a much better job of inentifying there apples and oranges!




Yes, how often have we seen this in the recent past - 



> The decline in new-home sales to a seasonally adjusted annual rate of 526,000 was much weaker than the 577,000 pace *expected by economists* surveyed by MarketWatch.




Considering that pontificating on data is pretty much they do all day you'd think they would get somewhere in the ballpark. 

As for financial journo's, the majority are the ones who were too dumb to be economists .


----------



## davo8

Uncle Festivus said:


> Make some hay, but stand close to the farm gate for a quick exit. Still no sign of the fat lady .




Just so you don't feel lonely...I'm standing right next to you!

The facts coming out of the USA are universally horrible and getting worse. Employment, prices, credit defaults, bankruptcies, foreclosures, business downturns, oil, inflation, banks -- all bad and no end in sight.

The rhetoric is variable. There are those talking the market up, but not a single competent independent commentator in that camp. Then there are those predicting disaster, including the usual suspects. Mostly the independents are predicting a very, very severe recession lasting at least another year and resulting in a serious drop in standards of living.

Meanwhile the US market is levitating. It's obvious there is market intervention and it can't last forever. 

Anyone who has the eyes to see the facts and still thinks that gloom and doom from competent commentators is a sign of the bottom and hype from the popular press confirms it is just plain stupid, IMHO.

The USA is a cot case, for now. All that remains to wonder is: what will happen to the rest of the world, and us?


----------



## explod

Uncle Festivus said:


> Yes, how often have we seen this in the recent past -
> 
> 
> As for financial journo's, the majority are the ones who were too dumb to be economists .




Nearly right Uncle, one of them made it to President.


----------



## Kauri

Crude prices have jumped this morning, rising $3 on the back of a slightly weaker USD today as well as *news that the US has shot warning shots at an Iran boat.* The strike at Grangemouth, with the shutdown in the refinery reported by the *BBC* , coupled with further attacks in Nigeria continue to fuel supply concerns. Gold prices are up ...  

Cheers
............Kauri


----------



## CamKawa

I read articles like this

*U.S. Economy: Sentiment Weakens More Than Anticipated (Update3) *
http://www.bloomberg.com/apps/news?pid=20601087&sid=aeW44YtQ_2s8&refer=home

and then find the DOW is up 42.91


----------



## eric341

Perhaps the market has already taken these economic data into account, and is now on the way up....?


----------



## eclipse

Is the US ready to drop interest rates again, lets wait and see what they will do next


----------



## Broadway

CamKawa said:


> I read articles like this
> 
> *U.S. Economy: Sentiment Weakens More Than Anticipated (Update3) *
> http://www.bloomberg.com/apps/news?pid=20601087&sid=aeW44YtQ_2s8&refer=home
> 
> and then find the DOW is up 42.91




I heard a guy on tv (can't remember-sry) say that this is because funds are placing money in the Dow 30 companies as a flight to safety because commodoties are not looking attractive anymore, and there's not much else, apart from cash.

And so this is pushing the market up temporarily.

But who knows for sure. For every doom and gloom expert there seems to be someone saying the bottom is in and ancient history.

There was good volume around mid-march, and the hang seng is trending up strongly, and the us dollar might have hit it's final bottom for a while - so I'm in with the bulls, for this week anyway.


----------



## Uncle Festivus

I think this week may be pivotal for everything - equities, commodities, currencies & gold. Lot's of fund managers & investors with itchy trigger fingers willing to pile into & out of the flavour investment/trade of the hour; the last gasp flip flops of the capitalist debt binge. 

A long legged-doji for gold & hanging man for the DOW may suggest a roll-over week ahead, and support for the 3rd alternative currency, gold, as the Euro zone too shuffles towards the recession precipice.   The end of the European Union perhaps, or a few recalcitrant countries to break free ie France & Spain, due to their systemic problems?



> The headline confidence figure fell to -7.4 in April from plus 1.2 in March, with a dramatic slump in the export order books to -14. This is flashing near-recession warnings. David Owen, an economist at Dresdner Kleinwort, said Europe would soon be engulfed by the twin effects of a "collapse in export volumes" and a slow motion credit squeeze. "The wheels are coming off the eurozone economy," he said. BNP Paribas warned clients yesterday that* the "decoupling story" was no longer credible*. "We see Europe in the early stage of a credit crunch, and if we are right credit supply will shut down," it said. Key governors of the European Central Bank began to back away from their hawkish stance of recent weeks, clearly disturbed by the market perception that they are mulling a rate rise to choke off price rises. Inflation has reached a post-EMU high of 3.6pc on surging oil and food costs.


----------



## ShareIt

so far the market doesn't seem to want to go down... it keeps rallying back to the highs and is showing a more positive outlook to break upside.... evidence that this market (S&P 500) does want to go higher, volume was heavier to the upside at the end of Friday (Friday is usually a profit taking day).... my , i think we will come in weak on Monday, possibly go below support and shake people out, then rally to the upside either the same day (Monday) or on Tuesday.... either way, it will be exciting to watch

ps. I also believe we might see some money rotation, the financials might start to take more of a lead and give the commodity stocks a breather.


----------



## sassa

ShareIt said:


> so far the market doesn't seem to want to go down... it keeps rallying back to the highs and is showing a more positive outlook to break upside....



"If Tech Companies Are Beating Earnings, Why Isn't NASDAQ Breadth Improving?
There is one problem with the rally theory. Market breadth on the NASDAQ stinks:
Market breadth hasn't moved higher with the market, and 
the new highs/new low number has been decreasing as well.
Why isn't NASDAQ breadth improving? Fundamentally it should be."

Charts on the Nasdaq are available at-
http://www.bonddad.blogspot.com/


----------



## Buster

G'Day Fellow ASF'ers,

Here's an interesting article I thought worthy of sharing..  



			
				Is A Recovery Likely? said:
			
		

> By Colin Twiggs
> April 26, 12:30 a.m. ET (4:30 p.m. AET)
> 
> *Recoveries And Inflation *
> 
> Investors may wonder how the market can possibly rally when the economy resembles a punch-drunk boxer hanging on the ropes. The answer is fairly simple: the big money is not betting on the economy it is betting on inflation.
> 
> The Fed is printing money as fast as it can ”” in order to save the banking system from annihilation. Nobody gets up off the canvas without assistance after taking a 1 trillion dollar sock on the jaw. While the Fed can provide liquidity, there is only one way to protect banks from falling asset prices which threaten to wipe out their reserves. That is to create inflation ”” to reverse the fall in asset prices.
> 
> Investors and financial markets response to low interest rates from the Fed is to borrow all that they can and invest in real assets in anticipation of rising prices. This becomes a self-fulfilling prophecy as demand for real assets exceeds supply, driving up prices.....and the next asset bubble is born.
> 
> The Fed does not mind, as investors mop up surplus money in the system and prevent it from flowing through to consumption ”” where it would affect consumer prices. Economists thought that they had found the holy grail. They could stimulate the economy without any significant impact on consumer prices. Only to discover that it is a poison chalice. There is no quarantine fence around asset bubbles and eventually higher asset prices flow through to consumers. When average workers can no longer afford to buy their own home, upward pressure on wages starts to rise. And when asset bubbles burst, as they are prone to, causing severe shocks to the economy, the Fed's only available response is to..... you guessed it ....... print more money and start the next asset bubble. The ever-increasing shocks are eroding the ability of the economy to recover and grow in a stable, predictable environment.
> 
> So where is the next asset bubble likely to occur? With wounds from collapse of the housing bubble still fresh, there are only two viable alternatives: stocks and commodities.
> 
> Inflation targeting by central banks is a major cause of bubbles. Inflation targeting is based on CPI which is a poor measure of the loss of purchasing power of the dollar. Why have house prices doubled in the last 5 years if inflation is averaging between 2 and 3 percent? Not to mention gold, oil and most other commodities. By using CPI as a measure, the Fed responds to crises long after the real damage is caused. Ever tried to steer your car while looking through the rear window to see where you are going? No wonder the Fed crashes into the sidewalk every time they encounter a bend in the road.
> 
> If you believe this is all too complicated and best left to a bunch of academic economists and self-interested bankers to sort out, allow me to remind you that the definition of stupidity is to repeat the same action and expect a different result.
> 
> If you agree with this opinion, please share it with your friends and colleagues.




Regards,

Buster


----------



## ShareIt

sassa said:


> "If Tech Companies Are Beating Earnings, Why Isn't NASDAQ Breadth Improving?
> There is one problem with the rally theory. Market breadth on the NASDAQ stinks:
> Market breadth hasn't moved higher with the market, and
> the new highs/new low number has been decreasing as well.
> Why isn't NASDAQ breadth improving? Fundamentally it should be."
> 
> Charts on the Nasdaq are available at-
> http://www.bonddad.blogspot.com/




Have you seen how over extended the NASDAQ is? Take a look at the low (bear stearns point) and look where it is now.... a solid run up!

It is in a very bullish pattern but needs a breath before the next leg up...  The market travels in waves, not straight lines... and to add, Microsoft had a shocker on Friday which holds a big percent of the NASDAQ weighting. 

A healthy rally is one that happens in stages... up, pullback, up pullback...etc... one that happens too fast too soon is a sign of caution... perfect example was the dot com bust 

As for tech beating earnings, look at the run up into the earnings day.... a nice run up... so from reading these charts, the market has already factored a portion of the earnings into stocks prior to the actual reports coming out.... why do some stocks now go down?

1) smart money sells into the strong move up as they would have bought at the low points... this is when the general public buys at the top when earnings come out. 

2) sometimes the market over estimates the earnings and this causes a correction...


----------



## Whiskers

Well, one way or the other this week is probably going to be decisive in terms of the direction of the market in the short to medium term.

The first Bush rebates will be deposited into taxpayers accounts from today and the Fed meeting to argue, it seems over the extent of any further cuts.

Last time I expected 50bp, but they gave 75. This time I would have expected 25 to about wind up the cuts, but they have since presented a gloomier picture for the near future. However there seems to be some dissent about the size of the cuts. 

I'm starting to lean a bit to a 50bp cut to appease the Bush camp to kill off recession talk quickly.

That should give the markets a decent thrill.


----------



## treefrog

AC markets' (forex mob)take, pre US open today:
"Last week's rally in the Dollar may have also led some investors to sell the currency ahead of the weekend to cash in profits, traders said. 

On Friday, Dollar had limited reaction to a report showing US consumer confidence fell for a third straight month, touching its weakest in more than 25 years.

In Europe, the Ifo German business sentiment index showed the biggest monthly fall since September 2001 on Thursday, taking the April headline number to a two-year low.

The percentage chance the Fed will keep its benchmark interest rate unchanged at 2.25% at this week meeting rose to about 26%. Just a week ago, futures markets were pricing between a 25 to 50bp cut.
Meanwhile, FX participants were paring bets that the ECB's next move will be a hike in benchmark interest rates."


----------



## Uncle Festivus

Whiskers said:


> Well, one way or the other this week is probably going to be decisive in terms of the direction of the market in the short to medium term.
> 
> The first Bush rebates will be deposited into taxpayers accounts from today and the Fed meeting to argue, it seems over the extent of any further cuts.
> 
> Last time I expected 50bp, but they gave 75. This time I would have expected 25 to about wind up the cuts, but they have since presented a gloomier picture for the near future. However there seems to be some dissent about the size of the cuts.
> 
> I'm starting to lean a bit to a 50bp cut to appease the Bush camp to kill off recession talk quickly.
> 
> That should give the markets a decent thrill.




Mmmm...you confuse me Whiskers - if things are going so well as you imply, then why do you expect a further rate cut. Surely the bottom has been priced in now? Shouldn't they start to resume their 'fight' against inflation again?
I think a lot of people will be surprised (as in :fan)before this week is out. Negative G-D-P!


----------



## ShareIt

Uncle Festivus said:


> Mmmm...you confuse me Whiskers - if things are going so well as you imply, then why do you expect a further rate cut. Surely the bottom has been priced in now? Shouldn't they start to resume their 'fight' against inflation again?
> I think a lot of people will be surprised (as in :fan)before this week is out. Negative G-D-P!




The way I see it is as follows... the market doesn't really care if we get a cut or not, could be 25, 50, who knows... what they will be looking at is the statement from the FED... so far they have shown negative look on the economy, and right now I believe most of the market is looking for another negative statement to follow along the lines of "risk remains to the downside".... this is pretty much expected and probably factored in already... so this gives more of a positive bias from a contrarian view...

What could turn this market around is a statement like "we are still facing downside risk, BUT things have gotten a little wincy tiny bit better since last meeting" This will kick the rally


----------



## Whiskers

Uncle Festivus said:


> Mmmm...you confuse me Whiskers - if things are going so well as you imply, then why do you expect a further rate cut. Surely the bottom has been priced in now? Shouldn't they start to resume their 'fight' against inflation again?
> I think a lot of people will be surprised (as in :fan)before this week is out. Negative G-D-P!




I'm not implying the US economy is going well, far from it. But by the same token it's not going to fall over overnight. I'm always analysing the psychology of how the decision makers will behave. 

As treefrog mentions the consensus seems to be shifting to 25, but with the US elections drawing periliously closer, I'm getting a bit of a sense that political expediency could prevail, that they could wear over cutting a bit now rather than risk dissapointing the market and sort out the consequences later, as they tend to do.

I agree the fight against inflation should be the new concern. I'm thinking they will try to appease the electorate with rate cuts so that lower interest rates flow through to consumers by election time and since (I think) the USD has been oversold especially against the euro, with a bit of PPT help they may try to effectively calm inflation which is largely because of oil by lifting the USD, thus reducing the cost of imports including oil in the process.

After-all they acknowledged early that they would save the economy before the USD. With their kit bag of trix to calm the credit crisis starting to fold out, it's near time to go rescue the USD.


----------



## ShareIt

Whiskers

I like the way you put it... it seems very possible what you just said


----------



## CamKawa

Interesting interview with David Whyss from S&P about the future of the US economy on Lateline Business last night.

You can view the interview here http://www.abc.net.au/lateline/business/ 10:41


----------



## Aussiejeff

....and these "re-affirming" headlines probably won't help the US markets in the short term either:

_*Buffett says recession may be worse than feared *

"This is not a field of specialty for me, but my general feeling is that the recession will be longer and deeper than most people think," Buffett said. "This will not be short and shallow.

"I think consumers are feeling gas and food prices," he added, "and not feeling they've got a lot of money for other things."_



See the full article here:

http://news.yahoo.com/s/nm/20080428/bs_nm/buffett_recession_dc


----------



## ShareIt

Aussiejeff said:


> ....and these "re-affirming" headlines probably won't help the US markets in the short term either:
> 
> _*Buffett says recession may be worse than feared *
> 
> "This is not a field of specialty for me, but my general feeling is that the recession will be longer and deeper than most people think," Buffett said. "This will not be short and shallow.
> 
> "I think consumers are feeling gas and food prices," he added, "and not feeling they've got a lot of money for other things."_
> 
> 
> 
> See the full article here:
> 
> http://news.yahoo.com/s/nm/20080428/bs_nm/buffett_recession_dc





yeah... and then the dude goes and invests a S**** load of money into a gum factory


----------



## explod

ShareIt said:


> yeah... and then the dude goes and invests a S**** load of money into a gum factory




Yeh, and if you cant afford smokes and have to eat less a small amount of gum can last all day.     He always kicks a..s


----------



## Aussiejeff

explod said:


> Yeh, and if you cant afford smokes and have to eat less a small amount of gum can last all day.     He always kicks a..s




..... and chewing wads of gum helps to relieve stress .....


----------



## Kauri

Might stretch the Cable..

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/04/29/cnjobs129.xml 

  Cheers
............Kauri


----------



## Uncle Festivus

Kauri said:


> Might stretch the Cable..
> 
> http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/04/29/cnjobs129.xml
> 
> Cheers
> ............Kauri




Yes, but I'm not sure economic reality has much to do with the share market these days?


----------



## wayneL

Uncle Festivus said:


> Yes, but I'm not sure economic reality has much to do with the share market these days?



Indeed.

Here's a little snippet from an ex options MM that illustrates that point nicely:



> While I doubt the eco problems are done, it doesn't mean the market can't rally anyway. I traded CAT options in the early 90's, and each quarter earnings would go from sucky to suckier, and yet the stock just rallied anyway in anticipation of the bottom in the earnings cycle. It literally took 2 years for it to actually bottom, but the stock generally lifted that whole time. *That experience forever convinced me the market can see whatever it wants to see, literally forever.*


----------



## Kauri

Uncle Festivus said:


> Yes, but I'm not sure economic reality has much to do with the share market these days?




Prolly nott... but the cable stretched a tad... longer term who cares.. share market who cares..  
a quick 50-80 pips for the aware..
Cheers
...........Kauri


----------



## Kauri

Kauri said:


> Prolly nott... but the cable stretched a tad... longer term who cares.. share market who cares..
> *a quick 50-80 pips for the aware*..
> Cheers
> ...........Kauri





or more...  a couple of strands just gave way.. 
Cheers
..............Kauri

 P.S.. CBI Apr Retail Sales Balance minus 26, Minus 3 was the consensus forecast.


----------



## Kauri

now we are in real trouble pancho...  HSBC downgraded *Bimbo*, the Mexican's largest baker and one of the world's largest bakeries companies ..
when Bimbos goes down we are all in strife...  or so my other harf tells me..  

   Guilty
............kauri


----------



## Uncle Festivus

Big night tonight, open the gate & put your running shorts on?



> 1710 ET 29Apr2008-U.S. economic indicators for April 30
> ------------------------------------------------------------------------------
> Major economic indicators set for release on Wednesday are the weekly
> Mortgagemarket index at 7 a.m., the April ADP National Employment survey at
> 8:15 a.m, *first-quarter GDP data at 8:30,* the April reading of the New York
> NAPM index at 9 a.m., and the April reading of Chicago PMI at 9:45. The Fed's
> interest rate decision is set to be announced at 2:15 p.m.


----------



## Aussiejeff

Uncle Festivus said:


> Big night tonight, open the gate & put your running shorts on?





Which way to them thar hills, buddy? 


AJ


----------



## ithatheekret

Uncle Festivus said:


> Yes, but I'm not sure economic reality has much to do with the share market these days?





Economic reality ........ nowdays half the media would have us believe that's just a Pink Floyd tune .

Thilly irioth !

Facts are facts and it's still a test . The economic realities test .

It's what we're worth .


----------



## davo8

CamKawa said:


> Interesting interview with David Whyss from S&P about the future of the US economy on Lateline Business last night.




Saw that. Just remember that S&P is strongly motivated to talk up the economy.  They make money when the good times roll.

Did you see Steve Keen? His view is a little different.


----------



## davo8

Uncle Festivus said:


> Mmmm...you confuse me Whiskers - if things are going so well as you imply, then why do you expect a further rate cut. Surely the bottom has been priced in now? Shouldn't they start to resume their 'fight' against inflation again?




Cutting rates is about generating liquidity and giving banks cheap money so they can survive their losses. Inflation and a dropping USD are inevitable and probably intended. 

Low USD spreads the pain to foreigners -- the Bank of Japan has been one of the biggest losers, but they don't count. Consumer pain simply doesn't matter as long as the pollies can explain it away.

Inflation and low interest rates means no safe haven in bonds -- effective returns are negative. Investors are forced to stay in the market to preserve capital against inflation. That's why it's levitating despite bad earnings -- no-one can afford to get off!


----------



## Kauri

VTB  (former Vneshtorgbank) reported to have mandated banks for a USD1 Bln loan in 2 tranches (18-Months & 3-Year), *at 0.60 & 0.65 over LIBOR* respectively...   mmm  must brush up on my languages..  ita. any help appreciayed..  bb..  but I guess the message is there somewheres..   

  Dammmm  KRudd and his taxes (grabs)...  
  Chaars
...............karri


----------



## Uncle Festivus

davo8 said:


> Cutting rates is about generating liquidity and giving banks cheap money so they can survive their losses. Inflation and a dropping USD are inevitable and probably intended.
> 
> Low USD spreads the pain to foreigners -- the Bank of Japan has been one of the biggest losers, but they don't count. Consumer pain simply doesn't matter as long as the pollies can explain it away.
> 
> Inflation and low interest rates means no safe haven in bonds -- effective returns are negative. Investors are forced to stay in the market to preserve capital against inflation. That's why it's levitating despite bad earnings -- no-one can afford to get off!



Perhaps I was being a tad facetious . Benny, Hanky & Georgy only have interest rates and tax cut's left in the hat - it's obvious interest rates have had zero effect on stimulating a bottom in the housing bust. They would at least be hoping to leave some in reserve, esp now as they appear to have convinced a willing investing public that the end of the credit crunch is over.
Tax cut's, let's see, $600 will go a long way towards, um, yes getting the US consumer to spend, spend & spend again.

No, the leveraged derivatives implosion is just beginning; the foreign support of the US debt black hole is waining; risk is being priced as fear; money & food are being hoarded; Chindia is to blame? Will we let them live like us at the expense of us?

This version of humanity is clearly not sustainable on current methods of consumption, so the day(s) of reckoning beckons? Perhaps we have merely witnessed the first act of the play written by greed & human vanity.
(must get out of other side of bed tomorrow and wear rose tinted glasses)


----------



## sam76

FTSE and Dow futures like the news.



U.S. Economy Expanded at 0.6% Pace in First Quarter (Update1) 

By Shobhana Chandra

April 30 (Bloomberg) -- The U.S. economy expanded at a 0.6 percent annual pace in the first quarter as an increase in inventories compensated for weaker consumer spending and a drop in business investment. 

The gain in gross domestic product, the sum of all goods and services produced, was more than forecast and matched the rate of growth in the previous three months, the Commerce Department reported today in Washington. The last time the economy grew less was in the fourth quarter of 2002. 

``We think we're in recession, but I don't know that the GDP numbers are going to turn negative at all in 2008,'' said Mark Vitner, senior economist at Wachovia Corp. in Charlotte, in a interview with Bloomberg Television. ``If you were to take out the swing in inventories, these numbers would be negative.''

http://www.bloomberg.com/apps/news?pid=20601087&sid=aFZ5qPxNMywA&refer=home


----------



## Uncle Festivus

sam76 said:


> FTSE and Dow futures like the news.
> 
> 
> 
> U.S. Economy Expanded at 0.6% Pace in First Quarter (Update1)
> 
> By Shobhana Chandra
> 
> April 30 (Bloomberg) -- The U.S. economy expanded at a 0.6 percent annual pace in the first quarter as an increase in inventories compensated for weaker consumer spending and a drop in business investment.
> 
> The gain in gross domestic product, the sum of all goods and services produced, was more than forecast and matched the rate of growth in the previous three months, the Commerce Department reported today in Washington. The last time the economy grew less was in the fourth quarter of 2002.
> 
> ``We think we're in recession, but I don't know that the GDP numbers are going to turn negative at all in 2008,'' said Mark Vitner, senior economist at Wachovia Corp. in Charlotte, in a interview with Bloomberg Television. ``*If you were to take out the swing in inventories, these numbers would be negative*.''
> 
> http://www.bloomberg.com/apps/news?pid=20601087&sid=aFZ5qPxNMywA&refer=home




I like that one - counting inventories that they can't sell as a positive. Wait for the revisions, assume that this is the first qtr negative?


----------



## Uncle Festivus

A few more snippets of reality for those who care?

Citi - the next BS?



> NEW YORK (MarketWatch) -- Citigroup's surprise $4.5 billion common-stock issuance Wednesday hammered home the fact that the bank still faces capital issues, and it keeps pressure on the largest U.S. bank to demonstrate that it's equipped to ride out the credit crisis, analysts said.
> 
> Wednesday's offering was Citigroup's fifth capital-raising effort in five months, which has seen the bank garner more than *$40 billion* and put its Tier 1 ratio at 8.6% by the end of March.
> 
> But, even with those efforts, Citi is still falling short of the mark, analysts said, and that could be a signal that the bank is struggling more than it would like to admit.




Classic - the loss wasn't as big as predicted by analysts, so slap a buy on it!



> A dismal U.S. market for selling pickups and SUVs along with a strike at a top parts supplier led General Motors Corp. to a massive first-quarter loss, but shares still surged 13% Wednesday as Wall Street had expected worse.





...bringing back the 12 month...... the cupboard is desperately bare....please buy our toxic debt?



> In addition, to meet growing financing needs, the Treasury announced that it is bringing back the 52-week T-bill. The first of the monthly auctions will take place on June 3. In a report to the government, a panel of experts said that the department must take more steps to meet the projected deficit. "The majority of members believe that the addition of the year bill combined with increases to the size and frequency of existing coupon debt over coming quarters *will still not be sufficient to satisfy the increased financing needs* of the Treasury over the intermediate and longer term," the panel said.


----------



## Whiskers

Well, the Fed only cut by 25. Gold up a bit and the USD down again... did the market take some profits after the ann or was it a sign of dissapointment it wasn't 50?

They're suggesting the worst isn't over and left the door open for another cut later... keeping a little pea shooter up their sleeve for next month? 

Gee, I don't know. From a psychological perspective I'm still wondering whether they are teasing wall street a bit. I guess we'll soon see whether they toss a tantrum again.


----------



## ShareIt

Whiskers said:


> Well, the Fed only cut by 25. Gold up a bit and the USD down again... did the market take some profits after the ann or was it a sign of dissapointment it wasn't 50?
> 
> They're suggesting the worst isn't over and left the door open for another cut later... keeping a little pea shooter up their sleeve for next month?
> 
> Gee, I don't know. From a psychological perspective I'm still wondering whether they are teasing wall street a bit. I guess we'll soon see whether they toss a tantrum again.




Surprising day on Wall street... but i wouldn't call it a short bet yet, a large number of put options would have been taken at the end of the day... so i wouldn't be surprised to see the rally tonight shaking out the people who went short.... tonight will be the tell all.... as for USD, think it's having a breather for now and might have another leg up soon


----------



## Uncle Festivus

Tis getting all a bit tiresome now. Aparently this chart means something bad, dunno, not an expert, but basically the Fed is insolvent??? Anybody?


> FEDERAL RESERVE STATISTICAL RELEASE
> 
> H.3 (502)
> Table 1 For Release at 4:30 p.m. Eastern Time
> April 24, 2008
> AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND THE MONETARY BASE


----------



## explod

Uncle Festivus said:


> Tis getting all a bit tiresome now. Aparently this chart means something bad, dunno, not an expert, but basically the Fed is insolvent??? Anybody?




What you say is in fact correct, they are well below the line and is why they are issueing these new 12 months bonds, but no takers.  I am also unable to interpret the figures.   Privateer newsletter will have more to say on it at the weekend and has done so recently and how they have been getting there historically.  Will look back over the isue when I have time and (yawn energy) later.


----------



## ShareIt

I had been expecting this rally to come and stated a few posts before.... but this rally smells like a BULL trap....


----------



## sassa

ShareIt said:


> I had been expecting this rally to come and stated a few posts before.... but this rally smells like a BULL trap....



Has the fat lady put her first foot on the stage?Will she pulled back by the stage manager tonight because she went too early?
According to Bonddad-
http://www.bonddad.blogspot.com/
-the SPY and IWM broke through key resistance points today and that means onward and upwards.


----------



## nioka

ShareIt said:


> I had been expecting this rally to come and stated a few posts before.... but this rally smells like a BULL trap....



Rather than smell a bull trap I think we are smelling what has been a bear trap.


----------



## sassa

nioka said:


> Rather than smell a bull trap I think we are smelling what has been a bear trap.



And beware of the lagging indicators-
"The third danger results from the interaction between wealth, spending and employment. As U.S. households’ wealth – in the housing market and the stock market – falls, their consumption is beginning to fall and will continue to do so, again with a lag. This decline in consumption is leading to a decline in profits, of which more is on the way, which in turn will lead to a decline in investment. The combined decline in consumption and investment spending will eventually lead to a decline in employment, as firms begin to recognise that their labour is insufficiently utilised. The decline in employment, in turn, means a drop in labour income, which, with a lag, leads to a further drop in consumption."
http://www.nakedcapitalism.com/2008/05/four-mega-dangers-international.html


----------



## ShareIt

nioka said:


> Rather than smell a bull trap I think we are smelling what has been a bear trap.




I have been riding this rally all the way up and it has been fun... but the one thing that is most important and that is missing, is volume... and that is why i think we are headed for a correction within a week


----------



## Uncle Festivus

Move along now, nothing to see here, just some overstated mark to market book entires, not really real really....eerily similar to that other famous 'victory'. Mission accomplished - well done financial wizards .



> _*Worst of credit crisis may be over: Bank of England*_
> _*Total subprime losses appear significantly overstated, U.K. central bank says*_
> 
> *LONDON (MarketWatch) -- The Bank of England said Thursday that the correction in credit markets has gone too far and that risk appetite and confidence were likely to gradually return to the financial system, indicating the central bank believes the worst of the credit crunch may be over.*
> 
> In a statement accompanying its twice-yearly report on financial stability, John Gieve, a Bank of England deputy governor, said the pricing of risk in credit markets appears "to have swung from being unsustainably low last summer to being temporarily too high relative to fundamentals.
> "So, while there remain downside risks, the most likely path ahead is that confidence and risk appetite will return gradually in the coming months," Gieve said.



Added to quotable quotes  >

"So, while there remain downside risks, the most likely path ahead is that confidence and risk appetite will return gradually in the coming months," Gieve said.


----------



## Whiskers

Uncle Festivus said:


> Move along now, nothing to see here, just some overstated mark to market book entires, not really real really....eerily similar to that other famous 'victory'. Mission accomplished - well done financial wizards .
> 
> Added to quotable quotes  >
> 
> "So, while there remain downside risks, the most likely path ahead is that confidence and risk appetite will return gradually in the coming months," Gieve said.




Yep, remember the residue will carry over for another day, Uncle. 

We'll be doing it all again in a year or two or three!

But Uncle, have you turned to supporting the opposition, or have you jumped ship to follow the safety of the crowd for awhile?


----------



## Uncle Festivus

Whiskers said:


> Yep, remember the residue will carry over for another day, Uncle.
> 
> We'll be doing it all again in a year or two or three!
> 
> But Uncle, have you turned to supporting the opposition, or have you jumped ship to follow the safety of the crowd for awhile?




Never! We will fight them on the beaches, we will fight them....woops, getting a bit carried away there .

Well, until the data changes I will continue with the view that we are in for more market churning, but trade the lemming sentiment anyhows. Interesting night tonight for sure  ie if the data is bad (and the NFP usually is consistently bad lately - sticking to trend?) then profit taking is on the cards I reckon



> 1712 ET 01May2008-U.S. economic indicators for May 2
> ------------------------------------------------------------------------------
> The major economic indicators due on Friday are April non-farm payrolls at
> 8:30 a.m. EDT and March factory orders at 10 a.m. EDT.


----------



## Whiskers

Well, the night has got off to a flier. Unemployment falls 'unexpectedly' and the Fed joins with European banks to battle credit crisis.

I'm not surprised, *BUT...*  AN OPEN CHEQUE!



> *Fed joins with European banks to battle credit crisis*
> Friday May 2, 9:17 am ET
> By Martin Crutsinger, AP Economics Writer
> *Fed announces new moves Friday with European banks to battle ongoing credit crisis *
> 
> 
> WASHINGTON (AP) -- The Federal Reserve announced Friday that it will expand a series of efforts to deal with the global credit crisis, in coordination with European central banks.
> 
> The Fed's decision to boost the amount of loans it makes to banks every two weeks, in a process known as a Term Auction Facility, was aimed at sending a strong signal that *the central bank is prepared to supply as much in reserves as U.S. banks need.* The latest move was made in coordination with the European central banks' efforts to bolster their financial systems as well.
> 
> The Fed said it was *also expanding the types of assets that investment banks can use as collateral *to receive loans from the central bank.
> http://biz.yahoo.com/ap/080502/fed_credit_crisis.html


----------



## dhukka

Whiskers said:


> Well, the night has got off to a flier. Unemployment falls 'unexpectedly' and the Fed joins with European banks to battle credit crisis.
> 
> I'm not surprised, *BUT...*  AN OPEN CHEQUE!




The US economy lost *20k* jobs and the unemployment rate fell, an unsustainable trend, the unemployment rate will rise in coming months. 

Whilst only *-20k* jobs were lost the controversial birth/death model added *267k* jobs for the month of April. To highlight the absurdity of this number, the b/d adjustment estimates *45k* new costruction jobs were created in April.  

Meanwhile on the liquidity front, things continue to go swimmingly:



> *Fed Raises Cash-Loan Auctions by 50% to $75 Billion*
> 
> The Federal Reserve expanded its cash- loan auctions for banks by 50 percent to $75 billion each after higher borrowing costs blunted the impact of the four-month-old program.
> 
> The Fed also increased its currency-swap arrangement with the European Central Bank by two-thirds to $50 billion and doubled the amount with the Swiss National Bank to $12 billion, extending their terms through January. In a third move, the Fed will accept other AAA rated asset-backed securities as collateral for Treasury loans through another program.
> 
> Fed Chairman Ben S. Bernanke created the Term Auction Facility and two other programs to reverse a decline in liquidity that began last year with the collapse in the market for subprime mortgages. Today's move may reduce loan payments for some companies and homeowners with variable-rate mortgages.
> 
> The actions were taken *``in view of the persistent liquidity pressures in some term funding markets,'' *the Fed said in a statement.


----------



## Uncle Festivus

dhukka said:


> The US economy lost *20k* jobs and the unemployment rate fell, an unsustainable trend, the unemployment rate will rise in coming months.
> 
> Whilst only *-20k* jobs were lost the controversial birth/death model added *267k* jobs for the month of April. To highlight the absurdity of this number, the b/d adjustment estimates *45k* new costruction jobs were created in April.
> 
> Meanwhile on the liquidity front, things continue to go swimmingly:




Ah yes, the birth death calculation, all very convenient at this juncture. I have to hand it to them, they have succeeded in placating the masses but at what cost for the future? One estimate is that the Fed has 'put out' approx $1trillion so far in priming liquidity, yet they still cut rates by 25 bp. 

If the money was getting back to the real economy then all would be fine again but it's not - most is finding it's way back to non productive equity speculaton and bringing bank balance sheets back from the brink to somewhere that they can only remotely start thinking about re-starting lending to the masses again.

We may have to wait for the next qtr figures to expose to the lemmings that the emperor isn't wearing any clothes. A Buffetism - you only know who's been swimming naked when the tide goes out. The tide is out, the people are picking up the floundering fish, but fail to see the tsunami approaching.

There is also a big emphasis on ensuring that important technical levels are broken, to the upside, to cement the illusion that this is the real deal, _again_! What they have set themselves up for is a re-test of the previous highs over 14k for the DOW. The danger is though if this fails then that would be an important negative signal. By that time also the real economy would have re-asserted itself with negative overtones so there still could be an alignment of negativity which could ultimatly test the resolve of all the permabulls. 12 weeks max?


----------



## Whiskers

Even the old guru isn't immune...



> Berkshire net income falls 64 percent because of derivatives
> Friday May 2, 7:12 pm ET
> By Josh Funk, AP Business Writer
> *Unrealized derivative losses send Berkshire's 1Q profit 64 percent lower *
> 
> OMAHA, Neb. (AP) -- Berkshire Hathaway Inc. said Friday its first-quarter profit fell 64 percent because it recorded an unrealized $1.6 billion loss on its derivative contracts, and its insurance businesses generated lower profits.
> 
> Berkshire reported net income of $940 million, or $607 per share, in the quarter ended March 31. That's down significantly from the net income of $2.6 billion Berkshire generated a year ago.
> 
> Berkshire's chairman and CEO Warren Buffett warned shareholders in his annual letter that the derivatives could make the company's earnings volatile. *But he predicted the derivatives will ultimately be profitable*.
> 
> Including the derivative losses, Berkshire's net investment losses in the quarter totaled $991 million. A year ago, the Omaha-based company recorded a $382 million investment gain.




...and he's still optimistic. 

But... 



> *Berkshire said its operating earnings are a better measure of how the company is performing in any given period because those figures exclude derivatives and investment gains or losses*. Berkshire reported $1.93 billion in operating earnings during the first quarter, which was down from $2.21 billion in operating earnings a year ago.
> http://biz.yahoo.com/ap/080502/earns_berkshire_hathaway.html


----------



## juiceman

Whiskers said:


> Well, the night has got off to a flier. Unemployment falls 'unexpectedly' and the Fed joins with European banks to battle credit crisis.
> 
> I'm not surprised, *BUT...*  AN OPEN CHEQUE!




If you cut the gobbley gook sounds like we had/have a serious problem 
If this was mum and dad their house would be Gone!!!
The effects of 1929 were not really felt by the public until 1930


----------



## numbercruncher

I see Japan is _starting_ to come clean .... 



> Japanese financial institutions together lost more than 1.5 trillion yen (14.4 billion US dollars) in the year to March because of the US subprime mortgage crisis, a report said Friday.
> 
> The nation's eight major banking groups alone are likely to post a combined subprime-related loss of more than 900 billion yen, the Nikkei newspaper said.
> 
> That is around 200 billion yen more than forecasts made public so far, it added.




http://news.theage.com.au/japanese-banks-see-144-bln-dlrs-in-subprime-losses-report/20080502-2a6m.html


----------



## davo8

ShareIt said:


> I have been riding this rally all the way up and it has been fun... but the one thing that is most important and that is missing, is volume... and that is why i think we are headed for a correction within a week




You're in good company.

Trade the charts if you will, but keep those stops tight!

link



> Wall Street faces the growing risk of an equities bloodbath in coming months as the credit crunch spreads to the wider economy and earnings crumble, according to a pair of grim reports issued by Goldman Sachs and Wells Fargo.
> 
> David Kostin, the chief US investment guru for Goldman Sachs, expects the S&P 500 index of Wall Street equities to plummet a further 15pc over the "near term" as companies scramble to lower their outlook for this year.
> 
> "Although only a few firms have reported first quarter results, early signs are awful. We expect a swath of lowered profit guidance," he said in a research note published today, entitled 'Fasten Seatbelts'.
> 
> Mr Kostin, who replaced the ever-bullish Abby Cohen as chief strategist in December, expects the S&P index to reach 1,160, which would amount to a fall of 27pc from the bull market peak of 1,576 in September and enter the annals as a relatively severe bear market.


----------



## ShareIt

davo8 said:


> You're in good company.
> 
> Trade the charts if you will, but keep those stops tight!
> 
> link




Totally agree... ride the way up while it lasts and keep tight stops... but already we see a topping candle as of Friday... we had extremely bullish news and the markets sky rockets.... then it doesn't go any higher after that and sells off into the move up....

Looks to me like the big guys are starting the distributing.... might get another bounce up and then that should from a short term top


----------



## refined silver

Aaa Maaa!

Warren Buffet gets $1.7b deriv loss in Q1!

After calling OTC derivs "financial weapons of mass destruction", in 2003, he didn't heed his own words!

http://www.bloggingstocks.com/2008/...by-1-7-billion-worth-of-financial-wmd-losses/


----------



## sassa

" The "end of the credit crisis" apostates looks to be a small and shrinking group (and we don't mean just the downbeat but nevertheless accurate Nouriel Roubini or Michael Panzner). 
A particularly persuasive reading comes from Doug Noland at Prudent Bear. A student of Hyman Minsky, he takes his theory of "Monday Manager Capitlaism" one step further into "Financial Arbitrage Capitalism," which means that the inmates are not merely running the asylum, they've learned how to position themselves not as crooks, but as prison facilities managers, expand their operations to other locales, and secure government funding.

In all seriousness, the problem that Noland alludes to is that finance is now driving the real economy. And given how speculative our financial system has become, this is leading to poor capital allocation and increased volatility, both of which will dampen growth. Keynes considered reducing volatility to be a major goal of policy, since it would lower the risk premia investors required, and more favorable interest rates would promote greater investment and with it, growth (note that Keynes did not propose the countercyclical measures that have become associated with his name). But high volatility produces the reverse effect: investors demand higher returns to compensate for heightened risk, which reduces invesment. But traders find it hard to make money in quiet markets; a certain level of fluxuation is their friend. So Wall Street's interests can and increasingly do conflict with those of Main Street.

Looking at the world through the Minksy-via-Noland lens exposes the flaw in the credit optimists' thinking. Keeping the game going in its current form requires an increase in leverage. The private sector had hit the point where credit had expanded beyond the ability of the underlying assets to support it. but rather than let asset prices fall to a level commensurate with their cash flow (or try to temper the deleveraging), central banks are instead trying to validate inflated asset values via artificially low interest rates and credit support to dodgy debt. That effort will eventually fail and eventually is likely not all that far off. The negative real rates will fuel new speculative activity, exacerbating the problem of overly high leverage relative to GDP. As AutoDogmatic pointed out:
That very complex of unusually high foreign buying of US debt (that is, lending to us) is now being choked off by its own consequences: the collapse of all the US credit markets...

The upshot is we aren't going to be able to increase our borrowing to fix the problems now. And we can't enter a war to generate the necessary stimulus (a-la FDR) because we're already completely extended fighting two of them....virtually all of the capital investment in America in the past three decades went into the military and military-related expenditures overseas, rather than truly productive areas like manufacturing back here at home, so we have nothing we can gear up to generate surplus output.

We are thus faced with the farcical situation where the government has already begun "bailing", but it is having to borrow even more to do so. Since we're past the point of exhaustion (beyond the "Minsky moment") already, this borrowing is apt to have increasingly disastrous effects. Look at the $160 billion emergency stimulus bill congress passed a few months ago (with checks having started going out in the mail a few days ago). The government is immersed in a record-breaking fiscal deficit -- so bad the Treasury Borrowing Committee is crying "uncle" -- so where is it going to get the money to pay these checks?

More borrowing, of course. But what happens when you add more borrowing when the supply of lenders is shrinking? Interest rates go up.

The Fed currently has a policy of holding interest rates down, to hold together the creaking financial system. As we discussed, borrowing is already dramatically ramping up because of structural spending needs, the war, and now bailouts. These two objectives are in conflict. Something will have to give.

Whether the Fed allows it or not, interest rates will rise. The Fed may succeed in artifically holding down interbank rates, but this will not help most of us. Soon we will be faced with the ultimate farce of mortgage rates dramatically rising because of all of our national borrowing, even though much of it has been piled on to help out those harmed by the housing bubble."
http://www.nakedcapitalism.com/2008/05/is-credit-crisis-really-over-minsky.html


----------



## ShareIt

nioka said:


> Rather than smell a bull trap I think we are smelling what has been a bear trap.




This mornings open seems to look like a bull trap... but let's see how it closes


----------



## explod

Well done Sassa, for posting the above.  It is what the Privateer newsletter has been saying for years now but due to the crapola it is hard to stay on track and get it through to people.

I really feel sorry for the carnage that is being dropped on the ordinary innocents.


----------



## ShareIt

A close below the all important 1400 level on the S&P... it now turns out that we have a lot of people trapped above this level... if it continues to inch lower Thursday, a heap of selling might start


----------



## sassa

And about time for investors if the said body sticks to their word.The only problem is that it is too late and why wait till the end of the year!
"The U.S. Securities and Exchange Commission will require Wall Street investment banks to disclose their capital and liquidity levels, after speculation about a cash shortage at Bear Stearns Cos. triggered a run on the firm, SEC Chairman Christopher Cox said.
The disclosures will be ``in terms that the market can readily understand and digest,'' Cox said today during a speech in Washington. The SEC will require the disclosures ``later this year,'' he said."


----------



## Uncle Festivus

Should be an interesting night - have the rising wedges finally broken down? 



> *AIG reports $7.8 bln net loss; to raise $12.5 bln*
> *Insurer hit by $9.11 bln write-down, $6.09 bln of realized investment losses*
> 
> American International Group reported a $7.81 billion first-quarter net loss late Thursday as the giant insurer was hit hard by the credit crunch.


----------



## explod

Uncle Festivus said:


> Should be an interesting night - have the rising wedges finally broken down?





Yep Uncle, and the US$ index is moving down tonight and pencilling in that next head and shoulders, from what my eyes see.  And right on cue in line with the established pattern.


----------



## Uncle Festivus

explod said:


> Yep Uncle, and the US$ index is moving down tonight and pencilling in that next head and shoulders, from what my eyes see. And right on cue in line with the established pattern.




I have a similar rising wedge for the DOW, and a roll-off top for oil too. So this is leading us to some sort of new phenomenon called 'inflation'. I thought it was tamed  but somehow I think all it's fury is about to be unleashed. 

Talk about chickens coming home to roost???


----------



## sassa

"How can we realistically trust the data that come out of the various US departments anymore? Even given the benefit of the doubt.

Case in point: the Net Birth/Death model of the Bureau of Labor Statistics. During the most severe downturn in the real estate and homebuilding sector since the Great Depression, the model keeps creating phantom construction jobs.

Not only did the model spew out a total of 98,000 net additional construction jobs in the 12 months to April 2008, it produced more such jobs in April 2008 than the same month last year (45,000 vs. 37,000, or +21%). In other words, new construction businesses that were established in that period supposedly created many more jobs than those lost from businesses shutting down.

The first casualty of war is the truth - Aeschylus. Problem is, who's the enemy?"
http://suddendebt.blogspot.com/


----------



## Uncle Festivus

sassa said:


> "How can we realistically trust the data that come out of the various US departments anymore? Even given the benefit of the doubt.
> 
> Case in point: the Net Birth/Death model of the Bureau of Labor Statistics. During the most severe downturn in the real estate and homebuilding sector since the Great Depression, the model keeps creating phantom construction jobs.




The first rule is that we shouldn't trust the latest employment/NFP data as it is lagging, it estimates a lot of things and will be revised in the coming months, just as GDP will be revised to negative. I think the period from July onwards will be very interesting because some of the secular trends emerging in the real economy will actually start to show up in the balance sheets of the next tier of affected companies, the first tier being financials and builders/real estate.

That is, if it all doesn't go to pot in the meantime, as the chart wedges have broken to the downside now, all that positive spin momentum looks to be spent. Prepare for the next round in the coming global recession?


----------



## sassa

These 'little' snippets of news probably are of no use any more as they are already priced in and the investor doesn't care to hear of them.
"HSBC is expected to announce tomorrow that it is writing off a further $4.6bn (£2.3bn) against mortgages, credit cards and other loans to stricken US consumers."
"Barclays is expected to warn of further write-offs when it issues its trading update next week, although these are thought to be less than a third of the £9bn write-offs made by RBS."
http://www.jessescrossroadscafe.blogspot.com/


----------



## sassa

Uncle Festivus said:


> Prepare for the next round in the coming global recession?



Ambrose Evans-Pritchard of the Daily Telegraph agrees with you-

"The bears at SociÃ©tÃ© GÃ©nÃ©rale are going into Siberian hibernation, issuing an "Ice Age" alert. They have slashed exposure to global equities to a minimum 30pc for the first time ever.

Their weighting of super-safe "AAA" government bonds has been raised to a maximum 50pc. This is a bet on gruelling "Japanese" deflation. The bank expects equities to fall by 50pc to 75pc.

"Nowhere and nothing will be immune. We are on the cusp of an equity meltdown that will slash and shred portfolios," said Albert Edward, SG's global strategist.

"We see a global recession unfolding. Liquidity will drain away and crush the twin emerging market and commodity bubbles. The recent hope that 'the worst might be over' is truly staggering. Profits are disintegrating," he said.

Today's "bear rally" may live on into June. Don't count on it. Global bourses are no longer rising hand-in-hand with oil in exuberant celebration of liquidity relief (US, UK, and Canadian rate cuts).

Crude ceased to be a friend of equities when it reached around $110 a barrel. At last week's close of $126, it became an outright threat. The Bush rescue package - $800 in rebate cheques per household - has been rendered null and void by the latest spike. The average US home is now spending over 8pc of income on energy or fuel.

OPEC is playing with fire by refusing to pump more oil to offset rebel attacks in Nigeria. The cartel's output drop of 350,000 barrels a day in April is a hostile act at this point.

But there again, why should Middle Eastern states help America as long as the White House keeps filling the US petroleum reserve to prepare for war with Iran? Bush is playing with fire, too.

The oil spike will burn itself out. China has hit the buffers. With inflation at 8.5pc, it risks political turmoil. Moreover, it has repeated Japan's mistakes in the 1980s, building too many factories shipping too many goods at slender margins into a crumbling export market.

Lehman Brothers' Sun Mingchun says China will tip over in the second half of this year. "With so much latent overcapacity, an export-led slowdown could trigger a chain reaction which, in the worst case, could threaten the stability of [its] financial and economic system," he said.

Britain, Europe, Japan, and China will go down before America comes back up. This is turning into a synchronised bust, after all. The Global Slump of 2008-09 is under way."
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/05/12/ccambrose112.xml


----------



## CamKawa

I'm going for some reverse psychology here. The market will rally on this great news. lol

"The collapse of the U.S. housing market, the worst since the Great Depression, is contributing to the economic slowdown and may push the economy into a recession. Median prices for a single- family home fell 7.7 percent in the first quarter, the biggest drop in 29 years, the National Association of Realtors reported yesterday. There were 4.06 million U.S. homes for sale at the end of March, 40,000 more than the prior month, the Realtors association said in an April 22 report. 

``Inventory levels have soared to unprecedented levels'' Brian Fabbri, chief North American economist for BNP Paribas, said in an interview. ``Builders and homeowners have to lower their prices significantly to sell that inventory out.'' 

Source: U.S. Foreclosures Rise 65 Percent as Vacated Homes Add to Glut


----------



## Uncle Festivus

Yes, it will be very interesting going into this weekend, as pressure is building between the push for a good finish for options expiry & a natural tendency for  this low volume bull trap to run it's course. That and the closeness of indices to technically bullish break out points which the cb's will likely massage over the line. Literally make or break time for global equity markets.


----------



## sassa

I like this statement,especialy since it came from CNN-
"No inflation if you don't eat or drive."
Tonight the inflation figures come out from the good old U.S.of A.They are expected to remain unchanged since last month but the ordinary folk are beginning to question the figures put out by the Gov.on this and unemployment.
And many wonder why markets..........


----------



## Whiskers

The US of A is all up up and away for awhile. 

Recession worries going, going, gon...

Import inflation going, going, gon....

The USD Index rising... as expected... well by some of us. :

I think that's just about all that matters at the moment. 


The chart looks a lot like it's settling into an uptrend channel.


----------



## Uncle Festivus

Whiskers said:


> The US of A is all up up and away for awhile.
> 
> Recession worries going, going, gon...
> 
> Import inflation going, going, gon....
> 
> The USD Index rising... as expected... well by some of us. :
> 
> I think that's just about all that matters at the moment.
> 
> 
> The chart looks a lot like it's settling into an uptrend channel.




If only I could be an economist so that I didn't need food or fuel .

Add in f&f, we get 5 month's of increases over *3% per month*.

Housing bust still busting - 



> More U.S. homeowners fell behind on mortgage payments last month, driving the number of homes facing foreclosure up 65 percent versus the same month last year and contributing to a deepening slide in home values





> More than 54,500 properties were repossessed by lenders nationwide in April. In all, about 2 percent of U.S. households were in some stage of foreclosure during the month, RealtyTrac said.



Import inflation gone? Not by my data? Always wait for the revisions, GDP too.



> Prices of goods imported into the U.S. increased 1.8 percent in April, led by a jump in fuel costs and metals that threatens to boost inflation.             The larger-than-expected gain followed a *revised 2.9 percent rise* in March that was higher than previously estimated, the Labor Department said today in Washington. Prices excluding petroleum increased 1.1 percent on higher costs for capital goods, industrial supplies and auto parts.



On the face of it, and the markets always do trade on any glimmer of hope these days, a reduction in the trade deficit would be appear to be good, until you read the reasons why - the US consumer is bankrupt, and the rest of the world is contracting!



> U.S. demand for imported goods slumped in March, overwhelming the impact of the first export decline in more than a year and causing the American trade deficit to shrink more than forecast.             ``Consumers have cut back significantly in just about every area but necessities, and we're seeing clear evidence of this in imports'', said Russell Price, senior economist at H&R Block Financial Advisors in Detroit. ``Weakness in our economy also seems to be affecting growth in other areas of the globe, thus slowing demand for our exports as well.''



When you havn't got cash, use the credit card @ 20% interest? Just to buy food & fuel - basically to live. Not much left over for discretionary spending?



> The money drain from high food and gas prices is causing consumers to fall behind on home-equity loans at Bank of America - at an even faster rate than the bank forecast *only three weeks ago*.  The grim report from the nation's second biggest bank underscored new problems ahead from the widespread debt that consumers piled up by borrowing against inflated home values to finance spending sprees over the past three years.
> Bank of America said more of its *once-credit-worthy* customers are struggling just to fill gas tanks and food pantries, and are relying on debt-laden credit cards to pay for necessities.



 Yes the only anomaly in all this is that the share market is still in denial. And the obligatory chart -  coming up against resistance rather than uptrend channel


----------



## sassa

"PROFITS After Tuesday’s slight decline, the Standard & Poor’s 500-stock index is still up almost 10 percent from the recent low it hit in mid-March. “Many on Wall Street,” as my colleague Vikas Bajaj recently wrote, “seem to think that the worst is over.”

To figure out whether they’re correct, don’t watch the week-to-week movements in the market. Instead, pay attention to corporate profits.

Corporate profits have just emerged from a historic boom. From 2002 to 2007, inflation-adjusted pretax profits rose more than 50 percent. But they’re not rising anymore. They are likely to end the current quarter 7 percent lower than they were a year ago, according to Global Insight, a research firm.

The big issue here is that current stock values are based on the idea that the profit boom wasn’t a bubble. Investors are assuming that profits will bounce back quickly ”” and justify today’s stock prices. If profits do rebound, stocks may hold up or even keep rising. If not, the market is going to start looking very expensive very quickly."

http://www.nytimes.com/2008/05/14/business/14leonhardt.html?_r=1&ref=business&oref=slogin


----------



## CamKawa

Looks like the US isn't the only one going through a correction. How much of a litmus test is NZ for Aus?

*NZ shoppers slam on the brakes*


New Zealand retail sales fell at their fastest pace in 11 years in the first quarter, led by weaker vehicle sales, backing views that consumer spending is slowing and interest rates will fall later in the year.

.....
Latest housing data from an industry body on Monday showed the number of house sales fell to its lowest level in 16 years in April, with the median price falling 1% from a year ago.

Source: http://www.businessday.com.au/nz-shoppers-slam-on-the-brakes-20080515-2egw.html


----------



## CamKawa

Looks like the commercials have sold off in to this rally. What, don't they have any faith? Looks like they bought in as it fell to, cluey buggers.


----------



## YELNATS

CamKawa said:


> Looks like the US isn't the only one going through a correction. How much of a litmus test is NZ for Aus?
> 
> *NZ shoppers slam on the brakes*
> 
> 
> New Zealand retail sales fell at their fastest pace in 11 years in the first quarter, led by weaker vehicle sales, backing views that consumer spending is slowing and interest rates will fall later in the year.
> 
> .....
> Latest housing data from an industry body on Monday showed the number of house sales fell to its lowest level in 16 years in April, with the median price falling 1% from a year ago.
> 
> Source: http://www.businessday.com.au/nz-shoppers-slam-on-the-brakes-20080515-2egw.html




Let me tell you the same thing's happening here but the Fed government hasn't woken up to it yet. 

I have a retail business and I can tell you that people have totally stopped spending and many small businesses are going to the wall. The Budget last night missed the point - it needed to be expansionary to revive the economy, not to deflate it further. There won't be inflation, only massive lay-offs unless Treasury and the RBA catch-up with the most recent developments.


----------



## CamKawa

YELNATS said:


> Treasury and the RBA catch-up with the most recent developments.



Developments in NZ are moving *very* quickly.

"New Zealand's employment fell by the most in 19 years in the first quarter as plunging business confidence prompted companies to fire workers, adding to signs economic growth has stalled. "
source: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=atBcv__tCDqQ

I agree the speed at which the downturn may take hold here may catch the RBA by surprise. Especially since commodity prices are booming and many still believe China is going to save us.

If commodity prices are in a bubble that bursts Australia may struggle for many years. The Great Depression only lasted between 1929 - 1933 in the US, however commodity countries like ours were hit very hard and we didn't pull ourselves out of the $hit until 1939.


----------



## andy87

maybe someone can clarify for me, but I heard that the demand for Aussie commodities from China is only going to make inflation worse due to the them having a strong Yen against the AUD or vice versa.


----------



## sassa

"V Stands For Victory(S&P)
At least that's what the bulls are really hoping with today's push above the 1420 level.
We not only reversed back to yesterday's highs but just for good measure ended up closing above it in the final few minutes of trading. Many are citing the pullback in oil as the reason, but I think the real reason is the bears' inability to gather any significant momentum on the downside. The idea that "if you can't beat'em, you might as well join'em" has been and continues to be the right trade.

That's probably a good thing since just about everywhere you look today from jobless claims, industrial production, housing, and manufacturing offered more gloom and doom. Thankfully some M&A rumors and over-hyped dealmaking kept Wall Street happily distracted."
http://www.thekirkreport.com/


----------



## nioka

The stock market bears have one thing in common with the polar bears. They are an endangered species. With the all ords again above 6000 the bears credibility is shaken again as it has been for some time now despite the sub prime, the housing crisis, the interest rate hike and the recession we are supposed to be having.

Not imminent and not severe.


----------



## Uncle Festivus

nioka said:


> The stock market bears have one thing in common with the polar bears. They are an endangered species. With the all ords again above 6000 the bears credibility is shaken again as it has been for some time now despite the sub prime, the housing crisis, the interest rate hike and the recession we are supposed to be having.
> 
> Not imminent and not severe.




Been waiting for some posts like this - now we can close the longs & go short, _again_? In fact, I shall be doing that this arvo on some selected blow off toppy type stocks.

  ps - 20% not severe enough for you? And try not to get entangled in your bull trap .


----------



## CamKawa

nioka said:


> The stock market bears have one thing in common with the polar bears. They are an endangered species. With the all ords again above 6000 the bears credibility is shaken again as it has been for some time now despite the sub prime, the housing crisis, the interest rate hike and the recession we are supposed to be having.
> 
> Not imminent and not severe.



Where do you think XAO will be by Christmas?


----------



## nioka

Uncle Festivus said:


> ps - 20% not severe enough for you? And try not to get entangled in your bull trap .




I'm enjoying eating prime beef. My stocks are worth more now that at any previous time and it has been gained by absorbing the fat from the bears. I love lemmings too.


----------



## nioka

CamKawa said:


> Where do you think XAO will be by Christmas?



  I don't really know and what is more, I don't really care. I'll work with whatever hand I'm dealt and the bull attitude will get me some bargains as the bears shed fat. Over time it will continue to rise.


----------



## dhukka

YELNATS said:


> Let me tell you the same thing's happening here but the Fed government hasn't woken up to it yet.
> 
> I have a retail business and I can tell you that people have totally stopped spending and many small businesses are going to the wall. The Budget last night missed the point - it needed to be expansionary to revive the economy, not to deflate it further. There won't be inflation, only massive lay-offs unless Treasury and the RBA catch-up with the most recent developments.




Interesting, may I ask what type of retail business you have and where it is? ie. capital city, metropolitan area etc.


----------



## Trembling Hand

dhukka said:


> Interesting, may I ask what type of retail business you have and where it is? ie. capital city, metropolitan area etc.




Dhukka from the many friend/ex-colleagues I have in the Hospitality biz(Melb) I can tell you they are particular depressed at the moment. The obvious rise in food cost is squeezing them bad but what they are finding harder to handle are the things like CPI linked rent increases. Many are coming to the realization that the profit margin on their products are close to nothing at the moment. Their higher profit "discretionary" products are selling less and the volume has moved to the stables.

Has changed many business profitability even if the volume is not down that much.


----------



## ShareIt

nioka said:


> I don't really know and what is more, I don't really care. I'll work with whatever hand I'm dealt and the bull attitude will get me some bargains as the bears shed fat. Over time it will continue to rise.




I think you speak to early


----------



## dhukka

Trembling Hand said:


> Dhukka from the many friend/ex-colleagues I have in the Hospitality biz(Melb) I can tell you they are particular depressed at the moment. The obvious rise in food cost is squeezing them bad but what they are finding harder to handle are the things like CPI linked rent increases. Many are coming to the realization that the profit margin on their products are close to nothing at the moment. Their higher profit "discretionary" products are selling less and the volume has moved to the stables.
> 
> Has changed many business profitability even if the volume is not down that much.




Thanks for that TH,

We are starting to hear more evidence of things slowing down in Oz. Things like lower auction clearing rates, significant house price declines in certain parts of Sydney. Housing finance, both in number and dollar terms is pulling back. Banks reporting slower volume growth and higher bad debt charges. Retail sales were down quarter over quarter in *1Q08*.

Compared to the US economy, the Aussie economy can change direction relatively quickly. (the NZ economy is showing signs of an abrupt slowdown at the moment) Not saying the Aussie economy is there yet, but signs are increasing.


----------



## Whiskers

andy87 said:


> maybe someone can clarify for me, but I heard that the demand for Aussie commodities from China is only going to make inflation worse due to the them having a strong Yen against the AUD or vice versa.




:headshake

Hey andy, the Chinese currency is the yuan. :bonk:

Japan's is the yen. 

I know, it's tough... what with curriencies called, Yuan, Yen, Won, Lek, Taka, Rouble, Mark...  :

This article from the Asia Times probably addresses your concern. 



> SUN WUKONG
> 'Devalue' call undermines yuan true faith
> By Wu Zhong, China Editor
> 
> HONG KONG - Until last week, it had been a general belief among financial investors and speculators that the Chinese currency, the yuan, would continue to appreciate particularly against the US dollar at least for the next couple of years. That faith is being undermined by market talk that the Chinese government might reverse its course of the past two years and deliberately devalue the currency.
> 
> The heretical talk started with the publication of a paper by Tan Yaling, a senior analyst with Bank of China (BOC) on May 6. The
> 
> fast appreciation of the yuan was now beyond the country's "bearability", Tan said, and was becoming harmful to the short-term stability and long-term development of the economy. She said the government should consider taking a "one-step" measure to significantly devalue the yuan at "an appropriate time" so as to disillusion the market's expectations of a continuous appreciation of the currency.
> 
> http://www.atimes.com/atimes/China_Business/JE14Cb01.html


----------



## Uncle Festivus

Here's one for those who think it's all back to normal (& believe in the tooth fairy).
The veneer of collusion illusion by the Fed & Bernanke & the other central banks can only delay some hard reckoning. This is at the coal face.



> The Californian city of Vallejo, population 117,000, has filed for bankruptcy. A city has never filed for bankruptcy before in the US. Vallejo's tax income has been shattered by a 26% fall in house prices. There are other cities on the brink in California. They're lining up to file.



http://www.sharecafe.com.au/fnarena_news.asp?a=AV&ai=8593



> The reality is that every bear market has a relief rally, and never does a market drop 20%, turn on a dime, and then return directly. The euphoria soon runs out of puff as those investors who missed out on selling on the way down take the opportunity to sell on the bounce. And just as the down-move may well have overshot, so too will the bounce likely overshoot as well. As to what the correct levels and timing are is a matter of conjecture, and that which ensures a market exists. But at the very least, dooming and glooming aside, global equities will need to do some more work to form a more solid base before investors can start to worry that they've missed out on the next great rally.


----------



## nioka

Uncle Festivus said:


> Here's one for those who think it's all back to normal (& believe in the tooth fairy).
> The veneer of collusion illusion by the Fed & Bernanke & the other central banks can only delay some hard reckoning. This is at the coal face.





 While we are not sheltered from the fallout in the USA we are DIFFERENT.

We have a government with a surplus of funds. We have a compulsory super scheme which is feeding a heap of cash into the market. We have a resource boom, the like of which has not been experienced before. Our natural gas and coal seam gas offsets the oil price on an international basis. We have almost recovered from the subprime fiasco. The Eddy Groves and the margin borrowers have paid their price but ABC Learning has business as usual as do most of the businesses whose shares were dumped by ANZ.

And somewhere the tooth fairy lingers.


----------



## CamKawa

nioka said:


> While we are not sheltered from the fallout in the USA we are DIFFERENT.
> 
> We have a government with a surplus of funds. We have a compulsory super scheme which is feeding a heap of cash into the market. We have a resource boom, the like of which has not been experienced before. Our natural gas and coal seam gas offsets the oil price on an international basis.



Yes we are different from the US. If commodities are in a bubble that bursts then we are in more trouble than them.

*Great Depression in Australia*

"The *Great Depression* of the 1930s was an economic catastrophe that severely affected most nations of the world, and Australia was not immune. In fact, Australia, with its extreme dependence on exports, particularly primary products such as wool and wheat, is thought to have been one of the hardest-hit countries in the Western world along with Canada and Germany."
source: http://en.wikipedia.org/wiki/Great_Depression_in_Australia


----------



## Whiskers

Good one Nioka. I would agree with all that. 

I think he has you trumped Uncle. 

I don't dissagree with your data and concerns, but concentrating on the short term I still stand by my earlier (classic) "the residue will carry over for another day". 

But that doesn't mean the markets will go to a lower low, just that the longer term up trend will be more tempered than it has in the previus 5 yrs.

I also agree with someone elses's quote somewhere today that the last meeting of the G7 came up with a plan to stabalise the world economy, which I still think involves supporting the USD. I'm banking on it. 



CamKawa said:


> Yes we are different from the US. If commodities are in a bubble that bursts then we are in more trouble than them.




Theoritically yes, CamKawa... but realistically, I don't believe commodies are in a bubble. I just don't see the demand for commodities crashing. A good part of that case is that I think China and India, among others, will increase domestic consumption at a faster rate than exports.


----------



## CamKawa

Whiskers said:


> Theoritically yes, CamKawa... but realistically, I don't believe commodies are in a bubble. I just don't see the demand for commodities crashing. A good part of that case is that I think China and India, among others, will increase domestic consumption at a faster rate than exports.



The problem I have with the China will save us theory is that if you look at the CSI 300 I'm not sure that Chinese believe they can save themselves.
http://www.bloomberg.com/apps/quote?ticker=SHSZ300:IND


----------



## woltage

Anyone with thoughts on what stock or stock types are less vulnerable to this imminent market correction?


----------



## explod

woltage said:


> Anyone with thoughts on what stock or stock types are less vulnerable to this imminent market correction?





I do not make recommendations.  But for me in shares I would have LGL, RSG, SBM, IGR and AVO,   there are a lot of other good ones.  As Aussie companies they have little sovereigh risk (eccept LGL) and no hedging.    But I have very few shares, money is tied up in physical gold which protects it from the big problems yet to hit.   A good conservative stock has got to be WOW who have a monopoly on our stomachs, (almost).

Spend a couple of weeks on a full read of the gold thread, "The Gold Price Where Is It Heading"


----------



## CamKawa

woltage said:


> Anyone with thoughts on what stock or stock types are less vulnerable to this imminent market correction?



Cash. Shop around for a good term deposit.


----------



## Uncle Festivus

Whiskers said:


> Good one Nioka. I would agree with all that.
> 
> I think he has you trumped Uncle.
> 
> I don't dissagree with your data and concerns, but concentrating on the short term I still stand by my earlier (classic) "the residue will carry over for another day".
> 
> But that doesn't mean the markets will go to a lower low, just that the longer term up trend will be more tempered than it has in the previus 5 yrs.
> 
> I also agree with someone elses's quote somewhere today that the last meeting of the G7 came up with a plan to stabalise the world economy, which I still think involves supporting the USD. I'm banking on it.
> 
> 
> 
> Theoritically yes, CamKawa... but realistically, I don't believe commodies are in a bubble. I just don't see the demand for commodities crashing. A good part of that case is that I think China and India, among others, will increase domestic consumption at a faster rate than exports.




I guess time will tell?

Chindia is suffering a bad case of inflation-itis at the moment. I wonder what will happen when the current cost increases for raw materials e.g. iron ore, oil & coal (of approx 70%?) starts to show up in the supply chain globally? 



> May 16 (Bloomberg) -- India's inflation rate *unexpectedly* rose to the highest in 3 1/2 years, adding pressure on the central bank to raise borrowing costs further to tame prices.
> Wholesale prices *gained 7.83 percent in the week* ended May 3 from a year earlier, after climbing *7.61 percent in the previous week,* the government said in a statement in New Delhi.



Unexpectedly! If your cost of raw materials is going up it's gotta come out the other end sometime, reducing either profits or consumption or standard of living eg food riots and higher interest rates eg Australia.
Chindia can't export it (inflation) any more so it may have to be contained locally which will severely reduce consumption. Not to mention their other minor problems .

The G7 better start pumping, priming, promoting the USD if they are to get any more traction as it seems to have stalled the last 2 weeks. Gold up $40 in 2 days.


----------



## Macquack

Uncle Festivus said:


> The Californian city of Vallejo, population 117,000, has filed for bankruptcy. A city has never filed for bankruptcy before in the US. Vallejo's tax income has been shattered by a 26% fall in house prices. There are other cities on the brink in California. They're lining up to file.




Hey Uncle,
Now there is an oppurtunity for MacBank.
Buy up bankrupt local councils in the US.
Brilliant, yet another *public utility monoply* investment to bleed funds out of the masses.
I bet they are already working on it.


----------



## sassa

US Consumer Sentiment Posts Lowest reading since 1980.

"The Michigan Sentiment number and the SP 500 generally are correlated. There is a significant divergence here that will be resolved with either the SP 500 taking a dive within the next 30 days, or Consumer Sentiment doing a quick rebound starting with the next revision of the May 2008 number.
Change is in the air."
http://www.jessescrossroadscafe.blogspot.com/


----------



## sassa

"I have over the years discussed what a poor economic recovery this cycle has been in terms of job creation. Given the lack of robust job creation, its not a huge surprise that layoffs typical of most recessions have yet to appear.

Merrill Lynch's David Rosenberg notes it has become "economic myth" that the April employment report was benign. In particular, he notes that hours worked, one of the employment metrics reported by the BLS, is rapidly declining. In the April NFP release, hours worked plunged:

"Companies did not cut as many positions as expected, they cut the hours instead.  The average work week plunged 0.3% (and, aggregate hours worked were down at an annual rate of 1% in the past three months), which, by the way, would be the equivalent of 400,000 job cuts. 

This is a sign that labor market conditions and domestic demand are far softer than the headline suggests. What drives consumer spending inevitably is income growth. Average weekly earnings fell 0.2% sequentially in April in what was the largest decline in two years. This dragged the year-on-year rate down to 3.1% from 3.3% in March, 3.7% in February and the nearby peak of 3.8% posted last November in what is clear disinflationary trend in wages. 

The rebound in the Household survey was all in part-time employment. While there was a nice rebound in the Household Survey, it was all in part-time employment – that is not the driver of confidence and spending. Growth in full-time jobs is what drives those things.  And, full-time employment actually fell 375,000 in April and is down 572,000 year-to-date; of the folks who were working part-time in April, the number doing so because of “economic reasons” (mostly slack business conditions) surged 306,000 or 6.3% – again the steepest runup in two years.  The diffusion indices fell through the floor to 45.4 in April from 48 in March – this measures the share of industries adding to payrolls and shows that even though the headline job loss was lower than expected, the decline was very broadly based across sectors.   (emphasis added)
In case you missed the underlined text, employers cut back so many hours that it was the functional "equivalent of 400,000 job cuts."

This is not the sort of data you associate with economic recoveries."
http://bigpicture.typepad.com/comments/economy/index.html


----------



## ithatheekret

I think we'll find that now as China has undergone devastating earthquakes and tremors , the supply demand ratio has been lifted a few notches .

The next year through to 2009 will be the next wave of need to rebuild many parts of its infrastructure , to be in time for the Olympics .


----------



## ShareIt

This may come as a surprise to the bears and I have had a strong bearish stance for a while, but I think we are going to see a bull market start within the next couple of months... However, I do first believe that a correction sometime this or next month will come first and then it would be a good time to load up..... bull market - we test the old highs and go slightly higher


----------



## Uncle Festivus

FWIW, I have seen this set up numerous times before. The Yen/Dow is as perfect a negative correlation as you could get, and it currently shows a possible turning point for both, indicating a breather for the DOW & equities in general. It may be a tad early but getting close? The Dow just can't seem to stay above 13k?


----------



## ShareIt

Uncle Festivus said:


> FWIW, I have seen this set up numerous times before. The Yen/Dow is as perfect a negative correlation as you could get, and it currently shows a possible turning point for both, indicating a breather for the DOW & equities in general. It may be a tad early but getting close? The Dow just can't seem to stay above 13k?




The Dow is at a tough resistance of 200MA... first touch too... so correction is looking very likely... but come end of summer in the US, i think a bull run will start... have some great evidence i have seen


----------



## explod

ShareIt said:


> This may come as a surprise to the bears and I have had a strong bearish stance for a while, but I think we are going to see a bull market start within the next couple of months... However, I do first believe that a correction sometime this or next month will come first and then it would be a good time to load up..... bull market - we test the old highs and go slightly higher




I'm a bear and not surprised in the least.    I never ceased to be amazed at the unsubstantiated claims though.   How about backing up your assertion with some reasons.


----------



## ShareIt

explod said:


> I'm a bear and not surprised in the least.    I never ceased to be amazed at the unsubstantiated claims though.   How about backing up your assertion with some reasons.




because that would be giving away my trade secret.... but time will tell, nothing is ever 100%.... but through my analysis, there is a strong probability of another bull run soon (July - Aug about)...


----------



## juw177

ShareIt, didn't you say in the Woodside thread that you took out a short? And that you think BHP has reached top?


----------



## ShareIt

juw177 said:


> ShareIt, didn't you say in the Woodside thread that you took out a short? And that you think BHP has reached top?




yes, I took a short today on WPL.... I said with BHP that it still has a possible leg up past the $50 mark (very likely actually) and then is due for a correction (but I haven't taken a short on it at this time).... if you look at a few posts back on this thread, I said that a correction will come in first and then we should get a bull run...

As a trader, I look to make $ on both sides... so yes, i will trade a correction and then load up for a bull run... but nothing is ever 100% and as we get closer to July, I will have a better idea if it will happen...


----------



## ShareIt

sorry juw177, BHP looks more likely to correct this week...


----------



## explod

ShareIt said:


> because that would be giving away my trade secret.... but time will tell, nothing is ever 100%.... but through my analysis, there is a strong probability of another bull run soon (July - Aug about)...




Well we dont' want to spoil your secret but assertions if made need to be backed up by some evidence.  If you cant' back it up dont post it, simple.

I think gold is going to go through the roof, if I could not back it up with reasoning (and I can and do) I would be stopped in my tracks by the moderators.  

And probability, a little less certain than earlier in the day, going a bit weak at the knees perhaps ?


----------



## ShareIt

explod said:


> Well we dont' want to spoil your secret but assertions if made need to be backed up by some evidence.  If you cant' back it up dont post it, simple.
> 
> I think gold is going to go through the roof, if I could not back it up with reasoning (and I can and do) I would be stopped in my tracks by the moderators.
> 
> And probability, a little less certain than earlier in the day, going a bit weak at the knees perhaps ?




Have you forgotten that this is a forum for sharing opinions and discussing thoughts??? I simply stated my opinion, you obviously disagree... note taken  as for evidence, only time will tell.... weak in the knees??? NEVER!


----------



## explod

ShareIt said:


> Have you forgotten that this is a forum for sharing opinions and discussing thoughts??? I simply stated my opinion, you obviously disagree... note taken  as for evidence, only time will tell.... weak in the knees??? NEVER!




Opinions without some substance to fill the holes will sink.  Problem is they can sink others.  

Time does not produce evidence but hindsight, and we can all be wise with that.


----------



## ShareIt

explod said:


> Opinions without some substance to fill the holes will sink.  Problem is they can sink others.
> 
> Time does not produce evidence but hindsight, and we can all be wise with that.




Well, a trader should always do their own research before jumping in on someone elses opinion... oh, as for gold, my opinion is that it has more to drop short term.


----------



## explod

ShareIt said:


> Well, a trader should always do their own research before jumping in on someone elses opinion... oh, as for gold, my opinion is that it has more to drop short term.




Well it is going up as we speak so thats where it is going short term, which is a reason, the current trend.  What is your reason for it going down?

Another reason why it is going up is that many descerning investors realise that the market is bearish so they want to hedge against it.

How about some rough ideas like that to back up your assertions which are no more than crap at this stage of the discussion.


----------



## ShareIt

explod said:


> Well it is going up as we speak so thats where it is going short term, which is a reason, the current trend.  What is your reason for it going down?
> 
> Another reason why it is going up is that many descerning investors realise that the market is bearish so they want to hedge against it.
> 
> How about some rough ideas like that to back up your assertions which are no more than crap at this stage of the discussion.




In a very nice way, I would like to go in more detail but it would take me a while to explain and get a chart happening, perhaps I can get to it on the weekend... yes, it is going up and it will go up a tad more $920 - $940 is my projection and then reverse to $840, perhaps lower... again, this is all speculation


----------



## MoneyNeverSleeps

There will me a major correction, every one agrees that market mechanisms such as securitisation are "broken" whilst there are trillions and trillions of dollars tied up in securitised debt in the world. All the US Fed has done is apply a bandaid and allowed the problem to become bigger rather than let Bears Stern start the process of unravelling the mess.

What I want to know is when OZ will acknowledge our out of control foreign debt:

Fraser/Howard left AUD$20B
Hawke/Keating left AUD$160B
Howard/Costell left AUD $600B and they had a "debt truck" driving around the country side saying that Keating was a fool!

Debt is currently increasing at about $60-$80B per year and accelerating!

Make no mistake, Australia is in serious trouble. Digging holes in the ground (and destroying our environment) will not keep the wolves from the door forever.

OZ foreign debt + a major global correction + our lack of any skill (other than digging holes) = ......... well it's too scary to contemplate actually!


----------



## CamKawa

MoneyNeverSleeps said:


> OZ foreign debt + a major global correction + our lack of any skill (other than digging holes) = ......... well it's too scary to contemplate actually!



We do have other skills in the areas of banking and house price speculation.


----------



## davo8

ShareIt said:


> because that would be giving away my trade secret.... but time will tell, nothing is ever 100%.... but through my analysis, there is a strong probability of another bull run soon (July - Aug about)...




US Consumer confidence at 25 year low, house prices crashing, unemployment on the rise, inflation up and you have "evidence" for a bull run? No bottom in sight but you're predicting recovery?

If you mean commodities and energy then could be, but if you mean financials or consumer, look for really bad news later this year. The real buying opportunities for those who still have capital will be next year.


----------



## ShareIt

davo8 said:


> US Consumer confidence at 25 year low, house prices crashing, unemployment on the rise, inflation up and you have "evidence" for a bull run? No bottom in sight but you're predicting recovery?
> 
> If you mean commodities and energy then could be, but if you mean financials or consumer, look for really bad news later this year. The real buying opportunities for those who still have capital will be next year.




At this stage I can only see it being a short bull run to the old highs and perhaps a little higher... but I still think we have a few months until it starts


----------



## MoneyNeverSleeps

"When the collapse comes, they can depend on the government? I don't think so, gold is our only Refuge." Yevhen, The Italian Job.


----------



## brty

Hi,

Let me see, when is the best time to invest, is it

A/ when consumer confidence is at a 25 year high or a 25 year low??

B/ House prices making record high after record high, or after they have crashed???

C/ When the market is making record highs or when good stocks are 40% off there highs???

Twenty years ago we had Keatings Banana republic, We could not sustain our foreign debt of ~$160b, the thought of ~$600b was laughable the world would call in our loans long before that.

In twenty years time there will be plenty of people complaining of debt of probably over $2.4T for Australia. Of course everybody just knows that it is not possible to get there because the world will call in our loans before then.:

After saying all that though, it will not just be a smooth ride up, I would be expecting a pullback over the next month or so as many good stocks are looking a little overbought after there 20-30% rises in the last 2 months.

brty


----------



## Kimosabi

MoneyNeverSleeps said:


> There will me a major correction, every one agrees that market mechanisms such as securitisation are "broken" whilst there are trillions and trillions of dollars tied up in securitised debt in the world. All the US Fed has done is apply a bandaid and allowed the problem to become bigger rather than let Bears Stern start the process of unravelling the mess.
> 
> What I want to know is when OZ will acknowledge our out of control foreign debt:
> 
> Fraser/Howard left AUD$20B
> Hawke/Keating left AUD$160B
> Howard/Costell left AUD $600B and they had a "debt truck" driving around the country side saying that Keating was a fool!
> 
> Debt is currently increasing at about $60-$80B per year and accelerating!
> 
> Make no mistake, Australia is in serious trouble. Digging holes in the ground (and destroying our environment) will not keep the wolves from the door forever.
> 
> OZ foreign debt + a major global correction + our lack of any skill (other than digging holes) = ......... well it's too scary to contemplate actually!



We are never going to get out of Debt while our money is based on Debt.

For anyone who would like to EDUCATE themselves on our Money and where our Money comes from, I'd recommend watching the following Video's(Most of the videos are based on the US Monetary System which has been investigated much better that the Australian Monetary System, but we don't appear to be any different to the US):

Money as Debt ==> http://video.google.com/videoplay?docid=-9050474362583451279

The Creature from Jeckyl Island ==> http://video.google.com/videoplay?docid=6507136891691870450

Money Masters ==> http://video.google.com/videoplay?docid=-515319560256183936

Fiat Empire ==> http://video.google.com/videoplay?docid=5232639329002339531

If everyone paid off all their Debts, THERE WOULD BE NO MONEY IN THE ECONOMY.


----------



## Whiskers

Well well, a  'computer snafu' resulting in an incorrect rating led to an interesting comment.

I wonder if the dis-affected subprime victims will latch onto that and sue the rating agencies too... or are they already!



> "Moody's is simply telling the truth slowly, and there's more truth to be told," said Janet Tavakoli, a consultant and president of Tavakoli Structured Finance in Chicago.
> 
> "Up until now I thought the rating agencies were incompetent rookies in structured products," Tavakoli said. "Now I'm suspicious that they may be crooked."
> 
> Agencies like Moody's Corp (NYSE:MCO - News), McGraw-Hill Cos. Inc.'s (NYSE:MHP - News) Standard & Poor's and Fimalac's (Paris:LBCP.PA - News) Fitch Ratings have been under pressure by investors, regulators and critics for the past year for incorrectly rating subprime mortgage debt.
> 
> http://biz.yahoo.com/rb/080521/moodys_shares_glitch.html


----------



## Aussiejeff

MoneyNeverSleeps said:


> "When the collapse comes, they can depend on the government? I don't think so, gold is our only Refuge." Yevhen, The Italian Job.




Can you eat gold? (I suppose you could sprinkle gold dust on corn grits to add flavour?)
Can you put gold in your petrol tank? (We already have "liquid gold", I suppose?)

Yeah. Seems gold would be very useful if/when the financial world collapses .....


----------



## Trembling Hand

Aussiejeff said:


> Can you eat gold? (I suppose you could sprinkle gold dust on corn grits to add flavour?).




LOL...... Yes its a common garnish on chocolate cakes. But it has no flavour :brille:


----------



## Aussiejeff

Is this news about funding for re-structure after the massive recent earthquake going to affect China's (and hence our) economic outlook over the coming year?

_"The central government *budget would be slashed by five per cent this year* to allow for the more than $US13 billion ($A13.57 billion) package, it said. "_

Full article link:

http://www.news.com.au/heraldsun/story/0,21985,23739362-5005961,00.html


AJ


----------



## Aussiejeff

Trembling Hand said:


> LOL...... Yes its a common garnish on chocolate cakes. But it has no flavour :brille:




Hahaha! 

MMM-mmmm.....! GOLD CAKE!!!

Now, that's a whole heap better than Corn Grits with Gold Dust!

LOL


----------



## sassa

"The main thing to keep an eye on is the QQQQs. They have pulled the market higher for the last few months. If they move through the 200 day SMA, we've got a big problem."
http://www.bonddad.blogspot.com/
I thought that if stocks were above the 200 day SMA that they were outperforming and part of a bull market trend.So why would the author of the above quote say ,"We've got a big problem?"


----------



## andy87

did anyone see george soros talking about global markets on Dateline last night?  Couldnt argue with a billionaire philantropist


----------



## questionall_42

andy87 said:


> did anyone see george soros talking about global markets on Dateline last night?  Couldnt argue with a billionaire philantropist




Could you enlighten us on his words of wisdom?


----------



## ithatheekret

Just a what if .................. what if the cake was made from TUNA or perhaps KINGFISH , both can be eaten and are worth their weight in gold .

Oh Crikey we'd have to Schnapper out of it !


----------



## sassa

"MAY … end of Q2 for Goldman
Please be aware, that Goldman finishes its Q2 end of the month … and if I’m not mistaken, Lehman and Morgan Stanley as well …
SO  … in the case you wonder, why Oil is flying and stocks are leaking …
Think about, who could be behind the move?
Guessed it?
You said GOLDMAN???
You win the prize … of knowing better 
And you can imagine, that their quarter (Goldman’s) will look nicely … Bullish on Crude … cautious on stocks …
And it makes sense, that if you bought much stock as member of the PPT … you lighten up as technical picture does not bode well … and as you know, that it won’t rise more … you even win more. 
It is as easy as it gets. 
And always remember … Goldman ALWAYS KNOWS, what the FED will do … or will not do …
So … as tomorrow is a “half-day” in N.Y. and Monday a holiday … I expect now a correction of the oil price and a bit of recovery for the equities as the “Q2-trades” should be close to be done …
June expiration will be superinteresting … so stay TUNED."
http://www.ridingthedax.com/2008/05/22/may-end-of-q2-for-goldman/


----------



## davo8

sassa said:


> "MAY … end of Q2 for Goldman
> I expect now a correction of the oil price and a bit of recovery for the equities




Did you read the Fed minutes? Do you think Countrywide declaring bankruptcy might have some effect? How many big banks can survive with no way to make obscene profits since securitisation collapsed? How many airlines can survive? How many builders? How many malls? How many SUV dealers?

Oil maybe, but I see the S&P double top and breaking trend, and gold stirring. The worst is ahead. Soon now.


----------



## Aussiejeff

ithatheekret said:


> Just a what if .................. what if the cake was made from TUNA or perhaps KINGFISH , both can be eaten and are worth their weight in gold .
> 
> Oh Crikey we'd have to Schnapper out of it !




Ohhh.... wotif the cake was made from FOOL'S gold!!! Dear me. Come in spinner ... hook, line and sinker! LOL


AJ


----------



## Temjin

http://moneynews.newsmax.com/streettalk/Jamie_Dimon_worst_ahead/2008/05/20/97555.html



> JPMorgan Chase CEO James Dimon says banks will suffer more from the recession than from the subprime debacle itself.
> 
> nvestment banks have written down tens of billions of dollar so far, but the worst is not behind us yet, Dimon says. Banks will be hit harder as the recession unfolds.
> 
> "The recession is just starting,” Dimon told an audience at the UBS AG financial services conference in New York.
> 
> "We don't know whether it's going to be mild or severe. It could be deep, it could be worse than the capital markets crisis."




Just who can you trust nowdays?  You have Warren Buffet telling you that the world credit crisis is over and everything will be back to normal, and the CEO of one of the largest investment banker saying the worse is not over yet. I feel for the mums and dads investor on who to trust.


----------



## sassa

> When the consensus was that JP Morgan got a screaming deal in its acquisition of Bear Stearns, I thought it was way too early to make that call. Yes, it certainly looked like the New York bank pulled a master stroke in getting the Fed to eat $29 billion of exposures, guaranteed to be the worst stuff that Morgan could hoover up.
> 
> But Bear also had a very large derivatives book, and as we well know, was a large credit default swaps protection writer. Those contracts are traded bi-laterally; JPM would not have particularly strong insights (its role as Bear's clearing bank wouldn't be of much help) and a mere weekend was clearly not enough time to do more than have a few key questions answered in the heat of putting a deal together. Similarly, Bear had two valuable assets: its headquarters building and its prime brokerage operation. The building, though still a good investment, will be worth less as Wall Street fires more people and Class A vacancies rise. Moreover, Bear was losing market share in prime brokerage, and in a period of deleveraging, it's the riskiest exposures that get cut deepest (and don't kid yourself, the real money in prime brokerage is in the lending).
> 
> So just as Bank of America's once touted deal with Countrywide looks like it will turn out to be a slow-motion train wreck, the Bear deal has the potential to be a millstone rather than an asset to JP Morgan.
> 
> A further sign that all is not well in former Bear-land is the sudden exodus of two former executives who were given very senior roles at Morgan. I came across this story by happenstance; it was broken by the Financial Times on a holiday weekend at 11:11 PM EDT (no coverage on any other outlets covered by Google News, nor on a search of the big financial blogs). So the pair was evidently forced out Friday to minimize press notice. And the article makes clear that mortgage valuations played a role in their removal.
> 
> These departures could be the result of bigger-than-expected Bear-related writedowns; in other words, this may merely be another aspect of a problem that has already been disclosed. But the way this was handled is highly sus, as the Australians would say. Don't be surprised if more shoes drop at JP Morgan



http://www.nakedcapitalism.com/2008/05/senior-bear-departures-signs-of.html


----------



## CamKawa

Temjin said:


> You have Warren Buffet telling you that the world credit crisis is over and everything will be back to normal



Buffett sees "long, deep" U.S. recession


----------



## davo8

CamKawa said:


> Buffett sees "long, deep" U.S. recession




There seems little doubt he's right. His earlier comments were about having seemingly escaped from potential collapse of the global financial system, but he is NOT optimistic over all. The US consumer has fallen in a hole, real estate is stil dropping and there are hundreds of bank collapses to come.

DOW is off 600 points or so. I'm not certain this is it, but (to coin a phrase) all we have seen so far is the end of the beginning.


----------



## Uncle Festivus

Temjin said:


> http://moneynews.newsmax.com/streettalk/Jamie_Dimon_worst_ahead/2008/05/20/97555.html
> 
> 
> 
> Just who can you trust nowdays?  You have Warren Buffet telling you that the world credit crisis is over and everything will be back to normal, and the CEO of one of the largest investment banker saying the worse is not over yet. I feel for the mums and dads investor on who to trust.



Well technically the credit crisis as such is over, but the recession is only now being seriously 'priced in' by the bobble heads. 
Even so, there will be more financial tsunamis to come ie Credit Default Swaps & JP Morgan being on the wrong side of them. Potentially bigger than what we have just come through. I don't think Buffet will escape this either.


----------



## davo8

Uncle Festivus said:


> Well technically the credit crisis as such is over, but the recession is only now being seriously 'priced in' by the bobble heads.
> Even so, there will be more financial tsunamis to come ie Credit Default Swaps & JP Morgan being on the wrong side of them. Potentially bigger than what we have just come through. I don't think Buffet will escape this either.




I'm with you, Uncle. The CDS overhang still has the potential to sink the entire shebang. From what I read recently it seems that a default rate of only around 2% or so would wipe out most of the big players. The Fed is still handing out cash against toxic paper as if there was no tomorrow, and there is no sign of the securitisation bubble machine getting back into business, so it's not obvious how it can ever unwind except by lots of defaults.

I'm sure there is something out there worth buying for the long term, but it's not at all easy to say what that is.


----------



## sassa

> Why Gold Will Be Whacked Again
> by Alex Wallenwein
> 
> Gold has recovered from its previous two "whacks" rather nicely this past week and the Friday before, but it will very likely be whacked again very soon, possibly as early as this coming Monday.
> Why?
> Because gold is rising while the Dow/US stocks are in ultra-dangerous territory.
> That is the one thing the "powers" cannot tolerate. Confidence in the dollar is apparently no longer a necessity for those who operate our economy from behind the scenes. In fact, a falling dollar is utterly desirable for them, for reasons to be discussed below.
> A primary stock market collapse, alone, is also not to high on their list of no-nos, but a collapsing stock market alongside a collapsing bond market alongside rising gold prices cannot, must not be tolerated.
> If such were to come to pass, investors would have no place else to go but to foreign stocks - and to precious metals stocks.
> Here is what's happening to the Dow:
> After breaking its resistance line in April during what looked to many as a "powerful rally", the Dow has betrayed the fundamental weakness of its recent, post-Bear Stearns, recovery by shying away from its 200-day moving average twice, breaking its recent uptrend, and falling below even its 60-day moving average. It is now about halfway between its resistance and its level 1 support.
> The engineered nature of this phony uptrend was revealed by the fact that it consisted largely of huge one or two-day rises which were inevitably followed by a series of smaller drops that at first capped and frequently eventually all but negated the previous rises.
> Normal, healthy uptrends just don't look that way.
> I would venture a prediction that, as soon as the Dow hits or crashes through support level 1, gold will be whacked again. If not, the Dow threatens to fall through its level 2 support, which would bring it below the January 200 high of 11,750 - and that would finally reveal that every bit of the Dow's recovery since then was contrived.
> The NYSE looks very similar, except that it briefly managed to break above its 200-day MA before succumbing to its fundamental weakness, and except for the fact that its support level #2, going back to January 2000, lies far below current levels, namely at 7000. Which only means that, once it breaks below support level 1, it has along, long ways to go before it finds support.
> 
> 
> 
> 
> 
> 
> 
> 
> http://www.safehaven.com/article-10345.htm
Click to expand...


----------



## sassa

If Hussman is correct,the credit market may be in for a severe jolt shortly.



> Meanwhile, credit default swaps blew out last week in a manner that we haven't seen since the week before the Bear Stearns debacle. I included some of these charts a few weeks ago. The steep rise in swap spreads this week was ominous. The apparent internal deterioration of credit conditions is a stark contrast to what investors have come to believe (hope) during the relief rally since March. The stocks of many investment banks have now plunged to the same or lower levels than they were at prior to the Fed's intervention with Bear Stearns




http://www.hussman.net/wmc/wmc080527.htm


----------



## Uncle Festivus

Yes, the CDS contagion will make the 'credit crisis' look like a dress rehearsal.

My father is being made to jump through hoops just to get his money out of his super fund, meanwhile it's value dropped 5% in a week!! What's it going to be like when the rest of the herd want theirs too??

Stating the obvious gets a bit of credibility, but I don't think the perma bulls have capitulated yet? 


> "THIS is a period of wealth destruction. The people who make money will be few and far between. There will be a lot more money lost than made." When George Soros — the phenomenally successful hedge fund manager — says this, you know something is wrong, very wrong.
> He has managed to make money almost consistently for over half a century — from his early days as one of the world's first major hedge fund traders to his involvement in Black Wednesday as the man who "broke the Bank of England", and in the latter years generating multibillion-dollar annual profits throughout the 1990s. The conditions today are almost uniquely dismal, however. "I think this is probably more serious than anything in our lifetime," he says.
> In short, his feeling is that the US and Britain are facing a recession of a scale greater than the early 1990s, greater even than the 1970s.



http://business.theage.com.au/man-who-broke-the-bank-struggling-to-break-even-20080526-2if7.html


----------



## Aussiejeff

Oh GAAAWD!!!! Run fer them thar hills, folks....

*"Alan Bond rejoins top 200 rich list"* http://news.theage.com.au/business/alan-bond-rejoins-top-200-rich-list-20080528-2iyj.html

The last time Bondy "flew high" was just before he and the rest of the market came plummeting back down to earth during the 1987-88 crash! Ugh....

Now where did I put that tin hat....???


----------



## sassa

> We expect that the FED will soon resume its garbage accumulation efforts in earnest. The innumerable pronunciamentos about the "recovering" credit markets, the "healing" of same, the progress of the "healthy and necessary CORRECTION" in real estate markets seem to us to have as much realism as Mark Twain's celebrated observation about his own demise: "My death has been much reported".
> 
> In the first place, there is the forthcoming tsunami-like wave of bank writedowns which are being necessitated to greater and greater degree with the passing of every day -- courtesy of the continuing plunge in residential real estate prices, which daily reduces the market value of extant home loans on banks' books, not to mention the market value and salability of the mountain of securitized mortgage-backeds (in the early stages of being joined by a widening array of other asset-backeds, such as commercial real estate-backeds, auto-backeds, credit-card backeds, and God knows what else). In the second place, there is the sad reality that the bear market in low quality loans and debt securities (colloquially known as JUNK BONDS and JUNK LOANS, er, excuse us, "leveraged" loans) is far from over -- nay, in certain sectors, it is JUST BEGINNING. Finally, there is the admittedly much smaller, but nonetheless symptomatic demand (growing like Topsy) from ill-starred buyers of securitized mortgage-backeds that the vendors of such securities --ie, the BANKS that originated the loans and the banks that bundled them together and sold them -- BUY BACK THIS STUFF since, it is alleged, the lenders and bundlers and Wall Street rocketeers who invented and disseminated these securitized products made loans -- and accepted same into their mortgage pools which back the bonds -- which were contaminated by fraud, inaccuracies, and poor judgment, confuting in fact the ostensible high quality ratings these securities were awareded and which served as their prime selling to point to buyers.
> 
> Where, oh where, will all this garbage wind up, we wonder? The imperative of avoiding a meltdown of the financial system -- barely averted during the BEAR STEARNS crisis (please excuse the pun -- perhaps we should refer to it, jokingly of course, as the BARE STEARNS episode) -- will, we would guess, be invoked again (and again? and again?) by the SAVIORS of our financial system, the trusty FED, to justify yet more rubbish acquisition.
> 
> Well, who knows? Perhaps the FED intends to dispose of this junk at some neighborhood flea market




http://www.money-sage.com/content/federal-reserve-dumping-ground-financial-garbage


----------



## explod

sassa said:


> http://www.money-sage.com/content/federal-reserve-dumping-ground-financial-garbage




Good on as usual Sassa

6 to 12 months ago the few of us who suggested these events were to unfold, were ridiculed as doom and gloom sayers.

Rest our case.     There has never been a better opportunity in history to buy physical gold.    And that is not advice to anyone, just what I would do, (but I have done it) you need to measure your own situation.

cheers explod


----------



## Romeo75

All this talk is making me very nervous  If the worst does happen, how affected do you all think the Aussie banks will be?  I hold shares in ANZ & NAB.  Should I be offloading or do what I always planned to do, and hold them long-term? I bought NAB at 28.26 & ANZ at 20.38.  I'm a complete novice obviously


----------



## Trembling Hand

Romeo75 said:


> All this talk is making me very nervous  If the worst does happen, how affected do you all think the Aussie banks will be?  I hold shares in ANZ & NAB.  Should I be offloading or do what I always planned to do, and hold them long-term? I bought NAB at 28.26 & ANZ at 20.38.  I'm a complete novice obviously




For every long term negative opinion you will find an equally compelling positive one. Which one do you give more weight to?? None! Do your own research rather than following rants from others.

For all you know we are all broke and useless traders. :


----------



## explod

Trembling Hand said:


> For every long term negative opinion you will find an equally compelling positive one. Which one do you give more weight to?? None! Do your own research rather than following rants from others.
> 
> For all you know we are all broke and useless traders. :




The matters from Sassa's post were not rants, they are facts.   And by all means do your own research by widely reading on the financial situation across the globe.   Problem is, sites such as Bloomberg serve up Wall Street rubbish.   If you are serious you need to stack up the figures.

Just the price of oil is going to drive businesses in Australia to the wall.

My last shares in Banks was ANZ 3 years ago, but that's just me.


----------



## Trembling Hand

explod said:


> The matters from Sassa's post were not rants, they are facts.   And by all means do your own research by widely reading on the financial situation across the globe.   Problem is, sites such as Bloomberg serve up Wall Street rubbish.   If you are serious you need to stack up the figures.
> 
> Just the price of oil is going to drive businesses in Australia to the wall.
> 
> My last shares in Banks was ANZ 3 years ago, but that's just me.




Come on  Explod the guy was asking for specific stock advice. Your underhandedly giving him that which is against every rule in the book. Both the forums and ASIC. My comment about rants was non biased and cuts both ways, bullish and bearish, but you have a need to give more weight to your own bearish opinion. Ones ego should be left well out of posts when someone asks for specific advice. 

Hope your willing to compensate the guy if he follows your guess and is not happy with YOUR advice.


----------



## Romeo75

It's all so confusing.  Some say that Aussie banks will be largely insulated from the crisis in the US.  One prominent investor says one thing one day, another prominent investor will say another thing the very next day.  I tend to think Aussie banks aren't as exposed as many of the US banks.  I think profits will take a small hit next year but will recover again in subsequent years.  The Aussie economy is not as aligned to the US as it once was.  As long as China keeps growing we should be insulated from a US recession to a large extent...just my thoughts, but thanks for the feedback and honest opinions...


----------



## explod

Trembling Hand said:


> Come on  Explod the guy was asking for specific stock advice. Your underhandedly giving him that which is against every rule in the book. Both the forums and ASIC. My comment about rants was non biased and cuts both ways, bullish and bearish, but you have a need to give more weight to your own bearish opinion. Ones ego should be left well out of posts when someone asks for specific advice.
> 
> Hope your willing to compensate the guy if he follows your guess and is not happy with YOUR advice.




Accept your stance.  However what in Sassa's post was a rant.   Is the article not clear enough?

There is no doubt that the way I put some things is a bit of a stretch but most often it is to counter the opposing, good feeling stuff, which is most often a bit of a stretch as well.    Between it all we have the intention of trying to provide some ballance to the extremes.   Unfortunately the Sub-prime junk assets to derivatives, hedging (still measured as assets) is extreme stuff and so gloomy no one wants to know.

He was as you say asking for specific stock advice, to satisfy that is certainly something for ASIC.    So where are we?

He has to use his own ruler or seek a professional.  Our argument at least alerts that there are no easy answers.


----------



## davo8

explod said:


> Accept your stance.  However what in Sassa's post was a rant.   Is the article not clear enough?




The form of the article by Money Sage was a rant. The content of the article was largely factual. If anyone wants to challenge those facts I can produce references, numbers and authorities yea high to back them up.

The independent commentators, plus Soros & Buffet, say that the US is in for a long deep recession, with multiple bank failures and much wealth destruction, and quote facts to back it up. The vested interests and in particular the mass media say everything is just fine, but they avoid the facts. I have no doubt who to believe.

A severe recession in the USA will harm Australia, and probably trigger a downturn here, except perhaps for mining. The downturn plus excess capacity may well pop the housing bubble here, like everywhere else in the world. This plus the damage to credit markets will hurt the banks and the rest of the financial sector. Banks here will survive, but they may cut dividends or struggle for a while. I sold all mine, and I'm not tempted by "bargains".

The timescale is specific: July to October. If there is no US crash by then it's safe to test the water. Until then, cash at 8% is best. Personally I'm building a list of mining-related companies to buy when the price is right. Not yet...


----------



## sassa

With a part underlying message of further writedowns by financial firms,either bank or investment,I post part of an article that I hope is full of fact and no ranting(no sarcasm intended to any of the forum's contributors).



> Ambrose Evans-Pritchard of the Telegraph looks at the rise of credit default swaps prices on investment banks and increasing interbank spreads, both indicators of heightened concern about counterparty and systemic risk.
> 
> No wonder Mishkin resigned. He probably doesn't want to go though another month like March. But his end-of-August departure date may not be soon enough to save him from more crisis management.
> 
> From the Telegraph:
> The debt markets in the US and Europe have begun to flash warning signals yet again, raising fears that the global credit crisis could be entering another turbulent phase.
> 
> The cost of insuring against default on the bonds of Lehman Brothers, Merrill Lynch and other big banks and brokerages has surged over the last two weeks, threatening to reach the stress levels seen before the Bear Stearns debacle. Spreads on inter-bank Libor and Euribor rates in Europe are back near record levels.
> 
> Credit default swaps (CDS) on Lehman debt have risen from around 130 in late April to 247, while Merrill debt has spiked to 196. Most analysts had thought the coast was clear for such broker dealers after the US Federal Reserve invoked an emergency clause in March to let them borrow directly from its lending window.
> 
> But there are now concerns that the Fed itself may be exhausting its $800bn (£399bn) stock of assets. It has swapped almost $300bn of 10-year Treasuries for questionable mortgage debt, and provided Term Auction Credit of $130bn.
> 
> "The steep rise in swap spreads this week is ominous," said John Hussman, head of the Hussman Funds. "The deterioration is in stark contrast to what investors have come to hope since March."
> 
> Lehman Brothers took writedowns of just $200m on its $6.5bn portfolio of sub-prime debt in the first quarter even though a quarter of the securities had "junk" ratings, typically worth a fraction of face value.
> 
> Willem Sels, a credit analyst at Dresdner Kleinwort, said the banks are beginning to face waves of defaults on credit cards, car loans, and now corporate loans. "We believe we're entering Phase II. The liquidity crisis has eased a little, but the real credit losses are accelerating. The worst is yet to come," he said.
> 
> The jump in corporate bankruptcies has not yet been picked up by the usual indicators, which tend to lag the market, lulling investors into a false sense of security. The true losses are already known to specialists in the business, said Mr Sels




http://www.nakedcapitalism.com/


----------



## sassa

Still time till opening for things to swing around and of course the trading day is another matter.Futures down 75 at the moment-
http://www.bloomberg.com/markets/stocks/futures.html
-attributed to


> June 2 (Bloomberg) -- U.S. stock-index futures fell on speculation a report will show manufacturing contracted for a fourth month, while a profit drop at U.K. lender Bradford & Bingley Plc reignited concern credit losses are spreading





> Futures indicated the S&P 500 will fall after posting its second straight monthly advance. The benchmark for American equities has lost 11 percent from an all-time high in October on concern that $387 billion in credit-related losses and writedowns at banks, along with record oil prices, will push the world's largest economy into a recession.


----------



## Whiskers

davo8 said:


> The independent commentators, plus Soros & Buffet, say that the US is in for a long deep recession, with multiple bank failures and much wealth destruction, and quote facts to back it up. The vested interests and in particular the mass media say everything is just fine, but they avoid the facts. I have no doubt who to believe.




Soros and Buffet don't have a _vested interest _in talking the market down? 

PS: Dow futures coming in to 69.

I think it's prudent to put some weight in the G7's desire for stability and some re-balancing of economies. I don't see them letting any stray ball past the keeper since they've gotten this far.


----------



## nioka

Whiskers said:


> Soros and Buffet don't have a _vested interest _in talking the market down? .



 Can you be sure they have no vested interest in talking the market down. Buffet in particular, I believe does have a vested interest in talking the market down. I read somewhere in the last week that he has a lot of money to invest right now. I guess he will be trying to get as much stock as he can with it. I'm trying to find where that was quoted.


----------



## Whiskers

nioka said:


> Whiskers said:
> 
> 
> 
> Soros and Buffet don't have a _vested interest _in talking the market down?
> 
> 
> 
> 
> 
> Can you be sure they have no vested interest in talking the market down.
Click to expand...



I did ask a sly question. 

You made my point here. 



> Buffet in particular, I believe does have a vested interest in talking the market down. I read somewhere in the last week that he has a lot of money to invest right now. I guess he will be trying to get as much stock as he can with it. I'm trying to find where that was quoted.


----------



## Whiskers

The yanks must have a bad dose of mondayitis today. 

The construction numbers had no bad surprises, actually better than forecast apart from domestic housing and Paulson is talking up the USD prospects, but the market is sliding.

Probably wake up in a frenzy late in the day.


----------



## Uncle Festivus

Whiskers said:


> The yanks must have a bad dose of mondayitis today.
> 
> The construction numbers had no bad surprises, actually better than forecast apart from domestic housing and Paulson is talking up the USD prospects, but the market is sliding.
> 
> Probably wake up in a frenzy late in the day.




Perhaps it's time for the permabulls to start scratching their collective heads trying to fathom why the market is falling - again! Indices have failed with a lower high, remains to be seen where it bottoms this time round?


----------



## sassa

> We know from centuries of evidence in countless economies, from ancient Rome to today's Zimbabwe, that running the printing press to pay off today's bills leads to much worse problems later on. The inflation that results from the flood of money into the economy turns out to be far worse than the fiscal pain those countries hoped to avoid..."
> 
> "Inflation is a sinister beast that, if uncaged, devours savings, erodes consumers' purchasing power, decimates returns on capital, undermines the reliability of financial accounting, distracts the attention of corporate management, undercuts employment growth and real wages, and debases the currency."
> 
> -Richard W. Fisher, President and CEO of the Federal Reserve Bank of Dallas



http://www.bigpicture.typepad.com/


----------



## davo8

Whiskers said:


> Soros and Buffet don't have a _vested interest _in talking the market down?




So if you won't believe Soros and Buffett the will you believe Nouriel Roubini?

http://www.rgemonitor.com/roubini-monitor/252731/the-complacency-that-the-worst-was-behind-us-in-financial-markets-is-rapidly-fading-away/



> The Complacency that the Worst Was Behind Us in Financial Markets is Rapidly Fading Away
> Nouriel Roubini | Jun 3, 2008
> 
> The complacency that took hold of financial markets (equity and partly credit) - after the bailout of the Bear Stearns’ creditor and the extension of the lender of last resort support of the Fed to systemically important broker dealers (those that are primary dealers) – is rapidly fading away as financial markets and financial institutions are again under severe stress.
> 
> No wonder that now heads just started to roll at the top of Wachovia and WaMu; that Lehman – even with the protection of the Fed security blanket – is in trouble again; that Countrywide is on the verge on bankruptcy once BofA pulls out of a loser acquisition of the biggest  and most insolvent mortgage lender; that the troubles among mortgage lenders are now spreading to the UK where the housing bubble was as big – if not bigger – than in the US; that S&P finally downgraded major financial institutions; and now that more financial trouble lurks ahead for major US banks and smaller US banks (small banks that will go into bankruptcy by the hundreds as the housing recession deepens, home prices collapse and the economic recession deepens and persist longer than expected by the market consensus).




You think he's trying to talk the markets down too?


----------



## sam76

Surely, the Democrat race being won would have a positive effect on the DOW?

yes/no?


----------



## Trembling Hand

sam76 said:


> Surely, the Democrat race being won would have a positive effect on the DOW?
> 
> yes/no?





???????

Its surprises that move markets. Is this a surprise?


----------



## sassa

And what will the Fed do if this story has substance.


> The chatta--and it's just that, unconfirmed chatta--is that counter-parties are "pulling a Bear" on Lehman Brothers (LEH). In other words, the "rumor becomes reality" scenario is making it's way around the trading wires.
> 
> I have no insight to the legitimacy of these stories but I'll say the same thing I said about Bear Stearns (BSC) in March. If rumors alone can bring down a franchise, how strong can that franchise be? This speaks to the fragility of a globally interwoven banking system in a finance-based economy built on more than $500 trillion of derivatives



http://www.minyanville.com/articles/lehman-LEH-BSC-bear-Stearns-Brothers/index/a/17418


----------



## Macquack

sassa said:


> And what will the Fed do if this story has substance.
> 
> http://www.minyanville.com/articles/lehman-LEH-BSC-bear-Stearns-Brothers/index/a/17418




The Fed might wheel out the oldest proven system of them all :- " *the barter system*" of exchange.


----------



## dhukka

dhukka said:


> Absolutely it's a crock, the ratings agencies have waited for two months for these companies to get their house in order to prevent downgrades. They should have been downgraded months ago.
> 
> This won't be the last we hear about the bond insurers, with anywhere from *$70 - $150 billion *in CDO losses (according to who you believe) *$3* billion is hardly going to do the trick. Interestingly Chief Executive Officer Jay Brown  said he has "questions'' about the company's 2007 preliminary results released last month and hasn't yet signed off the statements.
> 
> Also consider that the banks have NOT injected capital into AMBAC as a lot of the media has falsely reported. They are backstopping a rights issue, which means they don't have to get their hands dirty unless the rights are not taken up by existing sharehloders. This to me is a vote of no confidence on behalf of the banks.




As predicted, the sham that the ratings agencies have been running with respect to the Monoline insurers looks poised to fall apart:



> *MBIA, Ambac Credit Ratings Under Threat at Moody's *
> 
> Moody's Investors Service placed the Aaa insurance ratings of MBIA Inc. and Ambac Financial Corp. under review for a downgrade for the second time this year after the two largest bond insurers reported wider losses from the mortgage-market slump.
> 
> MBIA shares tumbled to the lowest since June 1988, Ambac slumped to a new all-time low and credit-default swaps on their debt rose after Moody's analyst Jack Dorer said a rating cut is ``the most likely outcome'' of the reviews. Dorer cited diminished ``new business prospects and financial flexibility'' and the likelihood for bigger insurance losses.
> 
> MBIA Chief Executive Officer Jay Brown rebuked Moody's and said the review is ``unnecessary.'' Ambac CEO Michael Callen said the timing was ``unfortunate'' because the company's problems are temporary. Armonk, New York-based MBIA and Ambac of New York sold a combined $4.1 billion in shares, bonds and convertible debt to bolster capital and save their ratings. With the shares down more than 90 percent in the past year and their debt under review, raising more money may not be possible, analysts said.
> 
> ``These companies are getting hit from all sides,'' said Robert Haines, an analyst with CreditSights Inc., a bond research firm in New York. They ``aren't writing new business, they're going to have more losses and they can't access the market to replenish capital. How can they be triple-A rated?''
> 
> MBIA Insurance Corp.'s insurance financial strength rating likely will fall to the Aa range, and a drop to the A category is possible, Moody's said today in a statement. Ambac Assurance Corp.'s ranking will probably be lowered to Aa, Moody's said in a separate statement.
> 
> Shares Drop
> 
> MBIA, which had plunged 90 percent in the past year, dropped $1.06, or 16 percent, to $5.63 today in New York Stock Exchange composite trading. Ambac, down 97 percent in the past year, fell 51 cents, or 17 percent, to $2.49.
> 
> Credit-default swaps tied to MBIA's insurance unit rose to a record as investors hedged against the risk the company's guarantees will sour. Sellers of five-year contracts demanded 23.5 percent upfront and 5 percent a year, according to CMA Datavision. That's up from 18.5 percent initially and 5 percent a year yesterday.
> 
> The upfront cost to protect Ambac guarantees jumped to 25.5 percent from 21.5 percent, CMA prices show.
> 
> The contracts pay the buyer face value in exchange for the underlying securities should the company fail to adhere to its debt agreements or if it can't make good on its guarantees.
> 
> No Changes
> 
> Moody's and Standard & Poor's put the ratings of Ambac and MBIA under review for the first time in January. The prospect of downgrades earlier this year roiled world capital markets on concern that guarantees for more than $1 trillion of debt may be worthless. Moody's affirmed the Aaa ratings on the insurance units of MBIA in February and Ambac in March.
> 
> Fitch Ratings cut Ambac to AA in January and MBIA to AA in April.
> 
> ``We disagree with Moody's decision,'' MBIA's Brown, said in a statement today. Moody's had given MBIA the impression in February that it had 6 to 12 months before the ratings may come under scrutiny. ``Since then, there have been no material adverse changes in the environment, and we believe our capital position has improved,'' Brown said. ``Thus we are surprised by both the timing and direction of this action and can only conclude that the requirements for a Triple-A rating continue to change.''
> 
> Moody's flip-flop on its rating has driven down new business ``precipitously'' in the past month, he said.
> 
> `Meaningful Uncertainty'
> 
> Ambac's Callen said the uncertainty surrounding the company is temporary. ``Outside the mortgage-related exposures, the remainder of our portfolio is performing well, and in line with our expectations,'' Callen said in a statement. The company has no plans to raise capital, he said.
> 
> Ambac reported a $1.66 billion net loss in the first quarter after $3.1 billion in charges for subprime-mortgage securities that it insured. MBIA had a loss of $2.4 billion as the value of derivatives it sells to guarantee debt tumbled $3.58 billion.
> 
> Dorer cited ``meaningful uncertainty'' surrounding Ambac's ability to regain market share since the first reviews. Callen yesterday said Ambac is writing minimal new business because potential customers lack confidence in the company's top ratings.
> 
> MBIA's results have shown ``continued deterioration within the guarantor's insured portfolio,'' Dorer said.


----------



## Whiskers

davo8 said:


> So if you won't believe Soros and Buffett the will you believe Nouriel Roubini?
> 
> http://www.rgemonitor.com/roubini-monitor/252731/the-complacency-that-the-worst-was-behind-us-in-financial-markets-is-rapidly-fading-away/
> 
> 
> 
> You think he's trying to talk the markets down too?




Aaah... just another accedemic, philosophing.  :

All, good theoritical stuff and idealisticly correct davo, but as we know political adgendas corrupt idealism.

I just get the feeling that there is too much political will now amoung a lot of nations to stabalise the markets, particularly the USD, from any further economic impacts and avoid any sudden 'bloodbath'... to increase regulation to prevent preditory lending and the shady sorts of business practices that caused the problem from occurring again and try to let the system sort itself out more orderly.

As I've mentioned on the gold thread, the fundamental indicators coming out of the US are OK now and starting to come in more on the better side of forecasts. While sentiment is still a bit shakey, as demonstrated by the what I think is a bit of an excessive correction this week driven by a degree of fear in re-rating headlines and the higher oil price.

Ironically, the price of everything has been falling the last few days. That no doubt causes uncertainty in some peoples minds for awhile too.


----------



## acouch

some lunchtime reading
ac

http://www.apfn.org/APFN/reserve2.htm


----------



## Broadway

Just to play devil's advocate, the XLF has stopped falling with a fairly decent amount of volume in the last 48 hours.

Maybe we are in a bull market since mid-march, with 3-5 day retracements.

There will always be major corrections every 6 months or so, but things look bright to me.

Maybe I need to find a bullish article to link.


----------



## sassa

Oh! What a tangled web we weave(apology to the bard).


> I just heard live on CNBC via Gasparino that Lehman is circulating an internal memo claiming they have deleveraged to 12:1 and have better liquidity than Goldman or MS.
> 
> And there was more, per Felix Salmon:
> And CNBC's Charlie Gasparino has got his hands on an internal Lehman Brothers memo...
> One of the items had to do with stories that came out yesterday about stock buybacks, were they buying back stock amid the financial crisis to prop up shares. They are saying, in the memo, the firm purchased quote "a small number of shares" as part of what they described as its ongoing and regular purchase program to minimize the dilution related to employee stock awards. This is part of what they do all the time at this point in time. They said they only purchased 1.3 million shares compared to volume, which is larger than that. Also they said in the memo, they are not in the market buying back today. So, this is what Lehman Brothers has put out in a memo.
> Now first to the content, which is sus, and then to the tactics, which are deplorable







> Now to the tactics, which stink to high heaven. Why, pray tell, is Lehman resorting to leaks and whispers rather than the proper procedure of public disclosure via a press release?







> But leaking an internal memo with non-public, material financial information to Gasparino is an SEC violation, although I am highly confident it was done in such a way the the firm has plausible deniability if questioned. Don't tell me this may have been an unauthorized employee leak; if this memo was circulated broadly to employees, it was done with the full intent that word would get outside the firm. That happens predictably with mass employee communications. And if it was limited distribution, the recipients, as anyone who has passed a Series 7 exam ought to know, are fully aware that selective disclosure of material information is a big no no under SEC Rule FD.
> 
> So why wouldn't Lehman disclose the sort of information it has been leaking to the Times and Gasparino (or more charitably, handled in such a way so as to guarantee that it would get out), particularly since they are favorable to the firm? Ah, the firm would be liable for the accuracy and completeness of any such disclosures.


----------



## Whiskers

acouch said:


> some lunchtime reading
> ac
> 
> http://www.apfn.org/APFN/reserve2.htm




Bludy long lunch! 

...but essential reading to understand the 'real system' v accedamic idealism.


----------



## sassa

Source of last article.

http://www.nakedcapitalism.com/2008/06/dirty-tricks-at-lehman-and-defense-of.html


----------



## Whiskers

I don't normally study overseas charts too much, but I decided to test my EW skills  to see if I could find why the the XAO didn't turn up as my indicaters initially suggested before going away just before close the other day.

... and I think I may have worked it out. :bananasmi

What I am thinking is the US finished a 5 leg up and had a little corrective wave A, B, C... which stretched out the XAO wave 4.

I reckon we've finally hit bottom for awhile again... and I have a theory why some other counts are wrong.

I know I'm a brilliant student...  ... but can someone please mark my assignment.


----------



## davo8

Whiskers said:


> Aaah... just another accedemic, philosophing.  :
> 
> As I've mentioned on the gold thread, the fundamental indicators coming out of the US are OK now and starting to come in more on the better side of forecasts.




Pardon? With the greatest of respect, what are you smoking?

Nouriel Roubini runs RgeMonitor, one of the most respected sources of independent economic commentary.

Residential property is still in free fall, with foreclosures running into the millions. There have been several small bank failures, and the ^BKX just fell through support at 75. Commercial property has just started to fall. Jobs are plummeting.

Lehman, Merrill Lynch, Morgan Stanley, MBIA, AMBAC all downgraded. Lehman desperately raising capital but unlikely to survive.

What you're seeing is a slow motion crash, courtesy of the Fed, instead of a quick crash and quick recovery. The banks are too big to let fail but all desperately need recapitalising, and the real question is who gets to carry the losses.


----------



## Whiskers

davo8 said:


> Pardon? With the greatest of respect, what are you smoking?




Nothin mate. 

I'm just gettin high on life atm.



> Nouriel Roubini runs RgeMonitor, one of the most respected sources of independent economic commentary.
> 
> Residential property is still in free fall, with foreclosures running into the millions. There have been several small bank failures, and the ^BKX just fell through support at 75. Commercial property has just started to fall. Jobs are plummeting.
> 
> Lehman, Merrill Lynch, Morgan Stanley, MBIA, AMBAC all downgraded. Lehman desperately raising capital but unlikely to survive.
> 
> What you're seeing is a slow motion crash, courtesy of the Fed, instead of a quick crash and quick recovery. The banks are too big to let fail but all desperately need recapitalising, and the real question is who gets to carry the losses.




I don't doubt his economic credentials... but I'm not sure he is jelling the (covert) political influence into his short term analysis.

As I say the fundamental economic data is generally OK and improving a little better than forcasts.

Unemployment popped out tonight a bit as did the number of foreclosures recently. On the plus side earlier today wholesale trade was strongest in a few months and retail sales are improving. Suggests to me people may have wiped their hands of problem mortgages and getting on with normal living/spending.

Since the end of the 1st quarter was widely tipped to be the crunch time for mortages, I would expect the number of foreclosures to translade to the writing off of a lot of consumer debt if not later today then very soon.


----------



## Uncle Festivus

Whiskers said:


> I reckon we've finally hit bottom for awhile again... and I have a theory why some other counts are wrong.




Whiskers, I admire your optimism but the evidence is becoming even more compelling now - 



> The U.S. unemployment rate jumped by half a percentage point in May -- to 5.5%, the highest since October 2004 -- on
> 
> *the biggest increase in seasonally adjusted unemployment in 33 years*,
> 
> government data showed Friday.




We have just gone from an orderly increase to possibly the start of a parabolic surge. And these stats usually err on the good side. This is getting scary. Still time for you to come over to the "dark side" 

And this is data from the real economy - derivitives will follow in a much more spectacular way, causing a global meltdown, BRIC's included (China will implode!).


----------



## Uncle Festivus

Nick Radge said:


> From Thursday nights report...




Yes, I've seen that ascending wedge pattern in a few charts and the breakdown several weeks ago now (https://www.aussiestockforums.com/forums/showpost.php?p=293325&postcount=3396), notably the FTSE, and a huge one building for the $AU/$USD.


----------



## sassa

Time for a bit of a chuckle.


> "The federal government is sending each of us a $600 rebate. If we spend that money at Wal-Mart, the money goes to China. If we spend it on gasoline it goes to the Arabs. If we buy a computer it will go to India. If we purchase fruit and vegetables it will go to Mexico, Honduras and Guatemala. If we purchase a good car it will go to Germany. If we purchase useless crap it will go to Taiwan and none of it will help the American economy.
> 
> The only way to keep that money here at home is to spend it on prostitutes and beer, since these are the only products still produced in US. I've been doing my part, and I thank you for your help"





http://www.bigpicture.typepad.com


----------



## dhukka

Whiskers said:


> I don't normally study overseas charts too much, but I decided to test my EW skills  to see if I could find why the the XAO didn't turn up as my indicaters initially suggested before going away just before close the other day.
> 
> ... and I think I may have worked it out. :bananasmi
> 
> What I am thinking is the US finished a 5 leg up and had a little corrective wave A, B, C... which stretched out the XAO wave 4.
> 
> *I reckon we've finally hit bottom for awhile again*... and I have a theory why some other counts are wrong.
> 
> I know I'm a brilliant student...  ... but can someone please mark my assignment.




Well your timing on that call couldn't have been more unfortunate Whiskers. That said I actually agree with you that SOME of the economic data has been better than expectations. If people want specific data points look at the ISM's, however the employment component of those indexes has deteriorated which is a bad sign. This week's intial jobless claims number was encouraging yet it should be remembered that the survey week that number pertains to was a 4 day week which always presents problems for seasonal adjustments. 

I think the US could be in for W shaped recession reminiscent of the early 1980's. There will be a blip in growth thanks to the rebate checks but what then? Where is the growth going to come from? Then we have oil which is wreaking havoc. The VIX is back up to 23.5. Sentiment could turn sharply here.


----------



## ithatheekret

dhukka said:


> There will be a blip in growth thanks to the rebate checks but what then? Where is the growth going to come from?




Corporate welfare and more corporate welfare to come ..........


----------



## dhukka

ithatheekret said:


> Corporate welfare and more corporate welfare to come ..........




Interesting that Former Fed voting member Lacker was saying yesterday that the Fed needs to take away their corporate welfare mechanisms (TAF's etc.). Could you imagine what would happen to Lehman Bros if the Fed took their backstop away? Can't see it happening, but the rhetoric is interesting.


----------



## IFocus

Whiskers said:


> I know I'm a brilliant student...  ... but can someone please mark my assignment.




Whiskers waves 1,3 and 5 should be impulsive waves your wave 1 is not an impulsive wave so more likely to be corrective.


----------



## ithatheekret

If Bear Sterns was the crash test dummy , we can easily imagine what would happen if Lehmans went belly up . I can't see it being allowed to happen though . It would definitely not be in their interest to allow Lehmans to stumble to close to the edge . Strong dollar twins ( Ben and Hank ) bellowing strength to the masses . Ben stating that the weak USD only affects Americans , what a wally of a statement ........ that must be why the US is now importing inflation , whilst USD denominated assets are deflating , bloomin' marvy for everyone else ....... yeah right .

I think they need to start rates moving to the upside , they know this , but won't go near it until they've got a new C.I.C. , they wouldn't dare yet , it would make the administration look bad . Not that this was ever a secret .

I'm with you Dhukka on the big W , but the claytons recession has to finish first . If Obahma takes the helm , it could be Obummer for some months after , not a good time to think of becoming a lobbyist . The only good thing , would be that the system could be flushed properly after a few good swallows of the metamucil ............


----------



## wayneL

dhukka said:


> Interesting that Former Fed voting member Lacker was saying yesterday that the Fed needs to take away their corporate welfare mechanisms (TAF's etc.).




I wonder what the price on his head is?


----------



## sassa

> With recent economic reports coming in generally weak but slightly better than expectations, we're seeing a relative calm in the financial markets. We don't see investors abandoning their aversion to risk, (though we're still alert to any signs of substantial improvements in market internals that would signal that), so there's not enough optimism to provoke self-feeding speculation. Still, credit spreads held relatively steady last week, rather than continuing their recent widening.
> 
> For now, we remain tightly hedged, since the overall profile of valuations and market action remains unfavorable. As I noted a couple of weeks ago, “The reality is that as recessions develop (and I continue to believe the U.S. faces a much more significant downturn than we've observed to date), the data can take months to accumulate to a compelling verdict, and in the meantime, speculative pressures can remain alive.”
> 
> Lest investors allow the weak but benign economic reports to create an “all clear” impression for the economy, the latest FDIC Quarterly Banking Profile, released last week, should encourage them not to close their ears and hum. I have to say that having read these regularly since the early 1990's, this is easily the most dismal report I've ever seen




http://hussmanfunds.com/wmc/wmc080602.htm


----------



## Whiskers

IFocus said:


> Whiskers waves 1,3 and 5 should be impulsive waves your wave 1 is not an impulsive wave so more likely to be corrective.




Thanks for the comments IFocus.

I reckon I had an impulse wave 1. I suspect you are referring to the point wayne made in the XAO thread about iv over lapping i.

Still working on the big picture and the proper hierarchy of codeing. I inadvertantly contradicted my own FA by using others assumptions that the Oct high was the end of the major wave 5 as my starting point.

I'm still confident my C (ticked) is a big C, but still checking.

Any other critique? Jump in y'all, cos I expect to confront others analysis... now that I've finally decided to get my teeth into EW. 

PS: Damn, my 3 dissapeared, but you know where it was.


----------



## josjes

No wonder the US market took a fright with 400 point drop on DJIA Friday. BKX (Banking Index) has just broken very important support level at 70, which was last seen in Mar 2003 (the start of the last bull run and the end of last bear market). 
BKX is the most important index as it flags the upcoming financial health or difficulty in the market.
Looking at this chart is quite telling, for the last five years, profits earnings from Financials/Banks were just puff of smoke, nothing more than just a mirage. 
http://finance.yahoo.com/echarts?s=%5EBKX#chart1:symbol=^bkx;range=19930225,20080606;indicator=volume;charttype=candlestick;crosshair=on;ohlcvalues=0;logscale=off;source=undefined


----------



## sassa

> Lehman Brothers Holdings Inc. is close to raising more than $5 billion of fresh capital from an array of investors including the New Jersey Division of Investment, according to a person familiar with the matter.
> 
> The move comes as the firm is set to report a second-quarter loss of more than $2 billion, this person said. Until recently, most analysts who follow Lehman have been predicting a loss of about $300 million






> So far, Friday's market turmoil hasn't deterred the outside investors, but Lehman may decide to see if markets stabilize on Monday before announcing its plans. A big capital increase from Lehman could help calm nervous investors and stabilize the broader market. The capital raising would come primarily through common shares, the first such issue since Lehman went public in 1994.
> 
> So far this year, Lehman has raised almost $6 billion, but that was mostly in the form of preferred shares, a stock-bond hybrid that doesn't dilute the ownership of common shareholders. While a common-share issue would hurt Lehman's already-suffering shareholders by diluting their ownership stake, rating companies and regulators are likely to look favorably toward a greater capital cushion.
> 
> Lehman's larger-than-expected second-quarter losses stem partly from asset write-downs and hedges used to offset losses in real estate and other securities, according to people familiar with the matter. The firm bet that indexes tracking markets such as real-estate securities and leveraged loans would fall. If that happened, it would book profits that would make up some of its losses from holding these securities and loans.
> 
> Note that according to the transcript of the first quarter earnings conference call (I have the pdf but no web version), Lehman was hedging Alt-As with mortgage servicing rights. If you call that a hedge, I have a bridge I'd like to sell you




http://www.nakedcapitalism.com/


----------



## sassa

Whiskers said:


> I don't normally study overseas charts too much, but I decided to test my EW skills :
> 
> What I am thinking is the US finished a 5 leg up and had a little corrective wave A, B, C...
> 
> I reckon we've finally hit bottom for awhile again..




You may well be correct at this time, but if we follow the U.S. market leads then according to SOME we will be in for further trouble.




> The US Stock Market probably still has another Major leg to the downside. There might be some backing and filling to the upside, but I believe the Stock Market is in trouble.




http://www.safehaven.com/article-10466.htm



> I don't expect to open in a free-fall tomorrow or the next day, but want you to be aware that we're only 300 points from breaking through key downside support levels. Once that happens (which I'm sure it will in the coming weeks) the next support level @ 11,700-11,600 becomes very vulnerable -- and if that one doesn't hold, expect all hell to break loose as the last leg of propped-up confidence in our economy gives way to unknown panic/crisis.
> 
> With that said, and expecting more bad news to roll in each and every day, I feel quite confident in stating that both of these downside support levels will eventually be broken (this year), but the real question ultimately relates to timing and the PPT -- What else do they have up their sleeves? No one yet knows, but expect a fight



http://www.safehaven.com/article-10463.htm


----------



## explod

A tit-bit from this weeks "Privateer Newsletter"



> Citigroup analysts have stated that a tightening of the rules regarding banks' off-ballance sheet vehicles (SIVs etc.) would force the banks to respond and could result in up to $US 5,000 Billion of assets (read "loans") coming back onto the books of the US banks.  That's $US 5 TRILLION of liabilities which have been kept off the ballance sheets of these banks.   When they arrive there, they will blow the total liabilities of American banks into orbit.   The main rating agencies in the US are all still trying to regain some credibility, having missed the main event while it was building up and then scrambling since last August.   They have now placed most major US banks on a credit watch and even downgraded some of them."




To quote a further conclusion from my source 







> "This is bigger than the subprime mess"



"

So further to your report above Sassa, the raising of funds will need a lot of spin now.


----------



## Mike Trader

*Re: George Soros :Short*

According to an interview yesterday on the BBC ,George Soros is short in both European & American Markets,quite pessimistic.Cheers Mike


----------



## ithatheekret

wayneL said:


> I wonder what the price on his head is?




If there is one though , I have noted that anyone that speaks out against the pro-Israeli stance is flogged severely . Being one that supports the Israeli cause I find it perplexing and without creedence as opinions are suppose to be welcome even though they may differ from others . Many overstate the positions held , then again many overstate the position the US markets and economy are in . If anyone was to cop some flak on their economic stance it would surely have to be Poole and it is always sobering words that come from Lacker and Poole . After all they're only trying to keep the bastards honest , but perhaps and just perhaps , they will go the same way our Dems went or are heading ........ into obscurity . Gag the truth and publish the BS .

Like the unemployment situation is due to teenager workers . 

MOOOOHAAAHAAA .


----------



## Pommiegranite

*Re: George Soros :Short*



Mike Trader said:


> According to an interview yesterday on the BBC ,George Soros is short in both European & American Markets,quite pessimistic.Cheers Mike





So he's shorting the market...hence the outward pessimism. It would be great if the media wouldn't give these people the time of day.

He's a trader/investor not an economist.


----------



## Macquack

*Re: George Soros :Short*



Pommiegranite said:


> So he's shorting the market...hence the outward pessimism. It would be great if the media wouldn't give these people the time of day.
> 
> He's a trader/investor not an economist.




I totally agree.

I also subscribe to the theory that these "guru's" end up doing the opposite to what they say to the media.


----------



## dhukka

ithatheekret said:


> After all they're only trying to keep the bastards honest , but perhaps and just perhaps , they will go the same way our Dems went or are heading ........ into obscurity . Gag the truth and publish the BS .
> 
> *Like the unemployment situation is due to teenager workers .
> *
> MOOOOHAAAHAAA .




Typical spin from the cheerleaders. Also heard that the minimum wage hike last year is pricing teenage workers out of the market. But if you actually look into the numbers you can see that the teenager effect was only part of the story. The following came from the BIG PICTURE:



> "Teen unemployment rose 3.3 points, which was probably exaggerated by some calendar issues. But teens are less than 5% of the workforce, so they contributed just 0.2 point of the total rise. Adult unemployment rose from 4.5% to 4.8% - and it was a clean move, with no rounding funniness. The adult participation rate rose 0.1 point, and the EPR [Employment Population Ratio] fell by 0.2 point. Also, the composition of the unemployment rise shows that it wasn't just the kids: permanent job losers and re-entrants accounted for 0.2 points of the rise, and new entrants just 0.1 point.
> 
> If you want to spin a story out of this, it could be that people are re-entering the labor force because they're having a hard time making ends meet."
> 
> -Liscio Report


----------



## sassa

> Stock investors looking for good news after Friday's rout in the U.S. won't be happy with the message coming from global bond markets.
> 
> Economic strength outside the U.S. has been a source of stability for corporate earnings amid the turmoil of the real-estate market collapse and credit crunch. Now, global bond markets, which have been more pessimistic than stock markets, are flashing warning signs about the outlook for both growth and inflation.
> For big developed economies -- most notably Europe, bond investors are signaling that the big risk is a severe economic slowdown. In emerging markets like China and India, inflation is a more serious threat. If these economies stumble or run into an inflation problem, that removes an important prop from under the stock market.





http://online.wsj.com/article/SB121295844546455357.html?mod=hpp_europe_whats_news


----------



## davo8

Investors don't need bond markets to tell them which way is down -- the bad news just keeps coming. Downgrading the monolines will wipe billions off bonds. Lehman is toast -- they just don't know who is big enough to bail them out.

So, anyone want to take a punt on where the market is headed tonight?

I don't do waves -- I'll just stick to my megabear forecast. Down, with the worst yet to come, no bottom this year. Whiskers?


----------



## explod

davo8 said:


> Investors don't need bond markets to tell them which way is down -- the bad news just keeps coming. Downgrading the monolines will wipe billions off bonds. Lehman is toast -- they just don't know who is big enough to bail them out.
> 
> So, anyone want to take a punt on where the market is headed tonight?
> 
> I don't do waves -- I'll just stick to my megabear forecast. Down, with the worst yet to come, no bottom this year. Whiskers?





Absolute crap and the martkets will continue to hold and sometimes rise on the crap.   So tired, would someone else explain that we are all broke.  A lot of us dont know it yet


----------



## nioka

davo8 said:


> So, anyone want to take a punt on where the market is headed tonight?
> ?



 I've just checked CFE in London. It's up. That is one that should be up here tomorrow. I doubt that it will be the only one. The price of oil and the credit squeeze may make the overall market fall but the oil and gas should do OK. All is never lost. When the speculators turn from buyers to sellers they will talk the market up again.


----------



## dhukka

Things were looking relatively bright in the US this evening until Lehman Brothers dropped this bomb:



> *Lehman Loses $2.8 Billion, Plans to Raise $6 Billion *
> Lehman Brothers Holdings Inc., the fourth-largest U.S. securities firm, reported a record $2.8 billion second-quarter loss and said it will raise $6 billion in capital in a public offering.
> 
> Lehman fell as much as 11 percent in New York trading after the firm said it sold about $130 billion of assets during the quarter. The New York-based bank reduced mortgage-related assets and leveraged loans by about 20 percent, it said today in a statement. The figures are preliminary and the final results will be released June 16.
> 
> Chief Executive Officer Richard Fuld, 62, is adding to the $8 billion he raised since February to quell concern that the collapse of the mortgage market would bring his firm down. Financial companies have raised more than $285 billion from investors to make up for almost $390 billion in writedowns and credit losses.
> 
> ``I am very disappointed in this quarter's results,'' Fuld said in the statement. ``However, with our strengthened balance sheet and the improvement in the financial markets since March, we are well-positioned to serve our clients and execute our strategy.''
> 
> Lehman dropped $3.49 to $28.80 at 7:24 a.m. in early New York trading after the company said it would sell common and preferred stock that converts to common shares in three years. It didn't say how much of each type would be sold. The company had $3.7 billion of writedowns on its portfolio of mortgage- related assets and leveraged loans during the quarter as hedges against the positions lost money, the bank said.


----------



## Whiskers

sassa said:


> Originally Posted by Whiskers
> I don't normally study overseas charts too much, but I decided to test my EW skills :
> 
> What I am thinking is the US finished a 5 leg up and had a little corrective wave A, B, C...
> 
> I reckon we've finally hit bottom for awhile again..
> 
> 
> 
> 
> 
> You may well be correct at this time, but if we follow the U.S. market leads then according to SOME we will be in for further trouble.
> 
> 
> http://www.safehaven.com/article-10466.htm
> 
> 
> http://www.safehaven.com/article-10463.htm
Click to expand...



I usually am thanks sassa.  ... but you're right, there will be more pain to come... carried over for another day, eh Uncle Festivus.


----------



## Uncle Festivus

Whiskers said:


> I usually am thanks sassa.  ... but you're right, there will be more pain to come... carried over for another day, eh Uncle Festivus.



It will whipsaw with a negative bias until the permabulls capitulate under overwhelming evidence. Stand close to the exits


----------



## Whiskers

Looks like interest rate cuts are done... what with news reports that rate rises are back on the horizon, and as many of us expected, the US admin talking up the USD and not ruling out intervention to prop it up 'just in time' to save/improve the US economy.

Who says they are the leaders of the 'FREE' world. 

But as I have emphasised, political adgenda corrupts the free markets, and usually wins out in the short term.

Despite a couple of aspects not fitting neatly with common EW thoughts, I'm thinking this is the bottom or near to of intermediate wave c, leg 2 of the next impulse up.

The main area where I differ from most is where I call August the intermediate (circled) wave 5 and the August low intermediate A with the Oct high (on low volume) B. 

I know it may be a controversal point, but I initially tried calibrating by eye of the chart and wasn't satisfied. So I got thinking about the intent of EW and calibrated the moves by priority of the most important criteria. It makes more sense for me... but again I'm open to discussion. 

Actually I will post a detailed chart on the XAO as that is what I am more interested in and for the most part resembles the DJIA.


----------



## davo8

Where do you get that eternal optimism about the markets?

I don't do EW, but to my eye the chart simply looks like a primary downtrend since that peak back in October. On a historic scale it looks like a bull market that should run 12 months or more, and the secondary uptrend since March is a typical retrace. The expected target would be around 1050 or so, about Xmas, and this would bring PEs back to where stocks start looking cheap again.

The devastating economic news means it could go lower or longer. A major event like Lehman folding would produce a 100 point drop.

So I can see why you might keep dancing, but I'd hope you keep close to the exits.


----------



## Whiskers

Been doing a bit more maths on my EW wave count.

It seems that my wave *c* can extend down to abt 11,735 and still be valid.

That's testing the limits of a Flat corrective wave c... of all the high oil speculators and the bears as well... oh, and the nerves of the bulls too. :


----------



## Whiskers

Actually, that should be about 11,800'sh.

Still a bit sleepy eyed. :


----------



## davo8

Whiskers said:


> Actually, that should be about 11,800'sh.




Whereas to me it looks like a target of around 10,000. 

I wonder who'll be closer.


----------



## Whiskers

davo8 said:


> Whereas to me it looks like a target of around 10,000.
> 
> I wonder who'll be closer.




It could well be in now. The market likes the better than expected retail sales. Inventories are up also. Oh and I think they liked kicking a couple of arses at Lehmans.

Get another positive CPI tomorrow and I think I'd be game to say game over. Economic ruin and recession a non event... apart from the anxiety and panic attacks some have suffered.


----------



## sassa

Whiskers said:


> It could well be in now. The market likes the better than expected retail sales. Inventories are up also. Oh and I think they liked kicking a couple of arses at Lehmans.
> 
> Get another positive CPI tomorrow and I think I'd be game to say game over. Economic ruin and recession a non event... apart from the anxiety and panic attacks some have suffered.



And of course there are differing opinions as to the market's performance-



> In the morning … bidding the market up on 2 reasons …
> 
> - a good feeling  that retail sales will come in better than expected
> 
> - the rollover of the leading equity futures contracts
> 
> So the game was BID ON HOPE in the morning … bash some shorts …
> 
> then the news flow … OVERWHELMINGLY NEGATIVE … as always …
> 
> Today …
> 
> - Lehman makes some management changes without cutting the man responsible … the CEO
> 
> - Yahoo and Microsoft take some air out of M&A hopes as they end talks
> 
> Result … markets loses all hot air from the morning …
> 
> hits NEW LOWS …
> 
> and then … as seen many times before … the last 30 mins.
> 
> 10 points squeeze … to bash some shorts …
> 
> Do I hate it??? … YES
> 
> Can I change it??? … NO
> 
> Why does it function?
> 
> As to much money is around … stupidity rules and the greed is big enough for most investors to “better” stay in the market …
> 
> Horrible … But payday looms




http://www.ridingthedax.com/2008/06/12/every-day-the-same-structure/


----------



## Trembling Hand

> Result … markets loses all hot air from the morning …
> 
> hits NEW LOWS …
> 
> and then … as seen many times before … the last 30 mins.
> 
> 10 points squeeze … to bash some shorts …
> 
> Do I hate it??? … YES
> 
> Can I change it??? … NO




That shows a fundamental misunderstanding of how/why the market moves/functions!!!!!!!!!


----------



## theasxgorilla

The actors in the market are fickle.  The Lehmann Bros news serverd to really give markets a reason to head south...and news like this may give them reason to find support.  Behold the mighty American consumer 

From Danske Bank Research:



> *US: Rebates revive retailers*
> 
> *Overview:* The May retail sales indicate that the pace of consumer spending has recovered over the past two months. In May, demand for retail goods rose by 1.0% m/m and by 1.2% m/m excluding autos. Moreover, the March and April numbers were revised higher. The numbers leave little doubt that consumer spending has been advancing at a healthier pace than previously anticipated and is much better than suggested by various consumer confidence measures and most of the weekly retail sales indicators.




Very few signs in Sweden of a massive panic or slow down.  I observed a lot of people holding off on hiring new staff as they were expanding, due mostly to the fear of a big-bang courtesy of media FUD campaigns, but as time has gone by the pressure of an expanding economy and the absense the bang has meant that there is little choice but to roll forward.


----------



## Uncle Festivus

theasxgorilla said:


> The actors in the market are fickle. The Lehmann Bros news serverd to really give markets a reason to head south...and news like this may give them reason to find support. Behold the mighty American consumer




Now all they need to do is keep giving away $50 Billion a month to help Americans continue to live beyond their means and recessions will be a thing of the past . Who's gonna pay the piper after delaying the inevitable?


> WASHINGTON - A flood of economic aid payments pushed the federal budget deficit to $165.9 billion, the highest imbalance ever for May.
> The Treasury Department reported Wednesday that the May deficit was more than double what it was in May 2007. Some $48 billion in payments went out as part of the $168 billion economic relief effort to revive the economy and keep the country from a deep recession.


----------



## sassa

Pleasing to see the bounce back in the Dow,NASDAQ and S&P last night as it will give a leg up to our market on Monday.Probably will be a follow up on Monday in the good old U.S.of A.Again bodes well for our market on Tuesday.
But....


> The early summer weeks of June have not been kind to the US stock markets. Across June's initial 8 trading days, the flagship S&P 500 stock index lost 4.6% of its value. This is not a trivial move for America's biggest and best elite companies, so stock traders are starting to sweat a bit.
> 
> As usual, Wall Street is generally pretty bullish despite the recent selling. It is largely perceived as a minor pullback within a big new bull upleg, a stellar buy-the-dips opportunity. But what if this is not the case? An alternative, and far-more ominous, interpretation of this past month's weakness suggests we could really be witnessing an awakening bear.
> 
> If you aren't a contrarian or haven't studied financial-market history, the notion of a new bear probably seems preposterous. I am not happy with this thesis either, as bear markets are much more challenging to thrive in than bull markets. Nevertheless, the case for a new bear is getting pretty compelling. And if a bear is indeed stirring, it is far more prudent to prepare for it instead of burying our heads in the sand.
> 
> The case for this new bear begins with stock-market technicals. The average price action in the 500 individual stocks comprising the S&P 500 (SPX) has been growing increasingly negative. With this index trending lower, the supplies of component shares offered by sellers are generally exceeding buy-side demand. Sellers outnumbering and overpowering buyers is one of the core bear-market attributes.
> 
> A year ago, the SPX technicals still looked bullish. In July it hit a new all-time high of 1553 within weeks of finally surpassing its old high-water mark of 1527 from way back in March 2000. There was a sharp selloff soon after this top as the initial subprime scare hit, but the SPX soon recovered. By early October it again hit fresh all-time highs near 1565. Together this pair of highs now looks like a secular double top



http://www.safehaven.com/article-10512.htm


----------



## Whiskers

China: gaining confidence as emerging economic power.

The USD just has to rise now to make good their tongue lashing on economic management to China that has back fired. :



> Booming, China Faults U.S. Policy on the Economy
> 
> BEIJING ”” Not long ago, Chinese officials sat across conference tables from American officials and got an earful.
> 
> The Americans scolded the Chinese on mismanaging their economy, from state subsidies to foreign investment regulations to the valuation of their currency. Your economic system, the Americans strongly implied, should look a lot more like ours.
> 
> But in recent weeks, the fingers have been wagging in the other direction. Senior Chinese officials are publicly and loudly rebuking the Americans on their handling of the economy and defending their own more assertive style of regulation.
> 
> Chinese officials seem to be galled by the apparent hypocrisy of Americans telling them what to do while the American economy is at best stagnant. China, on the other hand, has maintained its feverish growth.
> 
> Some officials are promoting a Chinese style of economic management that they suggest serves developing countries better than the American model, in much the same way they argue that they are in no hurry to copy American-style multiparty democracy.
> 
> In the last six weeks alone, a senior banking regulator blamed Washington’s “warped conception” of market regulation for the subprime mortgage crisis that is rattling the world economy; *the Chinese envoy to the World Trade Organization called on the United States to halt the dollar’s unchecked depreciation before the slide further worsens soaring oil and food prices*; and Chinese agencies denounced a federal committee charged with vetting foreign investments in the United States, saying the Americans were showing “hostility” and a “discriminatory attitude,” not least toward the Chinese.
> 
> All this reflects a brash new sense of self-confidence on the part of the Chinese. China seems to feel unusually bold before the Summer Olympics, seen here as a curtain raiser for the nation’s ascent to pre-eminence in the world.
> 
> http://www.nytimes.com/2008/06/17/world/asia/17china.html?_r=1&hp&oref=slogin


----------



## sassa

> In summary, the US economy is in a stagflationary recession, and the banks are working overtime with the Fed and Treasury to hide the rot in the crony capitalist financial system after multiple bubbles.
> 
> The real economy is about as imbalanced as any command economy can be, especially with the savings reserves of the better part of the world to play with.
> 
> In the short term the banks, lacking real world serious business potential, will continue to game the financial markets, so speculator beware.




http://www.jessescrossroadscafe.blogspot.com/


----------



## ithatheekret

*In the short term the banks, lacking real world serious business potential, will continue to game the financial markets, so speculator beware.*

......... and they know everything about what you own , including what's in your share portfolio right now .  oops


----------



## Uncle Festivus

ithatheekret said:


> *In the short term the banks, lacking real world serious business potential, will continue to game the financial markets, so speculator beware.*
> 
> ......... and they know everything about what you own , including what's in your share portfolio right now .  oops




Even my stash of gold bars, as in the photo ??


----------



## ithatheekret

They'd know mine Unc and the ones my good lady has swooped on for me , I paid by cheque ( personal and bank cheque ) , and dearest one racked 'em up on her magic plastic .............  and promptly paid them off with her wages that month . 

I got stuck with the materials cost for the renovations to her house , hehehe and the concreting , well I made concrete and its solid , but I wouldn't exactly call it concreting . If you've seen techscrews rise significantly in the hardware stores , well sorry , I'm partly to blame there too .

I've gone mad with them , they tend to make the outdoor work less idiot proof ........


----------



## Uncle Festivus

ithatheekret said:


> They'd know mine Unc and the ones my good lady has swooped on for me , I paid by cheque ( personal and bank cheque ) , and dearest one racked 'em up on her magic plastic .............  and promptly paid them off with her wages that month .
> 
> I got stuck with the materials cost for the renovations to her house , hehehe and the concreting , well I made concrete and its solid , but I wouldn't exactly call it concreting . If you've seen techscrews rise significantly in the hardware stores , well sorry , I'm partly to blame there too .
> 
> I've gone mad with them , they tend to make the outdoor work less idiot proof ........




Just out of curiosity, who do you deal your bullion with? 10oz bars paid for in cash keep's you under the 10k reportable level at the current Oz POG.


----------



## ithatheekret

So does $2500: twice a day , but I seek out some nice ladies at the Adelaide Exchange outlets and a couple of others that deal through jewellery repairs etc. , friends in that trade .

It does help to phone orders through though .............  then go collect .


----------



## explod

Increasing steam rising through the cracks:-



> N.Y. Fed's private OTC actions under fire
> Sun Jun 15, 2008 6:10pm EDT
> 
> WASHINGTON (Reuters) - The New York Federal Reserve's closed-door rule making with top players in the massive $60 trillion credit default swaps market came under legal fire on Sunday, as a fair finance activist filed a complaint questioning why it was done in the dark.
> 
> "The Federal Reserve seems to think it can engage in rule making in secret only with the industry," said Matthew Lee, executive director of the New York-based non-profit group Inner City Press/Community on the Move.
> 
> Lee filed the administrative complaint on Sunday with both the New York Fed and the Federal Reserve Board in Washington. In the complaint, he demanded that the central bankers explain why the meetings earlier this month were private and requested copies of all communications and details about the New York Fed-sponsored talks.
> 
> Officials at the Federal Reserve could not immediately be reached for comment.


----------



## Macquack

explod said:


> Increasing steam rising through the cracks:-




The Federal Reserve
Independent within government
"The Federal Reserve System is an independent government institution that has private aspects, but is neither a private organization, nor operates for a profit. It derives its authority and public purpose from the Federal Reserve Act passed by Congress in 1913. As an independent institution, the Federal Reserve has the authority to *act on its own without prior approval from Congress or the President*." - Wikipedia

At the end of the day, the Fed is answerable to nobody. Helicopter Ben would be laughing off the complaint.


----------



## explod

Macquack said:


> The Federal Reserve
> Independent within government
> 
> At the end of the day, the Fed is answerable to nobody. Helicopter Ben would be laughing off the complaint.




True, but with regime change looking likely, allegiances are shifting with blame games adding fuel.

A charge on the bastille door and public (lynchings) purges are troubling some.   Tends to leak the truth.

The US Supreme Court supposed to be independant also and we saw that (what a joke) at the last Presidential election.

Of course, the Fed is private enterprise, but so is civil action.


----------



## spooly74

A read for all the bears.



> The Royal Bank of Scotland has advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months as inflation paralyses the major central banks.
> 
> "A very nasty period is soon to be upon us - be prepared," said Bob Janjuah, the bank's credit strategist.
> 
> A report by the bank's research team warns that the S&P 500 index of Wall Street equities is likely to fall by more than 300 points to around 1050 by September as "all the chickens come home to roost" from the excesses of the global boom, with contagion spreading across Europe and emerging markets.
> 
> Such a slide on world bourses would amount to one of the worst bear markets over the last century.




http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/18/cnrbs118.xml


----------



## Uncle Festivus

spooly74 said:


> A read for all the bears.




Um, maybe more enlightening for the perma bulls, the bears already think this?


----------



## Whiskers

It had to happen.

It might have been in one of the oil threads awhile ago I posted some figures on the huge oil sand reserves being geared up into production in Canada and the huge amount of oil in coastal America that has been off limits... until now.

If it is true that speculators are bidding up oil supply contracts, and if this passes congress on top of the saudi's pumping more oil, it should dispell concerns of the world running out of oil and put a dampener on sky rocketing oil prices.

Even here in Qld and Northern NSW there are huge reserves of shale oil that are looking pretty profitable at current prices.  



> *Bush Will Seek to End Offshore Oil Drilling Ban *
> By SHERYL GAY STOLBERG
> Published: June 18, 2008
> 
> WASHINGTON ”” President Bush, reversing a longstanding position, will call on Congress on Wednesday to end a federal ban on offshore oil drilling, according to White House officials who say Mr. Bush now wants to work with states to determine where drilling should occur.
> 
> 
> No one knows for certain how much oil is in the moratorium area, but the federal Energy Information Administration estimates that roughly 75 billion barrels of oil in the United States are off-limits for development, and that 21 percent of this oil ”” or 16 billion barrels ”” is covered by the offshore moratorium.
> 
> http://www.nytimes.com/2008/06/18/w...gin&adxnnlx=1213790636-rYLQxLndgL/L+zxPqQs9Nw


----------



## explod

In my humble view the outlook and view put forward by GWB is as usual continued jawboning, most of the oil reserves cited are costly to recover heavy grades not well suited to petrol.  The following is long but worth revisiting:-



> World oil supplies are set to run out faster than expected, warn scientists
> 
> Scientists challenge major review of global reserves and warn that supplies will start to run out in four years' time
> 
> By Daniel Howden
> Thursday, 14 June 2007
> 
> Print  Email Search
> Search
> Go
> Independent.co.uk  Web
> Bookmark & Share
> Digg It
> del.icio.us
> Facebook
> Stumbleupon
> What are these?
> 
> Change font size: A | A | A
> Scientists have criticised a major review of the world's remaining oil reserves, warning that the end of oil is coming sooner than governments and oil companies are prepared to admit.
> 
> 
> BP's Statistical Review of World Energy, published yesterday, appears to show that the world still has enough "proven" reserves to provide 40 years of consumption at current rates. The assessment, based on officially reported figures, has once again pushed back the estimate of when the world will run dry.
> 
> However, scientists led by the London-based Oil Depletion Analysis Centre, say that global production of oil is set to peak in the next four years before entering a steepening decline which will have massive consequences for the world economy and the way that we live our lives.
> 
> According to "peak oil" theory our consumption of oil will catch, then outstrip our discovery of new reserves and we will begin to deplete known reserves.
> 
> Colin Campbell, the head of the depletion centre, said: "It's quite a simple theory and one that any beer drinker understands. The glass starts full and ends empty and the faster you drink it the quicker it's gone."
> 
> Dr Campbell, is a former chief geologist and vice-president at a string of oil majors including BP, Shell, Fina, Exxon and ChevronTexaco. He explains that the peak of regular oil - the cheap and easy to extract stuff - has already come and gone in 2005. Even when you factor in the more difficult to extract heavy oil, deep sea reserves, polar regions and liquid taken from gas, the peak will come as soon as 2011, he says.
> 
> This scenario is flatly denied by BP, whose chief economist Peter Davies has dismissed the arguments of "peak oil" theorists.
> 
> "We don't believe there is an absolute resource constraint. When peak oil comes, it is just as likely to come from consumption peaking, perhaps because of climate change policies as from production peaking."
> 
> In recent years the once-considerable gap between demand and supply has narrowed. Last year that gap all but disappeared. The consequences of a shortfall would be immense. If consumption begins to exceed production by even the smallest amount, the price of oil could soar above $100 a barrel. A global recession would follow.
> 
> Jeremy Leggett, like Dr Campbell, is a geologist-turned conservationist whose book Half Gone: Oil, Gas, Hot Air and the Global Energy Crisis brought " peak oil" theory to a wider audience. He compares industry and government reluctance to face up to the impending end of oil, to climate change denial.
> 
> "It reminds me of the way no one would listen for years to scientists warning about global warming," he says. "We were predicting things pretty much exactly as they have played out. Then as now we were wondering what it would take to get people to listen."
> 
> In 1999, Britain's oil reserves in the North Sea peaked, but for two years after this became apparent, Mr Leggett claims, it was heresy for anyone in official circles to say so. "Not meeting demand is not an option. In fact, it is an act of treason," he says.
> 
> One thing most oil analysts agree on is that depletion of oil fields follows a predictable bell curve. This has not changed since the Shell geologist M King Hubbert made a mathematical model in 1956 to predict what would happen to US petroleum production. The Hubbert Curveshows that at the beginning production from any oil field rises sharply, then reaches a plateau before falling into a terminal decline. His prediction that US production would peak in 1969 was ridiculed by those who claimed it could increase indefinitely. In the event it peaked in 1970 and has been in decline ever since.



   and continued next post


----------



## explod

> In the 1970s Chris Skrebowski was a long-term planner for BP. Today he edits the Petroleum Review and is one of a growing number of industry insiders converting to peak theory. "I was extremely sceptical to start with," he now admits. "We have enough capacity coming online for the next two-and-a-half years. After that the situation deteriorates."
> 
> What no one, not even BP, disagrees with is that demand is surging. The rapid growth of China and India matched with the developed world's dependence on oil, mean that a lot more oil will have to come from somewhere. BP's review shows that world demand for oil has grown faster in the past five years than in the second half of the 1990s. Today we consume an average of 85 million barrels daily. According to the most conservative estimates from the International Energy Agency that figure will rise to 113 million barrels by 2030.
> 
> Two-thirds of the world's oil reserves lie in the Middle East and increasing demand will have to be met with massive increases in supply from this region.
> 
> BP's Statistical Review is the most widely used estimate of world oil reserves but as Dr Campbell points out it is only a summary of highly political estimates supplied by governments and oil companies.
> 
> As Dr Campbell explains: "When I was the boss of an oil company I would never tell the truth. It's not part of the game."
> 
> A survey of the four countries with the biggest reported reserves - Saudi Arabia, Iran, Iraq and Kuwait - reveals major concerns. In Kuwait last year, a journalist found documents suggesting the country's real reserves were half of what was reported. Iran this year became the first major oil producer to introduce oil rationing - an indication of the administration's view on which way oil reserves are going.
> 
> Sadad al-Huseini knows more about Saudi Arabia's oil reserves than perhaps anyone else. He retired as chief executive of the kingdom's oil corporation two years ago, and his view on how much Saudi production can be increased is sobering. "The problem is that you go from 79 million barrels a day in 2002 to 84.5 million in 2004. You're leaping by two to three million [barrels a day]" each year, he told The New York Times. "That's like a whole new Saudi Arabia every couple of years. It can't be done indefinitely."
> 
> The importance of black gold
> 
> * A reduction of as little as 10 to 15 per cent could cripple oil-dependent industrial economies. In the 1970s, a reduction of just 5 per cent caused a price increase of more than 400 per cent.
> 
> * Most farming equipment is either built in oil-powered plants or uses diesel as fuel. Nearly all pesticides and many fertilisers are made from oil.
> 
> * Most plastics, used in everything from computers and mobile phones to pipelines, clothing and carpets, are made from oil-based substances.
> 
> * Manufacturing requires huge amounts of fossil fuels. The construction of a single car in the US requires, on average, at least 20 barrels of oil.
> 
> * Most renewable energy equipment requires large amounts of oil to produce.
> 
> * Metal production - particularly aluminium - cosmetics, hair dye, ink and many common painkillers all rely on oil.
> 
> Alternative sources of power
> 
> Coal
> 
> There are still an estimated 909 billion tonnes of proven coal reserves worldwide, enough to last at least 155 years. But coal is a fossil fuel and a dirty energy source that will only add to global warming.
> 
> Natural gas
> 
> The natural gas fields in Siberia, Alaska and the Middle East should last 20 years longer than the world's oil reserves but, although cleaner than oil, natural gas is still a fossil fuel that emits pollutants. It is also expensive to extract and transport as it has to be liquefied.
> 
> Hydrogen fuel cells
> 
> Hydrogen fuel cells would provide us with a permanent, renewable, clean energy source as they combine hydrogen and oxygen chemically to produce electricity, water and heat. The difficulty, however, is that there isn't enough hydrogen to go round and the few clean ways of producing it are expensive.
> 
> Biofuels
> 
> Ethanol from corn and maize has become a popular alternative to oil. However, studies suggest ethanol production has a negative effect on energy investment and the environment because of the space required to grow what we need.
> 
> Renewable energy
> 
> Oil-dependent nations are turning to renewable energy sources such as hydroelectric, solar and wind power to provide an alternative to oil but the likelihood of renewable sources providing enough energy is slim.
> 
> Nuclear
> 
> Fears of the world's uranium supply running out have been allayed by improved reactors and the possibility of using thorium as a nuclear fuel. But an increase in the number of reactors across the globe would increase the chance of a disaster and the risk of dangerous substances getting into the hands of terrorists.




......                                                                                              

..


----------



## saiter

The future doesn't look very bright at all. If only government leaders would pull their heads out of their arses and get to work on replacing the lost oil with another source(s).


----------



## davo8

http://www.nakedcapitalism.com/2008/06/rbs-publishes-global-stock-and-bond.html



> Ah, just when you thought it might be safe to venture into the markets again, RBS sends out a red alert, warning private clients to prepare themselves for a full fledged rout in equities and bond markets in the next three months, with the S&P losing 300 points, or nearly a quarter of its value, by September.
> 
> That's a bold and pretty specific call. The technically-minded believe that if the S&P 500 were to breach 1270 (closing, not intraday), the next support level is hundreds of points lower. In addition, the impact of inflation has not been factored into asset prices. The chart below (click to enlarge) illustrates how devastating inflation is to stock valuations. The S&P 500 multiple fell from over 17 to below 8 during the early 1970s, and pretty quickly too. However, then the impetus was the oil embargo, but note that as inflation became embedded, a bear market rally fizzled and the market hit even lower earnings multiples.




August-September is shaping up as crunch time. Any bulls still standing may find some bargains.


----------



## davo8

Leap2020



> On the occasion of this 26th – Summer 2008 Special – edition of the Global Europe Anticipation Bulletin, the LEAP/E2020 team has decided to launch an alert on the July-December 2008 period. Indeed, our team is now convinced that this period will consist for the whole world in a major plunge into the heart of the phase of impact of the global systemic crisis. The upcoming six months are in fact the core of the unfolding crisis. The troubles met in the past six months were mere harbingers.




Yes, they're French and yes, they hate Americans but that hasn't stopped them being right so far.


----------



## Aussiejeff

saiter said:


> The future doesn't look very bright at all. If only government leaders would pull their heads out of their arses and get to work on replacing the lost oil with another source(s).




Unfortunately, Great Wally Bush's head is permanently stuck in a very dark place..... :hide:


AJ


----------



## nioka

davo8 said:


> [URL="http://www.nakedcapitalism.com/2008/06/rbs-
> 
> August-September is shaping up as crunch time. Any bulls still standing may find some bargains.




The best time to invest is mostly always when the bears are active. These last 6 months have been the ideal time to make money on the market. Remember VALUE doesn't disappear, it just changes hands. The money part isn't real, it is a creation of the banking system.


----------



## wayneL

nioka said:


> The best time to invest is mostly always when the bears are active. These last 6 months have been the ideal time to make money on the market. Remember VALUE doesn't disappear, it just changes hands. The money part isn't real, it is a creation of the banking system.



So when the bears were active at 6500 was a good time to buy?

How about when the bears had that fantastic day in Oct 1929?

I prefer it when the bears are exhausted.


----------



## nioka

wayneL said:


> So when the bears were active at 6500 was a good time to buy?
> 
> How about when the bears had that fantastic day in Oct 1929?
> 
> I prefer it when the bears are exhausted.




Was it at 6500 because the bears weren't active. There was some bear talk but no action. It was a time when a fundamental analysis showed up the overpriced stocks. Then when the bears came out to play F/A showed up the underpriced ones. You see it is when the bears are in season and roaming around that it is time to go hunting. Value didn't disappear, it became easier to find as the bears turned to lemmings.


----------



## wayneL

nioka said:


> Was it at 6500 because the bears weren't active. There was some bear talk but no action. It was a time when a fundamental analysis showed up the overpriced stocks. Then when the bears came out to play F/A showed up the underpriced ones. You see it is when the bears are in season and roaming around that it is time to go hunting. Value didn't disappear, it became easier to find as the bears turned to lemmings.




Interesting view of events. 

How about that day in Oct 1929?


----------



## nioka

wayneL said:


> Interesting view of events.
> 
> How about that day in Oct 1929?




 I wasn't born untill 1932 so I don't remember much. This is what I suggest happened. Too many had borrowed "money" or had "money" in unsound banks of financial institutions. ( my motto: neither a borrower nor a lender be). There was a gigantic lemming rush.

 It is surprising, during property transactions (when you actually held deeds) how you could trace a lot of property transfers to the banks during that time and a transfer back to a private owner during the following years. I suggest that there was a conspiratory between the banks and the government to do away with the old deed system where a docoment handed down with the ownership of a property was in place.

 Nothing has changed.

 Money is an imaginary item. Property is a factual item. Property comes in many forms from trocus shell, gold, land, or a business. The crash is always in the "money" hardly ever in the "property".

 My Grandfather made his money in the great depression by buying a few city houses and a couple of pubs.


----------



## CamKawa

The futures board is glowing red which is good to see.
http://www.bloomberg.com/markets/stocks/futures.html


----------



## Whiskers

CamKawa said:


> The futures board is glowing red which is good to see.
> http://www.bloomberg.com/markets/stocks/futures.html






Well the Dow has now come over to the green side... the other two aren't far off. 

... not that this means anything come 3.00 pm.


----------



## davo8

nioka said:


> I wasn't born untill 1932 so I don't remember much.




But I'll bet you remember 1987. Things were looking good by mid 1988 with the markets up 30%. If you bought then with the All Ords at 1600 you lost 25% over 2 years, and it wasn't until 1993 that you were in front again. 6 years of going nowhere.

There were good stocks then and there are good stocks now, but the banks and finance stocks that have driven the markets for the past 10 years or more are not coming back any time soon. There is plenty more pain to come for that sector, and probably housing and retail too. We'll see soon enough.


----------



## nioka

davo8 said:


> But I'll bet you remember 1987.




 That is a period I would sooner forget but it will get a chapter in my book. I was convinced in a proposition to finance a property development by borrowing Swiss francs. Borrowed $350,000 and ended up owing over $900,000 I did the development for a Singapore branch of the westpac bank. That is why my motto ever since has been "neither a borrower nor a lender be". I still did OK over the period as there were some good buys around.


----------



## wayneL

davo8 said:


> But I'll bet you remember 1987. Things were looking good by mid 1988 with the markets up 30%. If you bought then with the All Ords at 1600 you lost 25% over 2 years, and it wasn't until 1993 that you were in front again. 6 years of going nowhere.
> 
> There were good stocks then and there are good stocks now, but the banks and finance stocks that have driven the markets for the past 10 years or more are not coming back any time soon. There is plenty more pain to come for that sector, and probably housing and retail too. We'll see soon enough.



Exactly the point Nokia is missing.

The time to buy is when bears are exhausted, not when they are active.


----------



## Sean K

wayneL said:


> Exactly the point Nokia is missing.
> 
> The time to buy is when bears are exhausted, not when they are active.



Yeah but still depends a lot on individual stocks and your investing/trading plan. The selected end of the the spec side of town is showing some exceptional returns. You can still invest in stocks right now with clear targets and stops and be making good money. However, buy and hold (or hope) investors in the broader market might be struggling for a while yet, which is probably what you're talking about.


----------



## ithatheekret

kennas said:


> Yeah but still depends a lot on individual stocks and your investing/trading plan. The selected end of the the spec side of town is showing some exceptional returns. You can still invest in stocks right now with clear targets and stops and be making good money. However, buy and hold (or hope) investors in the broader market might be struggling for a while yet, which is probably what you're talking about.




I agree , but ............. it takes time to make a decision on a purchase , the research involved is an arduous task . It sometimes takes me months to finally get around to buying in , but that's part of the job description and goes with the territory . What a lot forget is that we are all competing against each other in the markets .

Wayne is correct too , but that applies to the entire market and not to selective stocks , one side is technically based , with a usual fundamental area of disbelief , the other is straight out maths and then onto the charts for entries , so it's a chalk and cheese debate . Not often you get a win win .


PS..  We've had the bad news , or all the bad news is out there as they say , probably is too , so it must be time for the ugly news ........ after that it's normally the news that gets em puking enmasse that sends a good buy everything signal .


----------



## 2020hindsight

ithatheekret said:


> after that it's normally the news ... that sends a good buy everything signal .



let's hope it doesn't get to that m8. 

PS I'm thinking of getting into 100% cash for the end of financial year -  
 makes the SMSF bookkeeping easier - gotta pick the right day in the next two weeks  (after which there will probably be a week of big rises for the Dow lol)  

PS only money 

Incidentally, does anyone know if the market typically follows a pattern at "new financial year"?  up?  down? Obviously only a small blip compared to the other factors at play here, talk of recession, chance of democrat victory (they couldn't do worse that the other guys)


----------



## nioka

wayneL said:


> Exactly the point Nokia is missing.
> 
> The time to buy is when bears are exhausted, not when they are active.




 There are always undervalued stocks and there are stocks allready deserted by an exhausted bear. Some are exhausted while others are still active. You sell one stock to a bear still running and buy from one of the exhausted ones. I love bears, they encourage activity in lemmings.


----------



## sassa

Lies,lies and more damned lies????



> LONDON (Reuters) - A sharp rise in British retail sales pierced the global economic gloom like a rare shaft of sunlight on Thursda




http://www.reuters.com/article/ousiv/idUSL1921293720080619




> Office of National Statistics spending claims are bizarre, says Sir Philip Green
> 
> 
> By David Litterick and Richard Fletcher
> 
> 
> Leading retailers and economists have slammed the Office for National Statistics after it published sales figures that suggested Britons were spending at the fastest rate for 30 years.
> 
> 
> Despite rising inflation, higher fuel bills, lower consumer confidence and a slowing economy, the ONS said sales volumes grew by 3.5pc last month - the largest jump since 1979 - taking the annual increase in sales to a staggering 8.1pc.
> 
> The upbeat figures have increased the chances of an interest rate rise, said economists, who warned that the figures should be taken with a "pinch of salt".
> 
> Sir Philip Green, owner of retail chains BHS and Arcadia, said the figures were bizarre, given the economic situation. "These figures in no way reflect the current trend. They are totally misleading. I have no idea where they collect this information from. I'd love to know. Can I join the club that is seven points up in May?"
> 
> He admitted that the month had seen an improvement, but cautioned against seeing it as a consumer recovery. "May was better. But we had the first week of sunshine following weeks of rain, sleet and even snow, which released a huge amount of pent-up demand. For anyone to read anything else into these numbers would be wrong and dangerous."
> Justin King was equally dismissive. "The ONS doesn't appear to understand how people shop," the Sainsbury chief executive said. "These figures are based on a small basket and exclude promotional activity." The figures sit in stark contrast to other surveys of the retail sector. The British Retail Consortium, for instance, said sales values rose by just 4.6pc in May, or an even smaller 1.9pc on a like-for-like basis




http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/20/cngreen120.xml


----------



## Whiskers

sassa said:


> Lies,lies and more damned lies????




Is the ONS related to the OGC? 



https://www.aussiestockforums.com/forums/showthread.php?p=291892#post291892


----------



## davo8

ithatheekret said:


> We've had the bad news ... so it must be time for the ugly news ........ after that it's normally the news that gets em puking enmasse that sends a good buy everything signal .




That's my point. I'm an optimistic bear. The lower it goes, the more chance there is that the stocks I like to own will be available cheap. There's plenty more bad news coming for financial stocks, and every chance we're going to get a downturn in the housing market here, or even a recession. Great! I'm a value investor and I love bargains!

My guess is the bottom will be around the end of the year, and before then we'll get some bad news that everyone said could never happen. Meanwhile, there's no harm in cash and a spot of gold.


----------



## explod

davo8 said:


> That's my point. I'm an optimistic bear. The lower it goes, the more chance there is that the stocks I like to own will be available cheap. There's plenty more bad news coming for financial stocks, and every chance we're going to get a downturn in the housing market here, or even a recession. Great! I'm a value investor and I love bargains!
> 
> My guess is the bottom will be around the end of the year, and before then we'll get some bad news that everyone said could never happen. Meanwhile, there's no harm in cash and a spot of gold.




I think it may be very much worse than that.

By many accounts, this downturn has more troubling demensions than the Great Depression which began in the 1920's and did not really lift out of the doldrums till the late 1950's, some would say a small lift and then still bad in the 1970's.

I think this one got going in earnest about 2001/2, the Dot.com and the lift from there was built on cheap money, which in effect, as we are beginning to witness has been a valueless spike/bubble.

So if it is as bad as the Great Depression, some 30 years, then 2040 could be ok, except by then the problems of global warming and too many people will be a real problem.


----------



## nioka

explod said:


> I think it may be very much worse than that.
> 
> By many accounts, this downturn has more troubling demensions than the Great Depression which began in the 1920's and did not really lift out of the doldrums till the late 1950's, some would say a small lift and then still bad in the 1970's.
> 
> I think this one got going in earnest about 2001/2, the Dot.com and the lift from there was built on cheap money, which in effect, as we are beginning to witness has been a valueless spike/bubble.
> 
> So if it is as bad as the Great Depression, some 30 years, then 2040 could be ok, except by then the problems of global warming and too many people will be a real problem.



There is so much that is different in this modern world. The problem this time around was the cheap credit in a system that allows banks to lend money they didn't have in the first place and without proper security. They are allowed to lend 10 times their deposits which works if nobody wants their cash. In the great depression the banks had lent actual money and couldn't get it back. Then they ran out of money themselves. The money has dried up but the world is still functioning almost normally apart from that. 

Nor was there a super fund rolling along as there is now. Oil was abundant but had little use. Oil is scarce, energy is scarce, food is scarce. From the depression to WW1 farmers couldn't sell their produce. Men were walking the roads looking for work, now we have a labour shortage and the reserve bank is trying to slow the economy.

The bears are endangered, cattle prices today are at near record highs. The bulls will rule.


----------



## Macquack

nioka said:


> Nor was there a super fund rolling along as there is now.




"I sincerely believe that banking establishments are more dangerous than standing armies, and that the *principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale. *" 
Thomas Jefferson 3rd president of US


----------



## wayneL

nioka said:


> There is so much that is different in this modern world. The problem this time around was the cheap credit in a system that allows banks to lend money they didn't have in the first place and without proper security. They are allowed to lend 10 times their deposits which works if nobody wants their cash. In the great depression the banks had lent actual money and couldn't get it back. Then they ran out of money themselves. The money has dried up but the world is still functioning almost normally apart from that.
> 
> Nor was there a super fund rolling along as there is now. Oil was abundant but had little use. Oil is scarce, energy is scarce, food is scarce. From the depression to WW1 farmers couldn't sell their produce. Men were walking the roads looking for work, now we have a labour shortage and the reserve bank is trying to slow the economy.
> 
> The bears are endangered, cattle prices today are at near record highs. The bulls will rule.



You have drawn a number of erroneous conclusions about the the causes Great Depression. I would do some more research.

The basic similarities are striking.

* Massive credit expansion.

* Massive malinvestment.

The details differ, but the result could be similar.

I hope it doesn't result in GD@ , but one unavoidable economic fact is that the result of massive malinvestment is inevitably contraction. Only the size will have to be decided in retrospect. 

The wild-cards in the deck is oil/energy and Israel (as catalyst for a truly insane war with Iran).

Read up on Kondratief as well.

Nokia, you have a propensity to characterize bears as lemmings. Dumb. Bears are bulls with different criteria. Bears are looking for restoration of value and/or hedging aginst imbalances of value, nothing more.

Cheers


----------



## ithatheekret

The 1920's were the good times , when the Fed was just created , everyone thought it would keep the economy stable , businesses responded and went overboard as did investors , with blind confidence inspired by rhetoric and wishful thinking . Then when the Fed couldn't stabilize , production waned , durable goods stayed on shop floors , prices started to fall and then finally wage earners used to beef and three veg ended up with bread and dripping .
Fifteen years earlier the 1905 market had peaked on good news from the Admin and confidence was high .

Then came 1914 ( we know what happened then )  the market dropped , off to war they went , the market rallied  , but just before all the troops came home the market wobbled again , had a recovery bounce the next few years , then just as the cycle had restarted the whole lot collapsed .

In the 20's prices were strong and the market believed the Fed tales this gave investors confidence , 

Does it sound like a familiar story line yet ? If 1905 was our 80's and 1920's were the 90's , we would have to look for the signals to call in our 30's ( end of 1929 on ) .  

Then the controllers sat back and let it roll , and roll it did , all the way down puke lane .

What will happen when all those troops come home ?

What will happen when all the banks start to really turn the screws ?

I'll leave this section with a passage from that wombat Keynes .

" once banks realize that deflation has significantly impaired the value of their collateral ............ they become particularly anxious that the remainder of their assets should be as liquid and as free from risk as it is possible to make them. This reacts in all sorts of silent and unobserved ways on new enterprise. for it means that banks are less willing than they would normally be to finance any project ............. "

On the oil spin , well okay they want to get out past the shelf , oh and Brazil of course    ( the only good thing I like about Brazil is it's currency that soared ) , just side stepping shale in this observation . Now these offshore ideas are all great sounding , but ........ the depths they will have to drill down to will border on records and probably surpass many . To do so they will go through many drill heads and other soft metal parts that will all end up melting into a useless pulp and twisted mess . So as they struggle to get down to the oil , a good bet would be to find the suppliers and buy these stocks , they'll be selling plenty of drilling rods and heads to the oilers .

Oilers get into all sorts of problems when drilling , much of which when the drillhead driver or rods twist or get stuck , can simply be redrilled , but that at levels closer to the surface than where they want to drill on the outer continental shelf and the deep holes they'll have to put down off Brazil . 
At the depths they are needing to achieve it's going to be expensive work , I don't think they'd even contemplate the projects from a business sense if they didn't think oil was going to stay high . My money says oils going up , the 130 spot was a nice test area , the 140 flirt followed by the 138 flirt are ominous , and the China news lasted one night , boy the weeks are getting quicker nowdays ...........

................. and lots of melted and buckled rod will be coming back as scrap from the rigs . It's going to be a lot of work for little gain and it will take years to achieve . I prefer the alternatives except hydrogen fuelled vehicles , we don't want bombs driving around our world , it would be safer to get around on weather balloons , as long as you don't smoke that is .........


----------



## nioka

wayneL said:


> Nokia, you have a propensity to characterize bears as lemmings. Dumb. Bears are bulls with different criteria. Bears are looking for restoration of value and/or hedging aginst imbalances of value, nothing more.
> 
> Cheers




 There is a good reason for this. Bear activity brings out the conditions for lemmings to mass ready for a run to the cliffs. Bull activity stamps them into the ground. I do agree that a bear market does help to re-establish values.

 My knowledge of the great depression is mainly gained directly from being brought up by people directly affected and listening to their lessons and their experiences. My youth was spent during the days when families and friends spent many hours sitting around conversing. Also having many friends with their lives greatly affected by the depression as indeed was mine. Reading about it is the same as reading advice from some of the current economists. Even though I say that, I know that I'm never going to always be right and never too old to learn.


----------



## explod

nioka said:


> There is a good reason for this. Bear activity brings out the conditions for lemmings to mass ready for a run to the cliffs. Bull activity stamps them into the ground. I do agree that a bear market does help to re-establish values.
> 
> My knowledge of the great depression is mainly gained directly from being brought up by people directly affected and listening to their lessons and their experiences. My youth was spent during the days when families and friends spent many hours sitting around conversing. Also having many friends with their lives greatly affected by the depression as indeed was mine. Reading about it is the same as reading advice from some of the current economists. Even though I say that, I know that I'm never going to always be right and never too old to learn.




The bear bull thingo is a bit of a connundrum.    I relate to the old school as like you grew up amongts those who surferred at the hands of the Great Depression.

However in mid 40s (20 odd years ago) hit business and management school which was basicly management by objectives, over the top encouragement, and how high to jump.   This has made the super bulls, anyone contrary to this is staid, uncool and a loser.

In reality we know that the bull is the uptrend and the bear is the down trend.    So if one can throw off the shackles and looked objectively at both camps then suddenly the light shines on great opportunity.  Out of the bear comes the bull perhaps.

From my own current viewpoint, currencies are losing value, so it is a no brainer to look for those things going the other way, in my case I have chosen gold.   Others oil and so on.


----------



## sassa

And then along came.....


> In the past, I would make market pronouncements with absolute certainty, but I have since learned my lesson. I don't know what will happen, but I do know that all good things come to an end. Nearly everyone who doesn't work for the government believes the economy is in recession. The second quarter ends this month and companies will start releasing earnings reports in early July. What will they say? How was business? The market already seems to be getting the jitters.
> 
> Common sense dictates slow to no growth for a long time coming:
> 
> High gas prices with no sign of abating
> Higher food prices, especially in light of Midwest floods
> No end in sight to housing bust
> Continued tight credit
> Rising unemployment
> Consumers maxed out, little savings and starting to save what they can
> The possibility of war before the election
> It is that last item that could result in catastrophe. A war with Iran, as is being discussed, would send oil prices skyrocketing overnight. Americans may be able to get by - barely - on $4 gas, but what if that doubles? What would happen to the economy at $8 gas? How would people get to work? What would happen to the price of food, and to heating our homes come winter? Printing more money for the war would send the dollar's value down further. Inflation would go into overdrive.
> 
> Considering the cavalier attitude this administration has shown towards war, it simply cannot be ruled out. The drums of war are getting louder. The stock market is clearly getting nervous about something heading into summer




http://www.safehaven.com/article-10565.htm


----------



## davo8

sassa said:


> And then along came.....




Indeed. It really could get that bad -- there is no obvious driver for recovery.

On topic: the S&P carpet looked awful and I saw some EW site claim the DOW is about to break a 34 year trend.

Any want to pick a direction for Monday? My pick is: look out below!


----------



## sassa

> Secretary Paulson announced plans to give the Federal Reserve new and explicit powers to oversee and regulate the financial services industry. However, a sober look at his plan reveals that it is tantamount to giving the fox complete autonomy to guard the henhouse






> What few economic leaders have acknowledged is that the Federal Reserve itself is responsible for the real estate and credit bubbles, which are the source of our current troubles. By keeping interest rates too low for too long, the Fed ignited a speculative fever and engendered a disregard for risk management that pushed asset prices above rational levels. Should we blame the private sector for taking advantage of all the cheap credit, or the Federal Reserve for supplying it?






> If Paulson can be so completely clueless regarding the Fed's role in the current debacle and in America's economic stumbles over the past two generations, why would anyone place any faith in his proposed remedies? In fact, an unaccountable and unelected Federal Reserve, which nonetheless has lately proven to be as politically craven as any two-bit politician, does not hold the keys to our economic revival. However, with its increased willingness to rescue the big financial firms from their own excesses, perhaps Paulson sees an expanded Fed as the best way to ensure the continued prosperity of his former pals on Wall Street



http://www.safehaven.com/article-10559.htm


----------



## Whiskers

davo8 said:


> Indeed. It really could get that bad -- there is no *obvious driver *for recovery.
> 
> On topic: the S&P carpet looked awful and I saw some EW site claim the DOW is about to break a 34 year trend.
> 
> Any want to pick a direction for Monday? My pick is: look out below!




Talking about obvious drivers... one thing about this oil bubble, dare I call it that... is that *there are no fuel shortages behind the sharp price rises.* Quite the contrary, everyone seems to be pretty well supplied.

Seems to add weight to the artificial, speculator driven scenario.

Interesting that all the major fuel co's seem to be saying the prices are artifically high.

Regardless of whether oil prices retreat back below $100 tomorrow, I think the damage has already been done in terms of people changing their habits and lifestyle to reduce their demand for oil. That is what the Saudi's are seriously worried about. 

The other twits like Chavez nationalising industry and the Iranians are so short focused on domestic grandstanding that the damage will be done to demand for oil before they wake up and their likely response will likely be to screw down supply further accelerating the conversion to alternatives.

If a whiff of tougher regulation of commodity markets comes out of the weekend summit, in the name of international economic and political stability, then I reckon speculators holding contracts will be falling over each other to unload them. 

It's being seriously considered by some US lawmakers keen to reel in the renegades in other industries like they are doing with the property and finance sectors.

Again, I feel there is just too much international political will to kill off the high price of oil for nothing to come out of the weekend summit. Given that oil has taken over from the credit crisis and is at the heart of emerging (hyper) inflation concerns, if the right announcement comes out on monday... it could just as well be more a case of watch out above.


----------



## Undertow

I have doubts about any effort to quell the demand for oil in the immediate future. They have been talking about alternative fuels for a very long time and although there are other fuels for use these have not gained much momentum in the industry of motorization. Although there will be comments like the one recently from China that is used to try and quell some demand or indeed even to cause the price to drop at the bowser it looks like the oil price will remain solid or near enough to current levels or perhaps even higher for many years.


----------



## explod

> =Whiskers;305826]Talking about obvious drivers... one thing about this oil bubble, dare I call it that... is that *there are no fuel shortages behind the sharp price rises.* Quite the contrary, everyone seems to be pretty well supplied.




Would be interested to know who "everyone" is



> Seems to add weight to the artificial, speculator driven scenario




And the "artificial"?



> Interesting that all the major fuel co's seem to be saying the prices are artifically high.




Yep, good PR, not our fault, and if it goes higher, exonerated 



> Regardless of whether oil prices retreat back below $100 tomorrow, I think the damage has already been done in terms of people changing their habits and lifestyle to reduce their demand for oil. That is what the Saudi's are seriously worried about.




Not convinced that people in my area will give up the guzzling 4 x 4s without a very much greater hike and or fight



> The other twits like Chavez nationalising industry and the Iranians are so short focused on domestic grandstanding that the damage will be done to demand for oil before they wake up and their likely response will likely be to screw down supply further accelerating the conversion to alternatives.




The more damage the better, the sooner we bring on alternatives the better for my Grandchildren



> If a whiff of tougher regulation of commodity markets comes out of the weekend summit, in the name of international economic and political stability, then I reckon speculators holding contracts will be falling over each other to unload them.




The continual jawboning summits have had almost no effect so, with anticipation we will see what pans out



> It's being seriously considered by some US lawmakers keen to reel in the renegades in other industries like they are doing with the property and finance sectors.




The lowering of interest rates by the fed to lift the Dow from the collapse of the 01/02 bubble are the real culprits.  The heat is starting to make em run for the exits by blaming others.



> Again, I feel there is just too much international political will to kill off the high price of oil for nothing to come out of the weekend summit. Given that oil has taken over from the credit crisis and is at the heart of emerging (hyper) inflation concerns, if the right announcement comes out on monday... it could just as well be more a case of watch out above.




Oil is just a part of the credit crisis, as is debt, food and the lack in the western world of value adding production.   However the focus does take attention away from the real issue that we are (not in Aus) broke, and gives time for the Fed to try and respond.

Intersting times indeed


----------



## ithatheekret

What is worrying is that we have had a series of 52 week highs and 52 week lows in the market at the same time once again . The market has seen banks drop and energy stocks soar , but with oil running headlong into $140 , it must have us question exactly what will be the catalyst for further gains in the current market conditions . Is it once again the Hindenberg Omen ? I tend to believe this is so .

The current signal which is clearly a Hindenberg has me pondering whether we will get the count going against the market in the statistics of the indicator , which is around 1 in 4 . That's a 1 in 4 chance of a spectacular crash , which would run it's course if it occurs for around a minimum of around 100-120 days .

To get the signal showing up more than once in less than 36 days is not a good look and with the new lows well in excess of twice that of the new highs , I think it would be safe to say that the parameters have been met , so the framework for a significant decline is there . 

The last run I counted out prior to the latest was back in June last year , actually June to August where the signal had all the pre-requisites met 10 ( ten ) times , then we had the decline  . The US boards are now showing a heavy divergence once again . Until the lows overtake the highs or visa versa , the market will remain unstable IMO , I'd rather have a whole swag of lows , at least I'd know the bottom was close or close enough to buy without worrying .
If it was the reverse and we were drowning in highs , well I'd be running with the bulls , but right now I see a predominant HO signal and I don't like it one bit . Whilst it is never a 100% guaranteed event , every major decline in the NYSE has had a HO signal precede it .

For those unaware of this indicator investopedia has a well set out description .

http://www.investopedia.com/articles/trading/07/HindenburgOmen.asp


----------



## kingbrown

*The worlds an expensive place now ?*

oil now food ? 

This is a link to a USA govt report on peak pil production 
may be of some interesting reading ?

http://www.netl.doe.gov/publications/others/pdf/Oil_Peaking_NETL.pdf

also i would hate to be poor wheat up over 200 per cent

Can any one see a correlation here ?

See link below re World Bank report :

*High Food Prices - A Harsh New Reality*

While headline news about high food prices is a relatively recent phenomenon, the broader upswing in commodity prices began in 2001. Large structural shifts in the global economy””including growing demand in China and India””have been steadily reflected in commodity price increases, especially of metals and energy.


Click graph to enlarge




Click graph to enlarge

Food prices have increased in response to many factors: higher energy and fertilizer prices; increased demand for biofuels, especially in the U.S. and the European Union; and droughts in Australia and other countries. World grain stocks are at record lows and next year’s prices depend on the success of the next harvest in the northern hemisphere. 
Wheat prices (US$) have increased by 200 percent, and overall food prices (US$) have risen by 75 percent since the turn of the century. Adjusting for exchange rates and domestic inflation reduces the price increases faced by developing countries””but these increases are still severe for millions of poor consumers.

http://econ.worldbank.org/WBSITE/EX...165401~piPK:64165026~theSitePK:469372,00.html

After all we are a growing hungry world 

*Rice sales rationed as supplies dry up *
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/01/nrice101.xml


----------



## Whiskers

explod said:


> Oil is just a part of the credit crisis, as is debt, food and the lack in the western world of value adding production.




Yes, but the spike in oil has severely compounded those effects in the markets. I think it has been demonstrated that there are now a number of 'funds' out there with huge financial resources and quite capable of influencing the market, especially where little or no regulation and/or public knowledge or disclosure of the participants are.

Conversely, if the oil price were to fall I suspect the economy and share markets would look a very different proposition.

My point is that oil is a vital commodity which could and probably will be much more tightly regulated 'in the public interest'. 

Most of the speculative positions or market manipulation has occurred in the US. My feeling is that public opinion all over the world is demanding the US close the 'loopholes'  and reign in another batch of renegades that are abusing the system and I believe it will happen.

PS: If some of these bills get passed in the US, we could see an oil price collapse... a-la sub-prime mortgages.



> *Oil: Speculation or demand?*
> 
> NEW YORK (CNNMoney.com) -- "Speculation," a dirty word across America as Wall Street traders take the blame for record oil and gasoline prices, drew more attention Friday from Congress as three Democratic House members introduced yet another bill attempting to limit activity.
> 
> To underline his case, Rep. Bart Stupak, D-Mich., said speculators now control 71% of oil on the market. That means only 29% control the physical oil being traded, down from 61% eight years ago.
> 
> Stupak blamed loosely regulated trading markets with numerous loopholes for the ease that traders have to buy and sell crude.
> 
> As a result, Stupak introduced legislation with the support of two other Democratic Congressmen to *close loopholes that allow oil to be traded electronically in unregulated oil markets*. The bill would also regulate other methods that Stupak claims oil traders use to avoid federal oversight.
> 
> "We can eliminate a major avenue that traders use to avoid oversight," said Stupak at a press conference Friday. "It's time for Congress to close the *Enron loophole *and lower our gas and diesel prices by 50%."
> 
> Many in Congress have suggested that closing a provision in the Commodity Futures Modernization Act of 2000 that critics call the "Enron loophole," after the energy trading company whose bankruptcy was the centerpiece of the corporate scandals early this decade. The provision allows oil futures to be traded in markets outside of the jurisdiction of the Commodities Futures Trading Commission.
> 
> Stupak, the chair of a House Energy and Commerce subcommittee, has pledged to investigate regulation of speculation further in a hearing on Monday.
> 
> Congress is currently awash in nine different bills - including Friday's proposal - that attempt to limit the role of speculators. Several have bipartisan support, but only one was co-sponsored by a Republican.
> 
> *Proposals have included requiring foreign exchanges to provide more information about crude oil trades, limiting the number of contracts speculators are allowed to hold, increasing the amount of money speculators need to put up to buy an oil contract, and removing speculators from the market entirely and limiting trade to just producers and consumers. *
> 
> Opposition against regulation mounts
> Traders have lashed out against some of the lawmakers' proposals, such as banning speculation in some markets, saying that would only result in oil trading shifting to even less-regulated areas.
> 
> Stupak countered by saying the new proposed legislation is "the most comprehensive approach" that has yet been offered. He suggests closing all loopholes, including bilateral out-of-market trades, foreign trades on the InterContinental Exchange, swaps, and hedging exemptions. As a result, he believes excessive speculation will be stopped by complete oversight of the markets.
> 
> http://money.cnn.com/2008/06/20/new..._legislation/index.htm?postversion=2008062209


----------



## explod

Whiskers said:


> Yes, but the spike in oil has severely compounded those effects in the markets. I think it has been demonstrated that there are now a number of 'funds' out there with huge financial resources and quite capable of influencing the market, especially where little or no regulation and/or public knowledge or disclosure of the participants are.
> 
> .




Agreed, however no amount of manipulation is going to solve the medium term shortages of oil and food.    We need new wells to come online and good agricultural seasons.   It is stated that the new oil fields that Dubya was speaking of last week will take years to come online and will require $US200 to make them economic.

Certainly the futures markets can work wonders to ballance the books (and profits) but have we perhaps hit the perilous edge to those plays too.

Will be a very interesting week, I thunk


----------



## nioka

Speculators can only influence the market in the short term. Sooner or later, usually sooner, the law of supply and demand takes over. If oil is in ever increasing demand and in ever decreasing supply then the price will rise regardless of the speculation. With grain the speculators are gambling on the weather with the use of grain for biofuel production adding to the situation which in turn is influenced by the price of oil. The speculators affect the daily price but the trend is on the up and up regardless.

The commentry on the market is hard to follow sometimes. If the market falls and the oil price rises then the market fell BECAUSE the price of oil increased. But then if the oil price falls and so does the market then in is because the oil price has FALLEN.??? And sometimes "increasing price of oil is causing a recession" other times "a recession is causing the price of oil to fall".

The volatility will continue and grow as 'peak oil" gets more serious. It is a fact of life regardless of Rudds blowtorch to OPEC.

Invest in energy and the resources that are associated with it. They will get more valuable as money gets worthless.

The Aussie dollar is propped up to artificial highs with our high interest rate. It is not high to beat inflation but kept high to attract overseas money to finance our current account shortfall. Selling the farm and most of our manufacturing industries isn't bringing in enough to do that job.


----------



## Uncle Festivus

nioka said:


> Invest in energy and the resources that are associated with it. They will get more valuable as money gets worthless.




Up to the point where MADness takes control - Mutually Assured Destruction - from the high price of everything, leading to, in a best case scenario, a global recession (imminent?)?

Money supply inflation has contributed to a large part of the oil price (& commodities etc) rise over the years, with a top up of supply/demand fundamentals from Chindia, who are looking a bit 'over-inflated' at the moment ie detracting from the demand side of the equation. Inflation will be the problem until it isn't, ie a recession when deflation is the norm and they (BBBBBenny & the Jets) wished they had good old inflation back again.


----------



## Whiskers

nioka said:


> Speculators can only influence the market in the short term. Sooner or later, usually sooner, the law of supply and demand takes over.




That's true nioka, but as my earlier post was trying to highlight, it seems that speculative interests now have a dominating influence, nearing 3/4 of the oil market in an enviornment less open and accountable than Wall St. I don't think that is resonating very well with consumers at the moment.

That doesn't sound like a good thing to me and if this little poll on CNN is anything to go by it supports my estimation that US consumers have well and truly started voting with their feet as further illustrated by a chart on ABC TV news tonight showing US travel miles at significant lows. 

Not sure what the latest US consumption figure is, but earlier in the year it had actually dropped over 1ml bpd, ie about 5%... to just above 20ml bpd.

Any perceived future slowing in demand will make the 'speculative' end of town edgy and together with China decreasing the subsidy on oil, it is not difficult to see oil consumption growth fall much less than forecast or even decrease for a period as people rebel against paying high prices. 

If the US excellerates the conversion to more fuel efficient vehicles it will actually cause their oil consumption to continue to fall for awhile. If they drive less miles and fly less planes as well, that will make a significant decrease in their short term demand for oil.

I'm not holding any oil stocks at the moment because unlike gold, oil is a vital resource which I can see getting increasingly regulated... and to re-use my earlier analogy... popping it's poofu valve.


----------



## nizar

nioka said:


> Speculators can only influence the market in the short term. Sooner or later, usually sooner, the law of supply and demand takes over.




While what you say is true, speculators can move prices *quite significantly *in the short term.

Look at what the Hunt brothers did to silver in the late 1970s.


----------



## >Apocalypto<

nizar said:


> While what you say is true, speculators can move prices *quite significantly *in the short term.
> 
> Look at what the Hunt brothers did to silver in the late 1970s.




Livermore in Cotton. not only did he control the market he owned it all.


----------



## nioka

nizar said:


> While what you say is true, speculators can move prices *quite significantly *in the short term.
> 
> Look at what the Hunt brothers did to silver in the late 1970s.




Silver is a different kettle of fish. You can store it and you can easily reduce the usage. Oil is produced and used quickly and it is hard to reduce usage. Small reductions in it's use in one place is being offset by larger increases in other places. With the high cost of fuel, even the storage at individual service stations is below normal levels. My local servo often has some pumps out of fuel and last week was out of unleaded for the day. I doubt that the arabs will let speculators take profit that they could have themselves. i think the arabs are setting the price and are happy to see the USA squirm. Those speculating in oil will soon get caught and we will see another "sub prime" of the oil variety. It is not as though the oil is there to be bought and stored anyway. The main problem is peak oil. We are there.


----------



## Whiskers

The pressure is going to be on congress to do something about high oil prices this week. 

This report is set to be tabled on thursday.

http://businesstravelcoalition.com/campaigns/consolidation/beyond_$2_coke.pdf


----------



## wayneL

"Free enterprise" at the crossroads?

(Actually, free enterprise has been under assault for some time.)


----------



## theasxgorilla

Any technies out there who got into videoconferencing back when the writing on the wall was still quite faint?


----------



## explod

theasxgorilla said:


> Any technies out there who got into videoconferencing back when the writing on the wall was still quite faint?




Dont' know about the conferencing, but I mentioned a couple of books that I read last year and almost got howled off the screen. One published in 02, called it a bit early but has been spot on with the dynamics.  For those keeping out a weary eye so far is just a walk in the park.


----------



## sassa

> But what if the economy doesn't pick up steam in the second half of the year and the stock market continues lower? What if more banking problems materialize? Bank stocks are making new 52-week lows and have been falling fast this month. They do not seem to be forecasting an end to the credit crunch. And really they shouldn't, because there is no sign of a bottom in real estate and all indicators I follow suggest that we won't see one into at least the second half of 2009.
> 
> I think we are likely to see a Fall shock hit the market. Last year we saw the Fed do a 180 degree turn from talking about inflation to cutting rates like a mad hatter. This year I believe we will see the Fed abandon its talk of fighting inflation to once again intervening to bail out some bank, patch up the leaky economy, or in response to a stock market mini-crash. I think the situation right now is like it was a year ago - everyone is worried about inflation, but the bigger problems lurk in the cooked books the banks are carrying. In fact we are more likely to see more problems emerge and the stock market go lower as that is the primary trend right now.
> 
> In essence the Fed is playing a game of poker. It is bluffing when it says it is fighting inflation. It has no chips left and has bet everything on the slim chance that the economy has already bottomed. If something happens to make the Fed intervene again then it will be faced with a choice of fighting inflation by raising rates, which would have the effect of blowing up the banking system, or intervening to save the banking system, the economy, and the stock market, which of course would mean more inflation, a falling dollar, and falling bond prices. The Fed has proven that if it gets trapped into such a corner it will side to help the banks and the stock market a stable currency be damned.
> 
> If this is what we see happen in the Fall then the Fed will lose all of its credibility when it comes to maintaining a stable currency



http://www.safehaven.com/article-10581.htm


----------



## ithatheekret

explod said:


> Agreed, however no amount of manipulation is going to solve the medium term shortages of oil and food.    We need new wells to come online and good agricultural seasons.   It is stated that the new oil fields that Dubya was speaking of last week will take years to come online and will require $US200 to make them economic.
> 
> Certainly the futures markets can work wonders to ballance the books (and profits) but have we perhaps hit the perilous edge to those plays too.
> 
> Will be a very interesting week, I thunk




There's also the clean water shortage globally that has added to costs in food , it's not just a seasonal thing either , look deep into that and realise that water is an expensive resource , especially when it takes so much to get the basic needs of growing nations . They say oil is in everything , but so too is water .

Then oil users have to understand that we are in a new economic reality , that is making itself known to the world , the policy problems evolved partly due to administrations lack of response to this new reality and partly due to not wanting to acknowledge the fact in their terms in office .
Add military actions to it all and the tug of war gets to the stage where movements in price don't always mirror the dynamics in the fundamentals , chuck in speculation to the mix and bingo you get higher prices again .

But to top it all off , if the Persian Gulf gets locked up , then we'll see prices get extremely uncomfortable . The Iran problem would bite the middle easts exporters harshly , even the Saudis would find it impossible to ship their product . So much so that the new global dance would be the squirm !


----------



## dhukka

sassa said:


> http://www.safehaven.com/article-10581.htm




The stockmarket is starting to come round to the reality that a second half recovery is looking less likely and that credit problems are here to stay for the rest of the year and well into 2009. Much is made of the transports as a leading indicator of the economy, UPS dropped this bomb after market last night;



> *UPS slashes its profit outlook due to fuel, economy*
> 
> SAN FRANCISCO (MarketWatch) -- United Parcel Service Inc. said late Monday that it was slashing its second-quarter profit outlook, squeezed by soaring fuel prices and a sluggish U.S. economy.
> 
> It marks the second straight quarter that the company has warned it would not meet prior profit expectations. Its stock fell 4% in late trading.
> 
> The package-delivery giant cut its second-quarter profit forecast to a range of 83 cents to 88 cents a share. In late April, UPS had expected to earn between 97 cents and $1.04 a share. Since then, crude prices have surged from $110 to $136 a barrel.
> 
> On average, Wall Street analysts are expecting UPS (UPS)  to earn 99 cents a share in the second quarter, according to a FactSet Research. The shipper will issue earnings July 22.
> 
> UPS said slow U.S. economic growth has slowed package volume in the United States and curbed sales of its premium air-delivery services. Shipments into the United States also have been affected, hurting its international-business unit.
> 
> Last week, rival FedEx Corp.also issued a profit forecast well below Wall Street expectations.
> 
> Stocks of both companies have performed in line with the broader market. UPS shares are down 6% so far this year, while FedEx is down 10%. By comparison, the S&P 500 Index is off 10%


----------



## sassa

This post could be controversial.


> much more analytical traders like Barry Ritholtz do it too. Do what? Resort to "technical analysis", which is the art of drawing lines on charts and extrapolating from them what the market is going to do next.
> 
> Whenever you hear words like "overbought" or "oversold" or "momentum" or "support" or "resistance", it means that whatever you're hearing is garbage. But it also means that the person you're listening to has no idea what's about to happen, and is therefore resorting to the financial equivalent of astrology. In such cases, it's worth ignoring the message completely, but it's also worth having some serious thoughts about the messenger, too.
> 
> If you don't have any bright ideas about which way the market is going, there are two roads you can take. The smart and sensible route is to say "I don't have any bright ideas about which way the market is going". The dumb route is to get out your charts and start making predictions on the strength of technical analysis. So the next time you see someone doing that, ask yourself why they don't simply admit that they don't know. It would be much more honest, and much more useful




http://www.portfolio.com/views/blog...ures-in-technical-analysis-jim-cramer-edition


----------



## Whiskers

sassa said:


> This post could be controversial.
> 
> 
> http://www.portfolio.com/views/blog...ures-in-technical-analysis-jim-cramer-edition




Sounds like a simpleton, making simplistic assertions, simply demonstrating how simply dumb he is and simply vilifying anyone simply smarter than him who has a little more than a simple knowledge of technical (or fundamental) analysis and can use it more smartly than this dumb simpleton.  :


----------



## sassa

Whiskers said:


> Sounds like a simpleton, making simplistic assertions, simply demonstrating how simply dumb he is and simply vilifying anyone simply smarter than him who has a little more than a simple knowledge of technical (or fundamental) analysis and can use it more smartly than this dumb simpleton.  :



Whiskers,what great alliteration.Be careful of the "this" in your last line.I suspect you are referring to the author of the quote,not yourself.A better word would have been "the."Cheers.
I thought it might cause some discussion.All healthy,of course.


----------



## Whiskers

sassa said:


> Be careful of the "this" in your last line. I suspect you are referring to the author of the quote,not yourself.




Oops... yes indeed... although some may dispute.


----------



## professor_frink

sassa said:


> This post could be controversial.
> 
> 
> http://www.portfolio.com/views/blog...ures-in-technical-analysis-jim-cramer-edition




Not really. Someone who thinks that the dribble that comes out of Jim Cramer's mouth is technical analysis isn't really worth paying attention too


----------



## explod

Whiskers said:


> Oops... yes indeed... although some may dispute.




Dont' worry, some one has to take the wrap.  To be a blockhead is at least a form of support.

But a blockhead is not going to help the markets I suspect.   Perhaps the saviour are the eyes and ears.


----------



## Whiskers

explod said:


> Dont' worry, some one has to take the wrap.  To be a blockhead is at least a form of support.




Thanks for the consolation, explod... I think... 

Moving on to something else undesireable... consumer confidence took a decent hit... 

but congress is going to perk them up again by getting a posse after those oil price speculators and half the cost of fuel. 



> NEW YORK (CNNMoney.com) -- A key measure of consumer confidence dropped in June to the fifth lowest reading ever, as Americans grew more concerned about their jobs and more pessimistic about business conditions.
> 
> The New York-based Conference Board said Tuesday that its Consumer Confidence Index dropped to 50.4 from a revised 58.1 in May. The reading was the lowest since February 1992, when it was 47.3.
> 
> Economists had expected the index to decline to 56, according to a consensus compiled by Briefing.com.
> 
> http://money.cnn.com/2008/06/24/news/economy/consumer_confidence/index.htm?postversion=2008062410


----------



## kingbrown

Re *Chinese Goverment propping up market *?

In a little more than six months, the benchmark Shanghai composite index doubled, passing the 6,000 mark in October. Since then it has nosedived to less than half that level - yesterday closing at 2941. Many analysts believe it would have sunk further by now had the government not intervened. 

Small shareholders have been badly hit; some have lost their life savings. A few have even killed themselves in despair as their losses mounted.


http://www.guardian.co.uk/business/2008/jun/19/stockmarkets.investing

Any comments and some research on this would be welcome ?


----------



## Uncle Festivus

kingbrown said:


> Any comments and some research on this would be welcome ?




https://www.aussiestockforums.com/forums/showthread.php?t=9746

RIO & BHP killing the golden goose?

Australia's nest egg in the Chinese basket?

Can the world afford China?


----------



## Aussiejeff

Uncle Festivus said:


> https://www.aussiestockforums.com/forums/showthread.php?t=9746
> 
> RIO & BHP killing the golden goose?
> 
> Australia's nest egg in the Chinese basket?
> 
> Can the world afford China?





Well, ultimately the WORLD will have to pay for the resulting massive future hikes in the price of Chinese iron and steel .... what's good for BHP and RIO in the short term ain't gonna neccessarily be nice for your common Joe Blow in the long run!! (owww!! no pun intended Joe!) 



AJ


----------



## Whiskers

I'm off on a bit of a tangent, but true by title... this property market looks on pretty loose foundations to me. 

I know it doesn't rain much in Dubai, but struth, wouldn't one decent cyclone make a mess of these properties.




> DUBAI (Reuters) - Nakheel, developer of palm-shaped islands off Dubai's coast, plans big investments in listed property firms in Asia, the United Kingdom and the United States as the credit crunch offers opportunities to snap up bargains.
> 
> http://www.reuters.com/article/GlobalRealEstate08/idUSL2536035420080625?pageNumber=1


----------



## Family_Guy

If the dooms dayers are correct, then that above will all be under water in a couple of decades.


----------



## Macquack

Whiskers said:


> I'm off on a bit of a tangent, but true by title... this property market looks on pretty loose foundations to me.
> 
> I know it doesn't rain much in Dubai, but struth, wouldn't one decent cyclone make a mess of these properties.




And the only chance of catching a wave is the next tsunami.


----------



## Aussiejeff

Whiskers said:


> I'm off on a bit of a tangent, but true by title... this property market looks on pretty loose foundations to me.
> 
> I know it doesn't rain much in Dubai, but struth, wouldn't one decent cyclone make a mess of these properties.




Nice to see how the Mega-Rich Sheiks are putting a significant amount of the world's wealth (all that money has to come from somewhere) into such worthwhile projects for the benefit of the MegaRich...

Hmm.. is that a mega dust storm building up in the pic??


----------



## sassa

Two views on the FOMC statement.


> ``I like the comment of diminished economic risk, because what it tells the markets is that they feel increasing confidence that the economy is bottoming,'' James Paulsen, chief investment strategist of Wells Capital Management, which oversees about $222 billion, said in an interview on Bloomberg Television. ``That's a good thing.



http://www.bloomberg.com/apps/news?pid=20601057&sid=apWLC7H7m7CQ&refer=futures



> In announcing "no change" in rates today, the Fed pretends that its policy is perfectly calibrated to deal with the current economy. In reality however, the Fed is pinned down by a cross fire of inflation and recession. They see their best move as keeping their heads down and hoping that they emerge unscathed. Perhaps Alan Greenspan's best move as Fed Chairman was getting out when he did.
> 
> The reality is that America is faced by stagflation, economic recession and financial inflation at the same time! Rank and file American investors are beginning to understand this. As a result, U.S. stock markets are looking decidedly nervous. The possibility exists for major falls in the months and years ahead. However, don't look for anyone on television to tell you this. They are too busy shaking their pom poms



http://www.safehaven.com/article-10601.htm


----------



## sam76

Futures pointing to a nasty open.

currently at 11698 off 116


----------



## Whiskers

> Originally Posted by sassa
> 
> 
> 
> The reality is that America is faced by stagflation...
Click to expand...



I don't think we've got too much to be worried about sassa.

Full blown recession was never in my calculations and the revised numbers suggest it was not even close. As for stagflation... again I think a misnomer or mis-diagnosis. The problems in the financial sector are self inflicted by poor management. Although the effects flow through to the wider economy to some extent, all the best (government) economic management in the world cannot save bad managers from themselves. In other words the way I see it is this sector will have to evolve it's self dicipline or face continuing forced dynamic restructuring... some of which is coming from tighter regulation.

The property market was over rated up and down as was consumer spending and all will recover. The  lynch pin is obviously oil. What I see happening is people are already pretty seriously curbing oil use, eg GM has came out saying it's time to seriously engage in alternative powered vehicles because consumer sentiment has shifted substantially that way, and I would be surprised if congress does not treat oil as a vital resource and severely limit the speculative influence in oil trading.

I still see these types of measures supporting the USD in the medium term, which will benifit our mining industry with better cost to revenue ratios. 



> WASHINGTON (Reuters) - The economy grew at an upwardly revised 1.0 percent annual rate in the first three months of 2008, helped by stronger consumer spending and exports, a Commerce Department report showed on Thursday.
> 
> The department had estimated a month ago that gross domestic product, or GDP, grew at a 0.9 percent rate. GDP measures the total output of goods and services within U.S. borders.
> 
> Economists polled by Reuters had expected GDP to advance at a 1.0 percent pace. The figure was initially reported in April at an anemic 0.6 percent, fueling concerns that the U.S. economy may be slipping into recession.
> 
> Consumer spending, which accounts for more than two-thirds of national economic activity, rose by 1.1 percent in the quarter, a touch stronger than the 1.0 percent estimate given last month, helped by increases in medical care services. Despite the upward revision, consumer spending remained at the lowest level since the second quarter of 2001, which was during the last recession.
> 
> http://www.reuters.com/article/ousiv/idUSMAR64567120080626


----------



## Whiskers

Headlines like *Goldman downgrades fellow banks *at http://money.cnn.com/2008/06/26/news/companies/goldman_brokers/index.htm?postversion=2008062609 isn't helping much either. 

Pretty much a case of bag the opposition to make your own prospects appear better... becoming a bit of a self fullfilling prophecy.


----------



## theasxgorilla

Doesn't look good IMO.  A growing number of investors dont want to be long equities right now.


----------



## 2020hindsight

2020hindsight said:


> I'm thinking of getting into 100% cash for the end of financial year -
> ....
> Incidentally, does anyone know if the market typically follows a pattern at "new financial year"?  up?  down?




Mental note... - beware of the end of financial year dip in the market  after years like this ...  

They infer the selloff only happens after bad years. 

I'm not saying its the only factor at play here ... BUT - this article happily says TODAY (sorry YESTERDAY) (don't recall them saying much last week about it ) that "it was predictable" etc ... "It is an annual event but it is more pronounced this year" etc 

"locking in losses"!?  - heck, I was trying to secure the best outcome for the year I could - just for some self respect when my books go to the accountant! 

http://www.news.com.au/business/money/story/0,25479,23922142-5013953,00.html


> By Andrew Carswell June 26, 2008 07:17am
> 
> *AN increase in investors selling shares to lock in tax losses *will now ensure 2007-08 is the worst year for the Australian sharemarket in a quarter of a century.
> 
> It may be as annual as Easter, but the *frenetic share sell-off on the eve of the new financial year has reached epic proportions*, analysts say.
> 
> One has to dig back into the archives to 1981-82 to find a year that has surpassed the losses that have been incurred by investors in the past 12 months.
> 
> Yesterday's sharp plunge took the full-year losses to 15.2 per cent so far - a horror *downturn for investors who had been quite used to year-on-year gains. *
> 
> *The previous financial year, investors reaped rewards when the market increased by 29 per cent*.
> CommSec economist Savanth Sebastian told The Daily Telegraph it was no surprise to see shareholders running for the exit before financial year's end.
> 
> Nor was he surprised at the vast number of those selling, given that a high percentage of shareholders would have experienced losses this year.
> 
> "The markets are about to draw to a close on the worst year in 26 years, *so it is no surprise that we are seeing a lot of people locking in those tax losses to wipe out any gains, perhaps even gains in the property market.*






> "We've seen a lot of mum and dad investors buy blue chip stocks, particularly banks in recent time but banks have pulled right back, so there would be people selling to lock in losses and buying in the new year," he said.
> 
> "*It is an annual event but it is more pronounced this year *because the market has fallen 15 per cent."


----------



## 2020hindsight

mental note 2
might be good time to buy - just before EOFY
If the buy orders are all waiting for next Tuesday - why not get in first and buy Monday ?


----------



## 2020hindsight

continued..


> "So you may sell your underperforming shares and quickly get back in next year *but selling off and not buying back in is probably criminal at this point,"* Mr Sebastian said.
> 
> It was a message reiterated by Colonial First State chief equities analyst Hans Kunnen, who urged investors to think long-term.
> 
> He also suggested it would be dangerous to sell out this week in a bid to lock in losses for tax benefits, *and potentially miss the boat the following week*



PS This article will not have taken into account last nights oil price hike - adverse reaction in Wall St etc 
do you own oil search


----------



## explod

The close of the Dow is a low going back to October 06.  A bit of support around 11,000 but after that ?     The completion of head and shoulder will take it to the `11,000, and to 10x by the end of the year.   I think I could be sooner, (but there is no value in THINK)

Tonight may go down as Black Friday.   But it may be next week or so, but looking slippery now.

Anyway, there has been plenty of signs and warnings, so ASF members will be ok.


----------



## 2020hindsight

explod said:


> Anyway, there has been plenty of signs and warnings, so ASF members will be ok.



explod , howdy
but the bellboy keeps giving me all these great tips


----------



## explod

2020hindsight said:


> explod , howdy
> but the bellboy keeps giving me all these great tips




Yeh, but the Bellboy has a speial position, not everyone can get in.

I'm waiting for the Taxi Drivers.   Though I was talking to one a few years ago who also owns a nice farm just north east of Frankston near the new Freeway.  He had particular view about gold.  So the sell signals have to be watched sometimes.     Bit like the black box trading described on the Immen..thread today.  Has to be watched.


----------



## sassa

> All in all, it was a terrible, horrible, no good very bad day






> The SPYs opened lower and continued to move down for the rest of the day. This is clearly a very bearish chart that does not bode well for the future




http://www.bonddad.blogspot.com/


----------



## sassa

Whiskers said:


> Full blown recession was never in my calculations.






> Hard to argue with this:
> 
> "Nothing has been a more reliable indicator for an upcoming recession as the price of Oil. Every major bear market, every major economic decline has been preceded by a large spike in oil prices. The 73-74 recession, recession of beginning 80's and the recession of 2000. Oil prices jumped 80% between 1999 and 2000. Oil prices have been the most important indicator of major economic disasters. Whenever Oil prices rise about 80% from year ago levels, a fair chance does exist that a recession/bear market will follow."



http://www.bigpicture.typepad.com/


----------



## Aussiejeff

2020hindsight said:


> mental note 2
> might be good time to buy - just before EOFY
> If the buy orders are all waiting for next Tuesday - *why not get in first and buy Monday ?*




Hmmm. Then again, it might be prudent to wait for the tsunami of potentially *DISMAL* (IMO) company reports covering the last quarter to be unmasked.....

As the first wave of floodwaters subside around end of July, maybe some sad pickings will be lying cheaply around the seaside.

But, beware Rockfish and Blue Octopii....

AJ


----------



## nioka

Bedtime story.

  "And as the lemmings gathered beside the cliff a big bad black bear lurked in the dark background waiting to attack."

  Next episode after the break.


----------



## ithatheekret

I wonder if the US gov. will now attack the other speculators that have supported its balance sheet over the eons . Well for now , it looks like somebodys called abandon ship .


----------



## wayneL

It must be cartoon time.


----------



## wayneL




----------



## Sean K

Time to go long, the bears are getting cocky?

:


----------



## wayneL

kennas said:


> Time to go long, the bears are getting cocky?
> 
> :


----------



## ithatheekret

Ah , good old fashion British humour . Love that bear , no wonder the Lemmings are running to the cliff .

ASX200 rolled back through 5200 

I am somewhat amazed that if we are in an oil crisis , why am I not lining up for petrol yet ?

If we invade Canada we should be right for water , they can keep the shale.


----------



## explod

ithatheekret said:


> Ah , good old fashion British humour . Love that bear , no wonder the Lemmings are running to the cliff .
> 
> ASX200 rolled back through 5200
> 
> I am somewhat amazed that if we are in an oil crisis , why am I not lining up for petrol yet ?
> 
> If we invade Canada we should be right for water , they can keep the shale.




Yep, there's gunna be a run on whale skins.   The Japanese are going to tow the water down in leather bags so as to soothe their new buddy Rudd.   Maybe Therese will use the Comsec leverage to invest in the sailing tuggs.


----------



## dhukka

Whiskers said:


> Headlines like *Goldman downgrades fellow banks *at http://money.cnn.com/2008/06/26/news/companies/goldman_brokers/index.htm?postversion=2008062609 isn't helping much either.
> 
> Pretty much a case of bag the opposition to make your own prospects appear better... becoming a bit of a self fullfilling prophecy.




There's nothing self-fulfilling about it. This bear market is just following the usual course of events. Analysts are always behind the curve at turning points in economic and earnings cycles. Goldman is just catching up to reality. 

The writedowns on exotic credit products are starting to get smaller but that was never the greatest problem. Credit revulsion has now hit main street as consumers default on all types of loans. What this means for financial institutions is more loan loss reserves, more dividend cuts, more capital raising and a wave of bankrupticies.



> Full blown recession was never in my calculations and *the revised numbers suggest it was not even close.*




Take the export sector out of the equation and the domestic US economy grew at 0.2% in 1Q08. That's with a ridiculously low PCE deflator of just over 2% and employment numbers which are clearly being over estimated to the upside. Granted, recessions usually contain at least 1 quarter of negative GDP growth. However the the very nasty recession of 1981-82 started in July 1981, GDP growth in 3Q81 was *4.9%*. 

Employment has contracted for 5 straight months in an economy that needs to produce 150k jobs a month just to keep pace with population growth. Consumer confidence is at 25 year lows. Housing is in a depression, corporate earnings are deteriorating and consumers are being battered by declining wealth and higher prices, oh but they all got $800 bucks from uncle Sam, yeah that oughta save the day. This looks very much like a 1980's double dip recession with the second dip being the real nasty one. 

You underestimated the extent of the credit crunch and incorrectly called a new bull market in what was obvious to most as just a bear market rally. Having a rosy view of the world doesn't make you any less wrong.


----------



## Whiskers

ithatheekret said:


> I am somewhat amazed that if we are in an oil crisis , why am I not lining up for petrol yet ?




Good point ithatheekret. I made the same observation a little while ago.

For me it tends to support the speculators theory, holding contracts and forcing refiners to pay more.

I'm putting my money on the US congress giving the oil trading industry a long over due regultory reform a-la the financial industry. They have about half a dozen bills already, some with bi-partizan support.


----------



## professor_frink

Whiskers said:


> Good point ithatheekret. I made the same observation a little while ago.
> 
> For me it tends to support the speculators theory, holding contracts and forcing refiners to pay more.
> 
> I'm putting my money on the US congress giving the oil trading industry a long over due regultory reform a-la the financial industry. They have about half a dozen bills already, some with bi-partizan support.




http://www.bloomberg.com/apps/news?pid=20601087&sid=aBOhMpxHVbJE&refer=home



> *Oil Falls From Record as U.S. House Passes Speculation Measure  *
> June 27 (Bloomberg) -- Crude oil fell in New York, retreating from the record $140.39 a barrel reached yesterday, as the U.S. House of Representatives approved a bill aimed at curbing excessive energy-market speculation.
> 
> The bill, which passed 402-19, would require the Commodity Futures Trading Commission to consider using position limits, or constraints on the size of the stake each speculative investor can own, and raising margin requirements, the amount of money required to trade. The vote came after the record was set. ..................


----------



## Whiskers

dhukka said:


> There's nothing self-fulfilling about it. This bear market is just following the usual course of events. Analysts are always behind the curve at turning points in economic and earnings cycles. Goldman is just catching up to reality.




Reality eh!

It all sounds like pretty petty self preservation in the public eye to me. Only problem is that they are shooting themselves in the foot.

I reckon this post by refined silver in the gold thread is pretty right.



refined silver said:


> Here's another take on yesterday's action by Dan Norcini who is one of the smarter commentators versus Barrett's well described army of moron economic journalists.
> 
> 
> 
> 
> My take on this is that while the Forex markets are pushing the European currencies as well as the Yen higher, the market views the Fed's statement from yesterday as a capitulation of any attempt to talk up the Dollar. Bernanke's bluff has been called and the weakness of his hand revealed. Economic data simply will not permit the Fed to hike anywhere near as soon as many had been duped into believing by all the hawkish talk coming out of the Fed prior to the FOMC statement. That has attracted a wall of money back into commodities as an inflation hedge and is the reason why gold is so strong. Further helping gold is the horrific beating the darlings of yesterday’s stock rally, the financials, are receiving in today’s session.
> 
> The stock market is being pounded to kingdom come as those same financials get shellacked due to a series of downgrades by Goldman Sachs which issued a sell recommendation on Citi. That prompted a near immediate response from Wachovia which promptly then downgraded Goldman in a *tit-for-tat exchange being played by the investment banks*. If you listen carefully, you can almost hear them saying to each other as soon as their recommendations are made public, “NA-NA-NA-NA-NA, we downgraded you before you downgraded us!” or, “Take that, you swine!”
> 
> 
> 
> 
> https://www.aussiestockforums.com/forums/showthread.php?t=2366&page=230
Click to expand...





> Take the export sector out of the equation...




Now now, dhukka your picking the eyes out when they're down. Why not ignore the worst aspect as an aberation rather than what is still good?



> You underestimated the extent of the credit crunch and incorrectly called a new bull market in what was obvious to most as just a bear market rally.




I called an overall sideways market for the best part of the year... and that still hasn't changed. I also forecast a rise about may and coming back to a low for the end of june qtr. 



> Having a rosy view of the world doesn't make you any less wrong




Well, I feel sorry for you dhukka, if you can't find something rosy and pleasant in the world.

I just happen to subscribe to the philosophy that you are what you think and you will only attract positive experiences if you reflect a bit of positive karma.


----------



## Whiskers

professor_frink said:


> http://www.bloomberg.com/apps/news?pid=20601087&sid=aBOhMpxHVbJE&refer=home




Well, they moved pretty smartly on that one. But I didn't realise they had next week in recess.

Have to get a close look at what it says now.


----------



## wayneL

Whiskers said:


> I just happen to subscribe to the philosophy that you are what you think and you will only attract positive experiences if you reflect a bit of positive karma.



The secret?

Well, it works to a point. As observed in a particular philosophical tome:



> To every thing there is a *season*...
> ...A time to be born, and a time to die;
> A time to plant, and a time to pluck up that which is planted;
> A time to kill, and a time to heal;
> A time to break down, and a time to build up;
> A time to weep, and a time to laugh;
> A time to mourn, and a time to dance;
> A time to cast away stones, and a time to gather stones together;
> A time to embrace, and a time to refrain from embracing;
> A time to get, and a time to lose;
> A time to keep, and a time to cast away;
> A time to rend, and a time to sew;
> A time to keep silence, and a time to speak;
> A time to love, and a time to hate;
> A time of war, and a time of peace.




The Austrian school of economic thought puts it across in another way in relation to economies. In succinct terms:



> A time for boom, and a time for bust.


----------



## Trembling Hand

Whiskers said:


> For me it tends to support the speculators theory, holding contracts and forcing refiners to pay more.
> 
> I'm putting my money on the US congress giving the oil trading industry a long over due regulatory reform a-la the financial industry. They have about half a dozen bills already, some with bi-partizan support.




Won't it be funny when they increase the margin rates. Only people that will hurt is the people that lose money trading anyway. For the traders that set the value they will not give a flying toss whether the margin is 8 g's or 16 g's or 24.

What will be there answer when they take ownership of the price and set these ridiculous "controls" and see still goes up??


----------



## ithatheekret

Whiskers said:


> Good point ithatheekret. I made the same observation a little while ago.
> 
> For me it tends to support the speculators theory, holding contracts and forcing refiners to pay more.
> 
> I'm putting my money on the US congress giving the oil trading industry a long over due regultory reform a-la the financial industry. They have about half a dozen bills already, some with bi-partizan support.





Or the competition / offshore asset managers / OPEC members .........

and anyone else with a vested interest to keep the price of oil high whilst the globe is on a war footing .

How's about that for a string of assumptions ?  :


----------



## Whiskers

Trembling Hand said:


> Won't it be funny when they increase the margin rates. Only people that will hurt is the people that lose money trading anyway. For the traders that set the value they will not give a flying toss whether the margin is 8 g's or 16 g's or 24.
> 
> What will be there answer when they take ownership of the price and set these ridiculous "controls" and see still goes up??




Well, as yet I'm still unclear what will happen, although the bill still has to pass the senate and get Bushs monica on it... but assuming it passes it seems there is quite a lot of latitude and descretion in it from the Bloomberg article.

What's the effect of requiring someone to consider something? How does that work out?

The bill, which passed 402-19, would require the Commodity Futures Trading Commission to consider using:


position limits, or 
constraints on the size of the stake each speculative investor can own, and 
raising margin requirements, the amount of money required to trade.

My understanding of what they were trying to get at was to identify if there was any market manipulation, monolopy interests type of activity that was substantially corrupting the true market price. 

I reckoned that sooner or later they had to get the bulk of the oil market back in trading between producers and refiners. It just seemed an unsustainable bubble brewing with 70% of the oil market in speculators hands. How they apply this new law is gonna be interesting. It appears the CFTC can invoke immergency powers. Will it come to that!



ithatheekret said:


> Or the competition / offshore asset managers / OPEC members .........
> 
> and anyone else with a vested interest to keep the price of oil high whilst the globe is on a war footing .
> 
> How's about that for a string of assumptions ?  :




Exactly. We don't know whether it's mega rich hedge funds or even some of OPEC double dipping the market.

In any case, I've been getting the feeling for awhile that around the world people and politicans have been thinking the oil market is too much of a vital resource that has very serious consequences for the world economy to have the major share of it controlled by speculators.


Oh Wayne, I didn't go to the Austrian school of economics. We better make sure it doesn't become main stream curriculum eh!


----------



## alankew

Whiskers said:


> Well, as yet I'm still unclear what will happen, although the bill still has to pass the senate and get Bushs monica on it... but assuming it passes it seems there is quite a lot of latitude and descretion in it from the Bloomberg article.
> 
> What's the effect of requiring someone to consider something? How does that work out?
> 
> The bill, which passed 402-19, would require the Commodity Futures Trading Commission to consider using:
> 
> 
> position limits, or
> constraints on the size of the stake each speculative investor can own, and
> raising margin requirements, the amount of money required to trade.
> 
> My understanding of what they were trying to get at was to identify if there was any market manipulation, monolopy interests type of activity that was substantially corrupting the true market price.
> 
> I reckoned that sooner or later they had to get the bulk of the oil market back in trading between producers and refiners. It just seemed an unsustainable bubble brewing with 70% of the oil market in speculators hands. How they apply this new law is gonna be interesting. It appears the CFTC can invoke immergency powers. Will it come to that!
> 
> 
> 
> Exactly. We don't know whether it's mega rich hedge funds or even some of OPEC double dipping the market.
> 
> In any case, I've been getting the feeling for awhile that around the world people and politicans have been thinking the oil market is too much of a vital resource that has very serious consequences for the world economy to have the major share of it controlled by speculators.
> 
> 
> Oh Wayne, I didn't go to the Austrian school of economics. We better make sure it doesn't become main stream curriculum eh!



Whiskers sorry to pull you up on this but i think you will find that technically it was Bills Monica and it landed him in a whole heap of trouble.Bush is in enough trouble without bringing Monica into it


----------



## wayneL

Whiskers said:


> Oh Wayne, I didn't go to the Austrian school of economics. We better make sure it doesn't become main stream curriculum eh!




_Au contraire_! As the only truly useful model for both projection and management, it should be compulsory.

Here is a series of videos by Professor Krassimir Petrov, which give a very good overview:

http://sigmaoptions.blogspot.com/2007/09/lessons-in-economics.html


----------



## Trembling Hand

Whiskers said:


> I reckoned that sooner or later they had to get the bulk of the oil market back in trading between producers and refiners. It just seemed an unsustainable bubble brewing with 70% of the oil market in speculators hands.




That is a fundamental misunderstanding of how/who operates ALL futures markets. Speculators. All Futures. They are the best at pricing.



Whiskers said:


> In any case, I've been getting the feeling for awhile that around the world people and politicans have been thinking the oil market is too much of a vital resource that has very serious consequences for the world economy to have the major share of it controlled by speculators.



I hope you are stating other peoples opinions not yours. ie pollies.

I don't think anyone has EVER came up with a better alternative to pricing ANYTHING other than the market/speculators. Even given the odd bubble. Certainly not a bunch of populist pollies who only care about the next political poll.

I find it amazing that the price isn't been cheered considering the obvious damage fossil fuels do and the need to reprice that damage. Not to mention the need to develop an economy on something that is sustainable. and after I have another Beer we can talk about relying on a finite commodities that is mostly in undemocratic nut houses. Let the market price commodities not pollies.


----------



## Whiskers

alankew said:


> Whiskers sorry to pull you up on this but i think you will find that technically it was Bills Monica and it landed him in a whole heap of trouble.Bush is in enough trouble without bringing Monica into it




LOL LOL

Oh alankew, you... 

Gees if I wasn't in a 'rosy' mood I certainly am now after a couple of schnaps on a friday night and that...


----------



## wayneL

Trembling Hand said:


> I find it amazing that the price isn't been cheered considering the obvious damage fossil fuels do and the need to reprice that damage. Not to mention the need to develop an economy on something that is sustainable. and after I have another Beer we can talk about relying on a finite commodities that is mostly in undemocratic nut houses. Let the market price commodities not pollies.



It's called cognitive dissonance.

Over here it's: let's save the world and tax the crap out of fossil fuels, lets stop people buying big cars, let's cut down on air travel, let's encourage public transport...










.... let's build a new runway at Heathrow, let's add another couple of lanes to the M25, let's ignore the deplorable state of the train network etc.


----------



## Whiskers

Trembling Hand said:


> That is a fundamental misunderstanding of how/who operates ALL futures markets. Speculators. All Futures. They are the best at pricing.
> 
> 
> I hope you are stating other peoples opinions not yours. ie pollies.




Yes TH, I'm just trying to pick the market. As has often been said the markets (and pollies) move on sentiment far more than logic. 

I essentially agree with you, provided the specualtors aren't a defacto monolopy corrupting the true market. 

On a personal level I've been on the conservation or rather sustainability and recycling bandwagon for about 15 years... collecting all my old copper and brass fittings, alluminium and steel and taking to a recycler long before council recycling started in the area.

I'm phasing out horticultural production and now drive a very economical 4 cycl, so the price of oil isn't a big concern for me personally.

As far as political and economic issues are concerned, I try to put any 'aught to' type rationale out of my mind (except for election time) and focus on consumer, investor and political 'sentiment' in a more narrative than my own 'aught to' view.

Hows ya beer going? Whats your favourite? I had a change from Hahn Ice or that double hops beer or red tonight. Got hold of some nice Butterscotch Schnaps.


----------



## dhukka

Whiskers said:


> I called an overall sideways market for the best part of the year... and that still hasn't changed. I also forecast a rise about may and coming back to a low for the end of june qtr.



Actually you called a low for the end of May





Whiskers said:


> I'm still thinking up toward 6,000 + for a couple or three weeks and...
> 
> 
> 
> another low, but not lower low about late May.






And then this beautiful contrary indicator


Whiskers said:


> I'm looking at the weekly chart and I reckon, looking at the standard deviatian channel, we could have a minor correction back to 5,800'ish also, and still be in uptrend, then push on for one more leg up well into the 6,000's in this move.



 XAO at the time 5994, then proceeded to fall *11%* in just over a month to today's level of 5349.





Whiskers said:


> I suspect it's anxious times insofar as if the market turns up for another leg this week, as I expect, the worst case scenerio's will have to be revised and turn all eyes to the up side.



 XAO at the time 5866, 23rd May





Whiskers said:


> Quote:
> Originally Posted by Boggo
> Interesting chart after today in relation to its retracement zone.
> 
> If it holds above approx 5790 then I think my count is valid.
> 
> 6400 next ?
> 
> 
> 
> 
> 
> Sounds about right to me.
> 
> But the brits and yanks aren't doing us any favors yet.
> 
> A bit of a slow start. Mondayitis I think.
> 
> After they come back from lunch they should wake up and get going.
Click to expand...


 XAO at the time 5703, 3rd June





Whiskers said:


> I agree with the more recent part of Boggo's count and his projection.
> 
> It seems to me that the leg 5 *target is 6258 minimum*.



 XAO at the time 5691, 6th June









> Well, I feel sorry for you dhukka, if you can't find something rosy and pleasant in the world.




I find a great many things to be rosy and pleasant in the world, however your analysis is not one of them. 



> I just happen to subscribe to the philosophy that you are what you think and you will only attract positive experiences if you reflect a bit of positive karma.




Well it aint working, you keep forecasting positive scenarios for the stockmarket and it keeps going down.


----------



## Whiskers

Just thought I'd pop back in with this little survey of US opinion.

Dhukka, dear oh dear. Context man, context.

PS: 



> Stimulus sends personal income surging
> The government's $48.1 billion in economic stimulus checks payments play a key role. Personal spending grows.
> 
> NEW YORK (CNNMoney.com) -- Personal income surged in May as the government's stimulus payment plan to jump-start the economy took effect, according to a report released Friday.
> 
> The Commerce Department said individual income shot up 1.9% in May as a result of $48.1 billion economic stimulus payments in the month.
> 
> Stimulus checks accounted for a huge 5.7% rise in disposable income, versus a 0.4% increase in the previous month.
> 
> 
> *Consumers increased their savings rate*, as a percentage of disposable income, to 5% in May from 0.4% in April. Stimulus payments that go into savings or are used to pay off debts instead of being spent won't give the intended economic boost.
> 
> http://money.cnn.com/2008/06/27/news/economy/consumer_spending/index.htm?postversion=2008062709


----------



## wayneL

Whiskers said:


> Just thought I'd pop back in with this little survey of US opinion.
> 
> Context man, context.
> 
> PS:



Context indeed. The context is that CNNNNNNN are Wall St cheerleaders; bobbleheads of the worst order; financial propagandists beholden to the idiocratic industry of shifting truths, obfuscation, and churn.

Elsewhere, the context changes:

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/27/cnbarclays127.xml



> Barclays warns of a financial storm as Federal Reserve's credibility crumbles
> 
> Last Updated: 7:16am BST 27/06/2008
> 
> US central bank accused of unleashing an inflation shock that will rock financial markets, reports Ambrose Evans-Pritchard
> 
> *Barclays Capital has advised clients to batten down the hatches for a worldwide financial storm, warning that the US Federal Reserve has allowed the inflation genie out of the bottle and let its credibility fall "below zero"*.
> 
> "We're in a nasty environment," said Tim Bond, the bank's chief equity strategist. *"There is an inflation shock underway. This is going to be very negative for financial assets.* We are going into tortoise mood and are retreating into our shell. Investors will do well if they can preserve their wealth."
> 
> Barclays Capital said in its closely-watched Global Outlook that *US headline inflation would hit 5.5pc by August and the Fed will have to raise interest rates six times by the end of next year to prevent a wage-spiral. If it hesitates, the bond markets will take matters into their own hands.* *"This is the first test for central banks in 30 years and they have fluffed it.* They have zero credibility, and the Fed is negative if that's possible. It has lost all credibility," said Mr Bond..........


----------



## dhukka

Whiskers said:


> Just thought I'd pop back in with this little survey of US opinion.
> 
> Dhukka, dear oh dear. Context man, context.
> 
> PS:




Yes the context is clear, on each of the occassions I quoted you called the market higher and on each occasion it went lower.


----------



## ithatheekret

wayneL said:


> _Au contraire_! As the only truly useful model for both projection and management, it should be compulsory.





Absolument franchement ! Then sheeples can even get ejumakated too .

And the globe needs to update its context and straighten the books !


----------



## Whiskers

wayneL said:


> Context indeed. The context is that CNNNNNNN are Wall St cheerleaders; bobbleheads of the worst order; financial propagandists beholden to the idiocratic industry of shifting truths, obfuscation, and churn.
> 
> Elsewhere, the context changes:
> 
> http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/27/cnbarclays127.xml




 

Whooo there.... *the context *of my post was:


Which is the worst aspect of our dependence on oil? 
The stimulus sends personal income surging... (albeit maybe only for a short time), and
Consumers increased their savings rate

The point being in the context of all the doomsday predictions that the stimulus package would have no effect and US consumers are debt-aholics who would never recover... obviously at least some have increased their savings rate... a point I made earlier was more important than spending all the stimulus to make the macro economic indicators look better more quickly. 

The fact that they are increasing their savings bodes well for a sustained recovery.

My *context* was nothing to do with CNN. Those particular little facts that were the context of my post won't change regardless of whether they were delivered by the NY Times, the Courier Mail or some chinese herds man or whatever.

All this _Barclays warns of a financial storm as Federal Reserve's credibility crumbles_ stuff is a totally different issue to the *context* of my post for two main reasons.

One, my post was about recorded economic facts ie facts...* context *of facts.

Two, that other rant is about perception that has not eventuated yet... like that recession come depression that hasn't happened yet. 

All the hyper inflation speculation hinges on the price of oil. Oil collapses and the doomsday merchants will be on the lookout for another vehicle to hang their doom and gloom on. 

Yes, indeed context is everything.


----------



## Whiskers

dhukka said:


> Yes the context is clear, on each of the occassions I quoted you called the market higher and on each occasion it went lower.




The *context* my dear dhukka is in my use of our fine vocabulary which includes words like *could *and *if* as well as in *projecting technical targets*.

One has to be able to read, understand and then be able to properly interpret and represent the facts. :

By the way, I'm flattered... or should I be worried that you are stalking me, following my every move. 

You will have to excuse me if I couldn't be bothered reciprocating. I have better things to do... like another favourite saying of mine... adversity is the seeds of opportunity... so, every day is 'rosy' for me no matter what the weather or politics or economy is. : :


----------



## dhukka

Whiskers said:


> The *context* my dear dhukka is in my use of our fine vocabulary which includes words like *could *and *if* as well as in *projecting technical targets*.
> 
> 
> One has to be able to read, understand and then be able to properly interpret and represent the facts. :




A nice try at squirming out of your failures but there is no ambiguity about the purpose of your posts. You were calling the direction of the market and you were wrong. 



Whiskers said:


> By the way, I'm flattered... or should I be worried that you are stalking me, following my every move.
> 
> You will have to excuse me if I couldn't be bothered reciprocating. I have better things to do... like another favourite saying of mine... adversity is the seeds of opportunity... so, every day is 'rosy' for me no matter what the weather or politics or economy is. : :




Actually I only looked on one thread (XAO Analysis) and it took very little time to find examples of your false calls. The bulk of the time went in deciding which quotes to use, since there are so many of them.


----------



## dhukka

On another note related to US consumer opinion. The Conference board that surveys US consumer sentiment, (now at it's lowest level since 1980) in the course of collecting their data ask the question whether jobs are hard to get or plentiful. The graph below shows that US workers clearly believe it is getting tougher to find a job. The interesting part of that graph is the strong correlation (*0.87*) with the unemploment rate.


----------



## sassa

> A brief look at the papers this morning has the usual suspects talking up what a buying opportunity this market is. Consider:
> 
> What to Do to Survive This Market: "It's hard to time the market, so stay in and benefit from the inevitable turnaround"
> 
> Snatching Bargains From Bear's Jaws (WSJ)
> Market Update: For Stocks, the Worst Is Over (Kiplingers cover via NYT)
> 
> Have Swaps Overdone the Gloom? (WSJ)
> 
> To those of use who have spent decades studying contrary indicators, this stuff is laughable -- and quite dangerous. At least Barron's has an interview with Peter Schiff -- as penance for their disastrous June 2nd 2008 "Buy GM" cover story a month ago






> Most people assume that 1929 was when all the damage was done; it wasn't -- the rally and subsequent collapse was the most dangerous period. Trying to buy cheaply all-the-way-down is where nearly all the pain came from...



http://www.bigpicture.typepad.com/


----------



## Trembling Hand

Sassa are you short? Long? or just collecting news?


----------



## explod

Trembling Hand said:


> Sassa are you short? Long? or just collecting news?




Pretty tepid analysis in this.    Not speaking for Sassa, but the trumpet blowing confirmes my being out the right one at the moment.   The long have crook backs and the shorts make big noise. (The short man syndrome)


----------



## ithatheekret

Aww whiskers , you must be a legal , you have completely spun the " facts " around .


1/Which is the worst aspect of our dependence on oil? 


The fact that we are virtually powerless to do anything about it , we're oil junkies , policy after policy has set the markers out for this . Then along comes the ratpack of slumbering oil companies , who have direct links with anything but the consumer and more lobbyists than flies on a rotting carcus , hedging themselves to Boolaroo and back whilst snuggling up to anyone with a Saudi cut of an oil lease and a Presidents ear .

2/The stimulus sends personal income surging... (albeit maybe only for a short time), and 


Whoops , sends what surging ? Misprint , misprint . 
The only thing the stimulus has sent surging is the inflation rate period !


3/Consumers increased their savings rate 

That's a beauty , all I can say about that is . They'll have to , they're saving up for petrol !


----------



## Whiskers

ithatheekret said:


> Aww whiskers , you must be a legal , you have completely spun the " facts " around .




Noo,no,no, ithatheekret.

Actually, that's a bit of a back-handed compliment.  ...because 'legals' tend to see what's important to get the job done.

Let me explain my context a bit more thouroughly.



> 1/Which is the worst aspect of our dependence on oil?
> 
> 
> The fact that we are virtually powerless to do anything about it , we're oil junkies , policy after policy has set the markers out for this . Then along comes the ratpack of slumbering oil companies , who have direct links with anything but the consumer and more lobbyists than flies on a rotting carcus , hedging themselves to Boolaroo and back whilst snuggling up to anyone with a Saudi cut of an oil lease and a Presidents ear .




That little survey was just following on from a point TH made to illustrate how the yanks and probably many of us see the impact of the price of oil. As I mentioned earlier It hardly affects me personally.

But it's worth noting how people perceive the high price of oil. With surveys like that I am just making an observation and a judgement that although a degree of demand destruction is starting, the yanks would prefer to drive the price of oil right back down to maintain their lifestyle if they can. Something to keep in mind when that oil speculation bill becomes law to see if they invoke any new or extra powers to keep it down.



> 2/The stimulus sends personal income surging... (albeit maybe only for a short time), and
> 
> 
> Whoops , sends what surging ? Misprint , misprint .
> The only thing the stimulus has sent surging is the inflation rate period !




Well you said it, not me. Your giving the stimulus package credit for doing a lot more than the doomsdayers were anticipating... what, killed off the recession and kick started inflation 



> 3/Consumers increased their savings rate
> 
> That's a beauty , all I can say about that is . They'll have to , they're saving up for petrol !




Well, isn't that a good thing too... just in case oil prices stay high... and if oil falls they'll have a bit extra to throw into the markets to pump them up again. Win, win, isn't it!


----------



## Whiskers

Since I've been carrying on about the impact of oil lately and the possible, even very probable collapse of the oil bubble, I thought it opertune to highlight the current good position of an evening star formation. 

I know it's still early in the week, but if it holds around these prices for the rest of the week and given the pending course of the oil speculation bill to the senate and Bush, it makes for a good setup for a spectatular fall in a week or so and I would imagine that would spell quite a decent recovery for the economy and the stock markets.


----------



## explod

Whiskers said:


> Since I've been carrying on about the impact of oil lately and the possible, even very probable collapse of the oil bubble, I thought it opertune to highlight the current good position of an evening star formation.
> 
> I know it's still early in the week, but if it holds around these prices for the rest of the week and given the pending course of the oil speculation bill to the senate and Bush, it makes for a good setup for a spectatular fall in a week or so and I would imagine that would spell quite a decent recovery for the economy and the stock markets.




There is an old saying, "do not try to catch a falling knife"  I am going to introduce a new one,  "Rising crap is b...s.hit. if it was the bull behind it.  If it was the deputy, or the injun chief, stand aside Pal or you will be thunk" I think.

Whiskers, I love you for your enthusiasm.  Just wish we could meet on the fundamentals of reality.   But at this time of night I could very well be wrong.  In fact my wife says., or intimates that I am wrong allthe time.  Hope your not the missus in disguise.


----------



## Whiskers

explod said:


> There is an old saying, "do not try to catch a falling knife"  I am going to introduce a new one,  "Rising crap is b...s.hit. if it was the bull behind it.  If it was the deputy, or the injun chief, stand aside Pal or you will be thunk" I think.
> 
> Whiskers, I love you for your enthusiasm.  Just wish we could meet on the fundamentals of reality.   But at this time of night I could very well be wrong.  In fact my wife says., or intimates that I am wrong allthe time.  Hope your not the missus in disguise.




Just posting a 'keep an eye on this spot' notice, explod... cos the POG came off the boil in a pretty big way with just this setup, an evening star.  

It's not a certainty, but I know there's a lot hinging on the price of oil and a lot of political and consumer resentment around the world, so I'm just keeping a close eye on it and what the US regulators will be doing with the new legislation.

It just stands out to be the perfect tool and oppertunity for them to improve their economic and political prospects, help the USD and the stock markets all in one 'foul' swoop.


----------



## explod

Whiskers said:


> Just posting a 'keep an eye on this spot' notice, explod... cos the POG came off the boil in a pretty big way with just this setup, an evening star.
> 
> It's not a certainty, butI know there's a lot hinging on the price of oil and a lot of political and consumer resentment around the world, so I'm just keeping a close eye on it and what the US regulators will be doing with the new legislation.
> 
> .




The US regulators are not kin to GWB, so I think it will be fairly useless all round.   Those that follow by all means.   Gold well thats a long term thing, not worth speakin of really, its up more than 40% this last 12 months, nice to watch the grass grow my Dad used to say in the 60's as the herefords fatterned for the market.    Whiskers wish I could reach ya, but some you just cant'   But by Geroge if you got the Lord with ya then no worries I say.  And My Dad (rest him) was a great believer.


----------



## explod

Yeh, bit sorry bout the last Whisker, cause while I was writing it up gold went up the same way by $5,. jeeess, interesting times.  Funny oil bout the same, but US dollar down.   Anyway, just hold them gold blocks and dont' think too much.


----------



## xyzedarteerf




----------



## kingbrown

*'Financial catastrophe looms'*

It's a big statement that the world economy could potentially be facing one of the biggest crises for the last 150 years."

Most central banks and the International Monetary Fund are tipping only a mild hit to world economic growth.

The Bank for International Settlements, whose chief economist Harry White is retiring, says they are wrong.

"The Bank for International Settlements goes to great lengths to juxtapose their own view to what they call the consensus and that consensus is saying that inflation will be a blip that it'll only be around for a year and we'll get recovery and they're saying no," Associate Professor Bryan said.


He adds that he *has never seen a report as dire as this from a global economic agency.*


*"It's telling central banks that they got it wrong, that they shouldn't have let us get into this precarious position, that they should have been constraining credit earlier* and that they've put us in a position now where there just aren't clear policy options," Associate Professor Bryan said.



See ABC link 

http://www.abc.net.au/news/stories/2008/07/01/2290403.htm


----------



## kingbrown

*Bank of Japan is Inflating the Crude Oil “Bubble*

*Hyper-inflation in the commodities markets **is rivaling the US housing collapse and the global banking crisis*, as the biggest threat to the world economy. Finance ministers from the United States, Canada, Japan, France, Germany, Italy, Britain, and Russia, have expressed their alarm over the doubling of agricultural, energy, and key raw material prices from a year ago, which is pushing inflation rates around the world, to their highest in three decades

While the weak dollar against the Euro gets most of the blame for the sky-high price of crude oil, the dollar’s strength against the Japanese yen is also elevating the energy markets these days. *The Bank of Japan (BoJ) has kept its overnight loan rate pegged at 0.50%* for sixteen months, *which is nurturing inflation worldwide. Global “carry traders” are borrowing Japanese yen at 1% or less,** and converting the yen into US dollars, in order to purchase energy futures in New York.*

In his first major blunder, rookie BoJ chief Masaaki Shirakawa scrapped his predecessor’s policy of gradually raising Japan’s borrowing costs, and signaled a green light for “carry traders” to bid oil prices higher. “The outlook for economic activity and prices is highly uncertain. It is not appropriate to predetermine the direction of future monetary policy. We need to pay utmost attention to the downside risks to the economy,” he said on May 12th, - switching to a neutral policy.

Now the BoJ’s super-low interest rates are boomeranging on the Japanese economy. Wholesale prices for petroleum, coal, and gasoline prices are up +28% from a year earlier. Japan’s oil import bill soared 53% to $12 billion in May, and soaring steel and iron ore prices are hammering Japanese carmakers, such as Honda and Nissan, whose operating profit might drop 32% this year. Japan’s total import bill is up +12% from a year ago, narrowing its trade surplus by 46% to 485 billion yen ($4.7 billion). A half-point BoJ rate hike to 1% is necessary to shake-out the “yen carry” traders in the energy markets. Don’t count on it anytime soon.

Any thoughts is Japan a part of the problem 

see link 
http://news.goldseek.com/GoldSeek/1214496095.php


----------



## Awesomandy

Looks like Starbucks is closing 600 stores in the US. Well, as the older population would say, when the coffee shops close, there will be trouble ahead.


----------



## >Apocalypto<

by the way the news papers posters and all other commentators are sounding, it could just be about time to buy stocks!


----------



## wayneL

>Apocalypto< said:


> by the way the news papers posters and all other commentators are sounding, it could just be about time to buy stocks!



Contrarian theory is now to well known and is invoked way too early.

Fade the faders I reckon. Fading the 'right' downage is trickier than we all think. IMO


----------



## >Apocalypto<

wayneL said:


> Contrarian theory is now to well known and is invoked way too early.
> 
> Fade the faders I reckon. Fading the 'right' downage is trickier than we all think. IMO




was more of a joke WayneL!


----------



## wayneL

>Apocalypto< said:


> was more of a joke WayneL!



It wasn't a bottom-pickerist joke was it? 

Some will get it.


----------



## >Apocalypto<

wayneL said:


> It wasn't a bottom-pickerist joke was it?
> 
> Some will get it.




Ha Ha Ha


----------



## Wysiwyg

So another 6 billion plus day on the DOW.Over the last year 6 billion plus volume has been the bottom twice and near (3 days) once.Though this time the 6 billion plus volume was on the 27/06 which was a Friday and surely close to the bottom right now.
Will wait and see if it happens this time.Too obvious I suppose.


----------



## Aussiejeff

Now GM faces the possibility of bankruptcy because their saleyards are full of now-useless SUV's and they don't have enough small, fuel efficient models to sell?

http://business.theage.com.au/bankruptcy-talk-pushes-gm-to-lowest-since-1954-20080703-30vg.html

One has to ask what the hell the GM "boffins" have been feeding to their collective feeble minds, since they have been happily pumping out zillions of gas-guzzling SUV's for the past 10 years. I can't believe they didn't see this coming.....

Sheesh....

AJ


----------



## wayneL

I am ROTFL

US job losses are HIGHER than experts predicted, yet SP futures rally hard before the bell, DX in boomage and Gold drops $20 before you can say Jack Robinson.

I will never figure out the US investor. 

LOL


----------



## Whiskers

wayneL said:


> I am ROTFL
> 
> US job losses are HIGHER than experts predicted, yet SP futures rally hard before the bell, DX in boomage and Gold drops $20 before you can say Jack Robinson.
> 
> I will never figure out the US investor.
> 
> LOL




I got it figured, wayne.


----------



## Trembling Hand

wayneL said:


> I am ROTFL
> 
> US job losses are HIGHER than experts predicted, yet SP futures rally hard before the bell, DX in boomage and Gold drops $20 before you can say Jack Robinson.
> 
> I will never figure out the US investor.
> 
> LOL




Panic now!! :


----------



## dhukka

wayneL said:


> I am ROTFL
> 
> US job losses are HIGHER than experts predicted, yet SP futures rally hard before the bell, DX in boomage and Gold drops $20 before you can say Jack Robinson.
> 
> I will never figure out the US investor.
> 
> LOL




Wayne, the headline number of job losses in NFP's despite being slightly worse than the consensus estimate was not as bad as recent data on jobless claims and ISM manufacturing had suggested. It looked as though it might have been a triple digit decline. However the report was still weak. A total of 52k downward revisons to previous months, the unemployment rate which was thought might fall given the so-called statisical blip from last month did not budge and initial jobless claims spiked to a fresh 4 and half year high in the latest week breaching the 400k mark. 

After an initial sigh of relief, the market seemed to come round to the reality  that the report wasn't very good. The ISM non-manufacturing number just came in now and it was quite a bit weaker than expected.  The employment component of that index deteriorated sharply from *48.7* to *43.8*. A number under 50 represents contraction. This number is particularly important as more than 80% of US jobs come from the services sector. 

Based on this data the US labor market is clearly deteriorating further amd it won't be long before we see triple digit declines in employment. Sorry folks, the second half recovery forecast by the permabulls has been cancelled.


----------



## Sean K

dhukka said:


> Sorry folks, the second half recovery forecast by the permabulls has been cancelled.



Cancelled because of a single payroll number? OK

Market up .85%. 

Go permabulls!!  lol

Market and economy don't seem to speak to each other sometimes.

(could still collapse at the drop of a hat of course due to some good numbers)


----------



## dhukka

kennas said:


> Cancelled because of a single payroll number? OK
> 
> Market up .85%.
> 
> Go permabulls!!  lol
> 
> Market and economy don't seem to speak to each other sometimes.
> 
> (could still collapse at the drop of a hat of course due to some good numbers)




I should be more specific there kennas. The second half recovery refers to the second half recovery of the US economy that has been forecast by such permabulls as:



> *Bob Stein on Kudlow and Co, 02/12/2008*, “We think it’s a little bit slower in the first quarter and the fourth quarter of last year, but it is going to explode through the middle and the end of this year, the Fed will be effective.”




Also, not in reference to just one data point. There is a bunch of them that look fairly ominous for the second half. Even Fed governors are saying that there won't be a second half recovery



> The resulting slow recovery of financial markets that I think is likely suggests that the U.S. economy will be subject to substantial headwinds for some time. Indeed, the situation may be comparable to what happened in the early 1990s when the weakened condition of the banking industry in the United States led to a relatively slow recovery in economic activity. Thus, growth could continue to be quite weak, though I would hope it would pick up next year...
> 
> ...Different measures tell somewhat different stories, but it seems clear that U.S. home prices began decelerating a while back and have been posting outright declines in recent quarters. Mortgage defaults and foreclosures are at record highs and delinquency rates are at their highest level in 29 years, which could keep downward pressure on prices for some time to come.
> 
> An adverse feedback loop has emerged in the housing sector, as severe difficulties in the mortgage markets have significantly limited the availability of mortgage finance for many borrowers. The lack of mortgage credit, in turn, appears to have further driven down home sales and contributed to the decline in house prices. However, some of the slowdown in mortgage lending has been warranted.


----------



## Aussiejeff

kennas said:


> Cancelled because of a single payroll number? OK
> 
> Market up .85%.
> 
> Go permabulls!!  lol
> 
> Market and economy don't seem to speak to each other sometimes.
> 
> (could still collapse at the drop of a hat of course due to some good numbers)




Psssst!!!

Has everyone forgotten today is 4th July!!!! Would I be wrong in thinking the US market would traditionally tend to take a patriotic kick up on the half trading day before the Independence Day long weekend?

If I'm half-right, their small, patriotically induced overnight bounce back is looking pathetically weak. The opening AFTER the long weekend hangover has set in might be of more interest!


AJ


----------



## gfresh

Not a bad perspective on the destruction of credit growth and it's results, from the Netherlands..

http://atlanticfreepress.com/content/view/4131/32/


----------



## davo8

gfresh said:


> Not a bad perspective on the destruction of credit growth and it's results, from the Netherlands..




That's a good one -- thanks! Same thing is going to happen here -- 50%+ drop in house prices relative to AWE over a period of 6-10 years, as credit dries up. It may have already started.

Meanwhile we have the fascinating spectacle of a major bear market to watch unfold. The end result in both is bargains for those with cash to spend and the patience to wait. And all the while, the permabulls provide endless entertainment.


----------



## grace

davo8 said:


> That's a good one -- thanks! Same thing is going to happen here -- 50%+ drop in house prices relative to AWE over a period of 6-10 years, as credit dries up. It may have already started.
> 
> Meanwhile we have the fascinating spectacle of a major bear market to watch unfold. The end result in both is bargains for those with cash to spend and the patience to wait. And all the while, the permabulls provide endless entertainment.




Yep, agree with all of this.  Can't wait for it to spread to rural properties.  Some farms have gone up 300 - 400% in the last 8 years.  Income is about the same, costs are now triple.  Buyers are now just drying up.  Can see a major correction coming there.  Waiting and hoping.


----------



## Whiskers

The US congress gets back to work tonight and among issues on the adgenda include further oil speculation legislation. My best bet is some further legislation will follow which if pursued by the authorities as vigeriously as the public and many politicans want, should see the peak in oil prices for some time.

Just having a look at the maths, in round figures, world production @ 90m bpd x $140 = a $12.6trillion industry.

As no one seems to be disputing the 70% speculator factor, that's $8.8t. At 100:1 leverage thats a $12.6t industry controlled by an investment of $88billion.

That's an industry about the size of the US GDP controlled by speculative interests. 

Correct me if my maths is wrong as I don't invest in this market.

Given the wide ranging effect of the price of oil, it seems to me like this is a speculative bubble that will be burst by tighter regulation, regardless of whether it is currently driving up prices... because I can't see how a case can be made to convince consumers and the polliticans that there is no potentel for speculative interests to do so.


----------



## Trembling Hand

Whiskers, spectacular misunderstanding of what a futures contract is. 

Just like the muppets, pollies.


----------



## motorway

Whiskers said:


> Just having a look at the maths, in round figures, world production @ 90m bpd x $140 = a $12.6trillion industry.
> 
> As no one seems to be disputing the 70% speculator factor, that's $8.8t. At 100:1 leverage thats a $12.6t industry controlled by an investment of $88billion.
> 
> That's an industry about the size of the US GDP controlled by speculative interests.
> 
> Correct me if my maths is wrong as I don't invest in this market.




http://money.cnn.com/2008/07/01/mag...hunt.fortune/index.htm?postversion=2008070406




> Circling back to Masters' question - what would happen if speculators turned negative on oil futures, the way the Hunts eventually did on silver - my answer is almost nothing. Futures market speculators did turn massively negative on oil November 2005 when crude was $57 a barrel. What happened? Oil was $61 by year-end. "It's a different ballgame with oil than it was with silver," Tuccille told me in an interview. "As you said, they're not taking delivery."
> 
> The story of the Hunts cornering the silver market confirms what most academics have been saying all along about oil.
> 
> Severin Borenstein, a Berkeley economist and the director of the University of California Energy Institute, contends that in order to push oil prices 30% above fair market value, speculators would have to hoard the equivalent of 2.5 million barrels a day.
> 
> "At that rate," Borenstein writes in a new paper, "in less than a year this secret market manipulator would have built an inventory larger than the entire U.S. Strategic Petroleum Reserve."
> 
> This manipulator would have had to escape the attention of the U.S. Department of Energy and the International Energy Agency, both of which report that oil inventories are declining, not rising. "That much oil," Borenstein concludes, "would be very difficult to hide."
> 
> 
> *Where are the Hunt brothers of today stashing all their oil?*


----------



## Whiskers

Thanks for that post motorway.

I will use the following extract to try to make the point that I have suggested before. 



> The story of the Hunts cornering the silver market confirms what most academics have been saying all along about oil.
> 
> Severin Borenstein, a Berkeley economist and the director of the University of California Energy Institute, contends that in order to push oil prices 30% above fair market value, speculators would have to hoard the equivalent of 2.5 million barrels a day.
> 
> "At that rate," Borenstein writes in a new paper, "in less than a year this secret market manipulator would have built an inventory larger than the entire U.S. Strategic Petroleum Reserve."
> 
> This manipulator would have had to escape the attention of the U.S. Department of Energy and the International Energy Agency, both of which report that oil inventories are declining, not rising. "That much oil," Borenstein concludes, "would be very difficult to hide."
> 
> I sent Masters an e-mail with my findings on the Hunts but have yet to hear back. The question I now have for him - or for anyone else who believes speculators are responsible for $140 oil - is simple:
> 
> Where are the Hunt brothers of today stashing all their oil?




The first point is that most of the anti speculator arguments are based on the assumption, I think incorrectly, that the surplus oil is being stored somewhere. 

A specific point I made in an earlier post is what if some of the oil producers are double dipping, buying contracts to deliver their own oil and then not have to deliver it (to themselves), but help drive up the price for the next round.

Given the sophistication of some past scams and the lack of transparency in the market, can anyone categorically say something like this isn't or can't happen.


----------



## wayneL

Well the FTSE has officially entered a bear market... according to the media's definition that the market must be 20% down.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/07/08/bcnbear108.xml

This leaves me wondering just what sort of market is was to get us here.


----------



## wayneL

We also have another bank, seemingly in dire straits at the moment. 

Bradford & Bingly, a favourite of BTL "investors" is apparently in danger of imminent collapse. Another Northern Wreck fiasco in the making. 

So how about a clever renaming competition? 

I submit Badloan & (Credit)Bingeing.


----------



## explod

Whiskers said:


> Given the sophistication of some past scams and the lack of transparency in the market, can anyone categorically say something like this isn't or can't happen.




Of course, anything can, but I think we are clutching at straws of hope against rsising odds that things are looking very much worse than we would like to accept.


----------



## Whiskers

explod said:


> Of course, anything can, but I think we are clutching at straws of hope against rsising odds that things are looking very much worse than we would like to accept.




There is that element too explod.

But I'm prepared to bet that due to the apparent low level of accountability and transparency in the oil market and the potential at least to corrupt the market, that the regulatous will eventually regulate it down pretty tight to avoid another economic disaster like the subprime credit crunch.

Just to recap the domino effect, given that the markets were recovering from the credit crises and oil is becoming the thorn in the recovery and as the USD appreciates, oil depreciates, add in tighter regulation and I think you have a recipe for big investers jumping out of oil and gold to some extent and back into shares.

It remains to be seen but I'll take bets on the POO being much lower and the stock markets being much higher by years end.


----------



## dhukka

Whiskers said:


> *Just to recap the domino effect, given that the markets were recovering from the credit crises* and oil is becoming the thorn in the recovery and as the USD appreciates, oil depreciates, add in tighter regulation and I think you have a recipe for big investers jumping out of oil and gold to some extent and back into shares.




Sorry, try again. The markets were not recovering from the credit crisis. The credit crisis continued to worsen. There was a temporary haitus and a false view that all was well with the world after the corporate welfare policies of the Fed. Just as the Fed funds rate cuts were supposed to save the day 6 months ago. The market's are slowly working out that the Fed is largely irrelevant.


----------



## Wysiwyg

This journalist has a way with words.Little me waiting for some sort of uptrend to come in but the print news gets worse.Like they`ve gone out their way to find every bit of pessimistic news circling the planet.



> The manufacturing revolution of China and her satellites has been built on cheap transport over the past decade. At a stroke, the trade model looks obsolete.
> No surprise that Shanghai's bourse is down 56pc since October, one of the world's most spectacular bear markets in half a century.






> Come what may, globalisation has passed its high-water mark. The pendulum will now swing back from China to America. The mercantilists will have to reinvent themselves.




Don`t panic.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/07/07/ccview107.xml


----------



## 2020hindsight

Ya know lol - I was happily in cash as of 30 June - 
then I did what these idiots suggested and got back in ... because "selling off and not buying back would probably be criminal"

*The only thing criminal mate, is that flaming advice lol !!. *

This article from 26June refers (wish I'd never researched the matter ) - also posts 2651 to 2653.  
http://www.news.com.au/business/money/story/0,25479,23922142-5013953,00.html



> "So you may sell your underperforming shares* and quickly get back in next year but selling off and not buying back in is probably criminal at this point*," Mr Sebastian said.
> 
> It was a message reiterated by Colonial First State chief equities analyst Hans Kunnen, who urged investors to think long-term.
> 
> He also suggested it would be dangerous to sell out this week in a bid to lock in losses for tax benefits, and *potentially miss the boat the following week*




potentially miss the boat !!!
potentially miss the bludy boat !!!
Nobody mentioned it was the sister ship of the flaming Titanic !!!

Yet again these flaming experts are oh-so-wise ... AFTER the event


----------



## explod

2020hindsight said:


> potentially miss the boat !!!
> potentially miss the bludy boat !!!
> Nobody mentioned it was the sister ship of the flaming Titanic !!!
> 
> )




There there old pal, some of us have, against very hostile opposition, warned against the guru's and the distorted spun out press for 12 months or more.

But its ok 2020, we hang in together, its what makes ASF the best thing I know.


----------



## explod

And the signs just keep getting worse.  How much longer before the very real correction gets going.



> Jim Sinclair’s Commentary
> 
> “Hello, I am from the government here to help you.” Sure!
> 
> We're All Homeowners: Nationalization of Fannie, Freddie Unavoidable
> Posted Jul 08, 2008 12:09pm EDT by Aaron Task in Investing, Recession, Banking
> 
> Fears about Fannie Mae and Freddie Mac retreated somewhat Tuesday after their federal regulator, OFHEO Director James Lockhart, said new accounting rule changes should make "no difference in the risks of the two firms."
> 
> On Monday, Freddie and Fannie shares plummeted after a Lehman Brothers analyst said a new FASB rule could require the two firms to write-down as much as $75 billion.
> 
> Rather than the accounting rules, what's really got investors spooked is a growing realization the government will have to nationalize Fannie and Freddie, says Kevin Depew, executive editor of Minyanville.com.
> 
> The two mortgage lenders are simply too big to fail and too critical to the housing market, Depew says. Given Fannie and Freddie own or guarantee 50% of all housing debt, according to the WSJ, continued stress on their balance sheets means higher borrowing costs for the firms, and ultimately higher mortgage rates for individuals. It also means another round of write-downs for the battered financial sector generally, which owns a lot of Fannie and Freddie-backed paper.
> 
> But nationalizing the firms, each created by an act of Congress, would mean a wipeout for equity holders, who have already seen their holdings decimated in the past year.
> 
> More…


----------



## Aussiejeff

2020hindsight said:


> Ya know lol - I was happily in cash as of 30 June -
> then I did what these idiots suggested and got back in ... because "selling off and not buying back would probably be criminal"
> 
> *The only thing criminal mate, is that flaming advice lol !!. *
> 
> This article from 26June refers (wish I'd never researched the matter ) - also posts 2651 to 2653.
> http://www.news.com.au/business/money/story/0,25479,23922142-5013953,00.html
> 
> 
> 
> potentially miss the boat !!!
> potentially miss the bludy boat !!!
> Nobody mentioned it was the sister ship of the flaming Titanic !!!
> 
> Yet again these flaming experts are oh-so-wise ... AFTER the event





Well, *confusion* about where the market might head is rife ATM among "so-called" market experts, economists and media gurus. The US market response overnight (pure speculatory move?) is probably yet another prime example of headless chooks running around the pen.... 

As far as the media goes, on Bloomberg today for instance, we have two articles side by side - one claiming *"U.S. raises oil, gasoline price forecasts on strong demand and supply concerns"* yet the other claims *"Oil tumbles more than $5 on speculation slowing economies will curb demand"*.

Hahaha! Take your pick!


----------



## wayneL

explod said:


> And the signs just keep getting worse.  How much longer before the very real correction gets going.



Oooo-ahhhh!

The start of a string of nationalizations across the Anglo economies (starting of course with Northern Wreck)?

As I type this I'm watching the news; one commentator said "it's Armageddon".  Very very bearish all round. Showing building sites where all activity has stopped, empty High Street shops, banks in deep doo-doo etc.

I can hear the sound of wailing and gnashing of teeth through the walls of my terrace.


----------



## 2020hindsight

explod said:


> But its ok 2020, we hang in together, its what makes ASF the best thing I know.



explod m8, lol - or praps that's "we'll be hung out together" ...  - to dry that is !!
PS I'm a long term investor at the moment  - a VERY long term investor lol - try Newtonian telscope LONG TERM lol.   
Like, all I know is that the iron ore boys are building wharves just as fast as they can .. whatever..



			
				AJ said:
			
		

> As far as the media goes, on Bloomberg today for instance, we have two articles side by side - one claiming "U.S. raises oil, gasoline price forecasts on strong demand and supply concerns" yet the other claims "Oil tumbles more than $5 on speculation slowing economies will curb demand".
> Hahaha! Take your pick




haha he says !  
haha he says!
lol
And then you find out that this article (below) actually means that the price of local petrol in Wall street means that the car rally next month won't be cancelled or somepin... 

Then again, if these financial experts tried driving a car, they'd be spinning all over the place -   and in contradictory directions 

http://compareshares.com.au/show_news.php?id=S-496449


> Tumbling oil prices fuel Wall St rally
> NEW YORK - Tumbling oil prices has fuelled a rally on Wall Street, etc


----------



## davo8

Whiskers said:


> But I'm prepared to bet that due to the apparent low level of accountability and transparency in the oil market and the potential at least to corrupt the market, that the regulatous will eventually regulate it down pretty tight to avoid another economic disaster like the subprime credit crunch.
> 
> Just to recap the domino effect, given that the markets were recovering from the credit crises and oil is becoming the thorn in the recovery and as the USD appreciates, oil depreciates, add in tighter regulation and I think you have a recipe for big investers jumping out of oil and gold to some extent and back into shares.
> 
> It remains to be seen but I'll take bets on the POO being much lower and the stock markets being much higher by years end.




No. First off, by my reading pure speculative players are less than 30%. With the oil market in contango, there is obviously no incentive to pump oil. The main players manipulating the market (if any) are producers restricting supply. Now that the market has returned to backwardation, I expect prices to stabilise on the "real" figure, which should means a modest drop. Until the next time.

Second, this is not the cause and the credit crunch is nowhere near over. Round 2 is just getting started, with a bunch of bank failures soon. Take your pick: DOW 5,000, Gold $5,000, Inflation 20%, all on the cards. This is going to get really nasty, but slowly.

When will you finally admit you were wrong?


----------



## explod

davo8 said:


> When will you finally admit you were wrong?




That is probably a bit harsh.  Like most people stubble has had faith in and believed the jawboning press who exist by and for the multinational banking interests who's task it is to drag every last cent out of the sheeple.   

And for us fundamentalists it is taking awhile, but as you say is happening now, like Karl Marx (this will bring em out) his timing was a bit out.   The perfect machine wont need humans, except they botched the process somewhere and made too many machines competing against each other.


----------



## explod

From the peak the Dow is now down about 3,000 or a bit oveer 20%.   A little further will see it break support to see it around 10,000    Worth looking at the 10 year and it is clear that the low of 7,500 in late 2002 was when the Fed got serious about cheap money and the low-doc made em all say yeee haaaa   lets party maan.

My point is the US market reflected by the Dow rose from that point on borrowed money (time) so there was no value in the rise and its peak 14,100  at all.   It may be when we get back to 7,500 if the value has returned.   In my view the economic situation has been made much worse because the Fed et. al. stood on their hands and instead of limiting credit and getting themselves back to productive works they took the popular easy way out, print mopre money for the purchase of more porches.   So the situation today is very much worse.   

Yes a 5,000 Dow by Janauary is now a real possibility.   And further weakness is every possibility after that.   Remember the crash of 1929 played out for years after and stayed down for 20 years following. 

This is reality I am afraid, we will have another bad day today and I am sad that because we do not teach economics from 1st grade in our schools a lot of honest hardworking ordinary people are going to suffer a very great deal in the years ahead.


----------



## Muschu

I admit to wondering where some of the DOW predictions in this thread come from.  10 000; 7500; 5000? Why not 4000; 2500; 10?
Personally I'd like to see some analysis, rather than a brief overview on what has occurred at some other time, as I currently get the impression that some posts are largely sentiment-driven.
I suggest stronger evidence, analysis or back-up data would be a welcome attachment to such opinions or predictions.


----------



## Junior

davo8 said:


> No. First off, by my reading pure speculative players are less than 30%. With the oil market in contango, there is obviously no incentive to pump oil. The main players manipulating the market (if any) are producers restricting supply. Now that the market has returned to backwardation, I expect prices to stabilise on the "real" figure, which should means a modest drop. Until the next time.
> 
> Second, this is not the cause and the credit crunch is nowhere near over. Round 2 is just getting started, with a bunch of bank failures soon. Take your pick: DOW 5,000, Gold $5,000, Inflation 20%, all on the cards. This is going to get really nasty, but slowly.
> 
> When will you finally admit you were wrong?




The situation is much worse than this!  I reckon DOW 300, Gold $100,000, Inflation 2000%.  We're all in big trouble, oh, and property will be worthless.


----------



## gfresh

Here is plenty of evidence... 

http://www.financialsense.com/Market/cpuplava/2008/0709.html

The state of the financials:

http://www.financialsense.com/Market/barbera/2008/0701.html

Government Sponsored Enterprises (GSE's):

http://www.financialsense.com/Market/barbera/2008/0708.html

Sorry for quoting from the same source, there are others out there - but I think Barbara and Puplava seem to lay out the magnitude very well, giving information based on charting and real data, not just imaginary figures. 

If the crisis is of greater magnitude than anything that has gone on in the last 30 years, then the results on the sharemarket (a reflection of the overall economy) should also be equal to the worst that has been seen in that time, or even before. Surely anybody must see this clear as day? 

I think many DOW target figures are plucked out of the air, true, but at the current moment in time even if you're taking current levels and discounting for risk, there is a  load of risk out there, which could lead to targets that seem extraordinary now. It's an extraordinary event afterall.


----------



## explod

Muschu said:


> I admit to wondering where some of the DOW predictions in this thread come from.  10 000; 7500; 5000? Why not 4000; 2500; 10?
> Personally I'd like to see some analysis, rather than a brief overview on what has occurred at some other time, as I currently get the impression that some posts are largely sentiment-driven.
> I suggest stronger evidence, analysis or back-up data would be a welcome attachment to such opinions or predictions.




Back up statements for the Dow are many.  A book "Finanacial Armegeddon" has it all.  Published 2006, has been spot on and there are many others.  My analyses if you look at the Dow chart are in line with support points going back 10 years.  I am unable to post my chart.  If someone would oblige I will be only to willing to explain further.

Is it not enough to realise that the US since 2002 have lived on credit and cheap money, and what is happenning now is that "its pay day"    No one will lend the money anymore.   That is very well explained on this thread.

I cannot believe that visitors to this thread do not read the lead up. 

This market slide has been well anticipated by those who have done a bit of reading and checking.   T/A is one thing which I practice but good old fundemantal understanding of the markets is also required for survival.  And  success comes from a lot of research which is hard sustained work.   In fact one of the problems for the US is that they have hand fed the people from the TV and they have become lazy and complacent.


----------



## Muschu

explod said:


> ...A book "Finanacial Armegeddon" has it all.  Published 2006, ......




Interesting title.  I wonder if there is a contrary argument in another book?  

[Quote - gfresh] - I think many DOW target figures are plucked out of the air, true, but at the current moment in time even if you're taking current levels and discounting for risk, there is a  load of risk out there, which could lead to targets that seem extraordinary now. It's an extraordinary event afterall. [/Quote]

Agreed.


----------



## gfresh

I was actually going to post that explod, a quick and dirty 10 year chart of the Dow on a yearly scale...


----------



## kotim

Are we in for rough times, yes but not that bad.  Money is based on credit, and I don't care who you are, when some of the funds who are not broke decide to start investing then the marekt will turn around, people are greedy and when they think they will make some money they will try. 

Something to be mindful of though is value, if you go back to 1987-89 bank stocks such as wbc and ANZ had "pullbacks" for those who are brokers, crash for those who owned them in the order of magnitued of 50-60% from their all time highs.  So bearing in mind that history repeats we could say that th emost the main bank stocks could go down are 50-60%.  

Now for those who remember it was said that wbc etc may have gone down the tubes at those levels.  True or not who knows as it never happened, but at the moment we are down on bank stocks generally speaking of the order of 40% so another 10-20% is certainly possible, historically speaking.

The direction of the stock market in Australia is CONTROLLED y the big banks, if they are going down the market will go down, if they go up, then the market will go up.

I have hopefully learnt lessons form the past and I now know that we cannot have a market going up unless the financials like the banks are going up, so they have to turn first before we can see a general broad based turn around in the market for whatever period of time.  Easiest way to do it is whack on a moving average and YES choose the setting that best curvefits the historical happenings and then use that as a basic guide, or whatever other thing you want.  

When the money starts flowing back into bank shares then money can start flowng back into the other shares.

Thats why the sub prime was and is so bad.  The whole financial system is based on the valuation of the value of the banks and its banking activities

The whole monetary system is a debt based liability system that relies on the extension of credit, effectively our currency is made up of promissory notes. 

These notes, or our currency is only valued on the basis of what some one else things we are worth, so if that perception changes then we are worth more or less as the case may be. 

When you go to a bank and apply for a home loan they obtain power of attorney via your bank agreement/loan and do up a promissory note, that is the 'cash' that forms the deposit in their books which allows them to lend multiples of the loan they extended to you, to other people.

Banks do not lend money, they extend credit, for those who don't understand, go and investigate and you will find that if you added up all the money that a bank has on 'deposit' you will find that it is way short of the money they actually lend.

As I have said elsewhere, the current finacial system operates as an inverted pyramid, meaning there are lots more in the top layers than the bottom layers, so when you start peeling away at the top level and removed a layer, a single layer removed does not sould like much but that single layer has more debtors than the layer below it, so it takes a while before people see the layers coming undone, however because it is top heavy, by the time they see it coming undone, most of the people who it is coming undone for are allready caught and can't escape.

Anyway, we can guess and think all we like, but lets hope too many people do not get too hurt financially.


----------



## Whiskers

explod said:


> That is probably a bit harsh.  Like most people *stubble* has had faith in...




Stubble!... who ya callin stubble! 



> and believed the jawboning press who exist by and for the multinational banking interests who's task it is to drag every last cent out of the sheeple.




Hey... if you believe my biggest critic on this forum, I'm my own 'press'. 



> And for us fundamentalists




I'm a FA (predomanently) too. 

But seriously, the trick is not necessairly in the data or the headlines but the perception that people have... not you or I, but those who are in a position to make decisions to change the ground rules and/or flow of the tide.

I'm not sure exactly how it will all pan out, but what is clear is that since coming back from a week recess in their electorates and a week with their constituents, it seems the no 1 issue on US peoples and politicans minds is to 'fix' the oil price problem.

It also seems they have quite a bilateral commitment to do it ASAP. 

All, I'm warning of is keep the size and proportions of the industry sectors and effect of  regulatory and sentiment changes in context. 

Fundamental regulatory changes are coming to the oil industry on top of already in motion changes in the financial and mortgage sectors in the US. 

These are reputidly going to be the biggest changes to the dynamics of those industries in about 50 years... the net effect designed to stamp out fraud, corruption and systemic manipulation of these previously poorly regulated industries.


----------



## professor_frink

explod said:


> .................
> 
> Yes a 5,000 Dow by Janauary is now a real possibility.   And further weakness is every possibility after that.   Remember the crash of 1929 played out for years after and stayed down for 20 years following......




holy crap! That's a pretty bold statement to make


----------



## wayneL

explod said:


> ...because we do not teach economics from 1st grade in our schools a lot of honest hardworking ordinary people are going to suffer a very great deal in the years ahead.



I don't think it would do them much good to be honest.

What they teach in universities these days is perverted Keynesian rubbish and the sort of thinking that got us into the trouble we are in.

Only the Austrian school has any hope of helping folks work out what is happening, and unfortunately, it is passed over by they who control the curriculum.


----------



## explod

wayneL said:


> I don't think it would do them much good to be honest.
> 
> What they teach in universities these days is perverted Keynesian rubbish and the sort of thinking that got us into the trouble we are in.
> 
> Only the Austrian school has any hope of helping folks work out what is happening, and unfortunately, it is passed over by they who control the curriculum.




My Grandchildren are now 18 to 22 years.  A few years ago I gave them all a copy of Robert Kyosakis, Rich Dad Poor Dad for teenagers.  It is fairly basic but has done wonders for them.   Not 100% strike of course but they are so switched on compared to peers that I am very pleased with the focus I mentor.


----------



## wayneL

explod said:


> My Grandchildren are now 18 to 22 years.  A few years ago I gave them all a copy of Robert Kyosakis, Rich Dad Poor Dad for teenagers.  It is fairly basic but has done wonders for them.   Not 100% strike of course but they are so switched on compared to peers that I am very pleased with the focus I mentor.




Yes family should help. But most are as deluded (because of their education) about economics as Bubblevision.

Here is the very best intro to economics I've seen. http://sigmaoptions.blogspot.com/2007/09/lessons-in-economics.html

I've posted it before, and it is excellent.


----------



## ithatheekret

This last Hindenberg Omen noted here on ASF was a month after that article came out . Nov 07 If I recall correctly .

I ponder whether the latest HO in June will push the boundaries further .

Earnings time , remember the last round ....  ??  , this is where they say oops and then promise the moon again .......................


----------



## dhukka

explod said:


> My Grandchildren are now 18 to 22 years.  A few years ago I gave them all a copy of Robert Kyosakis, Rich Dad Poor Dad for teenagers.  It is fairly basic but has done wonders for them.   Not 100% strike of course but they are so switched on compared to peers that I am very pleased with the focus I mentor.




There is considerable evidence, a lot of it on this website, that Robert Kiyosaki is a fraud. I only read his book recently and it really is a poor read. I think the success of that book is testament to the level of financial illiteracy in the world. 

As someone who did economics in High School and then as an undergraduate degree I agree totally with wayne that most of it is a waste of time. I learnt far more on the job and through my own investigation. Thankfully I found the Austrian school of economics years ago as well. 

I do agree that financial education is seriously lacking. But hey, we don't want people to get too clued up do we? How else can we maintain an edge?


----------



## explod

dhukka said:


> There is considerable evidence, a lot of it on this website, that Robert Kiyosaki is a fraud. I only read his book recently and it really is a poor read. I think the success of that book is testament to the level of financial illiteracy in the world.
> 
> As someone who did economics in High School and then as an undergraduate degree I agree totally with wayne that most of it is a waste of time. I learnt far more on the job and through my own investigation. Thankfully I found the Austrian school of economics years ago as well.
> 
> I do agree that financial education is seriously lacking. But hey, we don't want people to get too clued up do we? How else can we maintain an edge?





Robert Kiyosaki is basically a writer and seller of information.  W D GANN et. al. are of similar vien.  But they did a lot of research and thier information is a very good starting point.   To call him a fraud is a bit rough in my view.   As a successful investor over many years I can say that his basic books for teenagers is very useful, what other easily acquired information is available .  Not everyone can go and do economics.  

Each to his own but to write someone off as a fraud without some backing up is bad.  I have noted comments on this site against Kiyosaki by others also, and they too generalised without facts.

If you have been to Uni as you say I'd have thought it automatic for you to substantiate your assertions.


----------



## Whiskers

explod said:


> If you have been to Uni as you say I'd have thought it automatic for you to substantiate your assertions.




Here, here.


----------



## dhukka

explod said:


> Robert Kiyosaki is basically a writer and seller of information.




Agreed, however Kiyosaki claims he is much more than just a bookseller and the vast majority of his claims about his investing forays are dubious at best. There is very good evidence that rich dad  never existed. 





explod said:


> Each to his own but to write someone off as a fraud without some backing up is bad.  I have noted comments on this site against Kiyosaki by others also, and they too generalised without facts.
> 
> If you have been to Uni as you say I'd have thought it automatic for you to substantiate your assertions.




Mate, read the website I linked. There is overwhelming evidence to back up what I said. Anyone with experience of financial matters would find Kiyosaki's book very thin. It starts out allright talking about investing in income producing assets which is fine. But it never gets any further than that. His stuff on investing in the stockmarket is puerile at best.


----------



## Muschu

explod said:


> My Grandchildren are now 18 to 22 years.  A few years ago I gave them all a copy of Robert Kyosakis, Rich Dad Poor Dad for teenagers.  It is fairly basic but has done wonders for them.   Not 100% strike of course but they are so switched on compared to peers that I am very pleased with the focus I mentor.




Does anyone recollect an ABC progam [4 Corners?] of RK's relationship to "Money and You"?  To my memory it was not good! And that is being nice. Might be worth researching.


----------



## dhukka

Whiskers said:


> Here, here.




Oh good, the peanut gallery has arrived.


----------



## davo8

Muschu said:


> I admit to wondering where some of the DOW predictions in this thread come from.  10 000; 7500; 5000? Why not 4000; 2500; 10?
> Personally I'd like to see some analysis, rather than a brief overview on what has occurred at some other time, as I currently get the impression that some posts are largely sentiment-driven.
> I suggest stronger evidence, analysis or back-up data would be a welcome attachment to such opinions or predictions.




Glad you asked. I have no idea what the final figure will be, but here are some possible ideas.

First, a typical severe bear market drops around 40% (1939, 1970, 2000). That sets a target of 8,400. A monster bear (1929) drops over 80%. That's under 3,000. As well, a severe bear market has often left the DOW below the price of gold. Maybe they'll meet in the middle at 5,000.

There is no chart that can tell you what will happen. Read the blogs and the experts, but NEVER the main stream media. Try rgemonitor.com, leap2020.eu and dollarcollapse.com, but there are plenty more. This is a once in a lifetime event, and it's really, really bad. Think about return OF your capital, not return ON your capital.

October could be fun. Not.


----------



## Trembling Hand

Whiskers here is one for you to read and ignore. A commodity hedge fund that has lost money recently. Why because he wasn't manipulating the price up.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a592_W25efSM&refer=home

For every punter long there is someone short. Of course you will ignore that fact as well.


----------



## Miner

davo8 said:


> Glad you asked. I have no idea what the final figure will be, but here are some possible ideas.
> 
> First, a typical severe bear market drops around 40% (1939, 1970, 2000). That sets a target of 8,400. A monster bear (1929) drops over 80%. That's under 3,000. As well, a severe bear market has often left the DOW below the price of gold. Maybe they'll meet in the middle at 5,000.
> 
> There is no chart that can tell you what will happen. Read the blogs and the experts, but NEVER the main stream media. Try rgemonitor.com, leap2020.eu and dollarcollapse.com, but there are plenty more. This is a once in a lifetime event, and it's really, really bad. Think about return OF your capital, not return ON your capital.
> 
> October could be fun. Not.





Good note
But why October would be fun (even it was a metaphorically said) and not July August. Is it going to be worst then ? 

Regards


----------



## Bushman

Thought you long-term Fed critics on this thread would enjoy this article: the heroes of Wall Street inc Paulson. LOL.

http://www.marketwatch.com/news/sto...-99E2-4775-A98D-11F0EC001467&dist=SecMostRead


PS: On undergraduate education, I agree with what has been said about Commerce degrees to an extent. It was more an excercise in 'ticking off the boxes' to become employable. Most of the real learning I have done has been 'on the job' so to speak. There is however no better degree than an Arts degree to learn about human nature. Yet business/financial employers mostly recognise Commerce degrees in Australia? My history major has provided me diddly squat from a dollar point of view. Wouldn't swap it though. 

It is a superficial world and maybe what we are experiencing is symptomatic of that.


----------



## sassa

Bushman said:


> Thought you long-term Fed critics on this thread would enjoy this article: the heroes of Wall Street inc Paulson. LOL.
> 
> http://www.marketwatch.com/news/sto...-99E2-4775-A98D-11F0EC001467&dist=SecMostRead




The "critics" will gain pleasure and satisfaction by reading the comments after the article.


----------



## explod

sassa said:


> The "critics" will gain pleasure and satisfaction by reading the comments after the article.




Who are the critics?

I gain no pleasure from either article or the following comments.  The article of course fails because no content/substance or reasoning is offerred.

I am passionate because I feel for the millions of honest hard working people who are going to suffer for many years due to the inept policies of the US Govt' and the greed of Wall Street.

There is no place for anyone to be smug, what is unravelling is dreadful and will begin to effect a nabour near you.


----------



## dhukka

Bushman said:


> Thought you long-term Fed critics on this thread would enjoy this article: the heroes of Wall Street inc Paulson. LOL.
> 
> http://www.marketwatch.com/news/sto...-99E2-4775-A98D-11F0EC001467&dist=SecMostRead
> 
> 
> PS: On undergraduate education, I agree with what has been said about Commerce degrees to an extent. It was more an excercise in 'ticking off the boxes' to become employable. Most of the real learning I have done has been 'on the job' so to speak. *There is however no better degree than an Arts degree to learn about human nature. Yet business/financial employers mostly recognise Commerce degrees in Australia? My history major has provided me diddly squat from a dollar point of view. Wouldn't swap it though.
> *
> It is a superficial world and maybe what we are experiencing is symptomatic of that.




Great post! Probably because  it resonates with me personally. I came straight out of High School went straight into a business degree at Uni and then straight onto the financial world treadmill. It wasn't until I'd thrown it all in and went walkabout that I began to read history and philosophy which filled in a lot of what I had been missing. How can you know where you're going if you don't know where you've been?


----------



## pepperoni

dhukka said:


> Great post! Probably because  it resonates with me personally. I came straight out of High School went straight into a business degree at Uni and then straight onto the financial world treadmill. It wasn't until I'd thrown it all in and went walkabout that I began to read history and philosophy which filled in a lot of what I had been missing. How can you know where you're going if you don't know where you've been?





Agree too ... did commerce and law degrees got whisked into big law firms where I finally actually learnt about the law.

And whilst I have always worked on major projects and PPPs I now know virtually nothing about finance compared to people who work in the business every day.


----------



## davo8

kotim said:


> The direction of the stock market in Australia is CONTROLLED y the big banks, if they are going down the market will go down, if they go up, then the market will go up.
> 
> When the money starts flowing back into bank shares then money can start flowng back into the other shares.




Most of what you say is true, except this bit. There has been a fundamental shift. It's isn't going to happen like this.

For 100 years or more banks were dead boring. Low P/E, good dividends, mature core blue chip stocks, but not for growth.

Over the past 30 years, banks changed. They learned how to create leverage beyond the limits of fractional reserve banking. During the past 15 years, they and the whole finance sector learned how to create and sell debt at higher and higher leverage, and that translated into insane returns for banks and REITs. RMBS, CMBS, CDS, all that stuff made heaps of profits.

But it's all dead now. No-one is writing those instruments now and no-one would buy them if they did. Banks and investors worldwide are in the process of losing at least $1.6 trillion (IMF). Finance as a primary driver of stock markets is over. Finis. Caput.

So what comes next? My guess is energy, agriculture, mining, commodities. I've sold all my banks and REITs and I'm looking for the next big thing. If there isn't one, we're all just history.


----------



## davo8

Miner said:


> Good note
> But why October would be fun (even it was a metaphorically said) and not July August. Is it going to be worst then ?




My reading from Jan pin-pointed Aug-Sep as the crisis point, so July is a little early. Historically something like 8 out of 10 of the worst moves have come in October. Maybe this one will too.

I've been posting to this thread for months just trying to get a few people to realise how serious the position is and how bad things could get. Within the next few months we should know if it really is "the big one". The worst is definitely still to come.

BTW I think the Aussie real estate market is going to crash too, for similar credit-related reasons. That should become clearer in the next few months too.


----------



## Bushman

dhukka said:


> How can you know where you're going if you don't know where you've been?




Ain't that the truth. It is an imprecise guide but it is the best guide we have. 

The empire cycle is resonating today as it has since antiquity. Innovate to survive, survive and become satiated, satiation leads to stability and wealth creation, wealth breeds complacency and the cracks begin to appear.  

Its been a golden run for the New World since colonialism ate itself in the 1940s and the old world finally passed on the baton. Now the new world is inexorably passing the baton on to the ancient civilisations of the east that originally shaped the philosophy of the old world. Nice symmetry there.  

So can the Yanks innovate again, wean itself from the oil fields of the Gulf and ATM of Wall Street, and get back to the basics that made it strong?  
They seem to want to build a neo con empire so it might not be such a bad thing if they don't.


----------



## pepperoni

Speaking of the east, I think islamic banking leads to almost full reverves.  Quite a contrast to aussie 20x reserve banks.


----------



## Whiskers

Trembling Hand said:


> Whiskers here is one for you to read and ignore. A commodity hedge fund that has lost money recently. Why because he wasn't manipulating the price up.
> 
> http://www.bloomberg.com/apps/news?pid=20601087&sid=a592_W25efSM&refer=home
> 
> For every punter long there is someone short. Of course you will ignore that fact as well.




Oooh TH, that's from Bloomberg. Is that source more reliable than CNNNNNNNN or my local footy team.  

Seriously though, apples and oranges... to the specific case I postulated.


Big week this week. Freddie and Fannie rescued. The financials are not drawing near as much short term loans from the Fed under the rescue deal the last couple of weeks and oil looking toppy to me.

Futures set for strong open... but with nothing much on the economic calender tonight it's probably a good bet the US will fade out pretty badly in the last hour.


----------



## ithatheekret

dhukka said:


> How can you know where you're going if you don't know where you've been?




A map , a set of eyes and a rear vision mirror would help ...........

then again Indy Mac had all of the above and it still hit Alt-A and ended up getting deleted by the OTS  now they'd best pray the Fed. Deposit Insurance Corp. has enough stuffed under the mattress to cover the losses .

Time for Hank to get the cheque book out again !


----------



## ithatheekret

I thought Unc might like to see this one : 

(Hyper)-Inflation, Deflation, HOCG and LOCG


By Francis Schutte .

http://seekingalpha.com/article/84819-hyper-inflation-deflation-hocg-and-locg?source=d_email

It occurs to me more and more often that people have not the slightest idea of what inflation and deflation are, and what the consequences are for the investor. Also, few understand the difference between Inflation and what is defined as "hyperinflation".

The definitions of inflation and deflation will be skipped as these have been explained in detail earlier under academics.  It is important to remember that these design and excessive growth and decrease in money and credit and NOT rising or falling prices. Price evolution has to bee seen as  a possible consequence.

In economics, hyperinflation is inflation that is "out of control," a condition in which prices increase rapidly as a fiat paper currency loses its value. Formal definitions vary from a cumulative inflation rate over three years approaching 100% (Today, many goods exceed the 100%) to "inflation exceeding 50% a month." In informal usage the term is often applied to much lower rates. As a rule of thumb, normal inflation is reported per year, but hyperinflation is often reported for much shorter intervals, often per month.

The definition used by most economists is "an inflationary cycle without any tendency toward equilibrium." A vicious circle is created in which more and more inflation is created with each iteration of the cycle. Although there is a great deal of debate about the root causes of hyperinflation, it becomes visible when there is an unchecked increase in the money supply or drastic debasement of coinage, and is often associated with wars (or their aftermath - Iraq, Afghanistan), economic depressions, and political or social upheavals.

The reason why it can be so hard to ‘understand’ we have (hyper)inflation is that in a (hyper)inflationary cycle and certainly in the initial stage NOT ALL PRICES RISE. Some prices, by name of these of the HOCG will even tend to fall.



As explained by Von Mises, as a result of Fractional Reserve Banking, fiat money and inflation, at a certain point, the prices of HOCG (high order capital goods) tend to fall and those of LOCG (low order consumer goods) tend to rise. In other words, we have a (hyper)inflation cycle but we still see some prices fall. We have (hyper)inflation and deflation at the same time. Rather confusing.

The shift from HOCG to LOCG exists because of a misallocation of funds. In other words, funds that should have been used to improve the agriculture and to increase the energy supply, were misallocated to for example the real estate market, and were used in the dot.com and stock market bubbles. However, because of oversupply, at a certain point, the demand for HOCG dries up and as suppliers/manufactures  scramble to sell the overstock, interest rates go up and prices of HOCG come down.

Meantime, no or little attention has been paid to the LOCG. No new investments nor research were made (because of the misallocation of funds there was no incentive), existing installations/plants became inefficient and outdated. Politicians did not understand the problem either and used the mass psychology to earn votes by not allowing the construction of nuclear power and clean coal plants, by making it difficult and even impossible to drill for more oil and to built new petrochemical refineries. No attention was given to the failing supply of LOCG. At a certain point, we see a growing disequilibrium between supply and demand (Peak oil and food commodities) and we end up having an inelastic supply (peak oil) and a rising or stable demand for the LOCG . Prices start rising at an abnormal rate. There is inflation and sometimes hyperinflation.

Important is to understand that this is the direct result of Fractional Reserve Banking and fiat money creation by the banks and political authorities. In other words, they are at the very origin of the evil they are blaming the speculators for today.

A recession and depression starts and last until all of the misallocated funds have been recycled correctly into the LOCG. The longer the cleaning cycle is delayed by subsequent credit injections  by banks and politicians (more fiat money, more misallocations and more inflation), the stronger and pain fuller the cleaning action and potential crash of the HOCG and the recession and depression.

If authorities really mean to stop inflation, they should stop Fractional Reserve Banking and the creation of fiat money.


----------



## zt3000

davo8 said:


> My reading from Jan pin-pointed Aug-Sep as the crisis point, so July is a little early. Historically something like 8 out of 10 of the worst moves have come in October. Maybe this one will too.
> 
> I've been posting to this thread for months just trying to get a few people to realise how serious the position is and how bad things could get. Within the next few months we should know if it really is "the big one". The worst is definitely still to come.
> 
> BTW I think the Aussie real estate market is going to crash too, for similar credit-related reasons. That should become clearer in the next few months too.




LoL

there is little to negligable sub-prime problems in Australia. Australian banks are well positioned, they are not trying to raise capital or cutting dividends. They are buy up,

Westpac and St George, NAB ABN Amro Investment Banking Arm

cmon people lol

be positive lol


----------



## wayneL

zt3000 said:


> there is little to negligable sub-prime problems in Australia.


----------



## explod

ithatheekret said:


> I thought Unc might like to see this one :
> 
> (Hyper)-Inflation, Deflation, HOCG and LOCG
> 
> 
> By Francis Schutte .
> 
> http://seekingalpha.com/article/84819-hyper-inflation-deflation-hocg-and-locg?source=d_email
> 
> It occurs to me more and more often that people have not the slightest idea of what inflation and deflation are, and what the consequences are for the investor. Also, few understand the difference between Inflation and what is defined as "hyperinflation".
> .




Thank you Itha,  the content is a LOCG and the paste is still in the HOCS catigory.

cheers xplod


----------



## Sean K

Jim Rogers gives a pretty bullish interview on Bloomberg.

Worth a watch/listen. 

http://www.bloomberg.com/index.html?Intro=intro3


----------



## sassa

Thought this quote was more appropriate in this thread regarding the Fannie & Freddie problem than in Thought For The day.
When the wolves are howling,crying "angels" only works for a short time.


----------



## kingbrown

*The Great Crash of 2008 ?*

Carefull what you wish for guys !
As there is very few that are going to benefit from this 
i have also been prudent but hard times may soon be upon us 
Many people are starting to really worry and yes some deserve it but not all 

For me iam up on the fence 
Pulled out of the market 1 month ago 
Now looking pulling my super out also 
I know brokers who have done the same 
times me by a million or 3 and we have are going to have a problem  

if we are not hit by a sledge hammer 1st We will probably in the end talk ourselves into a recession  

see todays news 

Re Aussie Property market set to crash 

http://www.businessspectator.com.au/bs.nsf/Article/Property-will-tumble-GJRJT?OpenDocument

then more good news 

http://www.business24-7.ae/Articles/2008/7/Pages/07152008_2a7cafb78b7f441eac9685251b467102.aspx

The measures announced by US Treasury Secretary fell short of full nationalisation (though that option remains open), but the package is nonetheless so radical that it amounts to a last-ditch solution by the American financial establishment. By seeking US Congressional approval for unlimited authority to lend money to Freddie and Fannie, and give them access to emergency Fed funds while Congress contemplates its reaction, the *Treasury has circled the wagons and signalled its determination that the US mortgage market will be the final – and they hope decisive – battle to head off the* *looming prospect of the Great Crash of 2008*.


more again ?

*Recession looms as Spain crumbles*

The eurozone is tipping into a deeper downturn than America itself despite the tremors in the US mortgage industry, and may already be in full recession for the first time since the launch of the single currency.
Industrial production for the EMU bloc fell 1.9pc in May, according to fresh *Eurostat data. It is the sharpest one-month decline for the region since the exchange rate crisis in 1992. Officials in Berlin have warned that Germany's economy could contract by as much as 1.5pc in the second quarter as export orders crumble.*

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/07/15/ccspain115.xml


----------



## tech/a

Europes as sick as a dog.Even early in the piece.

Tonight's going to be interesting.
That capitulation that most wish to see---a shock bottom---looks imminent!


----------



## explod

tech/a said:


> That capitulation that most wish to see---a shock bottom---looks imminent!




I have not noted anyone wishing a servere market correction.  It is a dreadful situation that is unfolding.

Is there some ill feeling against those who examine the fundamentals of markets and form the view that it is all going to get worse.   On my take it will get very bad before it gets better, it is not my wish, just my view.


----------



## davo8

zt3000 said:


> there is little to negligable sub-prime problems in Australia. Australian banks are well positioned, they are not trying to raise capital or cutting dividends. They are buy up,




This has little or nothing to do with sub-prime -- that was just a trigger.

There is a world-wide credit crunch. Everybody who has been making money out of selling debt is going to get hurt as the leverage unwinds. That means our banks and REITs too.

I sold ANZ at $26. It's $17. I'd buy it at about $12. Banks are a buy on a forward (not historical) P/E of around 8-10. They are not there yet.

This is NOT the bottom. [Repeat after me...this is NOT the bottom.]


----------



## sassa

Another big day coming for the Dow,Nasdaq and S&P.Futures are spiralling!!Financials to lead the way-JPMorgan beats analysts(love 'em) forecasts,Merril Lynch to report after market closes( and this will mean another boost for tomorrow's market).Nokia beat analysts' forecast as well as Coca Cola.Forget about any other figures coming out today(jobless etc).The market is hearing what it wants-positives.The Freddie,Fannie problem is passe-that was last Friday and Monday.
The Government sent a message to the shorters of the financials yesterday-get covered.They did-a great rally. 
Nearly time to get fully back into the market with a deal of leverage to take advantage of the profits to come.
I think?I am not quite sure.


----------



## pepperoni

sassa said:


> Another big day coming for the Dow,Nasdaq and S&P.Futures are spiralling!!Financials to lead the way-JPMorgan beats analysts(love 'em) forecasts,Merril Lynch to report after market closes( and this will mean another boost for tomorrow's market).Nokia beat analysts' forecast as well as Coca Cola.Forget about any other figures coming out today(jobless etc).The market is hearing what it wants-positives.The Freddie,Fannie problem is passe-that was last Friday and Monday.
> The Government sent a message to the shorters of the financials yesterday-get covered.They did-a great rally.
> Nearly time to get fully back into the market with a deal of leverage to take advantage of the profits to come.
> I think?I am not quite sure.




We will get 50 more of these dead cat bounces if this irrational exuberance continues.


----------



## sassa

I should have read the signs-"Merril to report after the bell."Of course it would mean that the market rally could not stand a poor result being reported before the bell or during trading.To counteract this bad news,Citi reports BEFORE the bell tomorrow.No betting on their outcome(beat analysts' estimates).The fillip for another rally in the financials.Perhaps,the bottom has been reached.


----------



## Bushman

What a dog Merril's have proven to be. Could not happen to a 'nicer' organisation. What is it - another $4.6b write down with up to another $10b to go? Amazing. They are starting to sell the farm to stay afloat now- Bloomberg and their financial data arm. What bets they flog off Black Rock too. A bitter pill... 

I am going to go out on a limb and say the JP Morgan result is more significant to sentiment as ML is a know CDO basket case? Citi will have the greatest impact on sentiment. Bottom is closer but the housing market will need to stabilise for this never ending bear/dead cat bounce cycle to end. What's it been now - 12 months since the intial July 07 sell down?


----------



## explod

Bushman said:


> Bottom is closer but the housing market will need to stabilise for this never ending bear/dead cat bounce cycle to end. What's it been now - 12 months since the intial July 07 sell down?




I wonder.  The slow down in spending, higher unemployment, oil and its impact on airlines, travel, getting to work.  Is not the worst still to be reported in the coming year or two in the US and elsewhere for that matter?


----------



## explod

And this from Jim Sinclair today as another cap off:-




> Dear CIGAs,
> 
> DERIVATIVES, BANKS, AND BAILOUTS
> 
> We at Guild Investment Management have mentioned the problems with derivatives 31 times in the five years between 2003 and the present in our market commentaries, yet people did not listen.  Now, many people call us who own bank stocks and banking related instruments wondering what to do.  Our opinion is to sell into rallies U.S. banking related stocks. There is no reason to own banking stocks in this environment as the problems will continue for years.  In the end, many equity shareholders will be wiped out.
> 
> If the U.S. Fed, U.K. central bank, and other central banks continue to protect all of the institutions, all of the shareholders, and all the depositors, the crisis will actually be more prolonged and more difficult to come out of than if they let a lot of the smaller institutions go broke.
> 
> Thus far, it is obvious that the Fed and the U.S. and U.K. administrations want to make the government the lender of last resort and make it a world where mistakes are not punished.  We go on record saying that this is a mistake...the example of Japan comes to mind.
> 
> The Japanese market peaked in 1990 at about 40,000 on the Nikkei 225 just as their banking crisis began.  Japan did not confront their banking crisis. They kept a lot of 'zombie' banks alive and did not write off the bad loans.  The banking system languished and the Japanese stock market bottomed down over 75% from its highs when it got to about 9,000 in 2003.  Today it is still only at 13,000.
> 
> Is that what you would like to see in the U.S. and Europe?  If so, then go ahead and continue with what looks to be the current Federal Reserve and U.S. Treasury strategy of keeping weak institutions operating 'as if' they were healthy and able to lend.


----------



## tech/a

*XAO*------  *-45pts*

Is it possible that we Aussies recognise a bulltrap!


----------



## IFocus

Funny just thinking haven't heard of the old favorite "Plunge Protection Team" for awhile maybe  they finally run out of funds or were at best just a myth.

Tech the SPI isnt buying it today either......yet


----------



## explod

IFocus said:


> Funny just thinking haven't heard of the old favorite "Plunge Protection Team" for awhile maybe  they finally run out of funds or were at best just a myth.




As old Sir Joh would say "Don't you worry about that"  the Plunge Protection Team is alive and well,  as in posts earlier today, timing the release of news after the market, and the suggestion they will have news for Monday before the market, and suppression of the gold and silver prices to protect the perception the US dollar is strong.


----------



## pepperoni

Doesnt matter if credit crisis is over or not ... the outlook is shocking on all fronts ... the market PE should be worse than average ... should be worse than what it is.  Indefinitely.


----------



## davo8

pepperoni said:


> Doesnt matter if credit crisis is over or not ... the outlook is shocking on all fronts ... the market PE should be worse than average ... should be worse than what it is.  Indefinitely.




Absolutely. Credit crunch and consumer collapse hits everything. The worst is yet to come. Banks, builders, developers, big box retailers, malls, airlines, automotive, you name it. 

Repeat after me: this is NOT the bottom.


----------



## sassa

> The following is offered by someone I have tremendous respect for, someone who has run major trading operations on both sides of the Street. If there's a smarter fellow in finance, I have yet to meet him. You may not agree with his view but as I’ve learned over the last twenty years, it should definitely be respected.
> 
> Two Plus Two Equals Four
> 
> Financial companies are desperate for capital but their stock prices are so low that any issuance would be dilution death for the companies. The government is desperately trying to keep the financial system together. Add that up and you get the possibility of a great manipulation.
> 
> How would the government engineer a rally in financial stocks so that these companies can sell stock to raise capital at a reasonable or at least palatable dilution level?
> 
> It might go something like this. Since financial stocks are in such trouble they have heavy short interest; this is natural and well known and can be used to their advantage. A clever “berry” might think to introduce confusing rules that raise the cost of borrowing short stock and temporarily confuse shorts into covering and not shorting more. And this is precisely what the SEC did.
> 
> It seems innocuous to most folks, but it put stock loan desks and dealers in complete disarray. New short sellers could find no stock to borrow and many existing short sellers were forced to cover as the technical rules forced allocation of loans at much higher costs.
> 
> For example, the rebate rate on Fannie Mae (FNM) the day before the SEC announcement was 1%; the day after it was -5%. Many who were short the stock were forced to cover, thus driving the stock price up.
> 
> But this alone would only drive stock prices up so much. The clever berry needs a catalyst, one that would force panic buying into now truncated supply.
> 
> It just so happened that the new SEC rules came conveniently the day before many of these financial companies were to report earnings. If just some how these earnings were really good the match would be lit on the kindling.
> 
> So far banks have miraculously come through on their end of things. Wells Fargo (WFC) and JPMorgan (JPM) reported better than expected beaten down earnings. Things must be getting better just as the companies need capital.
> 
> What a coincidence.
> 
> But if you look at how the banks “beat” their earnings the coincidence becomes clear. WFC took the unprecedented step of extending charge-off acknowledgment from 120 days to 160 days. This allowed the bank to move less capital to loan loss reserves and report better than expected horrible earnings. And JPM was even more aggressive. It actually lowered its loan loss reserves quarter to quarter.
> 
> The list of financial companies where shorting regulations are being enforced/enhanced is precisely the banks and dealers (and FNM/Freddie Mac (FRE)) that have access to the Fed's balance sheet (dealers through the PDCF and FNM/FRE through the recently-allowed access to the discount window). So we can speculate on the nature of the ''coincidence'': Perhaps the Fed is getting worried about the value of all that collateral these dealers have posted to the Fed balance sheet and must boost the capital of these companies to protect that value.
> 
> And now on cue FRE, a $5 billion market capitalization company wants/needs to issue $10 billion in new stock? Doesn’t that sound a little crazy? Well get ready for others to do the same because the banking system needs capital desperately and the government is there to help



http://www.minyanville.com/articles/bears-asia-contagion-google-GOOG-wfc/index/a/18096


----------



## sassa

> We have two of the largest and most important financial institutions writing off an additional 16.7 billion in writedowns. As of a few days ago and according to an on-screen graphic from Bloomberg total worldwide writedowns are now over $400 billion dollars. Most of those are from the US and Europe -- which leads me to wonder why Asia hasn't reported a lot of losses yet. Either they were smarter than the average bear or we have a wave of bad news from another continent on the way.
> 
> We have a government sponsored entity saying it is thinking about selling $10 billion in equity. This is on top of the Paulson plan which calls for an unlimited line of credit for these two companies in addition to letting the Treasury purchase Freddie and Fannie stock in the open market. Yet we are continually told the GSEs are in good shape. For a company that is in good shape, it sure looks like they are in desperate need of money.
> 
> And then there is Countrywide -- a company under federal investigation. We now know they were selling, well, crap. And that's a huge problem because a lot of the crap that Countrywide sold is backing up bonds in portfolios across the globe.
> 
> But over the last few days we've seen the financials rally because they're a great place to put money?



http://www.bonddad.blogspot.com/


----------



## davo8

sassa said:


> Financial companies are desperate for capital but their stock prices are so low that any issuance would be dilution death for the companies. The government is desperately trying to keep the financial system together. Add that up and you get the possibility of a great manipulation.




This guy is spot on the money. The naked short rules and selective enforcement of regulation SHO are part of a plan to boost specific share prices ahead of a capital raising. Ingenious! I wish I'd thought of that.

Won't help them though. The lift is only temporary. Soon it'll be back to business as usual -- heading for the exits.


----------



## explod

davo8 said:


> This guy is spot on the money. The naked short rules and selective enforcement of regulation SHO are part of a plan to boost specific share prices ahead of a capital raising. Ingenious! I wish I'd thought of that.
> 
> Won't help them though. The lift is only temporary. Soon it'll be back to business as usual -- heading for the exits.




Yep, anything to get over the line for the next US Fed election.   To keep it simple and safe, follow the lead within the gold thread.  

Prescious metals have been so repressed that when they take off following the real collapse of the USdollar, it will be parabolic. 

IMVVHO of course


----------



## Whiskers

davo8 said:


> This guy is spot on the money. The naked short rules and selective enforcement of regulation SHO are part of a plan to boost specific share prices ahead of a capital raising. Ingenious! I wish I'd thought of that.
> 
> Won't help them though. The lift is only temporary. Soon it'll be back to business as usual -- heading for the exits.




Two points davo8.

Wasn't the 'NO naked shorts rule' introduced about the time of the great depression and only lifted mid 2007 before it was selectively reintroduced again recently? It could be reasonably argued that lifting this rule exasabated the fallout from the sub-prime mortgage problem.

Secondly, I don't know what the numbers were last week... but I think it was the week before, Wall St firms had stopped borrowing from the Fed and Merchant Banks had also been cutting back in their 'emergency' borrowings.

Seems to me that a few people abused the relaxation of some of the rules and made a motza of a ballz-up for everyone... demonstarting that they cannot be trusted to do the right thing and forcing extra regulation right across the board.


----------



## davo8

Whiskers said:


> Wasn't the 'NO naked shorts rule' introduced about the time of the great depression and only lifted mid 2007 before it was selectively reintroduced again recently? It could be reasonably argued that lifting this rule exasabated the fallout from the sub-prime mortgage problem.




1. It was the uptick rule that was lifted. Naked shorts are covered by regulation SHO which was not lifted but has been selectively enforced. 

2. This is not a "sub-prime problem". This is a systemic problem of banks that sold debt to people who couldn't afford it and are now going down the toilet. These market manipulations are desperate measures to persuade people to buy new equity and keep the system together a bit longer.

The reality is that these institutions are worthless. The Bageholt rule says: wipe out equity, sack the managers, give the bond holders a haircut, protect the depositors, use the Fed to provide liquidity against a run. The Japanese rule says: bankers look after other bankers, the system looks after its own.

I wonder what will be the next disaster. This is NOT the bottom.


----------



## subaru69

This quite long (http://www.compareshares.com.au/zeal52.php) but it does pose a method of analysis that I was not familiar with, ie Long Valuation Waves.

US markets
The worst is yet to come
July 21, 2008
Adam Hamilton, Zeal Research

In recent weeks a major secular milestone was achieved in the US stock markets. But because of all the distracting market turbulence, very few investors are even aware it happened. And truth be told, even if the markets weren’t plunging I still suspect only the most diligent students of the markets would have any inkling. 

The venerable Dow Jones Industrial Average, or Dow 30, finally returned to fair value as measured by its price-to-earnings ratio. This is major secular milestone because it marks the halfway point in the 17-year secular bear in which the Dow 30, and the broader US stock markets, have been mired since early 2000. Understanding the implications of this milestone is exceedingly important for all stock investors.  


Some background is in order. Throughout history, the stock markets oscillate in great cycles running a third of a century each. These cycles are defined by prevailing valuations, the P/E ratios of the broader US stock markets. The stock markets go from undervalued, to overvalued, and back again over a 34-year span. I call these Long Valuation Waves and you can read all about them in another essay. 

The first half of any LVW is a 17-year great bull market, like we saw from 1982 to 2000. Valuations go from deeply undervalued levels at its start to extremely overvalued levels at its apex. Once the great bull peaks, though, the 17-year great bear emerges for the second half of the LVW. Valuations are gradually whittled away from extremely overvalued levels to deeply undervalued levels. And then like a phoenix this cycle begins anew. 

Now today, since the US stock markets have essentially drifted sideways for 8 years, a decent fraction of contrarian investors are aware of valuation-wave theory. But back in the early 2000s, it was long-forgotten by nearly all. To establish my bona fides in this line of research, I wrote my initial essays on this in December 2001, March 2002, and October 2002 back when thinking this way was heretical and ridiculed. 

Within the second half of an LVW that witnesses a 17-year great bear, the defining characteristic is contracting valuations. The first half of this 17-year period is a mean reversion of index P/E ratios. Valuations go from extremely overvalued levels back down to fair value, reverting to their centuries-old average. With the Dow 30 hitting fair value, this mean-reversion stage of the secular bear is now complete. 

This chart, updated from my October 2002 original one, shows this process visually. It looks complicated, but it is straightforward. The pair of blue lines is the index P/E ratio for the Dow 30. At Zeal we compute these critical numbers, along with the S&P 500’s and NASDAQ 100’s P/Es, once a month and publish them in our monthly newsletter. Watching index valuations is incredibly important for all long-term investors. 

The light blue line is the Dow 30’s simple average P/E ratio. Individual P/E ratios for all 30 component companies are gathered and then averaged. But this measure can be skewed by a relatively small component experiencing a wild valuation anomaly driven by some non-recurring one-time earnings event. Thus I prefer weighting the individual component P/E ratios by each component’s market capitalization. 

The dark blue line is the market-capitalization-weighted-average (MCWA) P/E. The bigger any component company, the more weight its P/E ratio is given. This measure is much harder to skew since earnings anomalies are much less common in the largest components compared to the smallest ones. For the rest of this essay, whenever I discuss P/E ratios they will be MCWA trailing (past 12 months, not estimated future) earnings. 

The red line is the headline Dow 30 itself that you watch every day. The white line is where the Dow 30 would hypothetically be if it traded at fair value, or 14x (pronounced “fourteen times”) earnings. I’ll discuss this fair-value concept in more depth below. Finally the yellow line is the Dow 30’s dividend yield. Slaved to the right axis, 3000 means 3%. Dividend yields are an important secondary measure of stock-market valuations.

Back in early 2000, the Dow 30 traded deep into bubble territory at a stupendously rich 45x earnings! But since then valuations have been gradually contracting, as they always do in secular bears, while the index itself has largely remained flat. By grinding sideways, the markets effectively grant time for corporate earnings to catch up with prevailing stock prices. This drives the valuation mean reversion. 

As valuations contracted over the past 8 years, the fair-value Dow rose. Since the index’s P/E ratio finally hit 14x fair value at the end of June, the fair-value Dow has converged with the actual Dow. Back in 2000, bulls foolishly believed that P/E ratios could stay high forever because we had to be in “A New Era”. But this chart shows how silly it was to believe the bubble hype then and ignore stock-market history. Mania valuations never last. 

This fair-value concept is very important to understand. Why 14x earnings? Over centuries, across many stock markets in many great nations, 14x earnings has simply been the long-term average valuation for common stocks. Sometimes valuations are higher, sometimes lower, but they always oscillate around a secular mathematical average of 14x. While long-established historical validity is enough proof, this number is quite logical too. 

Stock markets exist solely to facilitate capital transfers between those with surplus capital (savers, investors) and those who need capital (debtors in a loose sense, companies). In order to transfer this capital, both sides of the deal need a fair and mutually-beneficial exchange. If capital is too cheap, investors won’t offer it up for investment. If it is too expensive, companies won’t want to “borrow” it. 14x is just right for both parties. 

Interestingly the inverse of 14x earnings is a 7.1% yield. If an investor buys stock at a 14x P/E, it will take the company 14 years to fully earn back the price he paid. Without compounding, this translates to 7% or so. 7% is both a fair rate of return for investors’ hard-earned capital and a fair price to pay by companies who need this capital. All over the world for at least hundreds of years, capital has flowed freely at 14x and 7%. 

Stock markets oscillate around this 14x fair-value level because this is where the markets clear, all investors with surplus capital have the opportunity to invest it and all companies that want surplus capital have the opportunity to procure it. So this fair-value concept for stocks is not only historically verifiable, but it is eminently logical too. After 8 long years of mean reverting, it is exciting to see the Dow fairly valued again. 

This 14x fair-value point is also the anchor from which undervaluation and overvaluation are objectively measured. At half fair value, 7x earnings, stocks are very cheap historically. As soon as you see 7x earnings in the major stock indexes, it is time to throw every dollar you’ve got at the deeply undervalued stock markets. Such levels are only seen at the end of 17-year secular bears, like 1982. 

Conversely double fair value, 28x, is classical bubble levels. Once the major stock indexes trade above 28x earnings, it is time to think about exiting investments and preparing for the end of the 17-year secular bull. If you look at a Long Valuation Wave chart over the last century or so, the importance of 7x, 14x, and 28x index P/E ratios is readily apparent. Stock-market history is crystal clear regarding valuation ranges. 

The implications of the Dow once again hitting 14x earnings today, for the first time since the late 1980s, are profound. Seeing fair value again validates the thesis that we are in a secular bear, where stocks at best trade sideways for 17 years! Since 17 years is such a huge chunk of any investor’s investing lifespan, it is absolutely devastating for wealth creation to be trapped unaware within one of these secular bears. 

And if you add 17 years to the top of the last LVW in early 2000, you get out to 2016 or so for the projected end of this bear. We are only halfway through temporally and even more importantly in valuation terms. Bear markets don’t end at fair value, they continue their relentless valuation-mauling work until the general stock markets hit 7x earnings. Odds are very high that the Dow will still be trading near today’s levels in 2016 but with valuations cut in half again from today! 

Going from the bubble top to 14x is the mean reversion, which is now complete for the Dow 30. But just as the crests of LVWs witness extreme overvaluations, their troughs see extreme undervaluations. The second half of the great bear ushers in the dreaded LVW trough, where investors’ morale is crushed and an entire generation completely gives up on stock investing. Sadly the worst is yet to come.


----------



## subaru69

2nd  part:

For a rough road map of how the Dow 30 is likely to trade sideways and how its valuations are likely to evolve between now and 2016, we can consider the last LVW trough approach in the 1970s. The second half of that decade saw the same LVW section roll though that we face today. This next chart shows, very clearly, that secular bears do not conveniently end at fair value. They linger on until 7x is seen. 

Although this is a chart of the S&P 500, conceptually it is the same for the Dow 30. In fact, over 6 years ago when I first did this long-trading-range analysis I used the Dow 30. All 30 of the elite blue-chip Dow components are also in the S&P 500 (SPX). And these Dow components dominate it too, representing 32% of the entire SPX’s market capitalization but just 6% of its components! 



While these are SPX P/E ratios in this chart, they approximate the Dow 30’s pretty well. Since the Dow has much higher quality components on average than the SPX, the Dow’s P/E is usually a bit lower. For example, at the end of June when the Dow’s P/E hit 14.0x, the SPX’s was running at 18.1x. Nevertheless, the general P/E progression lower during secular bears certainly still applies to both indexes. 

As you can see here in the SPX, the US stock markets continued drifting sideways on balance throughout the rest of the last secular bear for over 8 years after fair value was reached! 14x in 1974 wasn’t the end, under 7x in 1982 was. While there were big cyclical bulls and bears within this period of time, when all was said and done the markets were dead flat. This gave earnings time to catch up with stock prices and the entire 34-year LVW cycle time to fully run its course. 

Since the LVWs slowly oscillate from undervalued levels to overvalued levels and back again, merely hitting fair value isn’t the end. It is only the halfway point in secular bears. This is crucial for investors to know because Wall Street is increasingly claiming that stocks are the cheapest today that they’ve been in decades. While true, this is very misleading and is going to hurt a lot of naÃ¯ve investors. 

14x earnings is definitely cheap compared to the Dow’s 45x in early 2000. But it is still very expensive compared to the 7x seen at the ends of secular bears manifesting in the second half of LVWs. Investors who watch their elite blue-chip stocks drift sideways on balance for 8 more years, taking real losses after inflation, will be devastated. Their portfolios will only be worth a modest fraction of what they could have been if they had understood the LVWs. 

So what’s a besieged stock investor to do? Sitting in cash or bonds certainly isn’t the answer. With the Fed doing everything in its power to destroy the US dollar, inflation is only going to accelerate. And with interest rates still not too far above half-century lows, longer-term bonds are going to take a beating as long rates inevitably rise. Odds are the coming 8 years won’t be kind to cash or longer bonds either. 

8 years ago I faced this same quandary regarding my own investment capital. I wanted to invest and speculate through the coming secular stock bear. So I studied market history and looked for sectors that performed well in such an environment. The most promising one by far was commodities and the companies that bring them to market. Commodities tend to thrive during secular stock bears, as I wrote way back in April 2001. 

Just as these secular stock bears tend to run for 17 years, so do the concurrent secular commodities bulls. While Wall Street loves to call today’s great commodities bull over the moment commodities start pulling back, the probabilities are very high that commodities will continue rallying on balance for another 8 years or so. And elite commodities stocks, with their high profits leverage to commodities prices, should see phenomenal gains. 

Although there are times within secular bears when most large commodities stocks get sucked down with general stocks, particularly during the vicious cyclical bears like we’re in today, most of the time they thrive. Investors can not only weather the general stock bear, but earn fortunes to boot, by prudently deploying capital in elite commodities stocks. 

And interestingly, it is actually the stock-market LVWs that really help drive these concurrent but inverse cycles in the commodities markets. During great bull markets in stocks, stocks become so sexy that virtually all investment capital gravitates toward stock markets. This starves other realms of much-needed investment. For example back in the late 1990s, everyone wanted to buy junk tech stocks but no one would touch oil producers. 

So by the end of the great bull in stocks, the first half of the LVW, commodities infrastructure has been starved of capital investment for at least a decade. Global capacity for producing raw materials is rusting away and not keeping pace with growing global demand. Raw materials just can’t compete for investors’ attention when the general stock markets are hot, leaving inadequate capital investment to handle world demand growth. 

By the time the great bear in stocks arrives, the second half of the LVW, commodities prices are gradually starting to rise simply because long-neglected supplies are inadequate. Then contrarian investors, looking for alternatives to thrive through a general-stock bear, start investing in this beaten-down sector. Commodities stocks are driven higher and even commodities themselves eventually become investment destinations. 

So the great valuation cycles in the stock markets, by virtue of so powerfully shaping global investment capital flows, heavily influence commodities too. Commodities infrastructure is neglected and left to rust when stocks are sexy. But when stocks start drifting sideways for 17 years, commodities regain favor as an alternative investment and capacity is rebuilt. Everything in the capital markets is interrelated. 

The bottom line is even though the Dow 30 just hit fair value, the secular bear is not over. Wall Street will tell you stocks are the cheapest they’ve been in decades, which is true. Nevertheless, valuations still remain twice as high as they ultimately travel at the ends of secular bears. Odds are the stock markets will continue drifting sideways on balance for the next 8 years or so until the Dow 30 actually retreats to 7x earnings. 

This is certainly depressing if you are a long-term investor. Watching the markets trade sideways, and taking real losses due to inflation, is no fun at all. Thankfully a secular commodities bull is running concurrently with the secular stock bear. So opportunities to profit abound, both on the long-term investment side and short-term speculation side. There’s no need to totally sit out a secular stock bear.


----------



## davo8

subaru69 said:


> This quite long (http://www.compareshares.com.au/zeal52.php) but it does pose a method of analysis that I was not familiar with, ie Long Valuation Waves.




Yes, I did read that. It was on several blogs. I don't buy 17 year waves any more than I buy Elliott Waves. Voodoo stuff.

However, the broad concept of "fair value" is reasonable, and the prospect now of several years of stock markets moving downwards as the finance sector blows off value and the consumer goes to sleep is very much part of my outlook. Deflation overall but rising prices for commodities, energy, resources, food. Wealth preservation, but new opportunities in new areas.

Always assuming we survive the financial tsunami headed our way.


----------



## subaru69

davo8 said:


> Always assuming we survive the financial tsunami headed our way.




Couldn't agree more. I have no idea about Fibonacci/EW etc but there do seem to be some inherent truths, ie 'fair value' and this can be established using many techniques including FA, TA and pretty much most systems.

I'm quietly optimistic, which some may see as immature, but I do expect an imminent wave of POO (not 'price of oil') which we should survive if the planning's been right.  Financials in my portfolio could be sold very soon but I'm going long with stuff that comes out of the ground.

Keep digging.


----------



## kransky

from what i think i understand, inflation levels and rates drive PE multipliers

high inflation is accompanied by high interest rates
if you can get 8% on a term deposit then how can PE multipliers be higher than 1/8% = 12.5X

if rates are low say 4% then stocks need to perform at 4% return or higher to get your money... so 1/4% = 25X, or 1/3% = 33X

does this make any sense to anyone else?


----------



## wayneL

kransky said:


> from what i think i understand, inflation levels and rates drive PE multipliers
> 
> high inflation is accompanied by high interest rates
> if you can get 8% on a term deposit then how can PE multipliers be higher than 1/8% = 12.5X
> 
> if rates are low say 4% then stocks need to perform at 4% return or higher to get your money... so 1/4% = 25X, or 1/3% = 33X
> 
> does this make any sense to anyone else?




You should factor in risk premium.


----------



## metric

*The global economy is at the point of maximum danger*

The global economy is at the point of maximum danger

By Ambrose Evans- Pritchard
Last Updated: 6:53am BST 21/07/2008


 Have your say      Read comments

It feels like the summer of 1931. The world's two biggest financial institutions have had a heart attack. The global currency system is breaking down. The policy doctrines that got us into this mess are bankrupt. No world leader seems able to discern the problem, let alone forge a solution.

The International Monetary Fund has abdicated into schizophrenia. It has upgraded its 2008 world forecast from 3.7pc to 4.1pc growth, whilst warning of a "chance of a global recession". Plainly, the IMF cannot or will not offer any useful insights.

Its "mean-reversion" model misses the entire point of this crisis, which is that central banks have pushed debt to fatal levels by holding interest too low for a generation, and now the chickens have come home to roost. True "mean-reversion" would imply debt deflation on such a scale that would, if abrupt, threaten democracy.

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The risk is that these same central banks will commit a fresh error, this time overreacting to the oil spike. The European Central Bank has raised rates, warning of a 1970s wage-price spiral. Fixated on the rear-view mirror, it is not looking through the windscreen.

More Ambrose Evans-Pritchard
More on economics
The eurozone is falling into recession before the US itself. Its level of credit stress is worse, if measured by Euribor or the iTraxx bond indexes. Core inflation has fallen over the last year from 1.9pc to 1.8pc.

The US may soon tip into a second leg of this crisis as the fiscal package runs out and Americans lose jobs in earnest. US bank credit has contracted for three months. Real US wages fell at almost 10pc (annualised) over May and June. This is a ferocious squeeze for an economy already in the grip of the property and debt crunch.

No doubt the rescue of Fannie Mae and Freddie Mac - $5.3 trillion pillars of America's mortgage market - stinks of moral hazard. The Treasury is to buy shares: the Fed has opened its window yet wider. Risks have been socialised. Any rewards will go to capitalists.

Alas, no Scandinavian discipline for Wall Street. When Norway's banks fell below critical capital levels in the early 1990s, the Storting authorised seizure. Shareholders were stiffed.

But Nordic purism in the vast universe of US credit would court fate. The Californian lender IndyMac was indeed seized after depositors panicked on the streets of Encino. The police had to restore order. This was America's Northern Rock moment.

IndyMac will deplete a tenth of the $53bn reserve of the Federal Deposit Insurance Corporation. The FDIC has some 90 "troubled" lenders on watch. IndyMac was not one of them.

The awful reality is that Washington has its back to the wall. Fed chief Ben Bernanke thought the US could always get out of trouble by monetary stimulus "Ã  l'outrance", and letting the dollar slide. He has learned that the world is a more complicated place.

Oil has queered the pitch. So has America's fatal reliance on foreign debt. The Fannie/Freddie rescue, incidentally, has just lifted the US national debt from German 'AAA' levels to Italian 'AA-' levels.

China, Russia, petro-powers and other foreign states own $985bn of US agency debt, besides holdings of US Treasuries. Purchases of Fannie/Freddie debt covered a third of the US current account deficit of $700bn over the last year. Alex Patelis from Merrill Lynch says America faces the risk of a "financing crisis" within months. Foreigners have a veto over US policy.

Japan did not have this problem during its Lost Decade. As the world's supplier of credit, it could let the yen slide. It also had a savings rate of 15pc. Albert Edwards from SociÃ©tÃ© GÃ©nÃ©rale says this has fallen to 3pc today. It has cushioned the slump. Americans are under water before they start.

My view is that a dollar crash will be averted as it becomes clearer that contagion has spread worldwide. But we are now at the point of maximum danger. Britain, Japan, and the Antipodes are stalling. Denmark is in recession. Germany contracted in the second quarter. May industrial output fell 6pc in Holland and 5.5pc in Sweden.

The coalitions in Belgium and Austria have just collapsed. Germany's left-right team is fraying. One German banker told me that the doctrines of "left Nazism" (Otto Strasser's group, purged by Hitler) had captured the rising Die Linke party. The Social Democrats are picking up its themes to protect their flank.

This is the healthy part of Europe. Further south, we are not far away from civic protest. BNP Paribas has just issued a hurricane alert for Spain.

Finance minister Pedro Solbes said Spain is facing the "most complex" economic crisis in its history. Actually, it is very simple. The country was lulled into a trap by giveaway interest rates of 2pc under EMU, leading to a current account deficit of 10pc of GDP.

A manic property bubble was funded by foreigners buying covered bonds and securities. This market has dried up. Monetary policy is now being tightened into the crunch by the ECB, hence the bankruptcy last week of Martinsa-Fadesa (â‚¬5.1bn). With Franco-era labour markets (70pc of wages are inflation-linked), the adjustment will occur through closure of the job marts.

China, India, East Europe and emerging Asia have all stolen growth from the future by condoning credit excess. To varying degrees, they are now being forced to pay back their own "inter-temporal overdrafts".

If we are lucky, America will start to stabilise before Asia goes down. Should our leaders mismanage affairs, almost every part of the global system will go down together. Then we are in trouble.


----------



## sassa

So the financials went up 2.8% on opening and finished the day 1% down.Profit taking?Selling on the rally?Knowing that the banks are using poor accounting methods with the backing of the Fed and SEC who don't want any further crises on their hands?
Still a good rally considering they went up 11.4% last week.


> Retailers having a harder time getting credit indicates there is concern about the strength and/or sustainability of retail spending. Also note that Wal-Maryt -- the largest retailer in the world -- had to agree to tighter lending controls. This is a company with 378 billion in revenue last year. They have to agree to stricter lending standards.
> 
> This is why last week's euphoria regarding the financial sector was so completely overblown. Everyone was thrilled because several banks reported losses that weren't as large as feared. That was the good news -- banks didn't lose as much money as projected. Yet they still lost lots of money and wrote down lots of debt. And all of those writedowns are starting to crimp lending.
> 
> Much of the decline in outstanding credit has been due to banks sharply reducing the amount of bonds and other debt securities held on their books, but the slowdown is apparent across all forms of lending. The heavy losses banks have taken on mortgage-related securities are forcing them raise cash levels, leading to tighter lending. Because they can't know what other problems might be lurking on their balance sheets, they are being especially cautious.
> 
> 
> None of this should be surprising to anyone. We have seen over $400 billion dollars in writedowns. We have seen 266 mortgage lenders shut their doors. All of this is bound to have an impact -- which it has in the discount spread





> Also note that LIBOR is still higher than the discount rate.
> 
> Ladies and gentlemen -- anyone that is recommending you move into financial shares is an idiot. There are still major problems out there. Credit standards are tightening and loans are getting harder to come by even though the Fed has (again) lowered interest rates to 0% after adjusting for inflation. None of this is good news




http://www.bonddad.blogspot.com/

Strong words from a blogger who usually tries to look on the "bright side" of things in the markets.


----------



## davo8

kransky said:


> if you can get 8% on a term deposit then how can PE multipliers be higher than 1/8% = 12.5X




Broadly yes, although you need to add the proper risk premium. The condition for investing in shares is:

Forward P/E < 1/(Riskless return + risk premium)

Which implies a forward P/E no more than 1/(7.25% + 2-3%) or about 10.

Banks are close to that on historical P/E, but they are going to take a profit hit, so the price is still too high on forward P/E. Even BHP is at 13, which is too high.


----------



## wayneL

davo8 said:


> Broadly yes, although you need to add the proper risk premium. The condition for investing in shares is:
> 
> Forward P/E < 1/(Riskless return + risk premium)
> 
> Which implies a forward P/E no more than 1/(7.25% + 2-3%) or about 10.
> 
> Banks are close to that on historical P/E, but they are going to take a profit hit, so the price is still too high on forward P/E. Even BHP is at 13, which is too high.



Do you think 2-3% risk premium is enough in the current environment?


----------



## subaru69

davo8 said:


> Which implies a forward P/E no more than 1/(7.25% + 2-3%) or about 10.




It seems you are saying that a P/E of 14 is not valid in the current environment. Does that mean a P/E of 7 will eventually come into play, as the article I included a few days ago indicated?

Ps- I hope I'm wrong.


----------



## Awesomandy

subaru69 said:


> It seems you are saying that a P/E of 14 is not valid in the current environment. Does that mean a P/E of 7 will eventually come into play, as the article I included a few days ago indicated?
> 
> Ps- I hope I'm wrong.




While I'm definitely not an expert in this area, I think there is a possibility of P/E 7 some time in the future. I would imagine that most mainstream investors would be too scared to put money into the market again for a very long time to come, after seeing their investments going down by 1/4 of their value. The thing is though, money will eventually have to go somewhere. While some of these might go into the more conservative options (e.g. savings/deposits), some of this money would probably be spent on life's little luxuries rather than being saved/invested. So, I'm guessing that, as the economy fixes itself up in the next few years, people will spend more money, but will not be investing as much. (Again, I'm mostly referring to the mainstream "investors".) When people spend more, company profits go up, and since people would still be afraid of putting money into the market, the share prices remain depressed, and the P/E gets pushed down. This will continue to happen until eventually, one day, people realise that "oh, we are spending all these money into such-and-such companies, they must be making tons of money. If I put money into them, it will make me loads!"

Well, I don't have prove, but that's how I think things happen.


----------



## subaru69

The market's a funny place at the moment.

We all should be happy, except the shorters, that the market is up >2.5% but I just get that feeling it means it has further to fall again later.  There wasn't that 'bottom feel' (feel free to post dirty comments on the Joke thread ) at ~4800.

False hope abounds with the US printing money.  I was just watching the lunchtime news and Zimbabwe has put into circulation a 100 Billion Dollar note, you can buy 2 loaves of bread with it.  Their inflation rate is 100,000%.

*1.00 AUD = 18,137,512,578.22 ZWD*


----------



## subaru69

Update:

*1.00 AUD = 18,137,104,876.31 ZWD *

The ZWD is strengthening, quick run out and get some.


----------



## professor_frink

subaru69 said:


> Update:
> 
> *1.00 AUD = 18,137,104,876.31 ZWD *
> 
> The ZWD is strengthening, quick run out and get some.




I'm going to go out and get a few of the ZWD from ebay soon. Only way I can tell people I'm worth 100 billion


----------



## nizar

professor_frink said:


> Only way I can tell people I'm worth 100 billion




I think I may do the same


----------



## davo8

subaru69 said:


> It seems you are saying that a P/E of 14 is not valid in the current environment. Does that mean a P/E of 7 will eventually come into play, as the article I included a few days ago indicated?




I guess it's possible. Given that the ASX P/E as a whole is now 10.67 and there are earnings downgrades to be expected, that would have the market drop another 1000 points or more. Lovely!

No, a 2-3% risk premium is not enough for me right now. I'm waiting for the next round of bad news and to get past Sep/Oct before I start getting too interested.


----------



## kransky

anyone remember the simpsons episode where homer tries to stop bart from jumping a huge canyon on his skateboard and ends up falling in himself?.. and instead of falling straight to the bottom (road runner V coyote style) he bounces off every ledge on the way down (usually on his head)..

kinda like the markets lately..


----------



## subaru69

kransky said:


> anyone remember the simpsons episode where homer....
> kinda like the markets lately..




DOH!:homer:


----------



## sassa

Excerpts from an interesting article by Mike Shedlock entitled "You know the banking system is unsound when..."


> 9. The SEC issued a protective order to protect those most responsible for naked short selling. As long as the investment banks and brokers were making money engaging in naked shorting of stocks, there was no problem. However, when the bears began using the tactic against the big financials, it became time to selectively enforce the existing regulation.
> 
> 10. The Fed takes emergency actions twice during options expirations week in regards to the discount window and rate cuts.
> 
> 11. The SEC takes emergency action during options expirations week regarding short sales





> 13. Citigroup (C), Lehman (LEH), Morgan Stanley(MS), Goldman Sachs (GS) and Merrill Lynch (MER) all have a huge percentage of level 3 assets. Level 3 assets are commonly known as "marked to fantasy" assets. In other words, the value of those assets is significantly if not ridiculously overvalued in comparison to what those assets would fetch on the open market. It is debatable if any of the above firms survive in their present form. Some may not survive in any form.
> 
> 14. Bernanke openly solicits private equity firms to invest in banks. Is this even close to a remotely normal action for Fed chairman to take





> 19. Bank of America (BAC) agreed to take over Countywide Financial (CFC) and twice announced Countrywide will add profits to B of A. Inquiring minds were asking "How the hell can Countrywide add to Bank of America earnings?" Here's how. Bank of America just announced it will not guarantee $38.1 billion in Countrywide debt. Questions over "Fraudulent Conveyance" are now surfacing.





> 24. There is roughly $6.84 Trillion in bank deposits. $2.60 Trillion of that is uninsured. There is only $53 billion in FDIC insurance to cover $6.84 Trillion in bank deposits. Indymac will eat up roughly $8 billion of that.
> 
> 25. Of the $6.84 Trillion in bank deposits, the total cash on hand at banks is a mere $273.7 Billion. Where is the rest of the loot? The answer is in off balance sheet SIVs, imploding commercial real estate deals, Alt-A liar loans, Fannie Mae and Freddie Mac bonds, toggle bonds where debt is amazingly paid back with more debt, and all sorts of other silly (and arguably fraudulent) financial wizardry schemes that have bank and brokerage firms leveraged at 30-1 or more. Those loans cannot be paid back.
> 
> What cannot be paid back will be defaulted on. If you did not know it before, you do now. The entire US banking system is insolvent



http://globaleconomicanalysis.blogspot.com/2008/07/you-know-banking-system-is-unsound-when.html


----------



## pepperoni

Great great great thread this one.


----------



## davo8

sassa said:


> Excerpts from an interesting article by Mike Shedlock entitled "You know the banking system is unsound when..."




Yes, I follow Mish. For a truly depressing read try Automatic Earth.

http://theautomaticearth.blogspot.com/2008/07/debt-rattle-july-23-2008-redefining-bad.html



> Fannie and Freddie are casino’s, gambling dens that have been encouraged by the house, in this case the US government, to play double or nothing over the past year, and now count on the same house to cover their blackjack losses. Which the house is about to do, with your money.
> 
> And the Congressional Budget Office plays along. They are supposedly independent, but that’s nothing but a stale joke: if they really were, they would have taken their own statements to heart about uncertainties regarding Fannie and Freddie, and presented their paymasters in Congress with at least for instance an "fair estimate" range, not a fixed number .
> 
> That fair estimate would state that potential losses to the US taxpayer from the GSE bail-out would be between $25 billion and $2.5 trillion. And still add that the number could be much higher.
> 
> Because if - make that when- US home prices go down by 50% or more across the board, when banks open their books and vaults to reveal they have little else but toxic paper left, and unemployment starts hitting prime time, there will be a $5.2 trillion combined Fannie and Freddie portfolio waiting for a "fair estimate".
> 
> Today, with memories of the outrage over the $29 billion in public funds used on Bear Stearns still fresh on everyone’s mind, moral hazard will be taken not just to a whole other level, but into a different dimension, and a universe unknown to man. A small step for man, a giant leap for mankind. In hindsight, it now becomes clear that Bear Stearns was used as a test-case, and the timid response to that bail-out directly opened the doors for the biggest heist in the history of America.




Even Nouriel Roubini is not that dismal.


----------



## sassa

And...



> But what interest does the public have in protecting the share prices of Fannie and Freddie stock? Don't stockholders understand they take a risk when they buy stock? In this case, the stockholders made a bad investment. They are supposed to lose their money (possibly all of it), right?
> 
> I have yet to hear any explanation from anyone as to why the government is supporting the share price. (In an NPR interview this morning, Senator Chris Dodd gave an incoherent answer that implied that supporting the share price was somehow tied to backing up the bonds. It isn't.)
> 
> In a country that can't fight a few billion dollars to provide funding for child care or children's health care, this multi-billion dollar affirmative action plan for dumb stockholders deserves a little questioning.




http://www.prospect.org/csnc/blogs/...2008&base_name=why_is_the_government_guarante


----------



## kingbrown

Well what a day makes ?

*National Australia Tumbles Most Since 1987 on CDO Provisions *By Stuart Kelly

July 25 (Bloomberg) -- *National Australia Bank Ltd. plunged the most since the October 1987 stock market crash *after the nation's biggest bank set aside A$830 million ($795 million) for credit market losses. 

The provisions for collateralized debt obligations that have lost value because of the U.S. housing market slump may cut full- year profit by almost A$600 million, Chief Financial Officer Mark Joiner said in an interview today. The Melbourne-based bank said it also has a A$4.5 billion debt portfolio backed mainly by corporate loans in Europe and the U.S. 

Chief Executive Officer John Stewart said soaring mortgage defaults in the U.S., where financial shares had their worst drop in eight years yesterday, forced National Australia to prepare for a ``worst case scenario.'' Shareholders Peter Vann and Angus Gluskie questioned whether Stewart will be able to avoid more losses as the credit crisis deepens and economies slow. 

more here 

http://www.bloomberg.com/apps/news?pid=20601081&sid=a8EqCVNvTeXc&refer=australia


----------



## davo8

Shares in Fannie Mae and Freddie Mac are toast. The government guarantee really only kicks in after the shareholders have lost everything.

Our banks here are not immune. I don't see them going bust unless the housing market tanks, but they are going to get hurt. Anyone bottom fishing for banks or other finance stocks better have really good inside information or a really long time horizon. There is bad news yet to come, and no-one really knows where from.

Repeat after me: this is NOT the bottom.


----------



## Sean K

davo8 said:


> There is bad news yet to come, and no-one really knows where from.



Um, there's bad news to come, but nobody knows where from?  

Righto.


----------



## wayneL

kennas said:


> Um, there's bad news to come, but nobody knows where from?
> 
> Righto.




There's bad news to come, 
But nobody knows where from.
You know, there are those of us
To whom that really sounds quite dumb.

Surely there is good news to cheer
in the most dire of situations
If only that we will pay less for beer
Due to some new fangled machinations

If the Wall Street moguls go broke
Who are are we to think we must cry?
The value investor might be quite stoked
For many a share he might buy.

It is true that price and earnings
Are completely out of tune
Way higher than Warren's yearnings
Anyone buying now must be a loon

So for me all this bad news 
and this is in common with Lao
I think bad news is good news
It's only bad news for now

The only truly bad thing
Is the poetry I write
Trying to make it all rhyme
Makes it really quite trite

So the best thing for you
my friend, is to treat this with ignore
Press the button for the trash  box
Let it not enter the lore

OMG!


----------



## Sean K

wayneL said:


> OMG!



 Hahahaha.

I know where bad news is coming from. Having my apartment inspected in an hour and I'm sure there's something wrong with it and the $2000 bond will be raped.


----------



## Aussiejeff

kennas said:


> Hahahaha.
> 
> I know where bad news is coming from. Having my apartment inspected in an hour and I'm sure there's something wrong with it and the $2000 bond will be raped.




"_Dear Mr Kennas,

Your have passed property inspection and your $2,000 bond is secure. However your rent will be increased 100% due to "unforeseen circumstances beyond our control".

If you have any problem with this slight adjustment, please call our office.

Sincerely,


Fanny._

:hide:


----------



## Bushman

davo8 said:


> Repeat after me: this is NOT the bottom.




Ok... 

This is not the bottom, this is not the bottom, this is not rowbotham, this is not gotham, this is Gotham City.... 

I am off to the movies to see our Heath in the The Dark Knight. Woo hoo.


----------



## Speewha

Hello, 

Abandon hope all ye who enter here . Dante 

Regards


----------



## Uncle Festivus

So if a bear market meets a Kondratieff Winter do we have a polar bear market? It looks to be more like the last rays of a Kondratieff Autumn?

<debt buildup and repudiation>
<stagflation>
<deflation>


----------



## Uncle Festivus

Some charts to show the profligate ways are not sustainable? Is it a coincidence the restraints of prudent financial management were lifted in about 1971?



> For Each $0.50 growth of GDP, Total debt grows by $2.5
> Most of the debt growth has been funded by increases in pools of mortgage money *borrowed from foreigners* thru GSE's (Fannie & Freddie) and Mortgage pools and growth of home equity loans and consumer debt.
> Exponential growth of debt started in early '90's fueled by growth of GSE's and consumer borrowing.
> To continue current growth of GDP, debt growth must continue at current accellerated levels.


----------



## motorway

Uncle Festivus said:


> So if a bear market meets a Kondratieff Winter do we have a polar bear market? It looks to be more like the last rays of a Kondratieff Autumn?
> 
> <debt buildup and repudiation>
> <stagflation>
> <deflation>






> When people talk about the current state of the economy they tend to do so in terms of the business cycle, a relatively short-term phenomenon covering maybe three to five years. But some economists believe a far more important type of cycle underlies our economic circumstances. It's called the Kondratiev cycle, or the Kondratiev wave and, if it does exist, we appear to be in a pretty dangerous stage of it at the moment.
> 
> Wolfgang Kasper
> Professor Emeritus Economics University of New South Wales




http://www.abc.net.au/rn/counterpoint/stories/2008/2296549.htm#






> Wolfgang Kasper: If you look at these waves they've always affected all the industrial countries and they are in it together sooner or later. But, and that is very important, the new industrial countries of any generation seems to be unfazed and the reason is quite clear; they don't have to destroy old social structures and old industries, that famous creative destruction of Schumpeter's.
> 
> Michael Duffy: So they've got a bit more flexibility.
> 
> Wolfgang Kasper: They are new and competitive and I think this time many parts of China et cetera will probably just beaver on unaffected.




This one is interesting too

The 1929 stock market crash

http://www.abc.net.au/rn/rearvision/stories/2008/2213492.htm#



> Well you have to understand as you look at the market going up the US economy was going full blast in real terms. The automobile industry had developed into a major industry, the steel industry, electricity was spreading throughout the country. Railroads were expanding. Obviously things like coal, steel. So, well, the stock market literally doubled from let's say '27 to 1929.
> 
> The fact is, that if you looked at any of the appropriate measures of economic vitality, as late as October of 1929, all the signals were good. *There was no inherent reason why the market crashed in 1929*. You look at automobile production productivity, all the signs were positive, so that when the newspapers in the summer of 1929, magazines, spoke about the economic environment. They were very bullish measures.
> 
> Harold Bierman
> The Nicholas H. Noyes Professor of Business Administration at Cornell University




motorway


----------



## davo8

kennas said:


> Um, there's bad news to come, but nobody knows where from?




As it happens, I wrote that just hours before the NAB announced a $1bn provision for CDO losses, and dropped 13%, takiing the other banks with it. That's exactly the kind of bad news I had in mind, and there is more to come.

Friday: another 2 US banks failed. That makes 7 this year. The target is over 100.

If every bank in the USA made exactly the same provisions for loss that the NAB did, based on their exposure to exactly the same CDO instruments, it would wipe out over half the banks.

And don't forget, Basel II is coming on Oct 1st.


----------



## Sean K

davo8 said:


> As it happens, I wrote that just hours before the NAB announced a $1bn provision for CDO losses, and dropped 13%, takiing the other banks with it. That's exactly the kind of bad news I had in mind, and there is more to come.



Well, please let us know exactly where it's coming from next time so I can trade it. Thanks!

By the way how many banks have gone bust so far?

During the S&L crisis in the 80s and 90s I think over 700 went down. A little way to go to match it. 

Of course, I think the federal gov bailed most of them using the taxpayers dollars. They'll probably do it again of course, and keep doing it, until ...... eeeek!


*Congress Approves Housing Market Rescue Bill*

26 Jul 2008 

The Congress approved a massive housing market rescue bill on Saturday, offering emergency financing to Fannie Mae and Freddie Mac, creating a new regulator for the mortgage titans and setting up a $300 billion fund to help troubled homeowners.


----------



## explod

kennas said:


> The Congress approved a massive housing market rescue bill on Saturday, offering emergency financing to Fannie Mae and Freddie Mac, creating a new regulator for the mortgage titans and setting up a $300 billion fund to help troubled homeowners.




I hear the bottom line is to help the banks/lenders.   Taxpayers bailing out poor lending practices.

The big world is a disgusting place.


----------



## Macquack

explod said:


> I hear the bottom line is to help the banks/lenders.   Taxpayers bailing out poor lending practices.
> 
> The big world is a disgusting place.




With the Treasury printing presses working overtime, the taxpayer takes a double hit through the inflationary effects of the bail out. Inflation is a hidden tax.

Does "Capitalism" have a "use by" date?


----------



## davo8

kennas said:


> Well, please let us know exactly where it's coming from next time so I can trade it. Thanks!
> 
> By the way how many banks have gone bust so far?
> 
> During the S&L crisis in the 80s and 90s I think over 700 went down. A little way to go to match it.
> 
> Of course, I think the federal gov bailed most of them using the taxpayers dollars. They'll probably do it again of course, and keep doing it, until ...... eeeek!




If only! The basic principle is that the finance sector is shot to hell, so just keep betting against banks.

In the S&L there were lots more small banks, but the core was barely shaken. This time the core is rotten and the big banks will only survive because of government backing (back door nationalisation). The bill that just passed Congress is another step in the process that started with Bear Stearns.

US regional banks will start failing over the next few months as borrowers default and the collateral is worthless.

Our banks are scared stiff that property here will collapse too. Sub-prime was just a trigger -- it's the collapse of the credit bubble that is the killer, and banks are the front line.


----------



## Aussiejeff

davo8 said:


> If only! The basic principle is that the finance sector is shot to hell, so just keep betting against banks.
> 
> In the S&L there were lots more small banks, but the core was barely shaken. This time the core is rotten and the big banks will only survive because of government backing (back door nationalisation). The bill that just passed Congress is another step in the process that started with Bear Stearns.
> 
> US regional banks will start failing over the next few months as borrowers default and the collateral is worthless.
> 
> Our banks are scared stiff that property here will collapse too. Sub-prime was just a trigger -- it's the collapse of the credit bubble that is the killer, and banks are the front line.




For some silly reason, this tune just popped into my head with modified lyrics...

_"The Yanks are turning Japanese, the Yanks are turning Japanese, I really think so, dah-dah-dah-dah-dah-dah-doh, turning Japanese, I think they're turning Japanese, I really think so, dah-dah-dah-dah-dah-dah-doh...."_

I'm worried now. Will I have to pay royalties????


----------



## wayneL

Aussiejeff said:


> For some silly reason, this tune just popped into my head with modified lyrics...
> 
> _"The Yanks are turning Japanese, the Yanks are turning Japanese, I really think so, dah-dah-dah-dah-dah-dah-doh, turning Japanese, I think they're turning Japanese, I really think so, dah-dah-dah-dah-dah-dah-doh...."_
> 
> I'm worried now. Will I have to pay royalties????




You're giving away your age there Jeff....

...whoops, so am I! :


----------



## Bushman

Macquack said:


> Does "Capitalism" have a "use by" date?




The question is what ideology would you replace it with? The other systems of distributing capital to buy goods and services have been grossly inefficient and have led to regular, and well documented, humanitarian disasters let alone wealth generation. They would be hugely unpopular with the 'working families' who drive the agenda in democracies the world over. There may be some dissaffection with the current erosion in personal wealth but noone would be advocating a return to big government, socialism or 'worse'. I mean where is the reward in that?  

The fact is that we need the financially engineered results to generate the cash flow needed to feed consumption within an average Western lifespan. With that comes a 'bubble economy'. I can see the rate of savings increasing to deal with the bubble bursting in the medium term but I cannot see many swapping the Holden for an ox & plough and collectivisation. 

The paradigm ain't broke while we are still living off the fat of the land. All that is being foregone at the moment is some of the fat in the system. It would need the depression or worse to change that .


----------



## kingbrown

ANZ Bank (ANZ) $15.95

AMID all of the ANZ Bank's horrendous debt-provisioning numbers, the scariest new info lies in *CEO Mike Smith's confession the bank has no idea whether or not the balance sheet buttressing will be adequate.*

Asked whether the bank had made a definitive statement that measures would obviate the need for further action, Smith replied: “`I don't think we have. On the information we have available now I think this is the best guess.” 

*Given National Australia Bank's counterpart John Stewart's comment on Friday that the global credit crisis was entering worst-case scenario territory, bank investors have every reason to be afraid -- very afraid. *

The ANZ's fears are somewhat different to the NAB's, in that the NAB on Friday provisioned $850 million against a specific book of collateralised loan obligations. 

The ANZ's malaise has little to do with the US housing crisis -- not directly at least -- but revolves around the *deteriorating position of “certain commercial property clients” and its now infamous securities-lending involvement. *

http://www.theaustralian.news.com.au/story/0,25197,24088324-23634,00.html

So at this stage at best our banking chiefs can only guess ? 
WTF


----------



## sam76

Aussiejeff said:


> For some silly reason, this tune just popped into my head with modified lyrics...
> 
> _"The Yanks are turning Japanese, the Yanks are turning Japanese, I really think so, dah-dah-dah-dah-dah-dah-doh, turning Japanese, I think they're turning Japanese, I really think so, dah-dah-dah-dah-dah-dah-doh...."_
> 
> I'm worried now. Will I have to pay royalties????






wayneL said:


> You're giving away your age there Jeff....
> 
> ...whoops, so am I! :





http://jp.youtube.com/watch?v=EpCcelpvkps

Enjoy!!


----------



## Uncle Festivus

kennas said:


> By the way how many banks have gone bust so far?
> 
> During the S&L crisis in the 80s and 90s I think over 700 went down. A little way to go to match it.




I don't have exact figures, but there may have been more failures in number terms in the S&L 'crisis',  but in size of debt being written off this is easily the worst since......1929? This dwarfs the S&L, or LTCM.....Russian implosion......




Aussiejeff said:


> For some silly reason, this tune just popped into my head with modified lyrics...
> 
> _"The Yanks are turning Japanese, the Yanks are turning Japanese, I really think so, dah-dah-dah-dah-dah-dah-doh, turning Japanese, I think they're turning Japanese, I really think so, dah-dah-dah-dah-dah-dah-doh...."_
> 
> I'm worried now. Will I have to pay royalties????




Deja vou?

https://www.aussiestockforums.com/forums/showpost.php?p=197924&postcount=2

https://www.aussiestockforums.com/forums/showpost.php?p=197931&postcount=4


----------



## davo8

Macquack said:


> With the Treasury printing presses working overtime, the taxpayer takes a double hit through the inflationary effects of the bail out. Inflation is a hidden tax.
> 
> Does "Capitalism" have a "use by" date?




So far, there had been no extra Treasury printing. The housing bill lifts the debt ceiling, so now the presses roll!

No, this is not a failure of capitalism, but it is a failure of economists, of consumerism, of regulators and of memory. 

Banks make money by manufacturing and selling credit, and that reached a massive bubble peak with securitisation last year. That model for banks to make money is now dead (and good riddance).

Von Mises (Austrian economics) described credit bubbles and how they end: either very badly or with the total collapse of the currency. It's all happened many times before, and the credit bubble is just as bad in Australia as anywhere else. 

Do your TA if you like, but just keep betting against banks, the finance sector and any business that relies heavily on credit. They are all in deep trouble, whether they (or the markets) know it yet or not.


----------



## wayneL

Bushman said:


> Macquack said:
> 
> 
> 
> Does "Capitalism" have a "use by" date?
> 
> 
> 
> 
> 
> The question is what ideology would you replace it with? The other systems of distributing capital to buy goods and services have been grossly inefficient and have led to regular, and well documented, humanitarian disasters let alone wealth generation. They would be hugely unpopular with the 'working families' who drive the agenda in democracies the world over. There may be some dissaffection with the current erosion in personal wealth but noone would be advocating a return to big government, socialism or 'worse'. I mean where is the reward in that?
> 
> The fact is that we need the financially engineered results to generate the cash flow needed to feed consumption within an average Western lifespan. With that comes a 'bubble economy'. I can see the rate of savings increasing to deal with the bubble bursting in the medium term but I cannot see many swapping the Holden for an ox & plough and collectivisation.
> 
> The paradigm ain't broke while we are still living off the fat of the land. All that is being foregone at the moment is some of the fat in the system. It would need the depression or worse to change that .
Click to expand...


I would add that the system we have at present in the Anglo world isn't really true capitalism; it's a sort of contrived capitalism some elements of socialism for the richest and the poorest.

It's a capitalism that robs the middle class to prop up the lower and upper classes. It's a capitalism that has forgotten about economic cycles and has attempted to banish boom and bust, by only allowing boom. It's a capitalism that refuses to regard recession as natural, cleansing, cathartic and important to clean out malinvestment. It's a capitalism that has turned moral hazard into a virtue. It is a capitalism that has embraced the most perverted forms of socialist economics while maintaining a profit motive, resulting in greed without consequence.

Except that the consequences are now emerging.

This capitalsim HAS reached is use by date and as a society we need to choose either true capitalism or socialism.

True capitalism has cycles. People win and lose, enterprise triumphs and fails, industries come and go.

We probably wouldn't like capitalism in it's purest form, therefore we will always have elements of socialism; welfare for the needy, regulation to protect the consumer, and a little social tinkering here and there. That's OK, we have to have a heart, and we can afford it, but this perverted Keynesian monster is dying and it need to be taken out to the back 40 and be put down.

The troubling thing is that "they" don't want to let it die (unsurprisingly), so instead of giving it the green injection now and letting it die peacefully and with dignity, it will die later, writhing in agony, flailing about and unconsciously kicking the crap out of anything within proximity... perhaps we are seeing the beginning of that process now.

Yep this capitalism is broken and we need a new model... fast.


----------



## kransky

i think we need to move a bit in the socialism direction on the capitalism/socialism divide.

i think if you go too far in either direction you get problems with crooks ripping off the people cos the system lets them...

somewhere in the middle for me tbh


----------



## subaru69

kransky said:


> i think we need to move a bit in the socialism direction on the capitalism/socialism divide.




The thing that I don't understand is how a Government or its proxy agent (eg the Fed or RBA) interfering in a capitalist system is anything other than socialist. 

My simple understanding of a socialist regime is one where the Government makes all the rules.  If a private business cannot survive then under capitalism, free market forces should take it to where it belongs.  Surely by propping up things that don't work we only have further to fall.  Look at most of the Soviet businesses pre-democracy: if they worked then communism there would never have ceased.

It seems that no country has a pure capitalist system. Unless I'm getting confused with a laissez-faire system. 

PS- can anyone tell I haven't done economics


----------



## dhukka

wayneL said:


> I would add that the system we have at present in the Anglo world isn't really true capitalism; it's a sort of contrived capitalism some elements of socialism for the richest and the poorest.
> 
> It's a capitalism that robs the middle class to prop up the lower and upper classes. It's a capitalism that has forgotten about economic cycles and has attempted to banish boom and bust, by only allowing boom. It's a capitalism that refuses to regard recession as natural, cleansing, cathartic and important to clean out malinvestment. It's a capitalism that has turned moral hazard into a virtue. It is a capitalism that has embraced the most perverted forms of socialist economics while maintaining a profit motive, resulting in greed without consequence.
> 
> Except that the consequences are now emerging.
> 
> This capitalsim HAS reached is use by date and as a society we need to choose either true capitalism or socialism.
> 
> True capitalism has cycles. People win and lose, enterprise triumphs and fails, industries come and go.
> 
> We probably wouldn't like capitalism in it's purest form, therefore we will always have elements of socialism; welfare for the needy, regulation to protect the consumer, and a little social tinkering here and there. That's OK, we have to have a heart, and we can afford it, but this perverted Keynesian monster is dying and it need to be taken out to the back 40 and be put down.
> 
> The troubling thing is that "they" don't want to let it die (unsurprisingly), so instead of giving it the green injection now and letting it die peacefully and with dignity, it will die later, writhing in agony, flailing about and unconsciously kicking the crap out of anything within proximity... perhaps we are seeing the beginning of that process now.
> 
> Yep this capitalism is broken and we need a new model... fast.




Great post wayne and davo8 has outlined well how we came to be in the current predicament. I come back from a few days away and look what happens, the banks are imploding. Who could have forseen it? Basically anyone who was paying attention. How long until we hear problems at CBA and WBC? I would suggest it's only a matter of time.


----------



## sk8er

subaru69 said:


> PS- can anyone tell I haven't done economics




No, you make more sense than the so called expert economists, usually "bought and paid for" by the media.


----------



## subaru69

subaru69 said:


> Update:
> 
> *1.00 AUD = 18,137,104,876.31 ZWD *
> 
> The ZWD is strengthening, quick run out and get some.




New update:
*17,877,661,242.37 ZWD*

African currency strengthens 1.5% relative to A$, maybe we should follow their monetary and fiscal lead...:shake:

:afro::afro::sword:


----------



## Bushman

wayneL said:


> This capitalsim HAS reached is use by date and as a society we need to choose either true capitalism or socialism.




There is not a snow ball's chance in hell that the 'Anglos' will choose socialism as the dominant paradigm. Too much paint has been expended on the blank canvas titled the 'EVIL OF SOCIALISM' for that to happen.  

So yes big government will continue plucking the corpse of Marx for the best bits to keep the lumpenproletariat addled to welfare money and the super rich cosy in their tax havens milking the land for all it is worth. But I have not seen anyone blame aspirational politics, ie blame themselves, for the giant doggy doo we as a 'Western' society are currently trying to skirt around. 

We blame politicians, we blame bankers, we blame the media, we do NOT blame ourselves. Until the middle classes temper the 'American Dream', the 'Australian Dream', the 'Kiwi Dream' (not of the agricultural variety), then this dreary cycle will continue, this bubble cycle will continue, and one day, yes, the strain will be so great that the black hole will open and 'we' will evaporate. 

Anyway may as well continue trying to make hay while sun shines...


----------



## wayneL

Bushman said:


> There is not a snow ball's chance in hell that the 'Anglos' will choose socialism as the dominant paradigm.



I hope you're right, but don't forget there is is significant chunk of the Oz population who consider Gough Whitless as "The Great Man". There is a socialist leaning gu'mint in power in Oz. Obama, (a Socialist) will apparently win in the Evil Empire. The gu'mint here in the UK is running to the left as fast as it can (before it loses in a landslide in 2 years to a left leaning Tory Party ).

Socialism is rapidly encroaching Anglo thinking and politics as the scurrilously contrived capitalist (and I use the word loosely) system we have starts to fail.

Hell indeed seems to be freezing over.

But it isn't socialism in the classic sense for the benefit of the proletariat, It's Champagne Socialism, for the benefit of the establishment, to protect the status quo. Which is how socialist systems always metamorphose into. We've just come at it from the opposite direction this time.

Make no mistake, the middle class have been unconsciously hoiked into dependency on middle class welfare, they are in love with _de facto_ socialism. They just don't realize they are paying for it as well as the upper and lower class welfare as well.

It won't be too  big a leap in getting the plebeians into accepting a system that dares not speak its own name, so long as the status quo is maintained... it is the clever and long disguised Fabian Socialist principle of "gradualism"... and folks don't even realize its happening.

No, they may not consciously "choose" socialism, but that's what they are getting and they are unconsciously complicit in its gradual induction. True capitalism of the Austrian model will need nothing short of revolution to restore now IMO.

</rant>


----------



## Sean K

I'm as bearish as anyone out there on the market, and especially humans as some of you are aware, but there are some who have an opinion that much of the drama is factored in already. How much is anyone's guess, and depends on if the system is really kaput, or can be salvaged.


1019 [Dow Jones] S&P/ASX 200 likely well supported near 4800, says Goldman Sachs JBWere. "...buying the market in the 4800-5000 level on a 12-month view will prove to be an absolute winner strategy," says broker. Highlights need to buy stocks when conditions look awful. "Make no mistake we are in very tough times and the very bad economic fall out still has plenty more to play out. But ask yourself has much of this been factored in or is the market mis-pricing the real risks out there." Index down 0.9% at 4876.3. (DWR)


----------



## GreatPig

Goldman Sachs JBWere said:
			
		

> buying the market in the 4800-5000 level on a 12-month view will prove to be an absolute winner strategy



That's the sort of thing many "experts" were saying all the way over the top and down in 1929.

Of course this time they might actually be right.

GP


----------



## Sean K

GreatPig said:


> That's the sort of thing many "experts" were saying all the way over the top and down in 1929.
> 
> Of course this time they might actually be right.
> 
> GP



GP, I wish you hadn't have made that look like I said it. I'm just providing someone else's opinion. Whoever it was. Maybe best they stay anon. 

Someone will be right. For the sake of my parents super, I'm hoping the ostitches, and these types of characters.


----------



## aleckara

wayneL said:


> Yep this capitalism is broken and we need a new model... fast.




I hate to admit it but it is the captialist countries who have believed in the 'free-market' (i.e reduction of tariffs, letting the market decide, profitable businesses are privatised instead of nationalised) that are in the economic difficult periods right now (and have the really bad trade deficits to boot).

Interesting to note today I read an article (on the Oil Drum somewhere) that Brazil is refusing to reduce its import tariffs even if a counteroffer was made to reduce their tariffs for brazillan ethanol. Brazil also achieved a current account surplus recently and I hate to admit it but is probably looking to maintain this. China is gaining thanks to its policies that manipulate the market and shift away wealth to it (eg low exchange rates, foreign investment caps, etc). OPEC, a cartel to manipulate oil prices to get the most out of their assets; another market manipulation. All these countries are thinking about themselves and seeing what works rather than adopting some theory when it comes to eco policy.

To me the commodity boom is another economic variable moving to accommodate this 'something for nothing' China boom. Inflation is finally moving on the back of commodity pricing which I see not as commodity price appreciation so much as cash depreciation. Which after so much wealth being sucked out of Western countries for some time is an inevitable pressure on the dollars of these countries.

I don't believe in the 'let the market rule' when not everyone is playing by the same rules. It is just selling our futures for cheaper import prices now.


----------



## Bushman

kennas said:


> Someone will be right. For the sake of my parents super, I'm hoping the ostitches, and these types of characters.




The night is always darkest just before the dawn...


----------



## nioka

aleckara said:


> To me the commodity boom is another economic variable moving to accommodate this 'something for nothing' China boom. Inflation is finally moving on the back of commodity pricing which I see not as commodity price appreciation so much as cash depreciation. Which after so much wealth being sucked out of Western countries for some time is an inevitable pressure on the dollars of these countries.
> 
> I don't believe in the 'let the market rule' when not everyone is playing by the same rules. It is just selling our futures for cheaper import prices now.




You can say that again    and again    and again. 

It is almost too late for the pollies to correct the situation. This has been said by many people over the years and the pollies don't seem to get the message. Short term gain for long term pain. It should be the other way around.


----------



## nioka

Bushman said:


> The night is always darkest just before the dawn...




It will be like waiting for the dawn after a bad blow during the night and knowing the devastation that you will see when dawn breaks. Been there done that.


----------



## dubiousinfo

Goldman Sachs JBWere  said:


> buying the market in the 4800-5000 level on a 12-month view will prove to be an absolute winner strategy.




I didn't realise that Goldman were actully members of ASF. This should improve the creds of ASF ......


----------



## kingbrown

Strange we are all so focused on China to save us these days  

Worrying news re Japan ?
Asian slide ? 

The good news is 
the Olympic media circus is about to roll into town 
Than most of us can whistle dixie for a few weeks  


*BOJ's Nishimura Says Japan May Have Recession*, Mainichi Reports 

By Lily Nonomiya

July 29 (Bloomberg) -- Bank of Japan Deputy Governor Kiyohiko Nishimura said the economy may fall into a recession as higher costs stagnate growth, the Mainichi newspaper reported.


----------



## kransky

personally i dont consider the rorting that is going on where banks and the wealthy are being saved from their stupidity and greed as socialism. its just plain stealing.. from the people/state. socialism often causes stealing, but socialism isnt actually stealing.. hehe

i consider socialism the ideal of getting people out of the rat race mentality that makes them want/need to borrow so much to have more goods than their neighbor. the ideal that we dont import oranges from brazil but we support our own riverland even if its products cost a little more..


----------



## pepperoni

Another months tops and we will have reached bottom ... then we just have years of very low returns and recession.  

Plus the asx being back where it was 2-3 years ago is in any event a big backward step in real terms.

Cant see it going less than 4500 esp with just a few decent earnings announcmements.


----------



## sk8er

kransky said:


> personally i dont consider the rorting that is going on where banks and the wealthy are being saved from their stupidity and greed as socialism. its just plain stealing.. from the people/state. socialism often causes stealing, but socialism isnt actually stealing.. hehe
> 
> i consider socialism the ideal of getting people out of the rat race mentality that makes them want/need to borrow so much to have more goods than their neighbor. the ideal that we dont import oranges from brazil but we support our own riverland even if its products cost a little more..




Agreed

While we are on the socialism theme, any chance of a spin in your porsche?


----------



## kransky

with what the market has been doing lately i have not made enough to splurge on a GT3... cant wait for us to find bottom though, should bring many opportunities.. i only worry that it might a long time before we do find bottom..

i see someone above has predicted we have hit bottom already.. did i understand the post correctly?

Anyway, did anyone see Gerry Harveys interview on Lateline Business? he was hilariously frank. He's been buying and buying in the last 12 months, harvey normon, westpac, nab etc etc and all are going down and he buys more and more and keeps going down.

he was then asked if he will keep buying and he said that he's lost the courage to keep buying.

How soon will we find bottom, how low will it be and will the market drag resource stocks down a lot with it? 

Anyone have any answers?

LOL


----------



## sassa

Kenneth Rogoff,in his article in the FT,certainly gives food for thought.



> Rogoff, in a Financial Times comment, contends we need a slowdown for different reasons: he views the efforts at stimulus as a dangerous, misguided way to try to evade the need to restructure the financial system.







> Absent a significant global recession (which will almost certainly lead to a commodity price crash), it will probably take a couple of years of sub-trend growth to rebalance commodity supply and demand at trend price levels (perhaps $75 per barrel in the case of oil, down from the current $124.) In the meantime, if all regions attempt to maintain high growth through macroeconomic stimulus, the main result is going to be higher commodity prices and ultimately a bigger crash in the not-too-distant future



http://www.nakedcapitalism.com/


----------



## Whiskers

Well, POO jumped 3.50 and knocked the wind outa the US tonight.

Only temporary though. The first little corrective (reversal) wave of the POO crash.


----------



## gfresh

Well the UK is looking nice and truly F'ed, to put it bluntly. Looking at various stats and articles over the last 2 weeks, looks like 7/10 of the world's largest economies are skating dangerously close to recession. I'd say in another quarter or two, it may be confirmed. 

http://www.bloomberg.com/apps/news?pid=20601087&sid=aFIUvqODrqUg&refer=home



> U.K. House Prices Fell, Confidence Dropped in July (Update1)
> 
> By Brian Swint and Svenja O'Donnell
> Enlarge Image/Details
> 
> July 31 (Bloomberg) -- U.K. house prices declined the most in almost two decades in July and consumer confidence fell to a record low as the economy edged closer to a recession.
> 
> *The average value of a home dropped 8.1 percent from a year earlier, the biggest decline since at least 1991*, Nationwide Building Society, Britain's fourth-biggest mortgage lender, said today. An index of confidence based on a survey of 2,001 people fell 5 points to minus 39, the lowest since the data began in 1974, GfK NOP Ltd. said.
> 
> Britain's economic outlook has deteriorated in the past month after ``bad news'' on retail sales and other data, Bank of England policy maker David Blanchflower said yesterday. The economy's weakness has helped erode support for Prime Minister Gordon Brown, whose ruling Labour Party had the lowest support since the early 1980s in a Populus Ltd. poll published this week.
> 
> ``These data reinforce our view that the U.K. economy is going into recession,'' Michael Saunders, chief western European economist at Citigroup Inc., said in a research note. ``With monetary and fiscal policy both hamstrung, most of the economic pain still lies ahead.''
> 
> On the month, house prices dropped 1.7 percent from June, the ninth consecutive decline, bringing the average value of a home to 169,316 pounds ($335,400), Nationwide said.
> 
> The pound snapped two days of gains against the euro after today's reports, falling to 78.76 pence as of 10:20 a.m. from 78.62 pence yesterday. (continued...)




Another snippet (from timesonline.co.uk). If that is the case, that would be a 25% fall.. massive. There are big implications for our banks too, they're just not going to tell anybody until they have to.



> However, *S&P expects the price of an average house to fall by a further 17 per cent into next year, plunging one in six homeowners into negative equity.*


----------



## davo8

http://www.rgemonitor.com/roubini-monitor/253191/global-recession-watch-recoupling-rather-than-decoupling/



> Nouriel Roubini:
> As already analyzed and discussed in detail in this blog there is now fresh evidence that at least a dozen major economies and some emerging markets are at risk of a recessionary hard landing. The list includes:
> 
> * United States
> * Japan
> * United Kingdom
> * Spain
> * Ireland
> * Italy
> * Portugal
> * Canada
> * New Zealand
> * Estonia
> * Latvia
> * Some other South-Europe emerging markets




And on the US housing futures, the consensus is for a 32% drop, bottom in 2010.

The wealth destruction rolls on...


----------



## Sean K

davo8 said:


> And on the US housing futures, the consensus is for a 32% drop, bottom in 2010.



So, there's going to be some great opportunities coming up in the near future.


----------



## Sean K

Cramer's called a bottom.

Batten down the hatches!! 


*Yes, the Market Has Bottomed*

If you thought you heard Cramer call a bottom during Tuesday’s Mad Money, you were right.

“It smells to me like something, in fact many things,” he said, “have at last changed for the better.” 

“I am indeed sticking my neck out right here, right now,” Cramer continued, “declaring emphatically that I believe the market will not revisit the panicked lows it hit on July 15. and I think anyone out there who’s waiting for that low to be breached is in for a big disappointment and [they’re] missing a great deal of upside.”

“Stop waiting,” he said, and “buy the next dip because I think it might be the last big one.”

Cramer pointed to five specific clues that proved to him that the market was about to turn up.

One is that the negativity is so bad we might be at the point of total capitulation. The investors Intelligence Survey reported a 30% bull-50% bear ratio. Fifty percent bearish! Who’s left to sell? That kind of despair and disbelief has historically been a sign, Cramer said, that the darkest part of night was ending and dawn was near. 


The king of the muppets has called it!!

Although, I do tend to agree with the last paragraph somewhat.


----------



## wayneL

kennas said:


> Cramer's called a bottom.
> 
> Batten down the hatches!!
> 
> 
> *Yes, the Market Has Bottomed*
> 
> If you thought you heard Cramer call a bottom during Tuesday’s Mad Money, you were right.
> 
> “It smells to me like something, in fact many things,” he said, “have at last changed for the better.”
> 
> “I am indeed sticking my neck out right here, right now,” Cramer continued, “declaring emphatically that I believe the market will not revisit the panicked lows it hit on July 15. and I think anyone out there who’s waiting for that low to be breached is in for a big disappointment and [they’re] missing a great deal of upside.”
> 
> “Stop waiting,” he said, and “buy the next dip because I think it might be the last big one.”
> 
> Cramer pointed to five specific clues that proved to him that the market was about to turn up.
> 
> One is that the negativity is so bad we might be at the point of total capitulation. The investors Intelligence Survey reported a 30% bull-50% bear ratio. Fifty percent bearish! Who’s left to sell? That kind of despair and disbelief has historically been a sign, Cramer said, that the darkest part of night was ending and dawn was near.
> 
> 
> The king of the muppets has called it!!
> 
> Although, I do tend to agree with the last paragraph somewhat.




Yes, it's "a" bottom, but only the most adventurous, or those who can gloss over the facts like CNN and The King of The Muppets (Remember the Bear Sterns BS?) 

I have to laugh at "the panicked lows it hit on July 15". Our Mr Cramer (Damn thats a hard name to twist into something derogatory) has forgotten what a panicked low looks like.

I don't know whether it's "the" low, I doubt it,  but there is certainly a tradeable rally out of it, so that's what I'm doing.

Biotechs are having a big hit out and even those doggy doody financials are hammering the shorts.


----------



## dhukka

wayneL said:


> I have to laugh at "the panicked lows it hit on July 15". Our Mr Cramer (Damn thats a hard name to twist into something derogatory) has forgotten what a panicked low looks like.




How about Mr Crapper? Did anyone notice the revision to US 4Q07 GDP to -0.2% from 0.6% previously? How about you Whiskers? Care to revise your previous statement in which you said:



Whiskers said:


> I don't think we've got too much to be worried about sassa.
> 
> Full blown recession was never in my calculations and the revised numbers suggest it was not even close.




For the record, you don't need negative GDP growth to call a recession but it certainly lends weight to the case. 4Q08 is setting up as a nasty one as the rebate check effect will have faded in the current quarter. Watch out for the payroll number revisions that accompany tonights payroll report, it has the potential to be on the nasty side.


----------



## pepperoni

This IS more or less the bottom ... it represents a significant real loss in the market over a considerable amount of time and huge losses short term.

The thing people need to adjust to is that once bottomed the market wont rocket up from here anytime soon ... volatility will continue and the market will trend flat or up 5-10% for a couple of years.


----------



## CamKawa

I don’t think this is the bottom of the stock market. I’m not looking for a bottom to form until I see two consecutive months of a least flat US house prices. As for when that will be I don’t know, but I’m not holding my breath.


----------



## sassa

> For the record, you don't need negative GDP growth to call a recession but it certainly lends weight to the case. 4Q08 is setting up as a






> "The time lag between the credit crisis in the financial sector and the peak of the credit squeeze in the real economy may simply be longer than initially anticipated" could result in the dreaded double dip recession.






> The tipping point has been reached. The biggest consumption party in the history of the world is now over and the hangover will be felt for years to come.




http://www.safehaven.com/article-10882.htm


----------



## macca

Hi all,

For me the bottom is reached when the XAO and the XJO are equal or the XJO is higher than the XAO.

We still haven't had the panic sell off of all the second tier stuff yet.

Still in 95% cash since last November, it is all too hard for me


----------



## kransky

nowhere near bottom imo...

but that has not stopped me from loosing money trying to ride small rebounds from steep dips



should just sit on the cash with more discipline and watch the slow motion train wreck thats happening right in front of us.


----------



## davo8

pepperoni said:


> This IS more or less the bottom ... it represents a significant real loss in the market over a considerable amount of time and huge losses short term.
> 
> The thing people need to adjust to is that once bottomed the market wont rocket up from here anytime soon ... volatility will continue and the market will trend flat or up 5-10% for a couple of years.




Yes, this is a recession, and no, this is not the bottom. Things that haven't happened yet (but they will):

1. Peak in unemployment.
2. Multiple bank failures, possibly including a big one.
3. Crash in commercial real estate.
4. Further downward revision of GDP figures.
5. Other failures: airlines? GM/Ford?

That's the good case. In the bad case, there is a global sell off of agency and/or treasury bonds, the USD heads for the cellar and loses AAA. The DOW headed down meets gold coming up.

I'm still picking October as an interesting month. It's got a good track history.

But I agree with the other bit -- this is going to be a long one.


----------



## Whiskers

I still think the US (stock markets) was stabalising and on the verge of recovering a little until oil went balistic. 

For me the US market is dancing to the tune of oil more than anything else now as in a bit of green at open tonight, but turning to red as soon as POO shot up sharply about $5.

But oil will start the next leg of free-fall later next week and all will be green, green, GOOO again.


----------



## explod

Whiskers said:


> I still think the US (stock markets) was stabalising and on the verge of recovering a little until oil went balistic.
> 
> For me the US market is dancing to the tune of oil more than anything else now as in a bit of green at open tonight, but turning to red as soon as POO shot up sharply about $5.
> 
> But oil will start the next leg of free-fall later next week and all will be green, green, GOOO again.




Well I think you are wrong.   The effects of oil above $100 some time back have not hit the bottom line yet.    There are many economic matters in the US over the last fews years that have not yet been acknowledged on Wall Street commensurate with the bottom line.   And these are just a few points.

The conditions are different and worse than the crash of 1929, a crash that lasted and continued for at least four years.

I see no magic cure or white knights to save the unwinding economic chaos that is the US.    And I THINK oil looks like it could be on the way up again after overnight action.


----------



## Sean K

I agree with the cat, in the very short term.

Seems POO is driving a lot of sentiment right now.

Except for gold. Oil down, gold up. Oil up, gold down. What the?

Probably just a temporary thing though.


----------



## kotim

hAVE A LOOK BACK AT 1987-89 and you will see the major bank stocks and what happened to them.  This is what is going to occur again.

The governments and financial institutions will have to put some sort of cap on the way banks continually extend credit and securitise "money"

This will impact upon earnings for the bank., this means that we may see them drop their dividend payouts.

The banks control the direction of the market in general and if the banks drop their dividend payout then there is less reason for people to invest in them as they are historically part defensive because of their dividend payout and associated growth.  If that is compromised for a while then that will effect peoples investment in them.

What will happen when we see the major bottom is a huge rush up about 30-50% over many months and then the reporting season will be upon us again and the banks will come out and say we are not earning as much money as we like and the profits(growth) are down, so then people will sell out of the banks and force the price way down again and so forth and that will go on for a few years.

The banking stocks effectively went sideways from 87 through to the early 90's.


----------



## brty

Hi,

The banking stocks went from a low immediately after the crash of '87, to new highs by late '89. In other words they gained about 100% over a short period.

What you really mean is what they did between the high of late '89 and the lows of late '92 when WBC and ANZ lost ~66% of their value. NAB lost about 30% between the '89 high and the '91 low, and then rose as it was perceived as the 'safer' bank.

brty


----------



## CamKawa

I tried to look up what the banks did between '87 - '92 but my data only goes back to '92. Anyone got a chart?


----------



## brty

Cam,

Go to bigcharts.com, they have charts back from early 88 for ANZ, NAB and WBC. Choose 'all data' for the time frame.

brty


----------



## kotim

brty look at the highs in 87 and it does not matter what they did after that, anyone who was a long term buyer of such a stock as anz in late 87 etc either made a little bit, lost a lot or lost a little in the following half dozen years until the market started to move away and up finally.  Not good for buy and hold unless you bought the bottom.

chart attached of westpac, weekly chart from 1987 thorugh to 1996


----------



## Whiskers

kennas said:


> I agree with the cat, in the very short term.
> 
> Seems POO is driving a lot of sentiment right now.




...'the cat'... well, coming from the king of cats I suppose thats a compliment. ... by the way I called him Tiger. 

Still not sure about 'stubble', explod! 



> Except for gold. Oil down, gold up. Oil up, gold down. What the?
> 
> Probably just a temporary thing though.




According to my master formula the POG will wobble a bit out of sync while the currencies relalign to a better looking US economy with low POO. All that other stuff is pretty much ancient history now and pales in significance to the POO.

Ultimately, I'm pretty sure the USD index will al least stabalise or recover a little boosting the US and with lower interest rates on the Aus horizon the AUD has already started to fall to probably the low 80's.

All the right ingredients to settle down the uncertainty in the world economy and re-launch the Aus resource sector.


----------



## brty

Hi Kotim,

Who said anything about a long term buy and hold??

Providing you did not buy in july- october '87, then you would have done all right.

If you bought in Nov-Dec of '87 you could have made 100% on your money within 20 months. After each 40-50% pullback, the banks made marvelous lows that could have been traded for 50-100% gains in short (relatively) periods of time.

I do not buy and hold for the long term, history shows it to be a losing game. How many of the top 20 companies (by market cap) from 1987 are still in the top 20 today?? After the 3 big banks, BHP and RIO, I think you would be struggling to find any.

bye


----------



## davo8

explod said:


> The conditions are different and worse than the crash of 1929, a crash that lasted and continued for at least four years.
> 
> I see no magic cure or white knights to save the unwinding economic chaos that is the US.    And I THINK oil looks like it could be on the way up again after overnight action.




Spot on. The market crash is by, with and from the collapse of the credit bubble. Oil is an unfortunate complication, but the financials are dead men walking. How can anyone believe that a financial stock dropping 90% is caused by the price of oil? Crazy!

Residential property is due to drop at least 35% across the board. Commercial property is just starting to drop. Banks cannot survive that kind of carnage, and another went bust this week, with more to follow.

Trade the bear rally if you must, but stick close to the exits. Repeat after me: this it NOT the bottom.


----------



## kotim

brty, no problems, the point of my original post was that we are going to be going into a relatively flat period for the next few years, yes if you can trade the swings then you can perhaps make good money, however for all the buy and hold brigade out there (read 95% whether through brokers or funds) then unless your fortunate enough to buy in at or very near the bottom then the growth they receive will be negative in real terms. one year the profit will be up, the next year not.  allow for inflation and the cost etc.  The whole point of my post was that we are int he same times.

Have a look at the bank stocks, made a big top in 2007, false break this year and down we go.  ANYWAY its just talk


----------



## Sean K

From our Finance Minister today:



> "Yes, the economy is slowing, yes we need to take the steam out of inflation, but people talking recession are getting way ahead of the facts."






Yes, yes, I am quoting politicians again. I must be mad, and we should all be listening to bloggers!

But, in the background, the TA anf FA experts are disagreeing somewhat. 

One thing I'm considering at the moment is:

Does economics equate to sharemarket performance?

Anyone have a view on that?


----------



## davo8

kennas said:


> One thing I'm considering at the moment is:
> Does economics equate to sharemarket performance?
> Anyone have a view on that?




Eventually, yes. The sharemarket is reasonably good at valuing companies; over time, valuations are driven by profits; and profits are driven by economics.

Economics: consumers have less money to spend.
Market: consumer discretionary marked down.
Reality: businesses sell less stuff.

Economics: credit is tight, less lending, more bad debts.
Market: hammers financial stocks.
Reality: banks and financials lose money, make less profits.

It's the timing that is the problem. TA helps there.


----------



## 2020hindsight

2020hindsight]
mental note 2
might be good time to buy - just before EOFY
If the buy orders are all waiting for next Tuesday - why not get in first and buy Monday ?[/QUOTE]

way back at post #2659
[QUOTE=Aussiejeff said:


> Hmmm. Then again, it might be prudent to wait for the tsunami of potentially *DISMAL* (IMO) company reports covering the last quarter to be unmasked.....
> 
> As the first wave of floodwaters subside around end of July, maybe some sad pickings will be lying cheaply around the seaside.
> ..AJ



spot on AJ - I shudda listened to you lol.


----------



## Whiskers

Just glanced over at Yahoo, saw the line chart and just happened to think... hum, the market's rising nice and smooth like a fresh baked sponge cake.


----------



## sassa

Whiskers said:


> Just glanced over at Yahoo, saw the line chart and just happened to think... hum, the market's rising nice and smooth like a fresh baked sponge cake.



How was the sponge Whiskers?Any cream on it for a follow up in the good old U.S.of A tonight?Volume was mediocre for a substantial increase.Selloff tonight?Constipated movement?



> Today's market action looked like a major Wall Street insiders push to break the traders/funds who were playing the long oil-long metals - short dollar-short financials cross trades. They were leaning awfully hard on them



http://www.jessescrossroadscafe.blogspot.com/


----------



## white_goodman

2020hindsight said:


> way back at post #2659
> 
> spot on AJ - I shudda listened to you lol.




all you need now is a delorian and gun it to 88


----------



## Whiskers

sassa said:


> How was the sponge Whiskers?Any cream on it for a follow up in the good old U.S.of A tonight?Volume was mediocre for a substantial increase.Selloff tonight?Constipated movement?
> 
> 
> http://www.jessescrossroadscafe.blogspot.com/




Yes well, it finished baking nicely, sassa. 

Lower oil will be the sweet icing I think... so long as it's whipped up before the cake goes too stale. 

But then you mention that other 'dirty word' of the moment (after oil speculaters) ie Wall Street insiders. So cautiously optermistic.


----------



## Whiskers

Not surprising (but unexpectedly according to the press) but not good news none the less.

Freddie Mac Losses soar, dividend slashed 80%.



kennas said:


> One thing I'm considering at the moment is:
> 
> Does economics equate to sharemarket performance?
> 
> Anyone have a view on that?




Just a backward looking reminder, but likely to put the US on the back foot a little I suppose, until oil drops again. 

But I think those with clear foreward looking economics will continue quietly accumulating now while the masses are still undecided, eg all that money exiting oil and gold and interest bearing accounts.


----------



## BentRod

> Cramer's called a bottom.




Clairvoyant??

http://www.youtube.com/watch?v=Udjx0f93Wbk


----------



## Uncle Festivus

Whiskers said:


> Not surprising (but unexpectedly according to the press) but not good news none the less.
> 
> Freddie Mac Losses soar, dividend slashed 80%.
> 
> Just a backward looking reminder, but likely to put the US on the back foot a little I suppose, until oil drops again.
> 
> But I think those with clear foreward looking economics will continue quietly accumulating now while the masses are still undecided, eg all that money exiting oil and gold and interest bearing accounts.




Another classic Whiskers - is your glass half full still - is there _really_ a glass at all??

It's interesting that you mention Freddie then in the same breath say you are buying bargains, I can only assume? What _are_ the 'forward looking economics' that suggest this is the bottom, or at least the time time to start accumulating? My forward looking data suggests that there is still a lot of negative data that has not been marked to market, as in company reporting, and even more behind the scenes money shuffling to prop up FAILING financial institutions. 

Make no mistake, there will be some name-brand failures in the next 12 months, some so called "too big to fail".

I agree that there are a lot of 'vapors' chasing the next hot sector, but in the END it will END in tears.

It's now the battle of the depreciating fiat currencies - there is only one currency that will survive?

The sooner the world ditches the $USD the better the world will be. 



> RENOWNED US investor Jim Rogers says the US dollar is no longer the world's reserve currency, and says *America's financial situation will get worse* regardless of who wins the upcoming presidential election.
> But Mr Rogers struggled to nominate a currency that could replace the US dollar, saying the euro, often named as a potential successor, was a "political" currency that would not exist in 20 years.
> Mr Rogers, in Australia for the Investment and Financial Services Association conference in Gold Coast, criticised the "*currency debasement*" strategies of Federal Reserve chairman Ben Bernanke.



http://business.theage.com.au/business/us-in-trouble-investor-20080806-3r71.html


----------



## Sean K

Just presenting other views.

:couch

07/08/2008 

1200 [Dow Jones] Australian jobs data appear "a little bit out of whack", given broader softening trend in employment, says Commonwealth Bank of Australia senior economist John Peters; adds numbers reflect fact there's still steam in economy, which "far from falling off a cliff". Says while economy slowing according to RBA's settings, "this talk of recession is way overdone by some in the media".(SRH) 

1221 [Dow Jones] Very recent bearish streak on Australian economy has likely gone too far, Citigroup Director of Economic Research Stephen Halmarick says. Notes while decline in New South Wales jobs is big, strength in Queensland, West Australian labor markets highlights persistent strength in resource rich part of Australian economy. "Maybe the RBA's patience on all this is probably the right strategy." Takes edge off calls for 50bp RBA cut in September. "I suspect some of the extreme bearishness about the Australian economy that has developed over the last week or two may have gone a little bit too far." But adds stronger-than-expected Australian jobs data need to be taken with "grain of salt", given reduction to sampling size of survey.(SRH)

1223 [Dow Jones] Australian June jobs data show labor market "easing glacially" but likely to incur significant weakness through 2H, says UBS Chief Economist Scott Haslem. Yet data still shows economy reasonably resilient with export income likely to provide some cushion; coupled with rising inflation, means RBA easing cycle will be cautious.(EGC)


----------



## Whiskers

Uncle Festivus said:


> Another classic Whiskers...




So, my commentry is going to survive time in memorial??? 



> My forward looking data suggests...




Nah, the data don't exist yet. Forward projections... based on the inevetable collapse of the POO and the flow of funds and realignment of the major currencies around a stronger USD. 

It will change the yard-sticks and goal posts somewhat again for awhile... such as reducing the cost of imports to the US, tempering inflation a bit and boosting consumer confidence. 

Keep a bit of space for me behind that couch, kennas... I might need it soon.


----------



## dhukka

Uncle Festivus said:


> Another classic Whiskers - is your glass half full still - is there _really_ a glass at all??
> 
> It's interesting that you mention Freddie then in the same breath say you are buying bargains, I can only assume? What _are_ the 'forward looking economics' that suggest this is the bottom, or at least the time time to start accumulating? My forward looking data suggests that there is still a lot of negative data that has not been marked to market, as in company reporting, and even more behind the scenes money shuffling to prop up FAILING financial institutions.
> 
> Make no mistake, there will be some name-brand failures in the next 12 months, some so called "too big to fail".
> 
> I agree that there are a lot of 'vapors' chasing the next hot sector, but in the END it will END in tears.
> 
> It's now the battle of the depreciating fiat currencies - there is only one currency that will survive?
> 
> The sooner the world ditches the $USD the better the world will be.
> 
> http://business.theage.com.au/business/us-in-trouble-investor-20080806-3r71.html




How about the most current indicator of the health of the US economy - the weekly jobless claims number?  In the latest week initial jobless claims came in at 455k, the highest level since March 2002. The 4 week moving average is now at 419.5k, the highest since July 2003. But since that survey was for last week that;s in the past. 

Oh yeah there was also AIG losing more than *$5*billion last quarter but that's all in the past. Also in the past Walmart and Target both missed sales growth estimates in July. But Walmart did offer some 'forward loooking' economic data warning that August Sales were coming in softer than expected. But don't worry August will soon be in the past along with the current US recession.


----------



## Sean K

dhukka said:


> How about the most current indicator of the health of the US economy - the weekly jobless claims number?  In the latest week initial jobless claims came in at 455k, the highest level since March 2002. The 4 week moving average is now at 419.5k, the highest since July 2003. But since that survey was for last week that;s in the past.
> 
> Oh yeah there was also AIG losing more than *$5*billion last quarter but that's all in the past. Also in the past Walmart and Target both missed sales growth estimates in July. But Walmart did offer some 'forward loooking' economic data warning that August Sales were coming in softer than expected. But don't worry August will soon be in the past along with the current US recession.



How does this compare with share market performance?

Can you overlay a DJI/S&P chart on that?

And, probably more relevant is an Australian jobs data v sharemarket performance.

My premise is that at some point in this chart there is a time to buy equities.


----------



## explod

kennas said:


> How does this compare with share market performance?
> 
> Can you overlay a DJI/S&P chart on that?
> 
> And, probably more relevant is an Australian jobs data v sharemarket performance.
> 
> My premise is that at some point in this chart there is a time to buy equities.




The market is about what everyone believes or thinks is value.  This is derived by very different means and perceptions.   All comes down to sentiment.

The United States has been the world economic engine since at least the 2nd World War ending.  As long as I have been alive.

If the Dow Jones jumps, everything jumps.    I repeat SENTIMENT

It cannot be quantified by overlays or even common sense Kennas.   It is a subjective world of individual judgements, no more no less.

I THINK for example that gold has bottommed for the moment (it may not have)  I THINK that LGL has been oversold, so today I brought back in, and I THINK it could be a good trade for about 6 months.   But it is just my perception of the sentiment made up from the fundamentals and the charts.


----------



## Uncle Festivus

kennas said:


> My premise is that at some point in this chart there is a time to buy equities.




I guess that would be the premise in a 'normal' cyclical market as we have become accustomed? But for some reason the emphasise now is on return *of* capital, not return *on* capital, and some have gotten burned trying to pick the last bottom, which was proclaimed loudly by the money shufflers to be the end of the credit 'crisis' - a tad premature. Ditto for this little episode? 

I don't think we have had a capitulation drop off yet, the DOW is still not 'fair' value on PE ratio's even after all this - it's only 2.5k off it's highs - an investment short, plenty to make on the downside yet?


----------



## CanOz

Uncle Festivus said:


> I guess that would be the premise in a 'normal' cyclical market as we have become accustomed? But for some reason the emphasise now is on return *of* capital, not return *on* capital, and some have gotten burned trying to pick the last bottom, which was proclaimed loudly by the money shufflers to be the end of the credit 'crisis' - a tad premature. Ditto for this little episode?
> 
> I don't think we have had a capitulation drop off yet, the DOW is still not 'fair' value on PE ratio's even after all this - it's only 2.5k off it's highs - an investment short, plenty to make on the downside yet?




Something too, to keep in mind is that one does not get too bearish...not that anyone is too bearish yet...but if you remember how the herd thinks when its a bull market, the "this bull is different" change of paradigm thing...although this one may be different, the phase where equities get accumulated should not be should it?

Cheers,



CanOz


----------



## Uncle Festivus

CanOz, this time might be different because the old formula of incessant issuing of vapor notes to keep the system primed for inflation isn't working, if it was they would be raising rates from the effective zero level it's at now, and all would be back to 'normal', cycle continues etc. Instead they are sh*tscared of deflation. 

At the moment we have stagflation, next step recession (if not already?), then worst case a deflationary depression?


----------



## CanOz

Uncle Festivus said:


> CanOz, this time might be different because the old formula of incessant issuing of vapor notes to keep the system primed for inflation isn't working, if it was they would be raising rates from the effective zero level it's at now, and all would be back to 'normal', cycle continues etc. Instead they are sh*tscared of deflation.
> 
> At the moment we have stagflation, next step recession (if not already?), then worst case a deflationary depression?





LOL! Vapor notes....are you referring to treasury notes?

Well i couldn't agree with you more, but that may not stop an accumulation in equities at some stage.

By the way, have you seen IOUSA yet? Can't wait for it!

CanOz


----------



## davo8

Uncle Festivus said:


> I don't think we have had a capitulation drop off yet, the DOW is still not 'fair' value on PE ratio's even after all this - it's only 2.5k off it's highs - an investment short, plenty to make on the downside yet?




Correct. I think some people here are having difficulty recognising a [market] bottom, perhaps because they've never seen one before. David Merkel has a pretty good summary.

http://alephblog.com/2008/08/07/the-fundamentals-of-market-bottoms/



> 1) The Investor Base Becomes Fundamentally-Driven. Now, by fundamentally-driven, I don’t mean that you are just going to read lots of articles telling how cheap certain companies are. There will be a lot of articles telling you to stay away from all stocks because of the negative macroeconomic environment, and, they will be shrill.
> 
> 2) Fundamental investors are quiet, and valuation-oriented.  They start quietly buying shares when prices fall beneath their threshold levels, coming up to full positions at prices that they think are bargains for any environment.
> 
> 3) But at the bottom, even long-term fundamental investors are questioning their sanity.  Investors with short time horizons have long since left the scene, and investor with intermediate time horizons are selling.  In one sense investors with short time horizons tend to predominate at tops, and investors with long time horizons dominate at bottoms.
> 
> 4) The market pays a lot of attention to shorts, attributing to them powers far beyond the capital that they control.
> 
> 5) Managers that ignored credit quality have gotten killed, or at least, their asset under management are much reduced.
> 
> 6) At bottoms, you can take a lot of well financed companies private, and make a lot of money in the process, but no one will offer financing then.  M&A volumes are small.
> 
> 7) Long-term fundamental investors who have the freedom to go to cash begin deploying cash into equities, at least, those few that haven’t morphed into permabears.
> 
> 8 ) Value managers tend to outperform growth managers at bottoms, though in today’s context, where financials are doing so badly, I would expect growth managers to do better than value managers.
> 
> 9) On CNBC, and other media outlets, you tend to hear from the “adults” more often.  By adults, I mean those who say “You should have seen this coming.  Our nation has been irresponsible, yada, yada, yada.”  When you get used to seeing the faces of David Tice and James Grant, we are likely near a bottom.  The “chrome dome count” shows more older investors on the tube is another sign of a bottom.
> 
> 10) Defined benefit plans are net buyers of stock, as they rebalance to their target weights for equities.
> 
> 11) Value investors find no lack of promising ideas, only a lack of capital.
> 
> 12) Well-capitalized investors that rarely borrow, do so to take advantage of bargains.  They also buy sectors that rarely attractive to them, but figure that if they buy and hold for ten years, they will end up with something better.
> 
> 13) Neophyte investors leave the game, alleging the the stock market is rigged, and put their money in something that they understand that is presently hot ”” e.g. money market funds, collectibles, gold, real estate ”” they chase the next trend in search of easy money.
> 
> 14) Short interest reaches high levels; interest in hedged strategies reaches manic levels.




If you go through that checklist, you'll find a couple but you'd have to agree that (repeat after me): this is not the bottom.


----------



## Whiskers

davo8 said:


> Correct. I think some people here are having difficulty recognising a [market] bottom, perhaps because they've never seen one before. David Merkel has a pretty good summary.
> 
> http://alephblog.com/2008/08/07/the-fundamentals-of-market-bottoms/
> 
> 
> 
> If you go through that checklist, you'll find a couple but you'd have to agree that (repeat after me): this is not the bottom.




Hi davo8. I'm looking to stock up on Xmas cheer. I've got one carton com'n when oil stays below 100 for more than a week. I'll wager ya another one this is the bottom. 

Have ya done any maths on how company balance sheets and profits alone, (without considering the overall US economy) will dramatically change as oil goes under 100 again, the USD gains 5 to 10% on many other currencies and will probably start raising interest rates again before most others or as others are lowering?

After all it was the demise of the USD and rampant oil that compounded the subprime/credit crunch problem.


----------



## explod

Whiskers said:


> After all it was the demise of the USD and rampant oil that compounded the subprime/credit crunch problem.





The subprime was a problem long before the rise in oil and the US dollar has been in a down trend since 02.

Oil was under $US60 2 years ago.   They are very bad and seperate problems


----------



## bean

This is not a bottom but a bear market rally in the US markets
DJIA could get to 12000 in next week or so before continuing back down.
As for oil it topped on *july 15th 2006*  Had a large correction 35%
before it started back up
Topped 15th july 2008 and we've only had a 20% correction 


As for other commodities some are in demand/short supply.
Fundamentals will eventually control the price not panic selling


----------



## explod

This bit from Jim Sinclair's site took my fancy as it is easy to forget the real numbers sometimes:-



> Posted On: Thursday, August 07, 2008, 9:12:00 PM EST
> 
> Sleep Well Dollar Holders
> 
> Author: Jim Sinclair
> 
> Sleep well all you dollar holders in the belief that public funds will solve everything. The next time you hear a politician use the word "billion" in a casual manner think about whether you want them spending YOUR tax money. A billion is a difficult number to comprehend but one advertising agency did a good job of putting that figure into perspective. Here it is:
> 
> A.
> 
> A billion seconds ago it was 1959.
> 
> B.
> 
> A billion minutes ago Jesus was alive.
> 
> C.
> 
> A billion hours ago our ancestors were living in the Stone Age.
> 
> D.
> 
> A billion days ago no-one walked on the earth on two feet.
> 
> E.
> 
> A billion dollars ago was only 8 hours and 20 minutes at the rate our government is spending it.
> 
> Now think about the size of the notional value of the mountain of all derivative of which 95% are OTC Derivatives: One Quadrillion, one thousand one hundred and forty four trillion.(Source: The Bank for International settlements).
> 
> Many people out there are resting assured that all financial problems have been solved by the use of public funds to sustain those that created these problems in the first place. If you can sleep soundly with such a brew boiling while believing there are no CONSEQUENCES, you are taking some heavy duty sleep medication. Public money will not solve all problems and if there isn't enough we will simply print more. That's a recipe for disaster.


----------



## Macquack

explod said:


> This bit from Jim Sinclair's site took my fancy as it is easy to forget the real numbers sometimes:-




Good stuff, Expod. Puts the number 1 Billion into perspective.

These days, if a company doesn't make a billion dollar profit or loss, nobody takes any notice.

May be its time to invest in wheel barrow manufacturing!

BTW Explod, what happened to your avatar
Also not sure about the mathematics, I make 1 Bill seconds ago to be 1976.


----------



## GreatPig

Macquack said:


> I make 1 Bill seconds ago to be 1976.



Yeah. If 1 billion seconds ago was 1959, then Jesus lived about 3000 years ago...

GP


----------



## davo8

Whiskers said:


> Hi davo8. I'm looking to stock up on Xmas cheer. I've got one carton com'n when oil stays below 100 for more than a week. I'll wager ya another one this is the bottom.




I wouldn't take the first one either way. My take is that a world recession will drive commodity prices down for a while, and oil could be anywhere from 90-110 or so. Until it starts going up again, which it most certainly will.

Equities have some way to go yet. I've already listed the things that haven't happened yet, and that's without even thinking about the odd black swan.



Whiskers said:


> Have ya done any maths on how company balance sheets and profits alone, (without considering the overall US economy) will dramatically change as oil goes under 100 again, the USD gains 5 to 10% on many other currencies and will probably start raising interest rates again before most others or as others are lowering?
> 
> After all it was the demise of the USD and rampant oil that compounded the subprime/credit crunch problem.




I'm not making a call on the USD yet. Profit reporting will be bad. The Fed is not going to raise interest rates any time soon. The credit crunch is far from over, and the next really bad period should be Sep/Oct (but around Aug 25th should be interesting).


----------



## dhukka

Whiskers said:


> Hi davo8. I'm looking to stock up on Xmas cheer. I've got one carton com'n when oil stays below 100 for more than a week. *I'll wager ya another one this is the bottom. *



I'll take that bet, only let's make it 10 cartons?


----------



## Whiskers

davo8 said:


> I'm not making a call on the USD yet. Profit reporting will be bad. The Fed is not going to raise interest rates any time soon. The credit crunch is far from over, and the next really bad period should be Sep/Oct (but around Aug 25th should be interesting).




Hey davo8, I called the USD earlier today in the gold thread. Safe as houses... well maybe not US houses. 



Whiskers said:


> I gather some of you are tipping the USDX to break down at the trend line... about where it is now.
> 
> I'm gonna say *the USDX has put in a bottom. *
> 
> Minor leg 1 is about complete, 2 should come back to around 75 - 76.
> 
> The first 5 minor waves should take it well into the 80's.
> 
> BUT, although I havn't completely figured the big picture in terms of EW it seems to me that even if this is a corrective leg on the way down, I think it could still get into the 90 to 100 range in the months or year ahead.


----------



## Whiskers

dhukka said:


> I'll take that bet, only let's make it 10 cartons?




 

Gosh, dhukka... what do ya think I am... a regular p!ss pot! 

It'll take me two or three years to drink 10 cartons. 

But are you sure you're good for 10.


----------



## gfresh

Well Japan is officially half-way into recession, with a 0.6% contraction last quarter. The wheel continues to turn... 

http://www.reuters.com/article/economicNews/idUST11028920080813



> By Yoko Nishikawa
> 
> TOKYO, Aug 13 (Reuters) - Japan's economy contracted in the second quarter at its sharpest rate in seven years, adding to worries that the world's No.2 economy has slipped into a recession as global growth shows more signs of losing steam.
> 
> Consumers and companies cut spending as they struggle with steep energy and raw material costs, while spreading damage from the U.S. slowdown hurt exports to emerging nations -- possibly marking the end of Japan's longest expansion since World War Two.
> 
> The 0.6 percent contraction matched market expectations and was the biggest quarterly decline since 2001, when Japan was last in recession after the Internet stock bubble burst.
> 
> "The data gave the impression that the economy has entered a recession, and I think it is in one," said Takahide Kiuchi, chief economist at Nomura Securities.


----------



## dhukka

Whiskers said:


> Gosh, dhukka... what do ya think I am... a regular p!ss pot!
> 
> It'll take me two or three years to drink 10 cartons.
> 
> But are you sure you're good for 10.




It would probably take me longer, but I'm sure my old man could polish them off in a couple of months. Don't worry about me, I'm good for it. So do you feel lucky? Well do ya punk?


----------



## davo8

dhukka said:


> So do you feel lucky? Well do ya punk?




How about telling us exactly what the bet is? Could be there are others would like a piece of that action. Sounds like better odds than the market is offering.


----------



## dhukka

davo8 said:


> How about telling us exactly what the bet is? Could be there are others would like a piece of that action. Sounds like better odds than the market is offering.





I thought it was pretty obvious davo, Whiskers has called the bottom for the stockmarket (again). I'll bet 10 cartons of beer that the August 5th 4882 closing low on the XAO was not the bottom.


----------



## Whiskers

dhukka said:


> I thought it was pretty obvious davo, Whiskers has called the bottom for the stockmarket (again). I'll bet 10 cartons of beer that the August 5th 4882 closing low on the XAO was not the bottom.






No, no, no, no, no, not quite correct.

Previously, I said I'd be *surprised* if, and I don't think the market will go lower... which I was... cos I didn't figure oil going balistic. 

However, this time I'm definately saying it won't go lower. :


----------



## Sean K

Cripes, The Aussie economy and banking system must be in trouble. I just watched an article on our banking system on CNN Latin America. The Latin Americans are worried about the credit crunch hitting them now. What's next, Africa?


----------



## Uncle Festivus

Whiskers said:


> However, this time I'm definately saying it won't go lower. :




Brave call there Whiskers 

I can see the same conditions emerging in the indices - ascending wedges - in the FTSE & DOW, with the FTSE _again_ leading the breakdown. XAO just 'mushing' around being torn between the financials & resources again.

Give it time for this episode to work it's way through then we can get back to the USD counter trades re-emerging again?


----------



## gfresh

I've heard this is where I signup for a free 10 cartons courtesy of whiskers? 

That low is only 5% away, that's only 2 days of negative moves with current volatility...

October I think will be nasty with the next batch of US results.. that's where we may see a new major low. Not enough bad news out there yet. US financials still falling rapidly last week, indicating there is still plenty of room to fall.


----------



## davo8

Whiskers said:


> However, this time I'm definately saying it won't go lower. :




So you're prepared to sell an out of the money digital put option on the XAO with a strike price of 4882 for a premium of $500 (no cheap beer, thanks!) and a payoff of $500? Expiring when?

Have you done a Black-Scholes on that?


----------



## CanOz

Food for thought.


----------



## kingbrown

*Is the fat lady starting to sing ?*

Fear over resources boom

Fears are growing that the commodities boom is ending as investors who have fled the oil market desert gold, copper and other metals. 
Oil prices have slumped 23% in four weeks, while gold and copper have fallen by similar amounts and last week lead plunged 15%. 

The falls follow a fundamental shift in financial flows as investors prepare for a global slowdown, News Ltd reports.

*"Commodity booms end ugly, they always do, and there has never been an exception,"* Access Economics director Chris Richardson told the newspaper. 

*"The speed and weight of money behind this move has been quite breathtaking,*" ANZ foreign exchange strategist Tony Morriss said. 


http://smallbusiness.theage.com.au/growing/finance/fear-over-resources-boom-907256442.html


----------



## davo8

*Re: Is the fat lady starting to sing ?*

Not even clearing her throat.

Commodity booms are multi-year affairs. A few weeks in the wrong direction is just a blip. It'll take a lot more than that.

The current very rapid USD move looks a lot more like a gigantic short covering by world currency traders. Too far, too fast, time for a correction. The trend on the USD is still down, oil up, but not so fast.

The really bad stuff is getting close now. October, I think. Good month for bad news.


----------



## CanOz

*Re: Is the fat lady starting to sing ?*



davo8 said:


> The current very rapid USD move looks a lot more like a gigantic short covering by world currency traders. Too far, too fast, time for a correction. The trend on the USD is still down, oil up, but not so fast.
> 
> .




Agree.


----------



## shmi

A little bit of news how this is really starting to affect even more people in  the US: 

http://news.yahoo.com/s/ap/20080818/ap_on_re_us/schools_hard_times

And really, thats just what the US need, their kids to be LESS educated.


----------



## Julia

The following article from 'Compare Shares' is worth reading:


> Resident Trader
> Should you jump off the sharemarket train or hang on for the ride?
> Will Kraa, August 18, 2008
> 
> The debate as to how to manage investments during the current downturn is not abating by any means. Fund managers obviously want to keep as much investor funds as possible under their management while most financial planners have an interest in recommending managed funds. It is to be expected therefore that we are being conditioned to keep our money in shares and are constantly being told that over the long term the market rises.
> 
> It’s not surprising then that most investors are firmly blinkered when it comes to deciding what to do in times like these. It has all been so easy for so many years and combined with the advice they are given constantly it leads many to think that the share market will shortly return to the upward trend and all will be well again. Even when I was speaking to a group of people who do understand the importance of risk management and have experience in trading I saw many surprised looks when I told them that what we have witnessed in the market in the last few years may well be a once on a lifetime experience. Australia does have many advantages as far as the resource sector is concerned but nothing is certain when it comes to what the rest of the world will be experiencing. There is no use having resources if the rest of the world can’t afford to buy them at the prices we would like to get.
> 
> 
> There are some very good analysts and other assorted ‘experts’ who say that in their opinion the market has now reached a bottom and we can expect that things won’t get any worse. There are also equally qualified people who say there is worse to come. And of course there are some who say they don’t know quite what to expect from here on. I’m very much inclined to side with this last group.
> 
> At the last Expo in Brisbane I listened to a very entertaining talk given by Mark D. Cook, a US trader who has a very good reputation as a day trader and has won several competitions in trading. There was a questions period at the end and it was interesting to see that the bulk of questions did not relate at all to the kind of trading he is famous for but rather questions as to his view of what the market was likely to do from now on. He did his best to answer but it was an insight into human nature to hear these long term questions asked of someone who trades with a view to the next few minutes or at most hours.
> 
> It well illustrated that as humans we desperately like to be reassured by the opinions of those who are seen as experts without considering if their expertise is relevant. Research has shown that the bulk of analysts’ opinions are wrong. Get used to it, foretelling the future is a lost cause. This is not the way to recovery of lost funds.
> 
> So let’s get some perspective on the current situation. The All Ordinaries Index is now back to where it was exactly two years ago. So if you had decided to hold a portfolio of stocks reflecting the market as a whole for say the last five years you would certainly be well ahead by now but the gains of the last two of those extraordinarily good years would by now have been wiped out. So where to from here? Is it credible to believe that we will soon see a repetition of the spectacular run up we have seen in the last couple of years? Or, even if the bottom has been reached now, is it more likely that things will go sideways for some time or that there might be a modest rally? If so it might be quite some time (possibly years) before we see the index above the highs of last year.
> 
> If this article is too late for you and you can see now that you should have sold earlier, now may not be a good time to sell but it may be wise to place stops to prevent further losses. A 2.5ATR(10) chandelier trailing stop on a weekly chart has given good results after back testing.
> 
> If you are holding stocks showing large losses it is tempting to ask, ‘Is this stock likely to go up again so that I will get my losses back?’ but that could well be the wrong question. It may be wiser to ask, ‘Is it more probable that this stock will be profitable or is there some other stock that is more likely to do well.’ A decision to hold a stock should never be based on the desire (very human) to see it give back any losses that would be realised if it was sold now. A good stock trending up is much more likely to get some good returns than a company in trouble with a falling share price. Holding rising stocks is the most probable way of making good the losses rather than sticking your head in the sand and simply hoping that stocks that have fallen are going to recover. Some will but they are also likely to be the ones that have not fallen as much as others.
> 
> Don’t be deceived by the idea that losses are not losses until the loss is crystallised by selling. Liberating the cash for a better investment could be the way to success even if the realised loss is painful but do make sure that the new investment is indeed a better one. Just turning over stocks will not in itself lead to profit except for your broker.
> 
> Buying more of a stock so that the break-even price is lowered is an absolutely crazy idea unless there is a very good reason indeed to expect that the fallen stock is now going to turn around and do well. Usually that is only wishful thinking. The fact that you already own a stock should not at all enter the equation when deciding to buy. Buy only if that is what you would do if you had never had anything to do with the stock before.
> 
> Currently, if you are able to trade well, trading CFDs on a short term basis and being willing at times to short stocks is one way of making some money. Trading the indexes, Forex, futures and options may also be considered if you have the expertise to use them. Many of these instruments are not suitable for use in a SMSF so there it may be necessary to be patient and wait for the market to show definite signs of recovery rather than the present ‘up one day, down the next’ behaviour we have seen lately.
> 
> Keep in mind that once the market starts trending up the stocks that will do well then may not be the ones that have done well in the last few years. Some will be, but ones that have raced up and then fallen sharply are not likely to be candidates for another great rally. It is also good to remember that once the market starts to recover there will always be a few stocks that rise strongly and in a poorly performing market they will do especially well since they will be the most sought after stocks with not much competition. Buying them will be good and help you to do better than the market as a whole.
> 
> If stocks have been recommended to you on the basis of very good ‘value’ or fundamentals, buy (or hold) them only if the market likes them, in other words, the price is going up. Fundamentals are out of date by the time you get them but the market as a whole usually has the latest information. It will show in the price.
> 
> My watchlist of rising stocks is now much reduced in size and I have recently sold out of some of my SMSF stocks that were rising but then fell to my stops and I exited. For me this is not the time to hang on hoping things will get better.
> 
> Make it your business to trade well and the profits will in time take care of themselves.


----------



## Aussiest

Wow, thanks for the article Julia, great read.


----------



## gfresh

The spread between Corporate Bonds and Government Bonds are blowing out once again. As the risk for holding a corporate bond is perceived higher, the yields will often increase to entice buyers to holding a bond with the higher risk. 

As the bond market is a snapshot of the wider credit market, large market moves downward seem probable in the next few weeks. 



> Investment-Grade Bond Spreads Surpass Record High Set in March
> 
> By Gabrielle Coppola
> 
> Aug. 18 (Bloomberg) -- The extra yield investors demand to own investment-grade bonds rather than government debt surpassed a record high set in March.
> 
> Spreads on investment-grade company debt widened 1 basis point today to 306 basis points, according to Merrill Lynch & Co.'s U.S. Corporate Master index. That's 1 basis point above the record set March 20 and matched on Aug. 15.
> 
> A basis point is 0.01 percentage point.


----------



## dhukka

gfresh said:


> The spread between Corporate Bonds and Government Bonds are blowing out once again. As the risk for holding a corporate bond is perceived higher, the yields will often increase to entice buyers to holding a bond with the higher risk.
> 
> As the bond market is a snapshot of the wider credit market, large market moves downward seem probable in the next few weeks.





It's a good point gfresh. Credit spreads are widening, the latest fed senior loan officer survey shows that financial instituions are still overwhelmingly tightening credit standards. Banks need to refinance huge amounts of debt and are borrowing record amounts from the Fed. 

The credit markets are telling a different story from the equity markets. To some extent extent, equities have been keying off oil but a fresh round of credit concerns will trump the benefits of lower oil IMO.


----------



## Uncle Festivus

Interesting read there dhukka, esp the bit about credit card loans, or lack off! The US consumer is toast?

Should be an interesting week to test the nerves of the bravest equities bull and gold bugs alike, some big swings going to happen? The credit crunch just took another turn for the worse - everybody looking to re-cap but the money spigot is dry & no one trusts anybody else - not good at all!

Bail outs & bankruptcies bandwagon!


----------



## Kauri

I thunk there is one more _major_ bank in the good ole us of a that will fail!!!... not too far away neither.... and after the inevitable reaction... the yank tank may get the inside running in the G1. International Recovery Stakes.. aaahhh.. maybe more lemmings to the slaughter???.. now... who to short..  

mmm :drink:... 

Slainte
..............Kauri


----------



## CanOz

Kauri said:


> I thunk there is one more _major_ bank in the good ole us of a that will fail!!!... not too far away neither.... and after the inevitable reaction... the yank tank may get the inside running in the G1. International Recovery Stakes.. aaahhh.. maybe more lemmings to the slaughter???.. now... who to short..
> 
> mmm :drink:...
> 
> Slainte
> ..............Kauri




Anyone care to guess which big US bank could be next? Anyone worried about any? I'm worried about one, but i don't know if should be or not?

There are short patterns showing up everywhere again, i missed a few goodies last night but i'm loaded tonite!

Cheers,


CanOz


----------



## wayneL

Please don't let it be Citibank! Or all us IB users are screwed.


----------



## CanOz

wayneL said:


> Please don't let it be Citibank! Or all us IB users are screwed.




You took the words right out of my mouth. Wayne, or anyone else care to contemplate that out loud?

C.Oz


----------



## dhukka

CanOz said:


> Anyone care to guess which big US bank could be next? Anyone worried about any? I'm worried about one, but i don't know if should be or not?
> 
> There are short patterns showing up everywhere again, i missed a few goodies last night but i'm loaded tonite!
> 
> Cheers,
> 
> 
> CanOz




Interesting topic given one of today's big stories:



> *Ex-IMF economist sees large U.S. bank collapsing:*
> 
> Kenneth Rogoff, the former chief economist of the International Monetary Fund, reportedly said Tuesday that a large U.S. bank will collapse in the next few months. "We're not just going to see mid-sized banks go under in the next few months, we're going to see a whopper, we're going to see a big one, one of the big investment banks or big banks," Rogoff told a conference in Singapore, according to a Reuters report.




I reckon Citi will survive but in a much different format. Parts will be split up and sold off IMO.

My money is on Washington Mutual (WM). Absolutely up to their necks in Alt-A doodoo, looking down the barrell of massive losses for at least the next 18 months (if they can stay in business that long).


----------



## davo8

Obviously Fannie and Freddie are toast. But if you want to see something scary, take a look at the CMBX spreads. It's not just that the junior tranches are over 3,000 bps (that's 30%, guys!), but some of the AA spreads went up 150bps just over the weekend.

http://markit.com/cmbx.jsp?Index=CMBX-NA-AA+4



			
				Macbeth said:
			
		

> By the pricking of my thumbs,
> Something wicked this way comes.


----------



## Kauri

More _leemings_ to the slaughter... down 10% in todays trading already... 
 and I also wonder if Fred and Fan will go the way of Northern Rock????

  Cheers
.............Kauri


----------



## Sean K

Kauri said:


> and I also wonder if Fred and Fan will go the way of Northern Rock????
> 
> Cheers
> .............Kauri



Looks like it.

What are the Russians up to here?

I wonder how going under will effect this cunning investment?

*MOSCOW, Aug 19 (Reuters)*

Russia is still buying debt issued by U.S. agencies Fannie Mae and Freddie Mac <FNM.N> <FRE.N> but on a smaller scale than before, Finance Minister Alexei Kudrin told reporters on Tuesday. Kudrin said the ministry considered other investments in its portfolio were currently riskier than Fannie Mae and Freddie Mac debt. Declining to be quoted directly, Kudrin added Russia would not have made a loss even if it had sold its entire holdings of bonds issued by the two U.S.


----------



## qmanthebarbarian

kennas said:


> What are the Russians up to here?




Ex KGB boys still peeved they were defeated without a shot being fired. 

Majors are calling oil cash costs at 80/barrel and OPEC cutting production if oil falls to 90/barrel to support oil price. Its like Jenga at the moment - and those KGB boys have itchy fingers and a fixation with the old testament...

:couch


----------



## dhukka

kennas said:


> Looks like it.
> 
> What are the Russians up to here?
> 
> I wonder how going under will effect this cunning investment?
> 
> *MOSCOW, Aug 19 (Reuters)*
> 
> Russia is still buying debt issued by U.S. agencies Fannie Mae and Freddie Mac <FNM.N> <FRE.N> but on a smaller scale than before, Finance Minister Alexei Kudrin told reporters on Tuesday. Kudrin said the ministry considered other investments in its portfolio were currently riskier than Fannie Mae and Freddie Mac debt. Declining to be quoted directly, Kudrin added Russia would not have made a loss even if it had sold its entire holdings of bonds issued by the two U.S.





My guess is that equity holders will be wiped out and bondholders will be made whole. Why? Because so much of the debt is owned by foreign governments and it was bought on the understanding that it had the implicit backing of the US government. The US would have some very pissed off foreign governments to contend with if they wiped out bond holders.

If you look at the losses coming down the pike the equity is already worthless. That means the current share price is simpy a call option on the future. 

I think the Treasury will step in and issue some kind of preference shares with their dutiful citizens money and nationalize these farcical instituitions once and for all.


----------



## Aussiejeff

dhukka said:


> My guess is that equity holders will be wiped out and bondholders will be made whole. Why? Because so much of the debt is owned by foreign governments and it was bought on the understanding that it had the implicit backing of the US government. The US would have some very pissed off foreign governments to contend with if they wiped out bond holders.
> 
> If you look at the losses coming down the pike the equity is already worthless. That means the current share price is simpy a call option on the future.
> 
> I think the Treasury will step in and issue some kind of preference shares with their dutiful citizens money and nationalize these farcical instituitions once and for all.





Oh dear. They might then have to rename the US the USS? (United Soviet States)



AJ


----------



## dhukka

davo8 said:


> Obviously Fannie and Freddie are toast. But if you want to see something scary, take a look at the CMBX spreads. It's not just that the junior tranches are over 3,000 bps (that's 30%, guys!), but some of the AA spreads went up 150bps just over the weekend.
> 
> http://markit.com/cmbx.jsp?Index=CMBX-NA-AA+4




yep, commercial real estate is toast and so are some of the regional banks that hold boat loads of it on their books. For those who have never seen these indexes before, basically the best way to think about it is that up is down. The CMBX is quoted as a spread, so when the spreads increase the bond prices are falling.


----------



## dhukka

Just on the topic of possible bank failures. If we include investment banks I think Lehman could be history before any of the aforementioned banks. 

*Lehman in Deep Trouble*


----------



## Sean K

dhukka said:


> Just on the topic of possible bank failures. If we include investment banks I think Lehman could be history before any of the aforementioned banks.
> 
> *Lehman in Deep Trouble*



It's a lottery now IMO.

They'd be all sleeping very poorly at the minute.


----------



## gfresh

Off the charts. Yeah, I was just about to suggest that Lehman is the prime candidate (so to speak, boy I'm funny). 

This has direct impact too for Australia, as they're the ones that packaged up a lot of these securities and sold them to many of our local councils and charities, under such lovely names as "Federation", "Kokoda", "Tasman", etc. It is really ****ty that our charities have to suffer, but unfortunately all is wise only in hindsight. 

$4bn would be massive, 50% of losses incurred so far, *in one quarter*.. showing that we're getting into the meatier end, but nothing to indicate anything is getting better. 



> The gap between yields on two- and 10-year notes reached the widest in more than 10 weeks as investors favored shorter maturities, more sensitive to the Federal Reserve's interest- rate policy. *Lehman Brothers Holdings Inc. may post $4 billion in writedowns when it reports fiscal third-quarter earnings,* JPMorgan Chase & Co. analysts said.




...



> Lehman may mark down some of its $61 billion of mortgage and other asset-backed securities after benchmark residential and commercial mortgage-related indexes declined by as much as 20 percent, New York-based JPMorgan analysts led by Kenneth Worthington wrote in a report yesterday. *Lehman, based in New York, has reported writedowns and credit losses of $8.2 billion in the past 12 months*, according to Bloomberg data.


----------



## Kauri

> Just on the topic of possible bank failures. If we include investment banks I think Lehman could be history before any of the aforementioned banks.






Kauri said:


> I thunk there is one more _major_ bank in the good ole us of a that will fail!!!... not too far away neither.... and after the inevitable reaction... the yank tank may get the inside running in the G1. International Recovery Stakes.. aaahhh.. maybe *more lemmings to the slaughter*???.. now... who to short..
> 
> mmm :drink:...
> 
> Slainte
> ..............Kauri




  Yep.... possibly more leemings to the slaughter..    .. turned out a nice short.. 

 Cheers
............Kauri


----------



## CamKawa

dhukka said:


> Just on the topic of possible bank failures. If we include investment banks I think Lehman could be history before any of the aforementioned banks.
> 
> *Lehman in Deep Trouble*



On the ABC midday news today this topic was mentioned though the news reader didn't mention a banks name specifically lots of video shots of Citi were shown. Whether or not they were trying to suggest something here I don't know.


----------



## Kauri

The Wall Street Journal website reports that Freddie _*Big Mac and fried*_ was forced to offer unusually rich terms to investors in a $3bn auction of its fries yesterday, fuelling concerns about a possible bailout for the mortgage giant and its sibling, Fannie Mae. 

Cheers
..........Kauri


----------



## davo8

dhukka said:


> My guess is that equity holders will be wiped out and bondholders will be made whole. Why? Because so much of the debt is owned by foreign governments and it was bought on the understanding that it had the implicit backing of the US government. The US would have some very pissed off foreign governments to contend with if they wiped out bond holders.
> 
> If you look at the losses coming down the pike the equity is already worthless. That means the current share price is simpy a call option on the future.
> 
> I think the Treasury will step in and issue some kind of preference shares with their dutiful citizens money and nationalize these farcical instituitions once and for all.




According to the spreads, anything other than the most senior bond holders are looking at at least a haircut.

I hear Pimco made a big bet on agency bonds. When all there is to catch is falling knives, even the best get hurt.


----------



## davo8

For some more dismal reading, Nouriel Roubini has been at it again.

http://www.rgemonitor.com/roubini-monitor/253378/the-worst-economic-and-financial-crisis-in-decades/



> here below is a detailed summary of the reasons for my views – as presented in this blog in the last few months - that this will turn out to be the worst financial crisis since the Great Depression and the worst US recession in decades (hyperlinks to my relevant recent writings are provided for each argument):
> 
> * This is by far the worst financial crisis since the Great Depression, not as severe as the Great Depression but second only to it.
> * At the end of the day this financial crisis will imply credit losses of at least $1 trillion and more likely $2 trillion. The financial and banking crisis will be severe and last several years leading to a severe and persistent liquidity and credit crunch.
> * This is not just a subprime mortgage crisis; this is the crisis of an entire subprime financial system: losses are spreading from subprime to near prime and prime mortgages including hundreds of billions of dollars of home equity loans that are worth little; to commercial real estate; to unsecured consumer credit (credit cards, student loans, auto loans); to leveraged loans that financed reckless debt-laden LBOs; to muni bonds that will go bust as hundred of municipalities will go bust; to industrial and commercial loans; to corporate bonds whose default rate will jump from close to 0% to over 10%; to CDSs where $62 trillion of nominal protection sits on top an outstanding stock of only $6 trillion of bonds and where counterparty risk – and the collapse of many counterparties – will lead to a systemic collapse of this market.
> * Hundreds of small banks with massive exposure to real estate (the average small bank has 67% of its assets in real estate) will go bust.
> * Dozens of large regional/national banks (a’ la IndyMac) are also effectively insolvent given their extreme exposure to real estate and will also eventually go bust. Most of these regional banks – starting with Wachovia and Washington Mutual – look like walking zombies in the same way IndyMac was.
> # Even some major money center banks are also semi-insolvent and while they are deemed too big to fail their rescue with FDIC money will be extremely costly. In 1990-91 at the height of that recession and banking crisis many major banks – in addition to 1000 plus S&L's that went bust – were effectively insolvent, including, as it was well known at that time, Citibank. At that time the Fed and regulators used instruments similar to those used today – easy money and steepening of the intermediation yield curve, aggressive forbearance, creative – i.e. liar – accounting, etc. – to rescue these major financial institutions from formal bankruptcy. But at that time the housing bust and the ensuing decline in home prices was much smaller than today: during that recession home prices – as measured by the Case-Shiller/S&P index – fell less than 5% from their peak. This time around instead such an index has already fallen 18% from its peak and it will most likely fall by a cumulative 30% before it bottoms sometime in 2010. If a 5% fall in home prices was enough to make Citi effectively insolvent in 1991 what will a 30% fall in home prices – and massive defaults on many other forms of credit (commercial real estate loans, credit cards, auto loans, student loans, home equity loans, leveraged loans, muni bonds, industrial and commercial loans, corporate bonds, CDS) - do to these financial institutions? It challenges the credulity of even spin masters to argue that financial firms are not in worse shape today than they were in 1990-91 when a significant number of major banks were technically insolvent. So, not only hundreds of small banks and a significant fraction of regional banks but also some major money center banks will become effectively insolvent during this crisis.
> # In a few years time there will be no major independent broker dealers as their business model (securitization, slice & dice and transfer of toxic credit risk and piling fees upon fees rather than earning income from holding credit risk) is bust and the risk of a bank-like run on their very short term liquid liabilities is a fundamental flaw in their structure (i.e. the four remaining U.S. big brokers dealers will either go bust or will have to be merged with traditional commercial banks). Firms that borrow liquid and short, highly leverage themselves and lend in longer term and illiquid ways (i.e. most of the shadow banking system) cannot survive without formal deposit insurance and formal permanent lender of last resort support from the central bank.
> # The FDIC will for sure run out of money as hundreds of banks will go bust and their depositors will have to be made whole given deposit insurance. With funds of only $53 billion, already up to 15% of such funds will be used to rescue the depositors of IndyMac alone. Thus, the FDIC is already requesting to Congress that the deposit insurance premia should be raised to compensate for this shortfall of funding. Too bad that this increase in insurance premia – that should be high enough in advance (not ex-post) to ensure that deposit insurance is incentive-compatible and not leading to gambling for redemption via risky lending in banks – is now too little and too late and is requested when the damage is already done as the biggest credit bubble in U.S. history is now going bust. Also the FDIC has done a mediocre job at identifying which banks are at risk. So far there are only about 90 banks on its watch list; and IndyMac was not put on that list until last month! So if the FDIC did not even identify IndyMac as in trouble until it was too late, how many other IndyMacs are out there that that the FDIC has not identified yet? Certainly a few hundred but such honest analysis of banks at risk is nowhere to be found.
> # Fannie and Freddie are insolvent and the Treasury bailout plan (the mother of all moral hazard bailout) is socialism for the rich, the well connected and Wall Street; it is the continuation of a corrupt system where profits are privatized and losses are socialized. Instead of wiping out shareholders of the two GSEs, replacing corrupt and incompetent managers and forcing a haircut on the claims of the creditors/bondholders such a plan bails out shareholders, managers and creditors at a massive cost to U.S. taxpayers.
> # Massive amount of creative accounting and other forms of balance sheet window dressing is occurring to prevent banks from recognizing their true losses. First, most financial institutions are putting increasing numbers of assets in the illiquid buckets of Level 2 and Level 3 assets. While FASB 157 should prevent manipulation of the valuation of such illiquid assets, forbearance by the SEC, the Fed and other regulators allows a massive amount of fudging. An insider told me that in a major financial institution the approach is as follows now: top management decide in advance what the announced writedowns should be and folks dealing with the toxic/illiquid assets come up with totally ad hoc assumptions to make sure that such illiquid assets are valued consistently with the decided-in-advance amount of writedowns and losses. This is not earnings smoothing; this is active manipulation and falsification of financial results aimed at creating even more obfuscation of the true state of financial institutions. This obfuscation is actively abetted by the SEC, the Fed and all other regulators that are now in forbearance crisis management stage where the objective is to avoid at any cost anything that may trigger a financial meltdown. Thus, most of these earnings reports are not worth the paper they are written off.




He called it early and he called it right. Definitely worth a read.


----------



## Kauri

Kauri said:


> The Wall Street Journal website reports that Freddie _*Big Mac and fried*_ was forced to offer unusually rich terms to investors in a $3bn auction of its fries yesterday, fuelling concerns about a possible bailout for the mortgage giant and its sibling, Fannie Mae.
> 
> Cheers
> ..........Kauri




Wall Street Journal"s claim that Freddie Mac officials are due to meet US Treasury officials today is being touted as the catalyst for today"s Freddie and Fannie share price slump.
Cheers
............kauri


----------



## explod

davo8 said:


> For some more dismal reading, Nouriel Roubini has been at it again.
> 
> http://www.rgemonitor.com/roubini-monitor/253378/the-worst-economic-and-financial-crisis-in-decades/
> 
> 
> 
> He called it early and he called it right. Definitely worth a read.




Many called and referred to many of us as whank..s when we tried to point these matters out 12 months ago.

And I still disagree with one point.    The sufferring and destitution of many people across the globe will be greater than the great depression.   But of course the financial industry dont' count the human costs, only the bottom lines.


----------



## Kauri

Kauri said:


> I thunk there is one more _major_ bank in the good ole us of a that will fail!!!... not too far away neither.... and after the inevitable reaction... the yank tank may get the inside running in the G1. International Recovery Stakes.. aaahhh.. maybe more lemmings to the slaughter???.. now... who to short..
> 
> mmm :drink:...
> 
> Slainte
> ..............Kauri






Kauri said:


> More _leemings_ to the slaughter... down 10% in todays trading already...
> and I also wonder if Fred and Fan will go the way of Northern Rock????
> 
> Cheers
> .............Kauri






Kauri said:


> Yep.... possibly more leemings to the slaughter..  .. turned out a nice short..
> 
> Cheers
> ............Kauri




  Now before anyones get the wrong impression and I get an *"enquiry"* from the powers that be... this is *all rumour..*   if you act on it don't set the hounds onto me...   my own personal reading has the forex $ crosses reacting by...
  :arsch:  

 Cheers
..............Kauri

The FT-reported news Lehman Brothers held secret talks to sell up to 50% of its shares to South Korean or Chinese parties in the first week of August but failed to reach agreement with either is being touted as a factor in USD weakness.    The Wall Street Journal website reports that the Fed quietly called Credit Suisse last month to see if it had pulled a line of credit from Lehman Brothers in response to a rumour.


----------



## davo8

explod said:


> Many called and referred to many of us as whank..s when we tried to point these matters out 12 months ago.
> 
> And I still disagree with one point.    The sufferring and destitution of many people across the globe will be greater than the great depression.   But of course the financial industry dont' count the human costs, only the bottom lines.




Do you have a basis for that view? The GD hit Australia hard, and in Europe was a major factor in triggering WW II. If people are hungry enough, even being a soldier can sound like a good idea.

Do you have a factual basis for believing that this will be worse?


----------



## dhukka

davo8 said:


> According to the spreads, anything other than the most senior bond holders are looking at at least a haircut.
> 
> I hear Pimco made a big bet on agency bonds. When all there is to catch is falling knives, even the best get hurt.




Looks like you're right davo, even the bond gurus looks like they may have gotten this one wrong.


----------



## dhukka

davo8 said:


> For some more dismal reading, Nouriel Roubini has been at it again.
> 
> http://www.rgemonitor.com/roubini-monitor/253378/the-worst-economic-and-financial-crisis-in-decades/
> 
> 
> 
> He called it early and he called it right. Definitely worth a read.




Yes he did call it right. I enjoy reading Nouriel Roubini's stuff, however he is starting to get a little bit over top isn't he? It's almost as though he feels like he has to out do himself everytime he writes something by coming up with and even gloomier outlook.

for example:



> In a few years time there will be no major independent broker dealers as their business model (securitization, slice & dice and transfer of toxic credit risk and piling fees upon fees rather than earning income from holding credit risk) is bust and the risk of a bank-like run on their very short term liquid liabilities is a fundamental flaw in their structure (i.e. the four remaining U.S. big brokers dealers will either go bust or will have to be merged with traditional commercial banks)




Goldman Sachs will merge just to survive? Big call. 



> This financial crisis signals the beginning of the decline of the American Empire; over time the relative economic, financial, military, geostrategic power of the US and reserve role of the US dollar will significantly decline.




Actually I think the decline of the American Empire probably started a few decades earlier, a bit of overstatement to pin the beginning on the current crisis. That said, I agree with most of what he said although I think his moment in the sun may have to his head.


----------



## dhukka

Kauri said:


> Now before anyones get the wrong impression and I get an *"enquiry"* from the powers that be... this is *all rumour..*   if you act on it don't set the hounds onto me...   my own personal reading has the forex $ crosses reacting by...
> :arsch:
> 
> Cheers
> ..............Kauri
> 
> The FT-reported news Lehman Brothers held secret talks to sell up to 50% of its shares to South Korean or Chinese parties in the first week of August but failed to reach agreement with either is being touted as a factor in USD weakness.    The Wall Street Journal website reports that the Fed quietly called Credit Suisse last month to see if it had pulled a line of credit from Lehman Brothers in response to a rumour.




Got a link for us Kauri?


----------



## explod

davo8 said:


> Do you have a basis for that view? The GD hit Australia hard, and in Europe was a major factor in triggering WW II. If people are hungry enough, even being a soldier can sound like a good idea.
> 
> Do you have a factual basis for believing that this will be worse?




Sociological observation only.   The current generation have had it good and were spoon fed.   Prior to the great depression people mainly lived off the land, young for example worked the UK coal mines and we could go on.

This generation of the developed world are ill equipped for what is developing and is why they will be the last to beleive the unfolding and so will suffer beyond imagination.

Little has been done in the US for the victims of cyclone Katrina for instance.  Rousources for recovery on many fronts for deteriorating situations are becoming non-existent.

The financial side you well know and the true horror of its emergence is now even on the pages of the news in the last few weeks.

But just my take for the debate.
Facts, how does one quantify the breadth of what is occurring.


----------



## Kauri

dhukka said:


> Got a link for us Kauri?




  Hard tom link rumours...   
  butt..
  you could try here..
 and here..   
Cheers
............Kauri


----------



## Kauri

Kauri said:


> I thunk there is one more _major_ bank in the good ole us of a that will fail!!!... not too far away neither.... and after the inevitable reaction... the yank tank may get the inside running in the G1. International Recovery Stakes.. aaahhh.. maybe more lemmings to the slaughter???.. now... who to short..
> 
> mmm :drink:...
> 
> Slainte
> ..............Kauri






Kauri said:


> The Wall Street Journal website reports that Freddie _*Big Mac and fried*_ was forced to offer unusually rich terms to investors in a $3bn auction of its fries yesterday, fuelling concerns about a possible bailout for the mortgage giant and its sibling, Fannie Mae.
> 
> Cheers
> ..........Kauri




  Having run a short on the leemings and tickled the Fannies shorts, and Fred as well.. oops   , there is one outstanding short USwise tonight to bring it all off... butt... the Powers that be.... butt....ahhh.. _you picked a fine to leave me loose heel_  Kenny Rogers was herd to otter as he picked himself up from the arsephalt....

beers
...........Kauri


----------



## dhukka

Kauri said:


> Hard tom link rumours...
> butt..
> you could try here..
> and here..
> Cheers
> ............Kauri




Well spotted, I take it you aren't a wsj subscriber?


----------



## Kauri

Lone Star PE moving in on floundering Jerry Bank???
*Kreditanstalt fÃ¼r Wiederaufbau??*
* IKB Deutsche Industriebank??*

*  Mayhaps..*

Cheers
............Gauri


----------



## CanOz

More from Jim Rodgers.....

http://seekingalpha.com/article/91641-interview-with-jim-rogers-part-i-bigger-financial-shocks-loom


----------



## Kauri

dhukka said:


> Well spotted, I take it you aren't a wsj subscriber?




  No... I have a ((*)) that subscribes to all manner of media... and I get a feed of what is relevant.. in return for my input...  and that service is... aah how best to describe her((*)) ...a quintessential aquaintance??..  
 Cheers
..............Lauri


----------



## Kauri

Just pondering.. Fred and Fannie up agin it, leeming doing it hard, and the MEDIA touted US int. cuts *not* as close as some ass ume... and .. well.. does this maybe make this the $US oversold correction/consolidation/pause we had to have.. or has it actually got legs... my money is NOT on the sidelines for the move I THINK is coming... in the *NEAR* term... does anyone else see anytink.. or nott... afore it happens that is..  

  Cheers
.................Kauri


----------



## nunthewiser

bugga the yank banks worry about our own , check the story!

While much of today's chatter will be over the solvency or otherwise of Babcock & Brown, perhaps a more important question is the terrible impact the Babcock crisis could have on our banks. 

If the chief executives of Westpac, Commonwealth, NAB and ANZ are doing their job, this week they will have called for a 'total exposure' statement for Babcock & Brown. I'm not privy to any such statement, but my guess is that one or two of the CEOs will have been shocked because their bank had been happily treating various parts of the Babcock group as separate clients and not understanding that it was one group. Exposures may have risen beyond what would have been prudent for one borrower. 

On my rough sums, the Babcock group owes banks and financiers in the vicinity of $50 billion. Never in Australia’s history have we had a group of this size in difficulty. Thankfully, the bulk of that amount is owed to overseas banks but our big four, led by the normally conservative Westpac, hopped in for their slice of parent debt. The odds are they have been lending big sums to some of the satellite operations and that the Babcock group will be among their biggest exposures. It is a serious matter for the Australian banking industry.

The stock market is saying that the listed satellites have only token equity. Those listed vehicles have debt of about $28 billion. The non-listed vehicles are just as large as the listed vehicles and take total debt beyond $50 billion. Babcock would claim that the stock market is wrong in the equity valuations and that the assets are generating sufficient cash to cover their loan requirements. But that won't stop bank CEOs with big exposures from feeling nervous. 

The Babcock group may be solvent, but it is in crisis. All the various entities have been borrowing on a non-recourse basis, so there are few if any cross-guarantees. What every bank now has to do is look at whether the assets over which they have security have a realistic worth that is greater than the loans in the satellite. 

In many cases they will be fine and the bank CEOs will gain great comfort. But in other cases they will find that the real value of the asset has fallen sharply. Babcock had a habit of paying top prices for assets and convincing bankers that it was all blue sky ahead. The great salespeople at Babcock will disappear and will be replaced by people who will count the real numbers and we will then find out what the position is. 

Among the highly leveraged assets under management is about $7 billion in aircraft leases. Last night I flew on an interstate scheduled 737 flight that had just nine passengers, requiring us to sit in selected positions to spread the weight. It was yet another reminder that while the market for aircraft leases is currently strong, that industry has a very volatile history. I will never forget the joint TNT-News Corp aircraft leasing operation in the 1980s that gave big book profits to News Corp when they were badly needed by Rupert Murdoch. Later, the profits evaporated as the aircraft value cycle turned. 

The world economy is slowing down and capital is short. Many asset purchase decisions made in the boom will look silly. The Babcock situation must now be looked at very carefully and we must all keep our fingers crossed that the stock market is wrong and there is real equity in the satellites – and that we are not on the brink of a set of serious banking losses. 


Robert Gottliebsen

http://www.businessspectator.com.au...-in-Babcocks-hands-HQ2JF?OpenDocument&src=spb


----------



## Kauri

. 







> Last night I flew on an interstate scheduled 737 flight that had just *nine *passengers, requiring us to* sit in selected positions to spread the weight*.




  BOLLOCKS!!!

  Wake up Australia... these idiots who call temselfs journalists need a reality check.. or will we keep sucking AND swallowing whatever they dish uP!!! 
Apologies of course if you(the Journo) happen to be grossly, excessively, even obscenely, overweight...

  Incredulous
................Krakatoa


----------



## Trembling Hand

Kauri said:


> .
> 
> BOLLOCKS!!!
> 
> Wake up Australia... these idiots who call temselfs journalists need a reality check.. or will we keep sucking AND swallowing whatever they dish uP!!!
> Apologies of course if you(the Journo) happen to be grossly, excessively, even obscenely, overweight...
> 
> Incredulous
> ................Krakatoa




This guy is a shame. Start of the year he was trumping another 20% gain for our market while pimping subscription bull market cow pads. Then during the meltdown it was all predatory, manipulators destroying good companies and value with naked shorts. Now his woken up and..



> Many asset purchase decisions made in the boom will look silly.




But when will people wake up to how silly this goose is?


----------



## nunthewiser

look totaaly agree on his great hindsight calls BUT you guys missing the point of the actual post ......... the point i was trying to get across by reposting this clowns article was , people forget the actual further ramifications of these debt ridden collapsing companies ....... it dont just dissapear , anyways ....think of the article what you will and pick out all the meaningless stuff but i figured it may help the odd person intrested in where the buck stops


----------



## Kauri

WSJ and FT on Leeming and Fred+Fannie...
Cheers
..........Kauri


----------



## Paladin

I posted this in 'Gold price - where is it heading' ( https://www.aussiestockforums.com/forums/showthread.php?t=2366&page=248 ) but figure it may be relevant here.

Here's one extra reason why I think the USD will soften: the fact that the US Exchange Stabilization Fund has recently been selling Euros like mad and buying dollars - which looks like a case of trying to keep the greenback high (IMO).

Take a peek at: http://siliconinvestor.advfn.com/readmsg.aspx?msgid=24833658

I can't quite reconcile the exact figures quoted there myself, but the raw data is available at:

http://www.treas.gov/press/international-reserve-position.html

(The link in the article quoted is broken)

If you look at the reserve position for 15/08, you'll notice that the treasury held 9,567,000,000 Euro securities. Look back at the 6th of June and you'll see that they held 16,192,000,000. That's a difference of 6.6 billion dollars.

Something seems to be afoot.

In short, I'm not reading much that gives me confidence in the US economy.


----------



## dhukka

Buffet was just on CNBC. Another great quote from the Oracle which was really a new version of an older quote:



> I think I said one time that you only find out who's been swimming naked when the tide goes out, well we've found out that Wall Street has been kind of nudist beach.


----------



## davo8

dhukka said:


> It's almost as though he feels like he has to out do himself everytime he writes something by coming up with and even gloomier outlook.
> 
> Actually I think the decline of the American Empire probably started a few decades earlier, a bit of overstatement to pin the beginning on the current crisis. That said, I agree with most of what he said although I think his moment in the sun may have to his head.




I've been reading him for a while. He actually pulled back a bit in March, but his message now is consistent and I simply can't find anyone prepared to find fault in his analysis. He has mountains of data, and it all points the same way. The losses have already happened, and it's a matter of when and where the tsunami hits, not if.

Read Steve Keen (Aus), Mish, Karl Denninger, Jim Kunstler, Ilargi and you'll get an even gloomier picture. And they all quote Nourini.

The USA is on a death march. Only the timetable and final destination are still in doubt.


----------



## explod

Yes as above, just the timing now.  My take remains as during or soon after the forthcoming Pres., election in Novemeber.

 And from Jim Sinclair's site this morning:-




> Dear Friends,
> 
> Part of my attempt to serve is to be barraged with every opinion from every chat site and blog that presents arguments against gold.
> 
> The most popular one now starts off sounding reasonable. It states that crude will trade down between $110 and $85, making inflationary expectations fall and as a result the trade deficit will decline making the dollar rise and therefore commodities fall. This will raise consumer expectations that will then increase spending, making the dollar rise.
> 
> The following is missing:
> 
> Deflation is assumed here to mean the falling cost of living. Deflation is the failure of debt. That looks toward the OTC derivative meltdown and the ongoing collapses occurring now in financial entities that require liquidity increases through rescues that use public money. Increased liquidity results in an increased cost of living regardless of economic conditions. That is an economic axiom.
> The assumption many have that Gold is not a currency speaks to their eyesight and poor memory. It stares you in the face every day if you look.
> The US is the MAJOR manufacturer and exporter of OTC derivatives. Should any side of the specific performance contract fail, the failure potential of the counter party is extremely high. That is quite dollar negative.
> There is a desire worldwide for central bank diversification out of the US dollar, which is unlikely to change.
> Central banks have already indicated they will cease buying US agencies, which is TIC negative and therefore dollar negative.
> There is no consideration of an explosion in the Federal Budget deficit that will eclipse any improvement in the US Trade deficit that is always looked at in comparison to TIC. It is certain to drop faster that the trade deficit drops, therefore making the Trade Deficit drop meaningless.
> This coming and present crisis is from a lockup of the credit system that is emerging from the meltdown of OTC derivatives. Consumers hold too much debt and are on the ropes. You would first need one hell of a recovery in housing to reinstate home equity and a major unlock of the credit market before consumers see any light at the end of their bankruptcy tunnel. Consumers being gleeful in this crisis at any point are simply NOT GOING TO HAPPEN.
> Consumers picking up the dollar is an interesting view because internal consumer glee means nothing to foreign exchange except as it impacts expectations of a US recovery in the middle of what the writer says will be the Great Greater Depression. That scenario defies logic.
> In the same argument the writer says the US economy slows, so where does the gleeful consumer fit in? The answer to that question is they don’t
> The writer feels the Trade Balance stands alone and will, by contraction, move the dollar. The trade deficit, whether or not covered by the TIC report, is what the Trade Balance is all about.
> This argument has, along with the totally non-existent yet still popular “Synthetic Dollar Short,” many of you angry with me. That is ok and deserved, as you are as good as your last call, but the arguments you now base that on are totally wrong in both instances.
> The Bush Administration will do what they did the last time the "D" word was used as recorded below. That was totally dollar negative long term. Should Obama win, his administration would invent social approaches to money and business that the Bush and Roosevelt administration never heard of. These approaches will without any doubt be long-term dollar negative.


----------



## Bushman

This thread is starting to sound like hysterical back slapping on the Titanic. 'We spotted the iceberg first, we spotted the iceberg first. We are all doomed but at least we spotted the iceberg first.' Classic. 

As for Gottleibsen and his nine passengers, I flew to Sydney and Brisbane last week and the plane was full. So if you follow his logic, that means you should all invest in Qantas and Virgin Blue. Call your brokers now.


----------



## explod

Bushman said:


> This thread is starting to sound like hysterical back slapping on the Titanic. 'We spotted the iceberg first, we spotted the iceberg first. We are all doomed but at least we spotted the iceberg first.' Classic.
> 
> As for Gottleibsen and his nine passengers, I flew to Sydney and Brisbane last week and the plane was full. So if you follow his logic, that means you should all invest in Qantas and Virgin Blue. Call your brokers now.





Not so, there is time to avoid the iceberg and most of us following this thread have.

Having a fair idea of what is taking place provides opportunity and optimism.


----------



## Kauri

There is talk among the investment community that we are on the brink of a larger wave of US dollar short-covering and USD-favourable repatriation flows. Analysts say that the real money funds in the US have piled huge amounts of investor money into Asia over the past four years and have only just begun to pare back. The heavy selling of the KRW over the past six months has forced the Bank of Korea to intervene at various levels. The KRW selling is accelerating now with the USD/KRW breaking up to 1085 this morning. Analysts and central banks in the region are concerned that this could be the start of the next phase of a larger pull out of Asian assets by US investors amid fears that the slowing growth in the OECD will have a severe impact on Asia where inflation is running too hot for anyone"s comfort. 
       Analysts say that the broad US dollar buying in Asia today might have been sparked by the New Zealand Trade data, but the concerns over heavy USD repatriation flows out of Asia is probably adding the most fuel to the USD rally.

Cheers
............Kauri


----------



## Bushman

explod said:


> Not so, there is time to avoid the iceberg and most of us following this thread have.
> 
> Having a fair idea of what is taking place provides opportunity and optimism.




Optimism? That is the issue with interpreting the written word but I would not describe the underlying theme of this thread as being optimistic. And yes I have been following this thread for over a year and yes I did not have a margin loan or used my house as an ATM so good for me. 

But it is depression this and depression that. You will have very real threat of unemployment in a depression so the fact that you did not margin into ANZ will be meaningless. But the risks have been pointed out ad naseum by now so whatever I have to say about the current 'crisis' is meaningless too. 

Everyone seems to forget that the world recovered from its depression last time around. I mean it took fascism eating itself to do so but we did it. We will all be better investors due to this credit maelstrom or at the very least regulation will be in place to avoid the excesses. After all the Fannie and Freddie model, spawned from the last depression, has worked well for 80 odd years which is a pretty good policy if you ask me. Now it needs to be re-jigged for the next generaion. Big deal. 

You should all be celebrating the demise of Bear Stearns and hopefully Lehmann Bros and a few pissant regional banks too as this will mean your kids will have a better future. Take some pain, redefine the model and move on. Humans are self interested after all. There will be another up in the asset cycle.    

I am a lot more optimistic today compared to 12 months ago; and it means we no longer have to hear about the 'War on Terror'!! Remember that abstract media construct?


----------



## Kauri

some more porridge for the bears

Cheers
..........Kauri


----------



## Sean K

Hooly dooly.

Not sure if Yu Yongding is worth listening to or not, but the bears would love him. 

*China goes the big squeeze*

David Hirst 
August 30, 2008 

A high-ranking Chinese economist has put his nation's cards on the table in the global financial poker game by effectively telling the US to fix Freddie and Fannie … or else.

"A failure of US mortgage finance companies Fannie Mae and Freddie Mac could be a catastrophe for the global financial system", Yu Yongding, a former adviser to China's central bank, says.

"If the US government allows Fannie and Freddie to fail and international investors are not compensated adequately, the consequences will be catastrophic," Yu said in e-mailed answers to Bloomberg. *"If it is not the end of the world, it is the end of the current international financial system*."


----------



## Captain Haddock

kennas said:


> "If the US government allows Fannie and Freddie to fail and international investors are not compensated adequately, the consequences will be catastrophic," Yu said in e-mailed answers to Bloomberg. *"If it is not the end of the world, it is the end of the current international financial system*."






hold me!


----------



## CanOz

kennas said:


> Hooly dooly.
> 
> Not sure if Yu Yongding is worth listening to or not, but the bears would love him.
> 
> *China goes the big squeeze*
> 
> David Hirst
> August 30, 2008
> 
> A high-ranking Chinese economist has put his nation's cards on the table in the global financial poker game by effectively telling the US to fix Freddie and Fannie … or else.
> 
> "A failure of US mortgage finance companies Fannie Mae and Freddie Mac could be a catastrophe for the global financial system", Yu Yongding, a former adviser to China's central bank, says.
> 
> "If the US government allows Fannie and Freddie to fail and international investors are not compensated adequately, the consequences will be catastrophic," Yu said in e-mailed answers to Bloomberg. *"If it is not the end of the world, it is the end of the current international financial system*."




Goodness me, you'd think they had a stake in it?

Cheers,


CanOz


----------



## wayneL

#### me!!!!!!!!!!

In a stunning reversal of policy, Nu Liebour decides to be honest with us....

Stow away all loose luggage and assume crash positions:


----------



## dhukka

Darling probably had little choice to come clean with figures like these;



> *Retailers suffer worst month in quarter of a century*
> 
> Retailers delivered their worst performance for nearly a quarter of a century last month and there is little sign of relief for them any time soon.
> 
> 
> Some 60 per cent of UK retailers said that sales in the first half of August were lower than a year ago, while just 13 per cent said they had increased, the CBI Distributive Trades Survey revealed.
> 
> The CBI data reinforces a widely held view among retailers that it could be 2010 before consumers, who are squealing from soaring food prices, utility bills and motoring costs, return to the high street with the vigour of previous years. The survey is also the latest to contrast sharply with the Office of National Statistics' retail sales data, which showed a 0.8 per cent rise in July and have recently drawn gasps of disbelief from retailers.
> 
> The CBI said the resulting rounded balance of minus 46 per cent of retailers posting falling sales was the worst since the survey began 25 years ago, although the business organisation said it had tweaked its answering practices over those years.


----------



## wayneL

dhukka said:


> Darling probably had little choice to come clean with figures like these;




Could be a Brutus-esque political maneuver as well. 

It will be McBeans on toast after that revelation. LOL


----------



## dhukka

This is starting to be a regular event on Friday after the market closes in the US. 



> Another US Bank Failure
> 
> Integrity Bank, Alpharetta, Georgia, with $1.1 billion in total assets and $974.0 million in total deposits as of June 30, 2008, was closed today by the Georgia Department of Banking and Finance, and the Federal Deposit Insurance Corporation was named receiver.
> 
> The FDIC Board of Directors today approved the assumption of all the deposits of Integrity Bank by Regions Bank, Birmingham, Alabama. All depositors of Integrity Bank, including those with deposits in excess of the FDIC's insurance limits, will automatically become depositors of Regions Bank for the full amount of their deposits, and they will continue to have uninterrupted access to their deposits. Depositors will continue to be insured with Regions Bank so there is no need for customers to change their banking relationship to retain their deposit insurance.
> 
> The failed bank's five offices will reopen Tuesday, September 2nd, as branches of Regions Bank. However, for the time being, customers of both banks should use their existing branches until Regions Bank can fully integrate the deposit records of Integrity Bank.




Is there a trend developing here?


----------



## davo8

dhukka said:


> This is starting to be a regular event on Friday after the market closes in the US. Is there a trend developing here?




Of course. There are hundreds to go. It's become quite part of my Saturday entertainment, checking for failed banks.

I'm waiting for the big one. It won't be Fannie/Freddie. That warning from the Chinese was about as strong as it gets. Lehman? WaMu? Wachovia?

Like I've been saying, October is a good month for stockmarkets.


----------



## explod

davo8 said:


> It won't be Fannie/Freddie. That warning from the Chinese was about as strong as it gets. Lehman? WaMu? Wachovia?




You gota be jokin, fred and fan are gone there just still tryin to keep it a secret.  

China is a producer and the US were the buyer, but chin just realised the money is worth nothin cause all they do is buy candies and a good time with no down payment of hard labor.  And they are also trying ti keep it a secret till they work out a way to recover or lump it somewhere else.

Davo, look around the world news in a bit more depth and get real.


----------



## GreatPig

dhukka said:


> the assumption of all the deposits of Integrity Bank by Regions Bank



That must be reassuring. Regions was listed as one of the Dead-Man-Walking banks in a recent John Mauldin newsletter (written by Bennet Sedacca).

You may need to register to read the newsletter.

GP


----------



## Whiskers

Bushman said:


> Optimism? That is the issue with interpreting the written word but I would not describe the underlying theme of this thread as being optimistic. And yes I have been following this thread for over a year and yes I did not have a margin loan or used my house as an ATM so good for me.
> 
> But it is depression this and depression that. You will have very real threat of unemployment in a depression so the fact that you did not margin into ANZ will be meaningless. But the risks have been pointed out ad naseum by now so whatever I have to say about the current 'crisis' is meaningless too.
> 
> Everyone seems to forget that the world recovered from its depression last time around. I mean it took fascism eating itself to do so but we did it. We will all be better investors due to this credit maelstrom or at the very least regulation will be in place to avoid the excesses. After all the Fannie and Freddie model, spawned from the last depression, has worked well for 80 odd years which is a pretty good policy if you ask me. *Now it needs to be re-jigged for the next generaion. Big deal.*
> 
> You should all be celebrating the demise of Bear Stearns and hopefully Lehmann Bros and a few pissant regional banks too as this will mean your kids will have a better future. Take some pain, *redefine the model and move on*. Humans are self interested after all. There will be another up in the asset cycle.
> 
> I am a lot more optimistic today compared to 12 months ago; and it means we no longer have to hear about the 'War on Terror'!! Remember that abstract media construct?




Bludy good post Bushman. 

I'm in accord with the notion that, just because a few businesses and banks fail that the end of the world is nigh... is nonsense.

Businesses and banks fail, merge, reorganise or whatever all the time.

It's normal and obvious that in tough economic times that more weaker and vulnerable ones will go, just as it's obvious that in boom times every two bit entrepreneur starts a new business that is fundamentally flawed or becomes mismanaged and is doomed to go when the economic cycle wanes.

I like a bit of conversation and chit chat, like most people... but some of the stuff of discussion here makes good humour and wit, but really for me most of it is just emotional frustration that things aren't evolving in some sort of perceived idealistic model.

The world isn't perfect... at least in many peoples eyes... but it does manage to evolve perfectly according to the laws of cause and effect, action and reaction.

Reminds me a bit of the sterotypical old busybodies getting together for a bit of a winge and gripe about anything and everything of everyone else's business... a bit self absorbing I think... and loosing touch with their own intellectual and intuitional tools to make the best of the idealistically imperfect hand they are dealt.

In other words the world is evolving all the time. It happens for a reason. Best try to get attuned.


----------



## wayneL

Bushman said:


> Everyone seems to forget that the world recovered from its depression last time around. I mean it took fascism eating itself to do so but we did it. We will all be better investors due to this credit maelstrom or at the very least regulation will be in place to avoid the excesses. After all the Fannie and Freddie model, spawned from the last depression, has worked well for 80 odd years which is a pretty good policy if you ask me. Now it needs to be re-jigged for the next generaion. Big deal.
> 
> You should all be celebrating the demise of Bear Stearns and hopefully Lehmann Bros and a few pissant regional banks too as this will mean your kids will have a better future. Take some pain, redefine the model and move on. Humans are self interested after all. There will be another up in the asset cycle.
> 
> I am a lot more optimistic today compared to 12 months ago; and it means we no longer have to hear about the 'War on Terror'!! Remember that abstract media construct?




You see I think bears are serious misunderstood and misrepresented. Most of us are not calling for Armageddon, though we may use that word hyperbolically. We (and certainly me) are calling for exactly the above scenario; resetting, rejigging, clearing out malinvestment and then moving on.

CLASSIC AUSTRIAN ECONOMICS.

As I have stated _ad nauseum_, bears are bulls. Bears are only bearish so they can be bulls again.

As we go into the northern hemisphere autumn, should I hope for more blooms from my now tatty looking petunias, should I invest in sunlamps and heaters to try to trick them into thinking it's still summer, or should I start preparing for winter and looking forward to next summer's blooms?

Financial winter is upon us folks, but that IS cause to be optimistic, because as winter follows summer and autumn, spring and summer follows winter.

There will come a point when this bear becomes unremittingly bullish and the economy tankage over here is exciting. I've prepared for it (a tad early so it turned out, but greedscam, crash gordon, et al had the sunlamps out on the petunias), so now I start preparing for the spring.

I'm still a bear for a while, but the bull is waking up as a result.

When was Warren Buffett most bullish? When did he buy stocks with his ears pinned back? When did Warren say his "spending drunken sailor" quote?

Yep, when blood was running in the streets, when market PE was 7 or 8 or something.

Market tankage is a time for bullishness and optimism... just not too soon into it. This will take a little while to play out, it's only just starting.


----------



## explod

wayneL said:


> Market tankage is a time for bullishness and optimism... just not too soon into it. This will take a little while to play out, it's only just starting.




A great post that I think is right on and mirrors my own feelings and approach.  Exciting times ahead for the wary.

And the steps will be such as, currencies, then special materials to new industries ad in fanitum.   

I await a day when I can buy some BHP for less that $20.   Absolute fear driven heard mentality will hand it to us on a platter.   But I am gunna make a bit out of gold first.

I also notice out our way land banking has already started by long term players wanting to preserve capital away from the financials.


----------



## dhukka

wayneL said:


> You see I think bears are serious misunderstood and misrepresented. Most of us are not calling for Armageddon, though we may use that word hyperbolically. We (and certainly me) are calling for exactly the above scenario; resetting, rejigging, clearing out malinvestment and then moving on.
> 
> CLASSIC AUSTRIAN ECONOMICS.
> 
> As I have stated _ad nauseum_, bears are bulls. Bears are only bearish so they can be bulls again.




Yep that sums it perfectly wayne. 

You've got to wonder what makes these delicate flowers so emotionally fragile that they feel the need to run around and tell everybody that it's not the end of the world, even though nobody said it was. Projecting their own insecurities perhaps?

There was a famous magazine cover back in 1982, I forget which one, that proudly pronuonced "The Death of Equities" That was when the market P/E hit an all time bottom just below 8. I don't expect the market P/E to get back below 8 but when we start to see that kind of sentiment I'll be jumping in with both meet and a margin loan to boot.


----------



## Kauri

According to the UK Sunday Telegraph Lehman Brothers is this weekend locked in talks with a group of foreign government-backed investment funds in an effort to secure billions of dollars in new equity capital. The Sunday Telegraph has learned that Lehman has intensified talks in recent days with Korea Development Bank about a capital injection of as much as 6 BLN USD. KDB has drafted in bankers from the heavyweight advisory boutique Perella Weinberg to provide counsel on the talks, which could be concluded this week. According to the UK Telegraph if the talks with the Koreans fall through, Lehman is lining up alternative investment from other sources, including Citic Securities, a Chinese brokerage. Lehman is also holding talks with a number of sovereign funds from the Middle East, which have been invited to participate in a capital-raising. These are understood to include investors from Abu Dhabi and Qatar.

In an interview that appeared in the Saturday UK Guardian, UK Chancellor Darling is quoted as saying that the UK is facing "arguably the worst" economic downturn in 60 years which will be "more profound and long- lasting" than people had expected. The Guardian article stated that Darling admitted that he had no idea how serious the credit crunch would become.
      Later in the weekend Darling took the airways to "clarify" his comments saying that he was referring to global economic conditions rather than those in Britain.

  Alls well with the financial world... crack another bottle of Xanadu..ooops.. maybe .. nnooop.. they've gone too..uummm

Cheers
......Kauri


----------



## CanOz

If the facts on Chris Martenson's site are anything to go by, its only going to get worse....or at least it will be a very different life in the next two decades for most of us.


Here's a new thread, i really appreciate your comments Kauri, along with all the other realists here.
https://www.aussiestockforums.com/forums/showthread.php?t=12227
Cheers,


CanOz


----------



## dhukka

CanOz said:


> If the facts on Chris Martenson's site are anything to go by, its only going to get worse....or at least it will be a very different life in the next two decades for most of us.
> 
> 
> Here's a new thread, i really appreciate your comments Kauri, along with all the other realists here.
> https://www.aussiestockforums.com/forums/showthread.php?t=12227
> Cheers,
> 
> 
> CanOz




Thanks immensely for than canaus, I think it's difficult to cover so many topics in a two and half hour course but he has done a fantastic job of attemptiing it. A lot of the stuff on money and fuzzy stats I was well aware of but his analysis of peak oil and the concept ERoEI was eye opening. Can't wait for the last 3 chapters. Don't know that I necessarily agree with all his conclusions but I do agree that the next 20 years will be much different than the last 20.


----------



## CanOz

dhukka said:


> Thanks immensely for than canaus, I think it's difficult to cover so many topics in a two and half hour course but he has done a fantastic job of attemptiing it. A lot of the stuff on money and fuzzy stats I was well aware of but his analysis of peak oil and the concept ERoEI was eye opening. Can't wait for the last 3 chapters. Don't know that I necessarily agree with all his conclusions but I do agree that the next 20 years will be much different than the last 20.




Certainly an eye opener for sure. 

I'll update the other thread as the last three chapters become available.

Cheers,


CanOz


----------



## Bushman

dhukka said:


> You've got to wonder what makes these delicate flowers so emotionally fragile that they feel the need to run around and tell everybody that it's not the end of the world, even though nobody said it was. Projecting their own insecurities perhaps?
> 
> .




I am sure you have heard to one about people in glass houses. Have a read of your statement above from a neutral point of view and then tell me where it sits on the 'emotional intelligence' scale? 

So from what I can ascertain, a bear is a bull with an anxiety disorder? Please, please - it is said with my tongue firmly in my cheek.


----------



## IFocus

wayneL said:


> You see I think bears are serious misunderstood and misrepresented. Most of us are not calling for Armageddon, though we may use that word hyperbolically. We (and certainly me) are calling for exactly the above scenario; resetting, rejigging, clearing out malinvestment and then moving on.
> 
> CLASSIC AUSTRIAN ECONOMICS.
> 
> As I have stated _ad nauseum_, bears are bulls. Bears are only bearish so they can be bulls again.
> 
> As we go into the northern hemisphere autumn, should I hope for more blooms from my now tatty looking petunias, should I invest in sunlamps and heaters to try to trick them into thinking it's still summer, or should I start preparing for winter and looking forward to next summer's blooms?
> 
> Financial winter is upon us folks, but that IS cause to be optimistic, because as winter follows summer and autumn, spring and summer follows winter.
> 
> There will come a point when this bear becomes unremittingly bullish and the economy tankage over here is exciting. I've prepared for it (a tad early so it turned out, but greedscam, crash gordon, et al had the sunlamps out on the petunias), so now I start preparing for the spring.
> 
> I'm still a bear for a while, but the bull is waking up as a result.
> 
> When was Warren Buffett most bullish? When did he buy stocks with his ears pinned back? When did Warren say his "spending drunken sailor" quote?
> 
> Yep, when blood was running in the streets, when market PE was 7 or 8 or something.
> 
> Market tankage is a time for bullishness and optimism... just not too soon into it. This will take a little while to play out, it's only just starting.




This must be a great post it mirrors my own opinion

Still need some serious fearful events to shake the fur off this bear market.


----------



## explod

IFocus said:


> This must be a great post it mirrors my own opinion
> 
> Still need some serious fearful events to shake the fur off this bear market.




As fear approaches, the senses numb to only what an individual wants to believe.    There are many sears to choose from who will strike the right cord for comfort.

A good translation, "the savvy will sucker the navvies out of their last dollar and more before they realise they have been robbed".

The Reserve dropped it today to gather a bit more tinder dry fuel, the savvy will use the window of opportunity to get out.


----------



## Bushman

explod said:


> As fear approaches, the senses numb to only what an individual wants to believe.    There are many sears to choose from who will strike the right cord for comfort.
> 
> .




Very poetic. I like it. 

Global inflation is the economic variable to 'fear' if you are looking to return to equities. Make sure there are a few inflation hedges in your portfolio. Cash does not meet this criteria.


----------



## davo8

Bushman said:


> Global inflation is the economic variable to 'fear' if you are looking to return to equities. Make sure there are a few inflation hedges in your portfolio. Cash does not meet this criteria.




I don't think so. The phenomenon we are seeing is debt destruction aka deflation. Anybody using lots of leverage is getting killed. Hedge funds, investment banks, mortage banks all get hurt.

Inflation will only get seriously going if central governments print lots of money and give it to consumers (to spend) not rich guys (to reduce their losses). My guess is that deflation will outweigh inflation across the system.

In deflation all assets reduce in value (even gold). If you have illiquid inflation hedges during deflationary times you are toast.

Only two assets I know really survive deflation. One is productive land; the other is productive business, but without debt. At present, cash getting 8% is looking quite good.

Actually you should pray for inflation. The other thing is far, far worse.


----------



## Kauri

RBS analysts in a note to clients today said Barclays may need to raise as much a Stg 7.5 bln to bring its capital ratio in line with investment banking peers. RBS cut its rating on Barclay's stock to "sell" from "hold".
  Now watch Barclays cut its rating on the haggis munchers..   

Cheers
...........Kauri


----------



## Kauri

and so it goes on ... and on.. and.....aaaaahh.. something you can bank on..

Merrill's talks to sell a significant amount of bad loans to Korea Asset Management Corp are faltering because of a dispute over price according to the Korean firm's CEO. Failure to strike a deal may indicate Merrill and Lehman may have to cut prices for assets that they are trying to sell as mortgage-related losses widen.
Cheers
............Kauri


----------



## Miner

Kauri said:


> and so it goes on ... and on.. and.....aaaaahh.. something you can bank on..
> 
> Merrill's talks to sell a significant amount of bad loans to Korea Asset Management Corp are faltering because of a dispute over price according to the Korean firm's CEO. Failure to strike a deal may indicate Merrill and Lehman may have to cut prices for assets that they are trying to sell as mortgage-related losses widen.
> Cheers
> ............Kauri





Welcome you back Kauri - certainly your absence was felt

Hope you have been working harder for us to provide your reserach

With DJ constant fall including last night 344 , sagging Oz dollar, we need your brain in this forum for us to protect from severity


----------



## Aussiejeff

Kauri said:


> and so it goes on ... and on.. and.....aaaaahh.. something you can bank on..
> 
> Merrill's talks to sell a significant amount of bad loans to Korea Asset Management Corp are faltering because of a dispute over price according to the Korean firm's CEO. Failure to strike a deal may indicate Merrill and Lehman may have to cut prices for assets that they are trying to sell as mortgage-related losses widen.
> Cheers
> ............Kauri







It's all grist for the mill right now...

Check out this uplifting forecast - 


*U.S. Must Buy Assets to Prevent `Tsunami,' Gross Says (Update3)*

http://www.bloomberg.com/apps/news?pid=20602004&sid=aZLLPW9YEa60&refer=world_indices

How deep are the Fed's pockets? Come to think of it, how deep are our OWN guvmint's Future Fund pockets?


Shall we say, minus 150 pts for the ASX today??



aj


----------



## Bushman

davo8 said:


> .
> 
> Actually you should pray for inflation. The other thing is far, far worse.





Tell that to the Zimbabweans. Rampant inflation is a humanitarian disaster. Be careful what you wish for. Have a look at inflation rates for the BRIC economies and consider that they are now exporting inflation, rather than deflation, to the world. Throw in commodities, oil and the fact that America will attempt to 'inflate' their way out of trouble (via an increase in money supply). Inflation will be the long-term threat to global growth. 

You are focussing on the bursting of an asset bubble. All we are seeing a return to real supply and demand equilibrium for all asset classes . Securitisation of long-term asset plays (property and infrastructure) was never a good idea as you are funding long-term investments with short-term capital structures and investor expectations (the 'yield, yield, yield' at any cost chorus).  

Anyway my 2c.


----------



## sassa

Is this the truth or a warning of what may be coming or speculation?



> Last week saw the publication of Q2 US whole economy profits data. They were shockingly bad. Core measures of profitability are in free-fall and have now reached a tipping point, where corporate activity could easily implode. We have also reached the point where companies give up ‘manipulating’ their profits higher and admit they are actually in free-fall. A combination of economic and reported profits slumping will catalyse the next equity downleg.




http://www.bigpicture.typepad.com/


----------



## explod

sassa said:


> Is this the truth or a warning of what may be coming or speculation?
> 
> 
> 
> http://www.bigpicture.typepad.com/





Us old Doom and Gloom sayers are now redundant.  You can all see it now.   

Like how the insiders shorted Lehman Brothers before the fall, then the Fed bailed them out with taxpayers money and it appears now that the insiders shorted again.    They sent Allan Bond to Gaol for much less.

We live in very intersting times indeed


----------



## dhukka

Ouch! August NFP's *-84,000*, unemployment rate jumps to *6.1%*, revisions to previous months shows *60,000* more losses than previously estimated.


----------



## dhukka

And joining the FDIC's failed bank list this week was Silver State Bank of Henderson Nevada. 



> *Nevada State Bank Acquires the Insured Deposits of Silver State Bank, Henderson, Nevada*
> 
> Silver State Bank, Henderson, Nevada, was closed today by the Nevada Financial Institutions Division, and the Federal Deposit Insurance Corporation (FDIC) was named Receiver. To protect the depositors, the FDIC entered into a Purchase and Assumption Agreement with Nevada State Bank, Las Vegas, Nevada, to assume the Insured Deposits of Silver State Bank.
> 
> The branches of Silver State Bank will open on Monday as Nevada State Bank in Nevada and National Bank of Arizona in Arizona. Depositors of the failed bank will automatically become depositors of Nevada State Bank or National Bank of Arizona. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage.
> 
> Over the weekend, customers of Silver State Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.
> 
> As of June 30, 2008, Silver State Bank had total assets of $2.0 billion and total deposits of $1.7 billion. Nevada State Bank agreed to purchase the insured deposits for a premium of 1.3 percent. At the time of closing, there were approximately $20 million in uninsured deposits held in approximately 500 accounts that potentially exceeded the insurance limits. This amount is an estimate that is likely to change once the FDIC obtains additional information from these customers.
> 
> Silver State Bank also had approximately $700 million in brokered deposits that are not part of today's transaction. The FDIC will pay the brokers directly for the amount of their insured funds.
> 
> Customers with accounts in excess of $100,000 should contact the FDIC toll-free at               1-800-523-8177        to set up an appointment to discuss their deposits. This phone number will be operational this evening until 9:00 p.m. PDT; on Saturday and Sunday from 9:00 a.m. to 6:00 p.m. PDT; and on Monday and thereafter from 8:00 a.m. to 8:00 p.m. PDT.
> 
> Customers who would like more information on today's transaction should visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/silverstate.html. Beginning Monday, depositors of Silver State Bank with more than $100,000 at the bank may visit the FDIC's Web page, "Is My Account Fully Insured?" at http://www2.fdic.gov/dip/Index.asp to determine their insurance coverage
> 
> In addition to assuming the failed bank's insured deposits, Nevada State Bank will purchase a small amount of assets comprised of cash and securities. The FDIC will retain the remaining assets for later disposition.
> 
> The transaction is the least costly resolution option, and the FDIC estimates that the cost to its Deposit Insurance Fund is between $450 and $550 million. Silver State Bank is the second bank to fail in Nevada in 2008. First National Bank of Nevada, Reno failed on July 25, 2008. This year, a total of eleven FDIC-insured institutions have been closed.


----------



## Sean K

dhukka said:


> And joining the FDIC's failed bank list this week was Silver State Bank of Henderson Nevada.



Is the pending mass failure of US banks anything similar to the US Savings and Loan crisis in the 80s when 750 banks failed, but ultimately up to 94' more than 1,600 banks insured by the FDIC were closed or received FDIC financial assistance.

Can we compare the current situation? Or, are the foundations for the crisis different and the current CC is going to have further reaching consequences?

(Interesting note that the DJI trippled during the S&L crisis, which included the 87 crash)


----------



## dhukka

kennas said:


> Is the pending mass failure of US banks anything similar to the US Savings and Loan crisis in the 80s when 750 banks failed, but ultimately up to 94' more than 1,600 banks insured by the FDIC were closed or received FDIC financial assistance.
> 
> Can we compare the current situation? Or, are the foundations for the crisis different and the current CC is going to have further reaching consequences?
> 
> (Interesting note that the DJI trippled during the S&L crisis, which included the 87 crash)




Obviously we're nowhere near the S&L crisis in terms of bank failures, I think we're just in the ramp up phase and that bank failures will get underway in earnest next year. I've seen estimates in the neighbourhood of 100 - 150 estimated failures. Also don't forget the 280 mortgage originators that have gone out of business in the last two years. 

The S&L crisis cost the FDIC (or US taxpayers) *$150 billion *from memory. Some estimates say they are going to need double that to take care of all the failures this time round. Expect the FDIC to go to congress soon and ask for a handout as they only have *$53 billion *to go around and they already used  an estimated 10 - 15% just on IndyMac. 

Here is an interesting article on the folly of comparing today's mess with the S&L crisis based simply on the number of failed institutions. A little old but still prescient. 

*Roger Ehrenberg And Readers Steve, BondInvestor, on Banking Industry Woes*


----------



## CanOz

Looks like the two GSE's are finally getting a bailout. The interesting thing will be how they structure it.

http://seekingalpha.com/article/94189-rescuing-frannie

Cheers,


CanOz


----------



## Nicks

The interesting difference between banks in the USA and Australia is that there are a plethora of suburban banks in the USA (as well as a few big ones like USB and BOA). By suburban I mean a bank that is confinded and operates literally soley in one suburb - they dont even operate elsewhere in the city or state.... and there are many more that operate just in the one city or state. With this comes a lack of diversification, as they loan to home owners of that locale. With the housing crash you will see many of these suburban banks that are in areas of significant mortgage defaults and housing price declines start to become distressed. There is no similarity in Australia in that we dont have such a vast amount of small banks confined to one local area.


----------



## dhukka

CanOz said:


> Looks like the two GSE's are finally getting a bailout. The interesting thing will be how they structure it.
> 
> http://seekingalpha.com/article/94189-rescuing-frannie
> 
> Cheers,
> 
> 
> CanOz




I don't see how common shareholders could survive but you never know. The US is now officially bail-out nation. What will be the final cost to taxpayers after all is said and done? This will dwarf the S&L crisis.  Anyway it should remove some uncertainty from the market and provide the basis for another dead cat boune.


----------



## explod

This is an excerpt from a book I have read and recommended on this forum more than 12 months ago.   Myself and a number of others were almost stoned for being doomsayers at the time.   However it does not do anything for the dreadful state of affairs unfolding but here it goes:-



> Introduction to Financial Armageddon: Protecting Your Future From Four Impending Catastrophes:
> 
> Few paid attention to warnings from Eric Breval, the head of the $15.5 billion Swiss state pension fund, in a November 2005 Bloomberg report. He discussed plans to shift assets away from the United States and referred to the financial “time bomb” that the nation’s largest mortgage lenders, Fannie Mae and Freddie Mac, were sitting on. The same held true in April 2006, when Citigroup vice chairman William Rhodes told the Wall Street Journal, “We are in a situation similar to that which existed in the spring of 1997, when threats existed to market stability and a lot of people didn’t want to see it.”





I am an avid user and believer in technical analysis but if you really want to survive, fundamental *understanding*, at least, is essential.


----------



## explod

dhukka said:


> I don't see how common shareholders could survive but you never know. The US is now officially bail-out nation. What will be the final cost to taxpayers after all is said and done? This will dwarf the S&L crisis.  Anyway it should remove some uncertainty from the market and provide the basis for another dead cat boune.







> However, the rumors have not yet converged on the shape of the plan, The New York Times says that not only wouldthe existing chiefs and likely the board will be given the heave-ho, but that the preferred shareholders would suffer as well as the common equity holders (note the details of the recapitaliztion were not reported). That was surprising and may not be correct. Most observers had assumed that preferred shareholders would be spared, since many banks hold significant slugs of Freddie and Fannie preferred, and a big writedown would be a direct hit to the bottom line.




06/08 from Financial Armageddon web page

The Fed have indicated disclosure of plans late Sunday night thier time.   We can expect some special jawboning to steady the open of trade on Monday IMHO.


It is also well and good to say this is only in the good ole US of A but it is (back to topic) the "servere market correction" that will reverbrate through everything when all the chickens are released that we are concerned with.


----------



## Kauri

The news on Fannie and Freddie might at least curtail the massive unwinding of risk trades that has plagued the AUD in recent weeks and induce some bargain hunting at these very low levels. As for the broad implications for the US dollar, there is likely to be a mixed reaction from analysts. The move by Treasury to effectively takeover the giant GSE"s and inject public money will increase the budget deficit and will make US Treasuries far less appealing. Some will feel that this could have negative implications for the US dollar longer-term at least.

Cheers
............Kauri


----------



## Uncle Festivus

Bushman said:


> Everyone seems to forget that the world recovered from its depression last time around. I mean it took fascism eating itself to do so but we did it. We will all be better investors due to this credit maelstrom or at the very least regulation will be in place to avoid the excesses. *After all the Fannie and Freddie model, spawned from the last depression, has worked well for 80 odd years which is a pretty good policy if you ask me*. Now it needs to be re-jigged for the next generaion. Big deal.
> 
> You should all be celebrating the demise of Bear Stearns and hopefully Lehmann Bros and a few pissant regional banks too as this will mean your kids will have a better future. Take some pain, redefine the model and move on. Humans are self interested after all. There will be another up in the asset cycle.
> 
> I am a lot more optimistic today compared to 12 months ago; and it means we no longer have to hear about the 'War on Terror'!! Remember that abstract media construct?




*"After all the Fannie and Freddie model, spawned from the last depression, has worked well for 80 odd years which is a pretty good policy if you ask me."*

A pretty good policy? Well I guess it's a good model if the government is always there to bail them out (it started with Chrysler) with taxpayers (or freshly 'printed') money. Some people have realised this and have gone on a debt bender unmatched in human history. Do you trust Henry Paulson & Ben Bernanke based on their record so far?



> August 1, 2007    BEIJING (Reuters) - Treasury Secretary Henry Paulson said on Wednesday the repricing of credit risk was hitting financial markets, *but U.S. subprime mortgage fallout remained largely contained*



 Mmmmm..... dismissed from proceedings as not a creditable witness or expert?

Paulsons' bazooka - 



> "Even though the conservativeship was built into the original legislation, it was a doomsday scenario. I guess in terms of the market, we are there" - Guy Cecala, an industry veteran and publisher of Inside Mortgage Finance



This is not part of a 'normal' cycle, so you can't compare with recent history to guide on how it's all going to resolve. The greatest credit expansion in history is now morphing into the greatest credit contraction in history with 25 years of irrational fiat money system & fractional reserve banking exuberance.

The great 'disconnection' is occurring right now with every country trying to limit the damage by withdrawing credit to foreigners, for use by their own citizens, although it might already be too late for some, if you take the NSW government as a micro example eg money coming in is not sufficient for even the normal necessities of modern life eg health, education, infrastructure, and no one is willing to lend the money unless the return outways the risk. 

Yes, we should applaud the demise of bad companies & practices, but in this connected world the contagion won't unfortunately be limited to the bad ones. The First Great Depression was only broken by WW2, so took 15-20 years to resolve - how long can you wait for the cycle to return?

Does your optimism translate to reality ie are you buying shares now, seeing how things can only get better??



> The director shouts in frustration on the set of "The End of the Credit Crisis - part 2" - "Benny & Paul, please try to make it look as if you mean it, or at least pretend to give the impression that you know what the heck you are doing". Coming to a bank near you perhaps??


----------



## nioka

The latest information from the reserve bank is reassuring. The Reserve Bank governor, Glen Stevens says there is no evidence to suggest there could be a recession in Australia, although it coundn't be ruled out completely.

 Quote; "We're in a slow growth-like period  .... I don't think it would be honest to deny there are some probabilities of that but the most likely outcome is the one we put out over the last six months"  

 Not real bullish but not at all bearish either.


----------



## explod

nioka said:


> The latest information from the reserve bank is reassuring. The Reserve Bank governor, Glen Stevens says there is no evidence to suggest there could be a recession in Australia, although it coundn't be ruled out completely.
> 
> Quote; "We're in a slow growth-like period  .... I don't think it would be honest to deny there are some probabilities of that but the most likely outcome is the one we put out over the last six months"
> 
> Not real bullish but not at all bearish either.




Yeah, Yawn, and jawboning.   Two bob each way based on what has happened.   No attempt at concluding from the recent evidience of what is really happening out there.    Petrol at the pump, food and overall debt costs.

You would think that our great and esteeemed leading financiers would give some guide to the future.   Oh well, you can never be wrong if you dont' say anything, keep the pants shiny on the seat eh.


----------



## nioka

explod said:


> You would think that our great and esteeemed leading financiers would give some guide to the future.   Oh well, you can never be wrong if you dont' say anything, keep the pants shiny on the seat eh.




 I thought they did say something positive. "NO IMMINENT AND SEVERE MARKET CORRECTION".


----------



## dhukka

nioka said:


> The latest information from the reserve bank is reassuring. The Reserve Bank governor, Glen Stevens says there is no evidence to suggest there could be a recession in Australia, although it coundn't be ruled out completely.
> 
> Quote; "We're in a slow growth-like period  .... I don't think it would be honest to deny there are some probabilities of that but the most likely outcome is the one we put out over the last six months"
> 
> Not real bullish but not at all bearish either.




There is no evidence, both historical and current, that suggests the RBA has a better handle on the future direction of the economy than anybody else. Uncle F highlighted above how clueless Paulson was last year. Bernanke and the rest of the Fed were also whistling past the graveyard chanting the 'containment' mantra this time last year and that credit losses would be contained to $100 billion. That's not to say that the Australian economy is headed for recession, just that we shouldn't take for granted that everything is allright because an RBA governor says so.


----------



## gfresh

I don't think I've ever heard a Reserve Bank head say "oh my, this is terrible, oh my god, we're going down hill fast!!", although a few times during history this may have been appropriate 

Their stance is always going to be fairly neutral, and even if things are quite terrible (as has been in the US), Bernanke and co have stilled used moderate language as to not panic the poor punters out there when they turn on the evening news. 

Similarly, I wouldn't expect too much other than gentle reassurance by our own RBA even if things weren't looking too good.

By contrast, the IMF and BIS have been a little less subtle however in their assessment, but probably more accurate.


----------



## dhukka

Amidst all the euphoria of the mortgage hedge fund bailout, Washington Mutual had a couple of interesting announcements yesterday. Firstly they finally booted the CEO. Next and more importantly they entered into an agreement with the OTS. 



> *WaMu replaces CEO, signs agreement with regulator *
> 
> Washington Mutual Inc. replaced its chief executive on Monday as the nation's largest thrift tries to find a new leader to guide it through the housing crisis.
> 
> The lender also said it signed an agreement with its main regulator, the Office of Thrift Supervision, which requires it to provide an updated business plan and forecasts for results, asset quality, capital and the performance of business segments.
> 
> The memorandum of understanding WaMu signed with the OTS may be the first intrusion into its affairs by regulators. If the company's condition worsens, the OTS can restrict WaMu's business operations, as it did with another thrift, Downey Financial (DSL) on Friday, the analysts said.




I still think these guys are prime candidates for chapter 11.


----------



## Uncle Festivus

Phew! now we can all get some sleep . What with the bailout of F&F the market rallies....back to where it was....... last Thursday....and on yawningly low volume! The PPT, take a bow! But alas, it twas just a fleeting glimpse of an bygone era of misguided optimism.

WaMu, Lehman & CDO's - the next chapter?

The real bear market starts - now!

Roubini's 12 steps are getting enacted by the looks of it, and Kondratief has the last laugh from the grave.

Prediction - the Dow & gold will both be 4 figures by 2009?


----------



## Whiskers

Uncle Festivus said:


> Phew! now we can all get some sleep . What with the bailout of F&F the market rallies....back to where it was....... last Thursday....and on yawningly low volume! The PPT, take a bow! But alas, it twas just a fleeting glimpse of an bygone era of misguided optimism.
> 
> WaMu, Lehman & CDO's - the next chapter?
> 
> The real bear market starts - now!
> 
> Roubini's 12 steps are getting enacted by the looks of it, and Kondratief has the last laugh from the grave.
> 
> Prediction - the Dow & gold will both be 4 figures by 2009?




I tell ya what uncle, I'll half agree with ya... gold in 4 figures by 2009.

But unc, I'm starting to worry about you. 



> Phew! now we can all get some sleep .




You wouldn't be suffering from some sort of manic disorder eh!


----------



## Uncle Festivus

Whiskers said:


> I tell ya what uncle, I'll half agree with ya... gold in 4 figures by 2009.
> 
> But unc, I'm starting to worry about you.
> 
> 
> 
> You wouldn't be suffering from some sort of manic disorder eh!




Why no, but what are they saying about me he he  (looks nervously over shoulder!)

Lehman down 30% tonight - toast again (invest in financial toasters perhaps?); I have my investment grade Dow short happening - a good nights sleep, wake up with some lunch money .


----------



## Whiskers

Uncle Festivus said:


> I have my investment grade Dow short happening - a good nights sleep, wake up with some lunch money .




Oh dear, that bad is it! Hope ya don't have to go too hungry.


----------



## Kauri

the price of Leeming shares implodes after South Korean bidding interest dissolved, raising the specter of potentially another Bear Sterns-type of bailout being rumored. Moreover, the government takeover of Fannie and Freddie this week is being seen more for what it is now that the initial euphoria has passed. What it is, is more US debt and no clear indication moronic lending practices which have created the current credit crisis will be reversed in the longer term. 
 Cheers
..........Kauri


----------



## dhukka

Kauri said:


> the price of Leeming shares implodes after South Korean bidding interest dissolved, raising the specter of potentially another Bear Sterns-type of bailout being rumored. Moreover, the government takeover of Fannie and Freddie this week is being seen more for what it is now that the initial euphoria has passed. What it is, is more US debt and no clear indication moronic lending practices which have created the current credit crisis will be reversed in the longer term.
> Cheers
> ..........Kauri




Well that has to be the shortest post bailout rally. Lehman got smashed and Washington Mutual lost *-20%* and Wachovia [B]-14.5%[/B]. Which one of these is going to go under first? looks like the market thinks it will be Leemings. 



> *S&P: Lehman on CreditWatch with Negative Implications*
> 
> Standard & Poor's Ratings Services said today that it placed ... Lehman Brothers ... on CreditWatch with negative implications.
> 
> "The CreditWatch listing stems from heightened uncertainty about Lehman's ability to raise additional capital, based on the precipitous decline in its share price in recent days," said Standard & Poor's credit analyst Scott Sprinzen. "Although the ratings ultimately could be affirmed, we do not currently rule out the possibility of lowering the ratings by more than one notch."


----------



## Onethong

By the way, it would be hard to see the Fannie and Freddie nationalisation as anything other than a massive official back-pedal from the free market. Maybe we are entering a new era of less free trade, higher taxes, and more nationalisations. The government backlash against globalisation could last for awhile. Capitalism is in retreat. Hmmmn.


----------



## Kauri

News that Lehman Brothers will announce their Q3 results tomorrow 
morning US time has pushed the USD/JPY, EUR/JPY and *AUD/JPY* higher. The move by 
Lehman to push forward their results announcement is hoped to remove the 
uncertainty surrounding the troubled investment bank that sent their shares 
plummeting 45% on Tuesday.
      The *AUD/JPY in particular collapsed late in the US session due to the deepening concerns aroused by the fall in Lehman shares and it is the AUD/JPY that is benefiting from the hope that Lehman will reassure the street* with their announcement and conference call to outline their strategies.

 Cheers
...........Kauri


----------



## dhukka

Lemmings just said that they will announce results tomorrow, a week earlier than scheduled. 



> *Lehman to report expected results Wednesday 7:30 am ET *
> 
> SAN FRANCISCO (MarketWatch) -- Lehman Brothers Holdings Inc. (LEH) said late Tuesday it will report its expected third-quarter results a week earlier than originally scheduled after shares of the firm fell about 45% in one day. Lehman said it will report at 7:30 am ET Wednesday and announce "key strategic initiatives."




"key strategic initiatives" sounds interesting.


----------



## Bushman

dhukka said:


> Which one of these is going to go under first? looks like the market thinks it will be Leemings.




Maybe we should gets some odds happening here: 
1. Lehmann @ evens 
2. Washington Mutual 3/1 
3. Wachovia 5/1 
4. US Fed smoky @ 20/1. Odds if they re-elect the 'Warpublicans' 10/1.


----------



## dhukka

Bushman said:


> Maybe we should gets some odds happening here:
> 1. Lehmann @ evens
> 2. Washington Mutual 3/1
> 3. Wachovia 5/1
> 4. US Fed smoky @ 20/1. Odds if they re-elect the 'Warpublicans' 10/1.




If you give me 4/1 on WM I'll take it.


----------



## Aussiejeff

Bushman said:


> Maybe we should gets some odds happening here:
> 1. Lehmann @ evens
> 2. Washington Mutual 3/1
> 3. Wachovia 5/1
> 4. US Fed smoky @ 20/1. Odds if they re-elect the 'Warpublicans' 10/1.




Oooh! Goody! *Tinny Bank Races!!!*

Look at 'em bail down the back straight!!!! 

I'll have a buck on "Beetlebomb".... 

Chiz,


aj


----------



## Kauri

Bushman said:


> Maybe we should gets some odds happening here:
> 1. Lehmann @ evens
> 2. Washington Mutual 3/1
> 3. Wachovia 5/1
> 4. US Fed smoky @ 20/1. Odds if they re-elect the 'Warpublicans' 10/1.




  5/1 on  a "shot-gun" marriage that *might*  be arranged between Goldman and Lemmings ..

  Cheers
............Kauri


----------



## sassa

Hank,spare me the ......Get another band aid out of the box,broker a deal for Lehman,let the market bounce and then let it settle into the routine.


----------



## dhukka

Leman loss of *-$3.9* billion or *-$5.92 *per share, mark to market losses of *-$7.8* billion. Trying to sell a majority stake in investment management business. Also trying to spin off Commercial real estate assets into some dodgy SIV structure.

Morons still paying a dividend of *$0.05*.


----------



## CAB SAV

Just watched Negus interview Dr Doom( Peter Schiff) & Prof. Steve Keen on Dateline.
Confirms what most feel, USA in financial strife. Sell,Sell,Sell


----------



## nomore4s

dhukka said:


> Leman loss of *-$3.9* billion or *-$5.92 *per share, mark to market losses of *-$7.8* billion. Trying to sell a majority stake in investment management business. Also trying to spin off Commercial real estate assets into some dodgy SIV structure.
> 
> Morons still paying a dividend of *$0.05*.




Doesn't this mean we'll get a rally now?:


----------



## sassa

Jesse is direct to the point in his opinion of 3 banks in America.



> Washington Mutual continues to get hammered as doubts about its solvency increase, and its core businesses decline almost as fast as its capital structure.
> 
> However, Lehman's announcement this morning was... a non-event at best, and a pathetic play for time at worst. The only real news was the potential sale of some British real estate to Black Rock for an undisclosed discount and the slashing of the dividend. Oh yeah, and Dick Fuld is still firmly in charge.
> 
> As we could not find any balance sheet associated with this release, we are still wondering what's really there behind the name and the facade. And even more so, what still lurks off balance sheet in uncharted waters.
> 
> The problem is not liquidity even at cheap levels. The problem is that the business model that supported these financial mutants has changed. They are standing their holding their buggy whips waiting for the horses to come back.
> 
> Time to adjust to the global economy guys and the new faces moving in. You no longer have the exclusive turf for Mulberry Street.
> 
> So, we still see Lehman as the leader in the dead-man-walking marathon, but Washington Mutual is not far behind, and possible pulling even. National City is within sight.
> 
> The finish line is a cliff.



http://www.jessescrossroadscafe.blogspot.com/


----------



## dhukka

Whiskers said:


> Hi davo8. I'm looking to stock up on Xmas cheer. I've got one carton com'n when oil stays below 100 for more than a week. I'll wager ya another one this is the bottom.




August 5th XAO close *4882*



dhukka said:


> I'll take that bet, only let's make it 10 cartons?






Whiskers said:


> Gosh, dhukka... what do ya think I am... a regular p!ss pot!
> 
> It'll take me two or three years to drink 10 cartons.
> 
> But are you sure you're good for 10.




September 11th XAO close *4871.5*

So I'm thinking I'll take 5 cartons of Crown and a couple of VB and since I'm not much of a drinker I'll donate the other 3 to ASF, so put in your orders boys, Whiskers is buying!:alcohol:


----------



## wayneL

dhukka said:


> August 5th XAO close *4882*
> 
> 
> 
> 
> 
> September 11th XAO close *4871.5*
> 
> So I'm thinking I'll take 5 cartons of Crown and a couple of VB and since I'm not much of a drinker I'll donate the other 3 to ASF, so put in your orders boys, Whiskers is buying!:alcohol:



Can I have Kronenburg?


----------



## dhukka

Allright wayne's in for a kronenburg, only two left fellas, get your oder in.

On a side note, Lehman down *-40%* in the first five minutes of trade.


----------



## Awesomandy

I've always liked my Heineken. 

And the xjo futures are trading down at the moment too...


----------



## mayk

With the swath of bad news hovering over LEH, I don't think it will survive over the weekend. Another historic baleout or shotgun marriage on the cards, curtousey of FR and US treasurery. Well for typical shorters this market must be a bull market...

I donot hold LEH, nor do I have any capacity to short any stock. I am just a silent observor.


----------



## davo8

dhukka said:


> August 5th XAO close *4882*
> September 11th XAO close *4871.5*
> Whiskers is buying!:alcohol:




Don't tell me he's still calling bottoms!? Will he never learn?

An average bear market runs 14 months, so we've still got months to go. And fireworks in October -- I can hardly wait!

So the real question is: how many times will Whiskers call the bottom before the real bottom?


----------



## Sean K

davo8 said:


> Don't tell me he's still calling bottoms!? Will he never learn?
> 
> An average bear market runs 14 months, so we've still got months to go. And fireworks in October -- I can hardly wait!
> 
> So the real question is: how many times will Whiskers call the bottom before the real bottom?



And youe been calling October as fireworks for ages too. You shouldnt really be throwing pies until your great prediction comes to fruition either. Good luck.


----------



## Kauri

Kauri said:


> 5/1 on a "shot-gun" marriage that *might* be arranged between Goldman and Lemmings ..
> 
> Cheers
> ............Kauri





   I'm balancing the book... down to 2/1 now...  
rumors surrounding a major US investment bank purchase of Lehman are gaining traction with the stock now looking to trade back above $5.  this same investment bank has been buying a huge amount of carry positions in anticipation of a renewed risk appetite in the markets.  Insiders... outsiders... darksiders...  read atween the lines and get set accordingly   ...  and hay... another weekend ann to save the US of A... shotgun or emergency cut???  mmm..  I'm set..   

  Slainte
.............Carry


----------



## Sean K

Kauri said:


> I'm balancing the book... down to 2/1 now...
> rumors surrounding a major US investment bank purchase of Lehman are gaining traction with the stock now looking to trade back above $5.  this same investment bank has been buying a huge amount of carry positions in anticipation of a renewed risk appetite in the markets.  Insiders... outsiders... darksiders...  read atween the lines and get set accordingly   ...  and hay... another weekend ann to save the US of A... shotgun or emergency cut???  mmm..  I'm set..
> 
> Slainte
> .............Carry



Some people dont think all this hay bailing is a good thing.

Bailouts Will Push US into Depression: Manager

The end result of the global economic slowdown may be the U.S. announcing national bankruptcy as the government cannot afford the bailouts that it promised and the market will not bail out the government, Martin Hennecke, senior manager of private clients at Tyche, told CNBC on Thursday.

"We expect a depression in the United States. We expect a depression, very possibly, also in Europe," Hennecke said on "Worldwide Exchange."


Only a CNBC story though....

Cramer has called a bottom remember, so weŕe all safe.


----------



## explod

> Jim Sinclair’s Commentary
> 
> All present economic plans and super spin strategies are focused on surviving 130 days 11 hours 36 minutes 53.4 seconds
> 
> Next president faces swelling U.S. debt
> By Gail Russell ChaddockThu Sep 11, 4:00 AM ET



 ..."

I think the hours need some updating but its near enough.


----------



## lusk

kennas said:


> The end result of the global economic slowdown may be the U.S. announcing national bankruptcy as the government cannot afford the bailouts that it promised and the market will not bail out the government, Martin Hennecke, senior manager of private clients at Tyche, told CNBC on Thursday.
> 
> "We expect a depression in the United States. We expect a depression, very possibly, also in Europe," Hennecke said on "Worldwide Exchange."




One of the main causes for the great depression was the government interferring and trying to do the right thing. All they did was make the liquidation process become drawn out. The idiots that are bailing out these banks are sending us down the same road.


----------



## GreatPig

lusk said:


> The idiots that are bailing out these banks are sending us down the same road.



Which is rather ironic given that Bernanke is supposed to be an expert on the causes of the great depression. You'd think he'd know.

GP


----------



## hacheln_mice

Bailouts are almost as American as gun ownership.  Moral hazard is not part of the American vocabulary.

With the exception of Paul Volcker, the 'solution' has always been to inflate your way out of an economic crisis.


----------



## Uncle Festivus

I like this picture, for it saves me writing a thousand words, and the colours are nice of course. A monthly chart, the trend is your freind, or go with the flow, don't paddle against the tide.......

BTW, the much forecast second half economic recovery is going great? Just need to drop some more dollars from the copter to get the peoples spending again


----------



## TheAbyss

Not much i can add but perhaps the thread should be renamed as i think the word Imminent needs to be - The current severe market correction


----------



## sassa

Regarding the Lehman Brothers rescue-
The Washington Post quotes that,"The government is looking for an agreement that would not involve public money."
Why wouldn't the 'would be rescuer/s'expect and seek the same deal as the Bear Stearns takeover where the taxpayer guaranteed $29 billion of shoddy paper?
What happens on Monday if the deal is not done by Sunday?


----------



## Whiskers

wayneL said:


> Can I have Kronenburg?






Awesomandy said:


> I've always liked my Heineken.




Lets see... 1, 2... ok, dhukka I'll have the 3rd. I like Heineken or any of the double hopped beer.



dhukka said:


> August 5th XAO close *4882*
> 
> 
> 
> 
> 
> September 11th XAO close *4871.5*
> 
> So I'm thinking I'll take 5 cartons of Crown and a couple of VB and since I'm not much of a drinker I'll donate the other 3 to ASF, so put in your orders boys, Whiskers is buying!:alcohol:




Ha ha ha ha ha... there's a sucker and lurker in every crowd.


> 14. wink at, to ignore deliberately, as to avoid the necessity of taking action



  :ald: 


Another LURKER bites the dust.

Did you say you had an education dhukka... you know read plain english and basic contract law, stuff like that.

Where does it say I made an offer to you. I didn't. I made one to davo8 but he buckled under the pressure of the moment and declined. 

In a nutshell... I humoured ya along... caught ya in a BEAR trap. 

But on the other hand you have made a clear open offer to the first three comers. 

Humm... "Whiskers is buying!" eh... I wonder what that's worth for fraud or somethin. ha ha.



> *Aussie Stock Forums Terms and Conditions of Website Usage*
> You agree not to use this website to post anything which is knowingly false and/or defamatory, misleading, deceptive, inaccurate, abusive, hateful, harassing, obscene, threatening, invasive of a person's privacy, or otherwise violative of any law.


----------



## dhukka

Whiskers said:


> Lets see... 1, 2... ok, dhukka I'll have the 3rd. I like Heineken or any of the double hopped beer.
> 
> 
> 
> Ha ha ha ha ha... there's a sucker and lurker in every crowd.
> 
> :ald:
> 
> 
> Another LURKER bites the dust.
> 
> Did you say you had an education dhukka... you know read plain english and basic contract law, stuff like that.
> 
> Where does it say I made an offer to you. I didn't. I made one to davo8 but he buckled under the pressure of the moment and declined.
> 
> In a nutshell... I humoured ya along... caught ya in a BEAR trap.
> 
> But on the other hand you have made a clear open offer to the first three comers.
> 
> Humm... "Whiskers is buying!" eh... I wonder what that's worth for fraud or somethin. ha ha.





Hook, line and sinker:


----------



## Kauri

the Fed and Treasury Department have been working with Leemming to help resolve the bank"s troubles, including talking to potential buyers, but that Fed officials "*currently* aren"t expected to structure a bailout along the lines of the Bear Stearns transaction or this past weekend"s rescue of mortgage giants Fannie Mae and Freddie Mac." *AIG, too, is weighing on stocks, with their 5-year CDS trading at around 850 bps, up a stunning 400 bps on the week.*

Bank of America, JC Flowers and China Investment Co are considering a possible joint bid for Leemming Brothers. Barclays is also interested in Lemmings.

confirmation from Treasury that Lemmings will have to be taken over, if possible, without direct US Govt funding beyond currently established lending facilities.

 Cheers
...........Kauri


----------



## Sean K

Kauri said:


> the Fed and Treasury Department have been working with Leemming to help resolve the bank"s troubles, including talking to potential buyers, but that Fed officials "*currently* aren"t expected to structure a bailout along the lines of the Bear Stearns transaction or this past weekend"s rescue of mortgage giants Fannie Mae and Freddie Mac." *AIG, too, is weighing on stocks, with their 5-year CDS trading at around 850 bps, up a stunning 400 bps on the week.*
> 
> Bank of America, JC Flowers and China Investment Co are considering a possible joint bid for Leemming Brothers. Barclays is also interested in Lemmings.
> 
> confirmation from Treasury that Lemmings will have to be taken over, if possible, without direct US Govt funding beyond currently established lending facilities.
> 
> Cheers
> ...........Kauri



China Inc buyout of the Fed may be imminent.

LOL.

Maybe give them 10 more years in a JV with Russia.


----------



## wayneL

kennas said:


> China Inc buyout of the Fed may be imminent.
> 
> LOL.
> 
> Maybe give them 10 more years in a JV with Russia.




我认为它是我们的非常明智的移动全部学会汉语语言。

Или возможно мы должны выучить русского.

Возможно оба.

Или если Сара Palin будет президентом, то, несколько из нас налево закончатся вверх с картинами подземелья снова.


----------



## wayneL

واقعيّا يفكّر المريض من المتشائم نحن كلّ سنكون يتكلّم عرضيّة ومعيشة تحت [شريا] في [ا فو] سنون.

[أه], إختبار إختبار.​


----------



## Sean K

LOL Wayne, 

Dont have a translater in this internet cafe on Copocabana Beach. Speaking of which, it is late afternoon in Rio and I must be on the sand to watch the sun go down. 

Is this related to a market correction?

Bloody hell, looking forward to a bottom, my Reals are burning holes in my pockets...

A caipiriha is in order....

Or 2....


----------



## wayneL

Just a discussion of which language we'll all be speaking in a decade or two.


----------



## noirua

wayneL said:


> 我认为它是我们的非常明智的移动全部学会汉语语言。
> 
> Или возможно мы должны выучить русского.
> 
> Возможно оба.
> 
> Или если Сара Palin будет президентом, то, несколько из нас налево закончатся вверх с картинами подземелья снова.



Yes indeed, this seems to be more a case of antidisestablishmentarianism and in need of upanishad streptomycin. Bring on the corroboree and make a night of it.


----------



## wayneL

noirua said:


> Yes indeed, this seems to be more a case of antidisestablishmentarianism and in need of upanishad streptomycin.




You know I'm a pedant. 

<edit> ahhh see you corrected... good lad.


----------



## Sean K

Will be some time before the international business language changes from English.

Just depends on how many of us get wipped out when China destroy the rest of the world. 

And, what influence BRI have as part of that..

Well be well dead by then though.


----------



## noirua

kennas said:


> Will be some time before the international business language changes from English.
> 
> Just depends on how many of us get wipped out when China destroy the rest of the world.
> 
> And, what influence BRI have as part of that..
> 
> Well be well dead by then though.




The international business language for the whole world will be English.  Those running Australia will be Chinese speaking English. They will use an Aussie keyboard, not Brazilian, however - lol


----------



## wayneL

Bem, a respeito de BRI, eu supor que nÃ³s devemos jogar portuguÃªses na mistura para a boa medida. 

Pelo menos nÃ³s poderemos requisitar um caipiriha… ou 2, quando em Rio.


----------



## wayneL

noirua said:


> The international business language for the whole world will be English.  Those running Australia will be Chinese speaking English. *They will use an Aussie keyboard,* not Brazilian, however - lol



...made in China.


----------



## noirua

wayneL said:


> Bem, a respeito de BRI, eu supor que nÃ³s devemos jogar portuguÃªses na mistura para a boa medida.
> 
> Pelo menos nÃ³s poderemos requisitar um caipiriha… ou 2, quando em Rio.





Hadriatindra er cambria teide. Goptimaniarat hermanscofic dodo empiacerpinoff acaman ASF:  http://www.thebull.com.au/the_stockies/forums.html


----------



## wayneL

noirua said:


> Hadriatindra er cambria teide. Goptimaniarat hermanscofic dodo empiacerpinoff acaman ASF:  http://www.thebull.com.au/the_stockies/forums.html




LOL, I'm afraid you got me there Noirua. (and systransoft.com)

What language is that?


----------



## noirua

wayneL said:


> LOL, I'm afraid you got me there Noirua. (and systransoft.com)
> 
> What language is that?



Hi wayneL, I have to admit it is Double Dutch. Only language I'm completely fluent in.


----------



## Sean K

Crikey, I can not even speak Spanish right now let alone Spangslishportugeuesesish...

Is this still part of the  Imminent correction?

Just must be that time of the night?

.....

Or afternoon in my case...


----------



## Glen48

I speak scene and obscene have a Wife made in China and after post am looking at shares in electronic translator companies.


----------



## Uncle Festivus

Now that we are getting way off topic, but still could have repercussions for the USA, is that they are fast becoming a nation of brown skinned Spanish speaking people, if the current trends continue. African Americans & Latinos will outnumber whites by about 2030 or so, not that far away.

The white English speaking establishment are getting a bit concerned, not least with Obama getting so close to the seat of power. There is more at play here than just the 'credit crisis' I think - it's the whole conservative white establishment who are throwing every last dime of taxpayers & electronic money to stay alive, and in power?


----------



## jeflin

hacheln_mice said:


> Bailouts are almost as American as gun ownership.  Moral hazard is not part of the American vocabulary.
> 
> With the exception of Paul Volcker, the 'solution' has always been to inflate your way out of an economic crisis.




Bernanke might as well as seek advice from Alan Greenspan, who emerged from  several crisis as a hero by inflating money supply.


----------



## Kauri

Kauri said:


> the Fed and Treasury Department have been working with Leemming to help resolve the bank"s troubles, including talking to potential buyers, but that Fed officials "*currently* aren"t expected to structure a bailout along the lines of the Bear Stearns transaction or this past weekend"s rescue of mortgage giants Fannie Mae and Freddie Mac." *AIG, too, is weighing on stocks, with their 5-year CDS trading at around 850 bps, up a stunning 400 bps on the week.*
> 
> Bank of America, JC Flowers and China Investment Co are considering a possible joint bid for Leemming Brothers. Barclays is also interested in Lemmings.
> 
> confirmation from Treasury that Lemmings will have to be taken over, if possible, without direct US Govt funding beyond currently established lending facilities.
> 
> Cheers
> ...........Kauri




According to the UK Times *AIG is planning a 20 BLN USD asset sell-off* as it fights to correct a record slump in its share price and braces for the impact of Hurricane Ike. Details of the plans could come as early as Monday. On Friday the insurer appointed investment bank JP Morgan to work on a rescue plan after its shares fell a record 31% in a single day. Assets under the hammer include Transatlantic Holdings, its New York-listed reinsurance group. Swiss Re and Munich Re, two giants of the European reinsurance business, are understood to be potential buyers. Other assets on the block are AIG"s consumer finance, reinsurance and plane-leasing units, according to analysts at Citigroup.

Slainte
...........Kauri


----------



## Aussiejeff

And from the other side of the pond, this should help things along nicely...

*SWITZERLAND'S biggest bank UBS is set to write down a further $US5 billion ($6 billion) in assets amid continuing financial turmoil, Swiss weekly SonntagsZeitung reported yesterday*.

The bank will post the loss in the second half of the year and is likely to inform markets just before its extraordinary general meeting on October 2, the paper said without citing its sources. 

Subprime losses will account for $US1 billion worth of the writedowns, while Alt-A loans -- made to borrowers one step up from subprime in credit terms -- will yield another billion in losses. 

Investments in monoline insurers -- a form of bond insurance -- will result in $US2 billion  writedowns and student loans the remaining billion, the paper said. 

One of the banks worst hit by the subprime crisis, UBS has written down some $US42.5 billion on its subprime-related assets. 

For its second quarter, it posted a net loss of 358 million Swiss francs ($390 million), but the bank's chief insisted last month it would still return to profitability next year. 

"We will be profitable again in 2009,'' CEO Mr Kurer said in an interview with Swiss Sunday newspaper NZZ am Sonntag. 

*Mr Kurer said the current situation faced by the bank could be compared to the aftermath of a severe storm. "One must first remove the fallen trees, then tidy up the house and cellar, and in the third phase, bring the shine back to the house,'' he said, adding that he believes the bank to be now in the second phase*.

Gee. Ya gotta admire the man's spunk after having presided over the LOSS OF $US42.5 Billion thus far?

Then again, Old Chinese proverb say - "Sometimes easier to bulldoze block than to patchup shell..."


----------



## Glen48

G DUBA talked about WMD .. greed has done more to the World than Bin Liner and his crew.
Greed as we can see is a great leveler. 


The Man Who Lived Through 1929 (Reprinted) 

Here is a post from last year that you may enjoy. This one gives you a feeling for what may lay ahead. It offers some perspective as to what we may expect, this time around. prev. printed 8/31/07

Let's go back and picture a man from the 1929 era. He would have been born about 1890 and been about 40 at the time. His world had gone from horse and buggy to the automobile. Between 1908 and 1927 Ford had produced 15,000,000 model T's. In 1904 there were three million telephones, by 1915 you could call coast to coast (the cost was prohibitive). By 1906, the electric light bulb was commercially feasible to produce. Radio came into its own in the 1920's. By 1924 there were 3 million radios in use in the US. The airplane had come on line. It was used to speed up mail delivery; commercial aviation was still a few years away. Technology had turned his life into something new and different.

The banks were loaning money out, 100% financing, interest only, 5 year loans that had to be refinanced at the end of the term. Also, you could borrow any amount you desired from your stock broker just pay the interest. Buying stocks on margin (10% down) was the name of the game.

Another thing to come of age, was installment buying. GMAC was created in 1919 to help sell more cars, and it did just that. There had been a stigma attached to not paying cash and through advertising, it became more acceptable. By the eve of the great depression, it had become a way to acquire the American Dream. You didn't have to wait and save up for what you wanted, you could have it now.

From 1915 to 1930 we had been transitioning from an agrarian economy to a more industrialized economy. Technology had changed our way of life without any perceived realization of it by the general population. A farmer was 10 times more productive with modern machinery. Agricultural prices were dropping because of this over supply. The speculation that had been going on in farm land was unsustainable. A bigger farm did not increase your return on investment, just the opposite.

Things started to go bad in 1926 with the Florida Hurricane, land speculation lost its appeal (severe understatement). Then in June of 1928 there was a mini stock market crash, a precursor to the big one. In October of 1929 the big crash came and "rearranged" the financial markets. In 1930 Congress passed The Smoot-Hawley Tariff Act, which some claim was responsible for the unemployment rate climbing to 25% (over the next two years). Bank failures started to be a problem in 1929 only to get worse in 1930, 1,352 banks failed. In 1931, 2,294 banks bit the dust.

So what happened to our gentleman? If he had a 5 year I/O loan that was due for renewal, it wasn't renewed; the bank wanted and needed the cash. Result, the bank got the house. He stood a 1 in 4 chance of being unemployed. If his bank had failed, he might have no savings left. Anything bought on installment might have to be returned or a payment made on it.

He probably survived with memories of the rough times he had. People from that generation were seasoned with these memories. They acted differently as so to avoid making the same mistakes over again.

Today, in the world of 2008, the "group memory" of these people is no longer with us. Are we destined to make the same mistakes as they did so long ago?

The evolution of the Internet is comparable to Radio of that time. And Google stock isn't quite as high as RCA's stock got to, before the crash. Then, there was the installment buying and interest only loans of the 1920's, verses the credit card of today and the same old loan formula (use their money not mine).

Almost sounds like an eerie episode of The Twilight Zone, doesn't it?


----------



## jiggy

interesting thread


----------



## Undertow

I do not expect a servere market correction. Most of the negatives are alreday known now. Seems it's more a case of riding out the storm. There will be ups and downs, more downs than ups are very likley but somewhere the tide will turn.


----------



## CanOz

The S&P futs are tapping 1205 now, if the July lows at 1200 give way then look out below. I think there is still allot that can unwind here and we may not see the bottom until some time in October.

Cheers,


CanOz


----------



## nunthewiser

So ladies and gents .......is tonight the night we start making new records ? gunna be intresting thats for sure


----------



## MrBurns

> A consortium of 10 global commercial and investment banks announced plans to provide 70 billion dollars to help offset a credit squeeze.
> 
> Bank of America, Barclays, Citibank, Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan Chase, Merrill Lynch, Morgan Stanley, and UBS, said in a joint statement they "initiated a series of actions to help enhance liquidity and mitigate the unprecedented volatility and other challenges affecting global equity and debt markets."




From the ABC web site.

I don't think anything can stop this now.

The market will fall because the companies that make up the market will not be worth what they were a few months ago and whats more it wont come back in a hurry.

This isn't panic this is logic.

I saw this coming 3 years ago, but the boom just kept going ...........til now.


----------



## wayneL

Undertow said:


> I do not expect a servere market correction. Most of the negatives are alreday known now. Seems it's more a case of riding out the storm. There will be ups and downs, more downs than ups are very likley but somewhere the tide will turn.



There are known knowns, there are known unknowns, *but then there are the unknown unknowns.*


----------



## Uncle Festivus

Undertow said:


> I do not expect a servere market correction. Most of the negatives are alreday known now. Seems it's more a case of riding out the storm. There will be ups and downs, more downs than ups are very likley but somewhere the tide will turn.




Well yes, we know the negatives, only the depth of the sludge is unknown, and if our generation will be around for the turning?



> *From Wikipedia, the free encyclopedia*
> 
> A *credit default swap* (*CDS*) is a credit derivative contract between two counterparties, whereby the "buyer" or "fixed rate payer" pays periodic payments to the "seller" or "floating rate payer" in exchange for the right to a payoff if there is a default[1] or "credit event" in respect of a third party or "reference entity".
> If a credit event occurs, the typical contract either settles by delivery by the buyer to the seller of a (usually defaulted) debt obligation of the reference entity against a payment by the seller of the par value ("physical settlement") or the seller pays the buyer the difference between the par value and the market price of a specified debt obligation, typically determined in an auction ("cash settlement").
> A credit default swap resembles an insurance policy, as it can be used by a debt holder to hedge, or insure against a default under the debt instrument. However, because there is no requirement to actually hold any asset or suffer a loss, a credit default swap can also be used for speculative purposes and is not generally considered insurance for regulatory purposes.



What went up, must come down, many times over, negative contagion.



> The market for credit derivatives is now so large, in many instances the amount of credit derivatives outstanding for an individual name are vastly greater than the bonds outstanding. For instance, company X may have $1 billion of outstanding debt and $10 billion of CDS contracts outstanding. If such a company were to default, and recovery is 40 cents on the dollar, then the loss to investors holding the bonds would be $600 million. *However the loss to credit default swap sellers would be $6 billion*. When the CDS have been made for purely speculative purposes, in addition to spreading risk, credit derivatives can also amplify those risks.



The tide is out for the tsunami; lot's of fat, ugly, greedy corporates are naked . The music has stopped.


----------



## wayneL

MrBurns said:


> This isn't panic this is logic.




Now that's a quotable quote! 

Ace!


----------



## MrBurns

> Now that's a quotable quote!




I'm flattered


----------



## dhukka

Sorry to interrupt the financial meltdown with some boring economic news. Industrial Production down *-1.1%* in August. That's the steepest decline since Hurricane Katrina. IP is one of the key measures the NBER uses to call recessions.


----------



## brty

Perfect scenario for Uncle Ben to come in with a large interest rate cut, and send the markets into a buying frenzy. 

It may not last long though.

Starting to look like the Feds have run out of money to bail. I too wonder what is in store for MS, Goldman and for that matter BofA.

brty


----------



## gav

nunthewiser said:


> So ladies and gents .......is tonight the night we start making new records ? gunna be intresting thats for sure




I believe it will.  Tomorrow we'll smash through that 4800 barrier that has been holding up as of late. Just my


----------



## wayneL

gav said:


> I believe it will.  Tomorrow we'll smash through that 4800 barrier that has been holding up as of late. Just my



Dunno 'bout that.

There are buyers in this market. There is a concerted effort at a gap fill, up 24 SP points from the gap down.

Don't ask me who is buying or why, but suspect GS a/c no. 95 is underpinning it.


----------



## wayneL

wayneL said:


> Dunno 'bout that.
> 
> There are buyers in this market. There is a concerted effort at a gap fill, up 24 SP points from the gap down.
> 
> Don't ask me who is buying or why, but suspect GS a/c no. 95 is underpinning it.



BTW I'm LMAO.

Suspected this would happen.


----------



## Whiskers

wayneL said:


> Dunno 'bout that.
> 
> There are buyers in this market. There is a concerted effort at a gap fill, up 24 SP points from the gap down.




Yeah, well bugga-me-dead... we may even get a green day yet!


----------



## Kauri

all eyes are are on stocks and whether the Lehman failure inspires broader safe-haven flows into the close. Today"s week NY Fed and Industrial Production releases certainly do little to reassure investors. Lower oil prices, although helpful to strapped consumers and businesses, are part and parcel of the weakening demand scenario that has crippled credit.
 Big money on the sidelines... mainly short term momentum players playing currently... too many rumours to post... a lot most likely with no basis other than to drive the fear/hope and clip a quick profit...

Cheers
..........Kauri


----------



## wayneL

wayneL said:


> Dunno 'bout that.
> 
> There are buyers in this market. There is a concerted effort at a gap fill, up 24 SP points from the gap down.
> 
> Don't ask me who is buying or why, but suspect GS a/c no. 95 is underpinning it.



Next time I post something like this, FADE IT! LOL

Posted right at HOD.


----------



## CanOz

wayneL said:


> Next time I post something like this, FADE IT! LOL
> 
> Posted right at HOD.




Well, the July low was just taken out....look out below.


----------



## explod

Whiskers said:


> Yeah, well bugga-me-dead... we may even get a green day yet!




All this gloom and doom stuff, sorry I got out of bed.

Anyway we are all still together on ASF

And hear that Big Chief Burnin Bush stated they are not going to bail out all these bad mobs at taxpayers expense either.

What a difference a few days can make


----------



## nunthewiser

Well here it comes..........................here comes the night.............whoa whoa yeah..................record breakin day on the asx ?


----------



## Kauri

wayneL said:


> Next time I post something like this, FADE IT! LOL
> 
> Posted right at HOD.





One institution that is often good to watch for further insights or direction into the markets is Goldman Sachs which more often than not is ahead of the rest of the crowd in terms of reacting to developments in times of heightened sensitivity. It hit new daily, and yearly lows.. 4 hours or so before the market closed... giving a little hint where tings were heading..   

Cheers
..........Kauri


----------



## Sean K

It's been a beautiful afternoon on Ilha Grande south of Rio.

Tropical paradise.

Good opportunity to invest in a pousada here, while the rest of the world crumbles..

Gotta be a buying opportunity soon...


----------



## deadset

It seemed like the Australian market dropped in anticipation already yesterday, whereas last night the US market dropped only 4%, so I'm only expecting a fairly minor drop today.  Then again it could over-panic with Oil and Commodities dropping as well last night too. It's definitely being a learning experience watching all this happen lately.  I'm curious as to how low oil will go and how long it will stay low, high 80s/barrell is within reach.

Let's hope that the last of the bad news with financials.


----------



## juiceman

deadset said:


> It seemed like the Australian market dropped in anticipation already yesterday, whereas last night the US market dropped only 4%, so I'm only expecting a fairly minor drop today.  Then again it could over-panic with Oil and Commodities dropping as well last night too. It's definitely being a learning experience watching all this happen lately.  I'm curious as to how low oil will go and how long it will stay low, high 80s/barrell is within reach.
> 
> Let's hope that the last of the bad news with financials.




Sorry to say this BUT i feel this is just the begining


----------



## pepperoni

Im an avid lurker on this thread but it seems pretty clear the bad news is accelerating ... which makes sense as by their nature all financials have some exposure to the others and the market generally.

There is no cause for any improvements in the foreseeable future - any support is limited to the extent to which the US Govt is prepared to commit taxpayer funds to supporting the markets and financial system.

ASX looks like its stabilising 2.5% down bringing yest + today to US fall level but I think they know but dont want to admit our investment banks are finished for at least a few year and are in complete denial about our banks.


----------



## Awesomandy

pepperoni said:


> ASX looks like its stabilising 2.5% down bringing yest + today to US fall level but I think they know but dont want to admit our investment banks are finished for at least a few year and are in complete denial about our banks.




Given what happened overnight, it is actually not that bad at the moment, I think. It would be interesting to see what happens when Hong Kong opens though - they had a public holiday yesterday, so I'm guessing it'll be down around 4%. Japan is currently down around 4.7% as I type as well, although they had a public holiday yesterday as well. So, all in all, it's not too bad - things could've been worse.


----------



## Calliope

I have no doubt that the American Haters who infest the political chat threads of this Forum wiil be overjoyed at the bloodbath on Wall Street last night. Oh yes I can hear them saying...I love Americans...many of my best friends are American...I only hate the Republications and Big Business.

Before they pop the champagne corks they should be aware that any meltdown  in the American economy will have a negative impact on the income of every Australian. (Even those on welfare and in government jobs)

It wiil affect the economy of every country in the world, including China and Saudi Arabia

All that is keeping Australia afloat at the moment is Business, both big and small, and those who work for them. It is not the government. It sees its role as putting obstacles in the path of entrepeneurs  Those members who contribute to the *stock*  threads know this. It has never sunk in with the idle chatterers.


----------



## explod

Calliope said:


> I have no doubt that the American Haters who infest the political chat threads of this Forum wiil be overjoyed at the bloodbath on Wall Street last night. Oh yes I can hear them saying...I love Americans...many of my best friends are American...I only hate the Republications and Big Business.
> 
> Before they pop the champagne corks they should be aware that any meltdown  in the American economy will have a negative impact on the income of every Australian. (Even those on welfare and in government jobs)
> 
> It wiil affect the economy of every country in the world, including China and Saudi Arabia
> 
> All that is keeping Australia afloat at the moment is Business, both big and small, and those who work for them. It is not the government. It sees its role as putting obstacles in the path of entrepeneurs  Those members who contribute to the *stock*  threads know this. It has never sunk in with the idle chatterers.




Could not agree with you more, the entire post.   Except BUSINESS,  the USA stopped doing business and went on an uncontrolled borrowing and spending spree.   And I have family whon are Americans living in America, (Deep south and republicans)

The reality check is difficult for all and not the fault of doomsayers, leftwingers or American haters.


----------



## gfresh

I think you'll find people in the 'idle chatter' threads have been sensible enough not to actually own any stocks for many months (or at least only a few) - so are happy to just watch it play out from the sidelines, and are more interested in the current "big picture" view right now. Most have suspected it would get worse many months ago, and here we are.. 

Yes, it will effect everybody. I don't think anybody here would be denying that it will. Those that play it well, and have even a basic understanding of the extent of the crisis faced should come out the other side much better off however.. 

Had people listened to the mainstream commentary, "it's a bargain", "banks are a buy now", "these things are just temporary blips in the long-term sharemarket", "we are nearing a bottom now", "china is the savior", etc, etc - no doubt they wouldn't be so happy now.

So thank god there are some independent thinkers out there, not just here, but over in the US (where one could read warnings 18+ months ago), that allow a different picture to be presented. Those that question government. Those that question big business. Those that question the whole system in many ways. It's damn healthy of a productive society to allow individuals to do that.


----------



## Glen48

The only small business in Oz making money are the ones who were a big business and few years ago.
OZ is just as much in Debt as the rest of the World except for Housing as we have the most over priced homes in the World.
The next question do we sell every thing in the red and bail out for awhile?
NAB is on the cards to take a dive.
AIG will most likely be next up there with JP Morgan, Citibank, and Bof A


----------



## Uncle Festivus

Calliope said:


> I have no doubt that the American Haters who infest the political chat threads of this Forum wiil be overjoyed at the bloodbath on Wall Street last night. Oh yes I can hear them saying...I love Americans...many of my best friends are American...I only hate the Republications and Big Business.
> 
> Before they pop the champagne corks they should be aware that any meltdown  in the American economy will have a negative impact on the income of every Australian. (Even those on welfare and in government jobs)
> 
> It wiil affect the economy of every country in the world, including China and Saudi Arabia
> 
> All that is keeping Australia afloat at the moment is Business, both big and small, and those who work for them. It is not the government. It sees its role as putting obstacles in the path of entrepeneurs  Those members who contribute to the *stock*  threads know this. It has never sunk in with the idle chatterers.




Ditto as Gfresh. I guess it would come as a shock for those that believed the 'all is well' vested interest mobs, the 'markets always rise in the long term' spin. They go by the name of economists and analysts. The pyjama traders among us saw this coming for some time .

If you have been following this thread there is strangely nothing unusual about what's happening, & we don't even have to hate American's.  

You are right in some of your observations but to blame people on this forum for enjoying what is unfolding is way off the mark. Why begrudge those who have done due diligence, a bit of research and a little bit of common sense when they turn out to be right after all. I'm sure the object for me & others here is to put forward perspectives which, up till recently, have been dismissed as lunatic fringe ramblings. Guess what, the lunatics were maybe the only sane ones after all.

The 'bloodbath' was remarkably contained & planned for by the Money Shuffler Junta ie the Fed. If it was put into context of what it was, and what has been happening for the last 12-16 months then the Dow would/should be much lower. It is abnormal that it is not?

What will be interesting is what happens in the next few trading sessions. The real test will be when 'the plan' unravels and the Fed looses the little credibility it has left. Then you will see the real scramble for the exits! 

The contagion is now endemic, and several more companies have been reading the same book as Lehman etc, just finished Chapter 10 maybe? What happens when Boeing and General Motors file for bankruptcy? 

Human weakness and inability to deal with adversity, mainly by politicians and regulators, has gotton us to this point, now all of us have to pay the price for the collective financial & environmental largesse of the last 75 years.

No doubt you are all the better for your vent, so now you can deal with reality & plan for 'it'.


----------



## lumpdum

Uncle Festivus said:


> Ditto as Gfresh. I guess it would come as a shock for those that believed the 'all is well' vested interest mobs, the 'markets always rise in the long term' spin. They go by the name of economists and analysts. The pyjama traders among us saw this coming for some time .
> 
> ur vent, so now you can deal with reality & plan for 'it'.




From the small segment of my interest, it's the "last on first off"
 situation in terms of share price write-down. AMP SGB MQG


----------



## dhukka

Uncle Festivus said:


> Ditto as Gfresh. I guess it would come as a shock for those that believed the 'all is well' vested interest mobs, the 'markets always rise in the long term' spin. They go by the name of economists and analysts. The pyjama traders among us saw this coming for some time .
> 
> If you have been following this thread there is strangely nothing unusual about what's happening, & we don't even have to hate American's.
> 
> You are right in some of your observations but to blame people on this forum for enjoying what is unfolding is way off the mark. Why begrudge those who have done due diligence, a bit of research and a little bit of common sense when they turn out to be right after all. I'm sure the object for me & others here is to put forward perspectives which, up till recently, have been dismissed as lunatic fringe ramblings. Guess what, the lunatics were maybe the only sane ones after all.
> 
> The 'bloodbath' was remarkably contained & planned for by the Money Shuffler Junta ie the Fed. If it was put into context of what it was, and what has been happening for the last 12-16 months then the Dow would/should be much lower. It is abnormal that it is not?
> 
> What will be interesting is what happens in the next few trading sessions. The real test will be when 'the plan' unravels and the Fed looses the little credibility it has left. Then you will see the real scramble for the exits!
> 
> The contagion is now endemic, and several more companies have been reading the same book as Lehman etc, just finished Chapter 10 maybe? What happens when Boeing and General Motors file for bankruptcy?
> 
> Human weakness and inability to deal with adversity, mainly by politicians and regulators, has gotton us to this point, now all of us have to pay the price for the collective financial & environmental largesse of the last 75 years.
> 
> No doubt you are all the better for your vent, so now you can deal with reality & plan for 'it'.




Nothing to add, except great post unc.


----------



## Calliope

Uncle Festivus said:


> You are right in some of your observations but to blame people on this forum for enjoying what is unfolding is way off the mark. Why begrudge those who have done due diligence, a bit of research and a little bit of common sense when they turn out to be right after all
> 
> No doubt you are all the better for your vent, so now you can deal with reality & plan for 'it'.




Thanks Unc for  your comments. I  would like to state that I made no observations or cast any blame on any contributor to this thread. I was referring to a few people on *political* threads. Rather than begrudging your fellow contributors, I congratulate them on their research and common sense. 

Secondly I get no pleasure out of my vent as you term it. I am as aware as you are that America's present problems are a result of uncontrolled and unregulated lending and irresponsible borrowing. I have never borrowed above my means, and my reality is that I feel as a result of sensible investment I can weather the storm.


----------



## Greg71

I found this site the other day. It has some interesting stuff about Elliot Wave, that we're in a 200-year pattern. Scroll down to the Elliot Wave heading.

http://www.babylontoday.com/stocks_bonds.htm

Also, there are a number of double-tops forming on long-term charts.

http://www.stockcharts.com/charts/historical/


----------



## nioka

Uncle Festivus said:


> The pyjama traders among us saw this coming for some time ..




 Sure they did. However if I had taken notice of them when they first started to spruike doom I would be a hell of a lot worse off than I am today. 

The same pyjama traders will now be able to spruike "recovery" and sooner or later they will be saying I told you so.  

It is not ALL doom and gloom. There are some wonderful buying opportunities out there at the moment.


----------



## pepperoni

nioka said:


> Sure they did. However if I had taken notice of them when they first started to spruike doom I would be a hell of a lot worse off than I am today.
> 
> The same pyjama traders will now be able to spruike "recovery" and sooner or later they will be saying I told you so.
> 
> It is not ALL doom and gloom. There are some wonderful buying opportunities out there at the moment.




.... for the  omniscient, those with unfathomable  investment skills and the extremely lucky.  And if were talking going long thats assuming things will turn around very soon.

When funds (and banks!) headed by the brightest financial minds in the world are losing money hand over fist mere mortals like myself are far better off following this thread into something they can understand (even if its a term deposit thats earing 0% real after tax but not losing 20% plus).


----------



## pepperoni

Calliope said:


> All that is keeping Australia afloat at the moment is Business, both big and small, and those who work for them.




If the last few years characterise "floating" I think the sooner we "sink" the better for all.


----------



## CamKawa

The ABC's Stephen Long says it the way he sees it. Have a listen.
http://www.abc.net.au/news/audio/2008/09/16/2365912.htm


----------



## Calliope

pepperoni said:


> If the last few years characterise "floating" I think the sooner we "sink" the better for all.




Okay. I exempt you from my reference to common sense in post 3131.


----------



## Bushman

nioka said:


> It is not ALL doom and gloom. There are some wonderful buying opportunities out there at the moment.




Agreed. Look for mature assets without development risk and highly geared structures that provide basic human services and you will find a bargain.   Infrastructure comes to mind but not of the 'toll road to be built on dodgy traffic numbers' variety. Utiities, communication monopolies like Telstra will serve you well. But there is also the 'what is cheap today will be cheaper tomorrow' argument.  

I still think BRIC is here with us to stay as I see it as a once-in-a-generation emergence of a middle class. I am tipping that the sovereign states will be the ones who finance it now. Idle speculation off course... 

The US will be a basket case until the ressie market stabilises. There is now talk of setting up another agency that buys houses in the US at 3 times household medium income. Could work? My bet is on another 'shock and awe' campaign by the Fed if it has much left in the tank. 

PS: How are those odds going? 
Lehman, Merrils and WaMu have gone. What price Morgan Stanley and Goldman Sachs? The shorters are running out of targets.


----------



## Macquack

pepperoni said:


> .... When funds (and banks!) headed by the *brightest financial minds in the world *are losing money hand over fist ....




Dont over-rate these capitalist pigs.

They are no better than  used car salesmen.


----------



## nioka

Macquack said:


> Dont over-rate these capitalist pigs..




Hardly something you expect from someone on a stock market forum to state. Aren't we all trying to be capitalists?


----------



## pepperoni

Calliope said:


> Okay. I exempt you from my reference to common sense in post 3131.




And if common sense means we should wish for more of the same then thank god i have none.

IMO The "correction" was brought about by absurd business models and practices - bring on its speedy downfall before it does more damage I say.  

Ive sat in enough rooms with the BNBs and MQGs pulling rabbits out of hats in ways none of the rest of us *really* understood, and taking their cuts before the **** hits the fan.

And I dont think the insurers and rating agencies really understood either ... they just bet on model and took their cut.

Its been 99% financial trickery with 0% value add and no integrity over disclosure of the risks involved.  Its more "parasitic" than "professional".

And as the paper said yest the private equity guys have no doubt been doing the same and may very well face the same fate.   

"Over correct" for all I care as Ive bet against it the whole time.

We have to take our medicine after they have leveraged chunks of our future but the sooner the better.  Its the ones that endorsed and bet on its success that suffer the most and to that I say hurrah.  

Us average joes that didnt buy rivieras and ferraris on interest only will do alot better in relative terms through this period.

Loving or hating America has nothing to do with it ... or this thread for that matter. 



Back on topic I read that the interbank lending rate is now suddenly 2% above the fed rate (triple the norm I think)... I really hope people are re-learning how to price risk and I really hope that the market does not take its cue from a fed drop this week to go dead cat bounce or raging bull for a few weeks.


----------



## Macquack

nioka said:


> Hardly something you expect from someone on a stock market forum to state. Aren't we all trying to be capitalists?




There is a difference between a "capitalist" and a "capitalist pig". The former has some morals, the latter has none.


----------



## CanOz

nioka said:


> Hardly something you expect from someone on a stock market forum to state. Aren't we all trying to be capitalists?




Perhaps the greed factor is slightly more apparent in the Wall St. Banking crowd.

CanOz


----------



## Kauri

Bushman said:


> PS: How are those odds going?
> Lehman, Merrils and WaMu have gone. What price Morgan Stanley and Goldman Sachs? The shorters are running out of targets.





Given the focus on the financial sector, the spotlight will fall on Goldman 
Sachs today where the bank is due to report Q3 earnings before the Wall Street open. consensus expectations at $1.89 EPS versus $6.21 a year ago.

Cheers
...........Kauri


----------



## Kauri

pepperoni said:


> Back on topic I read that the interbank lending rate is now suddenly 2% above the fed rate (triple the norm I think)... I really hope people are re-learning how to price risk and I really hope that the market does not take its cue from a fed drop this week to go dead cat bounce or raging bull for a few weeks.




  Funding continues to prove a problem with short-term depo prices surging. The inability to trade with certain names is causing markets to rise and fall dramatically as offers are searched for by certain players. However, if funding cannot be secured 9% above the market it is unlikely to get done at 10,11% either. O/N USD depo prices surged to above 10% bid amid the recent move higher but offers are now only seen into 11/13% for the names looking for the bid.
Cheers
............Kauri


----------



## IFocus

dhukka said:


> Nothing to add, except great post unc.




Ditto


----------



## pepperoni

Kauri said:


> Funding continues to prove a problem with short-term depo prices surging. The inability to trade with certain names is causing markets to rise and fall dramatically as offers are searched for by certain players. However, if funding cannot be secured 9% above the market it is unlikely to get done at 10,11% either. O/N USD depo prices surged to above 10% bid amid the recent move higher but offers are now only seen into 11/13% for the names looking for the bid.
> Cheers
> ............Kauri




So this gets me wondering ... could this lead back to higher mortgage rates in aus?


----------



## dhukka

Bushman said:


> PS: How are those odds going?
> Lehman, Merrils and WaMu have gone. What price Morgan Stanley and Goldman Sachs? The shorters are running out of targets.




Don't forget AIG and Wachovia, plenty for the shorts to play with yet.


----------



## Kauri

dhukka said:


> Don't forget *AIG *and Wachovia, plenty for the shorts to play with yet.




  Weehaa... tanks dhukka    ... glad someone else spotted the elepants..

Slainte
...........Kauri


----------



## jono_oz

My only hope out of all this mess is that some of the media pouring the blood in the water, get bitten as well. At some point the disaster they want as front page news will mean no spending on ads...... hmmm no ads no money and hopefully less journalists! 
Now we just have to figure out how to get ride of the shorters and politicans and the world would be a much nicer place


----------



## pepperoni

jono_oz said:


> My only hope out of all this mess is that some of the media pouring the blood in the water, get bitten as well. At some point the disaster they want as front page news will mean no spending on ads...... hmmm no ads no money and hopefully less journalists!
> Now we just have to figure out how to get ride of the shorters and politicans and the world would be a much nicer place




Keep the shorters ... they expose the market's lies ... it only they could short pollies promises .


----------



## Gundini

pepperoni said:


> Keep the shorters ... they expose the market's lies ... it only they could short pollies promises .




This is what makes the sharemarket fun!


----------



## Julia

Calliope said:


> Secondly I get no pleasure out of my vent as you term it. I am as aware as you are that America's present problems are a result of uncontrolled and unregulated lending and irresponsible borrowing. I have never borrowed above my means, and my reality is that I feel as a result of sensible investment I can weather the storm.




I was feeling similarly, but had a sense of discomfort when I read the following from one of today's financial commentators (sorry, forget which one):



> The Fed widened the set of assets eligible as collateral for loans of US Treasuries to include all investment grade paper, and raised the size of these Treasury loans to $US200 billion.
> 
> The Fed also suspended rules that prohibit banks from using deposits to fund their investment banking subsidiaries, in what was the most dramatic part of the arrangements.



Does this mean that everyday depositors risk losing their cash?


----------



## jono_oz

I heard on the news that there was a huge toxic waist dump found in Balmoral Slopes, and that property prices are expected to fall through the floor! Stay tuned for more updates!! 

(Shorting is so much fun  in someone elses back yard)


----------



## Gundini

jono_oz said:


> I heard on the news that there was a huge toxic waist dump found in Balmoral Slopes, and that property prices are expected to fall through the floor! Stay tuned for more updates!!
> 
> (Shorting is so much fun  in someone elses back yard)




That is soooo funny....Surely they are all on slabs in Balmoral Slopes, they can't fall through the floor!


----------



## gfresh

pepperoni said:
			
		

> So this gets me wondering ... could this lead back to higher mortgage rates in aus?




RBA has been providing a lot of extra short-term funding to give liquidity to our banks. And they can trade RMBS (mortgage securities) for cash now. Maybe why our banks have been able to so quickly to pass on lower 1 year fixed rates, etc to get people in the door. How long they can continue to do that I'm not sure. Keep firing up those printing presses I guess..  

Julia: FDIC provides backup to all bank deposits up to USD$100K.. but even they're running out of money, they're asking congress for more 

Washington Mutual surely must fail now.. A junk rating is terrible, who's going to lend them money with that sort of rating? I don't know why the hell the average American still trusts a bank in this state to hold their money? maybe the deposit insurance is their reassurance. A run would be it very quickly.. 

Personally, if I saw my bank at 95% off highs, there is no way my money was staying in there! even with a deposit guarantee..



> http://www.bloomberg.com/apps/news?pid=20601087&sid=a33xqCXC0xCA&refer=home
> 
> WaMu Falls in German Trading After S&P Slashes Rating to Junk
> 
> By Edward Evans and Ari Levy
> 
> Sept. 16 (Bloomberg) -- Washington Mutual Inc., the biggest U.S. savings and loan, fell 6 percent in German trading after Standard & Poor's cut its credit rating to junk.
> 
> S&P cited the deteriorating U.S. housing market and for its decision after the market close yesterday to slash its rating on Seattle-based WaMu to BB- from BBB-, leaving it three levels below investment grade. The stock fell to $1.88 by 10:30 a.m. in Frankfurt today, down from Monday's $2 close in New York.
> 
> ``Increasing market turmoil and the related impact from managing its concentrated mortgage franchise in this troubled housing and credit cycle led to the downgrade,'' S&P said in a statement yesterday. Wamu's ``weak equity pricing in the markets is also a concern, and it increasingly appears that market conditions could overtake credit fundamentals and leave the company with greatly diminished financial flexibility.''


----------



## pepperoni

Gundini said:


> That is soooo funny....Surely they are all on slabs in Balmoral Slopes, they can't fall through the floor!




Bwahaha.

Ive said many times before I just rent here ... ownership is limited to the token billionaires ha ha.


----------



## dhukka

gfresh said:


> RBA has been providing a lot of extra short-term funding to give liquidity to our banks. Same in Europe and other places. How long they can continue to do that I'm not sure. Keep firing up those printing presses I guess..
> 
> Julia: FDIC provides backup to all bank deposits up to USD$100K.. but even they're running out of money, they're asking congress for more
> 
> Washington Mutual surely must fail now.. A junk rating is terrible, who's going to lend them money with that sort of rating? I don't know why the hell the average American still trusts a bank in this state to hold their money? maybe the deposit insurance is their reassurance. A run would be it very quickly..
> 
> Personally, if I saw my bank at 95% off highs, there is no way my money was staying in there! even with a deposit guarantee..





If WaMu goes belly up, that would wipe out all FDIC funds and then some. Regardless, they will be going hat in hand to the treasury sooner or later as more and more banks fail.


----------



## pepperoni

"The cost to the FDIC if this company fails is likely to be quite high," analyst Rich X. Bove of Ladenburg Thalmann wrote. He estimates the net cost to the FDIC at $24 billion, which is about half of the assets in the FDIC's insurance fund.

The FDIC doesn't comment on specific cases, but a spokesman said yesterday that the fund has sufficient resources to cover the failure of a very large bank. In most cases, the FDIC promises to guarantee deposits up to $100,000. The government regards that promise as sacred. The FDIC might just have to borrow money from the Treasury Department to meet its obligations to depositors.

http://www.washingtonpost.com/wp-dyn/content/article/2008/09/15/AR2008091503035.html


----------



## Julia

gfresh said:


> R
> Julia: FDIC provides backup to all bank deposits up to USD$100K.. but even they're running out of money, they're asking congress for more



Geez, that's not much, is it!   Thanks gfresh.  Less than reassuring.


----------



## Kauri

news on AIG is worse as there are reports that the global insurance giant will _*file for bankruptcy Wednesday*_ if they don't find capital today.
I smell capitulation, of the short term variety, in the air but there are two more events that must take place first - the FOMC meeting and Morgan Stanley Q3 earnings Wednesday before the bell.

Cheers...I tink
.................Kauri

Incidentally... of course...The Russian stock exchange has been closed for an hour after a 16.6% collapse on the day; the Ruble has strengthened but only because the central bank has kept a lid on it; USD/ZAR has jumped to 8.1800 after a respite to 7.9900 yesterday; USD/TRY hit 1.2765; and in Asian markets the KRW was under huge pressure hitting 1165, the first time in 4- yrs. USD/PHP hit a 1-yr high; and USD/TWD tested the "08 highs.

Slainte
...........Lauri


----------



## pepperoni

I dont think a bankrupt aig is an option for the us ... without intervention it could mean instant default/unraveling of all the bs deals they gteed.

I think the aus exposure to aig is worse than to US banks (ie would effect alot of our big deals as i dont think we have any such domestic insurers).

So could be worse than a lehman IMO

http://www.bloomberg.com/apps/news?pid=20601087&sid=a_Cds_O.VT1w&refer=home


----------



## dhukka

Kauri said:


> news on AIG is worse as there are reports that the global insurance giant will _*file for bankruptcy Wednesday*_ if they don't find capital today.
> I smell capitulation, of the short term variety, in the air but there are two more events that must take place first - the FOMC meeting and Morgan Stanley Q3 earnings Wednesday before the bell.
> 
> Cheers...I tink
> .................Kauri
> 
> Incidentally... of course...The Russian stock exchange has been closed for an hour after a 16.6% collapse on the day; the Ruble has strengthened but only because the central bank has kept a lid on it; USD/ZAR has jumped to 8.1800 after a respite to 7.9900 yesterday; USD/TRY hit 1.2765; and in Asian markets the KRW was under huge pressure hitting 1165, the first time in 4- yrs. USD/PHP hit a 1-yr high; and USD/TWD tested the "08 highs.
> 
> Slainte
> ...........Lauri





Weird stuff happening, former AIG CEO Greenberg is jawbowning the market saying everything is fine with AIG. Guess we'll see.


----------



## Kauri

dhukka said:


> Weird stuff happening, former AIG CEO Greenberg is jawbowning the market saying everything is fine with AIG. Guess we'll see.





Yep, after hearing greenpeasandham I must admit I have realized the folly of my ways and have rushed out and applied for two more credit cards, drawn down on the equity on my home, and instructed my broker to look for non-earning blue sky promise tech stocks... I'm not missing out on this one....  

Cheering
............Kauri


----------



## davo8

nioka said:


> It is not ALL doom and gloom. There are some wonderful buying opportunities out there at the moment.




Not as many as there are going to be. When the tide goes out all the boats go down. This is not the bottom. Things that have not happened yet in the US (but they will):


JP Morgan, Goldman Sachs & AIG bust or taken over
150+ bank failures
Another 10+% drop in house prices
Bankruptcies in the "real" economy eg GM

In AUS: 

A drop in the housing market (how deep?)
Downturn in property development
More nasty surprises from people owning worthless paper
Tighter credit and higher interest rates for most borrowers.

The current events were all reasonably forseeable in Feb. From here on it gets really nasty, and far harder to predict.


----------



## wayneL




----------



## noirua

wayneL said:


>




That's the best one so far.  UK's Halifax Bank of Scotland (HBOS) have fallen a further 30% today and there are strong rumours that the Halifax, former building society, is wobbling badly under the weight of its mortgage problems. 
Further cash raising may well be needed otherwise this could be the UK's next big disaster.


----------



## CanOz

For those that think last night's recovery by the markets is a good sign:

"AIG is toast. This is the massive counterparty failure everybody's been scared of, and frankly I'm astonished that the broader stock market isn't plunging as a result. No one is prepared for the repercussions here: The failure of AIG is likely to be an order of magnitude more harmful than the failure of LTCM would have been. And it's not even happening on a Friday, where we could have yet another Emergency Weekend to try to work things out."

http://seekingalpha.com/article/95745-aig-is-toast?source=wildcard

Tick, tick, tick, tick

CanOz


----------



## Kauri

CanOz said:


> For those that think last night's recovery by the markets is a good sign:
> 
> "AIG is toast. This is the massive counterparty failure everybody's been scared of, and frankly I'm astonished that the broader stock market isn't plunging as a result. No one is prepared for the repercussions here: The failure of AIG is likely to be an order of magnitude more harmful than the failure of LTCM would have been. And it's not even happening on a Friday, where we could have yet another Emergency Weekend to try to work things out."
> 
> http://seekingalpha.com/article/95745-aig-is-toast?source=wildcard
> 
> Tick, tick, tick, tick
> 
> CanOz




  more to do with FX but is based on the crisis which is driving everything...AUD/USD fell below 0.7900 after the FOMC left rates unchanged and didn"t include any special items in their statement that would *alleviate fears over the AIG situation*. The AUD/USD then staged a vicious reversal higher after *Bloomberg reported that the Fed was working on a rescue loan to keep AIG from declaring bankruptcy*. This was followed shortly by *Morgan Stanley reporting their results after Wall Street closed and they were better than expected*. The AUD/USD soared to 0.8038 while the AUD/JPY traded back to 85.30 after hitting a low on Tuesday around 81.50. This was followed by a *NY Times report saying that AIG had hired a law firm to draw up bankruptcy papers* in case they couldn"t get funding and could file as soon as Wednesday. The AUD/USD collapsed to 0.7920 while the AUD/JPY fell to 83.50. The AUD/USD has settled between 0.7940/50 while the market awaits/creates further rumours.

Cheers
.........Kauri


----------



## noirua

CanOz said:


> For those that think last night's recovery by the markets is a good sign:
> 
> "AIG is toast. This is the massive counterparty failure everybody's been scared of, and frankly I'm astonished that the broader stock market isn't plunging as a result. No one is prepared for the repercussions here: The failure of AIG is likely to be an order of magnitude more harmful than the failure of LTCM would have been. And it's not even happening on a Friday, where we could have yet another Emergency Weekend to try to work things out."
> 
> http://seekingalpha.com/article/95745-aig-is-toast?source=wildcard
> 
> Tick, tick, tick, tick
> 
> CanOz



I think they are hoping that the Fed can cobble together some sort of $70 billion package.  Probably they will have to.  The UK's soccer team, Manchester United has a sponsorship deal with AIG and financed by the new owners.


----------



## wayneL

Even if AIG is propped up, I find the market action today somewhat bemusing...

...but there is nothing unusual in that. 

Although I wouldn't buy any of this shyte for the bottom drawer, that is for sure and certain.


----------



## lumpdum

davo8 said:


> The current events were all reasonably forseeable in Feb. From here on it gets really nasty, and far harder to predict.




Maybe it's for another thread.
Did no-one realise that it would end.
I mean EVERYTHING.Some dumb schmuck goes about their daily "schmuck' & the next thing is they have no job.The present madness to me was noticable when a dear friend was given money years ago, that a good audit then, & now, would show he's on borrowed time.Several homes + multiple re-draws later with a sub $400/wk other income, dunno how he does it. Voodoo+magik+redraw


----------



## Kauri

wayneL said:


> Even if AIG is propped up, I find the market action today somewhat bemusing...
> 
> ...but there is nothing unusual in that.
> 
> Although I wouldn't buy any of this shyte for the bottom drawer, that is for sure and certain.




and the latest in the saga...metinks AIG is far too important to let flounder... moral hazard or no..  (*MORAL* hazard?? fancy using that word in relation the the goodhole USofA economic systemic shambles.. ) A report in the WSJ saying that the Fed is considering offering AIG a secured bridge loan has sent the USD/JPY back to 105.30 and the AUD/JPY and EUR/JPY higher again. *If* the Wall Street Journal report proves correct it *should* ??? bring some temporary calm to the markets and send the JPY lower again. Traders are weary and wary after the price action in the USD/JPY and JPY-crosses has been buffeted by conflicting reports on how the AIG saga will be resolved.

Cheers
..........Kauri

Cheers
..........Kauri


----------



## Whiskers

Kauri said:


> and the latest in the saga...metinks AIG is far too important to let flounder... moral hazard or no..  (*MORAL* hazard??




Now your talkin.


----------



## Bushman

noirua said:


> I think they are hoping that the Fed can cobble together some sort of $70 billion package.  Probably they will have to.  The UK's soccer team, Manchester United has a sponsorship deal with AIG and financed by the new owners.




Good - I am a West Ham fan and this will hopefully mean they have to sell Ronaldo, Tevez and Rooney (maybe to Man City and its petrodollar backers). That should raise STG70m or so.  

See this credit crunch ain't all bad. We will have the asset markets move back to parity and we will have parity on the football pitch. 

'We're all blowing bubbles...'


----------



## Glen48

I see our very own Suncorp is going down now about $9.00  they were about that in 2001. They reckon if AIG sinks about 2M OZ will be in trouble with their super, how do you know where your super is ?
I triad to take mine out but you need to set uo a self funded Super to do it.


----------



## wayneL

Kauri said:


> and the latest in the saga...metinks AIG is far too important to let flounder... moral hazard or no..  (*MORAL* hazard?? fancy using that word in relation the the goodhole USofA economic systemic shambles.. ) A report in the WSJ saying that the Fed is considering offering AIG a secured bridge loan has sent the USD/JPY back to 105.30 and the AUD/JPY and EUR/JPY higher again. *If* the Wall Street Journal report proves correct it *should* ??? bring some temporary calm to the markets and send the JPY lower again. Traders are weary and wary after the price action in the USD/JPY and JPY-crosses has been buffeted by conflicting reports on how the AIG saga will be resolved.
> 
> Cheers
> ..........Kauri
> 
> Cheers
> ..........Kauri



It's a moral *dilema*!

A choice between moral hazard and a financial nuclear winter for the insurance industry, superannuants and pension holders.

Where were the regulators?


----------



## explod

wayneL said:


> It's a moral *dilema*!
> 
> A choice between moral hazard and a financial nuclear winter for the insurance industry, superannuants and pension holders.
> 
> Where were the regulators?




Ah well, they prolly hold on for the pollies day in the sunshine, keep Mckain out a de rain.   

Problem is private outside finance from other nations has stopped in its tracks.  The days of refinance is all over folks.


----------



## mayk

Regulators were sure that in this modern day and age of computerised system, such a non-sense should not have happened.


The blame should actually fall on the rating agencies. They didnot rate these companies down when they were dealing with subprime related securities, but when they see the public sentiment and sh*t hit the fan they are rating them down. They should be answerable to someone right?? In free market they were the regluators, they are the culprit to start with.


----------



## wayneL

Feds to buy an 80% stake in AIG.

Socialism is the new capitalism.

http://www.nytimes.com/2008/09/17/business/17insure.html?_r=2&hp&oref=slogin&oref=slogin


----------



## Kauri

wayneL said:


> It's a moral *dilema*!
> 
> A choice between moral hazard and a financial nuclear winter for the insurance industry, superannuants and pension holders.
> 
> Where were the regulators?




 very very busy setting up their SMSF's me tinks..

cheers
.......kjauri


----------



## Julia

mayk said:


> Regulators were sure that in this modern day and age of computerised system, such a non-sense should not have happened.
> 
> 
> The blame should actually fall on the rating agencies. They didnot rate these companies down when they were dealing with subprime related securities, but when they see the public sentiment and sh*t hit the fan they are rating them down. They should be answerable to someone right?? In free market they were the regluators, they are the culprit to start with.



Yes, I've been surprised there's not been more focus on this.
And remember when we first heard about the 'subprime crisis'?  Oh, it won't come to much, everyone said, certainly won't affect us here in Oz!


----------



## dhukka

wayneL said:


> Feds to buy an 80% stake in AIG.
> 
> Socialism is the new capitalism.
> 
> http://www.nytimes.com/2008/09/17/business/17insure.html?_r=2&hp&oref=slogin&oref=slogin




Did anyone really think the United Soviets of America government were going to let this fail? They can jawbone as much as they like about a 'free market' solution but when it came to the crunch they were never going to let a trillion dollar balance sheet go under with all the related counter party risks. AIG makes Lehman look like a walk in the park. The good ole US gummit should be about ready for a ratings downgrade itself soon.


----------



## CanOz

dhukka said:


> The good ole US gummit should be about ready for a ratings downgrade itself soon.




I cannot fathom why this has not occured yet? They are insolvent, and now burdened with more debt than ever they continue to take on more high risk bad debt.....when will this stop? Roll on Election.


----------



## pepperoni

I called the aig intervention last night.



pepperoni said:


> I dont think a bankrupt aig is an option for the us ... without intervention it could mean instant default/unraveling of all the bs deals they gteed.




I think the only thing saving the US Gov is its ability to print money.  With the critical mass of the US, the amount of money for all these bailouts might be only a extra 1% inflation.  Hopefully anyway!

Which might explain why they are holding rates when it seems they need to drop the most.


----------



## Whiskers

CanOz said:


> I cannot fathom why this has not occured yet? They are insolvent, and now burdened with more debt than ever they continue to take on more high risk bad debt.....when will this stop? Roll on Election.




A good buy... while debt is an asset ... float it off back to the public down the track when everyone has forgotten about now and they make a motza for the treasurey.


----------



## Bushman

Barclays is picking over the carcass of Lehman Bros. 

'Barclays has announced in a statement that it has reached an agreement to acquire Lehman Brothers' North American investment banking and capital markets businesses.

"The board of Barclays announces that Barclays has agreed, subject to US Court and relevant regulatory approvals, to acquire Lehman Brothers North American investment banking and capital markets operations and supporting infrastructure," the British bank said.'


----------



## jono_oz

I think Rupert must want some more MQG shares  Now he has reporters at the Australian trying to drive them to the wall. But it appears that MQG has decided not to let 1/2 truths rule the day! Problem for them will be who will print the real information?? 

Media 1 Vs MQG ?? Will wait and see.


----------



## Uncle Festivus

It has started. The collateral damage spreads out like a nuclear bomb mushroom cloud. Time for a super jumbo cash hiding mattress 



> *NEW YORK (MarketWatch) -- One of the original and largest money market funds has put a seven-day freeze on investor redemptions after the net asset value of its shares fell below $1, in a rare instance in the fund industry of what is called "breaking the buck."*
> 
> Primary Fund, managed by New York-based money market fund inventor The Reserve, said late Tuesday that its $785 million holding of Lehman Brothers Holdings debt has been valued at zero.




http://www.marketwatch.com/news/story/money-market-fund-breaks-buck/story.aspx?guid={56A2CEE5-5A53-4A27-A4BA-585CFBE173A4}

Interesting?



> The London interbank offered rate, or Libor, that financial institutions charge each other for loans soared 3.33 percentage points to 6.44 percent yesterday. *The increase was the biggest in its history*.


----------



## Bushman

Uncle Festivus said:


> It has started. The collateral damage spreads out like a nuclear bomb mushroom cloud. Time for a super jumbo cash hiding mattress
> 
> 
> 
> http://www.marketwatch.com/news/story/money-market-fund-breaks-buck/story.aspx?guid={56A2CEE5-5A53-4A27-A4BA-585CFBE173A4}
> 
> Interesting?




Yep sure is. I was reading about this money-market fund before. The chronology of events seemed to be:  
1. Fund has US$785m exposure to Lehman Bros debt; 
2. Lehman's demise meant it had to mark-it-to-market at $0; 
3. The fundie did not step in and buy the Lehman crud, thus 'breaking the buck' for the second time in the history of these Funds; 
4. This led to US$40 billion in redemption requests as one of the last save havens is breached; and 
5. The fund is toast even though only 3% of its debt holding was with Lehman Bros. 

That is the very defintion of the word 'contagion'. Also all the other funds that had exposure to Lehman's (and Freddie and Fannie before them) had to take a hair cut by buying the cruddy debt. How long can they keep doing so before a few more 'break the buck'? 

The one thing that keeps puzzling me is why does everyone keep trusting US Treasuries? I would have thought the concept of 'risk free' is now, for the first time, being seriously tested by this 'credit calamity'.


----------



## Glen48

From Patrick.net

In AIG's case they were writing credit default swaps like candy over the last few years.   As I have repeatedly pointed out these instruments are nuclear devices and all of them tick at inception, but the timer's window has duct tape over it.  There has been zero margin supervision on these as they're all "over the counter"; that is, no centralized reporting, no central clearing, no central control and no supervision - by anyone.  Now AIG is in the uncharitable position of having nearly $500 billion of exposure to corporate loans and CDOs, with nearly all of it written to banks - the very institutions that are now in trouble
f course none of these banks or other institutions are taking their marks - including WaMu - but the market is quickly figuring out that home prices are not going to reverse and head higher - they are instead continuing lower, as they must, as until affordability returns there is no other possible path forward. 

In markets like California where the median family income is $64,000 (as of 2006); this means the median home price must be about $192,000.

As of August it was $350,000, or still a bit over 40% overvalued!

Every bank with retained exposure to California of any material extent is in serious trouble and most of them with fail outright. 

This is simple mathematics. 

The regulators had to know this was going to happen years ago as the median price reached nearly nine times median income in 2005 and 2006.

Next boom will be an explosion.
At least we get new news each week as we watch History unfold and we can see how a depression starts and some will not see the end maybewe should be buying shares in White Lady ???


----------



## pepperoni

Glen48 said:


> From Patrick.net
> 
> In AIG's case they were writing credit default swaps like candy over the last few years.   As I have repeatedly pointed out these instruments are nuclear devices and all of them tick at inception, but the timer's window has duct tape over it.  There has been zero margin supervision on these as they're all "over the counter"; that is, no centralized reporting, no central clearing, no central control and no supervision - by anyone.




From my experience there is no proper due diligence on these things and they are based on a helicopter view and "she will be right mate" approach like alot of ratings.

And I think these like rating "dictate" risk and returns on deals.

But I think if bond insurers or rating agencies go under all their deals are sort of at large at best if not in default.

So I think we can expect complete protection for these types.  And they probably knew it all along which hardly inspires prudent or responsible behaviour .... the probably rode the bull into the ground for maximum bonuses until now.

We might find the banks were the lesser culprits that just lent money taking the insurers and raters guidances (eg Ill lend $x at %y because of this rating ... and that default swap hedging me in any event.)


----------



## Kauri

was that *Morgan stains* looking a tad strained???  stains or skid marks... looking around for a merger/partner???

Cash markets remain under pressure this morning as banks hoard cash and keep the purse strings tightly drawn. As such O/N dollars is still quoted as high as 7 to 8pct with Euros relatively orderly at 4.75% and Sterling something of a half way house at 6.5%. Banking stocks briefly opened higher but is under pressure again with *Irish banks* leading the way lower in the EUROFIRST 300 although* HBOS is the stand out dog currently down as much as 35%.* Queues forming at branches? Talk of bankruptcy.

  The AIG relief rally was the shortest yet... oh what fun..

Slainte
............Kauri


----------



## Kauri

amid the HBOS calamity shares in the UK are now down over 50% with various names touted in the frame to step in should such measures be required. Both HBOS officials and the FSA have made statements assuring the "stability" of the bank, however, confidence is a very fragile thing at present.
The rumour mill has been churning with ever increasing speed this morning with bank mergers dominating. All the major UK players have come under the speculative spotlight .
and Morgan stains has definite skid marks...

cheers
.........Kauri


----------



## deadset

What's Blue Planet's opinion now ?

What about housing here ?


----------



## Kauri

Trading has been suspended indefinitely on both the RTS and MICEX at the order of the Federal Financial Markets Service. The regulator has moved in response to yet another dramatic fall today with the RTS Index down 6.4%. 
     The head of equities at one Russian house agreed it was the right thing to do. "The problem is on the repo and derivative side and not with cash equities. 

Cheers
.........Kauri


----------



## wayneL

Lloyds TSB in takeover talks with HBOS.

Developing...


----------



## dhukka

Anyone catch those US housing numbers? 



> *Single-family building permits fall to 26-year low*
> 
> WASHINGTON (MarketWatch) - Home building tumbled again in August, with the number of new building permits for single-family homes dropping to a *26-year low*, the Commerce Department estimated Wednesday.
> 
> Starts of new homes fell 6.2% to a seasonally adjusted annual rate of 895,000, the lowest in 17 years, and much weaker than the 955,000 rate expected by economists surveyed by MarketWatch.
> 
> Starts of single-family homes fell 1.9% to a *17-year low *of 630,000 annualized units.
> 
> Building permits for single- and multiple-family dwellings fell 8.9% to a *26-year low* of 854,000 annualized units, with permits for single-family homes dropping 5.1% to 554,000, also a *26-year low*. Permits for single-family homes fell to the *lowest levels in at least 20 years *in the Midwest and West.




The housing bottom-callers will probably be notably absent today.


----------



## wayneL

Check out IVs and skews on financials.

Eg below is Morgan Stanley with underlying @~$24

Amazing!


----------



## Kauri

On the very day that CPI fell for the first time in two years and oil prices were tumbling toward $90 from the mid $147s in July, the FOMC yesterday decided that it was time to begin focusing on inflation and not lower rates in the midst of blatantly bearish economic data leading into the meeting and every indication credit will contract for the foreseeable future. The question is why? Some think it is because the Fed has finally decided to wall off so-called monetary policy from liquidity policy, if such a distinction can really exist. Massive liquidity injections by the Fed and other central bankers are being used, along with the workout for AIG, as the primary tool to combat the credit crisis. 
    Other factors may have been at play in the Fed"s decision to not cut its benchmark rates Tuesday, namely that with the massive amounts of debt the Fed, the Treasury and the US in general will have to sell in the coming days, weeks, months and years, now is not the time to let the USD hit the skids because foreign demand for thier debt must be maintained. The secondary reason for not cutting rates is that Reserve Primary Fund could be joined by others in breaking the buck, which would trigger massive problems in the short-term funding markets. Some kind of spread between the Fed funds rate and the costs of running money market funds must be maintained to help avert more buck breaking; buck breaking that could also break the USD. 
    In short, the FOMC are extremely worried about the value of the dollar, *with inflation only the window-dressing for that worry*. With monetary policy having been too easy for too many years, there is *almost no cushion left from traditional monetary policy and nonexistent US savings rates means funding has to come from abroad*.
 Bend me over roger...

Chhers
............Kauri


----------



## Kauri

The Bank of E will be extending its drawdown period for special liquidity assistance to the end of January 2009. The BoE says it made the decision in light of *current disorderly market conditions*.   I guess that s one way of describing it...

Cheers
...........kauri


----------



## gfresh

I smell something further wicked this way comes... gold near vertical in the last hour.


----------



## wayneL

wayneL said:


> Lloyds TSB in takeover talks with HBOS.
> 
> Developing...



There are stories coming out that a deal is NOT going to be done.

Backed up by the fact that Crash Gordon has released an emergency statement via a spokesman, the the gu'mint will do whatever it takes to stabilize the financial markets.

Perhaps this is something to do with the gold spike?


----------



## Kauri

Heavy equity market selling, with the DJIA down well over 300 pts, and flight to safety and liquidity, with with short-term US Tsy yields tumbling, are for the moment resulting in *more USD repatriation flows than dollar sales based on deteriorating US fundamentals*. 
    Talk of an RTC-type plan to stanch the bleeding in the US financial markets and more importantly the housing market, is making the rounds, but the logistics of getting legislation of this type written, passed, signed and implemented before the presidential elections are daunting to say the least. That said,* there is a growing sense that something preemptive and massive must be done soon by the government to stop the rot from spreading. *  , maybe a dose of Bushes favoutite shock and awe will do the trick..

Cheers
.........Kauri


----------



## dhukka

Kauri said:


> Heavy equity market selling, with the DJIA down well over 300 pts, and flight to safety and liquidity, with with short-term US Tsy yields tumbling, are for the moment resulting in *more USD repatriation flows than dollar sales based on deteriorating US fundamentals*.
> Talk of an RTC-type plan to stanch the bleeding in the US financial markets and more importantly the housing market, is making the rounds, but the logistics of getting legislation of this type written, passed, signed and implemented before the presidential elections are daunting to say the least. That said,* there is a growing sense that something preemptive and massive must be done soon by the government to stop the rot from spreading. *  , maybe a dose of Bushes favoutite shock and awe will do the trick..
> 
> Cheers
> .........Kauri




Yep, seems there is a call to resurrect the RTC



> *Resurrect the Resolution Trust Corp. *
> 
> ....The fact is that the financial system needs basic, long-term reform, but right now the system is clogged with enormous amounts of toxic real-estate paper that will not repay according to its terms. This paper, in turn, is unable to support huge quantities of structured financial instruments, levered as much as 30 times.
> 
> Until there is a new mechanism in place to remove this decaying tissue from the system, the infection will spread, confidence will deteriorate further, and we will have to live through the mother of all credit contractions. This contraction will undercut the financial system, and with it, the broader economy that so far has held up reasonably well.
> 
> There is something we can do to resolve the problem. We should move decisively to create a new, temporary resolution mechanism. There are precedents -- such as the Resolution Trust Corporation of the late 1980s and early 1990s, as well as the Home Owners Loan Corporation of the 1930s. This new governmental body would be able to buy up the troubled paper at fair market values, where possible keeping people in their homes and businesses operating. Like the RTC, this mechanism should have a limited life and be run by nonpartisan professional management....


----------



## dhukka

Signs of capitulation appearing as the VIX nudges 35. This following story is the kind of stuff you want to see for real capitulation to set in. 



> *How bad is it? It's actually pretty darn goodhttp://www.marketwatch.com/news/sto...0F-2256-4CB4-A1BA-9136F4112570}&dist=hplatest*
> *Commentary: 'Buy when there's blood in the streets'*
> 
> SAN ANTONIO, Texas (IndexRx) -- I just finished a telephone conversation with a friend who works for a large brokerage firm. He describes the typical mindset among his clients at the moment as one of panic and despair.
> The average investor, it seems, is considering giving up on the stock market and burying his money under a mattress (or in money market funds). Should you too be thinking about the exit?


----------



## noirua

The Dow 30 is jigging around at the moment between down 360 and down 400.  More interest in Gold now and the AU$1.28 to the US$1 is very interesting indeed.


----------



## deadset

Just one quick side track -

*I'm not sure how the USD decides to start rising* from July 15th when Bernanke's concern turned from growth to inflation and interest rates had been declared to have reached their bottom.

I can't recall interest rates changing in the US, so is the US dollar value rising simply from US investors pulling money out of foreign markets ?  

What's the main driver of the USD going up recently ?  I'm perplexed on this or is it simply going up as oil and commodities goes down ?


----------



## CanOz

deadset said:


> Just one quick side track -
> 
> *I'm not sure how the USD decides to start rising* from July 15th when Bernanke's concern turned from growth to inflation and interest rates had been declared to have reached their bottom.
> 
> I can't recall interest rates changing in the US, so is the US dollar value rising simply from US investors pulling money out of foreign markets ?
> 
> What's the main driver of the USD going up recently ?  I'm perplexed on this or is it simply going up as oil and commodities goes down ?





Call me crazy but one word comes to mind....intervention.

http://seekingalpha.com/article/95496-law-of-supply-demand-is-dead-for-gold-silver

Cheers,


CanOz


----------



## Kauri

Dow -2.0%; Gold up $83; oil +$2.30. Risk aversion still rife, *the "fear trade" forced a mass influx into the gold market* as US T Bills yield "nothing". Morgan Stanley and Goldman"s shares rebounded slightly from their lows. The Yen is no longer the driver, *a massive cable buy order from real money drove USD lower across board*. Same acct bought AUD and CAD. EUR/USD followed after EUR/GBP sold off initially. EUR/USD rebound triggered stops and has soared. Yen and USD being looked at as funding currencies. Commodity ccys have rebounded from lows, as mentioned real money demand for AUD & CAD.

Cheers
............Kauri


----------



## noirua

Well, the Dow 30 finished 449 points down on reflection on all these dud banking institutions still trading as ghosts in the night.

Halifax Bank of Scotland, one of the biggest UK banks was in fact bankrupt.  Only the intervention of Lloyds TSB Bank, with unknown prompting from the Bank of England, may have saved the day.
If Lloyds pull out, then the UK Government may have to pour in untold billion of pounds.

Royal Bank of Scotland are also wobbling badly and could yet go down.


----------



## mayk

What are the chances of Morgan Stanley surviving till next week? The way things are going they might have to merge with another bank. Already NYT is saying they are in talk with another bank (Wachova). If that happens next in line will be GS, which also comes under the category of "too big to fail"... 

1909 looks so similar to 2009. History indeed repeats itself, especially after a century...

And after that there will be a new beginning and a new rat race will follow. It is about time we enter 21 century and start off with new banks... Down with the old, in with the new

The good thing out of all this mess will be a better regulated derivative market from now on.


----------



## Kauri

noirua said:


> Well, the Dow 30 finished 449 points down on reflection on all these dud banking institutions still trading as ghosts in the night.
> 
> Halifax Bank of Scotland, one of the biggest UK banks was in fact bankrupt. Only the intervention of Lloyds TSB Bank, with unknown prompting from the Bank of England, may have saved the day.
> If Lloyds pull out, then the UK Government may have to pour in untold billion of pounds.
> 
> Royal Bank of Scotland are also wobbling badly and could yet go down.




New York Times is reporting that Morgan *Stains*ley is considering a merger with Wachovia or another bank in a desperate attempt to save itself from fate of its peers, Lehman Brothers and Bear Stearns. With the CDS market basically untradeable, *the current investment bank model is dead unless one can join forces.* ( any IB's in Aussie???  )Morgan Stanley shares fell 25% overnight.
Lloyds TSB has agreed to buy rival HBOS in the latest forced merger due to a funding squeeze. HBOS has been under mounting pressure due to its reliance on wholesale markets to fund its business. HBOS had lost more than half of its value in the last six-days.
The New York Times reports that Washington Mutual whose shares have fallen 94% in the last 12 months has put itself up for auction. Goldman Sachs has started the auction process with potential bidders suggested to be JPMorgan and Wells Fargo.

Now why is Gold surging???   

Cheers
............Kauri


----------



## noirua

Kauri said:


> New York Times is reporting that Morgan *Stains*ley is considering a merger with Wachovia or another bank in a desperate attempt to save itself from fate of its peers, Lehman Brothers and Bear Stearns. With the CDS market basically untradeable, *the current investment bank model is dead unless one can join forces.* ( any IB's in Aussie???  )Morgan Stanley shares fell 25% overnight.
> Lloyds TSB has agreed to buy rival HBOS in the latest forced merger due to a funding squeeze. HBOS has been under mounting pressure due to its reliance on wholesale markets to fund its business. HBOS had lost more than half of its value in the last six-days.
> The New York Times reports that Washington Mutual whose shares have fallen 94% in the last 12 months has put itself up for auction. Goldman Sachs has started the auction process with potential bidders suggested to be JPMorgan and Wells Fargo.
> 
> Now why is Gold surging???
> 
> Cheers
> ............Kauri




Trouble is that a lot of these banks may be worth less than zero. Thank heavens, I kept religiously to my plan of keeping 70% to 80% of my investment monies in cash or fixed interest.
There may be great problems now but I'm buying a stock here and there.
Gold is the only international currency. There could be a few countries imploding here.


----------



## Kauri

bouts of EUR/JPY selling aside, the EUR/USD appears poised to move higher. Faith in Wall Street as a major financial center is deteriorating and faith in US authorities to manage the crisis is waning. *Expectations that the Fed and Treasury will print money to climb out of the crisis should support the hard currencies such as the EUR and encourage central banks to speed up USD-diversification efforts.* Methinks we have gone past fear stage and are now firmly entrenched in terror.. 
Cheers
............Kauri


----------



## noirua

The US Fed is thought to be about to declare "limit in", no more money left to borrow. Has had to issue $100 billion bonds to expand balance sheet.
AIG is likely to be the last rescue, the rest go down.

The AUD is getting close to A$1.30 to the US$1.


----------



## Kauri

noirua said:


> The US Fed is thought to be about to declare "limit in", no more money left to borrow. Has had to issue $100 billion bonds to expand balance sheet.
> AIG is likely to be the last rescue, the rest go down.
> 
> The AUD is getting close to A$1.30 to the US$1.




 news that the US Treasury was going to provide financing to help prop up the Fed's balance sheet broadly undermined the US dollar, as Wall Street in the epicenter of the global financial market destruction.. well... who nose??

Cheers
...........Kauri


----------



## Bushman

Who is starting to sniff a return to Isolationism?


----------



## Kauri

[FONT=Arial,Helvetica,sans-serif]*"If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them (around the banks), will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered." - Thomas Jefferson*[/FONT]

*  Cheers*
*.................Kauri*


----------



## gfresh

noirua said:
			
		

> The US Fed is thought to be about to declare "limit in", no more money left to borrow. Has had to issue $100 billion bonds to expand balance sheet. AIG is likely to be the last rescue, the rest go down.




That indeed is a scary thought, because the rest are still probably enough to bring down even some of the merged entities. If there is no capital left to save them, then... 

On the bright side I guess, at least this is all coming to a head fairly quickly.. within the next 1-3 weeks we should know whether the entire financial system implodes, or whether a new landscape can be forged that will allow survival. Then again, those house prices - how the heck can they be stabilised so quickly? 

Consumer panic could be the big one, and I'm surprised it hasn't happened a little over in the US & UK already.. when everybody rushes to withdraw their savings. Then the government steps in to ban it in the interest of "national security". Nobody has access to their own money, until it's "safe" to do so 

Have to love some of the quotes out there right now, with bankers running around with their heads chopped off. Here is a re-assuring snippet:



> One shell-shocked senior banker in London said that there was no future left for the traditional investment bank. “The world is on the brink. The market is puking all over us. There’s no capital left in the world,” he said.


----------



## noirua

gfresh said:


> That indeed is a scary thought, because the rest are still probably enough to bring down even some of the merged entities. On the bright side I guess, at least this is all coming to a head fairly quickly.. within the next 2-3 weeks we should know whether the entire financial system implodes, or whether a new landscape can be forged that will allow survival. Then again, those house prices - how the heck can they be stabilised so quickly?
> 
> Consumer panic could be the big one, and I'm surprised it hasn't happened a little over in the US & UK already.. when everybody rushes to withdraw their savings. Then the government steps in to ban it in the interest of "national security". Nobody has access to their own money, until it's "safe" to do so
> 
> Have to love some of the quotes out there right now, with bankers running around with their heads chopped off. Here is a re-assuring snippet:




UK investors are fully covered for the first AU$80,000 (£35,000) if a bank goes under.  Different rules apply if the Bank is a foreign one: I think the foreign banks domain rules apply, could be wrong though. Also, investors with the Northern Rock Bank are fully covered for everything.
In America, State Law applies to some Banks and Federal Laws to others.  Too complicated to list.


----------



## dhukka

gfresh said:


> Have to love some of the quotes out there right now, with bankers running around with their heads chopped off. Here is a re-assuring snippet:






> One shell-shocked senior banker in London said that there was no future left for the traditional investment bank. “The world is on the brink. The market is puking all over us. There’s no capital left in the world,” he said.




This is the kind of stuff you want to see at market bottoms, but it is not widespread enough yet IMO. Too many calm collected individuals out there still.


----------



## jeflin

mayk said:


> What are the chances of Morgan Stanley surviving till next week? The way things are going they might have to merge with another bank. Already NYT is saying they are in talk with another bank (Wachova). If that happens next in line will be GS, which also comes under the category of "too big to fail"...
> 
> 1909 looks so similar to 2009. History indeed repeats itself, especially after a century...
> 
> And after that there will be a new beginning and a new rat race will follow. It is about time we enter 21 century and start off with new banks... Down with the old, in with the new
> 
> The good thing out of all this mess will be a better regulated derivative market from now on.




Well, I certainly hope for a better regulated derivative market. But I doubt if the investment banks will change from their old practices.


----------



## wayneL

dhukka said:


> This is the kind of stuff you want to see at market bottoms, but it is not widespread enough yet IMO. *Too many calm collected individuals out there still.*



...as evidenced by the lowly VIX.

36 may be high by recent standards, but can get much higher at real capitulation bottoms


----------



## dhukka

wayneL said:


> ...as evidenced by the lowly VIX.
> 
> 36 may be high by recent standards, but can get much higher at real capitulation bottoms




Yeah not there yet, would like to see the VIX in the *40's*. It hit *45* in August 02 and hit the same level in August 1998 with LTCM. Hopefully we can revisit those good ole days soon.


----------



## pepperoni

With the US and UK bank failures .. will one of our big 4 fail?

Im so tempted to put everything into NAB today and hold til it gets up 10%:

P/E ratio	8.36	
Dividend yield	9.1%


----------



## awg

my questions refer to the $100 billion pumped into AIG.

not sure this is the best thread for this post, but..

my reading is that the bulk of these monies are primarily to settle CDO/S default insurances.

if this is the case, does it not mean that if the situation deteriorates, this money will be effectively pissed away?

I recall a very prescient post by TECH_A,(some months ago), showing the exponential growth of interbank OTC derivatives, and his concern regarding counterparty risk.

in the highly likely event of further asset price falls, and given the high leverage in these financial instruments, it would seem that, $100 B, would be a drop in the bucket ( I think TechA post indicated OTC derivative value in excess of $60 TRILLION!), and would be swallowed up.

i would be pleased to hear that i am wrong, have misunderstood, or am ill informed


----------



## Kauri

Anatole Kaletsky writing in today"s UK Times states that the "apparent rescue of Halifax Bank of Scotland may result in a bigger crisis, if the drowning HBOS drags down its rescuer, Lloyds TSB." Kaletsky says that the events of the past two weeks might be only the prelude and not the climax of this "amazing" crisis. Kaletsky maintains that "if the Lloyds-HBOS merger offers the enlarged bank some kind of firm government safety net - not just for depositors, but crucially also for shareholders - it will probably succeed and act as a firebreak against the financial crisis on this side of the Atlantic. If, however, the merger is presented as a pure private sector solution, with no government support for shareholders, market attacks against HBOS will soon be revived and redirected against the merged bank. This will leave only one solution - nationalisation of the entire British banking system. The impossible will suddenly become inevitable." --

Cheers..Itunk
.................Kauri


----------



## explod

awg said:


> my questions refer to the $100 billion pumped into AIG.
> 
> not sure this is the best thread for this post, but..
> 
> my reading is that the bulk of these monies are primarily to settle CDO/S default insurances.
> 
> if this is the case, does it not mean that if the situation deteriorates, this money will be effectively pissed away?
> 
> I recall a very prescient post by TECH_A,(some months ago), showing the exponential growth of interbank OTC derivatives, and his concern regarding counterparty risk.
> 
> in the highly likely event of further asset price falls, and given the high leverage in these financial instruments, it would seem that, $100 B, would be a drop in the bucket ( I think TechA post indicated OTC derivative value in excess of $60 TRILLION!), and would be swallowed up.
> 
> i would be pleased to hear that i am wrong, have misunderstood, or am ill informed




I understand that is fairly accurate and the amount is closer to 62 trillion.

We live in very interesting tiems indeed


----------



## CamKawa

Tell you what cracks me up is when politicians tell us how safe our banks are, like they are renowned for telling the truth.


----------



## Kauri

News hitting the screens of the concerted intervention many had previously suspected. The liquidity push comes in a coordinated effort from the Fed, ECB, BoE, SNB, BoJ and the BoC, with news filtering through of the sizes and individual requirements of the reciprocal 180bn repo operations with the Fed in an effort to ease conditions in the dollar markets. It is having a minor impact in as much as stocks have opened with a slight bid and fixed income markets are a bit offered. Sustainability is highly questionable in the current environment but certainly the Fed are pulling out even more stops in an effort to pull the market out of the downward spiral.

Cheers
............Kauri


----------



## Kauri

someone out there is spreading filfy rumours of an emergency BOE cut at 0930GMT. when it more than likely doesn't eventuate and the originators have cleaned up and left the party... don't be left looking lonely..

Cheers
...........Kauri


----------



## IFocus

dhukka said:


> This is the kind of stuff you want to see at market bottoms, but it is not widespread enough yet IMO. Too many calm collected individuals out there still.




Yes still fur on the bear yet I want to hear the so called pros screams the end is here, amazing we break new ground but I still don't hear real fear


----------



## Kauri

The infection in the financial markets has now spread to State Street and Bank of New York which have dropped dramatically over the past half hour with State Street now down 40% on the day and BONY down 30%. This has been followed by additional losses in Goldman Sachs and Morgan Stanley as the fallout continues and the fear reaches unprecedented levels as reflected in the TED spread at record levels.  yet another wave of carry liquidation kicking in with the repatriation to US assets seen as the safest play at present. The best thing to do at present is probably to stay on the sidelines and wait this out for some form of stabilization. These market are not meant to be traded.
Custodians shares latest casualties; State Street & BNY-Mellon in Freefall
GS hit $85.88 and has bounced back to $100, however the fragility of the situation, and the innate volatility is simply shattering investors confidence.
Cheers
..........Kauri


----------



## noirua

They reckon Goldman Sachs is the next one in line for bailing out.  George Bush is reported to be contacting Banks to encourage them to merge.


----------



## Uncle Festivus

False alarm citizens, there is no credit crunch, as Dow surges in the final hour (again), up 400 pts. It's about time all that repo priming money was put to good use . Some nice window dressing from the PPT? Tonight will be the real test - who will be brave enough to hold over the week end?


----------



## mayk

Will Paulson's plan work?
http://www.bloomberg.com/apps/news?pid=20601087&sid=aOEQDGa_6XT0&refer=home


----------



## Kauri

Uncle Festivus said:


> False alarm citizens, there is no credit crunch, as Dow surges in the final hour (again), up 400 pts. It's about time all that repo priming money was put to good use . Some nice window dressing from the PPT? Tonight will be the real test - who will be brave enough to hold over the week end?




  leave the conspiracy explanations to the experts, the american columnists who ply thier trade and living by explaining everything away by feeding the gullible with "believe it or nott" theories..

US stocks rebounded in the afternoon on word the FSA were forbidding shorting of UK financial shares, while CALPERS stopped lending GS and 
MS shares and the NY AG threatened to prosecute shorts who manipulate the market with bearish rumors. The equity market has been back on the rebound  on the news that Senator Schumer has hinted at a permanent Fed plan in the works to address the current financial crisis and instability.Paulson has suggested the possibility of a Resolution Trust Corporation ("RTC") solution (remember the S+L crisis of the 80's??) to the current financial market turmoil. IMF suggested that it may be time for a global "systemic" approach to the problem, including fiscal policy, monetary policy & direct intervention.the Hedge Fund lobby is challenging SEC"s decision to require daily disclosure of short positions ( ooohh what a surprise ).Sen McCain said *SEC"s Cox should be fired* and *the clamber for* ending the short-selling *feeding frenzy grew louder*. . Focus is on stocks, central banks and regulators.

   Cheers
...............Kauri


----------



## tcoates

Interesting...

*Short selling of bank shares banned*


http://www.guardian.co.uk/business/2008/sep/18/banking.creditcrunch

Last paragraph...

George Osborne, the shadow chancellor, said: "Gordon Brown now says he wants to "clean up" the City. He seems to forget that he is the man who in ten years as Chancellor created the current system of regulation. For ten years he boasted about his achievements. Today he is trying to disown them.

My 2c worth - lets just put a Band-Aid over the cancer.

Tim


----------



## Bushman

Here it comes; what the markets have been craving. Ben & Hank's 'shock and awe' show. So it is either allowing smelly steaming CDO's to be swapped for crispy US dollars or it is an agency that buys up those pesky boarded up McMansions that have caused all this fuss. 

Can this all simply to be swept under the carpet now? There are already a few corpses under there already. 

WASHINGTON (MarketWatch) -- Top U.S. financial officials emerged from a briefing with congressional leaders Thursday night with an agreement to work quickly toward a broad-ranging fix for the crisis roiling U.S. and world financial markets. 
Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke briefed House and Senate leaders to hash out a solution to the massive downturn in global markets and the failure of several financial firms. 
*Treasury spokeswoman Brookly McLaughlin said in a prepared statement that Paulson, Bernanke and congressional leaders "began a discussion ... on a comprehensive approach to address the illiquid assets on bank balance sheets that are ... the underlying source of the current stresses in our financial institutions and financial markets*."


----------



## gfresh

Well it looks at least they are moving in the right direction .. lets see whether they can actually come up with something that has a chance of working. Could it involve(?) a multi-pronged attack...

1) agency that holds and can clear the bad CDO's, CDS, and whatever else that needs to be dealt with over the next few years. What happens to them once they are sitting there is a good question, but what happens to them on the Fed's books presently anyhow? 

2) a clearing house for hither-to 'off balance sheet' derivatives, so there is more transparency, and everybody can see what is happening with the securitisation market, and spot potential problems well in advance. 

3) cleaning up the source, the housing mess, with government policy.. e.g. encouraging people to stay in their homes, extending introductory interest periods, further tax benefits for holding property. This would probably allow 1) to slowly be dissolved as the housing market repaired itself. I think this is probably the most important thing. If house prices stop falling, there may just be a chance of reversal in the financial markets as less derivatives have to be written down and down and down until they destroy companies (the point we are now).

4) regulation giving greater oversight and tighter rules on securitisation, preventing further issues in future years. 

The short selling thing is missing the issue if you ask me, but I guess they figure it will allow time for things to be repaired in the short-term.  

Of course that's if you support the fact that things should be interfered with, but as we've seen, of course they will try.


----------



## chops_a_must

OK.

So what have I missed?


----------



## wayneL

chops_a_must said:


> OK.
> 
> So what have I missed?



Us, UK & Aus have turned into hybrid soviet socialist states.

Joe Schmuck must take on private risk, but if your big enough, risk is socialized.

Welcome back to a brave new world.


----------



## chops_a_must

wayneL said:


> Us, UK & Aus have turned into hybrid soviet socialist states.
> 
> Joe Schmuck must take on private risk, but if your big enough, risk is socialized.
> 
> Welcome back to a brave new world.



Cool.

Sounds like I'm back in my 16 year old communist chops element.

I can't trust you Wayne. I leave you alone and the world economy goes belly up.

This never happens to me when I play Civilization 4.

My first decree is to rename Federation Square, Red Square.


----------



## wayneL

chops_a_must said:


> Cool.
> 
> Sounds like I'm back in my 16 year old communist chops element.
> 
> I can't trust you Wayne. I leave you alone and the world economy goes belly up.
> 
> This never happens to me when I play Civilization 4.
> 
> My first decree is to rename Federation Square, Red Square.




Yes, apparently us evil short sellers have trashed the world economy.


----------



## nunthewiser

wayneL said:


> Yes, apparently us evil short sellers have trashed the world economy.




INFIDEL!!!!!


----------



## Whiskers

*Lookout Above*

 :  ​


----------



## chops_a_must

wayneL said:


> Yes, apparently us evil short sellers have trashed the world economy.



Personally, I blame Adam Smith.

I guess my great great granddad has been vindicated. He always told me, "Only the state can control capital", and that ultimately capitalism destroys itself.

I'd say buy gold, but don't keep it under your bed, I will be there.


----------



## Uncle Festivus

> LONDON (MarketWatch) -- The U.S. Securities and Exchange Commission early Friday issued an emergency order temporarily banning short selling in the shares of nearly 800 financial institutions.
> 
> The regulator said the move was needed "to protect the integrity and quality of the securities market and strengthen investor confidence," and added it was acting in concert with the U.K.'s Financial Services Authority, which announced a similar ban on Thursday.




Also, it was decreed that selling of equities will only be allowed on days starting with S, or Saturdays & Sundays. However, since these are non trading days there will be no selling from now on, thank you - Henry Paulson.

The Paulson/Bernanke creed - 



> Give me your tired derivatives, your poor investement bankers, your huddled masses in tents yearning to breathe free, the wretched refuse of your teeming CDO's. Send these, the homeless, tempest-tossed foreign creditors, to us: I lift my lamp beside the golden one way door.
> Which leads to the room of immorality​



On a lighter note, bubbling in the back ground is something called the real economy, the one where people have jobs and actually make things. Or perhaps don't have jobs and don't make things & don't buy houses or cars. Speaking of cars, odds for a bail out of General Motors bail out/bancruptcy just blew out with it's CDS rates. 

It's the Oliver Twist economy - "Please sir, can I have some more". And more shall be delivered from the bottomless money pit?

Next weeks candidates - General Motors, Goldman Sachs, Morgan Stanley, or any other bank or institution NOT too big to fail?


----------



## Awesomandy

Uncle Festivus said:


> Next weeks candidates - General Motors, Goldman Sachs, Morgan Stanley, or any other bank or institution NOT too big to fail?




Despite the US plan (whatever it might be), people are already pulling money out of their Morgan Stanley accounts, so while the stock price is rebounding (for now), I can't imagine them having a healthy cashflow at the moment.


----------



## Uncle Festivus

Whiskers said:


> *Lookout Above*​
> 
> 
> 
> 
> : ​




So, are you saying something will be dropped on us from a great height

It would be interesting to see what ROE the US Fed got out of all their 'investments' over the last week. Let me see, the Dow finished the week before at 11400, finished this week at 11400, so for an outlay of $400B, $500B or whatever, they are - treading water, or whatever the sludge they find themselves in.

Same again next week fellas?

Our thoughts & gratitudes go out to the good citizens of the US, who have pledged their hard earned tax's to subsidise the bail out of the world.


----------



## wayneL

:bricks1:

http://www.nytimes.com/2008/09/20/w...gin&adxnnlx=1221869143-GlbZF0piHT9zlGiBWJ7tZg



> Congressional Leaders Stunned by Warnings
> 
> By DAVID M. HERSZENHORN
> Published: September 19, 2008
> 
> WASHINGTON ”” It was a room full of people who rarely hold their tongues. But as the Fed chairman, Ben S. Bernanke, laid out the potentially devastating ramifications of the financial crisis before congressional leaders on Thursday night, there was a stunned silence at first.
> 
> Mr. Bernanke and Treasury Secretary Henry M. Paulson Jr. had made an urgent and unusual evening visit to Capitol Hill, and they were gathered around a conference table in the offices of House Speaker Nancy Pelosi.
> 
> *“When you listened to him describe it you gulped," said Senator Charles E. Schumer, Democrat of New York.*
> 
> As Senator Christopher J. Dodd, Democrat of Connecticut and chairman of the Banking, Housing and Urban Affairs Committee, put it Friday morning on the ABC program “Good Morning America,” *the congressional leaders were told “that we’re literally maybe days away from a complete meltdown of our financial system, with all the implications here at home and globally.”*
> 
> Mr. Schumer added, “History was sort of hanging over it, like this was a moment.”
> 
> When Mr. Schumer described the meeting as “somber,” Mr. Dodd cut in. *“Somber doesn’t begin to justify the words,” he said. “We have never heard language like this.”*
> 
> “What you heard last evening,” he added, “is one of those rare moments, certainly rare in my experience here, is Democrats and Republicans deciding we need to work together quickly.”
> 
> Although Mr. Schumer, Mr. Dodd and other participants declined to repeat precisely what they were told by Mr. Bernanke and Mr. Paulson, they said the two men described the financial system as effectively bound in a knot that was being pulled tighter and tighter by the day.
> 
> *“You have the credit lines in America, which are the lifeblood of the economy, frozen.” Mr. Schumer said. “That hasn’t happened before. It’s a brave new world. You are in uncharted territory, but the one thing you do know is you can’t leave them frozen or the economy will just head south at a rapid rate.”
> 
> As he spoke, Mr. Schumer swooped his hand, to make the gesture of a plummeting bird. “You know we’d be lucky ...” he said as his voice trailed off. “Well, I’ll leave it at that.”*
> 
> As officials at the Treasury Department raced on Friday to draft legislative language for an ambitious plan for the government to buy billions of dollars of illiquid debt from ailing American financial institutions, legislators on Capitol Hill said they planned to work through the weekend reviewing the proposal and making efforts to bring a package of measures to the floor of the House and Senate by the end of next week......


----------



## MrBurns

It may be unchartered territory and it may not last BUT someone's making milions out of this and it ain't me.

The spike in stocks is incredible.


----------



## nioka

Uncle Festivus said:


> Our thoughts & gratitudes go out to the good citizens of the US, who have pledged their hard earned tax's to subsidise the bail out of the world.



 Thoughts and gratitudes be dammed. Thoughts, blame and serve you bloody right would be more like it. 

It is the nonproductive use of money that was never there in the first place by financial institutions in the USA that started this mess. Followed by plenty of wheeler dealers, some on this forum, that think it is smart to make huge financial gains using questionable trading methods. 

 For a country (or the world for that matter) to prosper and grow, investments should at least have a productive element. Any system designed with the main aim being to build wealth at the expense of others without an increase in productivity is doomed to failure. It is no different to pyramid selling. 

Now that the failures of short selling without owning something to sell have been revealed, particularly where the aim is to purposely devalue a company, we are well on the way to correcting the correction.


----------



## dhukka

Meanwhile back in reality, another bank joined the FDIC's failed bank list: 



> *Ameribank, Inc., Northfork, WV*
> 
> On September 19, 2008, Ameribank, Inc., Northfork, WV was closed by the Office of Thrift Supervision (OTS) and the Federal Deposit Insurance Corporation (FDIC) was named Receiver.  No advance notice is given to the public when a financial institution is closed.


----------



## Macquack

nioka said:


> It is the nonproductive use of money that was *never there in the first place *by financial institutions in the USA that started this mess.




I think you summed it up perfectly.



nioka said:


> ..... we are well on the way to correcting the correction.




Is that correcting the correction *up* or correcting the correction *down*.


----------



## explod

We are far from the banking problems of the US.  However the real problem that will raise its head in the days ahead will be rumours and fear.  A public run for cash in any country is going to cause mayhem and possibly fianancial lockout.

In my humble view.

From my studies of the last few years I was prepared for bad times but the underlying news I have picked up this morning and its swiftness has even got me a very concerned and uncertain.   

Has someone got a better take?


----------



## MrBurns

> Has someone got a better take?




No not a better take but I think you're right , this isn't over it's just starting and it will get worse perhaps a lot worse.
The bail out is just a smoke screen, they cant fix this problem it has to run it's ugly course, the bail out is about confidence not a real fix.

All you can do is just sit and watch it all unfold.


----------



## nioka

Macquack said:


> I think you summed it up perfectly.
> 
> 
> 
> Is that correcting the correction *up* or correcting the correction *down*.




 For stocks that are fundamentally sound and not deep in debt, up. For stocks trading in money that doesn't exist down, down ,down.


----------



## jeflin

dhukka said:


> Meanwhile back in reality, another bank joined the FDIC's failed bank list:




More banks will fail in the coming months and it is good for the recovery of a post-bubble economy that they consolidate. 

Depositors just have to watch out for their minimum sum deposits which are insured. No point withdrawing everything and putting them under their pillows.


----------



## Macquack

If the current world financial crisis (centered in the US) has been created by *unlimited credit creation combined with irresponsible  lending *by financial institutions, then how can throwing *more money *at it ( "mother of all bailouts") fix the problem?


----------



## gfresh

The good thing is that it now seems they have the Senators **** scared, and maybe they are finally waking up to the magnitude. This is maybe a good thing. Inaction on policy initiatives to solve the problem at its heart have continued for many many months now. 

So far, still don't see much mention of an attempt at tackling the housing crisis however. So far just looks like allowing conditions that may allow the re-inflatation of the credit bubble, and the blind hope that everybody will start borrowing willy nilly, and start buying again. Not sure if it's really going to work like that.  



			
				noika said:
			
		

> For a country (or the world for that matter) to prosper and grow, investments should at least have a productive element. Any system designed with the main aim being to build wealth at the expense of others without an increase in productivity is doomed to failure. It is no different to pyramid selling.




Would not like to be an American tax payer right now. All I see is a big iron ball pulling on their leg for the next decade. Not very good conditions for another economic boom. 

I think you're dead right on the productivity there. How are these measures improving the productivity of American businesses that have been failing for the best part of 8 years (auto makers and airlines for instance) ? Only by improving productivity can their global competitiveness increase, real wealth be created, and a stronger economy created longer-term.

With real cash to burn, infrastructure being built to improve real productivity, and more importantly learn from the mistakes of the USA, the stage is set for Chinese economy to really romp all over the Americans in the next 10 years. If they play their cards correctly of course.


----------



## pepperoni

Agree with these posts ... these unproductive profits were never real ... and sooner or later this needed to be corrected, as it is now through the asset price drops and now the bailout.

IE - the average US family started with whatever assets and their 700k share in the US debts/deficit.  The boom may have made them X but in return they get more US debt/deficit ... just a question of whether is $100k, $500k or more. 

Either way you can bet the bailout will try to kick the can as far down the road as possible ... poor next generation will either be wage slaves of unprecedented proportions or see major upheavals/war etc.


----------



## gfresh

The frustrating thing is we are not much better here, with all our imaginary wealth and investment created through property rather than real productivity. While it might help those involved with building, construction, and the rest, it's not very useful unless we can somehow export houses worldwide 

It would be an interesting to think how different our economy could be if we instead poured those billions of dollars into things that actually helped bring dollars into the country, rather than keep pushing house prices up and up. Really achieves nothing, and only helps destroy real wealth as more and more income is required to service an average mortgage, rather than putting it towards other wealth generating assets. 

Mining may not be the most advanced way to produce real wealth, but at least it's tangible, and real new dollars are created. It's at least what we can draw upon, whereas many other countries do not have this opportunity.  This ridiculous housing madness has to stop, and investment in real, wealth creating industries needs to be encouraged.


----------



## Glen48

Well the Bronco's went who is next Citibank. MQG Suncorp, J P Morgean this week.


----------



## Macquack

Glen48 said:


> Well the Bronco's went who is next Citibank. MQG Suncorp, J P Morgean this week.




Have to be Mac bank aka the "Sharks", the financial "Storm's" next victim.


----------



## white_goodman

Macquack said:


> Have to be Mac bank aka the "Sharks", the financial "Storm's" next victim.




MQG, the ceo has sold out of everything im pretty sure if you look at company announcements


----------



## zt3000

Macquack said:


> If the current world financial crisis (centered in the US) has been created by *unlimited credit creation combined with irresponsible  lending *by financial institutions, then how can throwing *more money *at it ( "mother of all bailouts") fix the problem?




Thats easy

Print more money lol, and it has the effect of devaluing the dollar, and hence devaluing the chinese 1.3 trillion US reserves ... lol

smart cookies i say


----------



## Whiskers

Uncle Festivus said:


> So, are you saying something will be dropped on us from a great height




Well, for the US anyway. 

The are certainly going to have to wear a heavy economic burden for a long time yet.



> It would be interesting to see what ROE the US Fed got out of all their 'investments' over the last week. Let me see, the Dow finished the week before at 11400, finished this week at 11400, so for an outlay of $400B, $500B or whatever, they are - treading water, or whatever the sludge they find themselves in.
> 
> Same again next week fellas?
> 
> Our thoughts & gratitudes go out to the good citizens of the US, who have pledged their hard earned tax's to subsidise the bail out of the world.






nioka said:


> Thoughts and gratitudes be dammed. Thoughts, blame and serve you bloody right would be more like it.
> 
> It is the nonproductive use of money that was never there in the first place by financial institutions in the USA that started this mess. Followed by plenty of wheeler dealers, some on this forum, that think it is smart to make huge financial gains using questionable trading methods.
> 
> For a country (or the world for that matter) to prosper and grow, investments should at least have a productive element. Any system designed with the main aim being to build wealth at the expense of others without an increase in productivity is doomed to failure. It is no different to pyramid selling.
> 
> Now that the failures of short selling without owning something to sell have been revealed, particularly where the aim is to purposely devalue a company, we are well on the way to correcting the correction.




I'm inclined to agree with nioka to a large extent here.

Since it's essently the US's flu, born and bred out of their own unhygenic economic house keeping, isn't it better to quarantine it to there as much as possible than let it spread around the world?

If one steps back and tries to imagine what 'God' would do  ... I suppose he would say something like you made your own bed, so now lay in it.

Seriously though, the US eventually had to wear the pain otherwise it would have been even more despised by the rest of the world, untrusted, even more extraordinarly self centered and incapable of any semblance of good economic management.

In the macro scheme of things, this may just have sealed the steady demise of the US as an economic power and allow time for the rest of the world to sort out a new era in world economic players.


----------



## pepperoni

Whiskers said:


> If one steps back and tries to imagine what 'God' would do  ... I suppose he would say something like you made your own bed, so now lay in it.




Id say the same if we hadnt been using AIG, MBIA and even cheap US funding for many big deals in aus over the last 5 years!

And if our banks had no exposure to the US , which they have to the tune of many hundred million.

And if our property speculators hadnt been taking advantage of said bond insurers, raters and funding sources to some degree.


----------



## mayk

FWIW, the trading is not productive, so wealth creation by trading should also be looked down upon. (Now almost most of the forums members including me do trading so just leave it at that).  One more positive for investors over traders...And if media is to be believed, they are actually causing this turmoil 

Nowadays people talk of billions (and trillions) as if they do not matters. Scary stuff. I guess, Billion is the new Million.


----------



## Kauri

GSE regulator James Lockhart says in their position as conservator the FHFA has directed Fannie and Freddie to start buying MBS issues immediately. SO the *big sponge* has been launched, and it will be interesting to see how having a motivated buyer changes the desire of banks to divest this paper at current pricing, or whether they"ll hold out for a bounce - either way it plays into the Fed & Treasury"s hands,* but if there"s a lot of selling and no bounce that could be ominous*.

Cheeers
...........Kauri


----------



## Glen48

Prof Steve Keen said on CH 9 he is selling his house, I have sold mine and it should settle to-day.

From The Money Markets:
View our 1-hour video "Plague to Pandemic" 
They tell us interest rates to rise to cover the cost of the USA money troubles.


----------



## dhukka

So the investment banks are officially dead, I guess those nasty short sellers may have been onto something?



> *Goldman, Morgan to become holding companies
> Companies get access to Fed lending in exchange for oversight*
> 
> WASHINGTON (MarketWatch) -- In yet another extraordinary development for Wall Street, the Federal Reserve said late Sunday night that venerable investment banks Goldman Sachs and Morgan Stanley will become bank holding companies.
> 
> The Wall Street titans will be allowed to transition into holding companies following a mandatory five-day waiting period, and will be able to take advantage of credit from the Federal Reserve Bank of New York in order to complete the transition.
> 
> Upon completion, Goldman (GS) and Morgan (MS) , two of the biggest and most powerful investment banks on Wall Street, would join the ranks of and compete with Citigroup (C) , JPMorgan Chase & Co. (JPM) Bank of America (BAC) and others.
> 
> In becoming holding companies, Goldman and Morgan would get access to the Federal Reserve's emergency lending facilities. But that access comes at a price: greater scrutiny by regulators and new capital requirements.


----------



## Glen48

I wonder if things get so bad in USA if there will be another civil War?
From what I see there seems to be resentment by the Tax payer's being forced to bail out the very people who put the tax payers under water.
Why did Turnbull mention Rudd should look at a USA style bail out? What does Turnbull know?


----------



## sassa

Anybody know what the plan will be for next month?


----------



## bean

ALMOST ARMAGEDDON
MARKETS WERE 500 TRADES FROM A MELTDOWN
http://www.nypost.com/seven/09212008/business/almost_armageddon_130110.htm


----------



## kransky

if your really sick but you refuse to take that bad tasting medicine we know what happens in the end...

next they will just ban selling. that will keep prices going up


----------



## Kauri

Treasury is throwing a $700 bln price tag on the Troubled Asset Relief Program (TARP) and requesting a 6.5% increase in the debt limit to cover it. *Less than two full months have passed since the last permanent increase* to the debt limit was approved. If closed before the next presidential inauguration, the proposed increase (to $11.3 tln) would be the *sixth under George W. Bush and a 90% increase from where it was when he took office in 2001.* Mayhaps the shock and awe campaign he engineered was really aimed at the US populace... not poor old forgotten Binny...
The latest requested increase ($685 bln) is equal to half of the total debt 
ceiling in 1983 $1.39 tln). The total is up more than eightfold in 25 years. 
Doing that again in the next 25 years would mean a $92 tln debt in 2033. At 
current population growth rates, that would push the per-American share to 
$229,824, more than a tenfold increase from today, before the TARP is paid for. 
Few expect American taxpayers to pick up the full tab but *it suffers the *
_*imagination to think that foreign reserves are going to grow far enough and fast enough to absorb the Treasury's debt, least of all at current low rates.*_ --  but lets worry about that tomorrow...

Cheers
...........Kauri


----------



## rub92me

Kauri said:


> Treasury is throwing a $700 bln price tag on the Troubled Asset Relief Program (TARP) and requesting a 6.5% increase in the debt limit to cover it. *Less than two full months have passed since the last permanent increase* to the debt limit was approved. If closed before the next presidential inauguration, the proposed increase (to $11.3 tln) would be the *sixth under George W. Bush and a 90% increase from where it was when he took office in 2001.* Mayhaps the shock and awe campaign he engineered was really aimed at the US populace... not poor old forgotten Binny...
> The latest requested increase ($685 bln) is equal to half of the total debt
> ceiling in 1983 $1.39 tln). The total is up more than eightfold in 25 years.
> Doing that again in the next 25 years would mean a $92 tln debt in 2033. At
> current population growth rates, that would push the per-American share to
> $229,824, more than a tenfold increase from today, before the TARP is paid for.
> Few expect American taxpayers to pick up the full tab but *it suffers the *
> _*imagination to think that foreign reserves are going to grow far enough and fast enough to absorb the Treasury's debt, least of all at current low rates.*_ --  but lets worry about that tomorrow...
> 
> Cheers
> ...........Kauri



Don't worry, the show must go on. They're already inventing weapons of mass debt destruction which will blast all that debt to pieces.


----------



## Awesomandy

rub92me said:


> They're already inventing weapons of mass debt destruction which will blast all that debt to pieces.




It certainly looks like they've created their own WMDs. Currently, the people who are most likely to destroy the current American way of life are their economic policy makers, rather than Osama and co.


----------



## Aussiejeff

Awesomandy said:


> It certainly looks like they've created their own WMDs. Currently, the people who are most likely to destroy the current American way of life are their economic policy makers, rather than Osama and co.




**WARNING - THEORETICAL BLASPHEMOUS CONTENT FOLLOWS**

In a secret Al-Qaeda holiday resort somewhere near the Pakistan border, a wizened Osama sits, sipping green tea and wringing his hands with glee as he contemplates the Great Satan's (and his buddies) current financial woes and imminent future on his Sat laptop...  _"We have almost won..."_ he muses..... 

Meanwhile, his foe the Great Burning Bush is tooling up a great cache of WMD's (Weapons of Monetary Destruction) prior to declaring "The Great War On Wall Street" in a last ditch attempt to smash those commie Al_Qaeda Market Terrorists.... :horse:

**END OF BLASPHEMY**


----------



## nunthewiser

ROFLMAO!!!!! absolute brilliance ! thankyou kindly


----------



## lovergirl

Hi there,

I'm new to the forum and I am just having a quick peek to get familiar.

I have had a good laugh at this I couldn't help but Comment.


Thanks
Lou
www.stock-marketguide.net


----------



## sparc

assuming the rescue plan goes through and is signed off, i guess we have about a month or two of good trading and then all hell will break loose.

my reason being is that the core of the problem, which is a lack of oversight on the part of the regulatory bodies and the unsatiable greed of the bankers will not be taken care off by the 700 billion.

the question i have is that if they are really sincere about the bailout, then why are they asking for a law that gives them no accountability, no oversight of their decisions or review by any court in the country.

something is missing here....


----------



## chops_a_must

How are those money markets looking atm Wayne?


----------



## wayneL

chops_a_must said:


> How are those money markets looking atm Wayne?



Bonds taking it up the khyber. Market having a punt on inflation.

I still favour deflation in the face of all fundamentals to the contrary. (hedged of course)


----------



## Paladin

I stayed up late last night to watch Paulson and helicopter Ben talk to the senate committee. I have to say it made for amazing watching. I was expecting another rabbit out of a hat, but instead was quite alarmed by how clearly a desperate move this is. The valuation models favoring a maturity valuation, and the backing away from reverse auctions to more ad-hoc 'expert' valuations of derivatives make this whole thing look like it might be very, very expensive indeed. Of course there's little option, but the less-bad-case scenario is shaping up to be pretty bad I reckon.


----------



## Kauri

With EU commissioner Almunia, and a variety of the hoi polloi from the ECB and assorted EU Fin Mins protesting "No US style rescue package needed here" it is interesting to note that in the daily USD auction at the ECB there were still USD 21bn more bids than offers in the overnight auction; at the same time there were only $30bn of bids in the UK, $10bn under subscribed. The relative rates 2.5% ECB, and 2.022% for the UK. Overnight rates in the US are 1.65/2.4% and tom next 2.00/2.10%. Right off the bat that tells you there is a bigger liquidity issue in Europe than either the UK or US. Add to that the EUR term repo of E50bn was three times over subscribed, and it makes you wonder, hmmm - no need for a bail out here. Spain"s housing industry is a train wreck, Italy just registered 0% GDP, Ireland and Portugal have their problems, and some of the cuckoos eggs in German Landesbanks" balance sheets (and the odd French bank) are starting to come to light.
    A very interesting note from a Deutsche Bank analyst today commented that even if they wanted to, the Eurozone couldn"t come up with a similar rescue plan on short notice. They do not have the political cohesion, they can"t even agree on a constitution. As there are so many central banks in the Euro zone they would all have to agree to assume the bad debts of their own banks, AND those of the other states; which would require 15 different central banks to go cap in hand simultaneously to their own legislatures AFTER the ECB had to first concur it is what they wanted to do. The reason the ECB officials are "grateful" to the US authorities is because they can"t fix it themselves.

German state-owned KfW started shifting transactional exposure of E20bn to other banks after news that Lehman Brothers had filed for bankruptcy. According to DJ news reporters KfW shifted 173 transactions worth E20.2bn after the announcement they claimed. E319mn from KfW to Lehman was "a contractually agreed settlement of currency swaps scheduled for Sep 15" . In exchange KfW should have received $500mn under normal conditions, equivalent to EUR350 million on the day. 
     the total loss incurred by KfW including the currency swap transfer could be E536mn, the remaining E186mn results was exposure to Lehman Brothers bonds. Late last week LBBW claimed they would incur a "low three digit millions (Euros) hit due to the Lehman insolvency, and one of the French banks also owned up to the fact they have exposure in the E250mn range; it all adds up - but the banking sector is in good shape, the Fin Min said so.
  Likkanen says Europe does not need a rescue bank - maybe that"s because the BoE bought Northern Rock, and Lloyds bought HBOS? Oh, I forgot, they"re not European they"re British. He"s still ruffling his hawks feathers, says "we have to be very vigilant" but on the other hand says the ECB is aiming to keep providing liquidity. Question, if you are keeping rates at 4.25% and making the banks pay that, but you are lending the banks the money to do it, wouldn"t it be better to lower the interest rate so the banks" cost burden decreases, profits fatten, and loan write offs can be accelerated? Maybe not.
   There is a view emerging that the problems facing the US financial sector and US economy might not be just isolated to the US, and that Europe could face the same problems without the framework to deal with it as swiftly as the US has. Some call it "decoupling two" and the undermining of the "decoupling one" theory was behind the heavy EUR/USD fall in July and August.

  Cheers
...........Kauri


----------



## davo8

Paladin said:


> I stayed up late last night to watch Paulson and helicopter Ben talk to the senate committee. I have to say it made for amazing watching. I was expecting another rabbit out of a hat, but instead was quite alarmed by how clearly a desperate move this is.




Quite right -- desperate, and sadly misguided.

However, latest news is a deal has been done and the bail-out is about to happen. Some band-aids around exec compensation and mortgage relief, but otherwise it's just Helicopter Hank dropping money on banks, and especially his alma mater Goldman Sachs. At least Warren will get a bit richer.

Now if this doesn't move markets, the USD and gold, what will??? 
:grenade:


----------



## Kauri

talk that HBSC may buy the embattled Swiss banking giant UBS and share prices have already rallied over 5%.

rumours of a suspension to a major European banking stock have sent the Euro tumbling.

talk from Washington that the bailout bill will be signed, sealed and delivered before the close of business this week, and perhaps even today.

Cheers
...........kauri


----------



## wayneL

Kauri said:


> talk that HBSC may buy the embattled Swiss banking giant UBS and share prices have already rallied over 5%.
> 
> rumours of a suspension to a major European banking stock have sent the Euro tumbling.
> 
> talk from Washington that the bailout bill will be signed, sealed and delivered before the close of business this week, and perhaps even today.
> 
> Cheers
> ...........kauri




HSBC have also been rumoured to be circling the mortally wounded Bradford & Bingley.


----------



## CAB SAV

US durable goods fig. down 4.5%, more than expected
Jobless claims up to 500,000 worst since after 9/11
GE outlook down

So their futures go up.
Rabbit in a spotlight.


----------



## dhukka

CAB SAV said:


> US durable goods fig. down 4.5%, more than expected
> Jobless claims up to 500,000 worst since after 9/11
> GE outlook down
> 
> So their futures go up.
> Rabbit in a spotlight.




Beat me to it CAB SAV, good to see someone else is paying attention to the deteriorating economic fundamentals. Keep the faith.


----------



## nunthewiser

LOL but guys, dont you know the bailout will fix everything ..... anyone for bandaids?


----------



## Kauri

According to the NY Times there is disappointment that the meeting between US President Bush and US lawmakers at the White House Wednesday afternoon didn"t produce a firm agreement. The NY Times states that the status of the plan "was in doubt" when Senator Dowd complained that late complications were making the episode sound more like "a rescue plan for John McCain." The senator was apparently alluding to a growing revolt by conservative House Republicans against the proposed 700 BLN USD rescue, and the fact that Senator McCain has not yet endorsed the plan, whose concept runs contrary to the policy positions he has taken for years.
      The USD and Wall Street moved a lot higher after House Democrats announced that they had come within a whisker of agreeing to the Treasury plan. Republicans, including the White House and leaders of the House and Senate, scrambled for the rest of the afternoon to insist that word of an agreement was premature. .. After all, they have made an art form out of leaving ann's. to the weekend..


Cheers
...........Kauri


----------



## deadset

Could anyone reasonably expect an answer by Monday, you'd think they'd take a bit more time yet to reach a decision on the $700B.

We'll have to see how far they get in this next week.

It'll be busy there on Friday.


----------



## Green08

How much do you think the push to 'get the deal done' because of the election?  A commentator on CNBC said that it is far too rushed; he feels the rush is due to election conditions and should wait until one of them is the new President.  

I sometimes feel Bush is forcing the issue to make a quagmire of the crisis he is not educated to make any decisions and his ability to be manipulated is like Play-Dough. The odds on Obama getting in are weighed towards him.  So if Obama is President and you can tell is will be for 1 term then the Republicans are in for another run.  Obama wouild be blamed for this catastrophe. 

I looked at Bush on his address to the nation last night and thought, I hope people aren't taking you seriously you have made many incorrect speeches re; nuclear weapons in Iraq , we won the war etc. People must be sick of it.


----------



## explod

Kauri said:


> . .. After all, they have made an art form out of leaving ann's. to the weekend..
> 
> 
> Cheers
> ...........Kauri




That's it Kauri, you now dig the crap

Welcome to D @ G team, but on the bright side


----------



## explod

In elaborating on crap, Chuck Butler describes the bailout as "Cash for Trash"  I remember Kiyosaki using the same words here last year.  Anyway Chuck's (from Us Everbank) take is worth a look:-



> The President sure painted a rosy picture for the U.S. economy last night didn't he? NOT! Whoa there partner! With words like "collapse" and "danger" and "panic", President Bush was telling the country that we're in deep dookie! In telling the public that the government must put $700 Billion of taxpayer's money at risk to bail out the financial system, he said... "We're in the midst of a serious financial crisis. Our entire economy is in danger. America could slip into a financial panic."
> 
> Now... Those are some serious statements, folks... And were followed up by the comments by the chairman of the House Financial Services Committee, Barney Frank, who said, "Whatever you think about whether or not there was a need for a bailout... Once the president, secretary of the Treasury, and the Federal Reserve Chairman have announced that if you don't do this, there will be a collapse, there's probably going to be a collapse if you don't do it."
> 
> Wow! Those are grave words there folks... But don't you feel like snake oil salesmen are selling us a powerful medicine that if we don't take it we'll die? Why all these grave words now? Where has this been for the last year, as the credit wound tighter and tighter, house values spiraled downward, Oil reached $145, The dollar continued to lose purchasing power? It's all related... And if these bozos on Congress can't see that, we're in deep dookie whether we pass this $700 Billion bailout package or not! There are two guys that see the light... Ron Paul, and Jim Bunning...
> 
> So... The markets are waiting for the bailout package to be passed, and it does look as though they are close to reaching an agreement on the amendments to the deal... But, until they pass it, the markets are basically standing still. The dollar did receive the McLovin I talked about yesterday, as Big Ben Bernanke and Treasury Sec. King Henry filled the halls of congress with more lies and videotape... You see... No one is talking about the fact that this $700 Billion doesn't do anything to improve spiraling house prices... Nothing to improve the recession... Nothing to improve energy prices... And so on, and so on... I will say this about the package... I call it... "Cash for Trash"... And nothing's going to change my mind!


----------



## Bushman

Ze Germans aren't happy it would seem - article quoting Germany's Finance Minister Peer Steinbrueck. 

http://www.marketwatch.com/news/sto...-BC7E-4178-9BFE-F9A8C897D209&dist=SecMostRead

Two things that struck me about the article -

1. Herr Steinbrueck believes that the US will lose it's status as 'superpower of the global financial system' via the death by a 1000 cuts it is enduring at the moment (presumably to be replaced by those sensible Germans  -oh the irony); and

2. I know how senstive the shorters are to any overt criticism of their trading system, so I note that I am quoting the journo who has paraphrased the good minister; here it is  - 

' The finance minister said he would push for a *global ban on speculative short selling *and would use next month's meeting of the Group of Seven finance ministers and central bankers in Washington to *press for new rules that would prevent banks from fully securitizing loans and selling them to third parties*. ' 

So it would seem that ze Germans ain't that keen anymore on 'speculative' short selling (I'm guessing this is directed at hedge funds) and securitisation! Would have thought you just need to temper securitisation of leveraged mortgages to get the desired effect but then again my name is not Herr Steinbrueck.


----------



## white_goodman

Bushman said:


> Ze Germans aren't happy it would seem - article quoting Germany's Finance Minister Peer Steinbrueck.
> 
> http://www.marketwatch.com/news/sto...-BC7E-4178-9BFE-F9A8C897D209&dist=SecMostRead
> 
> Two things that struck me about the article -
> 
> 1. Herr Steinbrueck believes that the US will lose it's status as 'superpower of the global financial system' via the death by a 1000 cuts it is enduring at the moment (presumably to be replaced by those sensible Germans  -oh the irony); and
> 
> 2. I know how senstive the shorters are to any overt criticism of their trading system, so I note that I am quoting the journo who has paraphrased the good minister; here it is  -
> 
> ' The finance minister said he would push for a *global ban on speculative short selling *and would use next month's meeting of the Group of Seven finance ministers and central bankers in Washington to *press for new rules that would prevent banks from fully securitizing loans and selling them to third parties*. '
> 
> So it would seem that ze Germans ain't that keen anymore on 'speculative' short selling (I'm guessing this is directed at hedge funds) and securitisation! Would have thought you just need to temper securitisation of leveraged mortgages to get the desired effect but then again my name is not Herr Steinbrueck.





just dont mention the war


----------



## IFocus

Bushman said:


> Ze Germans aren't happy it would seem - article quoting Germany's Finance Minister Peer Steinbrueck.
> 
> http://www.marketwatch.com/news/sto...-BC7E-4178-9BFE-F9A8C897D209&dist=SecMostRead
> 
> Two things that struck me about the article -
> 
> 1. Herr Steinbrueck believes that the US will lose it's status as 'superpower of the global financial system' via the death by a 1000 cuts it is enduring at the moment (presumably to be replaced by those sensible Germans  -oh the irony); and
> 
> 2. I know how sensitive the shorters are to any overt criticism of their trading system, so I note that I am quoting the journo who has paraphrased the good minister; here it is  -
> 
> ' The finance minister said he would push for a *global ban on speculative short selling *and would use next month's meeting of the Group of Seven finance ministers and central bankers in Washington to *press for new rules that would prevent banks from fully securitizing loans and selling them to third parties*. '
> 
> So it would seem that ze Germans ain't that keen anymore on 'speculative' short selling (I'm guessing this is directed at hedge funds) and securitisation! Would have thought you just need to temper securitisation of leveraged mortgages to get the desired effect but then again my name is not Herr Steinbrueck.




Who mentioned the war......

I am not sensitive to the ban on short selling I just cannot see any evidence on how it can change market direction.

Having gone through the days when it was all the Day Traders fault the arguments are eerily similar.

Any way it appears its a brave new world, where am I going to hide the gold bars


----------



## deadset

Green08 said:


> How much do you think the push to 'get the deal done' because of the election?




It works both ways, it could be political catastrophe if they make a blunder, so this would tend to draw the process out.  The longer it draws out, the greater the danger of collapse.  The public doesn't understand the implications fully from what I can tell, and a few politicians are still getting their head around it.  So maybe if there's a few bumps along the way, then they'll get the message.  It's going to be interesting.


----------



## refined silver

WaMU, just gone bust. Biggest bank so far. 

Bought by JPM who are the Feds consolidator, and who have had more money from the Fed under the table than anyone else, already 100s of billions.


----------



## lusk

refined silver said:


> WaMU, just gone bust. Biggest bank so far.
> 
> Bought by JPM who are the Feds consolidator, and who have had more money from the Fed under the table than anyone else, already 100s of billions.




No surprise if you look at who created the FED and who has interests in it. Most think the FED is part of the government, its not it was created by banks to protect banks, JP Morgan is involved.


----------



## acouch

http://www.youtube.com/watch?v=Bjpor8iBe58&NR=1

ac


----------



## wayneL

From my mate at MacBank


----------



## lusk

acouch said:


> http://www.youtube.com/watch?v=Bjpor8iBe58&NR=1
> 
> ac




Ron Paul always stands up and give's Bernanke a serve. He even mentions the constitution, maybe the guys that wrote it might have known something back then.


----------



## pepperoni

Ron Paul was great ... bernanke was like something out of a scary NWO movie.


----------



## wayneL

pepperoni said:


> Ron Paul was great ... bernanke was like something out of a scary NWO movie.



Art imitates life...?


----------



## acouch

wayneL said:


> From my mate at MacBank




haha loved it 

have a great weekend 
ac


----------



## dhukka

lusk said:


> Ron Paul always stands up and give's Bernanke a serve. He even mentions the constitution, maybe the guys that wrote it might have known something back then.




I think it's a tragedy that you have someone like Ron Paul, who understands economics, understands the problems with the Federal Reserve and can see where they are headed, yet you know, that *99%* of the other elected officals in the room have little to no understanding to what he's on about and are probably saying to themsleves, not that nutjob Ron Paul prattling on about the constitution and the Federal Reserve again. Sad really.


----------



## wayneL

dhukka said:


> I think it's a tragedy that you have someone like Ron Paul, who understands economics, understands the problems with the Federal Reserve and can see where they are headed, yet you know, that *99%* of the other elected officals in the room have little to no understanding to what he's on about and are probably saying to themsleves, not that nutjob Ron Paul prattling on about the constitution and the Federal Reserve again. Sad really.



I note that he often gives Mises and the Austrian school a plug in his speeches. This will not endear him to the current batch of economists who have been indoctrinated to disregard the Austrian school... even though the  modern schools are a load of bollox and failing us.

Infuriating really.


----------



## dhukka

wayneL said:


> I note that he often gives Mises and the Austrian school a plug in his speeches. This will not endear him to the current batch of economists who have been indoctrinated to disregard the Austrian school... even though the  modern schools are a load of bollox and failing us.
> 
> Infuriating really.




Couldn't agree more. Just maybe the Austrian school has a chance at getting more mainstream exposure at a time like the present. Wishful thinking?


----------



## Macquack

lusk said:


> Ron Paul always stands up and give's Bernanke a serve. He even mentions the constitution, *maybe the guys that wrote it might have known something back then*.




Thomas Jefferson 3rd President of the US and Founding Father had vision. He saw this coming way back in 1802. In a letter to the Secretary of the Treasury :-

"If the American people ever *allow private banks to control the issue of their currency*, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs." Thomas Jefferson


----------



## chops_a_must

wayneL said:


> Art imitates life...?




It's all ok.

They've got this guy Not Sure.


----------



## kransky

dhukka said:


> I think it's a tragedy that you have someone like Ron Paul, who understands economics, understands the problems with the Federal Reserve and can see where they are headed, yet you know, that *99%* of the other elected officals in the room have little to no understanding to what he's on about and are probably saying to themsleves, not that nutjob Ron Paul prattling on about the constitution and the Federal Reserve again. Sad really.




That is the unfortunate reality now days.. i feel like politics is such a waste of time. 

I have read that before about Jefferson, those old timers really had their heads screwed on right... but boy has the train come off the tracks in the US of A, in so many ways


----------



## chops_a_must

Well... Mr Doom reckons gold is good, but so to with the USD, which I find weird... unless they go the reverse peg like I proposed.


----------



## wayneL

Monday, according to many commentators, the market is either saved or goes over the edge.... a thousand FTSE points according to my soothsayers.

I've placed a bit of an each way bet. If we're saved, I make a little bit of money (that's the place bet), if we tumble into the abyss, I'm a rich man. Loss situation if the market dithers and vols collapse on Monday.

I think it will be a long weekend.


----------



## wayneL

Another bank down the slot.

:sleeping::sleeping::sleeping:

Bradford and Bingley to be nationalized.

http://www.telegraph.co.uk/finance/...ford-and-Bingley-to-become-latest-victim.html


----------



## noirua

Talk in the London Evening Standard that Lloyds TSB Bank may be considering pulling out of the takeover of Halifax Bank of Scotland.  The shares of Lloyds TSB have fallen sharply on further consideration of the takeover.  Halifax, part of the HBOS setup, is a mortgage bank with severe problems.


----------



## deadset

I'm definitely not carrying much debt going into this weekend.  There'll definitely be some news out before US market open, hopefully during our trading day on Monday, though I expect for alot of things they will dither til late in the week ?


----------



## explod

David James was just mentioning in todays Age this morning a small matter of the derivatives market playing roulette with the global financial system.

The point that hits me is the size of the thing.   450 trillion dollars.  Tried to explain it to the better half and couldn't so got on the calculator and worked out that it is a pile of $100 notes 9 million kilometres high.   

Now how far would that be end to end?   are we still in the solar system?

Anyway, sounds like deals been done and we are all saved for another week, er day.


----------



## $20shoes

explod said:


> The point that hits me is the size of the thing.   450 trillion dollars.  Tried to explain it to the better half and couldn't so got on the calculator and worked out that it is a pile of $100 notes 9 million kilometres high.




I pulled out the calculator on the weekend too, Explod. I was reading a gold article that tried to put 1 trillion dollars into perspective. They suggested if you spent $1M per day from the time Christ was born until now you would have just spent about 3/4 of a trillion dollars. When I read that, my jaw kinda dropped...


----------



## MrBurns

I'm getting sick of this I wish the whole thing would just implode and get it over with. Can't invest in anything at present.

What do you do sit on the fence for another year ? (not that it will take that long I guess)


----------



## wayneL

MrBurns said:


> I'm getting sick of this I wish the whole thing would just implode and get it over with. Can't invest in anything at present.
> 
> What do you do sit on the fence for another year ? (not that it will take that long I guess)



Trade yer @ss off. 

But agree with your sentiment... wish they would just let capitalism do its thing... Oh wait, we're not capitalists anymore.


----------



## gfresh

Not looking any better out there after the "bailout" package was approved in principle. If it was meant to give confidence, it seems to have failed already. The longer banks hoard cash, the more likely it seems other banks will fall over. Seems to be quite self-perpetuating. 

Apparently the TED spread (Banks borrowing rate vs Treasury rate) is at a record high. The last time this happened was just before the 1987 stock market crash. Is it possible history will repeat?



> http://www.bloomberg.com/apps/news?pid=20601087&sid=aQIbeNQz_Qxg&refer=home
> 
> Money-Market Rates Jump as Bank Rescues Stoke Lending Concern
> 
> By Gavin Finch and Lukanyo Mnyanda
> 
> Sept. 29 (Bloomberg) -- The cost of borrowing in euros for three months rose to a record after government-led bank bailouts heightened concern that more will fail, prompting financial institutions to hoard cash.
> 
> The euro interbank offered rate, or Euribor, climbed 10 basis points to 5.24 percent, the European Banking Federation said today. That's the biggest jump since June. The London interbank offered rate, or Libor, for three-month dollar loans rose to 3.88 percent, the highest level since Jan. 18 and up from 2.81 percent a month ago. Singapore's benchmark rate for such loans increased to the highest level in eight months.


----------



## acouch

I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered.
The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.

 Thomas Jefferson

ac


----------



## Macquack

acouch said:


> I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered.
> The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.
> 
> Thomas Jefferson
> 
> ac




In a letter to the Secretary of the Treasury Albert Gallatin (1802).
Know that off by heart. 

When President John F. Kennedy welcomed forty-nine Nobel Prize winners to the White House in 1962 he said, "I think this is the most extraordinary collection of talent and of human knowledge that has ever been gathered together at the White House – with the possible exception of when Thomas Jefferson dined alone."

Jefferson predicted the current financial turmoil over 200 years ago.

He would be saying f*** the Federal Reserve.


----------



## pepperoni

God i hope the bailout talk is just to buy time and doesnt go ahead.

Yes it wont be pretty for growth or jobs but US people wont have to inherit more debt and all the defaulted loans will be nicely deflationary.

http://www.youtube.com/watch?v=qUT3RjsHYDk&feature=related


----------



## BentRod

Classic, the date that video was posted marked almost the exact top in the Euro


----------



## GreatPig

Another one (effectively) bites the dust.

Citigroup to buy Wachovia's banking operations.

Although the FDIC is reassuring everyone that Wachovia didn't actually fail. 

GP


----------



## sparc

Can someone explain to me what they mean by injecting money into the market, all central banks around the world are injecting billions of dollars into the system:
http://www.reuters.com/article/hotStocksNews/idUSTRE48S0Z920080929

is this merely to do with the currency, or is the money given directly to the banks.

second questions is, where is all this money going, once the injection has been done, its seems there is a black hole and no amount of funding by the central banks seems to enough.


----------



## wayneL

The Celtic Tiger shot by poachers.


----------



## BentRod

Brutal.

That is a big move


----------



## lesm

What an interesting night for trading



> *GLOBAL MARKETS-World stocks set for biggest 1-day loss in 20yrs*
> 29 Sep 2008 - 15:26
> 
> LONDON, Sept 29 (Reuters) - World stocks tumbled more than 4 percent on Monday, on track for their biggest one-day loss in at least 20 years as concerns about the financial sector intensified, prompting broad sell-off in risky assets.
> 
> MSCI's main world equity index fell 4.2 percent <.MIWD00000PUS> on the day, hitting its lowest level since September 18.
> 
> (Reporting by Natsuko Waki)
> 
> ((natsuko.waki@reuters.com, +44 207 542 6721, Reuters Messaging: natsuko.waki.reuters.com@reuters.net))
> 
> Keywords: MARKETS GLOBAL


----------



## noirua

Big falls as the careful package from the States, 3 pages becomes 100 pages, has too many strings attached. Bradford and Bingley will not be the last lender to get in trouble, with RBOS (Royal Bank of Scotland) in trouble over it's Fortis Bank connections and Lloyds TSB wobbling over the takeover of HBOS (Halifax Bank of Scotland).

UK's, FTSE 100 down 5.1%, FTSE 250 down 5.9%.
RBOS down 19.5%, HBOS down 18%, Xstrata down 18%, Lloyds TSB down 13%, Barclays down 12%, Vedanta down 10%, BHP down 11%, Antofagasta down 13%, Anglo American down 11%, and Rio Tinto down 10%.  

Oil US$102 for Brent crude, Gold US$905 oz.

Aussie$ down 2.16% ag'st US$1.

Dax Xetra down 4.6%.  Paris cac 40, down 4.6%,  Eurofirst 300 down 5%. 
Dow down 2.6%, S & P 500 down 3.7%, Nasdaq down 4.1%.


----------



## wayneL

Bail out voted down... but re-vote happening apparently.


----------



## cuttlefish

sparc said:


> Can someone explain to me what they mean by injecting money into the market, all central banks around the world are injecting billions of dollars into the system:
> http://www.reuters.com/article/hotStocksNews/idUSTRE48S0Z920080929
> 
> is this merely to do with the currency, or is the money given directly to the banks.
> 
> second questions is, where is all this money going, once the injection has been done, its seems there is a black hole and no amount of funding by the central banks seems to enough.





sparc - my understanding of how this works may not be correct but I think its something like this.

Imagine there are four brothers (the banks).  One brother say's he'll go down and buy a case of beer and asks the other three brothers to spot him a tenner each to go one quarter in the $40 box of beer.   The three other brothers agree that they want the beer but they don't trust the other brother and are worried that he actually owes the local loan shark $30 and is going to head out of the house and pay their $30 to the loan shark instead of delivering the beer and they'll be out of pocket $10 each.

So the brother goes to Dad (the reserve bank) and Dad lends the dodgy brother the $30 to go and buy the case of beer (he's not a very responsible Dad) and Dad (the Fed) tells the other brothers they each owe him $10 when they get the case of beer.  The other brothers are happy with this.  Dad has 'injected' $30 into the system.  The other brother comes back with the beer - the 3 brothers pay Dad back the $30 - everyone's happy.   Repeat this scenario simultaneously and continuously and I think thats roughly whats happening with the central banks.  

If we carry on the analogy for a bit of poetic license - the dodgy brother DOES actually owe the loan shark money - but its not $30 its $120 - and so he's waiting until Dad (the fed) trusts him enough to spot him $120 before going and paying back the loan shark and then crying poor to Dad to bail him out.  (read Bear, AIG, Freddie, Fannie).

The senate is now (hopefully) about to approve a bill that will give Dad enough money to just go to the loan shark and say - look you know my sons aren't good for the debt - how about I pay you a quarter of what they owe and we call it quits 'eh - 'cos I'm getting sick of them coming to me for short term loans every time they want a pizza or a case of beer.

(oh and each brother is also simultaneously a dodgy loan shark and when the Dad has paid them all out for a quarter of the debt they'll all start doing dodgy loans to each other again).


----------



## mazzatelli1000

These sort of moves arent good for the heart :swear::cussing:c:


----------



## wayneL

Great quote!



> “This is essentially Mr Paulson’s bill to help his friends and I can’t buy it,” said Paul Broun, a Republican of Georgia. “This is a huge cow patty with a piece of marshmallow stuck in the middle of it.”




ROTFLMAO


----------



## mazzatelli1000

wayneL said:


> Great quote!
> 
> 
> 
> ROTFLMAO




Drawing up new plans within the next 72 hours 

"They wanted to let the market run free, instead they have let it run wild" Barack Obama


----------



## theasxgorilla

There was no reason for anybody to have been long the market since, oh, about January.  This the capitulation many said to expect.

Game over.


----------



## wayneL

wayneL said:


> Monday, according to many commentators, the market is either saved or goes over the edge.... a thousand FTSE points according to my soothsayers.
> 
> I've placed a bit of an each way bet. If we're saved, I make a little bit of money (that's the place bet), if we tumble into the abyss, I'm a rich man. Loss situation if the market dithers and vols collapse on Monday.
> 
> I think it will be a long weekend.



Half an hour to go and Dow *-700*, SP500 *-96*

Happy to take the money, but things look bad


----------



## wayneL

In other news Campbell Soup (CPB:NYSE) is up *+1.2%*

Is this an omen??


----------



## mazzatelli1000

wayneL said:


> Half an hour to go and Dow *-700*, SP500 *-96*
> 
> Happy to take the money, but things look bad




hmm backspread?? (no need to answer WayneL)


----------



## mazzatelli1000

wayneL said:


> In other news Campbell Soup (CPB:NYSE) is up *+1.2%*
> 
> Is this an omen??




Haha, already started eating from can food months ago


----------



## wayneL

mazzatelli1000 said:


> hmm backspread?? (no need to answer WayneL)



Basically, yes.

Long vega/gamma to the downside.

Check out VIX. LOL


----------



## mazzatelli1000

wayneL said:


> Basically, yes.
> 
> Long vega/gamma to the downside.
> 
> Check out VIX. LOL




Congratulations!!! :alcohol:

What a day to be long vega and gamma - the VIX up 35%

hasnt been this high for 10 years if im looking correctly


----------



## cuttlefish

I've got a few Australian positions open that would probably fit that description - but wish I'd been a bit more aggressive now.  Tomorrow (today)  will be interesting anyway.


----------



## mazzatelli1000

cuttlefish said:


> I've got a few Australian positions open that would probably fit that description - but wish I'd been a bit more aggressive now.  Tomorrow (today)  will be interesting anyway.




Hindsight is great

I wish I had been more aggressive as well 

On a positive note, gold is up


----------



## cuttlefish

Well I certainly won't be paying for any inflated volatility today but I might sell some of it and see if I can find something closer to pure delta.


----------



## cuttlefish

mazzatelli1000 said:


> On a positive note, gold is up





Yeah - the long gold positions might actually pay off one day 

I think if the bailout goes through it is more inflationary and thus better for gold. I also believe its better for the economy at this juncture - as long as they also try to manage an orderly decline in the USD and also don't try to prop up every insto - i.e. let the basket cases fail but shore up the ones that can weather it plus look after some of those that are important from a systemic perspective. The liquidity injection might let them manage it so the whole lot doesn't go up in smoke, but its a fast burning fire at the moment.


----------



## chops_a_must

theasxgorilla said:


> There was no reason for anybody to have been long the market since, oh, about January.  This the capitulation many said to expect.
> 
> Game over.




Exactly.

Now we just wait until we know which companies are going to survive, or buy index funds for now.

Poor old Nizar looks to have been beaten and stopped blogging. Just can't conceive why anyone would have decided to be long only in a mechanical system recently. Untestable and insane...


----------



## Kauri

Paulson is set to now meet with Bernanke,  Bush and congress to try and work out some form of a solution to the current crisis after today"s vote failed to go through. The market is now pricing in a 100% chance of a 25bps Fed rate cut at the October meeting with a 70% chance for a 50bps cut.

Cheers
.............Kauri


----------



## CanOz

wayneL said:


> Half an hour to go and Dow *-700*, SP500 *-96*
> 
> Happy to take the money, but things look bad




Well done Wayne, maybe one day you could explain how you "straddled" this event and came out a bigger winner than only a winner. Surly a fitting addition to your options thread? 

Cheers,


CanOz


----------



## adobee

Can someone please advise.. if i set some stocks to sell at market prior to open will they be sold at the lowest sell price or the highest buy price ?? 
How would this work as it is not something I generally do ???
Thanks !


----------



## Trembling Hand

adobee said:


> Can someone please advise.. if i set some stocks to sell at market prior to open will they be sold at the lowest sell price or the highest buy price ??
> How would this work as it is not something I generally do ???
> Thanks !




The match price.

https://www.aussiestockforums.com/forums/showthread.php?t=11619


----------



## Kauri

Trembling Hand said:


> The match price.
> 
> https://www.aussiestockforums.com/forums/showthread.php?t=11619





otherwise known .. (today anyways.. )  as the panic/terror price..   
Cheers
..........Kauri


----------



## Edwood

hey chaps - 3 peaks domed house.  looks a bit like the DOW hey.  7,500 anyone? (not tomorrow btw )







Dow at close last night


----------



## Kauri

The surprise failure of the Treasury bailout plan to pass Congress has forced US Treasury and the Fed to go back to individual solutions, according to the Wall Street Journal."Treasury *is likely to revert to addressing problems institution by institution*." The article goes on to say the US government is likely to continue trying to extinguish fires by lending money to troubled institutions, aiming to prevent failures that could ripple through the financial sector. The FDIC, which oversees failing banks, could also play a greater role. Plan B isn"t that encouraging in light of Paulson"s comment: "*Our tool kit is substantial but insufficient*" in the immediate aftermath of the bill"s failure. 
    Congressional leaders said they intended to go back to work on the bill, with a new vote possibly late in the week after the Jewish holiday of Rosh Hashanah, which began at sundown Monday and runs through Wednesday night. The WSJ points out that complex election-year politics makes the outcome hard to predict and the tone of the article *suggests that an eventual passage is not a done deal *despite the harsh reaction in the financial markets.

Cheers
...........Kauri


----------



## MrBurns

150 points down as @ 1:30 is not a disaster. People still have too much money and not enought sence. Let the market clean them out and then we'll see a real fall.
One thing this says to me is that the bailout wasnt needed, I don't see blood on the streets anywhere yet...................


----------



## Kauri

The French President, Nicolas Sarkozy says, the French state and state bank CDC are to invest in another besieged Benelux bank. Amidst all the latest US rejection of the bailout plan the news is seen as little more than a continuance of a theme. According to the statement they will have a 25% stake in Dexia, which under Belgian law is a blocking minority. The decision was taken to "guarantee continuity of funding for local authorities". 

The Irish government has announced that it is safeguarding all deposits at Allied Irish Banks, Bank of Ireland, Anglo Irish Bank, Irish Life and Permanent, Irish Nationwide Building Society and the Educational Building Society. The scheme also guarantees covered bonds, senior debt and dated subordinated debt (FT website). 
    There is an article by Ambrose Evans-Pritchard in today"s Daily Telegraph headlined "*Now Europe is staring into the abyss*" . This reports that half of the ECB"s shadow council have called for a rate cut this week.

Russian Stock Market Suspended Until 08:30 GMT Precautionary measures taken by the Russian regulators in light of Monday"s significant Wall St collapse. The market will re-open at 12:30 local time-08:30 GMT

Cheers
...........Kauri


----------



## Kauri

*Rumours* about Unicredit are back in the spotlight, once more generating "share suspension" rumours...

*Rumours* of a possible emergency Fed rate cut later today are being touted as a factor in cable"s rise to an intra-day high of 1.8119. The last emergency Fed Funds rate cut was a 75bp reduction to 3.5% on January 22. The FF rate has been at 2.0% since it was cut to that level in April. The next scheduled FOMC meeting is on October 28/29. The final FOMC meeting of 2009 is scheduled for December 16. December FF futures are reportedly pricing 1.5%.

Cheers
...........Kauri


----------



## sam76

FTSE is green (just)


----------



## Macquack

sam76 said:


> Chuck Norris is The Fed.




It might be time to change your signature to "Chuck Norris kicking the s*** out of the Fed"


----------



## sam76

Macquack said:


> It might be time to change your signature to "Chuck Norris kicking the s*** out of the Fed"




How about Helicopter Chuck - dropping pain to the people?


----------



## Macquack

sam76 said:


> How about Helicopter Chuck - dropping pain to the people?



How about
"Chuck Norris is the pilot Ben Bernanke calls when he wants to shower the economy with dollar bills. *Sometimes, Chuck refuses to fly*. "


----------



## CAB SAV

Data due tonight in US- Consumer Confidence rating est. 56.9 ,sure.
Due friday US- Unemployment rate est. steady 6.1%, sure
Recent poor data from US has been overlooked due to bailout getting all media attention. Wait till they add 2 & 2 together.

Thursday AUST. Trade balance est. deficit $800bill.


----------



## Kauri

The market is now concentrating on a *possible co-ordinated rate cut*. Speculation was already growing that Australian rates were going to be cut by 50bps at the RBA meeting next Tuesday.

Cheers
...........Kauri


----------



## Uncle Festivus

Kauri said:


> The market is now concentrating on a *possible co-ordinated rate cut*. Speculation was already growing that Australian rates were going to be cut by 50bps at the RBA meeting next Tuesday.
> 
> Cheers
> ...........Kauri




Um, US rates are already effectively negative, so will they now start to Turn Japanese and pay people to take the money & run. Woops, they are already doing that now. The funny thing is, the banks are putting more money BACK into CB's vaults because they don't trust anyone!



> "The interbank market has collapsed," said Hans Redeker, currency    chief at BNP Paribas.
> "We're now seeing a domino effect as the credit multiplier goes into    reverse and forces banks to cut back lending to clients," he said.
> Mr Redeker said the latest alarming twist is a move by banks to deposit â‚¬28bn    in funds at the European Central Bank in a panic flight to safety. This has    jammed the mechanism used by the authorities to shore up the financial    system in a crisis.
> "*The ECB is no longer able to inject liquidity because the money is just    coming back to them again. This is extremely serious.* If monetary policy is    no longer working, there is a risk that the whole system will blow up in    days," he said



http://www.telegraph.co.uk/finance/...-crash-hits-Europe-as-ECB-loses-traction.html


----------



## Awesomandy

Edwood said:


> hey chaps - 3 peaks domed house.  looks a bit like the DOW hey.  7,500 anyone? (not tomorrow btw )




That certainly looks eerily similar, but from my knowledge, the first 3 peaks should be around 8 months apart (point 3 -> point 7). From your chart, that section took at least 16 months to complete. 

Also, for this pattern to be valid, the low at point 10 must be tested at least twice (point 12 and 14 at the least). It appears that, in this chart, the low has only been tested once. 

But still, the general shape looks very close, I have to say...


----------



## IFocus

Awesomandy said:


> That certainly looks eerily similar, but from my knowledge, the first 3 peaks should be around 8 months apart (point 3 -> point 7). From your chart, that section took at least 16 months to complete.
> 
> Also, for this pattern to be valid, the low at point 10 must be tested at least twice (point 12 and 14 at the least). It appears that, in this chart, the low has only been tested once.
> 
> But still, the general shape looks very close, I have to say...




For as long as I have looked at markets that pattern has been trotted out I guess it has to be right one day


----------



## chops_a_must

Not trading it, but expecting a big fade here...


----------



## wayneL

LTSB is "renegotiating" the deal to buy out HBOS.

http://www.citywire.co.uk/personal/...unds/content.aspx?ID=315867&re=3844&ea=199083


----------



## cuttlefish

Couldn't help but smile at the following suggestions on what the US govt could do to help with the credit crisis (this was on cnn web site, and no its not a humorous piece it was serious commentary).

_*Suspend so-called mark-to-market accounting rules, which during the past year have required financial firms to write down more than $500 billion in losses.
*Change federal requirements that force banks to keep a certain level of cash on hand for every dollar they lend out.
*Give banks the chance to exchange loan notes for notes from the Federal Deposit Insurance Corp. As a government agency, the FDIC's notes would be more valuable than the banks' notes, allowing the banks more flexibility to make loans.
*Purchase on a massive scale mortgage-backed securities issued by finance giants Fannie Mae and Freddie Mac. The Bush plan calls for the Treasury to buy a broader range of mortgage-backed securities.
*Extend limits on short sales of financial sector stocks.
*Cut the fed funds rate - the Federal Reserve's target for short-term lending - perhaps all the way to zero, or in coordination with rate cuts by other central banks around the globe._


I like the first 2 in particular - stop forcing banks to value assets at market prices and  stop forcing them to have money before they lend any out - I mean you can't really be fairer than that can you ?!?  


Full article here.

http://money.cnn.com/2008/09/30/news/economy/plan_b/index.htm?postversion=2008093015

And actually upon reading it I can almost agree with point no. 1 - maybe I can qualify for a job on wall street lol.


----------



## Aussiejeff

Looks like [size=+1]*The Mighty Mighty Fed*[/size] and his MegaBank cohorts have won the first round of Musical Bailouts. It is now a case of cracking the champagne corks and [size=+2]"Let The Party Begin"[/size] in expectation that Congress will pass a brick on Thursday.... :bier:

Then wait for Round 2 of the Great Musical Bailout game to begin, with the remaining Mega Bank players circling each other, looking for weaknesses to exploit yet another "takeover" and subsequent "hiding" of toxic debt. Eventually, after an exhausting series of Bailout Games, all the World's Toxic Debt should be consumed by JUST ONE REMAINING BANK (I'm tipping "The Mighty Mighty Fed" here, coz they seem to have an infinite amount of $StarBucks gushing out of their money presses at the moment).

So, the burning question is - should we take bets on WHICH bank will become *The World's Greatest Monopoly Bank* winner? Will Warren Buffet be CEO?


aj


----------



## Kauri

Fed"s Lockhart is on the news saying he expects one-by-one tackling of troubles facing the financial market because *he doubts the government"s bailout plan will be passed*. Voter sentiment is strongly against the proposal shot down by Congress yesterday and policy makers are scrambling for alternative approaches now, including letting the FIDC continue to sell off troubled banks to stronger banks when they can or perhaps_ looking at accounting changes to more accurately value the seized up mortgage portfolios, though outright repeal of the mark-to-market rule appears to be a long-shot at this stage._

Cheers
...........Kauri


----------



## Edwood

IFocus said:


> For as long as I have looked at markets that pattern has been trotted out I guess it has to be right one day




lol - yeah an oldee but a goodee eh


----------



## bas

cuttlefish said:


> Couldn't help but smile at the following suggestions on what the US govt could do to help with the credit crisis (this was on cnn web site, and no its not a humorous piece it was serious commentary).
> 
> _*Suspend so-called mark-to-market accounting rules, which during the past year have required financial firms to write down more than $500 billion in losses.
> _



_

I actually think this would be good. Its a bit hard to mark to market when there is no liquid market and every asset parcel is slightly different.

Wasn't it the change in policy late last year that caused most of this ****?_


----------



## wayneL

bas said:


> I actually think this would be good. Its a bit hard to mark to market when there is no liquid market and every asset parcel is slightly different.
> 
> Wasn't it the change in policy late last year that caused most of this ****?




No, It was mark to model (AKA mark to fantasy) that resulted in mis-priced risk.

Mark to market just meant shareholders and creditors had to be told the truth.


----------



## Uncle Festivus

It would make for a great Monty Python sketch if it weren't so serious.

Let's change all the rules like, now, instead of when the gravy train was going full tilt boogie into oblivion. I can see why they dont want to mark to market when it's worth a big fat zero, or worse, they have a liability as well!

These clowns - The Fed, Treasury and the politicians don't have clue! Well actually I think the Fed does, but will look after their own ilk ie JP Morgan, Goldman Sachs etc and the faceless men with old establishment money. The very existence of the Fed itself is at stake so they won't go down without a fight.

The ban on short selling really worked a treat - the biggest points fall in the Dow ever. So now we have these unrestrained gyrations up & down until eventually the system gets so out of balance that, in spite of the miracle cure the bail out package is supposed to be, there is going to be the mother of all crashes, instead of just a severe correction?

How safe is your/our money? The CBA has $16B in derivative exposure!!


----------



## communique

Uncle Festivus said:


> It would make for a great Monty Python sketch if it weren't so serious.
> 
> How safe is your/our money? The CBA has $16B in derivative exposure!!




Uncle, you always seem to have knowledge of matters at hand. I do get alarmed about your comments about our banks. I am not asking for advice, I just want to know in your considered opinion.
1. Is there government backed deposit insurance in this country? 
2. Do you have any comment on the lender of last resort facility for Australia?
Many thanks in advance.


----------



## Trembling Hand

Uncle Festivus said:


> How safe is your/our money? The CBA has $16B in derivative exposure!!





Uncle that is very mischievous of you. What are the derivatives??

I would guess that 98% of them are just the run of the mill exchange listed derivatives. Mostly being hedges to hard assets.

The other thing is when a derivative is taken out the reported exposure is not what is at stake. Its in a very simplistic way the margin.


----------



## refined silver

bas said:


> I actually think this would be good. Its a bit hard to mark to market when there is no liquid market and every asset parcel is slightly different.
> 
> Wasn't it the change in policy late last year that caused most of this ****?




Legislating lying in accounting rules is not the way to economic prosperity!!

It won't fix anything, just postpone it slightly and make it worse.

Think about it for a moment. Legislating that companies can lie on their balance sheet, is absurd. Where does it stop? 

Thats why there's already no trust between banks etc, cos they know each other are lying.


----------



## bas

How can it make it worse? Valuing potentially good assets at distressed prices doesn't seem to be helping anyone.


----------



## chops_a_must

I tell myself everyday, reality is a bitch.


----------



## nomore4s

bas said:


> How can it make it worse? Valuing potentially good assets at distressed prices doesn't seem to be helping anyone.




lol, yeah valuing potentially crap assets at over inflated prices has worked a treat so far.


----------



## Uncle Festivus

Trembling Hand said:


> Uncle that is very mischievous of you. What are the derivatives??
> 
> I would guess that 98% of them are just the run of the mill exchange listed derivatives. Mostly being hedges to hard assets.
> 
> The other thing is when a derivative is taken out the reported exposure is not what is at stake. Its in a very simplistic way the margin.




That could very well be the case, just passing on what I heard on Radio National this morning. The trouble is apparently it is impossible to know just what they are from the published info?


----------



## Uncle Festivus

communique said:


> Uncle, you always seem to have knowledge of matters at hand. I do get alarmed about your comments about our banks. I am not asking for advice, I just want to know in your considered opinion.
> 1. Is there government backed deposit insurance in this country?
> 2. Do you have any comment on the lender of last resort facility for Australia?
> Many thanks in advance.




Sorry to alarm you, but it's best to be forewarned?? FYI, I have my money with CBA.



> *Banks to bail out fallen rivals*                                             David Uren and Richard Gluyas
> | _June 03, 2008_
> 
> *THE nation's big banks could be forced to bail out the customers of a failed rival - and will be prevented from merging with each other - under the Government's new plan for the sector.*
> 
> Wayne Swan said yesterday he would maintain the Four Pillars policy, which prevents the nation's four biggest banks from merging but will not stop the planned $19 billion takeover of St George by Westpac.
> 
> The Treasurer also unveiled a scheme to protect the deposits of bank customers in the event their institution collapsed - bringing Australia in line with almost all developed countries.
> 
> Announcing the scheme, which will cover deposits of up to$20,000 in banks, building societies and credit unions, Mr Swan said customers would get their money back, paid by the government, within a week of their institution collapsing.
> 
> Depositors with larger amounts caught in a collapse would get their first $20,000 back, but would then have to wait for the institution to be liquidated or taken over before they got the rest.
> 
> If there was a shortfall, other banks could be charged a levy to make up the difference.
> 
> The Treasurer said 80 per cent of Australian bank customers had deposits smaller than $20,000, though he noted that the smaller number of customers with larger deposits made up more than half the bank deposit base. The policy is designed to avert the sort of bank run that threatened to send the British building society, Northern Rock, to the wall last year.



http://www.theaustralian.news.com.au/story/0,25197,23801057-5013946,00.html

DYOR to be sure.


----------



## Kauri

The Securities and Exchange Commission told banks that, despite fair-value accounting regulations, they did not have to use fire-sale prices to value bad assets . The Dow closed closed down 7% on Monday, after the House of Representatives surprise rejection of the Bush administration"s $700bn TARP. 
_The US Senate will voted on the TARP later today, *after accepting tax breaks and a higher limit for insured bank deposits* in a bid to win House of Representatives approvals by the end of the week_ . 
    The UK Treasury is working on a proposal that _could insure a total of GBP 1.9bn trillion in deposits in UK banks and building societies_, according to officials . UK PM Gordon Brown, meanwhile, is "personally fighting" to save the GBP 12bn proposed rescue of HBOS by Lloyds TSB. HBOS"s current market value is GBP 6.45bn, 35% below the value of the Lloyds TSB bid. 



Cheers
............Kauri


----------



## chops_a_must

Kauri said:


> The Securities and Exchange Commission told banks that, despite fair-value accounting regulations, they did not have to use fire-sale prices to value bad assets .



Lol.

I'm twice the Enron that you'll ever be.


----------



## kransky

Uncle Festivus said:


> Sorry to alarm you, but it's best to be forewarned?? FYI, I have my money with CBA.
> DYOR to be sure.




WTF, i thought the first 100k of all bank deposits was insured by the govt. This 20k talk is news to me!

and bad news. i have all mine in the CBA too

might be worth spreading some in 20k lots to anz and nab

bloody hell US and UK public are protected to 100k!


----------



## Aussiejeff

[size=+2]** NEWS FLASH **[/size]

Media experts report DOW Futures *down 70 points* so far tonight on speculation by speculators that speculation by speculators that Congress might or might not pass "something" on Thursday is mere speculation by speculators....



[size=-4]I'd make a great headline boy in a glam paper, huh?[/size]


----------



## MrBurns

I'm almost sick of this now, what I was expecting for the last 3 years has happened now it will be just share market fluctualtions, one day up one day down.

I'm busting to get into the market but I'm not a day trader so i'll wait another month to see what happens, when the market settles I'll go in , it may be a lot longer than a month though.

I have to comment on the bulldust that's fed to the public via the media. it's absolute crap with no depth whatsoever, I guess that means that those on this forum have the inside edge as it seems the average Aussie is almost clueless.


----------



## nioka

MrBurns said:


> I guess that means that those on this forum have the inside edge as it seems the average Aussie is almost clueless.




Some of the "call themselves experts" on this forum are very, very average. Don't underestimate the average aussie.


----------



## Nick Radge

MrBurns,
In the 1970 - 1974 bear market it took the ASX 4-years to hit the bottom, some 64% from its highs. We've only been going 18-months or so but I don't think the depth of the decline did the damage back then, but the time it took. In the 1987 - 1993 bear market the ASX traded in a 30% range for 6-years. I personally think that's what we're seeing now. Somehow another month of patience may not make the grade. 

Nick


_This post may contain advice that has been prepared by Reef Capital Coaching ABN 24 092 309 978 (“RCC”) and is general advice and does not take account of your objectives, financial situation or needs. Before acting on this general advice you should therefore consider the appropriateness of the advice having regard to your situation. We recommend you obtain financial, legal and taxation advice before making any financial investment decision._


----------



## communique

kransky said:


> WTF, i thought the first 100k of all bank deposits was insured by the govt. This 20k talk is news to me!
> 
> and bad news. i have all mine in the CBA too
> 
> might be worth spreading some in 20k lots to anz and nab
> 
> bloody hell US and UK public are protected to 100k!




It has been reinforced daily by PM and Treasurer that our big 4 banks are strong with solid books and can whether the financial storm.  For the sake of not eating baked beans we all have to believe this and not panic on what is happening in a country with poor regulations, too many banks and suffering a major property crash.  I still can't believe they had interest rates of 1 and 2%

It is interesting to note that in the latest  US "bailout" package they have increased the deposit guarantee to $250,000 from $100,000 but in Australia it is only $20,000.   I suspect that ours would magically increase rapidly to instil stability in our banks if there was a hint of anything wrong with our banking system.  

Thanks Uncle for the article.


----------



## wayneL

nioka said:


> Some of the "call themselves experts" on this forum are very, very average. Don't underestimate the average aussie.




Nokia obviously "considers himself" an expert on experts.


----------



## MrBurns

Nick Radge said:


> MrBurns,
> In the 1970 - 1974 bear market it took the ASX 4-years to hit the bottom, some 64% from its highs. We've only been going 18-months or so but I don't think the depth of the decline did the damage back then, but the time it took. In the 1987 - 1993 bear market the ASX traded in a 30% range for 6-years. I personally think that's what we're seeing now. Somehow another month of patience may not make the grade.
> 
> Nick
> 
> SIZE][/I]




Appreciate the insight.
So leave cash in the bank I guess, this is getting boring, a little less boring than counting your capital losses.


----------



## gfresh

I am not even sure the $20k is a law yet, I think it's still pending? $20k is not much for most people even with a vague amount of cash, meaning the inconvenience of multiple accounts. 

Ruddy was asked tonight about it.. Was pretty vague (as usual ). He was going on about the usual "strength of our big 4", so why not the reassurance of a guarantee?

wiki: 







> According to IADI, as of June 2006, there are currently 118 countries with a deposit insurance system in operation, pending, planned or under serious study (i.e. 95 in operation, 11 pending, 12 planned or under serious study).




In reality, it would probably pan out like the US with their banks - other bank takes the deposits, or the other valuable divisions they want, leave the rest. After all, deposits are extra capital.


----------



## nioka

wayneL said:


> Nokia obviously "considers himself" an expert on experts.




Derinition of an expert;

       Ex ... Something that was

       Spurt.,.... A drip out of control.

No I don't go anywhere near being an expert, actually the oposite. The older I get the more things I find that I don't know. Something the young guns here have yet to learn.

 One thing I do know though is that if I don't agree with some of you then I become the moron because you can't possibly be wrong. The more I point out the ethics of living and investing, the more some get upset. I wonder why.


----------



## rub92me

nioka said:


> Some of the "call themselves experts" on this forum are very, very average. Don't underestimate the average aussie.



Q: Where does the average aussie get the majority of their data from about the health of the financial system?
A: Headlines and soundbites in the media.
Q: What is the merit/quality of 99% of these headlines and soundbites?
A: Absolute and utter cr@p.
Q: What is the most likely information output if the input is cr@p data?
A: Even the average aussie know the answer to that one.


----------



## MrBurns

> Ruddy was asked tonight about it.. Was pretty vague (as usual ). He was going on about the usual "strength of our big 4", so why not the reassurance of a guarantee?




I saw that ........Rudd is clueless.

The interviewer was running out of time but should have nailed him on that issue.


----------



## Trembling Hand

nioka said:


> The more I point out the ethics of living and investing, the more some get upset. I wonder why.



 Not sure if I'm getting upset but you are yet to show how your "investing" is any different to my trading.


----------



## Whiskers

nioka said:


> Derinition of an expert;
> 
> Ex ... Something that was
> 
> Spurt.,.... A drip out of control.
> 
> No I don't go anywhere near being an expert, actually the oposite. The older I get the more things I find that I don't know. Something the young guns here have yet to learn.
> 
> One thing I do know though is that if I don't agree with some of you then I become the moron because you can't possibly be wrong. The more I point out the ethics of living and investing, the more some get upset. I wonder why.




Hey, TH... re XAO post, that's why I'll never claim to be an ex spurt. 

I agree nioka. I may not be as 'matured' as yourself, but these young upstarts brimmin with testosterone sure are bludy cocksure of themselves. 

I think there's an old sayin about that somewhere too.


----------



## dhukka

bas said:


> I actually think this would be good. Its a bit hard to mark to market when there is no liquid market and every asset parcel is slightly different.
> 
> Wasn't it the change in policy late last year that caused most of this ****?




Oh Jesus, here we go again. First it was the short sellers and now it's the accounting rules. Funny how the accounting rules were working fine when the banks were making money. 

For the record banks do not have to mark all their assets to market. There are essentially 3 buckets called level 1, 2 and 3. Level 3 is mark to fantasy and companies like Citigroup have tens of billions in level 3 assets. 

Do you think if they suspend mark to market rules that will create more confidence? Will banks be more willing to lend to one another knowing that their counterparty has dodgy overvalued assets on their balance sheet? We hare so much about the need for more transparency, this is the complete opposite of transparency, it's obfuscation. 

Be careful what you wish for. One of the reasons that Japan endured the 'lost decade' was because they did not force their banks to own up to the losses on their balance sheets. That helped create a reluctance to lend and hence Japanese banks earned the name 'zombie banks'.

Some great quotes from Calculated Risk:



> "Suspending mark-to-market accounting, in essence, suspends reality."
> Beth Brooke, global vice chair at Ernst & Young LLP, WSJ, Sept 30, 2008
> 
> "Blaming fair-value accounting for the credit crisis is a lot like going to a doctor for a diagnosis and then blaming him for telling you that you are sick."
> analyst Dane Mott, JPMorgan Chase & Co.,
> 
> "Suspending the mark-to-market prices is the most irresponsible thing to do. Accounting does not make corporate earnings or balance sheets more volatile. Accounting just increases the transparency of volatility in earnings."
> Diane Garnick, Invesco Ltd.,


----------



## Macquack

dhukka said:


> Oh Jesus, here we go again. First it was the short sellers and now it's the *accounting rules*. Funny how the accounting rules were working fine when the banks were making money.




Notwithstanding its shortcoming's, I have always been a fan of *Historical Cost Accounting*. At least you knew how much was actually paid for an asset at a point in time.


----------



## Julia

MrBurns said:


> I saw that ........Rudd is clueless.
> 
> The interviewer was running out of time but should have nailed him on that issue.



I've posted about this interview on the "Rudd - I'm pissed off" thread.
I think she couldn't have gone any further without being downright rude.
The viewers of the 7.30 Report would not have failed to realise that Rudd was dodging the issue.  Silly of him, really.


----------



## chops_a_must

nioka said:


> No I don't go anywhere near being an expert, actually the oposite. The older I get the more things I find that I don't know. Something the young guns here have yet to learn.
> 
> One thing I do know though is that if I don't agree with some of you then I become the moron because you can't possibly be wrong. The more I point out the ethics of living and investing, the more some get upset. I wonder why.



You realise you don't know something about something, yet are prepared to make a judgements about said somethings? Why is that? Wisdom is knowing when you don't know something, and it's something you haven't grasped. I may be as opinionated as all hell, but there are a lot of things I don't know, and I make no calls about them unless it is to ask a question.

Some of us here (like myself) do make calls on ethics in investing and trading. The difference being we know the inherent problems with such a standpoint. Some would argue that trading like you are doing here, like basically everything else anyone does here, is unethical to begin with. Ethical dealings in the market are a rather large paradox...


----------



## rhen

I've read somewhere here Schiff referred to as Dr Doom. This is some Freudian defence mechanism? I feel perhaps a Dr. "Right up til now and perchance the future" is much more appropriate. Don't get me wrong...he'll be making squillions right now from his book and investment service...he's there for the money too.
But, watch this clip and make up your own mind who has the voice and manner of reason.

http://www.youtube.com/watch?v=knJudP7QgyY


----------



## rhen

Here's a real "DR Doom".
Have fun!?

http://www.youtube.com/watch?v=XtXtuoRPpGY


----------



## white_goodman

bailout bill passed


----------



## wayneL

white_goodman said:


> bailout bill passed




Only the senate, still has to go back to the reps.


----------



## white_goodman

wayneL said:


> Only the senate, still has to go back to the reps.




oh i see, when does this happen?


----------



## rhen

This arrived this morning. I apologise for its length. 
Ooops...
Sorry...it exceeds ASF length constraints.

Summary of the email from van tharp...impossible, but here goes:
cash is king until it's worthless
the king is dead (maybe soon?, but when/if it is)
long live the king...
gold

this, of course, is written for the US market.
(Oh, and I get the impression he doesn't like the bailout)

one man's opinion...please don't shoot this messenger!

 A sample from the email:

_What you should do?
•	Obama has suggesting raising the amount of FDIC insurance. You need to make sure that you have no more cash in banks than the amount of insurance you have. To date, as far as I know, bank failures have not cost any depositors money. The FDIC has not had to pay out any money to depositors, but that’s why banks disappear overnight as they absorb into another bank. However, the change in rules that allows banks to use depositors’ money to secure their investments could mean that some bond holders could have first priority over your money.
•	Money market funds, although not insured, are generally safe. There are a few instances where because of runs, they could only pay depositors 97 cents on the dollar. But that’s not a huge loss.
•	Watch the stock price of your bank. Wachovia’s price looked awful. However, it was taken over by Citigroup whose price looked much worse until recently.
•	If you are a value player, be very careful. Classic contrarian, David Dreman, had a huge play in Freddie Mac and Fannie Mae and wiped out about 30% of his fund when the Fed took over 79% of them. And how many people had stock in Wachovia and Washington Mutual and watched their values disappear overnight? 
•	Develop a game plan and a worst-case contingency plan to help you get through this safely, just as we teach in our Blueprint workshop. I cannot stress the importance of having a worst-case contingency plan under these conditions. The worst thing you can do is listen to CNBC, CNN, or any other news channel for information about what to do. These people do not know and the “talking heads” are full of misinformation.
•	As I’ve been saying since I wrote Safe Strategies for Financial Freedom, we’re in a secular bear market. Phase II is now waking up from hibernation. This one could last a while. There will be many, many opportunities for those who survive it, but the word now is survival. And expect the entire bear to last at least another 10 years. Remember that we still haven’t seen the effect of the baby boomers getting well into retirement and needing to withdraw their retirement money from the stock market yet. 
•	Long-term, I would expect the government to default on many of its future contractual obligations. How can it honor over $100 trillion in unfunded future obligations? This is just my opinion, but do you really trust the government? Remember what I said earlier””the government can change the rules any time it wants.

Last month I said that we were experiencing a deflationary credit contraction. September has been disaster after disaster. Let’s hope that next month is much, much better. Until October’s update, this is Van Tharp. 


_


----------



## bas

dhukka said:


> Do you think if they suspend mark to market rules that will create more confidence? Will banks be more willing to lend to one another knowing that their counterparty has dodgy overvalued assets on their balance sheet? We hare so much about the need for more transparency, this is the complete opposite of transparency, it's obfuscation.




Banks aren't lending because they are worried their counterparty won't be there tomorrow. What is causing the counterparties to fail- writedowns eroding capital. If their capital is preserved, less chance of falling over and more chance of borrowing from other banks.

Its obviously a bit of a bandaid fix, but we are in a perfect storm at the moment- delaying the supposed inevitable might actually end up solving some of the problems longer term.

And i fully understand the views of others who think mark to market is the only true valuation- i'm just putting this out there a bit to promote a bit of discussion


----------



## Whiskers

white_goodman said:


> oh i see, when does this happen?




Seems like it may happen Friday, there... Saturday morn here.


----------



## Whiskers

bas said:


> Banks aren't lending because they are worried their counterparty won't be there tomorrow. What is causing the counterparties to fail- writedowns eroding capital. If their capital is preserved, less chance of falling over and more chance of borrowing from other banks.
> 
> Its obviously a bit of a bandaid fix, but we are in a perfect storm at the moment- delaying the supposed inevitable might actually end up solving some of the problems longer term.
> 
> And i fully understand the views of others who think mark to market is the only true valuation- i'm just putting this out there a bit to promote a bit of discussion




Yeah, I'm inclined to agree with you bas... at least to the extent that the US gov was always going to intervene if for no other reason than political expediency and to buy some time as you say to let things work out in a more orderly fashion. 

I don't see the logic of the 'idealistic' arguement that everything should be mark to market and left to it's own devices.

The notion of 'mark to market' in accounting and stock exchange listing requirements isn't a consistant standard across the world anyway.

It seems to me that until every country fully adopts the IASC standards and then equivilant exchange reporting rules, then the notion of mark to market is itself a variable concept in an international sense.


----------



## dhukka

bas said:


> Its obviously a bit of a bandaid fix, but we are in a perfect storm at the moment- delaying the supposed inevitable might actually end up solving some of the problems longer term.




The exact some reasoning that Japan used and looked what happened to them. A recent study of numerous banking crises presented in the October Liscio Report poited out a few crucial lessons from the past, chief among them:



> One crucial lesson stands out: speed matters. This is obvious to anyone who followed Japan's dithering in the 1990s; standing aside and hoping the problem goes away is not a good idea. Relatedly, "forbearance" --regulatory indulgence, such as permitting insolvent banks to continue in business-- does not work, as has been established in earlier research. As the authors say, "The typical result of forbearance is a deeper hole in the net worth of banks, crippling tax burdens to finance bank bailouts, and even more severe credit supply contraction and economic decline than would have occurred in the absence of forbearance." This suggests that suspending mark-to-market requirements is not a good idea.


----------



## kransky

If you dont mark to market then your promoting the housing bubble
and by doing that your condoning the current prices
currently joe six pack spends his whole life repaying interest to the banks to pay off his home loan. I for one would prefer if house prices were halved and we all spent less of our lives working our butts off to pay interest to banks to make their shareholders wealthier

why not let house prices fall, the weak (greedy and/or stupid) banks fail and create new banks with private cash that IS out there... and then restart the economy

right now whole suburbs in the US are becoming ghost towns because no one is buying the houses because banks cant come to grips with the reality that prices are too high.. while this saga is prolonged the houses rot..

its like playing a loosing game of poker (and your opposition knows he has a better hand), you have a loosing hand but you keep trying to bluff your way through.. you have already thrown in your car and house.. now you want to throw your wife (taxpayer) into the pot too..


----------



## Bushman

dhukka said:


> The exact some reasoning that Japan used and looked what happened to them. A recent study of numerous banking crises presented in the October Liscio Report poited out a few crucial lessons from the past, chief among them:




Good post. Exactly what I was thinking about it all - the BOJ and the Japanese governement have embarked on this exact path before and the end result was economic ruin.

As for mark-to-market, it has some flaws, the most obvious being how do you value to market when the market is illiquid and there is no transactional evidence. CDO's, property, infrastructure assets and the like all fall into this category. But is is there to protect investors from 'director's valuations' of illiquid asset classes (CDO's, property etc). 

It is not causing any of this instability - the future cashflows associated with the underlying assets combined with highly leveraged structures they are held in are doing it all by themselves. Boils down to dodgy assets and miniscule equity bases - doing what investment banks do and that is doing the dodge on the regulators. And know they know that the regulator will bail them out if it all goes wrong. 

Let them fall I say. The sooner the unwinding is completed, the sooner the end of the bear market.


----------



## white_goodman

they need to pinpoint the weak banks, ones that are gonna cause uncertainty and arent solvent, eliminate them thrtough mergers and acquisitions and give the rest a chance to survive and bring some confidence back in the market. Gotta take out the poison so banks dont fear lending to each other


----------



## deadset

RE : Schiff
The only problem I have with Gold is that at any moment a heap of rushing water could uncover a huge deposit that dwarfs any previous find.

RE : Banks in Japan
Something weird going on there.  I got stuck in Osaka once with $5 on a Friday night, they have no ATMs at night, but they've had iPhone equivalents all along, they could have warned me when I paid cash for dinner for the whole troop after working my butt off for a week averting another disaster, which they promptly unfixed then presented the same problem to the other vendor.  Then you hear about investors with 0% interest, then you hear about people there having to go thru Yakuza to get small loans.  Some things you just don't want to know about regarding Japan and Asian business in general.

RE : Market correction.
Ok, I've sold off, I don't have to believe in Santa anymore.

RE : House prices.
I think they've been way overpriced for a long time.  It's almost as much a financial risk as getting married to a bimbo you can't afford if you ask me.


----------



## dhukka

white_goodman said:


> they need to pinpoint the weak banks, ones that are gonna cause uncertainty and arent solvent, eliminate them thrtough mergers and acquisitions and give the rest a chance to survive and bring some confidence back in the market. Gotta take out the poison so banks dont fear lending to each other




That's exactly right and one of the things that is wrong with the Paulson plan. Under the Paulson plan you don't know who is going to be solvent because you don't know what price they are going to get for the assets. If they just recapitalized the banks and made a clear distinction between the ones they are going to back and the ones that they will let go under then it would remove a degree of uncertainty that currently exists.


----------



## IFocus

deadset said:


> RE : Schiff
> The only problem I have with Gold is that at any moment a heap of rushing water could uncover a huge deposit that dwarfs any previous find.




Deadset I don't get his meaning for this?


----------



## Kauri

when I pull the chain.... there is a rush of wasser???    

cheers
........................................................kauri


----------



## acouch

of interest perhaps 
ac

http://www.bloomberg.com/apps/news?pid=20601103&sid=a9FDRUP3akdY&refer=news


----------



## bean

For interest - those that know Dow Theory
Mention on a forum
Both the Industrials and the Transports closed at their lows for the year today. In particular, the Transports closed below their lows from January, which had not been breached since then.

So, the simultaneous lows confirm each other, and Dow Theory would say that we are headed down to the 2002 lows. Perhaps quickly. I am sure Richard Russell's column today will feature this prominently.

*2002 Low 7215*

For chartists '3 peaks ' or 'doomed house pattern' does that appear on the Dow?

Whatever it doesn't look good...surprise rate cut may only produce a brief short covering rally.
Will we see a run on the Banks in the US this week or next?


----------



## startrader

Some of you may find these thoughts from Steve Keen (Associate Professor in Economics and Finance, University of Western Sydney) interesting:

"... the root problem is not the banks’ holdings of toxic bonds, but the public’s holdings of unnecessary debt. A vast proportion of the US$41 trillion debt that America’s private sector has (almost 3 times the size of the US economy) was used to finance gamblnig on shares and house prices in the biggest speculative bubble in global history. That debt, ultimately, is what is driving the US economy into Depression.

Unless that is attacked, then a Depression will follow, whether or not Wall Street is bailed out.

Tellingly, Paulson’s original plan made no provision to reduce mortgage debt. So Paulson wasn’t being a Hero for Main Street””though I expect he believed he was. He was instead attempting to save Wall Street from itself, as Greenspan did so many times when he was Fed Chairman””but each “save” only worked because it revived the frenzy of irresponsible lending that has defined Wall Street and American banking in general.

This time, nothing can save Wall Street. There is, after all, no-one to lend to below the Subprimes, apart from those who are already in gaol. But I have the feeling that some time in the future, many of Wall Street’s current lenders will indeed find themselves doing business behind bars.
....

Blind Freddy could have seen this coming–it took a special set of blinkers NOT to see that too much debt could be a problem, that subprime lending was a scam, and that the risks of default were drastically underestimated by the statistics used to concoct CDOs and the like.

That pair of blinkers was supplied by the dominant school of economic thought, Neoclassical Economics, which ingrains into its followers a belief that the economy is always in equilibrium–and coincidentally that “money doesn’t matter”, even though one of the most famous Neoclassicals, Milton Friedman, is known as a “Monetarist”.

Like most economic uses of quasi-English, that term is a misnomer. Milton’s key argument was that the rate of growth of the money supply–which he modelled entirely as “fiat” money, absent of any debt–had no long term impact on economic performance: all it could do was cause inflation.

Their model of money creation is simplistic, and clearly not in accord with the empirical data. It made them blase about the level of debt compared to income, and naive about the relationship between asset price inflation and debt.

The best indicator of this is the OECD preliminary Economic Outlook, published in May 2007, which contained the immortal wisdom “the current economic situation is in many ways better than what we have experienced in years. Our central forecast remains indeed quite benign”.

Three months later, the crisis began. Mainstream economists didn’t see it coming, not because it wasn’t obviously approaching, but because the theories they believed in made them turn a blind eye to virtually every indicator of any importance."


----------



## CanOz

And if they've seen the light recently then they haven't told the currency traders.

CanOz


----------



## Aussiejeff

bean said:


> For interest - those that know Dow Theory
> Mention on a forum
> Both the Industrials and the Transports closed at their lows for the year today. In particular, the Transports closed below their lows from January, which had not been breached since then.
> 
> So, the simultaneous lows confirm each other, and Dow Theory would say that we are headed down to the 2002 lows. Perhaps quickly. I am sure Richard Russell's column today will feature this prominently.
> 
> *2002 Low 7215*
> 
> [size=+1]*For chartists '3 peaks ' or 'doomed house pattern' does that appear on the Dow?*[/size]
> 
> Whatever it doesn't look good...surprise rate cut may only produce a brief short covering rally.
> Will we see a run on the Banks in the US this week or next?




Do the last couple of "dead cat" bounces over this year to Fri 3 Sep 2008 count?


----------



## bean

DOW 2002 Low 7215

todays close breached the Dow trend line from the 2002 low. 

so an interesting time as a retest of that is on the cards...a failure....well no major support till pretty close to the 2002 low.


----------



## gfresh

A friendly rundown from Nouriel Roubini (Friday):

http://www.rgemonitor.com/roubini-m...rrest_the_risk_of_the_mother_of_all_bank_runs


----------



## davo8

bean said:


> DOW 2002 Low 7215
> 
> todays close breached the Dow trend line from the 2002 low.
> 
> so an interesting time as a retest of that is on the cards...a failure....well no major support till pretty close to the 2002 low.




What trend is that then? Do you have a chart?

Looks to me as if there is pretty solid support between 9700 & 10000, going back to 2004. I wouldn't expect it to fall through that without at least a bit of a struggle. Might even test resistance at around 11000 first, don't you think?


----------



## davo8

gfresh said:


> A friendly rundown from Nouriel Roubini (Friday):




I've been following Nouriel for a good long time now and I think he's got it mostly right. If anything, he was a bit optimistic given how things look now.

But Steve Keen knows why: a credit bubble this big just has to end in tears when it pops. And Hank's bail-out is about keeping some air in the bubble, which never seems to work when I try it.

The dismal month of October has only just started, and there is lots more bad news to come. The credit markets are frozen tight, foreclosures are headed past 1.5 million, unemployment (U6) is 11%, the crunch in Europe may bring down the Euro and Warren Buffet says he's never seen it so bad (which for an old guy like him means something!).

So, at the risk of repeating myself: this is NOT the bottom. Please remain seated until the end of the ride. This one could be a doozy!


----------



## CanOz

davo8 said:


> What trend is that then? Do you have a chart?
> 
> Looks to me as if there is pretty solid support between 9700 & 10000, going back to 2004. I wouldn't expect it to fall through that without at least a bit of a struggle. Might even test resistance at around 11000 first, don't you think?




fwiw


----------



## GreatPig

davo8 said:


> Warren Buffet says he's never seen it so bad



Although that didn't stop him putting $3bn into GE and $5bn into Goldman Sachs.

GP


----------



## mayk

GreatPig said:


> Although that didn't stop him putting $3bn into GE and $5bn into Goldman Sachs.
> 
> GP




I guess, it was charity for Wall Street


----------



## wayneL

Holy Crap!

This is the scariest article I've read yet: http://www.telegraph.co.uk/finance/...-hot-seat-as-Europe-falls-into-the-abyss.html

This is not on some gold ramping website or by a tin foil hat wearing nutter. This is Ambrose Evans-Pritchard on of the most sensible and consistently accurate economic journalists out there. (along with Jeff Randall and a couple of others) IN THE DAILY TELEGRAPH - a conservative broadsheet.

Over here people have been stocking up on baked bean and bottled water, the sports stores have sold out of baseball bats. On another thread I posted an article on a bookie running a book on the first city to riot.

There is talk of bank holidays (where the entire banking system closes down for a week or so) The *Tory* shadow Chancellor of the Exchequer is calling for the nationalisation of the whole banking industry... and the gu'mint is taking it seriously http://www.telegraph.co.uk/finance/...t-could-take-shares-in-high-street-banks.html

I don't know about you lot, but I'm assuming crash positions.


----------



## Pager

Time to get the brown trousers out 

On the other hand the press do have a habit of sensationalizing things, hopefully that's the case and governments around the world will pull there fingers out.


----------



## noirua

wayneL said:


> Holy Crap!
> 
> This is the scariest article I've read yet: http://www.telegraph.co.uk/finance/...-hot-seat-as-Europe-falls-into-the-abyss.html
> 
> This is not on some gold ramping website or by a tin foil hat wearing nutter. This is Ambrose Evans-Pritchard on of the most sensible and consistently accurate economic journalists out there. (along with Jeff Randall and a couple of others) IN THE DAILY TELEGRAPH - a conservative broadsheet.
> 
> Over here people have been stocking up on baked bean and bottled water, the sports stores have sold out of baseball bats. On another thread I posted an article on a bookie running a book on the first city to riot.
> 
> There is talk of bank holidays (where the entire banking system closes down for a week or so) The *Tory* shadow Chancellor of the Exchequer is calling for the nationalisation of the whole banking industry... and the gu'mint is taking it seriously http://www.telegraph.co.uk/finance/...t-could-take-shares-in-high-street-banks.html
> 
> I don't know about you lot, but I'm assuming crash positions.



I would think it early days for stacking up on food etc., in any European country. Seems doubtful that they sell baseball bats in the UK as they don't play baseball.
Problems somewhere down the line maybe but Brits have about AU$4.5 trillion saved.

Looks blue sky all the way with the occasional black cloud. Not bothered myself.


----------



## wayneL

noirua said:


> I would think it early days for stacking up on food etc., in any European country. Seems doubtful that they sell baseball bats in the UK as they don't play baseball.
> Problems somewhere down the line maybe but Brits have about AU$4.5 trillion saved.
> 
> Looks blue sky all the way with the occasional black cloud. Not bothered myself.



Regarding baseball bats - as per your habit, you're taking out of your @rse http://www.milletsports.co.uk/baseball/index.php?source=google_ppc_uk They even have an American football league here Mr know it all.

I am speaking of the sentiment. Whether it is warranted, only time will tell.

FWIW I don't have stocks of baked beans or bottled water myself, just a few obligatory krugs etc.

Regarding savings, the total savings figure you quoted, whether that is true or not, is not in cash for the vast majority. It is in pensions schemes and other insurance or fund based entities. On average the british will run out of cash in 17 days if his income stopped. 

That is the reality.


----------



## Pager

There would be a plentiful supply of cricket bats i would have thought 

But quite why anyone would want to start playing baseball during this crisis is a mystery to me


----------



## gav

Pager said:


> There would be a plentiful supply of cricket bats i would have thought




Ah yes, but the Poms dont know how to use those!


----------



## wayneL

Pager,

Cricket bats are too clumsy and heavy to be able to pull out of the back seat of the car in a hurry. :

+++​
FWIW, here is John Mauldin's latest newsletter with his views on the bail-out: http://www.frontlinethoughts.com/pdf/mwo100308.pdf


----------



## wayneL

gav said:


> Ah yes, but the Poms dont know how to use those!



Ooooh ouch!

LOL

Remind me not let something like that slip out when I'm down at the pub.


----------



## GreatPig

Especially not if there are any cricket bats lying around. 

GP


----------



## noirua

wayneL said:


> Regarding baseball bats - as per your habit, you're taking out of your @rse http://www.milletsports.co.uk/baseball/index.php?source=google_ppc_uk They even have an American football league here Mr know it all.
> 
> I am speaking of the sentiment. Whether it is warranted, only time will tell.
> 
> FWIW I don't have stocks of baked beans or bottled water myself, just a few obligatory krugs etc.
> 
> Regarding savings, the total savings figure you quoted, whether that is true or not, is not in cash for the vast majority. It is in pensions schemes and other insurance or fund based entities. On average the british will run out of cash in 17 days if his income stopped.
> 
> That is the reality.




Hi WayneL, I am living in the UK at the moment in a small village in Kent. Within 20Km there are 4 supermarkets, 2 Tescos, Asda and Sainsburys. I can assure you there are no food problems whatsoever.

I can't remember seeing a baseball bat in any store I've been in.

No doubt there is a Baseball League with a small following. I think the Americans may sponsor it to keep it alive.

The majority of Brits I know are retired or have retired early on pensions. Probably this is an affluent area so I doubt many care much about recessions. Probably different in the North of England, so they say. 

Good Luck in Cheltenham, too far North for me, or is it West, on these unreliable motorways.


----------



## gav

GreatPig said:


> Especially not if there are any cricket bats lying around.
> 
> GP




Na I reckon you'd be pretty safe, as long as you got out of the way by the third swing! :


----------



## wayneL

noirua said:


> Hi WayneL, I am living in the UK at the moment in a small village in Kent. Within 20Km there are 4 supermarkets, 2 Tescos, Asda and Sainsburys. I can assure you there are no food problems whatsoever.
> 
> I can't remember seeing a baseball bat in any store I've been in.
> 
> No doubt there is a Baseball League with a small following. I think the Americans may sponsor it to keep it alive.
> 
> The majority of Brits I know are retired or have retired early on pensions. Probably this is an affluent area so I doubt many care much about recessions. Probably different in the North of England, so they say.
> 
> Good Luck in Cheltenham, too far North for me on these unreliable motorways.




Firstly, though Cheltenham is north of Kent, is not "north" it's "west". Secondly Cheltenham is also an affluent area, the most complete Regency town in England and home the the most prestigious girls school in the country. It's the Cotwolds here, plenty of old money as well. Princess Anne lives just down the road and Highgrove not much further away. FYI http://www.visitcheltenham.com/ or http://www.cheltenham4u.co.uk/

But you (perhaps purposely) misconstrued the whole meaning of my post. Now I know you like to ignore facts, avoid questions and leap to bullish conclusions in the face of all evidence to the contrary, but I invite you to read the post again, carefully this time, to see how you have drawn the wrong conclusions.

PS Haven't been to Kent yet, but believe it's a nice part of the country.


----------



## Macquack

wayneL said:


> FWIW, here is John Mauldin's latest newsletter with his views on the bail-out: http://www.frontlinethoughts.com/pdf/mwo100308.pdf




Good article, except for the first page of self-promotion and advertising.


----------



## Pommiegranite

wayneL said:


> Firstly, though Cheltenham is north of Kent, is not "north" it's "west". Secondly Cheltenham is also an affluent area, the most complete Regency town in England and home the the most prestigious girls school in the country. It's the Cotwolds here, plenty of old money as well. Princess Anne lives just down the road and Highgrove not much further away. FYI http://www.visitcheltenham.com/ or http://www.cheltenham4u.co.uk/
> 
> But you (perhaps purposely) misconstrued the whole meaning of my post. Now I know you like to ignore facts, avoid questions and leap to bullish conclusions in the face of all evidence to the contrary, but I invite you to read the post again, carefully this time, to see how you have drawn the wrong conclusions.
> 
> PS Haven't been to Kent yet, but believe it's a nice part of the country.





Cheltenham is a part of Gloucester, and Gloucester's most famous resident was:

http://en.wikipedia.org/wiki/Fred_West


----------



## noirua

wayneL said:


> Firstly, though Cheltenham is north of Kent, is not "north" it's "west". Secondly Cheltenham is also an affluent area, the most complete Regency town in England and home the the most prestigious girls school in the country. It's the Cotwolds here, plenty of old money as well. Princess Anne lives just down the road and Highgrove not much further away. FYI http://www.visitcheltenham.com/ or http://www.cheltenham4u.co.uk/
> 
> But you (perhaps purposely) misconstrued the whole meaning of my post. Now I know you like to ignore facts, avoid questions and leap to bullish conclusions in the face of all evidence to the contrary, but I invite you to read the post again, carefully this time, to see how you have drawn the wrong conclusions.
> 
> PS Haven't been to Kent yet, but believe it's a nice part of the country.



Hi again, I was taken to a Wildfowl Refuge at Slimbridge in Gloucestershire, seem to remember the M5 motorway being mentioned.  Also stayed at a village called Boughton on the Water, seem to remember it was in the cotswolds. 
Most Aussies don't stay in Gloucestershire, out in the sticks someone told me. Posh though, you must be affluent yourself. Have you seen the Princess Anne yet?


----------



## nunthewiser

Wayne is princess anne ?


----------



## wayneL

noirua said:


> Hi again, I was taken to a Wildfowl Refuge at Slimbridge in Gloucestershire, seem to remember the M5 motorway being mentioned.  Also stayed at a village called Boughton on the Water, seem to remember it was in the cotswolds.
> Most Aussies don't stay in Gloucestershire, out in the sticks someone told me. Posh though, you must be affluent yourself. Have you seen the Princess Anne yet?



I don't feel very affluent compared to some around here, but scratch by OK.

Out in the sticks - well if you like London, it will feel like the sticks here and there aren't many Aussies about (that's good). But if you like the country life, it's perfect. On the other hand, two hours has me parked at XXXXXXX XXXXX (top secret free parking ) and twenty minutes on the train to the city. Not that far. Only an hour to Birmingham or 45 minutes to Bristol too.

Pommiegranite,

"Cheltenham is a part of Gloucester" -  there is a no man's land with barbed wire and land mines separating Gloucester and Cheltenham. Two different worlds. (Gloucester is the pits)


----------



## noirua

wayneL said:


> I don't feel very affluent compared to some around here, but scratch by OK.
> 
> Out in the sticks - well if you like London, it will feel like the sticks here and there aren't many Aussies about (that's good). But if you like the country life, it's perfect. On the other hand, two hours has me parked at XXXXXXX XXXXX (top secret free parking ) and twenty minutes on the train to the city. Not that far. Only an hour to Birmingham or 45 minutes to Bristol too.
> 
> Pommiegranite,
> 
> "Cheltenham is a part of Gloucester" -  there is a no man's land with barbed wire and land mines separating Gloucester and Cheltenham. Two different worlds. (Gloucester is the pits)



I should have realized that, as I remember seeing a Bank called "The Cheltenham & Gloucester".
My local railway station is on a slow line so it's fortunate I'm rarely going up to London. Went to London Zoo once but felt sorry for the animals and came out after 1 hour. They do have a free Aussie newspaper in London at news stands around Oxford Street and Tottenham Court Road. 

I do try to remain cheerful in bear markets as I know a bull will arrive eventually and butt it into the long grass. Some of your posts might drive people to suicide.


----------



## Aussiejeff

WOT?? No-one here has a word for the poor Geordie's??

On behalf of my BRILLIANT Scottish ancestors, I wish to inform you that they will be wielding the dreaded "Mashie Niblick" during the coming UK Dark Ages - more than a match for tha weeek 'n flamsy beesball baat. 

Bewarrrre a man in a ver-r-r-r-r-y shorrt kilt bearring a packed sporrrrrron....


----------



## wayneL

Aussiejeff said:


> WOT?? No-one here has a word for the poor Geordie's??
> 
> On behalf of my BRILLIANT Scottish ancestors, I wish to inform you that they will be wielding the dreaded "Mashie Niblick" during the coming UK Dark Ages - more than a match for tha weeek 'n flamsy beesball baat.
> 
> Bewarrrre a man in a ver-r-r-r-r-y shorrt kilt bearring a packed sporrrrrron....



As it happens, I'm Geordie blood. Folks are from North Shields. 

We kicked off this whole schmozzle with Northern cRock.


----------



## Aussiejeff

wayneL said:


> As it happens, I'm Geordie blood. Folks are from North Shields.
> 
> We kicked off this whole schmozzle with Northern cRock.




Not to worry, me Geordie mate - looks like the BananaBucks schmozzle will stop here....

*China's Ping An Insurance Co will record a $US2.3 billion ($A3 billion) loss on its stake in troubled European bank Fortis NV, in the biggest blow yet to a Chinese institution from the global credit crisis.*

Full article - http://compareshares.com.au/show_news.php?id=S-520231

So much for China saving us....

The Tsunami is just beginning metinks.


----------



## chops_a_must

wayneL said:


> The *Tory* shadow Chancellor of the Exchequer is calling for the nationalisation of the whole banking industry... and the gu'mint is taking it seriously http://www.telegraph.co.uk/finance/...t-could-take-shares-in-high-street-banks.html
> 
> I don't know about you lot, but I'm assuming crash positions.



I was in the High Court the other day, and the Commonwealth QC trotted out parts of the bank nationalisation act.

Didn't seem to have anything to do with the case, but seems to be on a lot of people's minds for some strange reason.


----------



## Green08

Watching CNBC Dow Fut nearly - 300.  Their Joe just keeps shaking his head 9000  area coming.


----------



## chops_a_must

Just got this e-mail, sounds pretty serious:



> Crisis hits Japan!
> 
> 
> 
> Following the problems in the sub-prime lending market in America and the run on HBOS in the UK , uncertainty has now hit Japan .
> 
> 
> 
> In the last 7 hours Origami Bank has folded, Sumo Bank has gone belly up and Bonsai Bank announced plans to cut some of its branches. Yesterday, it was announced that Karaoke Bank is up for sale and will likely go for a song, while today shares in Kamikaze Bank were suspended after they nose-dived.
> 
> 
> 
> Samurai Bank is soldiering on following sharp cutbacks, Ninja Bank is reported to have taken a hit, but they remain in the black. Furthermore, 500 staff at Karate Bank got the chop and analysts report that there is something fishy going on at Sushi Bank where it is feared that staff may get a raw deal.


----------



## nunthewiser

chops_a_must said:


> Just got this e-mail, sounds pretty serious:




LOL ........... sheet me i nearly ran for the door with my swag to camp on bendigo banks front porch till they opened !!


----------



## Green08

CNBC Sqwark Box

The US has $600 Billion in Europe which is frozen in assets and they can't get it.  Alot of it is pension funds.

Now they are saying though house prices dropped 20% in the US they believe they have another 16% to drop over 18 months.  The Fed's  $700B won't be enough.

Charlie Gasporino and Steve Listmen (think that’s how you spell it) have alot of insight.  I'm abit addicted to this every night with Joe, Carl and Becky they have fascinating guests from everywhere. Will argue out right I remember Rick Santelli and a guy from another floor just screaming.  May not be conducive but they are trying to get the information out.


----------



## chops_a_must

That bell weather GE getting absolutely crushed.

Took a position on the open.

Ugly.


----------



## skyQuake

and there goes dow 10k!


----------



## chops_a_must

skyQuake said:


> and there goes dow 10k!




Without even a whimper.

I keep hearing this large cracking noise everytime I look at the market...


----------



## brty

And there goes 9900,

Whoops, 9840

Watch out below.

brty


----------



## dhukka

Any chance they hit the *10%* circuit breaker today?


----------



## mayk

Sure the night (err Day) is still young. Every time I click it goes down 20 points. Seems like sky is falling!


----------



## chops_a_must

dhukka said:


> Any chance they hit the *10%* circuit breaker today?



I'll bet a coke on it not happening.

That's how confident I am...


----------



## brty

Dhukka


> Any chance they hit the 10% circuit breaker today?




Probably a very good chance, after all, it's not like there will be a short covering rally.


brty


----------



## dhukka

brty said:


> Dhukka
> 
> 
> Probably a very good chance, after all, it's not like there will be a short covering rally.
> 
> 
> brty




Haha, yeah where are those terrible short sellers to save the day? Sure is a lot of egg on a lot of faces right now.


----------



## chops_a_must

dhukka said:


> Haha, yeah where are those terrible short sellers to save the day? Sure is a lot of egg on a lot of faces right now.



You are a criminal dhukka.


----------



## chops_a_must

Geez... and didn't the markets just love the latest miracle cure? 

Faded extremely hard...


----------



## dhukka

Bit vague though wasn't it. The Fed is going to buy commercial paper. How much exactly? The commercial paper market is about *$1.6* trillion in size, is the Fed gonna stand behind all that?


----------



## chops_a_must

dhukka said:


> Bit vague though wasn't it. The Fed is going to buy commercial paper. How much exactly? The commercial paper market is about *$1.6* trillion in size, is the Fed gonna stand behind all that?



Yeah, I really don't get it TBH.

Hurry up and declare communism already! It'd be cheaper this way.


----------



## Aussiejeff

chops_a_must said:


> Yeah, I really don't get it TBH.
> 
> Hurry up and declare communism already! It'd be cheaper this way.




Actually, I believe there would have to be a genuine People's Revolution first (including mandatory guillotining for the existing Financial Market Royalty, with public viewing stalls ala the French Revolution) to achieve a satisfactory transformation into a "fairer" Communist State.

 :behead: :behead: :behead:


----------



## Bushman

Wow - the US consumer has rediscovered the joys of the piggy bank.

*WASHINGTON (MarketWatch) *-- U.S. families paid off consumer debts at the fastest pace in more than 10 years in August, a sign that consumers are rushing to pare back their spending and save more money as the economy slips deeper into recession.
*It was the first month since January 1998 that consumers had paid off more debt than they took on. *
Borrowing to buy an automobile declined sharply. Consumers also charged less on their credit cards than they paid off. 

The immediate effect on corporate America - well have a look at BoA: 
"While showing more realism with plans to raise $10 billion of new common and cut the dividend in half, Bank of America suffers as the largest U.S. consumer bank at a time of greater consumer weakness," Deutsche Bank analyst Mike Mayo said on Tuesday." 

This is the saviour of Merril's. Ouch - stage III of the credit crunch? Lets hope not as BoA would really be a wipeout. Could the Fed even bail them out? 

For the moment they are (finally) conserving cash by slashing their dividends in half and trying to raise $10bUS on the equity markets. Well d'uh - cashflow 101 is being enacted. 

Share price down +20% overnight.


----------



## Edwood

Edwood said:


> hey chaps - 3 peaks domed house.  looks a bit like the DOW hey.  7,500 anyone? (not tomorrow btw )
> 
> 
> 
> 
> 
> 
> 
> Dow at close last night





Dow futs down to 9295 just now, not too far to 7,500 now....


----------



## solomon

I must say Edwood that the charts do look remarkably similar.


----------



## mayk

Is  FED acting as a bank now?

http://online.wsj.com/article/SB122339483324611667.html?mod=special_page_campaign2008_mostpop


> The Federal Reserve said it will bypass ailing banks and lend directly to American corporations for the first time since the Great Depression, and it hinted strongly at further interest-rate cuts -- a cocktail of unconventional and conventional remedies for an economy whose prognosis is deteriorating rapidly.
> 
> The historic and potentially risky move of lending to nonfinancial corporations, the latest in a string of extraordinary steps taken by the Fed over the past month, carries the government deeper into the role of propping up private markets.


----------



## CanOz

mayk said:


> Is  FED acting as a bank now?
> 
> http://online.wsj.com/article/SB122339483324611667.html?mod=special_page_campaign2008_mostpop




You know, depending on the Corp, they may be less risky than the banks!

Cheers,


CanOz


----------



## MS+Tradesim

Given the crazy volatility lately these probably mean nothing but any FTSE or DJIA futs traders care to comment?


----------



## MS+Tradesim

Can this be right? Or data error? 340 odd pts??????


----------



## chops_a_must

Correct.

YM at 9640 on my screen.


----------



## Trembling Hand

LOL

rate cuts everywhere!!!!!!!!!


----------



## chops_a_must

Trembling Hand said:


> LOL
> 
> rate cuts everywhere!!!!!!!!!




At the moment I keep getting that "dig up stupid" simpsons scene in my mind.

Seems more than applicable to the current situation.


----------



## gav

where do u guys get your live US data from?


----------



## Trembling Hand

From our brokers. IB.

Cheapest way is through a cfd provider


----------



## gav

Oh OK, couldnt find anywhere on Commsec that has it, not even slightly delayed?  Ive just been watching from CNN (although I know thats not live).

Did it really just drop from 190pts up to 60pts up in the minutes?


----------



## Kauri

the co-ordinated rate cut,.... _totally unexpected as it was_...., will encourage some back into the markets and carries.. butt, as the root of most of the mayhem is the freezing of credit, and I don't see this cut as doing enuff to get Banks lending to each other agin, I already hear a faint clamouring in the distance as the punters at the bar start calling for the next shout... and Uncle Ben and his mates have deep pockets full of taxpayer funded credit cards....

Cheers
..........Kauri


----------



## solomon

This is sadly humourous - the FED's reasons for cutting rates (from www.marketwatch.com)

"Moreover, the intensification of financial market turmoil is likely to exert additional *restraint on spending, partly by further reducing the ability of households and businesses to obtain credit."*

Leaving aside the fact that some business models genuinely make a healthy use of credit, the FED's reasoning on the household's seems crazy. People's spending is going to be restrained because they can't access money that they don't have and that is a bad thing! Credit got us all into this mess, but it sure isn't going to get us out of it, and promoting it right now seems to be like giving booze to an alcoholic.

For me, this statement from the FED saying it is trying to pump air into the credit bubble which has already burst has me in a panic. I don't know whether to laugh or cry. This whole thing is probably going to get much worse.


----------



## kransky

yes.. imo the more they put this off the harder the fall will be..

seems like all the apples are going into the same basket which is already mostly full of bad apples.. end result is one sh!ty basket.. lol

you know what i mean... ?


----------



## chops_a_must

The problem as I see it is this:

They are punishing savers at the time they are most needed to pay down debt, de-leverage and provide a base for the next cycle.

So what is going to happen when we have trawled the bottom for a length of time and we are needing re-stimulation? There is nothing, there can be nothing.

In the selfish act of attempting to bail out everything, only slowing the inevitable decline, that is all, they are reducing potential benefits in the future.


----------



## chops_a_must

And hardly surprising, the futures go into reverse. Lol.


----------



## mayk

What a joke, DOW is like a yoyo tonight. I don't get why US FED is so bent on pleasing and cushioning the stock market. I think the sooner they stop interfering the sooner things might get better. They have a new thing to announce every day. 

Now everyone has forgotten about the bailout altogether.


----------



## Awesomandy

mayk said:


> What a joke, DOW is like a yoyo tonight.




That's to be expected. It's completely fueled by emotion at the moment. Tonight has been a little bit like this... OMG... rate cuts everywhere.. Buy! Buy! Buy!... oh, wait... may be those rate cuts won't really fix the problem... hmm... Sell!!!


----------



## Kauri

S+P..from where I sit... gazing out to the neighbours... the bottom is in sight... and..ooops... damme... she caught me looking..   

 Cheers
............Kauri


----------



## Kauri

the Fed funds futures market gives 94% odds of another 25 bps cut at the October 28-29 FOMC meeting. .. ..  and the UK seems to think thier darling will pay out another 50 in a week or two... and the

cheers
..........kauri


----------



## chops_a_must

VIX popping again.

GM down about 6% within a minute or so...


----------



## Kauri

*The NY Times* is reporting that the US Treasury is considering taking ownership stakes in many US banks to try to restore confidence, according to government officials. The article states that the lack of success in unlocking frozen credit markets is forcing Treasury too look at that option and 700 BLN USD bailout bill gives them the authority to inject cash directly into banks that request it. The Treasury plan, still preliminary, resembles one announced on Wednesday in Britain. The article goes on to say: "The American recapitalization plan, officials say, has emerged as one of the most favored new options being discussed in Washington and on Wall Street. The appeal is that it would directly address the worries that banks have about lending to one another and to other customers."

Chweers
.............Kauri


----------



## Aussiejeff

Kauri said:


> *The NY Times* is reporting that the US Treasury is considering taking ownership stakes in many US banks to try to restore confidence, according to government officials. The article states that the lack of success in unlocking frozen credit markets is forcing Treasury too look at that option and 700 BLN USD bailout bill gives them the authority to inject cash directly into banks that request it. The Treasury plan, still preliminary, resembles one announced on Wednesday in Britain. The article goes on to say: "The American recapitalization plan, officials say, has emerged as one of the most favored new options being discussed in Washington and on Wall Street. The appeal is that it would directly address the worries that banks have about lending to one another and to other customers."
> 
> Chweers
> .............Kauri




Hmmm. If the US Treasury took ownership of most of the major banks and BOOTED all the top execs off to a deserted tropical island with a miniscule Golden Parachute each and replaced those Bozos with their own el-cheepo Guvmint salaried Bozos, how much would they save the economy? Have to be in the Billions?

Wot a great idea! Go Fed , GO!!


----------



## sam76

Happy anniversary all.


----------



## GreatPig

Iceland Closes Stock Exchange.



> Trading on the Iceland stock exchange has been suspended until Monday as hundreds of millions of pounds invested by British councils is at risk in the country's crisis.



Bloody whinging Poms.

GP


----------



## chops_a_must

From my noob analysis of such things, it looks like both Ford and GM are being priced in for bankruptcy.

I think we all knew it was going to happen sometime, but perhaps not this quickly?


----------



## noirua

GreatPig said:


> Iceland Closes Stock Exchange.
> 
> Bloody whinging Poms.
> 
> GP



Latest figure is AU$2.5 billion with majority of councils having not yet declared. 
There are a lot of companies that are thought to have Aussie connections who put their money into Iceland's banks. Guess we'll hear late as usual.


----------



## Kauri

chops_a_must said:


> From my noob analysis of such things, it looks like both Ford and GM are being priced in for bankruptcy.
> 
> I think we all knew it was going to happen sometime, but perhaps not this quickly?





Wholesale sales fell 1.0% in August, *mostly the result of weak demand for 
autos and petroleum products*.  The latest sales decline is the biggest one-month drop in 19 months.  July's change, originally reported to be -0.3%, was revised lower to -0.8%.  The data show that wholesalers are unable to get rid of excess inventories and signal a likely slowdown in production.  Due to poor September unit auto sales,  expect another drop in September wholesale sales and another rise in inventories.  

cheers
............Kauri


----------



## Edwood

8,500 Dow - nearly at the 7,500, should do it tomorrow at this rate.  What a run hey!  tomorrow is a turn date mind...


----------



## chops_a_must

Kauri said:


> Wholesale sales fell 1.0% in August, *mostly the result of weak demand for
> autos and petroleum products*.  The latest sales decline is the biggest one-month drop in 19 months.  July's change, originally reported to be -0.3%, was revised lower to -0.8%.  The data show that wholesalers are unable to get rid of excess inventories and signal a likely slowdown in production.  Due to poor September unit auto sales,  expect another drop in September wholesale sales and another rise in inventories.
> 
> cheers
> ............Kauri



More to do with the implied vols.

Super cali freakin unbelievable!

+350% seems to be reserved for dead ducks...


----------



## Bushman

chops_a_must said:


> From my noob analysis of such things, it looks like both Ford and GM are being priced in for bankruptcy.
> 
> I think we all knew it was going to happen sometime, but perhaps not this quickly?




GM is a dead duck now. They cannot raise debt (S&P have just placed them on negative credit watch), they cannot raise equity and that means they are dead from a cash point of view (unless the poor old US taxpayer steps in via the Fed). 

Good article. Only quote that matters is that *18% of their sales in 2007 came from the subprime lending market*. Debt propped up their balance sheet and inflated their p&l! 

http://money.cnn.com/2008/10/09/news/companies/taylor_death_watch.fortune/index.htm

CDS spreads on GM and Ford are in the thousands of % now. That is pricing in bankruptcy. What then for the widely quoted $55trillion CDS derivative market? GM was one of the biggest issuers of corporate bonds in the US market. 

No wonder AIG failed. 

Question is will the US taxpayer bail out the auto industry now that the bond market is washing its hands of it?


----------



## chops_a_must

It has to, doesn't it???

The flow on effects would be enormous. Catastrophic.

They are running the gauntlet of complete social upheaval in certain parts with this one...


----------



## gfresh

*Re: Imminent and severe market crash*

Another 7.3% down on the DOW last night .. massive, the crash is in progress. People were talking about 8000 being the next support, and at this rate we're only 1 or 2 days away! 

Rapid re-adjust for serious recession, probably what should have happened months ago, when even the more conservative commentators were starting to see there were serious problems. 


Good question would be what happens to the Australian operations / Holden if GM goes under? Going to be some big fallout too. 9th largest company in the world.. some 266,000 employees 

Surely they can't nationalise an auto maker?? ...can they?

GE not looking very good at all either. There's going to be big fallout if that keeps falling .. very big.


----------



## Aussiejeff

*Re: Imminent and severe market crash*



gfresh said:


> *snip*... Good question would be what happens to the Australian operations / Holden if GM goes under? Going to be some big fallout too. 9th largest company in the world.. some 266,000 employees
> 
> Surely they can't nationalise an auto maker?? ...can they? ...*snip*




Gee, I hope the Bathurst 1000 goes ahead in two days time..... two days! So far away....

Maybe next year there will be a Guvmint run Bathurst 50?


----------



## chops_a_must

Geez... it's awfully quiet in here today...


----------



## sam76

chops_a_must said:


> Geez... it's awfully quiet in here today...




A picture tells a thousamd words....


----------



## Sean K

chops_a_must said:


> Geez... it's awfully quiet in here today...



Cripes! What was that that just went flying down past the office window??


----------



## Aussiejeff

kennas said:


> Cripes! What was that that just went flying down past the office window??




*[size=+1]$uper$wanDiver[/size]*?


----------



## nioka

This thread must have a name change. Leave out the "imminent".Even the original Bull will now admit to "severe". However all is not lost. The market WILL recover. Even if we have not reached the bottom there are a lot of stocks that are good value and 'now is the hour" to adjust your portfolio. I've just placed some buy orders and a few "sell the dogs" and build in some tax losses. Happy trading, chances like this do not come around often, make the best of a bad lot.


----------



## Kauri

S&P downgrades on Ford and GM, rumours that Morgan Stanley wouldn"t get the 9 BLN investment from UFJ and rumours that there are 360 BLN worth of Credit Default Swaps maturing tomorrow. All of this on a day when the short- selling ban was lifted .

Cheers
..........Kauri


----------



## chops_a_must

nioka said:


> chances like this do not come around often, make the best of a bad lot.



Thought you only poured scorn on opportunists, now you are one?


----------



## nioka

chops_a_must said:


> Thought you only poured scorn on opportunists, now you are one?




Call me an opportunistic INVESTOR, prepared to stay in a troubled market by investing in companies that are sold down past their fundamental value. I am scornfull of those that withdraw support from companies that are serving their shareholders well and producing the wealth that makes this a great country.


----------



## nioka

Kauri said:


> All of this on a day when the short- selling ban was lifted .
> 
> Cheers
> ..........Kauri




 Is this the problem? Bring back the ban then.


----------



## MrBurns

nioka said:


> Call me an opportunistic INVESTOR, prepared to stay in a troubled market by investing in companies that are sold down past their fundamental value. I am scornfull of those that withdraw support from companies that are serving their shareholders well and producing the wealth that makes this a great country.





For goodness sake this isn't an inspirational Disney movie this is business, they dont make money for any other reason but to make money and neither should you.


----------



## Bushman

nioka said:


> Is this the problem? Bring back the ban then.




No it is not the problem.


----------



## Kauri

chops_a_must said:


> From my noob analysis of such things, it looks like both Ford and GM are being priced in for bankruptcy.
> 
> I think we all knew it was going to happen sometime, but perhaps not this quickly?




The FT is reporting this morning that the US Treasury might be forced to rush out a bank recapitalization plan after the dramatic fall on Wall Street in the last two hours of trading. US officials were hoping to have some time to finish the plan but analysts said they could be forced to act immediately. The idea is to put capital not just into financial institutions that are on the brink of bankruptcy, *but a much wider range of entities that have been weakened by the credit crisis *and are responding by pulling back from risk across the board. 

 doesn't sound like auto-manufacturers... yet  ...
Cheers
...........Kauri


----------



## MrBurns

Kauri said:


> The FT is reporting this morning that the US Treasury might be forced to rush out a bank recapitalization plan after the dramatic fall on Wall Street in the last two hours of trading. US officials were hoping to have some time to finish the plan but analysts said they could be forced to act immediately. The idea is to put capital not just into financial institutions that are on the brink of bankruptcy, *but a much wider range of entities that have been weakened by the credit crisis *and are responding by pulling back from risk across the board.
> 
> doesn't sound like auto-manufacturers... yet  ...
> Cheers
> ...........Kauri




The more they try to fix it the worse it gets.


----------



## Aussiejeff

MrBurns said:


> The more they try to fix it the worse it gets.




That's because the more they try to fix *it*, the more people realise HOW FREAKIN' BAD the situation REALLY is...

The more polliticians spruik "I Will Fix This" or "We Are Doing Great", the worse the people's confidence in the system becomes.

IMO it is a crisis of confidence in the current Instamatic Electronic Trading system, where fortunes can be wiped out in a millisecond, with the press of someone's grubby finger...

So, the banks have packed up their bats and gone to skulk in the respective corners.

Game over for now... wonder how long the riot in the spectator stands will go on for?


----------



## gav

nioka said:


> This thread must have a name change. Leave out the "imminent".Even the original Bull will now admit to "severe". However all is not lost. *The market WILL recover*. Even if we have not reached the bottom there are a lot of stocks that are good value and 'now is the hour" to adjust your portfolio. I've just placed some buy orders and a few "sell the dogs" and build in some tax losses. Happy trading, chances like this do not come around often, make the best of a bad lot.




(See in bold)

Can you put this guarantee on a legal document for me?   If so, where do I sign for 1M x BHP


----------



## seasprite

MrBurns said:


> For goodness sake this isn't an inspirational Disney movie this is business, they dont make money for any other reason but to make money and neither should you.




USA were worried about weapons of mass destruction when they are perfectly capable of doing it themselves. I think Nioka is on to something here , Donald Duck should run as an independent candidate for president to replace this Mickey mouse that is running it at present.


----------



## mayk

I think the US lead international effort of a co-ordinated rate cut has instilled a co-ordinated panic in the markets! 

They are actually Guinness, they thought that if they take the world down with them then it won't be bad, they will still be the leader. But if the world somehow sustained itself, they will be wholly screwed. The effect is that USD is still strong, Gold is still under $1000, and Euro which people were hinting as an alternate to USD is stuffed. 

I think, if the things get much worse, the big plan of a centralized bank for the world, can become a reality in the next decade. I, for one, am ready for one world currency (whatever that maybe Not GOLD though).


----------



## jono_oz

Obviously there are some serious problems with the global economic system. But does anyone else think that the Media are in no way helping, and in many ways amplifying the hysteria and fear. I know bad news sells - but they are like a pack of sharks jumping on anything that is bad and beating down anyone who has anything positive to say. 
anyone who wants to start a rumour just has to send an email to News Media or post it on UTube (where most of our news comes from these days!). Now is the time for some positive spin for a change - it might have been fun to sell down the market at the beginning - but its not hurting the fat cats that started this whole mess - just my family and yours, cousins, parents, and friends. 
Like my Mum always says - if you don't have anything nice to say - then don't say anything! Media and Mr Bernaki please take note!


----------



## CanOz

jono_oz said:


> Obviously there are some serious problems with the global economic system. But does anyone else think that the Media are in no way helping, and in many ways amplifying the hysteria and fear. I know bad news sells - but they are like a pack of sharks jumping on anything that is bad and beating down anyone who has anything positive to say.
> anyone who wants to start a rumour just has to send an email to News Media or post it on UTube (where most of our news comes from these days!). Now is the time for some positive spin for a change - it might have been fun to sell down the market at the beginning - but its not hurting the fat cats that started this whole mess - just my family and yours, cousins, parents, and friends.
> Like my Mum always says - if you don't have anything nice to say - then don't say anything! Media and Mr Bernaki please take note!




My media exposure is limited to Bloomberg, and to be honest i thought that they seemed to be a bit in denial about the whole thing. If you are seeing doom and gloom in the media now then maybe its another sign that the market is near capitualtion? Food for thought?

Cheers,


CanOz


----------



## chops_a_must

CanOz said:


> My media exposure is limited to Bloomberg, and to be honest i thought that they seemed to be a bit in denial about the whole thing. If you are seeing doom and gloom in the media now then maybe its another sign that the market is near capitualtion? Food for thought?
> 
> Cheers,
> 
> 
> CanOz



CNBC has been like that for weeks now.

Cynical as all hell, and for once, actually pretty accurate about the general situation and market climate IMO.


----------



## Indie

jono_oz said:


> Obviously there are some serious problems with the global economic system. But does anyone else think that the Media are in no way helping, and in many ways amplifying the hysteria and fear. I know bad news sells - but they are like a pack of sharks jumping on anything that is bad and beating down anyone who has anything positive to say.
> anyone who wants to start a rumour just has to send an email to News Media or post it on UTube (where most of our news comes from these days!). Now is the time for some positive spin for a change - it might have been fun to sell down the market at the beginning - but its not hurting the fat cats that started this whole mess - just my family and yours, cousins, parents, and friends.
> Like my Mum always says - if you don't have anything nice to say - then don't say anything! Media and Mr Bernaki please take note!




So want more lies, more fairy tales. The financial system which was built on unprecedented credit expansion, false reporting, and advertising spin is collapsing like the ponzi scheme is it. Don't blame the media now that they are finally reporting some semblance of what the true situation is. I feel for anyone who has lost money out of this. It's terrible. The media are more to blame for keeping people in the dark. No trace of true investigative journalism, just shallow profit and loss reporting while they take easy advertising dollars from the financial industry. I spent the best part of a year urging other people to get out of the market, set up private super, and only one person took the advice. Everyone else was plugged into the mass media Bullsh*t machine. The blue pill or the red pill folks? Which one do you want?


----------



## CanOz

I took a screen shot to save a memento of this occasion. I honestly did not think i would see the index's at these levels so quickly. History in the making.

CanOz


----------



## Kauri

if the S+P is going to bounce... via another gov. initiative or three... this might be as good a place as any??

Cheers
...........Kauri


----------



## Whiskers

Kauri said:


> if the S+P is going to bounce... via another gov. initiative or three... this might be as good a place as any??
> 
> Cheers
> ...........Kauri




Indeed... but I think they are afraid to get too involved in 'Secret Mens Business' in 'Sacred Wall Street'.


----------



## Julia

> =Indie;347672]
> 
> So want more lies, more fairy tales. The financial system which was built on unprecedented credit expansion, false reporting, and advertising spin is collapsing like the ponzi scheme is it. Don't blame the media now that they are finally reporting some semblance of what the true situation is. I feel for anyone who has lost money out of this. It's terrible. The media are more to blame for keeping people in the dark. No trace of true investigative journalism, just shallow profit and loss reporting while they take easy advertising dollars from the financial industry. I spent the best part of a year urging other people to get out of the market, set up private super, and only one person took the advice. Everyone else was plugged into the mass media Bullsh*t machine. The blue pill or the red pill folks? Which one do you want?



I completely agree.   I also feel there must be many commentators/financial planners who are running for cover now.  For many months they ridiculed anyone suggesting it would be wise to sell and protect capital.  Easy enough to buy back in when confidence returns.  "Just locking in losses", they said as far back as the beginning of this year.  Kept on saying it.

I did a rough calculation on the stocks I sold at the beginning of January, comparing their sale value then with what they were worth today.
Even if that resulting differential capital amount earned no interest, it would sustain my annual cost of living for about ten years!


----------



## gav

Dow is down another 3.3%! (285pts)


----------



## davo8

nioka said:


> Even if we have not reached the bottom there are a lot of stocks that are good value and 'now is the hour" to adjust your portfolio. I've just placed some buy orders and a few "sell the dogs" and build in some tax losses. Happy trading, chances like this do not come around often, make the best of a bad lot.




I confess to being very relieved. The waiting was getting on my nerves. I sold out of almost everything Oct-Feb and forecast October as "the big one" with a range of 4000-4500. Now I'm waiting to buy.

However, I still say (as I have told Whiskers so often): this is NOT the bottom. But perhaps you can see it from here! It still doesn't feel right, but it's getting close.

Problem is, lots of stocks you could buy still have bad news ahead. Banks may never recover; retail, developers are in for a tough time. It could be a many months before we see growth, so recession-proof, non-financial, dividend-paying stocks are ideal. TLS anyone?


----------



## chops_a_must

davo8 said:


> It could be a many months before we see growth, so recession-proof, non-financial, dividend-paying stocks are ideal. TLS anyone?




Certainly agree in part.

But it will be interesting to see what happens when TLS stops paying divvies out of debt...


----------



## dhukka

Anyone game enough to call a short covering rally in the afternoon on Wall street tonight? Must be due soon. Morgan Stanley is now a sub *$10 *stock. GM Sachs now at *$85*.


----------



## chops_a_must

dhukka said:


> Anyone game enough to call a short covering rally in the afternoon on Wall street tonight? Must be due soon. Morgan Stanley is now a sub *$10 *stock. GM Sachs now at *$85*.



I've got some nothing money on a rally sometime between now and next Friday Dhukka.


----------



## brty

Considering the dow is already 200 points above the early bottom, does this count as your rally???

Whoops 300 point above the bottom as I type.

Fast fast market.

brty


----------



## chops_a_must

brty said:


> Considering the dow is already 200 points above the early bottom, does this count as your rally???
> 
> Whoops 300 point above the bottom as I type.
> 
> Fast fast market.
> 
> brty




I reckon we're going to get an almighty short squeeze on some of these...


----------



## dhukka

brty said:


> Considering the dow is already 200 points above the early bottom, does this count as your rally???
> 
> Whoops 300 point above the bottom as I type.
> 
> Fast fast market.
> 
> brty




Maybe that's all we get? just rally back to a couple of percent down instead of 7 or 8% down.


----------



## chops_a_must

dhukka said:


> Maybe that's all we get? just rally back to a couple of percent down instead of 7 or 8% down.




The fact the buyers haven't been broken here is a bullish sign.

FWIW, long calls in GE and GM, and looking for very sharp runs here.


----------



## brty

The dow is now in positive territory for the day after being down 460+.

Banks are strong, and news of paulson thinking of taking radical measures. I wonder if that includes spending some change (a few billion) on buying today.

brty


----------



## dhukka

Looks like Bush failed to inspire, now there's a surprise.


----------



## chops_a_must

dhukka said:


> Looks like Bush failed to inspire, now there's a surprise.



For all his gunslinging, he'd rock up to a duel without a gun. That's how pathetic he is.


----------



## chops_a_must

And Morgan Stanley being put to the sword...


----------



## Sean K

dhukka said:


> Looks like Bush failed to inspire, now there's a surprise.



He was pretty crap, as usual. I was surprised the market held up as he was speaking, but as soon as he left the garden it crumbled..

Was interesting watching the rollercoaster this am, especially the trading floor cheering as the index went back up into positive territory...lol


----------



## chops_a_must

We're gonna have fun Monday. 

Financials killed, commodities killed. Copper down 12% or something.

We're probably heading to 3300...


----------



## Dextrum

I commend you to examine this chart of the Dow, which shows the P/E ratio of the US market since 1881 (courtesy of NY times). It clearly shows that US market was way overvalued at 35 P/E as at 21 Sep 2008. The average over last 125 years was 14-16

If we take 1985 as a guide we can expect the market to bottom out at 5-6 P/E which will then be a buying opportunity, also for Oz market. The US market has some way to go however a buy in at P/E levels of 5-6 should be rewarded.  
www.nytimes.com/imagepages/2008/09/21/weekinreview/20080921_LEONHARDT_GRFK_A.html


----------



## noirua

chops_a_must said:


> We're gonna have fun Monday.
> 
> Financials killed, commodities killed. Copper down 12% or something.
> 
> We're probably heading to 3300...




We are waiting for the sellers to realize the market is oversold and stop the pannick selling. Monday may well surprize by being mixed at the start and ending level to up on the day.


----------



## Sean K

noirua said:


> We are waiting for the sellers to realize the market is oversold and stop the pannick selling. Monday may well surprize by being mixed at the start and ending level to up on the day.



I thought this morning was capitulation after that bounce, but at mid day I wasn't so sure, and now I'm confused about being unsure.....


----------



## Aussiejeff

kennas said:


> I thought this morning was capitulation after that bounce, but at mid day I wasn't so sure, and now I'm confused about being unsure.....




I'm pretty sure of one thing - the $AUBananBuck is ON THE NOSE...

Currently *down 6%* to *.643* USD!!

Where the bloody hell are ya, tourists!!!


----------



## Aussiejeff

Anyone know how many stock exchanges were suspended yesterday? From the sound of the media reports, quite a few have decided to pull out of the World's Biggest Poker Game.

Also, when I scrolled through the ASX announcements list yesterday, I noticed an AWFUL lot of Trading Halts, most with no brief explanation. Wonder why so many? Guess we find out next week.

Lastly, however this financial markets mess plays out from now and due to the economic lag effect involved, I feel safe in predicting the end of OCT (Jul-Aug qtr) and end of JAN (Oct-Dec qtr) company reporting periods are probably going to be very miserable reading for many companies that have so far appeared to sail safely beneath the radar - let alone for those currently hanging on by a thread.

This is shaping up to be Santa's Worst Xmas for many a year....


----------



## sam76

kennas said:


> I thought this morning was capitulation after that bounce, but at mid day I wasn't so sure, and now I'm confused about being unsure.....




lol I think that pretty much sums it up for me as well.

What was last night all about and where to from here?


----------



## Aussiejeff

Hahaha!

Talk about someone in total denial...

_Anal-yst Marc Touati of Global Equities said the market behaviour reminded him of *"a spoiled child who doesn't realise what his parents have done for him"*_.

What a jerk. Actually, it is more a case of BAD PARENTING, you goose....


----------



## IFocus

Aussiejeff said:


> I'm pretty sure of one thing - the $AUBananBuck is ON THE NOSE...
> 
> Currently *down 6%* to *.643* USD!!
> 
> Where the bloody hell are ya, tourists!!!




Yes back to the Banana republic, friends going to Bali complaining the Indonesian RUP down from 8000ish to 6000ish for AUD

Indo's may not even want to trade Bananas soon


----------



## dhukka

The FDIC was busy on Friday, 2 more failures to add to the list. 



> *Meridian Bank, Eldred, Illinois*
> 
> On October 10, 2008, Meridian Bank, Eldred, Illinois was closed by the Department of Financial and Professional Regulation of the Illinois Division of Banking and the Federal Deposit Insurance Corporation (FDIC) was named Receiver.  No advance notice is given to the public when a financial institution is closed.






> *Main Street Bank, Northville, Michigan*
> 
> On October 10, 2008, Main Street Bank, Northville, Michigan was closed by the Michigan Office of Financial & Insurance Services and the Federal Deposit Insurance Corporation (FDIC) was named Receiver.  No advance notice is given to the public when a financial institution is closed.


----------



## Aussiejeff

From an article in the Australian newspaper today - 

_*INVESTORS have been warned off the junior and mid-cap pure-play iron ore miners, as further bad news from China is anticipated.*

Following Mount Gibson Iron's announcement that its Chinese customers want a delay in shipments because of credit issues, Goldman Sachs JBWere said the iron ore market had deteriorated further than it had realised.

*"Clearly, in this circumstance we do not believe investors need to be exposed to the small, mid-cap pure play iron ore sector,"* analyst Stephen Gorenstein said in a note to clients yesterday_. 

To my mind, this spells BAD news (probably over an extended period of years) for an awful lot of iron ore companies. But then, why worry. Our economy will continue to charge ahead at 2-3% growth on the back of the infinite resources *boom*, if SuperKrudd, SwanDiver and IMF "ex-spurts" are to be believed.


----------



## IFocus

Aussiejeff said:


> From an article in the Australian newspaper today -
> 
> _*INVESTORS have been warned off the junior and mid-cap pure-play iron ore miners, as further bad news from China is anticipated.*
> 
> Following Mount Gibson Iron's announcement that its Chinese customers want a delay in shipments because of credit issues, Goldman Sachs JBWere said the iron ore market had deteriorated further than it had realised.
> 
> *"Clearly, in this circumstance we do not believe investors need to be exposed to the small, mid-cap pure play iron ore sector,"* analyst Stephen Gorenstein said in a note to clients yesterday_.
> 
> To my mind, this spells BAD news (probably over an extended period of years) for an awful lot of iron ore companies. But then, why worry. Our economy will continue to charge ahead at 2-3% growth on the back of the infinite resources *boom*, if SuperKrudd, SwanDiver and IMF "ex-spurts" are to be believed.





There is trouble in paradise


----------



## bean

bean said:


> For interest - those that know Dow Theory
> Mention on a forum
> Both the Industrials and the Transports closed at their lows for the year today. In particular, the Transports closed below their lows from January, which had not been breached since then.
> 
> So, the simultaneous lows confirm each other, and Dow Theory would say that we are headed down to the 2002 lows. Perhaps quickly. I am sure Richard Russell's column today will feature this prominently.
> 
> *2002 Low 7215*
> 
> For chartists '3 peaks ' or 'doomed house pattern' does that appear on the Dow?
> 
> Whatever it doesn't look good...surprise rate cut may only produce a brief short covering rally.
> Will we see a run on the Banks in the US this week or next?




For the Chartists or those that looked up 
'3 peaks ' or 'doomed house pattern'
you would have seen the pattern
Play out over the last week

So are we at 
28  	 Price bottoms near point 10. This decline may not be a straight-line affair, but it always happens.
Point 10 is that near the 2002 Lows?


----------



## bean

Speculation
From another Forum in US
A world wide Bank holiday monday?
Obama speaks to nation on tuesday?

Just hope G7 come out with something big over the weekend


----------



## moXJO

Lets hope for a V reversal on the Dow daily (isn’t that last candle a reversal sig?). I don't feel like having total financial collapse this week.


----------



## Aussiejeff

moXJO said:


> Lets hope for a V reversal on the Dow daily (isn’t that last candle a reversal sig?). *I don't feel like having total financial collapse this week.*




That would be so-o-o _passe_. :bananasmi


----------



## moXJO

Aussiejeff said:


> That would be so-o-o _passe_. :bananasmi




Yes totally clashes with my plasma TV purchase.


On a serious note you would hope for some sort of reversal at these levels.


----------



## chops_a_must

Lol...



> Oct. 13 (Bloomberg) -- The U.S. Federal Reserve said central banks will offer financial institutions unlimited dollar funds, backing up efforts by governments to restore confidence in markets.
> 
> The ECB, the Bank of England and the Swiss central bank will conduct dollar auctions with maturities of seven days, 28 days and 84 days at a fixed interest rate, the Washington-based Fed said on its Web site today. The Bank of Japan will consider introducing ``similar measures.''
> 
> Policy makers from the Group of Seven nations pledged at the weekend to take ``all necessary steps'' to stem a market panic after the MSCI World stock index plunged 20 percent last week. Central banks last week cut interest rates in tandem for the first time since 2001, the U.S. plans to buy $700 billion in distressed assets from banks and in Europe, the U.K. is leading a push to keep lenders afloat with taxpayers' money.
> 
> ``By providing unlimited dollar funds they are acting on the back of the G-7 plan to ensure the system is fully liquidized,'' said Lena Komileva, an economist at Tullet Prebon Plc in London. ``We're going to see even more liquidity provided and more aggressive rate cuts are coming.''
> 
> Central banks are expanding their toolkits after money-market lending rates surged to records last week. The Fed on Oct. 7 said it will create a special fund to buy U.S. commercial paper and the ECB last week said it would offer financial institutions unlimited euro funds. The Bank of England is scheduled to announce a revamp of its own money-market operations later this week.
> 
> `Work Together'
> 
> The cost of borrowing in dollars for three months nevertheless jumped to the highest level since Dec. 27, the British Bankers' Association said Oct. 10.
> 
> The ECB, the BOE and the Swiss National Bank ``can provide U.S. dollar funding in quantities sufficient to meet their demand'' into 2009, the Fed said today. ``Central banks will continue to work together and are prepared to take whatever measures are necessary to provide sufficient liquidity in short- term funding markets.''
> 
> All of the previous dollar swap arrangements between the Fed and other central banks were capped.
> 
> Today's ``action is unprecedented,'' said Neil Mackinnon, chief economist at ECU Plc in London and a former U.K Treasury official. Komileva said it may have a ``bigger impact'' than last week's rate cut ``in terms of practical impact on dollar libor globally.''
> 
> G-7 finance chiefs pledged Oct. 10 to take ``urgent and exceptional action'' after stocks plunged and as a global recession looms. European leaders yesterday agreed to guarantee new bank debt and use taxpayer money to keep distressed lenders afloat. Royal Bank of Scotland Group Plc, HBOS Plc, and Lloyds TSB Group will get an unprecedented 37 billion-pound ($64 billion) bailout from the U.K. government.
> 
> The collapse of New York-based Lehman Brothers Holdings Inc. precipitated the latest chapter of the 14-month crisis, causing banks to stop lending to each other out of concern they may not get their money back.




http://www.bloomberg.com/apps/news?pid=20601087&sid=ad3yz0VA2AY8&refer=home


----------



## Snakey

I saw Friday the 10th as an opportunity day because i thought the dow would bottom on friday night.  In january I predicted a bottom on xao as being 4200 instead it got lower. the dow hit 7770  friday night then bounced significantly.
this indicated to me that the bottom in fact was reached. The dow is very important because its driving the worlds markets. (like it or not) The fact that it bottomed wiping out the five years of  boom in value was excessive. Excessive bottom is what we are looking for. Now i expect a rally to at least 5000 settling at 4600.` As per support lines on chart. my


----------



## chops_a_must

chops_a_must said:


> The fact the buyers haven't been broken here is a bullish sign.
> 
> FWIW, long calls in GE and GM, and looking for very sharp runs here.




Looks like I'm going to be ahead 300% or thereabouts on the GM, and about 30% on the GE. Not bad for a few days work...


----------



## Edwood

Edwood said:


> 8,500 Dow - nearly at the 7,500, should do it tomorrow at this rate.  What a run hey!  tomorrow is a turn date mind...




turned on the date 'n all

gotta love the way markets can rally as far and as hard as they like but as soon as they drop by X amount the cb's kick in


----------



## Kauri

Kauri said:


> if the S+P is going to bounce... via another gov. initiative or three... this might be as good a place as any??
> 
> Cheers
> ...........Kauri





  butt.... where next??

Cheers
............Kauri


----------



## Kauri

The Wall Street Journal is reporting that the White House will roll 
out details of the bank rescue plan tomorrow that will include a plan for the 
Treasury to take approximately 250 BLN USD in equity stakes in potentially 
thousands of banks. In addition, the FDIC is expected to temporarily extend its backstop from bank deposits to new senior preferred debt issued by banks and thrifts for three years.
Cheers
.........Kauri


----------



## MrBurns

I really don't understand how all this will work, they're just saving the banks so they can repeat their mistakes all over again. 

The system caused this and they're propping up the system ????????

There needs to be wholesale change and that cant happen without changing the way things work not supporting the way things got us into this mess.

At the end of the day, Govt will have more control over people and the rich will be super rich. I think that's the plan.


----------



## noirua

MrBurns said:


> I really don't understand how all this will work, they're just saving the banks so they can repeat their mistakes all over again.
> 
> The system caused this and they're propping up the system ????????
> 
> There needs to be wholesale change and that cant happen without changing the way things work not supporting the way things got us into this mess.
> 
> At the end of the day, Govt will have more control over people and the rich will be super rich. I think that's the plan.




All the Governments want to do is sell their bank holdings, to make a profit, and get re-elected.


----------



## moXJO

Oh look ...calls for one bank to control us all 



> World 'needs new financial system'
> World leaders must meet to agree a new Bretton Woods system, Prime Minister Gordon Brown said, referring to the global financial architecture agreed at the end of World War II.





http://www.news.com.au/business/story/0,27753,24493647-31037,00.html


----------



## Aussiejeff

At the end of the day, Big Brother ALWAYS wins.


----------



## kransky

Aussiejeff said:


> At the end of the day, Big Brother ALWAYS wins.




not if everyone has a gun?


----------



## MrBurns

deleted - wrong thread


----------



## Glen48

Just when you think things a good some else comes along.
From Patrick .net


Lehman Brothers, the bust investment bank, triggered one of the biggest corporate debt defaults in history yesterday as it emerged that the US Federal Reserve is harbouring grave concerns about whether Washington’s $700 billion (£413 billion) bailout fund will avert a financial meltdown.

An auction of Lehman’s bonds yesterday determined that the bank’s borrowings were worth only 8.625 cents on the dollar. The valuation leaves the insurers of the debt a bill of about $365 billion. It is not clear whether the insurers, which are required to settle the bill in the next two weeks, will be able to pay – a development that could further undermine increasingly stressed capital markets.

The $365 billion default came as stock markets around the world suffered one of their worst days since the crash of 11 years ago. Panicking about the prospect of global recession, the FTSE 100 index of leading shares in London crashed within seconds of opening, losing 8.9 per cent of its value, its worse fall since October 1987.

The index recovered to close down 225 points, marking a 5 per cent decline, but more than a fifth was wiped off London shares this week alone. Issues in New York fluctuated wildly as the Dow Jones industrial average slumped by 312.14 points at lunchtime before closing at 8,451.19, down 128.00. Both markets had been scared by losses in Tokyo, where the Nikkei lost 10 per cent of its value.
Related Links

    * Lehman staff will make millions to unwind trades 

    * Fuld denies responsibility for Lehman collapse 

Amid the mayhem across the world’s stock markets, senior Fed officials now doubt whether Washington’s bailout fund will work unless it is launched in some form in the next two weeks.

The Times has learnt that central bankers in America are anxious that if the Treasury is not able to accelerate the speed at which it launches its rescue scheme, it will have no effect. At the moment, the Treasury, which controls the fund, is working to a five-week schedule to get the rescue package up and running. Under present plans, the bailout fund is not expected to buy its first distressed mortgage-backed bonds until after the US elections on November 4.

It is understood that the Fed believes that this will be too late to help the banks that are suffocating under market conditions. Credit markets have frozen up and many banks have been cut off from being able to borrow from one another.

Mr Paulson’s bailout fund is designed to buy up distressed bonds held by troubled banks. This week the former chairman of Goldman Sachs appointed Neel Kashkari, one of his protÃ©gÃ©s at the Wall Street bank, to run the fund. Mr Kashkari had already been working closely with Mr Paulson during the negotiations over the passage of the “troubled asset relief programme” on Capitol Hill.

Mr Paulson is also considering a range of other forms of financial assistance, which include the Treasury using taxpayer funds to buy stakes in Wall Street banks. Under such a plan, the cash received in return for the shareholding would provide much-needed capital for the banks.

Lehman’s corporate debt default promises to increase the stress across global credit markets. Sean Egan, of the Egan-Jones ratings agency, said: “This is a killer. Lehman said a month ago that it was in terrific shape and now you can’t even get ten cents on the dollar for its debt.

“It underscores the deep structural flaws in our financial system, knocks confidence in the financial markets and raises the cost of capital. It also demonstrates that we are experiencing not only a crisis of confidence, but a crisis.”

About 350 banks and investors are thought to have insured an estimated $400 billion of Lehman’s debt through complex derivatives, known as credit default swaps. These include Pacific Investment Management, the manager of the world’s largest bond fund, Citadel, the US hedge fund, and American International Group, the insurer that the US Government recently bailed out with two loans totalling about $123 billion.

The Times has learnt that the US Treasury has been overwhelmed with requests from executives of other beleaguered sectors who are seeking a similar bailout scheme for themselves. It is thought that representatives from the US car and airline industries have approached the Government for assistance. It is understood that Mr Paulson does not believe that it is his job to help them. Rather, he is intent on addressing the root problems of the financial crisis.


----------



## kransky

what are you talking about? Friday was the bottom


----------



## chops_a_must

kransky said:


> what are you talking about? Friday was the bottom



That's old news.

It was known Friday.


----------



## Macquack

Glen48 said:


> The Times has learnt that the US Treasury has been overwhelmed with requests from executives of other beleaguered sectors who are seeking a similar bailout scheme for themselves. It is thought that representatives from the US car and airline industries have approached the Government for assistance. *It is understood that Mr Paulson does not believe that it is his job to help them*. Rather, he is intent on addressing the root problems of the financial crisis.




Paulson's mission is to address the real issue (greed) and conveniently contain it to the banking sector.

Paulson says :

"F*** you guys, we (bankers) are in need of greed more than you."


----------



## Glen48

Wayne Swam must of had a talk to GW and decided if this bloke is running  the USSA I better get back to Oz and tell Big Kev we are in  big trouble and see if we can spend our way out of this mess.


----------



## treefrog

some interesting snippets from today's daily reakoning:
You will recall, dear reader, that an old Louie lost his head after the debt of France's monarch topped 80% of France's GDP. Seymour Durst put up a 'debt clock' in New York to keep track of the U.S. debt. When he put it up, the U.S. national debt was only $2.7 trillion. That was in 1989. Not even 20 years later and the debt has topped $10 trillion - forcing the owners of the debt scoreboard to add another digit. U.S. gross domestic output is about $13 trillion - and falling. This puts the national debt at 77% of GDP...and rising fast. 
..
Our favorite columnist, Thomas L. Friedman, calls this the "post-binge world." We read Friedman to get insights: not as to what is really going on; Friedman has no idea. But Friedman gives voice to popular prejudices; he tells us what the unthinking masses are yearning for. 

And here it is: 

"This workout promises to be painful, complicated and protracted," he explains. No cause for panic, in other words. It will all be worked out. Then, he offers more reassurance, quoting the calming words of the world's richest man: 

"I have no idea what the stock market is going to do next month or six months from now," said Warren Buffett on Friday. "I do know that the American economy, over a period of time, will do very well, and people who own a piece of it will do well." 

The Sage of the Plains did not reveal how he knows these things. Maybe he is right; maybe he isn't. But here at The Daily Reckoning we've urged readers to panic out of U.S. assets for a long time. And now, readers are advised to stay in panic mode...and sell into the coming rally. 
...
--The optimistic view is that it already HAS decided and stocks are clear to rally from here. But keep in mind, earnings analysts have yet to downgrade their expectations for the next two quarters. When they do, shares could head lower. In fact, we believe the market (here and in the U.S.) will eventually test the 2003 lows. But it may not happen just net. 

--Please remember what the job of the Bear is. His aim is to destroy your capital. But he can only do so if you're willing to stay in the market and keep your capital at risk. In the last week, fear and panic were so prevalent that there were no buyers in the market. Capital fled, indices fell and the marketplace was deserted of bulls. 

--The Bear's job now is to sucker you back in, to make you think the worst is over and that this is a rally you can't afford to miss. He does that by giving you a rally that seems convincing. A rally you can't resist. But take a look at the two charts below. 



The Crash of '29: 49% in less than a month



A 52% Rally and then an 86% Fall


--After the '29 Crash the bear got clever. Between November of 1929 and April of 1930, the market zoomed up 52% in just five months. It didn't make a new high. But the price action was surely enough to sucker many investors back in, believing the worst was over. It wasn't. Over the next two years, stocks fully priced in the debt deflation in the economy and fell 86%. 

--This is precisely the scenario the Fed wants to prevent. It's willing to risk a hyperinflationary melt-up in order to avoid prolonged debt deflation. We just don't know, historically, what the result will be. So how should you handle it? 

--Be ready for a strong rally in Aussie stocks that could carry through past more interest rate cuts from the RBA this month and the U.S. election in November. It may even last through the end of this year and into early next. We don't expect stocks to make a new high. But a similar rally to the post-'29 crash would put the All Ords at about the same level they were in May of this year. 




--Is it tradeable? You bet.


----------



## davo8

kransky said:


> what are you talking about? Friday was the bottom




Now that we've all had a good laugh, what do you really think?

There's no way to avoid giving the 2002-3 lows a good test -- that's around 800 on the S&P500. And if that doesn't hold, what next?

This sucker is broken but good. There's way too much bad news not priced in yet.


----------



## Sean K

davo8 said:


> Now that we've all had a good laugh, what do you really think?
> 
> There's no way to avoid giving the 2002-3 lows a good test -- that's around 800 on the S&P500. And if that doesn't hold, what next?
> 
> This sucker is broken but good. There's way too much bad news not priced in yet.



I'm not sure how much more bad news is or isn't factored in, but the recent falls were obviously overdone in the short term, and thus the rebound. It even looked like capitulation low to me. 

I'm not sure if you can absolutely say how much is factored in either davo. 

When you say the 'sucker is broke', are you saying the entire financial system is going to break down and be replaced by something else? Or, just that there will be a lower low? As you asked, sub 800 on the S&P and what next?


----------



## Sean K

Following the problems in the sub-prime lending market in America and the recent problems with Banks in the UK, uncertainty has now hit Japan. In the last 7 days Origami Bank has folded, Sumo Bank has gone belly up and Bonsai Bank announced plans to cut back some branches. Yesterday it was announced that Karaoke Bank is up for sale and will probably go for a song. Also today, shares in Kamikaze bank were suspended after they nose-dived. The Samurai Bank is soldiering on following sharp cutbacks, Ninja Bank is reported to have taken a hit, but they remain in the black. Furthermore, 500 staff at Karate Bank got the chop and analysts report that there is something fishy going on at Sushi Bank where it is feared that the staff may get a raw deal....!


----------



## chops_a_must

kennas said:


> Following the problems in the sub-prime lending market in America and the recent problems with Banks in the UK, uncertainty has now hit Japan. In the last 7 days Origami Bank has folded, Sumo Bank has gone belly up and Bonsai Bank announced plans to cut back some branches. Yesterday it was announced that Karaoke Bank is up for sale and will probably go for a song. Also today, shares in Kamikaze bank were suspended after they nose-dived. The Samurai Bank is soldiering on following sharp cutbacks, Ninja Bank is reported to have taken a hit, but they remain in the black. Furthermore, 500 staff at Karate Bank got the chop and analysts report that there is something fishy going on at Sushi Bank where it is feared that the staff may get a raw deal....!



Already posted it in this thread I think Kennas.


----------



## Sean K

chops_a_must said:


> Already posted it in this thread I think Kennas.



Damn it!!


----------



## chops_a_must

Not directed at you Kennas my man.

More on behalf of Rob Grubb for the contestant, in the markets:

Bow bow.


----------



## GreatPig

I think I've seen that posted 5 or 6 times in different places now.

GP


----------



## CAB SAV

Experts always said the decline in the Nikkei could never be considered a model for the US because Japan had weak banks with dodgey balance sheets-sound familiar? As Japan has no interest rate(stagflation) and my guess that they pay next to nothing in div's, in real terms they are down lot more.
But it could never happen in the US- right?


----------



## Aussiejeff

Correct me if I'm wrong, but I'm under the impression that one of the conditions for the public debt bank bailouts/buyouts in the UK is that NO DIVIDENDS will be paid to shareholders of those banks UNTIL the public debt is repaid?

If that is so, surely that is going to mean long term dis-interest by local and international investors in those banks affected? I always thought one of the big attractions of the banks was their regular & relatively large (in percentage terms) and "safe" dividends?

Am I missing something here?


aj


----------



## treefrog

Aussiejeff said:


> Correct me if I'm wrong, but I'm under the impression that one of the conditions for the public debt bank bailouts/buyouts in the UK is that NO DIVIDENDS will be paid to shareholders of those banks UNTIL the public debt is repaid?
> 
> If that is so, surely that is going to mean long term dis-interest by local and international investors in those banks affected? I always thought one of the big attractions of the banks was their regular & relatively large (in percentage terms) and "safe" dividends?
> 
> Am I missing something here?
> 
> 
> aj




that's it as i understand it also aj, so yes hard to fathom how it helps the banks wrt the ordinary shareholder interests


----------



## dhukka

Whoa! Whilst we knew that US economic data was going to get worse in September even today's retail sales numbers took the most pessimistic by surprise registering their first year over year decline since Oct 2002. On another note the Empire State Manufacturing survey fell to a new record low of *-24.6*.


----------



## kransky

Marc Faber on Lateline Mon night 

http://www.abc.net.au/lateline/content/2008/s2389900.htm



			
				Lateline said:
			
		

> TONY JONES: You've said recently of some of the largest European banks, the crucial problem is they become too big to fail, but also too big to be saved. Tell us what you mean?
> 
> MARC FABER: Well, I think first of all, in a perfect market you have hundreds and hundreds of competitors and if one competitor fails or goes bankrupt it's not the end of the world, because it's just one of a few hundred. In banking, it has become a business that has become heavily concentrated among a few large players and if one of these large players fails, it goes through the whole food chain of the financial system and like a domino stone that falls down, it hits the next domino stone and so forth and so on. And that is the first problem. *The second problem is that in comparison to the GDP of some countries, bank's assets are far larger. And so I think that if these countries bail out the banking system they expose themselves to eventually going bust.*
> 
> TONY JONES: Yes, you point to the leverage ratio of some of the giant banks like Deutsche Bank and Barclays. Can you explain to us what you mean by pointing to those leverage ratios, and what are the implications of these incredibly high ratios in those two giant banks?
> 
> MARC FABER: Let's say we are businessmen and we run our businesses and we have equity of 100 and maybe we borrow 50 and then we have a relatively high cushion in carrying our business, even if we have one year's loss or if business turns down. What the banks and investment banks and companies like Fannie Mae and Freddie Mac have done over the years is they have increasesed leverage, and that has been evident through excessive debt growth in the system everywhere in the world, but in particular in the US and in other Anglo Saxon countries. And the end result was that, say, *banks they have equity of one and then assets of anywhere between 20 to 50. In other words, the cushion of safety, which was the equity was very small when compared to assets. So when assets start to go down, the equity is gone almost overnight.*
> 
> TONY JONES: *It is incredible. You've said that Barclays has a lending ratio of 60. The Deutsche Bank has a lending ratio of 50, that's $1 of equity to $50 of assets.* Now that seems to be way out of kilter with economic rationalality?
> 
> ....
> 
> TONY JONES: Do you think the Europeans are facing a financial crisis in their banking system, potentially worse than the United States?
> 
> MARC FABER: Could be in some cases. In some cases the banks are more leveraged and national banks or the GDP of these countries, unlike the US, do not support a bailout. I'd like to point out in the US we have now an additional problem coming out. Commercial real estate, and then rising unemployment, rising default rate and globally, we have the credit default swap that is still a time bomb and the whole derivatives market, that is another time bomb. *Then in the US, just in the last few days, the following has happened. Last week the S&P the stock market was down something like 18 per cent. But in the past when the stockmarket was down, Government bonds in the US rallied. But in the last couple of days this hasn't happened. The bond market was also weak. Obviously, if the Government bails out the entire system, the credit of the Government diminishes and in my opinion Treasury bonds in the US should already be rated as junk bonds. I'm sure the US Government will eventually go bankrupt. Maybe not tomorrow, but as far as the eye can see, we will have deficits in the US Government, deficits of more than $1 trillion annually.*
> 
> TONY JONES: Do you think Australia is going to get swept up to the same degree, or are we insulated?
> 
> MARC FABER: No, I think probably even worse, because don't overlook the fact the US is in very bad shape, but very simply put ... here, I oversimplify, the US doesn't produce anything, it consumes. So if consumption goes down in the US, Okay, Americans become a bit slimmer, that's very good if the obesity rate drops in America and they consume less electronics, they drive around a little bit less, it's not the end of the world. But the translation mechanism goes then into the producers for America. Notably, China and other Asian countries that then have falling industrial production and diminishing exports to the United States. And, therefore, their demand for raw material goes down and so the Asian economies are like a warrant on the US economy. When the US does well they do particularly well, and when the US does badly they're hit very hard and that then goes through to the resource producers, to OPEC, to Russia, to Australia and these countries in my opinion are actually quite vulnerable, especially given the large foreign debt of Australia.
> 
> TONY JONES: We're also already, in fact, hearing that some steel mills in China are cutting demand for iron ore. They're actually calling on smaller miners in Australia to actually postpone delivery of orders. Do you think that will spiral, get worse?
> 
> MARC FABER: Yeah, I think so, because if you look at the global synchronised boom 2001 2007 it began in the US and then it led to strong growth in China and as China was growing strongly, the industrial production went up, exports went up and then capital spending went up very substantially. And when capital spending picks up, then obviously the demand for commodities does not only go up because of local consumption and industrial production, but because of the capacity expansion. And when the recession comes the expansion is cut down and that leads to a slump in the demand for commodities. We've seen the Baltic Dry Index collapse, oil prices drop from close to $150 a barrel to around 80. Of course it will hit Australia, and very badly so.
> 
> TONY JONES: You've also pointed, and I'd mentioned this before to the asset bubble in housing prices in Australia. Are we, in this country, do you think, due for a major correction?
> 
> MARC FABER: Yes, I think so, major correction. Because if you look back at Australia we always had booms and busted and they tended actually to be more pronounced than in the United States. So I think we had a colossal boom in home prices and to some extent, also in commercial real estate in shopping malls and so forth and that will go in reverse. It is very difficult to call the bottom, but I think these things take time and if you look at Japan, we peaked out in 1989 on the Nikkei at 39,000. We're now at 9,000 or so. So it can take a very long time and I think this crisis will be a crisis, a milestone in economic history. The way people used to ask, "Are you born before 1929 or after 1929, or before the World War II, or after World War II?" People will ask in future, "Were you born before 2007, or after 2007?"


----------



## davo8

kennas said:


> I'm not sure how much more bad news is or isn't factored in, but the recent falls were obviously overdone in the short term, and thus the rebound. It even looked like capitulation low to me.




Given that few of us have lived through one, let alone traded one, I beg to differ. Capitulation has a sense of desperation, of hopelessness, of lack of interest. Capitulation is (or follows) flat with low volatility, not V-shaped with VIX of 70. This is NOT the bottom.



> I'm not sure if you can absolutely say how much is factored in either davo.
> 
> When you say the 'sucker is broke', are you saying the entire financial system is going to break down and be replaced by something else? Or, just that there will be a lower low? As you asked, sub 800 on the S&P and what next?




There are unknown unknowns out there -- I just don't know what they are! All I know is they are going to happen and the market is going lower.

My view is that much of the financial system is permanently broken. After it's nationalised, socialised, deleveraged and recapitalised it isn't going to work the way it used to. Any financial stock you buy now is pure guesswork. Most will never really recover.


----------



## Kauri

the weakness in stocks and commodities etc today isn't because banks are still on the brink of catastrophe at the moment but  the *fear* is that the "D" word is taking over from the "R" word  as the most likely path for the economy.   another 50bp US cut at the next meet??? if so then the canon is empty... only the pop-gun left....   

Cheers
........Kauri


----------



## chops_a_must

Kauri said:


> the weakness in stocks and commodities etc today isn't because banks are still on the brink of catastrophe at the moment but  the *fear* is that the "D" word is taking over from the "R" word  as the most likely path for the economy.   another 50bp US cut at the next meet??? if so then the canon is empty... only the pop-gun left....
> 
> Cheers
> ........Kauri




What do you mean, "canon"? They didn't have one! They've been using the pop-gun all along!


----------



## Sean K

Crikey, you rarely here a Rio or BHP downramping their prospects.

Or is this a good sign that lower growth is factored in to their prices?

I love the comment on the $10b bandaide by the gov at the bottom of the article.


*No riding China's back: Rio Tinto*
David Uren and Matt Chambers | October 16, 2008 

THE nation's reliance on China to carry it through the impending global slowdown has been dealt a blow, with mining giant Rio Tinto saying it no longer expects the engine of Australia's resources boom to bounce back this year.

Rio Tinto chief executive Tom Albanese said yesterday a post-Olympics slowdown in commodities demand would drag on longer than the company had thought just two weeks ago and the company may slow mine expansions. 

"We expect to see Chinese economic data in the third quarter of this year showing an exaggerated economic slowdown because of the Olympics effect," Mr Albanese said. "It now seems clear that any bounce in net demand will be delayed until next year." 

.....

"There's a danger they fired off half their ammunition before they've seen the enemy."


----------



## chops_a_must

All I have to say is, LOL. Various shorts again...


----------



## cuttlefish

I've got a few of those open as well - will be interesting to see what happens today (though odds are I'll sleep through most of it  ).


----------



## CAB SAV

It's taken a while but now that so much has come out regarding all the bailouts, focus will turn to state of economies, particularly US. No traders should be surprised that the markets will deteriorate a lot furthur now. When data comes out shortly  showing unemployment rising quickly in US, expect big falls and with all other indicators such as declining retail,manufacturing etc. continuing to deteriorate. If the general public were to be informed as to the real implications of the trillions of dollars tied up in junk derivatives, well turn to the "is there a god" thread.


----------



## Aussiejeff

Kauri said:


> the weakness in stocks and commodities etc today isn't because banks are still on the brink of catastrophe at the moment but  *the fear is that the "D" word is taking over from the "R" word*  as the most likely path for the economy.   another 50bp US cut at the next meet??? if so then the canon is empty... only the pop-gun left....
> 
> Cheers
> ........Kauri




What "R" word? As far as I am aware NO US leader of importance has admitted that "RECESSION" has arrived - yet. It has always been termed by the High and Mighty as _"might move toward a recesssion"_ or _"not in recession - yet"_. 

I did hear on the radio today some analysts saying America's economy was "in a Rut"! Does that count as a filthy _"R"_ word *shudder*?

Then again, maybe you are right and they will bypass the filthy, unspeakable "R" word and go directly to the even more unspeakable "D" word . Then again, the High and Mighty might like to define a slide into _"D"_ as merely "tending towards a Dip"!

Well, we DO know by now that they are all a bunch of DipSticks who have attended Word Smithing For Idiots 101 - the lot of 'em. That's a given! It is nice to have some certainty there at least... LOL

aj


----------



## James Austin

indicative opens on the majors *sitting at -10%* as i write, 

fall at open may be even bigger than overnight SPI futures indicate

** or maybe instos messing with the mums and dads, scaring them into a sell, so they can buy even cheaper


----------



## dhukka

Thanks for that kransky, always like listening to Marc Faber, doesn't pull any punches and is usually pretty close to the mark with his analysis.


----------



## spooly74

Aussiejeff said:


> What "R" word? As far as I am aware NO US leader of importance has admitted that "RECESSION" has arrived - yet. It has always been termed by the High and Mighty as _"might move toward a recesssion"_ or _"not in recession - yet"_.
> 
> I did hear on the radio today some analysts saying America's economy was "in a Rut"! Does that count as a filthy _"R"_ word *shudder*?
> 
> aj






> Oct. 15 (Bloomberg) -- Federal Reserve Bank of San Francisco President Janet Yellen said the U.S. is in a recession and policy makers' interest-rate stance is aimed at addressing the risks of a deeper downturn.




http://www.bloomberg.com/apps/news?pid=20601087&sid=asSZxyFTNrAU&refer=home


----------



## Ageo

So let me ask you guys, i have no doubt that the market will tank (severley), but with all this capital injection (Trillions of paper money thrown into the system globally) do you guys think it will creep up a little before tanking? i mean surely this money will temporarly prop the market up (along with interest rate cuts etc...), but then once that all dries up i would expect hell to break loose?


----------



## Sean K

Ageo said:


> So let me ask you guys, i have no doubt that the market will tank (severley), but with all this capital injection (Trillions of paper money thrown into the system globally) do you guys think it will creep up a little before tanking? i mean surely this money will temporarly prop the market up (along with interest rate cuts etc...), but then once that all dries up i would expect hell to break loose?



Isn't it already off 35% or something? You're waiting for it to tank? LOL

I suppose it can go down another 100% or so...


----------



## Ageo

kennas said:


> Isn't it already off 35% or something? You're waiting for it to tank? LOL
> 
> I suppose it can go down another 100% or so...




 Kennas i havent seen unemployment rise a fair amount as of yet, i havent seen many business's going bust as of yet and i havent seen the whole system turn upside down on its head as of yet. So to answer your question yes im waiting for it to tank.... after all the worthless paper money that floods the system.


----------



## MrBurns

Ageo said:


> Kennas i havent seen unemployment rise a fair amount as of yet, i havent seen many business's going bust as of yet and i havent seen the whole system turn upside down on its head as of yet. So to answer your question yes im waiting for it to tank.... after all the worthless paper money that floods the system.




When that happens what about cash ? Money in the bank will be worth less than it is now ? Hyper Inflation ? Time to go for gold yet ?


----------



## Aussiejeff

MrBurns said:


> When that happens what about cash ? Money in the bank will be worth less than it is now ? Hyper Inflation ? Time to go for gold yet ?




How much gold will I need to exchange for a can of baked beanz at my local Coles?

Will my $50 gold coin be "worth it's weight in gold" or the $50 face value?

Will Coles accept gold?

So many questions, so little time!

PS: If I grow carrots, will they be worth as much as gold nuggets?


----------



## MrBurns

Aussiejeff said:


> How much gold will I need to exchange for a can of baked beanz at my local Coles?
> 
> Will my $50 gold coin be "worth it's weight in gold" or the $50 face value?
> 
> Will Coles accept gold?
> 
> So many questions, so little time!
> 
> PS: If I grow carrots, will they be worth as much as gold nuggets?




Come on you're really Wayne Swann aren't you.......


----------



## Ageo

MrBurns said:


> When that happens what about cash ? Money in the bank will be worth less than it is now ? Hyper Inflation ? Time to go for gold yet ?




Well i dont know everything but you dont have to be Mr Buffet to understand that whats happening is only just the start of it......

Hyper inflation? well isnt that when you flood the market with money that wasnt there? where is all this money coming from? i do know 1 thing thow that gold will be a safe haven for people simply because thats what they believe (its proved itself in the last few weeks that when economy heads south, gold tends to trend north).

Back to my question thow, do you guys believe with all the cash injection (which still has to happen) that the market will prop up a little before it tanks?


----------



## MrBurns

Ageo said:


> Well i dont know everything but you dont have to be Mr Buffet to understand that whats happening is only just the start of it......
> 
> Hyper inflation? well isnt that when you flood the market with money that wasnt there? where is all this money coming from? i do know 1 thing thow that gold will be a safe haven for people simply because thats what they believe (its proved itself in the last few weeks that when economy heads south, gold tends to trend north).
> 
> Back to my question thow, do you guys believe with all the cash injection (which still has to happen) that the market will prop up a little before it tanks?




I dont really want to but I think I'm going to have to buy gold in the next week or so. Thanks for your input.

No I dont think the market will be propped up, confidence has gone.

Sooner or later people will realise this will not end with shares going back to where they were.

It will end will shares at a low that just sits there, the time to buy will be when everyone else shruggs their shoulders and walks away.

Same with property I remember when there was no fuss over property, no one gave a toss, that was the time to buy.

And in both cases shares and property you can take your sweet time about when to go back in because when the time is right there wont be any rush, just general apathy.


----------



## explod

Have a look at the USJIA on big charts, set to all data and monthly candles and tell me that the dow is not staring at a fall to between 4000 and 2000 by early next year.   

For everything, everywhere this is looking very grim indeed and nobody knows the answers or where the end is.  If they do I would like to hear it.

Howard Ruff, has a good article on Kitco,3/9, talks about the financial fall of the Roman Empire.


----------



## dhukka

Great Stuff by Nicholas Nassim Taleb. It's a pity that the reporter doesn't understand what he's on about. This clip won't give anyone much optimism but it is interesting. For anyone who hasn't already I would thoroughly recommend his books, "Fooled by Randomness" and "The Black Swan"


----------



## skyQuake

2000 or 4000 for DIJA sounds a bit extreme, thats pricing in a crapload of uncertainity... Charts tell me high 6000s but then we have to reassess from there.


----------



## chops_a_must

dhukka said:


> Great Stuff by Nicholas Nassim Taleb. It's a pity that the reporter doesn't understand what he's on about. This clip won't give anyone much optimism but it is interesting. For anyone who hasn't already I would thoroughly recommend his books, "Fooled by Randomness" and "The Black Swan"




Rejigged for you Dhukka.

Fooled By Randomness is an awesome book. Didn't realise it had anything to do with markets etc. when I picked it up.

Am yet to read The Black Swan. But Taleb is incredibly good. I've said elsewhere that he's the only one in finance I feel grasps probability and expectation conceptually and truly.


----------



## Sean K

chops_a_must said:


> I've said elsewhere that he's the only one in finance I feel grasps probability and expectation conceptually and truly.



Don't rate Faber?


----------



## chops_a_must

kennas said:


> Don't rate Faber?




Never heard him talk specifically on probability etc.


----------



## Ageo

Interesting clip Dhukka, its funny how he reckons that Bernancke sp? (Reserver bank chairman i think) along with another chap is responsible for this.

More confirmation of my beliefs

I agree with the man that he reckons this is just the beggining........


----------



## Green08

> *How far can Libor rise?*
> 
> Breakdown USA
> 
> ·  * US Firms hold $871 billion of bonds maturing through 2009.*
> ·   Yields on overnight U.S. commercial paper claimed 171 basis points to 3.95 percent.
> 
> ·   Paper backed by assets rates (credit cards, auto loans) rose 229 basis points to 6.5 percent, highest since 2001.
> 
> ·    TED spread, was at 352 basis points. The spread was at 110 basis points a month ago.
> 
> LIBOR is used to calculate rates for $360 trillion of products ranging from credit derivatives to home loans and company debt.




http://www.whybanksfail.com/?p=173


----------



## grace

Remember reading this in The Bulletin mag when it was in print.  Max Walsh seemed to have hit the nail on the head when he wrote about what would happen to global financial markets back in January 07.

*



			Since 2002 some $4.5bn in CDOs, mainly synthetics, have been issued in Australia. Middle-market investors account for around 65% of these issues. This market segment, according to the Reserve Bank, consists of "local governments, university and charity endowment funds, and high net worth individuals, as well as smaller boutique fund managers".
		
Click to expand...


*


> "Wow! Talk about a sow's ear being turned into a silk purse! Think of the leverage involved in converting low- into high-quality debt, even more so when the CDOs are leveraged by their buyers 10 or 20 times! And think of the losses when the 25% fall in house prices we foresee wipes out the BBB tranches of the RMBSs by which the entire CDOs are collateralised."
> 
> In theory the investors in such CDOs can be protected by Credit Default Swaps that pay out any losses on BBB tranches of the CDOs.
> 
> If we have a serious downturn in the US, not a wildly improbable scenario, then BBB-rated paper would see extensive defaults.
> 
> The potential cascading effect in financial markets would make the 1987 meltdown - which was caused by the failure of portfolio insurance, the fashion du jour in 1987 financial markets - look like a tiny blip.




http://bulletin.prev01.ninemsn.com.au/article.aspx?id=177920&print=true

http://bulletin.prev01.ninemsn.com.au/article.aspx?id=139965



> In fact there is probably not a professionally managed superannuation fund, or any balanced fund for that matter, that does not have a weighting of CDOs which are insured against failure by CSDs.


----------



## rub92me

chops_a_must said:


> Rejigged for you Dhukka.
> 
> Fooled By Randomness is an awesome book. Didn't realise it had anything to do with markets etc. when I picked it up.
> 
> Am yet to read The Black Swan. But Taleb is incredibly good. I've said elsewhere that he's the only one in finance I feel grasps probability and expectation conceptually and truly.



Agree that he's a great writer and thinker. The Black Swan is less about trading and the markets, but he did give Fannie Mae as a specific example of a  blowup waiting to happen in that.


----------



## Kauri

the uber bank has been forced into a $59.2 bln government bailout. The  plan calls for a government capital injection of 6 bln Swiss francs $5.2 bln which will help set up a fund for as much as $60 bln of toxic assets that will be supported by the central bank. 

  Highland Capital Management, a Dallas based buy-side fund, has announced it will close two hedge funds with assets of more than $1.5B after losses on high yield, high risk loans and other types of debt. In a letter to investors the fund wrote that it had suffered from "unprecedented market volatility and disruption" while also stating that "the environment is one where the fundamental tools used to manage the credit strategies fund"s trading, hedging, shorting and financing are highly constrained and in some cases unavailable." 

  cheers
............Kauri


----------



## chops_a_must

rub92me said:


> Agree that he's a great writer and thinker. The Black Swan is less about trading and the markets, but he did give Fannie Mae as a specific example of a  blowup waiting to happen in that.




Yeah, I really should read it. I was thinking of doing post-grad work in very similar areas to what Taleb discusses in parts. He puts on paper basically most of the problems that I have with economic theory, yet seem to escape those in the field, and draw derision from said people in most cases when discussing those issues.


----------



## refined silver

grace said:


> Remember reading this in The Bulletin mag when it was in print.  Max Walsh seemed to have hit the nail on the head when he wrote about what would happen to global financial markets back in January 07




If there were $4.5b in CDOs, you can add a zero for the number of CDSs written on them. These CDSs were NEVER expected to be called upon to pay.


----------



## Ageo

Whats funny when i listen to economists on t.v is there huge amount of optimism that the market will suddenly turn around, stocks are at cheap value blah blah blah, then i notice all these economists work for a company that has been affected by the current market conditions so im assuming there trying to calm the public. There is only a few independent economists which actually to me speak the truth


----------



## Aussiejeff

Ageo said:


> Whats funny when i listen to economists on t.v is there huge amount of optimism that the market will suddenly turn around, stocks are at cheap value blah blah blah, then i notice all these economists work for a company that has been affected by the current market conditions so im assuming there trying to calm the public. There is only a few independent economists which actually to me speak the truth




It's a World Finance War and PROPOGANDA is the name of the game. It seems many media "expurts" and "anal-ysts" have been reading the *"J. Goebbels Handbook Of Glib Lies 101"*, so expect more of the same over an extended period.  

Garbage in = garbage out.


----------



## Ageo

A very interesting article from the mises

http://mises.org/story/3151

It explains good credit vs bad credit
This paragraph sums it up quite nicely



> Trouble emerges however if, instead of lending fully backed-up money, a bank engages in fractional-reserve banking, the issuing of empty money, backed up by nothing


----------



## basilio

The concern about trillions of dollars of dodgy debt is real. Unfortunately it is of such concern no one wants to face it. The original elephant in the dining room.

How is the situation to be resolved? Firstly there is no way the debts can be paid. Much is based on  artificially  high property prices, the rest has been pissed against the wall by the bankers and is represented by the conspicuous consumption of this elite. 

But then another even more urgent issue arises. In the material world we face the critical issues of peak oil and global warming. In a nutshell if our current civilization is to survive in any recognisable way we must re engineer our society to

1) live on renewable non fossil fuel based energy sources
2) (Somehow) drastically  reduce current CO2 in the atmosphere to 350 ppm (parts per million) over the next 30 years to ( perhaps ) prevent runaway climate change.
3) reduce international resource use to levels that can be sustained  without destroying the systems that produce them. In plain language you can't cut down more trees than are being produced;you can't take more water out the rivers and aquifers than goes in.

We have been sold and have bought The Big Lie.  We have  believed that somehow in a closed system (one earth) man can grow exponentially and our ingenuity will solve all problems. In the last 15 years the Wall street " Rulers of Universe" convinced everyone that writing figures on bits of paper was real wealth. It certainly was when they persuaded everyone else to pay their hard earned cash for it. And all we have is expensive wallpaper.

There are some excellent analysises of this situation on the net. The best ones I have seen are by George Monbiot. He wrote a very recent article in the Guardian and gave a chilling presentation to a journalists conference back in 2004. 

My thoughts. Start growing some veges, learn or relearn some basic  physical skills, start creating a simpler lifestyle that isn't going to require the rivers of gold we currently need.

http://www.monbiot.com/archives/2008/10/14/this-is-what-denial-does/
http://www.monbiot.com/archives/2004/10/06/no-longer-obeying-orders/


----------



## CanOz

basilio said:


> The concern about trillions of dollars of dodgy debt is real. Unfortunately it is of such concern no one wants to face it. The original elephant in the dining room.
> 
> How is the situation to be resolved? Firstly there is no way the debts can be paid. Much is based on  artificially  high property prices, the rest has been pissed against the wall by the bankers and is represented by the conspicuous consumption of this elite.
> 
> But then another even more urgent issue arises. In the material world we face the critical issues of peak oil and global warming. In a nutshell if our current civilization is to survive in any recognisable way we must re engineer our society to
> 
> 1) live on renewable non fossil fuel based energy sources
> 2) (Somehow) drastically  reduce current CO2 in the atmosphere to 350 ppm (parts per million) over the next 30 years to ( perhaps ) prevent runaway climate change.
> 3) reduce international resource use to levels that can be sustained  without destroying the systems that produce them. In plain language you can't cut down more trees than are being produced;you can't take more water out the rivers and aquifers than goes in.
> 
> We have been sold and have bought The Big Lie.  We have  believed that somehow in a closed system (one earth) man can grow exponentially and our ingenuity will solve all problems. In the last 15 years the Wall street " Rulers of Universe" convinced everyone that writing figures on bits of paper was real wealth. It certainly was when they persuaded everyone else to pay their hard earned cash for it. And all we have is expensive wallpaper.
> 
> There are some excellent analysises of this situation on the net. The best ones I have seen are by George Monbiot. He wrote a very recent article in the Guardian and gave a chilling presentation to a journalists conference back in 2004.
> 
> My thoughts. Start growing some veges, learn or relearn some basic  physical skills, start creating a simpler lifestyle that isn't going to require the rivers of gold we currently need.
> 
> http://www.monbiot.com/archives/2008/10/14/this-is-what-denial-does/
> http://www.monbiot.com/archives/2004/10/06/no-longer-obeying-orders/




Agree with this as well. Have you seen The Crash Course, by Chris Martenson?

Here:https://www.aussiestockforums.com/forums/showthread.php?t=12227&highlight=crash

Cheers,


CanOz


----------



## Aussiejeff

From todays "Business Spectator"..

_"Future markets see the RBA is cutting rates by 1.25 per cent by the end of the year, and *analysts expect the cash rate to be down to 3.75 per cent by March next year*"_


Sheesh. How in hell are depositers supposed to maintain a capital base if this happens? This is the most likely dastardly equation...

*[(Deposit) + (3.75% Interest) - (5% Inflation) - (25% Tax on interest)] = CAPITAL LOSS!! *

So, will everyone pull their deposits out and rush to buy gold bullion? Some might, but dream on if you think everyone can or will. Banks will start to collapse from a lack of REAL capital to support their funny money if significant cash deposits are withdrawn due to the implied LOW interest rate return and subsequent capital loss for depositors. 

This appears to be an economically dangerous short-termism policy IMO. At the end of the article, an even worse scenario for depositors is painted...

_"University of Western Sydney associate professor of economics and finance Steve Keen predicts a two per cent cash rate by the end of next year, *dropping to 0 per cent in 2010*, the paper said_


http://www.businessspectator.com.au...ld-see-hefty-RBA-rate-cuts-KGJSP?OpenDocument

PS: I wonder if this is the price we will now pay for having deposits "guaranteed" ??


----------



## kransky

nice read

http://www.financialarmageddon.com/2008/10/a-real-straight-shooter.html


----------



## Aussiejeff

Wow! Looks like all the promises made by World Guvmints to "guarantee everything so far" including the kitchen sinks has worked a treat. All's well. Let the borrowing begin again in earnest! 

Beats me why the Masters Of The World just don't come out and say "We have also decided to guarantee ALL CDS & derivatives to whatever value you can ever imagine". It's worked so far for whatever Trillions they have cooked up. The markets have gone nuts on a buying spree. 

So, surely that would fix everything. GUARANTEE THE LOT - RIGHT NOW! These derivatives and default swaps are just imaginary figures anyway, aren't they? So why don't guvmints take the ultimate punt and make the claim. What's to lose? Imaginary guvmint reserves? They must be imaginary, since I can't imagine how the hell they are going to pay back what they have already promised!


aj


----------



## mayk

Aussiejeff said:


> So, surely that would fix everything. GUARANTEE THE LOT - RIGHT NOW! These derivatives and default swaps are just imaginary figures anyway, aren't they? So why don't guvmints take the ultimate punt and make the claim. What's to lose? Imaginary guvmint reserves? They must be imaginary, since I can't imagine how the hell they are going to pay back what they have already promised!
> 
> 
> aj



Haven't they done that indirectly by talking stake into most financial institutions?


----------



## Julia

I've just started a thread on CDS's in the hope we can transfer comments which presently exist on this topic in several threads into the one place.


----------



## chops_a_must

Iceland then Argentina and South Korea. Who's next?



> Argentina Default Looms as Pension Funds Seizure Roils Markets
> 
> By James Attwood and Bill Faries
> 
> Oct. 22 (Bloomberg) -- Argentina's planned seizure of $29 billion of private pension funds stoked concern the nation is headed for its second default in a decade.
> 
> Investors say President Cristina Fernandez de Kirchner's decision may further hurt markets already reeling from slumping commodity prices and slower growth. The retirement system, set up in 1994 to help bolster capital markets, owns about 5 percent of companies listed on the Buenos Aires stock exchange and 27 percent of shares available for public trading, data compiled by pension funds show.
> 
> Argentine bond yields soared above 24 percent before the announcement late yesterday, and the benchmark Merval stock index tumbled 11 percent. The last time the government sought to tap workers' savings to help finance debt payments was in 2001, just before it stopped servicing $95 billion of obligations.
> 
> ``It's the final of many nails in the coffin from an institutional investor perspective,'' Bill Rudman, who helps manage $3 billion of emerging-market equity at WestLB Mellon Asset Management in London. Argentina is ``disappearing into irrelevance.''
> 
> The government's proposal to take control of 10 funds, including units of London-based HSBC Holdings Plc and Bilbao, Spain-based Banco Bilbao Vizcaya Argentaria SA, still needs congressional approval. Fernandez said yesterday her decision is ``in a context where the biggest countries'' are taking steps to protect their banks because of the global financial crisis.
> 
> ``Instead, we're taking them for our retirees and workers,'' she said during a rally in Buenos Aires.
> 
> Borrowing Needs
> 
> Argentina's borrowing needs will swell to as much as $14 billion next year from $7 billion in 2008, RBC Capital Markets, a Toronto-based unit of Canada's largest bank, said yesterday.
> 
> South America's second-largest economy hasn't had access to international capital markets since its 2001 default. Holders of about $20 billion of defaulted bonds rejected the government's 2005 payout of 30 cents on the dollar, and Fernandez has said she's considering proposals to offer a new deal.
> 
> The cost of protecting Argentina's bonds against default soared yesterday, as five-year credit-default swaps based on Argentina's debt jumped 2.38 percentage points to 32 percentage points, according to Bloomberg data. The contracts to protect against or speculate on default pay the buyer face value should a borrower fail to adhere to its debt agreements.
> 
> The proposed takeover ``makes the chance of default in the short-term less likely by inflicting immense damage to the long- term credibility of the government and the financial system with its own people,'' said Paul McNamara, who helps manage $1.2 billion of emerging-market assets at Augustus Asset Managers Ltd. in London.
> 
> Investment Mix
> 
> Amado Boudou, the head of Argentina's social security administration, said yesterday the government will keep the same investment mix for the funds, with 60 percent in bonds and 10 percent in stocks. He called the privately run system an ``enormous error.''
> 
> Currently, about 55 percent of the 94.4 billion pesos ($29.3 billion) held by the private pension funds is invested in government debt, according to the pension regulator's Web site. A takeover would allow the Fernandez administration to write off the sovereign bonds held by the funds, said Javier Salvucci, an analyst with Buenos Aires-based Silver Cloud Advisors.
> 
> ``It's a short-term fix that may cause more fiscal and macro pain in the long haul, which has been typical of the last two administrations,'' said Will Landers, who manages $5 billion in Latin American equities at BlackRock Inc.
> 
> Volume Quadrupled
> 
> Since the pension system began in 1994, trading volume on the Buenos Aires stock exchange has quadrupled. The funds were net buyers of domestic equities for a third straight month in September, investing about $144 million, according to Deutsche Bank AG. They have about $4.1 billion in domestic stocks, strategist Guilherme Paiva wrote in an Oct. 15 note.
> 
> The government's plan is ``one additional factor to count against Argentine assets,'' said Vinicius Silva, an emerging market strategist at New York-based Morgan Stanley, which recommends that emerging-market equity investors have a ``zero' weighting in the country.
> 
> Nestor Kirchner, Fernandez's husband and predecessor as president, began tightening restrictions on private pension funds last year, requiring them to keep more investments in the country to sustain economic growth. The rules forced the funds to ``repatriate'' about $3 billion in mostly Brazilian assets, Sebastian Palla, chairman of the country's pension fund association, said in February.
> 
> Fund Sales
> 
> Foreign emerging-market funds sold about $250 million in Argentine stocks through August this year in the biggest outflow since 2000, according to fund flow tracker EPFR Global in Cambridge, Massachusetts. The Merval is down 51 percent this year compared with 39 percent for the Bovespa in neighboring Brazil.
> 
> Bond markets also have tumbled. Yields on the government's 8.28 percent bonds due in 2033 have almost tripled to 24.69 percent from 8.83 percent a year ago.
> 
> Seven years ago, as the government tried in vain to stave off a debt default, it pressured the pension funds to participate in bond swaps that pushed forward repayment dates. That December, strapped for cash to pay salaries, it ordered the funds to transfer $3.2 billion in bank deposits to state-owned Banco de la Nacion.
> 
> The latest move is ``much, much worse,'' said McNamara at Augustus Asset Managers Ltd.
> 
> ``It's not just shoving a little bit of debt in at the edge, it's taking over the whole system,'' he said. ``It does even more damage to the concept of encouraging people to invest in the domestic financial industry.''
> 
> To contact the reporters on this story: James Attwood in Santiago at jattwood3@bloomberg.netBill Faries in Buenos Aires wfaries@bloomberg.net
> Last Updated: October 21, 2008 22:01 EDT




http://www.bloomberg.com/apps/news?pid=20601087&sid=aDuA9V2SI6GY&refer=home


----------



## Uncle Festivus

chops_a_must said:


> Iceland then Argentina and South Korea. Who's next?
> 
> 
> 
> http://www.bloomberg.com/apps/news?pid=20601087&sid=aDuA9V2SI6GY&refer=home




And you say gold is doomed???


----------



## mantronic

Gold hasnt been doing anything great lately.


----------



## chops_a_must

Uncle Festivus said:


> And you say gold is doomed???




And what a mighty reaction it had.

These things haven't exactly been unknown.


----------



## Uncle Festivus

mantronic said:


> Gold hasnt been doing anything great lately.




It's just hit $AU1400, currently $AU1150. These are the figures that matter to me at least.


----------



## Uncle Festivus

chops_a_must said:


> And what a mighty reaction it had.
> 
> These things haven't exactly been unknown.




The gold price in every other currency other than $US has been hitting record highs.


----------



## chops_a_must

Uncle Festivus said:


> It's just hit $AU1400, currently $AU1150. These are the figures that matter to me at least.



That's a very big retrace though...


----------



## mayk

Beginning of the end of regulation free market.

http://economix.blogs.nytimes.com/2008/10/23/greenspans-mea-culpa/

For more effect read it in the background of the following music.
http://www.youtube.com/watch?v=cBBHJZD7BXM


----------



## derty

Forget all that gumph about sub-prime and CDO's, Fox News know why the DOW is tanking:


----------



## kingbrown

*usa markets now in limitdown* 
ie sells are being limited to a 6.4% drop on the open 



Fox news is sounding like like this may be it ?

any current comments ??


----------



## CanOz

This will go down in History my friend! Limit down BEFORE the open!!! Are you kidding me

I'm not going to call a bottom or anything stupid like that but its starting to smell a bit like capitulation to me! 

Cheers,

CanOz


----------



## chops_a_must

kingbrown said:


> *usa markets now in limitdown*
> ie sells are being limited to a 6.4% drop on the open
> 
> 
> 
> Fox news is sounding like like this may be it ?
> 
> any current comments ??



Yep... I think this is it.

I wish I could take a screenshot, because my screen is rather hilarious.

Short citi and GE, which is a bit of a laugh for me. :


----------



## chops_a_must

CanOz said:


> This will go down in History my friend! Limit down BEFORE the open!!! Are you kidding me
> 
> I'm not going to call a bottom or anything stupid like that but its starting to smell a bit like capitulation to me!
> 
> Cheers,
> 
> CanOz




It was happening virtually every other day in the ag commodities late last year and early this.

Gonna be fun Can. Got any positions or strategies?


----------



## cuttlefish

Downright scary really - thats an amazing futures number.


----------



## kingbrown

Its starting to sound like they're just going to pull the plug in the states today.

Cashed up and ready to go here !!! he he


----------



## CanOz

chops_a_must said:


> It was happening virtually every other day in the ag commodities late last year and early this.
> 
> Gonna be fun Can. Got any positions or strategies?




No posies on anything at the moment Chops. Waiting for a retrace on several FX pairs...but i like AUDJPY...thanks to Kauri. 

So i am 100% CASH and to be honest i'll be lucky to make 10% out of this in the next week on my FX account.

You?

Cheers,


COz


----------



## chops_a_must

CanOz said:


> No posies on anything at the moment Chops. Waiting for a retrace on several FX pairs...but i like AUDJPY...thanks to Kauri.
> 
> So i am 100% CASH and to be honest i'll be lucky to make 10% out of this in the next week on my FX account.
> 
> You?
> 
> Cheers,
> 
> 
> COz




Yes, I had a long iron condor on GE, and I got out of the short put last night, because I didn't like the way it was trading. I thought it was precipice material.

So I was left with a bear call spread on GE with a put.

Have had a bear call spread on C all week, and am short GLD.


----------



## CanOz

chops_a_must said:


> Yes, I had a long iron condor on GE, and I got out of the short put last night, because I didn't like the way it was trading. I thought it was precipice material.
> 
> So I was left with a bear call spread on GE with a put.
> 
> Have had a bear call spread on C all week, and am short GLD.




I think that if you can manage those positions then your risk at least is clearly defined, reminds me of WayneL

The buck is on the move again Chops!

COz


----------



## Trembling Hand

I've been throwing my little matches into the fire all day (SPI, GC, HSI, Z, Dax). Bloody hell my  trigger finger is swelling. 

Very hard time to hold a position. I have shorted then covered then shorted lower again & again all day/night. Just another amazing day in paradise hey!!


----------



## chops_a_must

CanOz said:


> I think that if you can manage those positions then your risk at least is clearly defined, reminds me of WayneL
> 
> The buck is on the move again Chops!
> 
> COz



I have virtually no risk to manage now, which is how you want every trade to be.

And I can have a "free" crack at some things now, aim for some home runs, like with the long put. I don't think I will though. No need to get greedy.

The decisions for me will come next week some time I would imagine...


----------



## CanOz

chops_a_must said:


> I have virtually no risk to manage now, which is how you want every trade to be.
> 
> And I can have a "free" crack at some things now, like I did with the long put. I don't think I will though.
> 
> The decisions for me will come next week some time I would imagine...




When you think the medium term view will come into place and the volatility has peaked?

COz


----------



## chops_a_must

CanOz said:


> When you think the medium term view will come into place and the volatility has peaked?
> 
> COz




The volatility will probably peak acutely tonight. Which will keep me from getting out of some calls. But I'm still very much a novice, so take what I say with a grain of salt...

Doesn't mean that things wont keep going down, more of a matter of timing leaving the trades, to make sure the maximum, or minimum volatility is priced into the option at the time of leaving the trade.

Would love for Wayne to be here now...

There is a thunderstorm here to complete the atmosphere...


----------



## kingbrown

energy  stocks getting hit !
oil down down down !!! 

capitulation ?


----------



## Trembling Hand

chops_a_must said:


> There is a thunderstorm here to complete the atmosphere...




LOL. Bit of heat building up!!


----------



## CanOz

chops_a_must said:


> The volatility will probably peak acutely tonight. Which will keep me from getting out of some calls. But I'm still very much a novice, so take what I say with a grain of salt...
> 
> Doesn't mean that things wont keep going down, more of a matter of timing leaving the trades, to make sure the maximum, or minimum volatility is priced into the option at the time of leaving the trade.
> 
> Would love for Wayne to be here now...
> 
> There is a thunderstorm here to complete the atmosphere...




Although i really couldn't give a flying rats ass about being right or wrong, i would like to be able to get a feel for the markets, and i think its time like these that help that ability. FWIW, i agree, i think the volatility should peak in the near term. 

Cheers,

COz


----------



## chops_a_must

Trembling Hand said:


> LOL. Bit of heat building up!!




Scalp that biatch! LOL!


----------



## BentRod

> Would love for Wayne to be here now...




Me too  


Not sure if already mentioned but have you guys noticed this is the same date as the 1929 crash?

Oct 24.


----------



## chops_a_must

CanOz said:


> Although i really couldn't give a flying rats ass about being right or wrong, i would like to be able to get a feel for the markets, and i think its time like these that help that ability. FWIW, i agree, i think the volatility should peak in the near term.
> 
> Cheers,
> 
> COz



I agree. Trading almost full time December and January taught me a lot about feel in the market.

If something doesn't feel right, go with your gut instinct. And it's times like these that you notice it so much more, and need to trade with it.


----------



## nunthewiser

well well well . aint life intresting!........ futures trading stopped from too much ............ global co-ordinated melt down ......... plans in place how to close markets if it drops certain % in different time frames ..........

thank gawd im a drinkin man and can say a toast for what we are about to recieve 

amen 
anun


----------



## CanOz

BentRod said:


> Me too
> 
> 
> Not sure if already mentioned but have you guys noticed this is the same date as the 1929 crash?
> 
> Oct 24.




Bent, i was thinking that day had some sort of relevance in history, but i couldn't remember why...thanks! Different days though they didn't have a way of pricing things in before the market opened, did they?

COz


----------



## chops_a_must

nunthewiser said:


> well well well . aint life intresting!........ futures trading stopped from too much ............ global co-ordinated melt down ......... plans in place how to close markets if it drops certain % in different time frames ..........
> 
> thank gawd im a drinkin man and can say a toast for what we are about to recieve
> 
> amen
> anun



We better just hope the pineapple has some lube...


----------



## theasxgorilla

BentRod said:


> Me too
> 
> 
> Not sure if already mentioned but have you guys noticed this is the same date as the 1929 crash?
> 
> Oct 24.




I must admit, from my busy little place in the "real economy" I hadn't noticed...you get the feeling it's going to be real bad.


----------



## chops_a_must

Canny... open the book trader for the ES on IB.

Sit back, relax, watch and giggle when you shouldn't...


----------



## kingbrown

new york stock exchange chief on fox live looks a bit 
*pannicked *

ding ding !!


----------



## chops_a_must

Not nearly enough blood...


----------



## dhukka

yep very orderly, the limit down in the futures was a tad misleading


----------



## THE BUZZ

word of the day,

ca·pit·u·la·tion (n) 

1. The act of surrendering or giving up. Surrender. 
2. A document containing the terms of surrender


were all screwed???

great thread , keep 'em posted , many thanks.


----------



## CanOz

chops_a_must said:


> Canny... open the book trader for the ES on IB.
> 
> Sit back, relax, watch and giggle when you shouldn't...




Still.....allot of bids there....why?

COz


----------



## chops_a_must

THE BUZZ said:


> word of the day,
> 
> ca·pit·u·la·tion (n)
> 
> 1. The act of surrendering or giving up. Surrender.
> 2. A document containing the terms of surrender
> 
> 
> were all screwed???
> 
> great thread , keep 'em posted , many thanks.




Not. Even. Close.


----------



## Kauri

CanOz said:


> Still.....allot of bids there....why?
> 
> COz




Strange priced action immediately following the Wall St open with USD/JPY recovering from levels around 92.00 to 92.75 and the talk in the market is that the BoJ might have helped massage the Dollar higher.   

Cheers
...........Kauri


----------



## theasxgorilla

chops_a_must said:


> Not. Even. Close.





Agreed, although the VIX is looking mighty spectacular!


----------



## BentRod

Watch the close.

Who would want to hold over the weekend?


----------



## chops_a_must

theasxgorilla said:


> Agreed, although the VIX is looking mighty spectacular!




hello,

no, normal gyrations

thankyou,
vixbots


----------



## Trembling Hand

Thats the problem with big down opens. All you can do is buy, Which I mostly have. Only nutters would sell that open.

probably roll over now but I don't care. I will be rolling over in bed.


----------



## nunthewiser

bleedin hell , i took up drinkin and knocked back the bishop for that lame assed open ... woopee do .......... might have to sing sea shantys to the neihbours instead to get some excitement


----------



## chops_a_must

Quality... if only WayneL was here to enjoy it.


----------



## Aussiejeff

chops_a_must said:


> Quality... if only WayneL was here to enjoy it.




Haha! Good-un Robo-Chops 

The most meaningful chart I have seen for a long while.


----------



## robots

hello,

gee brothers the copying is awesome, you right if only WayneL was around to see it all

great work, what a life

thankyou
robots


----------



## Kauri

more profit warnings from European companies (DSM and TNT) with more expected, specifically from Deutsche Post.
  the US is expected to cut rates on Wednesday 50bp to 1%. 
  In the UK, Alistair Darling is getting flak from economists for trying to spend his way out of the recession. Hedge funds are also in the news with more funds stopping outflows, most noticeably RAB Capital which was reported over the weekend.
  A Kaupthing samurai failed to make payment after its seven day grace 
period. Kaupthing"s Samurai bonds are around 5% of their value on the secondary market which some see as a somewhat high number given the low probability of recovery in the currently difficult conditions for Iceland. Kaupthing has JPY78bn outstanding Samurai paper.

Cheers
...........Kauri


----------



## IFocus

chops_a_must said:


> Quality... if only WayneL was here to enjoy it.




I like how the line goes down to the ground then down the step..........great find Chops Waynel would love it


----------



## chops_a_must

IFocus said:


> I like how the line goes down to the ground then down the step..........great find Chops Waynel would love it




This one is good as well:


----------



## chops_a_must

Rumours are Citigroup are going to be involved in some sort of deal.

Looking at the options, a lot of interest coming onto the market between the 17.5-20 strikes. So would expect something higher than that to be the price offered, or equivalent...


----------



## Aussiejeff

The grizzly Bears are off and running....

Fed has now opened Mega Billion dollar credit swaps with many central banks all over the planet, thus spreading US risk to everyone. http://www.bloomberg.com/apps/news?pid=20601087&sid=aUNPTGKAY_bQ&refer=home

US citizens rejoice! The rest of the world will save you by feeding capital in through these numerous, wide open "$wap windows" to cover your debt$. 

Oh, of course the Fed will be sure to help out a fellow credit swapper in the reverse direction too.... if and when it so suits them.  

Ahhhh! I see blue skies ahead.....

Time for lift-off!


aj


----------



## Aussiejeff

Gee. Awful quiet around here (the entrance to the Bear Cave).

Looks like the Fed's brilliantly executed Cash Tsunami has washed 'em all awaaaaay with an imminent and severe market rise? Consider the great news...

- US heading for "moderate to deep recession" for years sends share markets sharply higher.
- 100,000's more US jobs heading for the scrapheap sends share markets sharply higher.
- US Fed in debt up to and increasingly past it's eyeballs sends share markets sharply higher.

It looks all good to me!

BUY, [size=+1]BUY[/size], [size=+2]BUY[/size]


----------



## cuttlefish

Aussiejeff said:


> The grizzly Bears are off and running....
> 
> Fed has now opened Mega Billion dollar credit swaps with many central banks all over the planet, thus spreading US risk to everyone. http://www.bloomberg.com/apps/news?pid=20601087&sid=aUNPTGKAY_bQ&refer=home
> 
> US citizens rejoice! The rest of the world will save you by feeding capital in through these numerous, wide open "$wap windows" to cover your debt$.
> 
> Oh, of course the Fed will be sure to help out a fellow credit swapper in the reverse direction too.... if and when it so suits them.
> 
> Ahhhh! I see blue skies ahead.....
> 
> Time for lift-off!
> 
> 
> aj




Yeah I have a similar take on it. Its funny how the article frames it as though its an act of generosity by the US govt to be doing these swaps with these countries - while to me it just looks like the US attempting to palm off its overprinted crud to as many corners of the world as it can in exchange for the productivity of other countries (effectively what a countries currency represents).   But I'd be interested in hearing other viewpoints.


----------



## Bushman

All I can say is the US housing bubble emerged from 1% interest rates. 

They will keep them at 1%, artificially re-inflate the housing market and then hopefully avoid the sub-prime mess by not securitising mortgages backed by artificial house prices. 

Is Pavlov in the house?


----------



## CamKawa

Being the bear that I am I will keep myself occupied during this rally by watching Credit Crash Britain Part1


----------



## treefrog

a helicopter view:


> Carl Swenlin | DecisionPoint
> CHANGING WITH THE MARKET
> When the market changes, we must change our tactics, strategies, and analysis techniques to accommodate the new market conditions. This is not a new idea, but it is one that is not very widely recognized, particularly when applied to the long-term. In recent writings I have emphasized that we are in a bear market, and that we must play by bear market rules. Overbought conditions will usually signal a price tops, and oversold conditions can often see prices slip lower to even more oversold conditions. When making these comments, my focus has been on the cyclical bull and bear markets. What I want to address in this article are the secular forces of which we must be aware.
> On the chart below I have identified the five secular trends that have occurred in the last 80-plus years. First is the 1929-1932 Bear Market, which, although it was short, saw the market decline 90%. Next was a secular bull market that lasted from 1932 to 1966, which overlaps with the consolidation of the 1960s an 1970s. In the early 1980s another secular bull market began which peaked in 2000 (basis the S&P 500). Finally, we seem to have entered another consolidation phase that could last another 10 to 15 years.
> I began my market studies in the early 1980s, before the big bull market took off, and I learned from the guys who learned all they knew from the market action of the 1960s and 1970s. Applying those rules to the new bull market was confusing, frustrating, and unprofitable. While I didn't participate in those markets, it is easy to imagine the bewilderment of those who, educated in the bull market of the 1920s, took the elevator all the way down to the basement starting in 1929.
> The long bull market after the 1932 bottom was missed by most of those traumatized by the crash, but it trained a whole new group of analysts who learned that the market always goes up . . . until everything they knew was proven wrong by a 20-year consolidation. Finally, the battle cry of the 1980s and 1990s bull, "this time it's different," was learned well by those who ultimately ate the 50% decline of 2000-2002.
> Unfortunately, it takes time to unlearn the lessons of the heady 1980s and 1990s, and we can still observe people using bogus valuation models that only work in bull markets. We still see people trying to pick bottoms, and we still see people who think that a stock is under valued because it is down 70%. By the time this current secular market phase is over, people will have learned all new rules, that will not apply to the next 20 years.
> Whether or not I have correctly identified the current secular market phase as a consolidation remains to be seen, but I am certain that we are no longer operating on the rules of the last secular bull market.


----------



## panikhide

treefrog said:


> a helicopter view:




That is a great idea, but what are the new 'rules' you speak of?


----------



## treefrog

panikhide said:


> That is a great idea, but what are the new 'rules' you speak of?




just posted swenlin's comment there pan; but he is referring to the method for trading a LT consolidating market  rather than the method used for the recent LT bull market - I don't know what are his specific differences but I doubt it would be buy and hold. Obviously your timeframe becomes important - more MT may be relevant.


----------



## Aussiejeff

How exciting!

Heard a few media "expert" commentators whispering rumours that the market might have bottomed and could signal the end of the Bear Market.

Ooooh, I love it when they get all uppity after an office sweep win on Melbourne Cup Day!

Ahhhh. The immediacy of the Modern Media. One day its' GLOOM, the next day ... BOOM!!


----------



## Aussiejeff

-----------------

**NEWS FLASH**

Treasurer Swan says budget to take $AU40 Billion hit from financial crisis.

-----------------



Ouch!!


----------



## treefrog

Aussiejeff said:


> -----------------
> 
> **NEWS FLASH**
> 
> Treasurer Swan says budget to take $AU40 Billion hit from financial crisis.
> 
> -----------------
> 
> 
> 
> Ouch!!




and that would be his most optimistic spin he can put out atm - at least its a step back from repeating 'no problem, no problem, we won't go into recession.'
but wait for it, it will come, "oh, not our fault, all theirs, but we can't now avoid recession" followed by "it looks like it will be deeper than we thought"


----------



## MrBurns

treefrog said:


> and that would be his most optimistic spin he can put out atm - at least its a step back from repeating 'no problem, no problem, we won't go into recession.'
> but wait for it, it will come, "oh, not our fault, all theirs, but we can't now avoid recession" followed by "it looks like it will be deeper than we thought"




followed by, "Aw Ruddy it's my turn to go overseas" 
"bugger off Swanny I've found 3 more seminars to go to, I'm not staying in this place, it's buggered, we're in a flami'n depression"

"We've spent the surplus and the future fund, quick call an election so we can lose and get out of the firing line and blame the Libs"

"How will we make sure we lose Ruddy?"

"Well Swanny we'll let you compose and deliver the policy speech with emphasis of fiscal responsibility" ........then duck, that should do it.

"Yes I'll have the fillet steak and cab sav for lunch and shut the bloody windows in the dining room, all those blasted starving peasants groaning puts you off your food"

"save my house Mr Rudd, my shares have gone down Mr Rudd, what are you doing about unemployment Mr Rudd" they just wont let up. 
Swanny give another $150B to the banks and $25 to the Salvos, that ought to shut them up for a while" I'm sick of all that "my kids are starving" rubbish, GET A JOB, I did.


----------



## CamKawa

Is this bloke a nutter or what?
http://www.youtube.com/watch?v=ge2J2lNusJs


----------



## MrBurns

CamKawa said:


> Is this bloke a nutter or what?
> http://www.youtube.com/watch?v=ge2J2lNusJs




Has to be, the FBI would have blown his head off by now if it were true.


----------



## frenzel

CamKawa said:


> Is this bloke a nutter or what?
> http://www.youtube.com/watch?v=ge2J2lNusJs




Just a bit!  Towards the end....



> Go out and wire all your money to foreign accounts.  Whether it's British pounds, Swiss Francs or French Francs, but not Euros, because the Euro is not backed by anything.




Small credibility crisis with that quote.  The Amero is BS, and if you want one, speak to this guy. He's been pressing them for fun, the same coin as shown in the video.

Although I'm not convinced we won't see some radical currency rethink within our time.  The US$ is certainly going to become worthless at some point as all fiat currencies in history have.  

What standard would we use for a Bretton Woods II type scenario though?


----------



## davo8

Aussiejeff said:


> How exciting!
> 
> Heard a few media "expert" commentators whispering rumours that the market might have bottomed and could signal the end of the Bear Market.
> 
> Ooooh, I love it when they get all uppity after an office sweep win on Melbourne Cup Day!
> 
> Ahhhh. The immediacy of the Modern Media. One day its' GLOOM, the next day ... BOOM!!




Indeed. I'm still voting for 7K on the DOW, 700 on the S&P and 3500 on the ASX. 

It's not that I'm a perma-bear, but it really doesn't feel like the bottom yet. And the list of bad news (especially CDS implosions) just goes on and on.


----------



## Glen48

Any punters on how low the USD will go and when? Should be good in the cfd game.


----------



## explod

Glen48 said:


> Any punters on how low the USD will go and when? Should be good in the cfd game.




If they keep printing the money to shore up failing enterprises then it will go down to nothing.  Hopefully the new US team will put the brakes on somehow.

Germany did that from the mid 1920's and that's what eventuated.   Just reading a book on the subject of the Great Depression and the manipulation of money and credit by Ludwig von Mises from his notes and papers 1923 to 1946.    You would think he was talking about our crisis today.


----------



## skyQuake

Hey guys, its the end of the bear market!

http://www.guardian.co.uk/business/marketforceslive/2008/nov/04/marketturmoil-morganstanley

Hope he gets sacked for calls like this...


----------



## Glen48

Strange how all these boom start... Greed, Money... Boom.. Bang and no one ever learns.
Nothing repeats like History.


----------



## doctorj

Glen48 said:


> Strange how all these boom start... Greed, Money... Boom.. Bang and no one ever learns.
> Nothing repeats like History.



"History doesn't repeat itself, but it does rhyme."
-- Mark Twain


----------



## dhukka

Interesting interview with Robert Shiller on the &:30 report a couple of nights ago.  Shiller saw a lot of the current mess coming years ago and called the tech bubble back in 200.


----------



## kransky

goldman sachs gray-beard on lateline tonight says we are likely at bottom and the chinese stimulus package will stop us falling into a deep recession. He says australia is very well placed to take advantage of this. 

i think its BS... we are not at the bottom yet imo..us consumer sentiment and housing prices are still falling... circuit city going under... gm... 

the only issue is that markets generally lead economics... but by how much? i think its too early


----------



## dhukka

I just love all these platitudes that are doing the rounds at the moment. e.g. the market bottoms 6 months before the end of a recession etc.  I think John Maudlin put it well in his weekly newsletter this week.



> Before we look at how weak the economic numbers were from both the manufacturing and service sector surveys, let me cover an important point about recessions. You are going to hear all sorts of analysts (including sometimes even this humble analyst!) quote statistics that in general sound like: "Since the end of WWII average recessions have lasted X months, and thus we are almost through the current one, so buy what I am selling." Or the ever popular "Stocks tend to find the bottom in the middle of a recession, so now is the time to buy."
> 
> There will be lots of variations that all assume that past performance is somehow indicative of future results. And such an assumption is a prescription for investment pain.
> 
> First, there are not enough data points about recessions between the end of WWII and now to have any statistical meaning.* I count 11 recessions since WWII. In what other human endeavor would we use just 11 data points and then decide to bet our hard-earned money? While average data can have meaning and give some grounds for comparison, it should be treated with heavy levels of skepticism when used as an argument for investing with conviction.*


----------



## chops_a_must

kransky said:


> the only issue is that markets generally lead economics... but by how much? i think its too early



Yah.

You can already see the next round of news building up. I'm mainly short now.


----------



## kransky

great read imo

http://www.portfolio.com/news-marke...1/The-End-of-Wall-Streets-Boom?tid=true#page9


----------



## Aussiejeff

kransky said:


> goldman sachs gray-beard on lateline tonight says we are likely at bottom and the chinese stimulus package will stop us falling into a deep recession. He says australia is very well placed to take advantage of this.
> 
> i think its BS... we are not at the bottom yet imo..us consumer sentiment and housing prices are still falling... circuit city going under... gm...
> 
> the only issue is that markets generally lead economics... but by how much? i think its too early




Totally agree. Just gotta wonder how much Goldman-Sachs execs and hangers-on are manipulating this situation for their own SHORT TERM benefit. How many company SP's are they subtly or not-so-subtly "influencing". Hmmmm.

I think *Total BS* is the state of play at the moment. Gordon Brown seems to be advocating a Brave New World Order (obviously with England somewhere at the head of the pack) that will SPEND, SPEND, SPEND it's way out of the current mess, obviously bailing out companies left right and centre along the way. He calls it "FISCAL STIMULUS". Sounds like a wet dream to me. Unfortunately, now KRudd seems to be infected with the same terminal disease. Cheesus wept. That's the exact same policy BS that got us INTO the cesspit to start with 

Every goddamn company around the planet that starts going downhill from here on till forever is going to put it's hand out for a GuvMint bailout (or if they are dismissed from a claim, might sue their GuvMint on the grounds of S.timulus T.echnical D.iscrimination - a new and virulent form of fiscally transmitted disease).

Let's get one thing straight here. Big Brother is aiming for Total Control.

Even now, I don't trust what I am seeing happening on share markets world wide. How much of what is happening is NOW being manipulated by governments interfering in the once-free markets? Can we be sure that a dead-cat bounce happens due to "free-market" activity? 

Who wants to "invest" in a market when now the flamin' GuvMint$ can interfere at any moment and trash your plans? Let's see. Where are they at currently?

Interest rate manipulation? - CHECK
Currency manipulation? - CHECK
Share market over-regulation? - CHECK
Money Supply manipulation? - CHECK
Failed company bailout manipulation? - CHECK

Need I go on?

The World has suddenly changed forever - heavily in favour of the Body Politik and Big Bro. Somehow, we have to come to terms with that. It's not so much a case of the markets leading the economy, but politicians leading the markets to wherever they WANT them to be through overt and not-so-overt manipulation.

Have I mentioned the word "manipulation" yet?

Have a great day.....




aj


----------



## Uncle Festivus

Aussiejeff said:


> Have I mentioned the word "manipulation" yet?
> 
> Have a great day.....
> 
> aj




AJ, all markets are manipulated, you just have to know which way. Don't fight it, go with the flow.


----------



## Aussiejeff

Uncle Festivus said:


> AJ, all markets are manipulated, you just have to know which way.




Ahhhhh. So, you are a GuvMint blacksuit? 

Unfortunately, most of us "on the outside" don't know when or by how much GuvMint$ are going to hit the "Manipulate" button. Makes for treacherous punting conditions.


----------



## kransky

http://financialsense.com/fsu/editorials/willie/2008/1112.html

grim editorial... interesting times ahead most likely!


----------



## Temjin

Interesting read on China's unofficial position.

http://www.chinastakes.com/story.aspx?id=813



> *                                                     Before Saving the US                                                 *
> November 11,2008
> 
> 
> 
> 
> 
> by                                                     CSC staff
> The nature of the current global financial crisis is the biggest debt crisis in America’s history. The issuer of the world’s reserve currency, the US has been borrowing for quite a long time without any limit. America’s trade, international payment and fiscal deficits have existed for over 40 years (a fiscal dividend once occurred during Clinton’s administration but deficit soon returned). Statistics show that America’s internal and external debt exceeds $60 trillion, over 400% of the country’s annual GDP of a bit over $14 trillion. Of that total, family debt (including mortgages), financial and non-financial firms’ debt, and municipal and national debt come to about $15 trillion, $17 trillion, $22 trillion, $3.5 trillion, and $11 trillion, respectively, though it is hard to tell how these debts have been split up among foreign governments, financial firms, companies, and individuals. [FONT=&#23435]　　[/FONT]​ To relieve the crisis, the US must repay its debts, and to do that it needs to live a more frugal life instead of asking others to continue lending it the money to maintain its over-consumption. ​ ​ The first thing the government needs to do is reduce spending and the deficit. Correspondingly, the US needs to cut military disbursement, stop its global expansion and the robbing of oil resources from other countries. Companies should also become thrifty and avoid highly leveraged operation. Families and individuals should stop anticipating their income to buy houses and travel globally. Instead, they should warmly welcome foreigners to travel to and spend money in the US. [FONT=&#23435]　　[/FONT][FONT=&#23435]　　[/FONT]​ *China** Should Raise Conditions*​ ​ But if the US must ask China to buy some portion of its national debt, what kind of conditions and principles should China we raise?[FONT=&#23435]　　[/FONT]​ The principle should be the same as the basic principle upheld by the US and IMF when “saving” other countries in crisis: cut fiscal disbursement and both the government and the people should save money. Besides that, there are six points: first, the US should cancel the limits on high-tech exports to China, and allow China to acquire advanced technology and high-tech companies from the US; secondly, the US needs to open its financial system to Chinese financial institutions, allowing all Chinese financial firms to open branches and develop business in the US; third, the US should not prevent Europe from canceling the ban against selling weapons to China; fourth, the US should stop selling military weapons to Taiwan; fifth, the US should loosen its limits on numbers of Chinese tourists and allow them to travel freely to the US; and sixth, the US should never restrain China’s exports to the US and force RMB appreciation in the name of domestic protectionism and employment pressure.​ ​ If the US should refuse to agree to the six principals, that only means it doesn’t really need China to save its market and buy its national debt. Then China’s choice is quite simple: rationally adjust the structure of its foreign exchange reserve assets and avoid the risk of the US national debt according to market rules. ​ ​ What is worth special attention is that the prerequisite for China’s purchase of US national debt is that China has enough foreign currency to meet the exchange demand when hot money is flowing out in large scale. Otherwise China will have to sell US debt to relieve its lack of foreign exchange currency, which will lead to sharp depreciation of China’s dollar assets. What is even worse, China may immediately suffer a financial crisis led by the lack of foreign currency. ​ ​ So if the US wants China to help save its market, the US government and the IMF must admit China’s right to manage its foreign exchange independently. Once large scale hot money outflows occurs, China has the right to take effective measures to restrain the speed and amount of hot money outflow, and the US and IMF can’t blame China for it. This is the most important prerequisite, even more important than the six principles mentioned above. If the US can’t agree to it, China may trap itself when saving the US. When exchange crisis happens in China, who can promise the US and the IMF won’t hit China when it’s down?​ ​ _(The author is a professor at Central China University of Science and Technology. The piece is translated from his article on China Business News)_​



​​It has been said that the Chinese government has a habit of making official statements through non-government channels. ​​Their "demands" are quite reasonable to my eyes but probably totally unacceptable to the US. It's almost as if there is a direct transfer of power/wealth to them. If I were the US, I would rather inflate my debt out of existence rather than preventing the Chinese from taking over my countries' technologies/resources. 
​


----------



## CanOz

I think China has the chance to do whatever it wants at this stage. The trick is to look like its saving the US, make it obvious to everyone. To come out like the more gracious is key here, but not all that hard to do.

The question is, will the world believe the truth?

CanOz


----------



## Aussiejeff

CanOz said:


> I think China has the chance to do whatever it wants at this stage. The trick is to look like its saving the US, make it obvious to everyone. To come out like the more gracious is key here, but not all that hard to do.
> 
> The question is, will the world believe the truth?
> 
> CanOz




Yee-haw! 

Overnight their was another bout of totally ABYSMAL world economic news and outlooks - including pathetic US news. Yet the DOW has gone ballistic in the last couple of hours on what news? GWB's heroic "There ain't nuthin wrong with the free markets!" rallying speech? Ya gotta be kiddin'!

Gotta wonder who is manipulating the US share market right now.... has the Fed "secretly" started buying those dud company shares already?


aj


----------



## MrBurns

Aussiejeff said:


> Gotta wonder who is manipulating the US share market right now.... has the Fed "secretly" started buying those dud company shares already?
> aj




Even if they have been they'll run out of money sooner or later, even the great USA hasn't got enough moey to bail out the whole western financial system but I have to give it to them they're having a go.

added - 



> Market News
> US budget deficit mounting at $10b a day
> Spending by the US government to stem the sharp economic slowdown racks up a deficit of $10b a day.


----------



## CAB SAV

I'm going back to bed & try this again. After all the negative global news wake up to find US 500pts+ up. Am I dreaming or are they dreaming? What the. Will someone please predict new lows.


----------



## Aussiejeff

CAB SAV said:


> I'm going back to bed & try this again. After all the negative global news wake up to find US 500pts+ up. Am I dreaming or are they dreaming? What the. Will someone please predict new lows.




This might help to explain - 

Today from AAP

-----------------

_Wall Street launched a massive rebound Thursday, sending the Dow Jones industrial average up 550 points, or 6.7 per cent after earlier driving it down 300 points and below the 8,000 mark, as *investors decided they did not want to miss out on buying stocks at cheap prices*.

After three days of selling that wiped out about $1 trillion in shareholder value, many investors, though nervous about the economy, believed the market had priced in enough bad news. So *when the Standard & Poor's 500 index managed to recover from multi-year trading lows, investors swarmed back in*.

*It's "a herd mentality,"* said Ryan Larson, senior equity trader at Voyageur Asset Management. *"We started going higher -- and you don't want to be the last one on the boat."*

The stock market's initial selloff began after the Labor Department reported that the number of newly laid-off individuals seeking unemployment benefits jumped last week to a level not seen since just after the Sept. 11, 2001, terrorist attacks.

And there were more signs of a severe pullback in consumer spending, a troubling trend that had pummeled stocks earlier in the week. Wal-Mart Stores Inc. trimmed expectations for full-year earnings, and Intel Corp. late Wednesday cut more than $1 billion from its sales forecast, providing more evidence that few industries are safe from a clampdown on spending by businesses and consumers alike.

But then the S&P lifted above its Oct. 10 trading lows, and *a Treasury auction of 30-year bonds got decent demand from both domestic and foreign buyers*, said Arthur Hogan, chief market analyst at Jefferies & Co. The auction results alleviated some fears that the government will have a hard time financing its costly bailout.

Hogan called it a "great sign" that the S&P recovered after falling below its Oct. 10 trading lows. *"Historically, if you test a low within 45 days and close above it, it's very bullish," he said.*_

---------------------

Personally, I think the CIA covertly inserted some subliminal micro-second "BUY,BUY,BUY" messages into GWB's heart-warming G20 rah-rah broadcast. 

As Mr Larson said - "It appears to be a herd mentality". So, that augers well for a sustained rally - until the lead Crazy Bull runs over the edge of the Grand Canyon...

So-called "investors" gambling on the dream that what has been happening in the economy is really only a bad dream and tomorrow they will wake up and smell the rose once more seems to be a tad insane to me. But hey, WHAT WOULD I KNOW??? :silly:


----------



## Glen48

It is easier to make a list of those countries not in a recession yet OZ still _seems _to be traveling ok??? Are we to get a big shock one day were every thing collapses over night or will it be slow day by day like the others?


----------



## sassa

The wit of the economist.

http://www.rgemonitor.com/blog/roubini/254403/explaining_todays_bounce


----------



## Aussiejeff

sassa said:


> The wit of the economist.
> 
> http://www.rgemonitor.com/blog/roubini/254403/explaining_todays_bounce




Brilliant!

My thoughts exactly... LOL


----------



## kransky

Double bottom

The bear market is all over.. go the bulls!!!!!!!!!!!!!!!!!!!!!1



trouble is how long will it go for and can we take advantage of it


----------



## Uncle Festivus

kransky said:


> Double bottom
> 
> The bear market is all over.. go the bulls!!!!!!!!!!!!!!!!!!!!!1
> 
> 
> 
> trouble is how long will it go for and can we take advantage of it




Double bottom indeed - hooray . What are you buying?


----------



## MrBurns

Uncle Festivus said:


> Hooray . What are you buying?




Food stamps


----------



## Glen48

I use a bottle of Head and Shoulders each night and still loosing money.
Buying Time is the only option even better doing time at least you get 3 meals a day and maybe all the sex as well whether you need it or not.


----------



## kransky

haha... i was tempted today but didnt have the balls to buy some "oversold" stocks... the bounce just seems too obvious i worry it wont last long at all..

i feel safer waiting for a small bounce then going short...


----------



## chops_a_must




----------



## IFocus

chops_a_must said:


>





Crackup Chops


----------



## Glen48

Some are even pushing for the replacement of the US dollar as the world's main reserve currency. Others are primarily aiming at better regulation of the existing system and supervision of financial institutions with global reach. Efforts to create a new reserve currency (Bretton Woods II), are unlikely to be successful, if only because the US is not interested and without US agreement, little can be done. The US has de-facto veto power over the introduction of a new reserve currency system, because it can decline to guarantee an exchange rate between that hypothetical new currency and the vast amount of US dollar denominated financial liabilities already in circulation around the world. A return to the pre-1971 gold standard is not feasible.


The G-20 meeting in Washington later this week is important, but it will at best be the start of a long process. The IMF will almost certainly emerge as a more important multilateral institution than it has been the in the past ten years. In some ways we are back to 1944 when allied financial leaders got together in Bretton Woods New Hampshire to figure out how to deal with the financial and economic devastation left behind by the Second World War. More accurately, we are back to the long period of preparation that preceded the historic 1944 Bretton Woods meeting. China - under the Nationalist government - participated then, it will have a much larger voice in the G-20 meeting later this week. It, along with other major emerging market economies, should also have a much larger voice in the IMF. Globalization has suffered a set-back, but in rearranging the global financial system, we should be careful to protect the principles of free trade and not to throw out the baby with the bath water.



(The author is a senior adjunct professor of economics at Johns Hopkins University.)


----------



## Aussiejeff

Oh dear. Yet another RED sunrise in the Land of Oz.....

Japan finally capitulates and announces "R" word.

Not unsurprisingly following that auspicious announcement, 

Our financials today - hammered (CBA now almost down to $30! graph looks a tad nasty)
Our materials today - hammered
Our ... almost everything - hammered


All Ords 3,500 coming right up (down to 3615 ATM)? Is that a triple crown Bull Trap from mid-Oct to mid Nov?


----------



## davo8

Aussiejeff said:


> Our financials today - hammered (CBA now almost down to $30! graph looks a tad nasty)
> All Ords 3,500 coming right up (down to 3615 ATM)?




And about bleeding time! I've been calling bank shares to crash since Feb -- what have they been levitating on? Fair value for banks going forward is whatever produces a dividend yield above the bank bill rate. For CBA that's under $30. If they cut dividends, it's less.

All Ords: do us a favour! The main target is 3200-3400 from 2003-04. Should get there before Xmas. The bad news is building the US again. Should be another wave of the tsunami along any time now.


----------



## chops_a_must

Some big deflationary numbers out...

I would like to read the words of Dhukka on the matter.


----------



## dhukka

chops_a_must said:


> Some big deflationary numbers out...
> 
> I would like to read the words of Dhukka on the matter.




I wrote this back on January 23rd. 



dhukka said:


> Agreed it's not their job to bail out investors. However I think the inflation scare is overdone. Deflation will be the theme in 08. THe RBA might be giving back interest rate hikes by the end of the year or into early next.




I've never understood the inflation scare that everyone was hammering on about even as late as July this year both here and in the US. You had most mainstream economists in the US saying that the Fed would have to raise interest rates to combat it. I read a research report by Suncorp in August that was forecasting RBA rate hikes into 2009. How could they not see what was coming?

A massive debt bubble that artifically propped up all asset classes just could not be sustained. I said here many times over the last 15 months that Fed rate cuts would not work in such an environment and today's data confirms that the Fed, despite all it's liquidity ventures is going to have a tough time preventing deflation. However they will pull out all the stops. Bernanke is a student of the great depression and deflation is his biggest nightmare. 

However, we don't need to get too excited about inflation just yet as the good old Keynesian liquidity trap is playing out. The trick will be once the US economy gets going again to see how quickly the Fed drains the stimulus out of the economy. If they do not mop up excess liquidity then inflation could become a problem but that certainly isn't the problem we have right now.

I think the hyperinflation scenario is the one piece of Peter Schiff's thesis that he has wrong, at least in the medium term.


----------



## chops_a_must

Thanks for that Dhukka old boy.

I know it's been your main concern/ condition outlook, which is why I wanted your opinion.

Certainly with gold failing at its last try, it has been my confirmed view also - as well as the markets evidently.

The interesting thing though, is it is almost universally the concern about some kind of inflation down the track, the question of when is the biggest problem though...

If it becomes a drawn out deflation, it could get really bad. As even defensive companies in staples and so forth will have negative earnings - more so than what would be expected.


----------



## Aussiejeff

You just KNOW the Oz economy is going down when RBA Head Honcho Stevens starts beseeching the media and consumers to not think about the unspeakable "R" thingy or we might just get what we wished for.

What a load of tripe. That is the same swill spouted by the Bush administration a month ago. "Think positive and it will all go away". That signals to me the RBA is entering panic mode.

Really, was Steven's purposefully fed Magik Mushrooms before his speech yesterday? He appeared to rather like the sound of his own "soothing" voice. Far from restoring "confidence" in our economy, Blind Freddie can see right through him. If anything, "confidence" will now slip further as he obviously can't be trusted to face up to the task ahead.


Wanka.

IMO of course....



aj


----------



## Aussiejeff

Oh, n-i-i-i-ce finish to the DOW last night.

Bring out the SPECIAL BIG RED carpet for the ASX opening, boys. It's party time....

Sorry Mr Stevens.

I fergot to write "I must not think about the R-word" a thousand times, as you suggested.

P.S. Your Lil' Ozzie Bleeder just sunk below the 64c mark - AGAIN. You must be asleep at the wheel... LOL


----------



## noirua

Dow finished down 427.5 points at 7997.28 ( big worries that the Federal Reserve will not be able to bail out the troubled Auto industry). 
Mining stocks, in London, were hit with losses up to 18%, Vedanta down 16%, Kazakhyms down 18%, Lonmin down 13%, Xstrata down 12%, Anglo American down 7%, BHP down 7%, Rio Tinto down 9%.


----------



## Spek

Futures pointing to another 4% down today.  Another few weeks of this and we might rid ourselves of the cowboys jumping in after any bit of good news for the quick  bounce back up to 7000  

Might even get back to the  days when share prices were stable for weeks and months only really moved materially in relation to fundamentals like actual results and forecasts.


----------



## Kipp

What is frustrating to me is that the excuse I hear time and time again to another days of Neg 400pts on the Dow is, "recession fears".
Surely noooone is any doubt that US (and indeed the majority of the world) is already IN recession.

So, I would like different market commentary to justify another bloody day for the ASX or Dow... why not take a cosmological perspective?  "The All Ords fell anther 4.2% today, wiping out another $300 Billion off the value of the sharemarket.  Investors confidence plummeted as Venus is in retrograde, with the vernal equinox approaching".


----------



## mayk

I think people are suspicious of Citi Bank. It is going down quickly. This might be the biggest causality of this crisis.

Here is a chart:

http://finance.google.com/finance?c...et=1227136928828&chddm=121887&q=NYSE:C&ntsp=0


----------



## Aussiejeff

Kipp said:


> What is frustrating to me is that the excuse I hear time and time again to another days of Neg 400pts on the Dow is, "recession fears".
> Surely noooone is any doubt that US (and indeed the majority of the world) is already IN recession.
> 
> So, I would like different market commentary to justify another bloody day for the ASX or Dow... why not take a cosmological perspective?  "The All Ords fell anther 4.2% today, wiping out another $300 Billion off the value of the sharemarket.  Investors confidence plummeted as Venus is in retrograde, with the vernal equinox approaching".




Spin, spin, spin.....  

That's all these World Financial Crisis "managers" have got left....

Enjoy the ride.


----------



## chops_a_must

Well... GM down over 30%... Ford 16%...

I must have been one of the few to ever have made money going long on GM this year.


----------



## noirua

...and still the mining stocks tumble as investors go for cash in London.  BHP down 9%, RIO down 10.5%, Vedanta down 12%, Xstrata down 11.5%, Anglo down 7%, Kazakyms down 10%, Lonmin down 1.5%.
The severely tanking Aussie$0.62 (reverse AU$1.6162) against the US$1, is eroding confidence in Aus.


----------



## MR.

Did America have a public holiday yesterday so I'm looking at the -5%+ from the day before?  But no......  The dow's down another 5% Thursday.  
AUD/US is at 61.4/$1-

At least if there are any Australian manufactures left they will find they are now very competitive.  

Imports out of China and Taiwan are purchased in USD's.  
Perhaps some inflation there coming!


----------



## Aussiejeff

MR. said:


> ... AUD/US is at 61.4/$1...




**DING DING**

AUD/US now 60.9/$1..


----------



## CAB SAV

Watched the movie "Shining" last night. Thought it was scary till i saw US market close this morning. Now that's scary.
Can't see anything less than another min. 30% drop next year.


----------



## MrBurns

Unless GM are bailed I think the capitulation in the US will continue, even then any recovery may be only short lived.

What happened on Wall St last night was proof that it will go down regardless of intervention on any level.

Capitulation hasn't started here .......yet. correct me if I'm wrong.

Just think, a few weeks ago we were talking on a completely different level, the worst of predictions have now actually come true, who knows where we'll be a few weeks from now.


----------



## Edwood

Dow 7500 target from the 3 peaks & domed house hit o/night...


----------



## sassa

And the market rallied 6.54% on-



> NEW YORK (MarketWatch) -- U.S. stocks on Friday rallied on a report President-elect Barack Obama would nominate Timothy Geithner to be the nation's Treasury secretary.
> "The market's message is Geithner is a good choice. He's young, he's intelligent and he's experienced. What this country needs are people who are young, full of energy, and can put in 26-hour days. There's nothing like leverage," said Hugh Johnson, chairman of Johnson Illington Advisors




http://www.marketwatch.com/


----------



## CAB SAV

sassa said:


> And the market rallied 6.54% on-
> 
> 
> 
> http://www.marketwatch.com/




US looking for any excuse to have a rally. Timothy Geithner is the messiah, the reason for the rally, the reason the market turned, the reason again all other poor data overlooked. This guy must be good because he works 26 hour days. He has also been beside Ben Bernanke throughout the crisis-wow.  Genuine rally?


----------



## Sean K

CAB SAV said:


> US looking for any excuse to have a rally. Timothy Geithner is the messiah, the reason for the rally, the reason the market turned, the reason again all other poor data overlooked. This guy must be good because he works 26 hour days. He has also been beside Ben Bernanke throughout the crisis-wow.  Genuine rally?



Any reason could have driven the market today. I think it's just a technical bounce. Or, maybe a sustained rally? Just how much is factored in will be disclosed later...


----------



## explod

kennas said:


> Any reason could have driven the market today. I think it's just a technical bounce. Or, maybe a sustained rally? Just how much is factored in will be disclosed later...




From Cuck Butler, Everbank




> Investors fled stocks and moved back into dollars throughout the trading day yesterday, rallying the dollar index back to the highest level since April 2006. We moved above 88 on the dollar index a week ago, but it was unable to maintain the higher level.
> 
> The same thing occurred last night, as equity markets in Asia rebounded, bringing the dollar index back below the 88 handle. Apparently there was speculation that a sale of Citigroup Inc. will reduce risk in the financial system, slightly increasing the confidence of investors. This is how perverse these markets have become; the possible sale of one of the largest financial firms in the US actually rallies the markets.




It is a crazy world out there and the market players dont' know where to go but in desperation are going and following anything that seems to move.  I think the lateness of the move up looks a lot like Fed money to me, who can tell?


----------



## IFocus

The Real Great Depression

By SCOTT REYNOLDS NELSON


While many commentators on the recent mortgage and banking crisis have drawn parallels to the Great Depression of 1929, that comparison is not particularly apt. Two years ago, I began research on the Panic of 1873, an event of some interest to my colleagues in American business and labor history but probably unknown to everyone else. But as I turn the crank on the microfilm reader, I have been hearing weird echoes of recent events.

http://chronicle.com/temp/reprint.php?id=477k3d8mh2wmtpc4b6h07p4hy9z83x18


----------



## sassa

kennas said:


> Any reason could have driven the market today. I think it's just a technical bounce. Or, maybe a sustained rally? Just how much is factored in will be disclosed later...




How big will the rally be when Obama names a new SEC chairman?


----------



## jonojpsg

IFocus said:


> The Real Great Depression
> 
> By SCOTT REYNOLDS NELSON
> 
> 
> While many commentators on the recent mortgage and banking crisis have drawn parallels to the Great Depression of 1929, that comparison is not particularly apt. Two years ago, I began research on the Panic of 1873, an event of some interest to my colleagues in American business and labor history but probably unknown to everyone else. But as I turn the crank on the microfilm reader, I have been hearing weird echoes of recent events.
> 
> http://chronicle.com/temp/reprint.php?id=477k3d8mh2wmtpc4b6h07p4hy9z83x18




Hey IFocus, that is a VERY interesting read!  The points of note that stood out to me were; 

1. the fact that it was US industry taking over Europe then, and now it's China taking over the US

2.  The post-panic winners, even after the bailout, might be those firms ”” financial and otherwise ”” that have substantial cash reserves. 

As far as the correction goes, it seems to me that once the Citi and auto makers issues are sorted out one way or another, we should see the end of the correction.  

My reasoning would be that given that Citi is the largest bank in the US, they are not going to be allowed to go under, at least that is my understanding of the purpose of the bailout.  Whatever happens, once it is resolved that would bring much more certainty to the market as it would be a model for what would most likely happen when other smaller players get into trouble as well.  

The automakers are a slightly different case as they are more an emotional attachment for the US.  If they go under, the DOW will obviously go much lower (maybe another 1000); if they get bailed out, the DOW should stabilise.  Regardless, once the situation is resolved, we should see the extent of the correction reached. IMO of course (not that I know much)


----------



## Edwood

sassa said:


> And the market rallied 6.54% on-
> 
> ...There's nothing like leverage," said Hugh Johnson, chairman of Johnson Illington Advisors




aye its done wonders for the global financial system.


----------



## sinner

jonojpsg said:


> Hey IFocus, that is a VERY interesting read!  The points of note that stood out to me were;
> 
> 1. the fact that it was US industry taking over Europe then, and now it's China taking over the US
> 
> 2.  The post-panic winners, even after the bailout, might be those firms ”” financial and otherwise ”” that have substantial cash reserves.




I read it too, thanks for posting IFocus. So what you're saying jono is invest in Chinese financials, automakers and other commodity producers? :


----------



## chops_a_must

Edwood said:


> aye its done wonders for the global financial system.




Hahahaha...

The contrary indicators for cynicism are going off like there's no tomorrow on ASF lately.


----------



## Glen48

I see in Honkers Rollers and Bentley's are now down to 38K up market apartments have takes a dive


----------



## kransky

http://www.nakedcapitalism.com/2008/11/chinas-smoot-hawley.html

Very interesting read! 

The solution to this is for the Renminbi to appreciate and for China to consume and pull the rest of the world out of the deepening hole we find ourselves in..

basically the standards of living must move in opposite directions...

makes sense right? 

did you all see the news today? unionized auto industry workers in the US get paid US$73/hr incl benefits... that is around 208k AUD per annum at the current exchange rate plus super. 

sustainable?


----------



## >Apocalypto<

check this out for getting it right.

http://au.youtube.com/watch?v=2I0QN-FYkpw

unfreakin believable!


----------



## kransky

many people saw this coming.. incl me 

most in the industry making big money from it all couldnt admit the party was going to finish.. with a big hangover monday morning

now going forward.. Marc Faber from 21 Nov 2008 talking about the future... 
http://au.youtube.com/watch?v=UDsaUD5KPdE


----------



## sassa

Citi's in serious trouble and "too big to fall."



> Citi's common stock is now worth less than the government pumped into the company last month. (On the bright side, if the government hadn't pumped in the money, it would now be worth zero). The company's tangible book to equity ratio is now more than 50-to-1, and the firm's gigantic mountain of consumer debt "assets" will almost certainly face enough writedowns in the next several quarters to wipe out the equity that's left





> Whatever happens, Citigroup won't declare bankruptcy.  Before that happens, Hank Paulson will take it over, just as he did Fannie and Freddie.  He will then chop it up and start selling off the pieces to try to recoup some of the $2 trillion that taxpayers will be on the hook for.
> 
> Citi's debtholders will probably be kept whole in that scenario (Hank won't risk another Lehman). Citi's preferred shareholders will probably get hit but not vaporized. Citi's common shareholders, meanwhile, will probably get wiped out.



http://clusterstock.alleyinsider.com/2008/11/citigroup-finally-panics

Then there is the question of GE's viability.If it is in trouble then there will be more than one cat amongst the pigeons.
http://www.minyanville.com/articles/WMT-LOW-GE-Credit-recession-depression/index/a/20014


----------



## explod

sassa said:


> Citi's in serious trouble and "too big to fall."
> QUOTE]
> 
> No one is too big to fall anymore.   Pundits I read used to say "we live in interesting times"  now we see comments as  "we live in atonishing times"


----------



## sinner

Hi peoples,

I was searching through the drivel on youtube trying to find some decent commentary from October, came across this

http://www.youtube.com/watch?v=Xz-dgLxWEg4&feature=related

It's labelled Pete Schiffr on Glenn Beck (which he has been on a few times) and it's got lots of sarcastic commentary etc and Peter Schiff being a prick as usual which you can probably safely ignore, but the so called diamond in the rough is the commentary from ex-big-cheese of the St. Louis fed. He has some interesting things to say.


----------



## dhukka

dhukka said:


> This is starting to be a regular event on Friday after the market closes in the US.
> 
> 
> 
> Is there a trend developing here?




The  trend continues with another 3 US bank failures on Friday.


----------



## Aussiejeff

dhukka said:


> The  trend continues with another 3 US bank failures on Friday.




In that case, current illogical "free market" logic will probably result in a Tsunami wave of optimistic panic buying...... especially so with the Great God Of Free Markets (GWB) proclaiming he is gonna build some sort of "shrine" in Texass to the ideals of "free markets, freedom and democracy".

Wheeee!

Go figure.




aj


----------



## TheAbyss

If you required confirmation that the Americans have thrown logic out the window and are becominging increasingly desperate and grasping at straws no matter how thin, look no further than Fridays late rallly. 

If they can move a market up by some 6% based on a rumour that an individual from the private sector is coming to the white house to take over from Paulson then they are clueless and looking for any ray of hope imo.

This will be a short lived rally for sure and certain.


----------



## sammy84

TheAbyss said:


> If you required confirmation that the Americans have thrown logic out the window and are becominging increasingly desperate and grasping at straws no matter how thin, look no further than Fridays late rallly.
> 
> If they can move a market up by some 6% based on a rumour that an individual from the private sector is coming to the white house to take over from Paulson then they are clueless and looking for any ray of hope imo.
> 
> This will be a short lived rally for sure and certain.




Private industry?! Geithner is from the New York Fed, before that the IMF, and has had an integral role in the bail out plan to date. From what I hear from my friends in the US, Geithner is one of the most respected men in the financial sector. Regardless, if you speak to technical analysist they say we were due for a bounce anyway.


----------



## explod

sammy84 said:


> Private industry?! Geithner is from the New York Fed, before that the IMF, and has had an integral role in the bail out plan to date. From what I hear from my friends in the US, Geithner is one of the most respected men in the financial sector. Regardless, if you speak to technical analysist they say we were due for a bounce anyway.




Agree absolutely;   at 3pm US time trading, the Dow was at 7,500, in the last hour it rallied 546 points to the close of 8,046.    Not only on this, but many other indexes, the US close stratiegic sales for maximum sheeple consumtion over the weekend.   I bet a lot of fed money went into that last hour.  They failed this time on the HUI and the gold price, maybe that will be the crack in the ice.

This week will indeed be interesting, reminds me of listening to the Lone Ranger on the radio as a child; could not wait for the next episode.  5.45pm  on 3YB Warrnambool.


----------



## TheAbyss

No matter who the guru is or where he hails from there is no silver bullet and sentiment is low. 

A rally is due and will come on the back of almost any news but the white knight can only lay the basis for the future not the present which was written in the past excesses.


----------



## barrett

On the daily chart of the Dow, Friday was a reversal that also completed a bullish engulfment on very high volume which is about the most bullish candlestick sign that there is.  So I expect a massive rally through Christmas.  Why?  Lots of monkeys tapping on keyboards.  That's about the most useful fundamental explanation that there is in this market.


----------



## noirua

The UK FTSE 100 rose 9.84% (Mainly big cap and financials in rally) and Dow currently up 4%.  Big rebound on the ASX later this morning, no severe correction today.
Massive Budget boost in UK.  Australia needs, and should get one soon.
Citigroup gets $20 billion bailout.


----------



## The Edge

Monday  24 November 2008

> If you required confirmation that the Americans  
> have thrown logic out the window and are 
> becoming increasingly desperate and grasping at 
> straws no matter how thin, look no further than 
> Fridays late rallly. 

To throw anything out the window requires one
having it in the first place.  It is questionable to
accuse Americans, collectively, as being grounded
in logic.

> If they can move a market up by some 6% based 
> on a rumour that an individual from the private sector 
> is coming to the white house to take over from 
> Paulson then they are clueless and looking for any 
> ray of hope imo.

The impact was a knee-jerk reaction to a desperate
situation where the public is looking for anything to
fill the vacuum left by Bush.  It is not so much a
grasping at straws as it is recognition that at least
some positive steps are being taken, and these steps
were viewed favorably by the market.

Most of the world is clueless over this unparalled, 
historic series of events, as the global economy 
unravels before everyone's helpless eyes.  And
sadly, yes, any ray of hope will make a difference,
because it is a start.

> This will be a short lived rally for sure and certain.

Have to disagree with you on that one.  The vertical
nature of this decline, along with the heavy volume 
on Friday, makes this activity climatic, and it sets the
stage for a rebound, within a bear market.

What rally may ensue, and I could be dead wrong,
is not likely to be short-lived, and by that is meant
measured in days, or even a few weeks.

The only thing ever certain in any market is that it
will change, but the how is never certain.


----------



## wayneL

The Edge said:


> Monday  24 November 2008
> 
> > If you required confirmation that the Americans
> > have thrown logic out the window and....




Who are you quoting here Edgy?


----------



## Sean K

wayneL said:


> Who are you quoting here Edgy?



Is he talking to himself?


----------



## explod

The recent US bailout of 900 billion now looking pretty insignificant.   Todays Business Age details a new US pledge to lend more than $US7.4 trillion on behalf of the American taxpayer to rescue the financial system.   That is according to the article $US24,000 from every man, woman and child.

And in the UK they are going to increase spending and reduce taxes.  Does that mean Brown has an election coming up?   he he eh  ::

Lets all just go down to the casino, I will show you a nice little system for the roulette.


----------



## Aussiejeff

explod said:


> The recent US bailout of 900 billion now looking pretty insignificant.   Todays Business Age details a new US pledge to lend more than $US7.4 trillion on behalf of the American taxpayer to rescue the financial system.   That is according to the article $US24,000 from every man, woman and child.
> 
> And in the UK they are going to increase spending and reduce taxes.  Does that mean Brown has an election coming up?   he he eh  ::
> 
> Lets all just go down to the casino, I will show you a nice little system for the roulette.




HOORAY!!!

The Regulators Of The Free Markets have attached a HUGE INFLATIONARY bottle to the next MASSIVE speculative bubble!

WHOOP-EEE! All punters get ready for TAKEOFF  - this is gonna be a moonshot this time!! Our buddies in the World Guv-Mint$ are gonna back Big Bus$ne$$ to the hilt - the taxpayers hilt that is - HAW, HAW!!! 

PS: All you "long term" investors and econo-freaks can go jump. C'mon punters, let's have a big party while the bubbly rises!!! YOW-ZAAAA!


----------



## The Edge

Monday 24 November 2008  [on CST]

Quoting from The Abyss, above, #3782.


Cheers!


----------



## CAB SAV

US buying on hope. Poor data ignored- Sales of existing homes declines more than expexted in Oct. 45% of sales were distressed sales, foreclosures increasing 5% in Oct. 84868 homes lost to foreclosure.
3 mth Libor rate up 2.16 to 2.17% Overnight Libor up 0.7 to 0.8%


----------



## mayk

CAB SAV said:


> US buying on hope. Poor data ignored- Sales of existing homes declines more than expexted in Oct. 45% of sales were distressed sales, foreclosures increasing 5% in Oct. 84868 homes lost to foreclosure.
> 3 mth Libor rate up 2.16 to 2.17% Overnight Libor up 0.7 to 0.8%



Don't let truth get in the way of a good story...


----------



## CanOz

CAB SAV said:


> US buying on hope. *Poor data ignored-*




IMO this is the most important statement here. If you want to trade this rally (if its really a rally) then it all depends on how well and how long the market can ignore the bad news, and there will be plenty. 

So its got to ignore the bad and over react to any postive news, thats the key to sentiment in the next few sessions.

Cheers,


CanOz


----------



## Bushman

CAB SAV said:


> US buying on hope. Poor data ignored- Sales of existing homes declines more than expexted in Oct. 45% of sales were distressed sales, foreclosures increasing 5% in Oct. 84868 homes lost to foreclosure.
> 3 mth Libor rate up 2.16 to 2.17% Overnight Libor up 0.7 to 0.8%




It is poor data but it is priced in. You need to look at the balance of housing supply in the states (round about the 11 month mark) and this has been showing signs of stabilising. 

The next downward move will be based on recessionary signals (business confidence, unemployment, factory orders, inventory t/o and the like) or the price of oil stabilising and then rising (inflationary). My 2c. 

US housing has bottomed. It would have to be CMBS or something like that deteriorating that adds to the 'credit crises' from here.


----------



## sassa

> In response to the question of the day -- do I think we're consolidating right now, the answer is no. The four market sectors that account for the largest percentage of the market all have incredibly bearish charts right now. That concerns me greatly.




http://www.bonddad.blogspot.com/


----------



## CAB SAV

Will be interesting to see US reaction tonight. Out comes GDP Sept Q, Personal Consumption Sept Q, Core PCE Sept Q, Cons Cons Confidence Nov, plus more Wed.


----------



## basilio

What if the stock markets were closed down? 

Just thinking out of the square here. We are in totally uncharted territory at the moment. To spell it we have

1) Huge collapses in the  US banking systems with knock on implications around the world. There is much unraveling to come
2) Imminent collapse of American car manufactures with the predictable consequences on employment, debt and effects on national income
3) American debt levels going into the stratosphere. They are already way overstretched. How will any markets handle the extra trillions of dollars of treasury notes? Who can and will buy them?
4) Social security responsibilities that were always going to a struggle but will now take on far greater dimensions.

I'll leave out issues 5 -100...

My point is that when we add up the figures  it all looks ugly. We have accepted corporate deceit and used  self deception as a mechanism to keep all the balls in the air up until now. But I do fear that the current world wide debt liabilities probably outweigh nominal assets. 

So perhaps there could be situation when reality comes through and stock markets are simply too sick to be allowed or able  to trade.  Historically the pricking of the South Seas bubble in England 1720, and the simultaneous implosion of the Mississippi Bubble in France in the same year collapsed the economies of these countries. 

There is a more constructive view of what we need to do. It's worth checking out the full text of this story and the Energy Bulletin website that brings these ideas together.



> Kunstler: Zombie Economics
> James Howard Kunstler, blog
> All the activities based on getting something-for-nothing are dead or dying now, in particular buying houses and cars on credit and so it should not be a surprise that the two major victims are the housing and car industries. Notice, by the way, that these are the two major ingredients of an economy based on building suburban sprawl. That's over, too. We're done building it and the stuff we've already built is destined to loose both money value and usefulness as the wrenching transition goes forward.
> 
> All this obviously begs the question: what kind of economy are we going to live in if the old one is toast? Well, it's also pretty obvious that it will have to be based on activities productively aimed at keeping human beings alive in an ecology that has a future. Once you grasp this, you will see that there is no reason to despair and more than enough for all of us to do, so we can recover from the zombie nation disease and get on with the next chapter of American history -- and I sure hope that Mr. Obama will get with the new program.
> 
> To be specific about this new economy, we're going to have to make things again, and raise things out of the earth, locally, and trade these things for money of some kind that we earn through our own productive activities. Don't make the mistake of thinking this is optional. The only other option is to go through a violent sociopolitical convulsion. We ought to know from prior examples in world history that this is not a desirable experience. So, to avoid that, we really have to put our shoulders to the wheel and get to work on things that matter, and do it at a scale that is consistent with what the world really has to offer right now, especially in terms of available energy.
> (24 November 2008)



http://www.energybulletin.net/node/47322


----------



## Bushman

basilio said:


> http://www.energybulletin.net/node/47322




Harder to do though under the current capitalist system that sees the US dollar as the sole global currency? We need currency diversification and competition! Who though - Euro most likely I guess even though it carries Spain, Italy and Greece on its shoulders. 

Otherwise status quo will resume and the rest of the world will continue to dig up resources and manufacture trinkets to feed to the bloated body of the US consumer.


----------



## MrBurns

basilio said:


> What if the stock markets were closed down?




I think I would be an instant property bull, get some gold too.


----------



## Agentm

not everyone is convinced of this depression/recession



Depression?? Probably not.

From The Kiplinger Letter


How does it Compare?

What are the odds this recession will become another Great Depression?
Slim, in our judgment. Yes, this is the worst financial crisis since then.
But it’s not as bad an economic crisis…more comparable to, say, the mid-’70s.

The Depression was a global economic collapse on an immense scale,
measured in multiples of today’s statistics of pain.

It was preventable, and the lessons learned greatly cut the likelihood of
a reprise of that decade.

So…we foresee a moderately severe recession, more akin to the
declines of the mid-’70s or early ’80s.

The contraction in GDP won’t be as extreme: Several quarters of declines
in the low single digits, resulting in about a 2.5% drop from peak to trough. From ’29 to ’33, real national output dropped 30%.

Joblessness won’t hit one in four workers as it did in ’32, when most families
depended on a single wage earner. Just north of 6% today, unemployment is likely to top out below 9% next year.

In the ’30s, millions lost their life savings…
wiped out as 9000 banks across the country failed. With federal deposit insurance in place today, losses are minuscule in comparison.

Of course, stock equity worth billions has evaporated, and more people
own stocks now than in the ’30s…directly or in funds, in IRAs and 401(k)s.

But the market drop isn’t as drastic. The Dow Jones index is down
a bit more than in ’00-’02 and ’73-’75, but less than the 89% plunge of ’29-’32. 

Though no one can predict the bottom, we expect that stocks purchased now will see strong gains over the next few years as the global economy recovers. 

In contrast, the Dow didn’t return to its pre-Depression high till the mid-’50s.

Homeownership was lower and foreclosures massive in the Depression.
Today, an estimated 5% of U.S. homes are in foreclosure or at risk of being lost.  As layoffs mount, that figure will climb, but home losses will also be dampened by government programs. Though double five years ago, 5% is still a small slice.

The sustained deflation of the early ’30s isn’t likely to be repeated today.
Then, as soaring unemployment eroded consumer purchasing power, the Fed
foolishly shrank the money supply by nearly a third…just the wrong medicine.
Today’s wiser Federal Reserve is pulling out all the stops to get credit flowing.

Another big difference: Trade policy. The Smoot-Hawley tariff legislation
of ’30 hiked duties on imports, leading other governments to do the same:
From ’29 to ’33, U.S. export value fell by nearly two-thirds. Exports, still booming for much of this year, will grow again next year, though only by a modest 1%.

Key in both time frames: Government spending. The national debt
grew over the ’30s by 150% and continued to soar through World War II.
Today Congress and the White House (both the outgoing and incoming president) seem inclined to spend whatever is necessary to forestall a deep, long recession...


budget deficits be damned. Next year, the deficit is likely to top $1 trillion.
At 7% of GDP…a modern record but well short of the 30% of GDP it hit in ’43.

Finally, America’s financial safety nets were absent in the early ’30s.
Though under severe and growing financial pressure, Social Security, Medicare and Medicaid, unemployment and bank deposit insurance, and private pensions all provide support to millions of Americans…employed, retired or jobless.


----------



## explod

Agentm said:


> not everyone is convinced of this depression/recession
> 
> 
> Finally, America’s financial safety nets were absent in the early ’30s.
> Though under severe and growing financial pressure, Social Security, Medicare and Medicaid, unemployment and bank deposit insurance, and private pensions all provide support to millions of Americans…employed, retired or jobless.





But where is the money coming from, hey Ralphie, you there Ralphie ?

Oh well, to believe or not believe.    BUT WHO KNOWS


----------



## Agentm

its just comment.. 

try reading it and hold your breath.. no one has the answers but its always interesting to read other opinion..  some cant handle opinion (obviously) seen here, others can..   life is like that..   all the best explod..


----------



## explod

Agentm said:


> its just comment..
> 
> try reading it and hold your breath.. no one has the answers but its always interesting to read other opinion..  some cant handle opinion (obviously) seen here, others can..   life is like that..   all the best explod..




Actually some people do have the answers and wrote about this calamity in succint detail some years ago.    

Opinion is also ok as long as there is some realism present, but the tretise above is fairyland crapola but I am sure plenty pay well to hear what they want to hear.


----------



## sinner

Hows this for a forecast kiddies...when it rains it pours!












(Charts from David Chapman)


----------



## chops_a_must

Agentm said:


> its just comment..
> 
> try reading it and hold your breath.. no one has the answers but its always interesting to read other opinion..  some cant handle opinion (obviously) seen here, others can..   life is like that..   all the best explod..


----------



## TATES23

good viewing!! 

http://www.news.com.au/perthnow/story/0,21598,24705811-5014325,00.html


----------



## Aussiejeff

Hah!

The Fed's new Motto of *"Daily Blurbs Will Save Our 'Burbs"* seems to be working.

Shockmarkets have capitulated from the Dark Side - Good have defeated Evil!

Fear has flown the coop overnight, to be replaced by a ravenous appetite for "Risk".

Mmmmm....mmmm - tasty, tasty Risk Burgers. Yumm! 

Who cares how many companies go bust when the future is UNLIMITED?

We gotta get on that gravy train now - the message is clear and present....

Or am I dreaming?


----------



## Sean K

DOW up 1000 points the last few days Jeff. 

Hope your trading the market and not the economy.


----------



## Aussiejeff

kennas said:


> DOW up 1000 points the last few days Jeff.
> 
> Hope your trading the market and not the economy.




DOW heading for the deep, deep South again, Kennas.

That was a nice big dead cat mirage you saw......

This leg down is going to be really nasty, with limited interest rate options left for the US and Japan.

Have a nice day.



aj


----------



## Sean K

Aussiejeff said:


> DOW heading for the deep, deep South again, Kennas.
> 
> That was a nice big dead cat mirage you saw......
> 
> This leg down is going to be really nasty, with limited interest rate options left for the US and Japan.
> 
> Have a nice day.
> 
> aj



Well, I hope you are short..


----------



## Aussiejeff

kennas said:


> Well, I hope you are short..




Can't short the big banks, mate.

Pity....


----------



## sassa

Is the DJI heading to revisit the low or to a new low?



> Notice the following on the daily chart:
> 
> -- Prices opened lower and then continued to drop
> 
> -- The 84.50 level offered a ton of support to prices
> 
> -- Once prices moved through the 84.50 level in a convincing fashion they tumbled on heavy volume
> 
> -- Prices closed at the absolute low on extremely heavy volume




http://www.bonddad.blogspot.com/


----------



## Ageo

Wasnt sure where to post this but since its based on the U.S then here it is:

Peter Schiff is officially my hero! 

http://www.youtube.com/watch?v=vweLBpE4mso

This man seriously knows his business


----------



## wayneL

Ageo said:


> Wasnt sure where to post this but since its based on the U.S then here it is:
> 
> Peter Schiff is officially my hero!
> 
> http://www.youtube.com/watch?v=vweLBpE4mso
> 
> This man seriously knows his business



Everyone from the Austrian school knew this was coming...



...and our governments embark on a supercharged Keynesian binge.

F**k!!!!


----------



## wayneL

wayneL said:


> Everyone from the Austrian school knew this was coming...




http://sigmaoptions.blogspot.com/2008/01/bump-lessons-in-economics.html

/\ A video series on economics from the Austrian School. I've posted them before, but worth bumping.


----------



## explod

wayneL said:


> Everyone from the Austrian school knew this was coming...
> 
> 
> 
> ...and our governments embark on a supercharged Keynesian binge.
> 
> F**k!!!!





Absolutely Waynel.   I could quote four titles by economic authors, and also several newsletters going back from 2002 who saw it coming and provided answers which will work.  You, I et al.  have quoted and pointed them.

Of course the answers require discipline and restraint and it seems those elements have left town.     

The gummumint and that steven fella at the big bank would have done well to have logged onto this space.


----------



## davo8

wayneL said:


> Everyone from the Austrian school knew this was coming...
> ...and our governments embark on a supercharged Keynesian binge.




I'm a Minsky fan myself, but same result: it was plain as dog's wotsits. I've been trying to get people out of financial assets all year, with a little success but not much.

Problem is, it's been dead easy to pick most of the moves until now but no longer. The October crash was right on schedule and markets are now all about on track. It gets much harder to pick what happens next, because there are so many crazy ways the governments can play it.

Next stop on the S&P should be 780-800 tests of the 2003 lows. We're still due a rally, but the 800 won't hold indefinitely. Question is: do we get Japanese lockjaw, deflation, inflation, dollar collapse or something really unexpected? Wish I knew, but it is not going to be nice either way.


----------



## sassa

> Senator Chris Dodd made an interesting proposal this afternoon, and on thinking further it seems to be one of the most reasonable and practical suggestions that we've heard during this crisis.
> 
> The Senator proposed that whatever givebacks, restrictions, haircuts, penalties, oversight, pay cuts and equity arrangements that are written into the bridge loans and funds to the automakers be applied in principle to all recipients of Federal bailout money including the Wall Street banks, and financials institutions like AIG and GE. This would include requiring written proposals for the restructuring and the use of this money and the adoption of a set of business reforms of the financial industry without exception




Amen.

http://www.jessescrossroadscafe.blogspot.com/


----------



## dhukka

Oops, US non-farm payrolls down *-533k* in November, the biggest monthly drop in payrolls since December 1974. Revisions were huge, September revised from a loss of *-284k* to *403k* October revised from *-240k* to *-320k*.


----------



## wayneL

Thanks Alan, Uncle Ben, et al. You have ensured the most exciting economic period in eighty years is approaching at exhilarating speed.

No eat #### and die!


----------



## dhukka

Great re-reading these threads, you come across some gems like these. 



Whiskers said:


> I don't think we've got too much to be worried about sassa.
> 
> *Full blown recession was never in my calculations and the revised numbers suggest it was not even close.* As for stagflation... again I think a misnomer or mis-diagnosis. The problems in the financial sector are self inflicted by poor management. Although the effects flow through to the wider economy to some extent, all the best (government) economic management in the world cannot save bad managers from themselves. In other words the way I see it is this sector will have to evolve it's self dicipline or face continuing forced dynamic restructuring... some of which is coming from tighter regulation.
> 
> The property market was over rated up and down as was consumer spending and all will recover. *The  lynch pin is obviously oil*. What I see happening is people are already pretty seriously curbing oil use, eg GM has came out saying it's time to seriously engage in alternative powered vehicles because consumer sentiment has shifted substantially that way, and I would be surprised if congress does not treat oil as a vital resource and severely limit the speculative influence in oil trading.
> 
> I still see these types of measures supporting the USD in the medium term, which will benifit our mining industry with better cost to revenue ratios.


----------



## chops_a_must

God damn things are going to get bad...

Can anyone come to terms with the absurdity of Washington in regards to the auto industry? 

I mean, they are prepared to pay trillions to bail out rich bankers, yet aren't prepared to stump up a measly 20 billion to save a million jobs. It makes absolutely no friggin sense...


----------



## Wysiwyg

dhukka said:


> Oops, US non-farm payrolls down *-533k* in November, the biggest monthly drop in payrolls since December 1974. Revisions were huge, September revised from a loss of *-284k* to *403k* October revised from *-240k* to *-320k*.




Noticed the bottoms were at the end of a recession except on one occasion.


----------



## dhukka

Wysiwyg said:


> Noticed the bottoms were at the end of a recession except on one occasion.




That is to be expected, businesses won't start hiring on mass until the economy starts to turn up, but where is the bottom of this recession? if this is to be the worst post World War II recession as many suggest, then we might only be half way through.


----------



## GumbyLearner

I think the autos are definitely stuffed.

If a bailout would work dont you think they could have raised the money
from private sources by now without having to go cap in hand to the FED.

Obviously theyre getting the bargepole treatment from everyone ATM! Too risky and still selling cars that cost too much to run! 

BTW I dont think the banks should have been bailed out either!

:walker:


----------



## dhukka

GumbyLearner said:


> I think the autos are definitely stuffed.
> 
> If a bailout would work dont you think they could have raised the money
> from private sources by now without having to go cap in hand to the FED.
> 
> Obviously theyre getting the bargepole treatment from everyone ATM! Too risky and still selling cars that cost too much to run!
> 
> BTW I dont think the banks should have been bailed out either!
> 
> :walker:




I actually think they are going to get some money, with a lot of strings attached. Noone is allowed to fail anymore in the United Socialists of America. Personally I like to see them go into Chapter 11 and restructure, free from all their legacy obligations.


----------



## GumbyLearner

I tend to agree with you Dhukka.

I mean it was only a week or so ago that GM, Ford & Chrysler execs
were flying in a private jets to plea for handouts and yesterday turned up
in "new" hybrids. Wow great PR!

Last time they wanted $25 Bill, yesterday it was $34 Bill and an economist from Moodys at the same meeting said they really need between $80 Bill to $100 Bill.  $9 Bill extra in two weeks 

All I would say to GM is Tough Luck!

:walker:


----------



## chops_a_must

dhukka said:


> I actually think they are going to get some money, with a lot of strings attached. Noone is allowed to fail anymore in the United Socialists of America. Personally I like to see them go into Chapter 11 and restructure, free from all their legacy obligations.



That's the obvious solution.

Can't see Obama allowing that with his supporter base and all...


GumbyLearner said:


> I tend to agree with you Dhukka.
> 
> I mean it was only a week or so ago that GM, Ford & Chrysler execs
> were flying in a private jets to plea for handouts and yesterday turned up
> in "new" hybrids. Wow great PR!
> 
> Last time they wanted $25 Bill, yesterday it was $34 Bill and an economist from Moodys at the same meeting said they really need between $80 Bill to $100 Bill.  $9 Bill extra in two weeks
> 
> All I would say to GM is Tough Luck!
> 
> :walker:



It's more complicated than that...

If the auto industry collapses, it will be worse than the great depression. Not only the loss of jobs, but the loss of billions of entitlements that otherwise would have gone into things like property, cars, stocks and so on...

It's also strange why the constraints are put on the auto industry and not the financials. That irks me.

I'm certainly no fan of the auto industry, but I am a fan of common sense. Allowing the auto industry to collapse without a protective structure would be like an act of deliberate self harm. I just don't understand why they are flirting with it.


----------



## GumbyLearner

chops_a_must said:


> Allowing the auto industry to collapse without a protective structure would be like an act of deliberate self harm. I just don't understand why they are flirting with it.




It really irks me too Chops.

But remember these same companies have had years of protective structure in the form of tariff barriers in many countries where their factories reside.
As a result, many other manufacturers cars have had to fight above their weight for a long time. And the key is it is cheaper to run an Asian made four cylinder than a six or eight made by a US based manufacturer

Your right it is complicated. But why havent they been able to survive with the assistance of tariffs? 

:nosympath


----------



## chops_a_must

GumbyLearner said:


> Your right it is complicated. But why havent they been able to survive with the assistance of tariffs?



Because deals signed up to decades ago make them massively uncompetitive, regardless.

It really is, among other things, a story of workers bringing down their own company.


----------



## GumbyLearner

chops_a_must said:


> It really is, among other things, a story of workers bringing down their own company.




Totally agree with you on that one!:jerry


----------



## kransky

unionised auto workers in the us get US$73/hr.. does it make sense to bail that nonsense out?


----------



## Sean K

dhukka said:


> Oops, US non-farm payrolls down *-533k* in November, the biggest monthly drop in payrolls since December 1974. Revisions were huge, September revised from a loss of *-284k* to *403k* October revised from *-240k* to *-320k*.



Those spikes down were followed by some decent recoveries in short time, around the end of the recessions. 

Question is, does it recover again like that? Or, long term in the abyss...

US recession is one year in, how long to go? 1 year, 5 years? Lots of factors at play I suppose. 

Need to start getting rid of the dead wood being propped up by the printng machines and start a fresh, somehow....


----------



## Aussiejeff

Marvellous stuff!

"Wall Street has put an upbeat spin on the government's report that the nation lost more than half a million jobs last month. *Stocks reversed early losses to finish sharply higher as the job numbers raise hopes that Washington will again step in to help the economy.*"

See? There is NO cause for any further pessimism, folks. It is now official - the worse the news gets, the bigger the bounce back will be, BECAUSE THE MORE THE FED WILL FIX IT!!

WHEEE-E-E-E-E-E!


----------



## Sean K

Aussiejeff said:


> Marvellous stuff!
> 
> "Wall Street has put an upbeat spin on the government's report that the nation lost more than half a million jobs last month. *Stocks reversed early losses to finish sharply higher as the job numbers raise hopes that Washington will again step in to help the economy.*"
> 
> See? There is NO cause for any further pessimism, folks. It is now official - the worse the news gets, the bigger the bounce back will be, BECAUSE THE MORE THE FED WILL FIX IT!!
> 
> WHEEE-E-E-E-E-E!



Jeff, the market is always right. Don't argue.


----------



## CAB SAV

kransky said:


> unionised auto workers in the us get US$73/hr.. does it make sense to bail that nonsense out?




and under their generous health plan, they get viagra for free-that's a bit stiff


----------



## Aussiejeff

CAB SAV said:


> and under their generous health plan, they get viagra for free-that's a bit stiff




**sniff**


----------



## Glen48

Whats the story with OZ car bail out? Are the taxpayers supporting the floor plans of all the car yards and letting the bank charge the feds for the pleasure?


----------



## baja

kransky said:


> unionised auto workers in the us get US$73/hr.. does it make sense to bail that nonsense out?




they dont get $73 in the pocket. Thats what it costs the company, not what  the employee gets deposited in their account.



> Auto workers make around $28 an hour plus benefits. The $73 an hour is the total cost for labor past and present retired and not retired divided by total number of actual hours worked. I posted this because I hear that number thrown around and would gladly take $73 an hour and take care of my own benefits. Thats $45 an hour for benefits. Very misleading. Really just a lie.


----------



## GreatPig

kennas said:


> the market is always right



I wonder what would happen if it ever was wrong...

GP


----------



## IFocus

GreatPig said:


> I wonder what would happen if it ever was wrong...
> 
> GP





GP the market regularly gets it wrong.......hupmmm when my stops get hit


----------



## noirua

It could well be, the time of severe corrections has ended. Interest rates are falling and stocks that are able to maintain dividends are going to look increasingly cheap.
So the market will continue to see some disasters as far as individual companies are concerned, but main indexes may start a long steady recovery despite the economy turning down.


----------



## Wysiwyg

noirua said:


> It could well be, the time of severe corrections has ended. Interest rates are falling and stocks that are able to maintain dividends are going to look increasingly cheap.
> So the market will continue to see some disasters as far as individual companies are concerned, *but main indexes may start a long steady recovery *despite the economy turning down.




Sheesh, I wouldn`t mind another shot at an index low, probably the safest entry one can get.Now if I say "I can`t see another index low being put in" then it should happen.


----------



## nunthewiser

Personally think we havent seen the overall low as yet but im from geraldton , what would i know


----------



## explod

GreatPig said:


> I wonder what would happen if it ever was wrong...
> 
> GP




Like what happenned as it looked like going to 6000 (AllOrds)


----------



## sassa

> "A severe global recession will lead to deflationary pressures. Falling demand will lead to lower inflation as companies cut prices to reduce excess inventory. Slack in labour markets from rising unemployment will control labor costs and wage growth. Further slack in commodity markets as prices fall will lead to sharply lower inflation. Thus inflation in advanced economies will fall towards the 1 per cent level that leads to concerns about deflation.
> 
> "Deflation is dangerous as it leads to a liquidity trap, a deflation trap and a debt deflation trap: nominal policy rates cannot fall below zero and thus monetary policy becomes ineffective. We are already in this liquidity trap since the Fed funds target rate is still 1 per cent but the effective one is close to zero as the Federal Reserve has flooded the financial system with liquidity; and by early 2009 the target Fed funds rate will formally hit 0 per cent. Also, in deflation the fall in prices means the real cost of capital is high - despite policy rates close to zero - leading to further falls in consumption and investment. This fall in demand and prices leads to a vicious circle: incomes and jobs are cut, leading to further falls in demand and prices (a deflation trap); and the real value of nominal debts rises (a debt deflation trap) making debtors' problems more severe and leading to a rising risk of corporate and household defaults that will exacerbate credit losses of financial institutions."
> 
> - Professor Nouriel Roubini of New York University




http://www.frontlinethoughts.com/gateway.asp?ref=reprint


----------



## The Edge

Saturday  6 December 2008

From an earlier observation:

> Can anyone come to terms with the absurdity 
> of Washington in regards to the auto industry? 

> I mean, they are prepared to pay trillions to 
> bail out rich bankers, yet aren't prepared to 
> stump up a measly 20 billion to save a million 
> jobs. It makes absolutely no friggin sense... 

That it makes no sense speaks to the success of
the international banking regime, aka the New 
World Order.

Over a period of almost a centruy, addressing the US, 
the Federal Reserve Sytem, since 1913, has directed 
everything that pertains to 'money,' starting with 
the elimination of specie-backed currency, replaced 
by Federal Reserve Notes, issued by a private 
corporation, The Federal Reserve Bank/System.

During this same span of time, the bankers created
the Crash of '29, [through manipulation - another story]
which culminated in the bankruptcy and demise of the
US as a sovereign country.  Roosevelt closed the banks,
ostensibly to prevent a run on money, but to give the
Fed time to replace the banking system completely over
to the Fed Res System.  As a country, the US was now
bankrupt, not revealed to the public as the reason for
closing down the system for several days.

Now in bankruptcy, the Secretary of the Treasury become
the official over-seeing the running of the US.  When the
initial plans for the $750 billion bailout were announced, if
anyone paid attention, it was to be under the complete
control of the Treasury Secretary, with no oversight or
review of any and all decisions made by him. 

Why?

He is the official that represents the creditors of the US,
the behind-the-scenes central bank system.

Backing up a bit, if one is not familiar with how the
Rothchilds took over the Bank of England, of course,
along with several other banking systems throughout
Europe, then this story will sound too incredible to
believe.  To that, I say, read your history.

Rather than get into the mechanics, or details of all
this all evolved, to answer the Q:

> Can anyone come to terms with the absurdity 
> of Washington in regards to the auto industry? 

Yes, but only within the context of that to which I
have alluded above.  Through decades of changing
the US currency from gold/silver backing to only
being backed by nothing, [all US Notes were destroyed
by the Fed to eliminate them from circulation] to ensure
the gradual, imperceptable replacement with fiat paper.

The school system was taken over by the now corporate
US, accomplished by the 14th Amendment, making ALL
citizens of the UNITED STATES, [ a corporation], or
citizens subject to the federal givernment, [anothe story].
The Fed had to control information, and the dumbing down
of Americans began.  The US scholl system went from one
of the best in the world to one of, not quite the worst.

This was not by accident.

Rothchild made his fortune by providing money for 
various countries to finance their wars, thus becoming
indebted to the Rothschild financial empire.

"Permit me to issue and control the money of the nation 
and I care not who makes its laws." ”” Mayer Amsched 
Rothchild, a prominent European banker in the 18th century

Those were not idle words.

It was the Federal Reserve Act, passed on 23 December 
1913 that effectively ended the Republican form of
government of the United States of America, to be
replaced by democracy, one of the worst possible forms
of government.

In a Republic, the rights of one are protected from the
interests of a majority.

In a democracy, the majority rules, and if one understands
how democracy functions, it is Socialism/Communism
coming to fruition.  The US is more communist in structure
and practice than Russia.  It is just that most have come
to believe that democracy is a good thing, aka brainwashing.

Democracy is insidious.  Do a google comparison between
a Republican form of government and a democratic form of
government.

Back to the omnipotent Fed.

"This Federal Reserve Act establishes the most gigantic 
trust on earth. When the President (Wilson) signs this bill 
the invisible government of the Monetary Power will be 
legalized. ”” Hon. Charles A. Lindbergh, Sr., Dec. 23, 1913

That it was passed on December 23, 1913, two days 
before Christmas, when most all the the members who
stood in opposition to this Act were home on holiday, the
most important piece of legislation was secreted through
the remaining sycophants of Congress, directed by just
a few powerful men.

It was long-standing custom not to pass any legislation
during the Christmans holidays, instead waiting until
January, when all members of Congress returned from
holiday.  Why else would the monst important peice of
legislation affecting the US financial system be passed
under such suspect circumstances, under secrecy?

There are no accidents.

The first member to head up the Federal Reserve was a
German Jew, not even a U S citizen, brought in from
Germany to set up the system, again, all done in secrecy.  
To this day, the Federal Reserve System is not accountable
to any government.  If you are not aware, the FRS is NOT
a part of the US government!

At no time have I lost sight of the question posed, but
to give a simple answer requires knowledge of a complex
overthrow of one of the richest, most powerful countries
in the world.  All without firing a single shot.

I take that back.  Only two shots were fired.

President Lincoln was going to issue Notes backed by the
US government, to finance the Civil War between the States,
instead of money issues by the banking system.

Where was the money coming from?  The London Rothchilds
were funding the north, while the Paris Rothchilds were
funding the Confederate South.  To use financing other than
from them was unacceptable.

BANG.

Prsident Kennedy was about to pass legislation to issue
4 bilion in silver certificates, still in circulation prior to
1964, instead of issuing fiat Federal Reserve Notes.

BANG.

An effective and judicious use of bullets.

The first piece of legislation passed by FDR, within
five days of taking office, was to close down the
banking system and make the ownership of gold illegal 
for US citizens to hold.

The bankers did not want anyone but them to have
all the gold. 

One of the first pieces of legislation passed by Lyndon
Johnson, successor to JFK, was to cancel the bill to
issue silver-backed certificates.  Subsequently, all siver 
backing was eliminated in 1964, even in coins.

So, why did Congress, unwitting marionettes, help
bail out the bankers first?  They have to protect the
system from its utlimate collapse from happening.

What about the auto industry and the millions of jobs
lost in the process?

Who gives a **** about "human resources."  They are
not part of the system, and they can always be
replaced.  [Ever wonder why "personnel departments"
were replaced by the "departments of human resources?"]


Few understand the significance of words, anymore.
On national television, addressing the situation of the
auto industry and the disasterous implications, in his
typically eloquent delvery, Bush said,

"I understand how the people are experiencing hard
times, but we have to do everything we can to protect
the system, and we will."

The sytem is more important than the people, and it
must be protected at all costs.

The reason why nothing makes "no friggin sense" is
because few are aware of the transition that took
place in the United States, since 23 December 1913,
and indeed, throughout the world.

Central Banks are Fascist in derivation, if I recall
correctly, but that matters not.  Central banks control
the money system, now a single network throughout 
the world, the lynchpin of The New World Order.

There is more, but it is the best way I could address
the legitimacy of the question.  When one begins to
comprehend that the world is not what it seems, that
it is led by unseen forces, forces that will tolerate
nothing opposing it, answers begin to make eminent
sense.

Follow the money.  Always, follow the money.


Just one opinion.


----------



## dhukka

Whiskers said:


> I suppose you are referring to that panel of 'economists' (NBER) report.
> 
> Firstly, it's a recession by their criteria but NOT by the conventional method (two consequitive months of negative GDP), so it's hardly overwhelmingly, or "Full Blown" as was my comment... and the announcement doesn't seem to have any dramatic effect of the 'foreward looking' markets.
> 
> Actually, with minor recessions/slowdowns, they are usually over by the time any offical call is made as I believe with high probability this will be after Obama gets in office... even if the current qtr is negative, the markets will be focused foreward looking.
> 
> So, for all practical purposes it'll be purely accademic for 'idealist' economists, number crunchers, librarians and the like... cos the bull had already bolted and started procreating again. :




You actually did yourself a favour a while back and stopped commenting on economic matters because it was obvious to all an sundry that you had no clue, but now you wish to highlight your shortcomings even further, so who I am to stop you?

The NBER's method *is* not only the conventional method, it is the *only* method. The 2 consecutive quarter's of negative growth is a rule of thumb measure. On any graph and every reference to recessions made by any economist, they use the dates defined by the NBER. If the 2 quarter method were used, there wouldn't have been a recession in 2001. Citing a reference to the age does not bolster your case, it actually diminishes it as the media continually gets this wrong. 

If the current quarter is negative? *4Q08* GDP will be down *4 - 5%*, plunges in employment, factory orders, retail sales, industrial production and ISM'a below 40 will ensure that. This will easily be the worst recession since 1982 if not since the end of WWII.

The stock market usually does head up well before the recession ends but when will this one end? I don't pretend to know, but I expect the same crowd who were banking on a second half 2008 surge in the economy to be disappointed again in the second half of 2009. Any recovery will be tepid at best.


----------



## dhukka

wayneL said:


> Basically, we wait for him to turn into a bear, then buy with ears pinned back.




Yep, Whiskers has been a very accurate contrary indicator of economic and market direction.


----------



## dhukka

Whiskers said:


> Two points... context again... I trade the market, you are taking a long term trend. You trying to correlate our comments is akin to an endurance bike rider comparing/arguing stratergy/time line with a sprinter. Different goal posts, different reward points.
> 
> If you had read all of my posts you would have seen that I have been very bearish on some things, particularly oil proven correct, against the wisdom of some and moderately bullish to bearish on others at various times. After all the market is there to be traded.
> 
> Secondly, since you highlighted the adjective relating to recession, you confirm my arguement... 2001 was a marginal (technical) recession as is the current case so far... ie not 'fullblown' like I said.
> 
> So, let me update my 'trading' outlook for the next couple of months. Oil, bearish to flat. Minerals, flat turning stronger into the new year. Precious metals, medium term bullish, longer term (year or so) bearish. Financials, flat... more regulation to come before turning mildly bullish. Residential roperty, forget US... Aus flat to mildly bullish outlook. Retail, generally OK but with lower traditional peak time sales volume.




Again, complete and utter rubbish, your metaphors are meaningless and your outlook is irrelevant to the topic. Your consistent efforts to twist meaning and change the subject are pathetic. Btw, why would you think anyone is interested in you outlook for anything? As a indication of what not to do? The meaning of your previous statement is crystal clear, you said the US economy would not even come close to a "full blown" recession. Here is the NBER's definition of a recession



> A recession is a *significant* decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.




By definition, for the NBER to call a recession, a *significant* decline in economic activity across the economy has to take place and for a lengthy period of time. Thus there was nothing 'marginal' or 'technical' about the 2001recession. By definition if the US economy is in recession, it is 'full blown'.  

Calling a recession marginal means you don't understand the meaning of a recession as defined by the NBER. If you want to compare recessions, then of course you can say the 2001 recession was less severe than 1973-75 or 1981-82 but that isn't what you said is it? 

Now if you want to argue that full blown means steep drops in GDP, which you probably will argue as you try to squirm your way out of being wrong once again, it doesn't matter. GDP in *4Q08* will be down at least 4%.

Even if it wasn't down sharply, you'd still be wrong, you said "wouldn't even come close", clearly a recession as defined above means it is close to whatever definition you invent for full blown.


----------



## Glen48

Apart from the well know example of a recession V a depression  what are the technical stats. of a depression?
If USA has only just discovered they have been a recession since 07 who knows they could be in a depression now?


----------



## dhukka

Glen48 said:


> Apart from the well know example of a recession V a depression  what are the technical stats. of a depression?
> If USA has only just discovered they have been a recession since 07 who knows they could be in a depression now?




Glen. prior to the 1930's depression was used to describe periods that we today call recessions. Post WWII it was decided not to call them depressions anymore because of the negative conotations associated with depressions. So there is no strict definition of a depression but there is a general rule of thumb to distinguish a depression from a recession. A depression is loosely defined as fall in real GDP of 10% or more. By that measure he haven't had a depression since *1937 - 38*.


----------



## Glen48

Davo 8 Let me correct you on one thing I can't see OZ coming out of this until about 2012, there is to much Fed help to let it collapse as quickly as it should.
Maybe we should be studying Tulips, Dot Com bubbles to get an idea where this will end.
We should also try and agree what the future will bring, Falling USD, deflation, Hyperinflation , gold up, Jobs, life style living in tents growing your own vegies. 3 rd World conditions, what will it take to turn it around, we can never go back to what we had.
I use to think about history and how hard it was to survive and glad i wasn't alive then now in x yrs time people will look back to to the great depression of 2007 - 200?? and wonder how we could get ourselves in such a mess.  
Strange how people who never work a day in their lives well soon be just as well of as those who had.


----------



## explod

Whiskers said:


> but regardless of whether a recession has been called 'official', slight, fullblown or otherwise a year in arears is of little consequence, unless you're a perma bear hell-bent on talking yourself and everyone else into disaster...



   So if you happened to see it all coming and tried to warn others "you're a perm bear hell-bent on talking yourself and everyone into disaster"     Crap



> There are a number of 'positive' influences coming up including the inauguration of Obama and the calming effect that is likely to have on Americas associates that one should keep in mind for trading and probably long term investment opportunities.




Well the news out this morning indicates Wall Street is aghast at Obama's pessimistic take on the financials




> I'm sorry, but I'm just not a 'perma' 'follower'. I don't lag behind to see what works for others and then hope to replicate. I'm always optimistically looking for 'opportunities', tipping a toe in the water.
> 
> Now, just to recap before I sign off and get back to something profitable, this latest string of arguement, no more personality attack, from dhukka started over splitting hairs on the interpretation of the degree of 'recession'. An example of degree/interpretation... take oil for example. From a sharemarket (oil) sector perspective it was very bullish for ages while the financials and the general economy was turning bearish. Similarly, there will be sectors turning bullish well before the wider economy looks good.




Do you honestly read back over the garbage that you put forward.   You have been padding after the permas for months and because you dont dig it you just BLAH BLAH away.



> It takes leadership, of which there is new coming, to turn sentiment, confidence and markets.
> 
> That's why these generalisations of recession, boom, crisis or whatever mean less to some than others.





So the world will be saved by Obama, wish him all the best.   You indicated (and I'll go back if required and bring them forward) that the Bush Admin would save us also.   So the price of scrap steel dropping from $500 a tone to $90 a ton in three months is a generalisation perhaps.


----------



## Glen48

B O has pledged $600 B to create jobs and save the US auto industry, just tack it on the 8 Trillion and rising.
How much longer can they keep borrowing and yet all seem to think the USD will always be strong????


----------



## waz

Exactly what is this 600bil going to be spent on?
Also, how do we know its going to create 2.5mil jobs?

Ive read about how they will embark on its biggest infrastructure investment since the 1950s. Even if you could create those jobs, whats to say that the unemployed workforce is skilled to take on those jobs. 

A person who got layed of from Starbucks doesnt exactly have the qualifications to build a road.


----------



## Whiskers

Glen48 said:


> B O has pledged $600 B to create jobs and save the US auto industry, just tack it on the 8 Trillion and rising.
> How much longer can they keep borrowing and yet all seem to think the USD will always be strong????




Only seen a little detail of what he plans, which I think includes some pretty severe attitudinal and managerial changes such as less models and more economecial models and kurbs on executive extravagance.

I think it is virtual self defence policy that he wants to maintain some sort of core vehicle building capacity and expertise.

I was bullish the USD for all it's latest run. The reason is not as simplistic as the strength of the US but a collection of issues in the current phenonemum that the USD is the proxy world currency.

But I'm turning mildly bearish recently. I'm not sure whether it'll go a bit higher before it falls again, but I suspect that if Obama gets what he wants it may kick a bit higher before falling at a slower rate than otherwise under Bushs' policies.



waz said:


> Exactly what is this 600bil going to be spent on?
> Also, how do we know its going to create 2.5mil jobs?
> 
> Ive read about how they will embark on its biggest infrastructure investment since the 1950s. Even if you could create those jobs, whats to say that the unemployed workforce is skilled to take on those jobs.
> 
> A person who got layed of from Starbucks doesnt exactly have the qualifications to build a road.




Fair questions waz. We should start to get some detail over the coming weeks. 

Re civil construction, I think you'll find they have plenty of engineers and supervisors. They are the last to be retrenched after the unskilled labourers, skilled labourers, plant operators, tradies, clerical staff and so on.

The labouring and skilled labouring jobs don't take long to get the hang of for keen people. Plant operation, tradies and clericial etc isn't much different no matter whether house construction where there has been numerous layoffs or civil construction, eg carpenters, concreters, plumber and drainers, book keeping , accounting etc still do the same things just in a bit different environment.


----------



## davo8

And then we wait...for the last bubble to pop.

There was the dot com bubble, then the property bubble, then the commodity bubble and now the Treasury bubble.

I wonder what happens when that one pops.

I think Sarkozy will light a candle.:arsch:


----------



## kransky

baja said:


> they dont get $73 in the pocket. Thats what it costs the company, not what  the employee gets deposited in their account.




yes your right...
http://mediamatters.org/items/200812040005

why was such crap aired on our news in oz?


----------



## kransky

sassa said:


> http://www.frontlinethoughts.com/gateway.asp?ref=reprint




I expect Roubini is much smarter than i... but a massive and prolonged deflation rewards the responsible savers and i just dont think the responsible will be rewarded and the irresponsible punished... that would just be too good to be true

plus china would then be able to buy EVERYTHING so logic says hyperinflation when the usd collapses



"logic" LOL


----------



## kransky

Glen48 said:


> Davo 8 Let me correct you on one thing I can't see OZ coming out of this until about 2012, there is to much Fed help to let it collapse as quickly as it should.
> Maybe we should be studying Tulips, Dot Com bubbles to get an idea where this will end.
> We should also try and agree what the future will bring, Falling USD, deflation, Hyperinflation , gold up, Jobs, life style living in tents growing your own vegies. 3 rd World conditions, what will it take to turn it around, we can never go back to what we had.
> I use to think about history and how hard it was to survive and glad i wasn't alive then now in x yrs time people will look back to to the great depression of 2007 - 200?? and wonder how we could get ourselves in such a mess.
> Strange how people who never work a day in their lives well soon be just as well of as those who had.




I am becoming increasingly scared because i am leaning this way also 
:hide:


----------



## wayneL

kransky said:


> I expect Roubini is much smarter than i... but a massive and prolonged deflation rewards the responsible savers and i just dont think the responsible will be rewarded and the irresponsible punished... that would just be too good to be true
> 
> plus china would then be able to buy EVERYTHING so logic says hyperinflation when the usd collapses
> 
> 
> 
> "logic" LOL




Do folks think we are overusing the term "hyperinflation". I think we are. While I would never discount true hyperinflation in one or more anglo economy, "high" inflation being probable after a period of deflation, I strongly doubt we'll get true hyperinflation in the anglo economies. 

http://en.wikipedia.org/wiki/Hyperinflation

That said, we must be vigilant for early signs of it in the commodities markets.


----------



## wayneL

Not a bad article from "Pesto" as he is now known here (as the BBC face of the Credit Crunch). 



> A crash as historic as the end of communism
> The credit crunch has destroyed casino capitalism. From the rubble a new, less divisive, economic model will emerge
> Robert Peston - http://www.timesonline.co.uk/tol/comment/columnists/guest_contributors/article5309917.ece


----------



## davo8

kransky said:


> I expect Roubini is much smarter than i... but a massive and prolonged deflation rewards the responsible savers and i just dont think the responsible will be rewarded and the irresponsible punished... that would just be too good to be true
> 
> plus china would then be able to buy EVERYTHING so logic says hyperinflation when the usd collapses.




Roubini is in the unfortunate position of having made a good call, and now everyone is watching. No, I don't think severe deflation is possible, because although you can destroy credit you can't destroy fiat money. Likewise, I don't think hyperinflation is possible, because that would mean printing physical bank notes with lots of zeros on them.

But I do think a default on the US T-bond and the USD is possible. In that case USD financial assets would drop very, very fast as people try to get out. Watch for May-Jun 2009.


----------



## wayneL

davo8 said:


> ...because although you can destroy credit you can't destroy fiat money.




Eh?

I think you might want to reconsider that view, FWIW.


----------



## dhukka

wayneL said:


> Eh?
> 
> I think you might want to reconsider that view, FWIW.




Especially since every experiment with fiat money in history has been a failure.


----------



## kransky

Is the Fed Taking the First Steps to Selective Default and Devaluation? 

http://jessescrossroadscafe.blogspot.com/2008/12/is-fed-taking-first-steps-to-default-or.html

interesting....


----------



## wayneL

More gloom from Gloomberg http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aKNSK0gYlqB0


> Q Ratio Signals ‘Horrific’ Market Bottom, CLSA Says (Update2)
> Email | Print | A A A
> 
> By Patrick Rial
> 
> Dec. 10 (Bloomberg) -- A global stock slump may have further to go, according to Tobin’s Q ratio, which compares the market value of companies to the cost of their constituent parts, CLSA Ltd. strategist Russell Napier said.
> 
> The ratio, developed in 1969 by Nobel Prize-winning economist James Tobin, shows the Standard & Poor’s 500 Index is still too expensive relative to the cost of replacing assets, said Napier. While the 39 percent drop in the index this year pushed equity prices below replacement cost, history suggests the ratio must sink further as deflation sets in, he said. *The S&P may plunge another 55 percent to 400 by 2014, Napier said.*


----------



## noirua

wayneL said:


> More gloom from Gloomberg http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aKNSK0gYlqB0
> 
> 
> 
> Q Ratio Signals ‘Horrific’ Market Bottom, CLSA Says (Update2)
> Email | Print | A A A
> 
> By Patrick Rial
> 
> Dec. 10 (Bloomberg) -- A global stock slump may have further to go, according to Tobin’s Q ratio, which compares the market value of companies to the cost of their constituent parts, CLSA Ltd. strategist Russell Napier said.
> 
> The ratio, developed in 1969 by Nobel Prize-winning economist James Tobin, shows the Standard & Poor’s 500 Index is still too expensive relative to the cost of replacing assets, said Napier. While the 39 percent drop in the index this year pushed equity prices below replacement cost, history suggests the ratio must sink further as deflation sets in, he said. *The S&P may plunge another 55 percent to 400 by 2014, Napier said.*/QUOTE]
> 
> 
> 
> 
> Thanks for all of that post. I wonder how much the constituents have changed since the 1987 crash. Even the tortoise changes of the DOW 30 are gathering speed.
> What I mean really is, how can we compare indices that have changed so much in their makeup.
> The FTSE 100 index (101 stocks) seems to be full of companies foreign to the UK.
> Even Macquarie Bank has so many foreign interests it makes Aussie indexes increasingly foreign and always vulnerable to foreigners pulling out cash.
Click to expand...


----------



## Aussiejeff

noirua said:


> wayneL said:
> 
> 
> 
> More gloom from Gloomberg http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aKNSK0gYlqB0
> 
> Thanks for all of that post. I wonder how much the constituents have changed since the 1987 crash. Even the tortoise changes of the DOW 30 are gathering speed.
> What I mean really is, *how can we compare indices that have changed so much in their makeup. *
> The FTSE 100 index (101 stocks) seems to be full of companies foreign to the UK.
> Even Macquarie Bank has so many foreign interests it makes Aussie indexes increasingly foreign and always vulnerable to foreigners pulling out cash.
> 
> 
> 
> 
> 
> Totally agree noirua. It's all become so terribly and inextricably ..... COMPLICATED!
> 
> Perish the thought that if it is all so complicated now, what will it be like in say, 10-20 years?
Click to expand...


----------



## noirua

Aussiejeff said:


> noirua said:
> 
> 
> 
> Totally agree noirua. It's all become so terribly and inextricably ..... COMPLICATED!
> 
> Perish the thought that if it is all so complicated now, what will it be like in say, 10-20 years?
> 
> 
> 
> 
> 
> 
> Yes, there may well be a new ASX China 200 index, for companies whose principal market is Hong Kong or China. Or the company is controlled through China 'A' shares.
Click to expand...


----------



## davo8

wayneL said:


> Eh?
> I think you might want to reconsider that view, FWIW.




Deflation requires a reduction in the money supply. I said it's not possible to destroy fiat money once created, in the sense you can't destroy 10% or 20% of the money. Money can change ownership, but once created it's indestructible so long as the system survives.

It is possible to destroy the currency as a whole. There are many ways to do that, with Zimbabwe and Iceland showing a couple of possibilities. France had the Franc, New Franc then Euro, so the old ones are "destroyed" in a sense.

It's also possible to destroy the value of currency.

There are hints that both Europe and the Fed have a "master plan". Europe wants the USD to collapse and be replaced by a new non-US system. The USA wants to devalue its debts and retain its role as the global reserve currency. Not everyone will get what they want.

I see this reaching a climax by around the middle of next year: summer 2009. There are many steps along the way. These are very smart guys who don't care if they look stupid while they get exactly what they want.


----------



## kransky

davo8 said:


> These are very smart guys who don't care if they look stupid while they get exactly what they want.




This has to be correct...


----------



## wayneL

Sehr Gut, Frau Merkel.

http://www.timesonline.co.uk/tol/comment/columnists/rosemary_righter/article5327458.ece

Germans reject Keynesian self destruction. 

Deutchland uber alles!!


----------



## doctorj

wayneL said:


> Germans reject Keynesian self destruction.
> 
> Deutchland uber alles!!



Doesn't that article explain exactly why Germany is able to "keep its powder dry" rather than join the Keynesian gravy train?

What good will Keynesian-style countercyclical stimulus packages do to inspire the frugal German consumer?  It's easy for Merkel to criticise, but who will buy all the BMWs that employ such a large number of Germans?


----------



## wayneL

doctorj said:


> Doesn't that article explain exactly why Germany is able to "keep its powder dry" rather than join the Keynesian gravy train?
> 
> What good will Keynesian-style countercyclical stimulus packages do to inspire the frugal German consumer?  It's easy for Merkel to criticise, but who will buy all the BMWs that employ such a large number of Germans?




Well, not many will be MEWed for quite some time, that's for sure.

However I'll take the A4 Cabriolet off my neighbor's hands at the right price. It will have to be cheap, because Audi drivers have won themselves an even worse reputation than Beamer drivers... (deservedly in my observation). 

I was thinking of going and supporting their breweries and bratwurst industry soon too.


----------



## doctorj

wayneL said:


> I was thinking of going and supporting their breweries and bratwurst industry soon too.



Me too, but unfortunately the Great British Peso doesn't go as far as it used to 

So instead I'm off to Geneva in an hour or so to support their fondu, chocolate and knife industries


----------



## noirua

doctorj said:


> Doesn't that article explain exactly why Germany is able to "keep its powder dry" rather than join the Keynesian gravy train?
> 
> What good will Keynesian-style countercyclical stimulus packages do to inspire the frugal German consumer?  It's easy for Merkel to criticise, but who will buy all the BMWs that employ such a large number of Germans?



There lie Germany's big problems as the emancipation of East Germany and its industries, has made it the most industrialized European country.


----------



## davo8

doctorj said:


> Doesn't that article explain exactly why Germany is able to "keep its powder dry" rather than join the Keynesian gravy train?
> 
> What good will Keynesian-style countercyclical stimulus packages do to inspire the frugal German consumer?  It's easy for Merkel to criticise, but who will buy all the BMWs that employ such a large number of Germans?




Germany is a mercantilist economy, like the Japanese, Chinese, Koreans, etc. In fact, these countries are the only ones which should be stimulating consumption, since their current account surpluses are part of the problem. 

Much more here: http://tradeandtaxes.blogspot.com/

For consumer countries in debt deflation, stimulus makes things worse.


----------



## wayneL

私は私およびあなたのあなたの映像を持っている 
「私を愛する書いた」私が書いた「追随的」
私はそこに凝視を坐らせ、あなたの毛が茶色の色にOhそれをすることを何もあるある 
あなたの目は雲としてハシバミそして柔らかい 
私は頻繁に誰もあるとき接吻する

私はあなたの映像を持っている、私は私があなたの百万をすべての円形私が医者にあなたの映像を撮ってほしい従って私はまたあなたの中から持っている出て来ていたりおよび回っていたりおよび提出していたりおよび「円形回っている私を見てもいい私の細胞好むあなたの映像を持っている

私は日本人を回している 
私は私が私が実際にそう考える日本人を回していることを考える 
回転日本語 
私は私が私が実際にそう考える日本人を回していることを考える 
私は日本人を回している
私は私が私が実際にそう考える日本人を回していることを考える 
回転日本語
私は私が私が実際にそう考える日本人を回していることを考える

性無し、薬剤無し、ワイン無し、女性無し
楽しみ、罪の当然それ私のまわりで暗くない皆である皆がサイクロンのレーンジャーのように私を避ける見ず知らずの人そういうわけで私が日本人を回している


----------



## moXJO

wayneL said:


> 私は私およびあなたのあなたの映像を持っている
> 「私を愛する書いた」私が書いた「追随的」
> 私はそこに凝視を坐らせ、あなたの毛が茶色の色にOhそれをすることを何もあるある
> あなたの目は雲としてハシバミそして柔らかい
> 私は頻繁に誰もあるとき接吻する
> 
> 私はあなたの映像を持っている、私は私があなたの百万をすべての円形私が医者にあなたの映像を撮ってほしい従って私はまたあなたの中から持っている出て来ていたりおよび回っていたりおよび提出していたりおよび「円形回っている私を見てもいい私の細胞好むあなたの映像を持っている
> 
> 私は日本人を回している
> 私は私が私が実際にそう考える日本人を回していることを考える
> 回転日本語
> 私は私が私が実際にそう考える日本人を回していることを考える
> 私は日本人を回している
> 私は私が私が実際にそう考える日本人を回していることを考える
> 回転日本語
> 私は私が私が実際にそう考える日本人を回していることを考える
> 
> 性無し、薬剤無し、ワイン無し、女性無し
> 楽しみ、罪の当然それ私のまわりで暗くない皆である皆がサイクロンのレーンジャーのように私を避ける見ず知らずの人そういうわけで私が日本人を回している




Turning Japanese?


----------



## Aussiejeff

moXJO said:


> Turning Japanese?




Unca Sam San?


----------



## explod

moXJO said:


> Turning Japanese?





Weeeelllll       youraaareaaaaalll      just a heap of shunts.    

And I am going for a cardenay



Uncle Ben, love ya maaaan


----------



## Bushman

moXJO said:


> Turning Japanese?




With Bernanks cutting rates to 0-0.25% the answer is a resounding YES! 

Now we are left with the 'unconventional' measures...apparently Ben is sending Mick Gatto over to 'pressure' the Ivy Leaguers to open up the coffers and start lending.  

I think Chopper Read would be more effective and it would make a good read when he publishes the story in a couple of years. 

Happy days...


----------



## Aussiejeff

Hehe.

Some Wall Street pundits are postulating that since the economic news couldn't get any worse (could it really?) the only way forward for stocks now is UP, UP and AWAAAY! 

It's bear shootin' season.... :hide:


----------



## sassa

So will the American dollar now replace the yen in the carry trade?


----------



## wayneL

sassa said:


> So will the American dollar now replace the yen in the carry trade?




With competition from the North Sea Peso (£).

We're going to zero too... watch.


----------



## Sean K

wayneL said:


> We're going to zero too... watch.



Maybe they can go negative negative. They pay you interest to take money off them?


----------



## wayneL

You gotta love this guy, LOL:


----------



## Wysiwyg

3 weeks ago I flew to Perth Virgin Blue and return Qantas.

The V.B. flight over was 

A) delayed 2 1/2 hours with a mechanical problem, a new aircraft was sourced.
B) the leg room for an over 6 footer is terrible, many tall people were stretching their legs in the aisle.
C) *no free tucker in flight*, have to pay for it

The Qantas flight back was on time, additional leg room and *free food and drinks.*

FREE TUCKER IN FLIGHT PLEASE RICHY ... AYY :


----------



## chops_a_must

"... but I think I better had not have said that"

ROFL... Lets put this at the end of some famous quotations shall we?

Kepler: "Orbits are elliptical, but I think I better had not have said that"

Caesar: "You too, Brutus, my son? But I think I better had not have said that"

Descartes: "I think, therefore I am. But I think I better not have said that. However, does thinking not, imply that I am not?" 

Last one has some poetic license. :


----------



## chops_a_must

Wysiwyg said:


> 3 weeks ago I flew to Perth Virgin Blue and return Qantas.
> 
> The V.B. flight over was
> 
> A) delayed 2 1/2 hours with a mechanical problem, a new aircraft was sourced.
> B) the leg room for an over 6 footer is terrible, many tall people were stretching their legs in the aisle.
> C) *no free tucker in flight*, have to pay for it
> 
> The Qantas flight back was on time, additional leg room and *free food and drinks.*
> 
> FREE TUCKER IN FLIGHT PLEASE RICHY ...




That was the whole point with Virgin though.


----------



## Aussiejeff

Now I know we REALLY ARE deep in the doo-do's - 

-----------------------

Herald Sun News

December 18, 2008 10:44am

*THE sister of supermodel Elle Macpherson has declared herself bankrupt.*

Mimi Macpherson was due to appear in the Federal Magistrates Court in Melbourne today for a bankruptcy hearing, but the court heard she declared herself bankrupt yesterday.

Omiros One, a Queensland property company, was seeking money from Ms Macpherson, with a brief court hearing today awarding costs to the company.

Ms Macpherson is known for her passion for whales and has appeared as a presenter on the Discovery channel.

---------------

Just another one of many higher profilers starting to go down the financial gurgler.

I'm also starting to notice on my occasional travels that a lot of well respected shops in the region around Wodonga have already become vacant shells or have "for sale" or "for lease" signs up.

Merry Xmas? For some.

Easter? For businesses looks like it will be el-crappo by then.  

**DING, DING** - "Bring out yer debt, all that luverrly debt!"


----------



## Sean K

Aussiejeff said:


> Now I know we REALLY ARE deep in the doo-do's -



LOL, bankrupt over a $100k debt.

Codswallop! 

I'm sure Elle has her money stashed in a bank account in the Caymans.

If legit though, I'd be happy to help her out with a home movie.


----------



## CAB SAV

Aussiejeff said:


> Now I know we REALLY ARE deep in the doo-do's -
> 
> -----------------------
> 
> Herald Sun News
> 
> December 18, 2008 10:44am
> 
> *THE sister of supermodel Elle Macpherson has declared herself bankrupt.*
> 
> Mimi Macpherson was due to appear in the Federal Magistrates Court in Melbourne today for a bankruptcy hearing, but the court heard she declared herself bankrupt yesterday.
> 
> Omiros One, a Queensland property company, was seeking money from Ms Macpherson, with a brief court hearing today awarding costs to the company.
> 
> Ms Macpherson is known for her passion for whales and has appeared as a presenter on the Discovery channel.
> 
> ---------------
> 
> Just another one of many higher profilers starting to go down the financial gurgler.
> 
> I'm also starting to notice on my occasional travels that a lot of well respected shops in the region around Wodonga have already become vacant shells or have "for sale" or "for lease" signs up.
> 
> Merry Xmas? For some.
> 
> Easter? For businesses looks like it will be el-crappo by then.
> 
> **DING, DING** - "Bring out yer debt, all that luverrly debt!"




She should have re-released the home made video her boyfriend took few years ago, might not have stopped her going down though.


----------



## chops_a_must

CAB SAV said:


> She should have re-released the home made video her boyfriend took few years ago, might not have stopped her going down though.




Lol... exactly my thoughts.


----------



## GreatPig

If she's that broke, maybe she could be talked into making another one. 

GP


----------



## Glen48

I heard Toyota has announced a loss the first time in 71 years.
A Mimi video on a Camary DVD played will get them both moving.


----------



## sassa

Part of an article by James Kunstler-



> This is very dangerous territory. In dollar terms, the numbers being applied to the various problems are so colossal -- trillions! -- that the death of our currency seems assured. And in defiance of congress's express intentions, none of the TARP "money" has been applied to its targeted purpose of buying up "toxic" (i.e. fraudulent) securities hidden in the vaults of banks, pension funds, and municipal portfolios.
> George W, Bush's personal bailout of General Motors and Chrysler is designed solely to postpone their bankruptcy and mass job layoffs until after the holidays. Otherwise, the $17.4 billion will probably be used by the companies to underwrite the extensive legal work required for the moment they must declare bankruptcy -- when Mr. Obama is in the White House. Meanwhile, the President-elect has ramped up his job-creation target overnight from two to three million, and some observers are catching a whiff of Soviet-style economic engineering ("...we pretend to work and they pretend to pay us....").
> The years since Jimmy Carter have produced an astoundingly flaccid public, sunk in various addictions and distractions, but this is about to change. The darkling mood of political protest and violent activism that saturated my own young adult years is scudding up again on the horizon. Mr. Obama's pick for attorney general, the mild-looking Eric Holder, may be the key figure in the early months of the new government. If he doesn't commence some aggressive investigations and prosecutions -- beginning with Henry Paulson for insider trading when he was in charge of Goldman Sachs and shorting his own company's mortgage-backed securities -- then the whole Obama enterprise could fall under suspicion of illegitimacy. The bums who ran the US banking sector into a ditch have to account for their turpitudes. They can't be allowed to hide under a TARP.
> Unfortunately, the legal system, and probably the legislative system, will be so buried in procedural bull**** from the unwind of countless enterprises and institutions, and the sorting out of the remnants, that it remains to be seen whether this generation of people-in-charge can even embark on a fresh start of anything connected to real everyday life in America. All this is starting to alarm the tattered residue of the middle classes, and from here it's a very short path to them being really pissed off.



http://www.kunstler.com/


----------



## kransky

its amazing that people with 9k coats and expensive watches etc dont have lots of spare cash for the little things like uniforms for kids.

http://www.financialarmageddon.com/...-journal-----well-to-do-turn-to-last-res.html

sorta feel like it serves them right fo getting carried away with the luxury purchases that are so unecessary...


----------



## noirua

The facts stare Australia in the face. Virtually all the mining industry will be hit very hard in 2009, and as agreements to supply at a certain price come to an end, prices for commodities will tank severely.
Profits will drop, taxes will come down and this, as well as royalties, will hit both the States/Territories and Federal Government. 
Unemployment will increase further draining Government reserves.
The Aussie$ has fallen because confidence is very low and many see a serious contraction.

This does not necessarily mean shares will plunge further though, as reducing interest rates will see certain sectors are now cheap: Or maybe falls have been overdone. Avoid resource stocks in particular and indeed others, that have insufficient cash in the bank.


----------



## Aussiejeff

noirua said:


> The facts stare Australia in the face. Virtually all the mining industry will be hit very hard in 2009, and as agreements to supply at a certain price come to an end, prices for commodities will tank severely.
> Profits will drop, taxes will come down and this, as well as royalties, will hit both the States/Territories and Federal Government.
> *Unemployment will increase further draining Government reserves.*




I think it's worth defining that any significant increases in unemployment will be almost entirely contained within the private sector - especially the resources & tourism sectors. 

If you happen to be fortunate enough to have a half decent Federal, State or Local Government public service job and are paying off a first home mortgage you will be dancing all the way to the bank!  



> *This does not necessarily mean shares will plunge further though*, as reducing interest rates will see certain sectors are now cheap: Or maybe falls have been overdone. Avoid resource stocks in particular and indeed others, that have insufficient cash in the bank.




You could well be right. IMO the sharemarket is becoming more disconnected from the reality of the real world economy and more of a Punters Paradise atm.

Allied to that, gummints the world over now have large and ever-increasing stakes in the world's sharemarkets via the massive company "bailouts" to date - which no doubt will continue unabated this year as well. Gummints are, in effect, "nationalising" stock markets to a certain degree - certainly a lot more than they ever have been before?  

Free market forces? Forget it. Much more gummint manipulation will be going on now to prop currencies, companies that are "too big to fail" etc,etc - and therefore sharemarkets themselves. Oh, and Ponzi Schemes that might need covering up . All at taxpayer expense, of course. 

Then again, I could be wrong.

It might be fine in '09

Good luck all


----------



## The Edge

Friday  2 January 2009

My market perspective tends to be somewhat myopic,
confined to the forces of supply and demand, attended
by volume, as they unfold depicted in charts.

Chart are my medium for reading, but I do not consider
myself a chartist in the same category with those who
employ mechanical methods in their interpretations,
i.e. RSI, MAs, [moving averages], stochastice, even
Elliott wave, but these are my admitted biases.

In that light, I address a few comments from above:

> You could well be right. IMO the sharemarket is becoming 
> more disconnected from the reality of the real world 
> economy and more of a Punters Paradise atm.

I would take the other side of that view, saying that the
markets accurately reflect the real world economy, and
is the primary reason behind last quarter's collapse.
Reality finally came home to roost.

I would aslo add, charts began to show weakness back
at the end of 2007, and there was definitely reason not
to be long by July 2008.  This can be viewed as a
hindsight assessment, but I was strongly advocating 
getting out from longs back then.  [I was not a 
participant on this site back then, and my presentations
were to high-end stock brokers who saw no merit in
what I could see.]

This is not to say I was taking this position because of 
the collapse that did follow.  No one could have determined 
the extent of how prices fell apart, but there was a simple 
and obvious change of trend in the above time frames and
I was going by what I saw.

> Free market forces? Forget it.

No, no, no!  They are based on solid principles and
should never be forgotten.  It was their abandonment
by the financial industry that led to this mess.

> Then again, I could be wrong.

Me, too.

Cheers!


----------



## IFocus

Aussiejeff said:


> I think it's worth defining that any significant increases in unemployment will be almost entirely contained within the private sector - especially the resources & tourism sectors.
> 
> If you happen to be fortunate enough to have a half decent Federal, State or Local Government public service job and are paying off a first home mortgage you will be dancing all the way to the bank!




Not so sure of the safe Gov job's as state and federal revenues are contracting rapidly.


----------



## noirua

IFocus said:


> Not so sure of the safe Gov job's as state and federal revenues are contracting rapidly.



Yep! The sudden turnaround is hiting the WA Government hard. QLD, NSW and Victoria look likely to follow.


----------



## Aussiejeff

US share market finally gave up on the "fake" rallies. 

World Reality is overdue to set in.... another nasty downleg could follow shortly IMO.


----------



## CanOz

Aussiejeff said:


> US share market finally gave up on the "fake" rallies.
> 
> World Reality is overdue to set in.... another nasty downleg could follow shortly IMO.




The VIX is down again, usually means there is a big move coming. Hard to imagine it would be up.

Cheers,


CanOz


----------



## Glen48

All is not lost work this out??
I assume if the AUD went down imported items would go up? 

http://images.comsec.com.au/ipo/UploadedImages/Ipod_index8688e7fa0d364c5498bd70b53a77bff9.pdf


----------



## Glen48

From Money & Markets:
The undeniable reality: The debt crisis that first appeared in the U.S. subprime mortgage market ... then precipitated a Wall Street meltdown ... and has now driven the American economy into its sharpest decline since the Great Depression ... has now spread to the entire world.

It is driving the economies of Western Europe and Japan into an unprecedented tailspin. It threatens the economic ”” and potentially political ”” stability of Russia, China and several emerging market nations. And it's setting the stage for a global depression of epic dimensions.


----------



## Aussiejeff

Glen48 said:


> From Money & Markets:
> The undeniable reality: The debt crisis that first appeared in the U.S. subprime mortgage market ... then precipitated a Wall Street meltdown ... and has now driven the American economy into its sharpest decline since the Great Depression ... has now spread to the entire world.
> 
> It is driving the economies of Western Europe and Japan into an unprecedented tailspin. It threatens the economic ”” and potentially political ”” stability of Russia, China and several emerging market nations. And it's setting the stage for a global depression of epic dimensions.




Yeah. I'm just real suspicious when so many Share Market Analyst optimists come out of the woodwork after a big Xmas & New Year's party and start proclaiming near boom times in the second half of '09. I'm a LOT more circumspect of possible way-over-optimistic statements these days. Especially given the track record of so many "gun" analysts who never saw the catastrophic negative side to their optimistic hype in the second half of '08. 

Why should we believe what they spruik now? Are they all suddenly "spot on" in their forecasts? 

aj


----------



## sassa

Aussiejeff said:


> Yeah. I'm just real suspicious when so many Share Market Analyst optimists come out of the woodwork after a big Xmas & New Year's party and start proclaiming near boom times in the second half of '09. I'm a LOT more circumspect of possible way-over-optimistic statements these days. Especially given the track record of so many "gun" analysts who never saw the catastrophic negative side to their optimistic hype in the second half of '08.
> 
> Why should we believe what they spruik now? Are they all suddenly "spot on" in their forecasts?
> 
> aj




For sure,Aussie, and one writer on MW warns investors about the same.



> Expect more of the same today, because "BS" is still Wall Street's official language. In both bear and bull markets the lure is the same, to get you to drink the Kool-Aid, to feed a new bubble and to make them (not you) rich


----------



## kransky

mish says he wouldnt be surprised if we get a rally till inauguration day... (Jan 20)... that would be a nice long rally... 

then back to reality...


----------



## MrBurns

I think the bottom line is that there will be no fast recovery , there is still a lot of fallout to come and there is still risk of severe downward pressure on the share market.
The NAB are talking about selling assets in Britain and perhaps we dont know their real position yet, remember the worse things get elsewhere the worse they will get here, we arent on another planet.
Keep your powder dry. I think the next 6 to 8 months will sort it out, so we at least know how bad it will be or is and at least be able to stop worrying about the unknown.
Job losses here and overseas are yet to really kick in and it will be ugly, that has a knock on effect for everything, there are too many unknows just yet to sleep soundly.


----------



## Sean K

MrBurns said:


> I think the bottom line is that there will be no fast recovery , there is still a lot of fallout to come and there is still risk of severe downward pressure on the share market.
> The NAB are talking about selling assets in Britain and perhaps we dont know their real position yet, remember the worse things get elsewhere the worse they will get here, we arent on another planet.
> Keep your powder dry. I think the next 6 to 8 months will sort it out, so we at least know how bad it will be or is and at least be able to stop worrying about the unknown.
> Job losses here and overseas are yet to really kick in and it will be ugly, that has a knock on effect for everything, there are too many unknows just yet to sleep soundly.



You need to make a judgement of how much of the potential bad news is factored in too MrB. 

Those not picking an oversold market a months ago have lost out on some significant gains. Some 100% plus gains actually. 

Medium term I'm not sure, but it's been a great trading opportunity recently. 

Don't be afraid to keep trading.


----------



## Glen48

http://images.comsec.com.au/ipo/UploadedImages/Ipod_index8688e7fa0d364c5498bd70b53a77bff9.pdf
This is an Comsec ipod index about the cost of ipods around the World and Craig James tells us OZ ipods are about the cheapest due the low AUD.
I assume if the AUD is low they should be higher priced, unless he is working on old stock which was imported when the AUD 97c or like good finance experts the high Gigs than the older model and therfore better value?
 .


----------



## MrBurns

kennas said:


> You need to make a judgement of how much of the potential bad news is factored in too MrB.
> 
> Those not picking an oversold market a months ago have lost out on some significant gains. Some 100% plus gains actually.
> 
> Medium term I'm not sure, but it's been a great trading opportunity recently.
> 
> Don't be afraid to keep trading.




I'm not sure how they could factor the bad news in when they dont know whats still in the closet and a collapse of another large institution could bring it all down again, just too risky for me. Perhaps with a few thousand but not with substantial funds, it would be just gambling.


----------



## Sean K

MrBurns said:


> I'm not sure how they could factor the bad news in when they dont know whats still in the closet and a collapse of another large institution could bring it all down again, just too risky for me. Perhaps with a few thousand but not with substantial funds, it would be just gambling.



The market over and undershoots, it's just a calculated risk to identify these periods. I've committed almost half my capital over the past 2 months to some short - medium term plucks, with stops. No buy and hoping yet though. The thing I am asking myself is just how many skeletons have been accounted for? Maybe even more than there are? Perhaps _fear_ has planted them? Or not...


----------



## MrBurns

kennas said:


> The market over and undershoots, it's just a calculated risk to identify these periods. I've committed almost half my capital over the past 2 months to some short - medium term plucks, with stops. No buy and hoping yet though. The thing I am asking myself is just how many skeletons have been accounted for? Maybe even more than there are? Perhaps _fear_ has planted them? Or not...




I look at whats happened so far and stand back and try to see the big picture, mass unemployment is already underway, less profits mean less staff, less home loans taken out less profits for banks less staff and around it goes, the reports of planned redundances and sacking emerging now is horrendous.
Alcoa just announced 13,500 jobs to go worldwide.
This is just snowballing and I dont believe that any sort of Govt intervention will change the ultimate result.

I see all this and I know that the sumami will reach us next year ( ummm this year) and I really cant justify diving into shares yet.

I simply do not understand "trading" sufficiently to go there so I just wait........................


----------



## Sean K

MrBurns said:


> I look at whats happened so far and stand back and try to see the big picture, mass unemployment is already underway, less profits mean less staff, less home loans taken out less profits for banks less staff and around it goes, the reports of planned redundances and sacking emerging now is horrendous.
> Alcoa just announced 13,500 jobs to go worldwide.
> This is just snowballing and I dont believe that any sort of Govt intervention will change the ultimate result.
> 
> I see all this and I know that the sumami will reach us next year ( ummm this year) and I really cant justify diving into shares yet.



This is exactly my point MrB. You may have already factored in the worst. You are factoring in next year's bad news. Others may be even less optomistic. By the time people are bullish again the bottom will have long long gone with possibly with many potential profits left wanting. I'm alreading kicking myself for missing potential gains. 

Of course, we may all not be factoring in the worst. eeeeek! 

Odds on this is just a little bear bounce though, but a good opportunity nonetheless.


----------



## MrBurns

kennas said:


> This is exactly my point MrB. You may have already factored in the worst.




I still have a gut feel this may turn very nasty..... more nasty.
For one thing just imagine the tax implications for US citizens and us for that matter supporting the bailout billions.

Yes I'm a fence sitter, as far as shares are concerned, for the time being anyway.

The only thing I would buy are some classes of property because that's what I know and I guess thats the difference....... you know shares I dont, you have to deal in what you know in this environment.


----------



## nunthewiser

Personally think we due for at least one more severe downleg before this correction through , BUT in the meantime this lil duck trading my superknickers off


----------



## Uncle Barry

Good afternoon,
If I may add,

My thinking is along the lines of Mr Buffetts ideas, 

'When people are greedy be fearful,
When people are fearful, be greedy."

Now this approach seems to work, as long as you are not operating on borrowed funds.

It has worked for me for about ..over 20years, so far.

I also add another of Mr Buffest's ideas, that is, 
to buy a stock that you can keep for 10years --- if you need to.

So when things go sour, now today as in the past, I just look the other way, till the cycle returns. As everything in the market is driven by cycles.

However today, 'things' are not looking too bad, 
I have noticed a number of times that some people don't appear to understand the 'market' works in advance of the retail 'things'

BUT
I am still worried about a major correction to come through.
Kind regards,
UB

Kind regards,
UB


----------



## TheAbyss

nunthewiser said:


> Personally think we due for at least one more severe downleg before this correction through , BUT in the meantime this lil duck trading my superknickers off




Based on the amount of breakouts at the moment you are not the lone ranger.



MrBurns said:


> I still have a gut feel this may turn very nasty..... more nasty.
> For one thing just imagine the tax implications for US citizens and us for that matter supporting the bailout billions.
> 
> Yes I'm a fence sitter, as far as shares are concerned, for the time being anyway.
> 
> The only thing I would buy are some classes of property because that's what I know and I guess thats the difference....... you know shares I dont, you have to deal in what you know in this environment.



MrBurns, further to Kennas's point the market is a forward looking instrument. If a poll were conducted i think most would agree that we are looking at a short term lift to 4000-4100 is followed by a another down leg and then slow prgression upwards. IMO this is based on the belief that most of the news is out there now so the rally upwards which has been going for a little while.

The next down leg will be on news not yet released and only suspected/expected by very those with more experience than the masses. Concensus there is we will get to around 3100 range.

In for now on just three stocks (STO, AOE and BHP) and ready to take profits at 4000 or 3300 on the downside


----------



## IFocus

kennas said:


> This is exactly my point MrB. You may have already factored in the worst. You are factoring in next year's bad news. Others may be even less optomistic. By the time people are bullish again the bottom will have long long gone with possibly with many potential profits left wanting. I'm alreading kicking myself for missing potential gains.
> 
> Of course, we may all not be factoring in the worst. eeeeek!
> 
> Odds on this is just a little bear bounce though, but a good opportunity nonetheless.




Reporting season still to come, obvious lower earnings for some which should be priced in but what the consensus of the company outlooks will possibly the next driver for direction up or down.

There seems to be a bit of hope-ium around so maybe a current run up.


----------



## roofa

I see all this and I know that the sumami will reach us next year ( ummm this year) and I really cant justify diving into shares yet.

I simply do not understand "trading" sufficiently to go there so I just wait........................[/QUOTE]

I watched a program a month or so back were a broker was of the opinion that you will lose more by not getting in than waiting for the market to rise.
Music to my ears as I had started getting into the market in October only to watch it slide after an initial short lived rise. Made purchases each month across 12 stocks and am reasonably happy at the moment being >12% up with 5 black and 7 red.


----------



## kransky

i have found that apart from loosing my nerve on ADY and selling at 0.9c  i have made good profits from buying over the last 3 months...

BMN 85%
BRM 24%
CVN 18%
PDN 44%

Small amounts though unfortunately... i dont have a lot so i cant risk too much in an environment like this...

but the opportunities are there..

now its a matter of picking the right time to get out again... how long will the rally go?

S&P loosing momentum...


----------



## Glen48

Of course Mr. Buffet is down 32% so far and rising.
I keep and eye on Patrick.net and see what is going on in USA and other countries, once things turn in USA wait and few yrs and them buy, they started to go down in 05 when we were just starting up and their housing market is getting worse.


----------



## roofa

kransky said:


> i have found that apart from loosing my nerve on ADY and selling at 0.9c  i have made good profits from buying over the last 3 months...
> 
> BMN 85%
> BRM 24%
> CVN 18%
> PDN 44%
> 
> Small amounts though unfortunately... i dont have a lot so i cant risk too much in an environment like this...
> 
> but the opportunities are there..
> 
> now its a matter of picking the right time to get out again... how long will the rally go?
> 
> S&P loosing momentum...







Well done Kransky,

I know one thing for sure, you only have a chance of making something if you get in, imo this would have to be one of the ideal times.

My blacks are;
ANZ
BDL
MGX
MRE
VBA

Can you or anyone recommend software to give me the % rise and fall etc.

Cheers and happy researching.


----------



## Uncle Barry

Hi G48
Of course Mr. Buffet is down 32% so far and rising.

Negative 32%

AND now to balance the situation,
how far ahead is he ........... ? in dollar terms.

He still holds a lot more dollars than me and will for the remainder of my life,
what about yourself ?

Myself, I try to follow the winners and seek the examples they set.
UB


----------



## Glen48

Unca Baz
depends when you ask him, he has dropped a lot on so even he is feeling the pinch.
The market WILL pick up but not for awhile so sit back and watch how a depression unfolds so you can tell your Grand kids not to be a silly as us.


----------



## kransky

roofa said:


> Can you or anyone recommend software to give me the % rise and fall etc.




i use commsec for stocks and under "my portfolio" you can set the purchase price of your holdings. it gives you a % change from purchase each time you look at your portfolio summary.


----------



## Trevor_S

Glen48 said:


> Of course Mr. Buffet is down 32% so far and rising.




in a year, from overheated highs...and he's been down several times before, as he mentions.  That happens if you don't bother too much with market timing and stop loss strategies  but isn't really a concern as he tends to buy and hold and doesn't use inappropriate leverageing... markets go up and down 

Being down from an overheated high is not a bad thing for some of us, the market retreating like it has just gives some of us that have been out of the market for some time the opportunity to acquire more of a decent business at a great price. (as Buffett tells us he is doing as well)

and if we're wrong, at least you guys have someone to sell to


----------



## IFocus

Gary Shilling's 2009 Predictions: More of the Same Pain

http://leavittbrothers.com/stocks-o...o-his-prediction-the-spx-will-fall-to-600.cfm


One of John Mauldins favorite Economist and consequently also mine Dr. A. Gary Shilling makes his forecast's for 2009.

Shilling make the comments recently how lucky he was that his 2008 forecast was spot on in other words he understands markets.......


----------



## Aussiejeff

roofa said:


> Well done Kransky,
> 
> I know one thing for sure, you only have a chance of making something if you get in, imo this would have to be one of the ideal times.
> 
> *My blacks are;
> ANZ
> BDL
> MGX
> MRE
> VBA*
> 
> Can you or anyone recommend software to give me the % rise and fall etc.
> 
> Cheers and happy researching.




Hopefully for you they're still black after the next few days...

Glad I've kept some powder dry.

In the meantime, fasten your seatbelts as...

DOWN

WE

GO

.....


----------



## roofa

Aussiejeff said:


> Hopefully for you they're still black after the next few days...
> 
> Glad I've kept some powder dry.
> 
> In the meantime, fasten your seatbelts as...
> 
> DOWN
> 
> WE
> 
> GO
> 
> .....





I do expect a bumpy ride for some time to come AJ, but I will be disappointed if the market returns to 3400 over the next few days. I too have kept some powder dry just in case we need to double down at some point this year.


----------



## Sean K

Lots of media sprouting about how bad reporting reason is going to be.

Calls of 'blood' on the floor and 'disaster' everywhere.

Even Shane Oliver is calling a top in the market.

Sign that things are on the way up. lol


----------



## wayneL

kennas said:


> Lots of media sprouting about how bad reporting reason is going to be.
> 
> Calls of 'blood' on the floor and 'disaster' everywhere.
> 
> Even *Shane Oliver is calling a top in the market*.
> 
> Sign that things are on the way up. lol




BUY BUY BUY!!!!!


----------



## gfresh

:iamwithst was thinking the very same thing today - "prepare for a bloodbath"..blah, blah.. 

Although today I noticed today a few stocks jumped up a bit.. traditionally the more defensive ones.


----------



## Aussiejeff

wayneL said:


> BUY BUY BUY!!!!!




Buy blood?


----------



## dhukka

The trend is not your friend, retail sales fell off a cliff in December, frugality is in fashion.


----------



## GumbyLearner

dhukka said:


> The trend is not your friend, retail sales fell off a cliff in December, frugality is in fashion.




Wow, what a chart Dhukka. Obviously not the season to be jolly last Christmas!


----------



## Aussiejeff

GumbyLearner said:


> Wow, what a chart Dhukka. Obviously not the season to be jolly last Christmas!




Nor were the European and US stock market(s) last night.

Helmets on! Head for the ASX fallout bunker.... :hide:


----------



## sassa

> The Baby Boomers have had their moment in power. The most spoilt generation in history has handled affairs with its characteristic hedonism. The results are coming in.




http://www.nakedcapitalism.com/2009/01/is-cap-and-trade-dead-on-arrival.html

Thank you Baby Boomers.


----------



## MrBurns

sassa said:


> http://www.nakedcapitalism.com/2009/01/is-cap-and-trade-dead-on-arrival.html
> 
> Thank you Baby Boomers.




I agree but I'm not sure anyone before us did any better, people are, en masse, greedy, selfish pigs, but individually usually very nice.

The difference may be that Baby Boomers had the right tools to do more damage than those before us.

I always felt we should leave the world a better place than when we entered it , I'm afraid that's not the case in real life, technology powers ahead, living standards and morals do not


----------



## Julia

sassa said:


> http://www.nakedcapitalism.com/2009/01/is-cap-and-trade-dead-on-arrival.html
> 
> Thank you Baby Boomers.



And who is 'naked capitalism.com'?
The link you supplied is all about carbon trading.
Perhaps you'd explain the reference to the baby boomers, and tell us exactly why this generation is - in your opinion - responsible for the current ills of the world.


----------



## kransky

err... because they all wanted to get rich quick simply by buying houses rather than working hard.. then they spent like mad while the scheme worked.. now those that forgot to sell are screwing the global economy

i should not say *all*.. some.. some people were responsible.. seems they will be punished when inflation finally comes after the deflation... to make the bad debts "smaller"..

this is like watching a thriller... sitting with popcorn.. will australian housing crash too? will unemployment hit the craper?.. 

only this is real life and any one of us can get screwed over by the growing unemployment..


----------



## kransky

Julia said:


> And who is 'naked capitalism.com'?
> The link you supplied is all about carbon trading.
> Perhaps you'd explain the reference to the baby boomers, and tell us exactly why this generation is - in your opinion - responsible for the current ills of the world.




i think he meant to link this

http://www.nakedcapitalism.com/2009/01/is-sterling-about-to-tank.html

and i rate nakedcapitalism... very good site i read daily!


----------



## sassa

Julia said:


> And who is 'naked capitalism.com'?
> The link you supplied is all about carbon trading.
> Perhaps you'd explain the reference to the baby boomers, and tell us exactly why this generation is - in your opinion - responsible for the current ills of the world.



Sorry about wrong link.Thanks Kransky for the correct one.One guy,not a baby boomer,Greenspan,had a pivotal and large part in the problems we are confronting at the moment.It would be fair to say that a larger part of the debacle has been 'manned' by baby boomers at the top(Ceos of Wall Street,Main Street;leaders of government agencies who were SUPPOSED to regulate the financial areas)and the baby boomers Kransky referred to.


----------



## Julia

sassa said:


> Sorry about wrong link.Thanks Kransky for the correct one.One guy,not a baby boomer,Greenspan,had a pivotal and large part in the problems we are confronting at the moment.It would be fair to say that a larger part of the debacle has been 'manned' by baby boomers at the top(Ceos of Wall Street,Main Street;leaders of government agencies who were SUPPOSED to regulate the financial areas)and the baby boomers Kransky referred to.




So ALL baby boomers are implicated in causing this debacle.  Great logic there, Sassa.


----------



## Julia

kransky said:


> err... because they all wanted to get rich quick simply by buying houses rather than working hard.. then they spent like mad while the scheme worked.. now those that forgot to sell are screwing the global economy
> 
> i should not say *all*.. some.. some people were responsible.. seems they will be punished when inflation finally comes after the deflation... to make the bad debts "smaller"..
> 
> this is like watching a thriller... sitting with popcorn.. will australian housing crash too? will unemployment hit the craper?..
> 
> only this is real life and any one of us can get screwed over by the growing unemployment..



I don't bother getting angry with idiots on forums very often, but this stupid generalisation which displays your ignorance is one of the silliest posts I've ever read.

Much of the current problem is the over-use of credit, something which shows no sign of abating.   Most baby boomers saved until they could afford something, and have been minimal users of credit.


Good to know that you find the financial crisis amusing, something to be watched with the added entertainment of popcorn.  Doesn't matter at all that the lives of real people are being hugely affected, and that unemployment will devastate many families and individuals.


----------



## jono_oz

Julia said:


> I don't bother getting angry with idiots on forums very often, but this stupid generalisation which displays your ignorance is one of the silliest posts I've ever read.
> 
> Much of the current problem is the over-use of credit, something which shows no sign of abating.   Most baby boomers saved until they could afford something, and have been minimal users of credit.
> 
> 
> Good to know that you find the financial crisis amusing, something to be watched with the added entertainment of popcorn.  Doesn't matter at all that the lives of real people are being hugely affected, and that unemployment will devastate many families and individuals.





Well said Julia!


----------



## MrBurns

Julia said:


> Much of the current problem is the over-use of credit, something which shows no sign of abating.   Most baby boomers saved until they could afford something, and have been minimal users of credit.




As far as I'm concerned credit *started* with the baby boomers, it was *OUR* parents that saved.
No one had ever heard of a credit card when I was a kid. Now my wallets full of them thanks to my peers.


----------



## sassa

Julia said:


> So ALL baby boomers are implicated in causing this debacle.  Great logic there, Sassa.



Can't see the word ALL in my post anywhere.Your interpretation,my generalisation.If I had lived during the depression,the generalisation would have been Victorian or Edwardian.


----------



## Julia

MrBurns said:


> As far as I'm concerned credit *started* with the baby boomers, it was *OUR* parents that saved.
> No one had ever heard of a credit card when I was a kid. Now my wallets full of them thanks to my peers.



Well, I'm a baby boomer and the only credit I've had is for mortgages which have been paid off quickly because I'd already had a substantial deposit, and then eschewed travel, new clothes etc until the debt was repaid.
I have only one credit card and that's paid off every month.
My social circle is fairly obviously in the same age group and we all have the same attitude.

I expect some baby boomers are irresponsible, just as some individuals in every generation will be.  What annoys me mostly is the dumb generalisations about all  groups, i.e. all Gen Y are selfish and irresponsible.  Complete rubbish.


----------



## Julia

sassa said:


> Thank you Baby Boomers.






sassa said:


> Can't see the word ALL in my post anywhere.Your interpretation,my generalisation.




Your initial post "thank you, Baby Boomers" implies the whole generation.
It is clearly a generalisation.


----------



## MrBurns

Julia said:


> Your initial post "thank you, Baby Boomers" implies the whole generation.
> It is clearly a generalisation.




Stop being picky, it *WAS* the baby boomers generation that brought in all the crap that we have to put up with today including low doc loans, easy credit, plastic shopping bags, global warming (if it is caused by humans) toxic waste and lots of other evil stuff.

Now we've got school kids needing to wear radiation suits in the playground because we created the hole in the ozone layer, we also have a special day where they can wear gloves and pick up all the **** we leave lying around and when they're not doing that they're learning how to make plants grow without water.
No running in the sprinkler for them, we fixed that too.

There you go kiddies ,we stuffed it up now you can fix it.


----------



## kransky

kransky said:


> only this is real life and any one of us can get screwed over by the growing unemployment..




did you not read this part julia? my popcorn comments were tongue in cheek because what is actually happening is so surreal that it seems like its from a movie

There are always exceptions to any generalization. You are to be commended for your lifestyle/actions and your friends julia.. especially given what has been happening around you. In a way your lucky that your social circle is made up of responsible/sensible and less materialistic people than the general public. Imagine the situation where people buy goods they cant afford like fancy cars and boats then their friends see this get jealous, then do the same then others see.. and it spreads like wildfire... 

if you read sites like nakedcapitalism you would read the crazy stories out of the US like i have. People who with regular income levels were buying very expensive houses even multiple houses all on loans, then buying boats and having multiple cars on loans too... living very extravagantly. You would not believe the insane stuff that has been going on esp in the US.

Who is more at fault the greedy bastards who made the loans to get bonuses or the sheep that were too busy trying to look/get rich to understand that money for nothing wasnt going to last forever? I dont know...


----------



## TheAbyss

kransky said:


> did you not read this part julia? my popcorn comments were tongue in cheek because what is actually happening is so surreal that it seems like its from a movie
> 
> There are always exceptions to any generalization. You are to be commended for your lifestyle/actions and your friends julia.. especially given what has been happening around you. In a way your lucky that your social circle is made up of responsible/sensible and less materialistic people than the general public. Imagine the situation where people buy goods they cant afford like fancy cars and boats then their friends see this get jealous, then do the same then others see.. and it spreads like wildfire...
> 
> if you read sites like nakedcapitalism you would read the crazy stories out of the US like i have. People who with regular income levels were buying very expensive houses even multiple houses all on loans, then buying boats and having multiple cars on loans too... living very extravagantly. You would not believe the insane stuff that has been going on esp in the US.
> 
> Who is more at fault the greedy bastards who made the loans to get bonuses or the sheep that were too busy trying to look/get rich to understand that money for nothing wasnt going to last forever? I dont know...




You have lost me Kransky. Making generalisations against any group is fraught with danger. I suggest you point out specifics rather than taking out your trusty shot gun and letting rip. 

I am a baby boomer and know that i have used credit wisely and have not used it to buy anything i cannot afford. My credit card has been repaid in full on its due date since i was around 22. I use a line of credit for property and a margin loan for the stock market.

My view is the misuse of credit etc is spread across a wide spectrum and is symptomatic of the fast food, want it life style that society has become.

Live in your glass house and blame others if you wish but do it without dragging an entire spectrum of the population into your mistaken views.

No harm or malice intended to you Kransky just prefer it if you didnt blame others who you do not know anything about or probably give a damn about.


----------



## rub92me

Julia said:


> What annoys me mostly is the dumb generalisations about all  groups, i.e. all Gen Y are selfish and irresponsible.  _*Complete rubbish.*_



What a dumb generalisation Mostly rubbish perhaps?


----------



## Julia

MrBurns said:


> Stop being picky, it *WAS* the baby boomers generation that brought in all the crap that we have to put up with today including low doc loans, easy credit, plastic shopping bags, global warming (if it is caused by humans) toxic waste and lots of other evil stuff.



I'll be picky if I like!  I really dislike being characterised as part of the cause of the crap you describe above.
Let's remember that the baby boomer generation is generally agreed to encompass people born from 1946 to 1964, far too great a span of years to classify every person born in that time as having similar characteristics.

And you need to make up your mind:  you say baby boomers 'brought in all the crap....... including global warming'.  Then your next phrase expresses doubt that it is in fact caused by humans!

Easy credit?  When I first applied for a mortgage after being divorced, it was still not unheard of for the bank manager to request the loan be guaranteed by a 'responsible male'.  Yes, really!





> Now we've got school kids needing to wear radiation suits in the playground because we created the hole in the ozone layer,



Nothing like a little exaggeration if it bolsters your case.



> we also have a special day where they can wear gloves and pick up all the **** we leave lying around and when they're not doing that they're learning how to make plants grow without water.



All generations participate in cleaning up rubbish.  Every day I collect plastic bags from the beach in the hope of saving the occasional turtle life.




> No running in the sprinkler for them, we fixed that too.



Oh for god's sake, get real.  The water shortage is directly related to successive governments failing to plan for increased population.
Anyway, kids can run in the sprinkler where I live to their hearts' content.


----------



## MrBurns

Well Julia you are a part of that generation even if you personally didnt do anything wrong, I'm the same but 'm part of it and take responsibility along my peers, we messed up bad and the kids will pay for it.



> including global warming'. Then your next phrase expresses doubt that it is in fact caused by humans!




If it is caused by humans then it was the baby boomers generation.


----------



## Julia

kransky said:


> There are always exceptions to any generalization. You are to be commended for your lifestyle/actions and your friends julia.. especially given what has been happening around you. In a way your lucky that your social circle is made up of responsible/sensible and less materialistic people than the general public. Imagine the situation where people buy goods they cant afford like fancy cars and boats then their friends see this get jealous, then do the same then others see.. and it spreads like wildfire...



So individuals have no personal responsibility with regard to their choices?
Impossible not to get swept up in the "let's have it all now' maelstrom?
Sorry, Kransky, but I find that a fairly pathetic excuse.





> if you read sites like nakedcapitalism you would read the crazy stories out of the US like i have. People who with regular income levels were buying very expensive houses even multiple houses all on loans, then buying boats and having multiple cars on loans too... living very extravagantly. You would not believe the insane stuff that has been going on esp in the US.



I don't need to read sites like 'nakedcapitalism' to know what has been happening.   It has been all over the mainstream media for more than a year.
 We are currently seeing the human reality of this in the Storm Financial thread.

  Who put a gun to the heads of the people you refer to above, or forced them to sign up for more than they could afford?  No one.





> Who is more at fault the greedy bastards who made the loans to get bonuses or the sheep that were too busy trying to look/get rich to understand that money for nothing wasnt going to last forever? I dont know...



I'd say it's pretty hard to differentiate between the two when it comes down to being realistic.   

Kransky, I'd be interested to know your own age group, and your views about personal responsibility, general ethics etc.

I guess all our attitudes are influenced by several factors, possibly primarily by the way we were brought up.  My parents experienced the latter part of the Great Depression and consequently took the view that rewards had to be worked for.   As a kid and a young adult, I put things I wanted on layby.
You've probably never heard of layby?  It was when you couldn't afford something, so you had the store put it aside until you could afford to pay for it in full.  Credit?   Never!  

So it's a whole different philosophy to what applies these days where it seems to be often a case of "I want it so I'll have it now.  No need to think about paying for it, just put it on the card."  

Obviously credit is a fundamental part of our lives.  Businesses are failing because they can't refinance.  Soon more and more individuals will be finding the same as jobs are lost.

But, hey, each to his own.  If the need to have the latest model car, biggest house, latest designer clothes is what does it for you, then good luck to you.
(Not you specifically, Kransky, but all the people who are immersed in this competitive culture.)


----------



## TheAbyss

MrBurns said:


> Well Julia you are a part of that generation even if you personally didnt do anything wrong, I'm the same but 'm part of it and take responsibility along my peers, we messed up bad and the kids will pay for it.




Lo doc loans were created because a lot more workers were under contract rather than salaried so they did not have the usual criteria to obtain a home. This is what a lo doc loan is for. The fact that some people commenced using these loans to obtain investment properties they couldnt ever afford so they could do a quick reno and sell it again does not dispute the need for a lo doc loan for a plumber or handyman to use one to buy a home.

The guilty are the users not the provider. If you gamble is it the Casinor or TAB's fault? Whether it is credit or gambling you cannot blame the supplier. Look in  the mirror, you will find the one responsible. In the end it is each individual to make their own decisions. Anyone who wants to take the responsibility for the wrong decisions of others has other issues that they need to resolve.

Our kids will make their own decisions, some good some bad just like the generations before them. Some will learn from them and some will not. Thats what creates a society. It is not up to the parents to take responisibility for their childrens choices in life. Our role is to ensure they are informed enough to be able to make a decision.

Perhaps a new thread should be started and everyone can throw brick bats at the generations of bygone eras and the current ones. If that doesnt suit you, you can always shoulder some responisibility for the worlds ills and listen to the plaudits and platitudes from the masses.


----------



## kransky

TheAbyss said:


> You have lost me Kransky. Making generalisations against any group is fraught with danger. I suggest you point out specifics rather than taking out your trusty shot gun and letting rip.




Gees.. why are people so protective of their generation? Arent you taking it a bit personally? Your not responsible for the actions of others who happen to be of a similar age.. 

baby boomers were those born from 1946 to 1964... so those that are 45-63 years old right now.

The real growth in housing and stock prices and thus credit happened from about 2001 after the tech bust onwards to today. So BBers were 37-55yo when this started. 

http://www.news.com.au/business/money/story/0,28323,24868470-462,00.html

http://caps.fool.com/Blogs/ViewPost.aspx?bpid=100573&t=01001019292467236494

http://blogs.domain.com.au/2007/08/blame_it_on_the_boomers.html

I am not the judge and executioner.. i am simply expressing what i have heard/read..


----------



## kransky

Julia i am not excusing people for what they do.. i am just trying to understand how/why they do what they do.. (ie overspend)

imo 99% of people have very little knowledge of economics/finance so i find it hard to be overly critical of them.. except i am disappointed by their greed.

I think those in power are more responsible for this by creating the conditions that led to the current problems. Rates stayed too low after 2001 and everyone jumped on the housing bubble ride. The crooks who lied to poor groups in the states to buy houses they should obviously not have are also to blame.. but they too know little of the consequences of their actions.. what if prices kept going up and up and up.. everything possibly seemed ok from their perspective... the blame goes to greenspan/bernanke etc etc

I started from very humble beginnings as my family emigrated to OZ when i was 5 with 2 suitcases of clothes. I am in my early 30s. I take a very cautious approach with spending money. I dont own a house and my car is 8 years old.


----------



## nunthewiser

Itsa late at night , ima fulla bourbon.................. BUT has got this profdound fact to share , even tho many here already know it 


blame Billy Clinton


gawd bless the free world


----------



## TheAbyss

kransky said:


> Gees.. why are people so protective of their generation? Arent you taking it a bit personally? Your not responsible for the actions of others who happen to be of a similar age..
> 
> baby boomers were those born from 1946 to 1964... so those that are 45-63 years old right now.
> 
> The real growth in housing and stock prices and thus credit happened from about 2001 after the tech bust onwards to today. So BBers were 37-55yo when this started.
> 
> http://www.news.com.au/business/money/story/0,28323,24868470-462,00.html
> 
> http://caps.fool.com/Blogs/ViewPost.aspx?bpid=100573&t=01001019292467236494
> 
> http://blogs.domain.com.au/2007/08/blame_it_on_the_boomers.html
> 
> I am not the judge and executioner.. i am simply expressing what i have heard/read..




Sounds like a lot of positives were initiated by the boomers then. I guess it depends on your perspective. Given the maturing age of the boomers, most would have been in their business prime in 2001 and perhaps the bulk have stepped back somewhat and doing the life style change these days and have handed over to the next generation at the upper levels while we concentrate on matters closer to home. Is this what has caused the current financial climate? Perhaps the keys were handed over prematurely?

I commend you on taking the time to read and listen to information. My advice would be to digest that information, form some ideas of your own and then use that as your base line. We are all able to do internet research and susbscribe to what we are interested in so just repeateing commentary is repetition that doesnt do justice to your intellect. Your posts are usually well thought out and i am not targetting you i just do not appreciate being a target nor watching others being targetted for no reason other than when they were born.



kransky said:


> Julia i am not excusing people for what they do.. i am just trying to understand how/why they do what they do.. (ie overspend)
> 
> imo 99% of people have very little knowledge of economics/finance so i find it hard to be overly critical of them.. except i am disappointed by their greed.
> 
> I think those in power are more responsible for this by creating the conditions that led to the current problems. Rates stayed too low after 2001 and everyone jumped on the housing bubble ride. The crooks who lied to poor groups in the states to buy houses they should obviously not have are also to blame.. but they too know little of the consequences of their actions.. what if prices kept going up and up and up.. everything possibly seemed ok from their perspective... the blame goes to greenspan/bernanke etc etc
> 
> I started from very humble beginnings as my family emigrated to OZ when i was 5 with 2 suitcases of clothes. I am in my early 30s. I take a very cautious approach with spending money. I dont own a house and my car is 8 years old.




Yet you are active in the stockmarket and have a fancy car as your avatar. Is this because you want to improve your life style and be able to support loved ones when required or are you a credit using waster of money evolving from your humble upbringing? One could generalise you into either class or in fact a raft of others.

My solitary point is that you should not generalis epeople as after all we are all unique, just like everybody else. be specific.


We could make a lot of generalisations about migrants but that would not be fair so why do you insist that it is fair to generalise baby boomers or any other group Kransky?


----------



## kransky

if you read my original post on this issue 3949 you will see that i made a definite effort to say that not all BBers are responsible.. Its stupid and pointless trying to "blame" a generation. There is nothing to be gained. And it was never my aim.

Undoubtedly some of those younger and older than the BBers have had a hand in this too...

I just dont see why people are so offended by comments that are so obviously a generalization.

generalization: 

a proposition asserting something to be true either of all members of a certain class or of an indefinite part of that class.

to say something very basic, based on limited facts, that is partly or sometimes true, but not always


----------



## MrBurns

kransky said:


> if you read my original post on this issue 3949 you will see that i made a definite effort to say that not all BBers are responsible.. Its stupid and pointless trying to "blame" a generation. There is nothing to be gained. And it was never my aim.
> 
> Undoubtedly some of those younger and older than the BBers have had a hand in this too...
> 
> I just dont see why people are so offended by comments that are so obviously a generalization.
> 
> generalization:
> 
> a proposition asserting something to be true either of all members of a certain class or of an indefinite part of that class.
> 
> to say something very basic, based on limited facts, that is partly or sometimes true, but not always





Anyone who takes personal offense because you blame a generation for something is a bit slow, you can except a generation was to blame without taking personal responsibility, I dont make plastic bags or do anything wrong but I fully accept it's my generation that is responsible for the world as it is today................I mean who else can you blame ?


----------



## TheAbyss

Back to the topic,

*Generalisation -* Oi, The US markets were up last night = Pretty generic information with no substance and of little value.

*Fact -* Did you note that mid session last night the US dollar retreated which saw commodities rise and subsequently stocks lifted in their wake?

Can you tell which is more worthwhile reading? 

Generalisations can stay in the general thread perhaps and i wont read them there.


----------



## sassa

TheAbyss said:


> Generalisations can stay in the general thread perhaps and i wont read them there.



Along with punctuation errors.


----------



## knocker

When do we get to short the **** out of the market next?


----------



## CanOz

knocker said:


> When do we get to short the **** out of the market next?




Short selling ban on Financials extended to something like March 6th.

CanOz


----------



## kransky

i have been looking to short for a while now... shorted the s n p at 820 2 days ago... didnt take a profit at 803 as wasnt on the computer.. then scraped a profit in mid last night.

not sure what the best strategy is due to the market volatility... slowly keep adding to a growing short position ignoring price variations? or wait for few day rally and short a fair bit then take a profit on medium size falls or small ones.

except i wannt to be in when the s n p goes down to 600 or 500... it will come imo... i dont think we are bottom of eco and earnings news by a longshot.


----------



## IFocus

kransky said:


> i have been looking to short for a while now... shorted the s n p at 820 2 days ago... didnt take a profit at 803 as wasnt on the computer.. then scraped a profit in mid last night.
> 
> *not sure what the best strategy is due to the market volatility...* slowly keep adding to a growing short position ignoring price variations? or wait for few day rally and short a fair bit then take a profit on medium size falls or small ones.
> 
> except i wannt to be in when the s n p goes down to 600 or 500... it will come imo... i dont think we are bottom of eco and earnings news by a longshot.




Kransky if I can suggest set targets to take profits or if you want to try and catch a bigger move leave a partial position on.

Personally I keep with all on all of and walk away start looking for the next setup and don't get hung up on missed profits as I didn't miss anything if they were not in my method.

Cognitive dissonance is the death of any trader


----------



## sinner

I reckon best strategy is to average into NYSE:SDS. Looking on doing this myself, wish FX and gold weren't so distracting.


----------



## sassa

> Technically, the Nasdaq and S&P both closed above some important resistance today (although just barely for the S&P) which is good for the bulls. It would be nice however for the market to be able to hold a rally/breakout like this just once without the government (or should I say taxpayers) getting involved and sponsoring it. That's one reason I still doubt this move and don't plan on playing it. We are also definitely overbought now on some short-term indicators and the others I watch like the McClellan are getting there very quickly as well. Maybe this time will be different - maybe this will be the rally that sticks. But everytime we have had one of these rallies where we get overbought with very little leadership, they have quickly failed, and that's still what I expect to happen here.
> 
> 
> There is no good fundamental news right now -- that is, the employment picture still stinks, people are spending less, manufacturing is cratering, housing is in a hole...you get the idea. There is no fundamental reason for the rally. That leads me to think this just isn't sustainable.
> 
> Let's also remember an important rule: the market will make an ass out of you whenever possible



http://www.bonddad.blogspot.com/


----------



## Aussiejeff

CanOz said:


> Short selling ban on Financials extended to something like March 6th.
> 
> CanOz




By then, the Japanese economy should be totally screwed. Good timing for a "short" storm in Oz?



> *Massive losses and cutbacks struck top Japanese companies on Friday, with electronics giant NEC alone shedding 20,000 jobs, as dire forecasts poured in from firms worldwide*.
> 
> Japan announced a triple slump in key economic data, with industrial output, consumer spending and employment all sharply down, and said there was no end in sight to the bad news.
> 
> The data echoed gloomy reports on the health of the economy in the United States, where President Barack Obama took aim at what he called the "shameful" bonuses given to Wall Street bankers during the financial crisis.
> 
> *December's 9.6 per cent drop in industrial output from the previous month was the steepest such decline on record, raising fears Japan's economy suffered its biggest contraction in decades in the fourth quarter of 2008.*
> 
> "The problem is very serious," Economics Minister Kaoru Yosano said. "As to when the economy will bottom out, it is impossible to predict at this time as the problem is not only domestic but global."
> 
> Japan's unemployment rate jumped to 4.4 per cent in December, the country's highest rate in three years, while household spending tumbled 4.6 per cent as consumers tightened their belts.
> 
> *Analysts say Japan's economy now looks set to log its worst quarter since the oil crisis in 1974.*
> 
> News of the global slowdown was no surprise to Japanese companies, which announced a raft of gloomy earnings data on Friday that underlined the severity of the crisis facing Asia's largest economy.
> 
> Electronics giant NEC said it was slashing 20,000 jobs worldwide to cope with the economic crisis and forecast a loss of $US3.2 billion ($A4.91 billion).



http://compareshares.com.au/show_news.php?id=S-547764


----------



## sassa

One blogger's thoughts on reforming the system which is broken and badly needs repair,
http://jessescrossroadscafe.blogspot.com/2009/01/are-we-ready-to-change-system.html
and an excerpt that mentions Australia,but is not expanded upon.




> Europe needs to tell the Brits and the Yanks to piss off, fix the euro, take an enormous dose of humility, reform their financial system, and don't play the fool again so easily. Asia needs to take care of its own and grow a middle class, and stop treating its people as coolies. Australia needs to go walkabout with Europe. The Mideast is its own worst enemy. Africa is the shame of our world.
> 
> Too radical? Then you're not ready yet for the changes that are required to end this cycle of boom, loot and bust.
> 
> It is time to begin serious, and significant, systemic reforms in the financial system. It is preferable to the historically likely alternatives.


----------



## davo8

For a genuinely pessimistic outlook, and totally in keeping with the title of this thread, try Karl Denninger:

http://market-ticker.denninger.net/archives/756-On-The-Edge-of-The-Abyss.html



> The rules of technical analysis for this pattern are:
> 
> * Pennants are continuation patterns - that is, whatever direction the market is moving when it comes in, it will move when it comes out.
> * The minimum target for the move is given by the length of the pole to which the pennant is attached.
> 
> In this case the pennant prognosticates a move downward of six hundred S&P 500 points from the break, which occurs at approximately 810.
> 
> That gives us a target on the S&P 500 of 210.
> 
> No, that's not a misprint.
> 
> I said two hundred and ten, and I meant two hundred and ten.
> 
> This puts the DOW at TWO THOUSAND.




Cheerful sort of bloke.


----------



## Sean K

davo8 said:


> For a genuinely pessimistic outlook, and totally in keeping with the title of this thread, try Karl Denninger:
> 
> Cheerful sort of bloke.



He's forgotten to use the words; may, could, probability, chance, likelihood, and possibly. There are no definates in any pattern.


----------



## explod

davo8 said:


> For a genuinely pessimistic outlook, and totally in keeping with the title of this thread, try Karl Denninger:
> 
> http://market-ticker.denninger.net/archives/756-On-The-Edge-of-The-Abyss.html
> 
> 
> 
> Cheerful sort of bloke.




"The Dow at 2000"

My take of the long term chart indicates that if the Dow falls below 7000 then 4000 is the first major support.   However a fall to that level quickly cound see the momentum take it down to a major support at 2000.

Have a look at the Dow on Bigcharts "DJIA   all data"

The confusion at the G20 as it closes may see some blood on the floor from tomorrow.     I feel like turning the computer off and going away somewhere.


----------



## wayneL

kennas said:


> He's forgotten to use the words; may, could, probability, chance, likelihood, and possibly. There are no definates in any pattern.




Good Grief!!!

Even us militant technical analyst warrior traders know that TA is BS. It only works when it works.

To make a case for 210 on the SP based on a measured move is.... frankly, shyte. Of course there is a possibility of it going to 210 at some point in the future, but not because of some poxy, stupid looking pennant.


----------



## nunthewiser

wayneL said:


> Good Grief!!!
> 
> Even us militant technical analyst warrior traders know that TA is BS. It only works when it works.
> 
> To make a case for 210 on the SP based on a measured move is.... frankly, shyte. Of course there is a possibility of it going to 210 at some point in the future, but not because of some poxy, stupid looking pennant.




Thanks , good post .. spot on


----------



## Aussiejeff

Hark!

Do I hear the **GRO-O-W-W-L-L-L** of the Bear?

US Markets have tanked o/night (S&P 500 down around 5% so far).

Next leg down for the Lil' Ozzie Bleeder, mayhap?


----------



## Aussiejeff

Here's a snippet from an article today that makes a lot of sense. If you're a Killer Bear, that is. 



> *Bail-out policies designed to keep the property and credit bubbles going will only prolong the agony and bleed taxpayers to death because the losses are way beyond the capacity of government*. Paul Krugman, Robert Shiller and many others advocate spending on productive infrastructure to get around the liquidity trap where both consumers and companies have to save and pay down debt.
> 
> *Kevin Rudd, Gordon Brown and Barack Obama are not doing anything about that. Instead, they are re-arming the bank robbers with billions and accelerating tax cuts. This approach is insane because it will hasten the Big "D"*.



http://business.theage.com.au/busin...uel-a-monster-mess-20090210-83k7.html?page=-1

How much longer before the REALLY BIG let down in the markets????


----------



## GumbyLearner

Aussiejeff said:


> Here's a snippet from an article today that makes a lot of sense. If you're a Killer Bear, that is.
> 
> http://business.theage.com.au/busin...uel-a-monster-mess-20090210-83k7.html?page=-1
> 
> How much longer before the REALLY BIG let down in the markets????




"Kevin Rudd, Gordon Brown and Barack Obama are not doing anything about that. Instead, they are re-arming the bank robbers with billions and accelerating tax cuts. This approach is insane because it will hasten the Big "D"."

Got gold AJ?


----------



## Aussiejeff

GumbyLearner said:


> "Kevin Rudd, Gordon Brown and Barack Obama are not doing anything about that. Instead, they are re-arming the bank Robs with billions and accelerating tax cuts. This approach is insane because it will hasten the Big "D"."
> 
> Got gold AJ?




Hey, speaking of gold - I need your expert advice Gumby.

If I coat a 10c coin with gold leaf worth 5c, would the intrinsic value then make it worth 25c? 

I hope to make a killing....


----------



## GumbyLearner

Aussiejeff said:


> Hey, speaking of gold - I need your expert advice Gumby.
> 
> If I coat a 10c coin with gold leaf worth 5c, would the intrinsic value then make it worth 25c?
> 
> I hope to make a killing....




I'll buy, but just let me weigh them and assay them first!


----------



## noirua

The answers today by Ben Bernanke to the US Congress seemed somewhat mournful throughout. 
Things would have been worse had it not have been for the Federal Reserves actions on interest rates and bailing out the banks.
Trouble is, much concerned comparing the 1930s and the problems of Japan since 1987. Also the inflation specter if money is raised against a backdrop of no recovery. 
Enough to trounce markets as the outlook for World economies looks to a worsening scenario with little or no growth.


----------



## Aussiejeff

noirua said:


> The answers today by Ben Bernanke to the US Congress seemed somewhat mournful throughout.
> Things would have been worse had it not have been for the Federal Reserves actions on interest rates and bailing out the banks.
> Trouble is, much concerned comparing the 1930s and the problems of Japan since 1987. Also the inflation specter if money is raised against a backdrop of no recovery.
> Enough to trounce markets as the outlook for World economies looks to a worsening scenario with little or no growth.




I never thought I'd see a glimmer of reality in Uncle Sam's jaundiced eye....


----------



## sassa

> Last night I watched President Obama hold one of the worst press conferences I can remember a president having. Long answers that were short on any substance and several clear contradictions. In one sentence he said "The days of spending more than we make, and living beyond our means are over". He then went on to detail how the US government is the sole entity that can solve the crisis because it will borrow more than it collects in taxes to live beyond its means. Classic. The President had no details on the rescue package, as he wanted to give Tim Geithner "his day in the Sun" to explain the plan. So I waited for today.
> 
> I am still waiting.
> 
> The big ball of nothing that was announced today was both a waste of time and a dangerous sign that the headliners in charge are still lost. I am not going to cover any of the plan's details that were announced, as those items as well as 80% of the plan are still in flux. Remember that we are told something has to be done ASAP or the world will collapse, but Giethner says the plan will not be put forward "until they get it right". How does he know when the plan is "right"?
> 
> I had warned my more liberal friends that when George Bush was gone, things were not really going to change. Without a convenient target to complain about, people might have to come to terms with the fact that George Bush by himself was not responsible for the economic mess. That blame falls squarely on the FED, the Treasury, the SEC, and the US Congress. All the same players are still there. Today's total bemusing display of incompetence means that the old fool Bush may be gone, but the supporting fools are still in charge.



http://www.economicdisconnect.blogspot.com/


----------



## Glen48

This is the last shot for B. O. and Co. we will see a quick rally and after that it will be all down hill.
Will it take the AUD as well as USD down?


----------



## drsmith

sassa said:


> http://www.economicdisconnect.blogspot.com/



Interesting video in that link but as with any politician I'm left wondering about any political motives behind his description of events.

If the global economy would have collapsed within 24 hours (as he describes it), why has there not been another run on the banks (electronic or otherwise) now this is in the public domain ?


----------



## CanOz

You want to be short if this pivot lets go.

CanOz


----------



## Aussiejeff

Looks like an Imminent & Severe Market Correction alright - UP? 

Oil slumps to under $US36 bbl overnight, yet almost all Oz oilers UP today. What's UP doc?

Chinese buying UP all our stocks?

_"I think I'm turning Cantonese, I think I'm turning Cantonese, I really think so...."_


----------



## MrBurns

Aussiejeff said:


> Looks like an Imminent & Severe Market Correction alright - UP?
> 
> Oil slumps to under $US36 bbl overnight, yet almost all Oz oilers UP today. What's UP doc?
> 
> Chinese buying UP all our stocks?
> 
> _"I think I'm turning Cantonese, I think I'm turning Cantonese, I really think so...."_





US market drop 5% we drop 10 points, the countries full of optimists, I'm not one of them.


----------



## CanOz

S&P 500 MINI - BEFORE THE OPEN

800 FINALLY GAVE WAY.


----------



## Wysiwyg

A couple of days late with my observation but many stock stochastics are at the over-bought and past stage.


----------



## doctorj

CanOz said:


> S&P 500 MINI - BEFORE THE OPEN
> 
> 800 FINALLY GAVE WAY.



Blame Moody's - the end is nigh apparently.

See https://www.aussiestockforums.com/forums/showpost.php?p=398966&postcount=15


----------



## sinner

Bloody volatility! There's even volatility on the VIX! I give up 

Stopped out of my VIX long and made the capital back shorting the SP500. What a joke! Lucky I checked before bed.

I have put more hours in today than the whole last week and now right before bedtime after all said and done +13 pips. I might as well give up chasing the next big move and concentrate on smaller trades again.

Will just settle for drooling over my gold sector gains on the ASX tomorrow!


----------



## Aussiejeff

MrBurns said:


> US market drop 5% we drop 10 points, the countries full of *optimists, I'm not one of them.*




Oh, MrBurns - I would never have guessed! 

I'll let you in on a little secret - me neither. Though I'd prefer to define myself as a "realist" more than a "pessimist". Optimism definitely has it's place in the world - at the appropriate time, when it reflects reality - and AFAIC I don't see this as being one of those times for unbridled optimism!  

Shall we see how the un-bridled, cavorting optimists go today then?? 


aj


----------



## MrBurns

Aussiejeff said:


> Oh, MrBurns - I would never have guessed!
> I'll let you in on a little secret - me neither. Though I'd prefer to define myself as a "realist" more than a "pessimist". Optimism definitely has it's place in the world - at the appropriate time, when it reflects reality - and AFAIC I don't see this as being one of those times for unbridled optimism!
> Shall we see how the un-bridled, cavorting optimists go today then??
> aj




I agree entirely, my neighbor last year was telling me I was a pessimist for not getting in, I said i have a bad feeling about all of this, and he just scoffed and said all the usual bulldust you get when people get lucky and think it's their investing talent.

I estimate he would have lost $1M at least, he hasn't told me but at least I would think.

I'm going to knock on his door soon and say what are you worried about, it'll come back don't be a PESSIMIST ! HA

I call it being realistic too and I have the runs on the board to prove it.

It used to really **** me when he called me a pessimist, well now it's his turn.


----------



## jono_oz

Wesfarmers profit up 46%, Woodside Profit up 73% - share prices go down


----------



## CamKawa

Here's a movie for the bears.







I.O.U.S.A

"Few are aware that America may be on the brink of a financial meltdown. I.O.U.S.A. explores the country’s shocking current fiscal condition and ways to avoid a national economic disaster."


----------



## CamKawa

MrBurns said:


> I agree entirely, my neighbor last year was telling me I was a pessimist for not getting in, I said i have a bad feeling about all of this, and he just scoffed and said all the usual bulldust you get when people get lucky and think it's their investing talent.
> 
> I estimate he would have lost $1M at least, he hasn't told me but at least I would think.
> 
> I'm going to knock on his door soon and say what are you worried about, it'll come back don't be a PESSIMIST ! HA
> 
> I call it being realistic too and I have the runs on the board to prove it.
> 
> It used to really **** me when he called me a pessimist, well now it's his turn.



Bears aren't pessimistic people. Bears are people who look for value.


----------



## sassa

An absorbing read(4 mins.)on Tim Geithner.



> FOOL ME ONCE, GEITHNER, SHAME ON YOU, FOOL ME TWICE..




http://www.newgeography.com/content/00585-fool-me-once-geithner-shame-you-fool-me-twice


----------



## Aussiejeff

Dejavu. The Thursday sucker rally heading into the Great OZ weegend. 

BUY, BUY, BUY, you lil' Ozzie sucke... errr - investors 

Ummm. Anyone like to guess what will likely happen to the DOW come our Saturday (Fri close US time)? Good setup coming for another "severe" short leg down early next week our time?

Well, whatever. Good luck to any buy-'n-holders. They might need it.


----------



## Aussiejeff

Well, this overnight development might not sit well with financials in the short term... 



> *[size=+1]The U.S. government sued UBS AG, Switzerland’s largest bank[/size], to try to force disclosure of the identities of as many as 52,000 American customers who allegedly hid their secret Swiss accounts from U.S. tax authorities*.
> 
> U.S. customers had 32,940 secret accounts containing cash and 20,877 accounts holding securities, according to the Justice Department lawsuit filed today in federal court in Miami. U.S. customers failed to report and pay U.S. taxes on income earned in those accounts, which held about $14.8 billion in assets during the middle of this decade, according to the court filing.



http://www.bloomberg.com/apps/news?pid=20601087&sid=aHxdrBYdaJD4&refer=home

I wonder how many more Madoff's & Stanford's they might shake out of the Ponzi Tree?

I also suspect that "about $14.8 billion in assets" is waaay conservative.


----------



## >Apocalypto<

Some thing I noticed for us all to ponder, take from it what you like. :alcohol:

see chart and enjoy..................


----------



## wayneL

>Apocalypto< said:


> Some thing I noticed for us all to ponder, take from it what you like. :alcohol:
> 
> see chart and enjoy..................




Symmetry?


----------



## gfresh

Yup, this is going to get messy.. UK market has a long way down as well. Could be the final capitulation many have been expecting.


----------



## So_Cynical

Aussiejeff said:


> Well, whatever. Good luck to any buy-'n-holders. They might need it.




Not if u brought and held gold...990 with a bullet and the US open to come.


----------



## Glen48

Certainly so if news and market talk proves true when US banks begin their reporting next month. 

It is an ugly picture out there for banks as talk about nationalization for the likes of Citigroup and Bank of America gets more persistent. Spreads in CDS tell the story: 

From GFT


----------



## Glen48

Glenn Stevens is confident we will avoid a recession...does that mean we will go straight to a depression or does he know some thing the rest of the World doesn't?


----------



## sassa

Can we make new lows?YES WE CAN.


----------



## sassa

> Citigroup (C) and Bank of America (BAC) won’t live to see May. The government will take them over within the next 60 days. The announcement may come as soon as tomorrow evening.




http://www.chartingstocks.net/2009/02/gone-in-60-days-citi-and-bank-of-america-wont-live-to-see-may/


----------



## Aussiejeff

Glen48 said:


> Glenn Stevens is confident we will avoid a recession...does that mean we will go straight to a depression or does he know some thing the rest of the World doesn't?




The man is clearly an economic & financial genius and knows more than any other so-called "expert" on the planet.

Every month, his massively up-beat assessments save our mighty OzEcon and Stock market from the ramblings of the rest of the world's dumb, pessimistic "experts".

So, Please, Mr Stevens Sir, I want more upbeat assessments! PLEASE!!!!


----------



## nulla nulla

The problem with all the chicken littles of the world, is that when they run arround screaming "the sky is falling", and they influence enough people, it will fall. Self perpetuating profits of doom.


----------



## Glen48

Is that why we are allowing FHO to go out and buy with our money and get into debt and have to walk away from their "Investment" once prices collapse?
Every time I make some investment they give you a warning that prices could go down but if you buy a house the agent can tell you houses double every 10 yrs and it is all legal.
I have been telling people to buy Gold ( set a record last night ) yet they still think I have 1 oar in the Water people will make their own choice but we should be given the best info. available at the time and then it is up to them  to make a choice.
I predict Steven's is wrong and he will change his mind in no time.


----------



## >Apocalypto<

Glen48 said:


> Is that why we are allowing FHO to go out and buy with our money and get into debt and have to walk away from their "Investment" once prices collapse?
> Every time I make some investment they give you a warning that prices could go down but if you buy a house the agent can tell you houses double every 10 yrs and it is all legal.
> I have been telling people to buy Gold ( set a record last night ) yet they still think I have 1 oar in the Water people will make their own choice but we should be given the best info. available at the time and then it is up to them  to make a choice.
> I predict Steven's is wrong and he will change his mind in no time.




were u telling them to buy it while it fell from 1000+ to 680??? all the expert golds bugs come out from under the carpet as soon as it makes a move. 

and Glen money can buy poverty you just need to spend it the right way.............


----------



## psychic

I just switch to cash again in my super as it looks like we are heading to 3000 over the coming month, once 3000 is hit, then I will switch back to my fund


----------



## Trembling Hand

psychic said:


> I just switch to cash again in my super as it looks like we are heading to 3000 over the coming month, once 3000 is hit, then I will switch back to my fund




Very 

Didn't you just post about loading up LONG on the market with CFD's


----------



## IFocus

John Mauldin on the shape of Europe's banks......scary 

A







> ustrian banks have lent $289 billion (230 billion euros) to Eastern Europe. That is 70% of Austrian GDP. Much of it is in Swiss francs they borrowed from Swiss banks. Even a 10% impairment (highly optimistic) would bankrupt the Austrian financial system, says the Austrian finance minister, Joseph Proll. In the US we speak of banks that are too big to be allowed to fail. But the reality is that we could nationalize them if we needed to do so. (And for the record, I favor nationalization and swift privatization. We cannot afford a repeat of Japan's zombie banks.)
> 
> The problem is that in Europe there are many banks that are simply too big to save. The size of the banks in terms of the GDP of the country in which they are domiciled is all out of proportion. For my American readers, it would be as if the bank bailout package were in excess of $14 trillion (give or take a few trillion). In essence, there are small countries which have very large banks (relatively speaking) that have gone outside their own borders to make loans and have done so at levels of leverage which are far in excess of the most leveraged US banks. The ability of the "host" countries to nationalize their banks is simply not there. They are going to have to have help from larger countries. But as we will see below, that help is problematical.


----------



## jonojpsg

IFocus said:


> John Mauldin on the shape of Europe's banks......scary
> 
> A




Hang on a sec - I know the USA trots out a GDP of $14 trillion but when you take out all the dodgy accounting, the real figure is more like $10tn.  If you want to tote up all the loans that US banks (including Fannie and Freddie) have made and the fact that a not insignificant percentage of them are dodgy sub-prime loans, I reckon that would have to come close to $7tn (or 70% of GDP).  I'm not sure why the situation is any different to the US except that the "MIGHTY" US is able to print money ad infinitum and rack up debts that they will never be able to pay off.

Just my


----------



## IFocus

jonojpsg said:


> Hang on a sec - I know the USA trots out a GDP of $14 trillion but when you take out all the dodgy accounting, the real figure is more like $10tn.  If you want to tote up all the loans that US banks (including Fannie and Freddie) have made and the fact that a not insignificant percentage of them are dodgy sub-prime loans, I reckon that would have to come close to $7tn (or 70% of GDP).  I'm not sure why the situation is any different to the US except that the "MIGHTY" US is able to print money ad infinitum and rack up debts that they will never be able to pay off.
> 
> Just my




Not sure I get your point Mauldin was comparing Euro bank dept as if it were US dept 

Full article here http://www.frontlinethoughts.com/gateway.asp?ref=reprint


----------



## Dangerous

nulla nulla said:


> The problem with all the chicken littles of the world, is that when they run arround screaming "the sky is falling", and they influence enough people, it will fall. Self perpetuating profits of doom.





Its called sentiment and it is very, very powerful....


----------



## sassa

Was going to post this in the Joke thread but thought it better here-
"It is now cheaper to buy a share in Citi than to make a withdrawal at an ATM."


----------



## Julia

More from "Business Spectator' on the nationalisation of banks:

http://www.businessspectator.com.au/bs.nsf/Article/21st-century-banking-$pd20090223-PHQCM?OpenDocument&src=kgb


----------



## Whiskers

The system is manipulated! 

Well... now that I've got your attention, :... if this article is correct, there's serious cause for concern especially with anything that is marketed or in any way relies on the Dow index.

I don't trade indicies so I don't know much about it... but is this a serious concern?



> Dow Jones Industrial Average blasted for including cheap stocks
> Posted Feb 23rd 2009 8:15AM by Zac Bissonnette
> Filed under: DJIA
> 
> The Dow Jones Industrial Average is in the headlines everyday, but few people actually understand how it's calculated. The DJIA is the sum of the value of one share of each of the 30 Dow components divided by the DJIA divisor, which is currently 0.1255527090. It's adjusted every now and then for spin-offs, dividends and splits. For geeks, the image at right shows the formula: p equals the price of the shares and d equals the DJIA divisor.
> 
> So what exactly is wrong with this formula? A ton. Critics have been pointing out forever that weighting the average based on stock price makes no sense because different companies have different numbers of shares outstanding. For example, if Berkshire Hathaway (NYSE: BRK.A) were part of the DJIA, its $70,000+ share price would dwarf the influence of all the other components combined. It would make much more sense to use a more holistic measure like market cap or enterprise value.
> 
> 
> But the collapse of companies like Citigroup (NYSE: C), General Motors (NYSE: GM) and Bank of America (NYSE: BAC) has critics lobbing another allegation: Basically, as the share prices of these stocks decline, the influence they have on the DJIA shrinks too. For example, there are currently five stocks that are part of the Dow 30 that are trading below $10 per share. If all five went to 0, the Dow would fall by less than 200 points according (subscription required) to the Wall Street Journal.
> 
> Of course, it doesn't make any sense at all: If 1/6th of the companies in the Dow 30 going to 0 would cause the market to fall by less than 3%, it really can't be called an accurate barometer of the health of the market. The DJIA formula seems to substitute ease of calculation and simplicity for substance and value.
> 
> http://www.bloggingstocks.com/2009/...l-average-blasted-for-including-cheap-stocks/


----------



## wayneL

Whiskers said:


> The system is manipulated!
> 
> Well... now that I've got your attention, :... if this article is correct, there's serious cause for concern especially with anything that is marketed or in any way relies on the Dow index.
> 
> I don't trade indicies so I don't know much about it... but is this a serious concern?




I've said it a bazillion times on here... possibly many times more; the Dow is for muppets & the bobbleheads on bubblevision.

The S&P500 is the index people should follow.


----------



## sinner

Hi Whiskers,

Thanks for the article, I enjoyed it. 

Isn't this always the case though, even in our own portfolios (if you have one), as a price declines its % of the overall decreases masking further declines?

Not sure who these "critics" are, but the DJIA seems to be doing just fine dropping like a rock on it's own without any special changes to how it is evaluated


----------



## theasxgorilla

wayneL said:


> The S&P500 is the index people should follow.




And we're still waiting for the SPY to break it's most recent low.  One more leg down then recovery...thats all I want.


----------



## numbercruncher

nulla nulla said:


> The problem with all the chicken littles of the world, is that when they run arround screaming "the sky is falling", and they influence enough people, it will fall. Self perpetuating profits of doom.






Ahhhh thats kinda like when its a 40c hot sunny day - if enough of these roosters you speak of run around screaming its raining its raining the skys will open up and rain ?


----------



## wayneL

Chicken Little is a very poor analogy. He was hit on the head by an apple(IIRC) and thought the sky was falling.

However, those of us who warned of problems in the economy were more like Paul Revere, who warned the revolutionary Americans of the approaching Redcoats,

Were those who warned of the Nazi danger Chicken Littles or Paul Reveres?


----------



## numbercruncher

11 year low for US markets today ....


Wonder if thats chicken little fault as well ? maybe scooby doo is to blame for that one ?


----------



## explod

Interesting discussion on the Dow guys.   For years the composition was arranged to make it the optomism meter.  Now with it going down they are calling fowl.

Being cracked up a lot lately

cheers explod


----------



## gfresh

yes:


----------



## wayneL

explod said:


> Now with it going down they are calling fo*w*l.
> 
> Being cracked up a lot lately
> 
> cheers explod




Or maybe cackled?


----------



## MR.

gfresh, the S&P500 / Dow do look similar.... do agree.  

Can see some flaws though! 

View attachment TIN HAT2.bmp

Just lov the pic.  
Stolen / borrowed from the Trembling Hand.
You can have the hat back when I'm finished!


----------



## gfresh

great pic 

GE is looking pretty sick and being led down by it's GE Capital unit..  if it keeps going we're going to see some fireworks there. 

http://www.marketwatch.com/news/sto...x?guid={B9787F3A-B1C9-430E-9F67-299D953D5CD4}

risk rating for GE capital higher than citigroup 



> Investors continued to show a strong level of fear over GE Capital's ability to meet its debt obligations Monday morning, as the cost to insure GE Capital's debt traded at a very high level of 510 basis points, meaning it would cost $510,000 to insure $10 million in debt for five years. In comparison, the cost to insure Citigroup Inc.'s (C) debt was only 425 basis points.


----------



## IFocus

wayneL said:


> Chicken Little is a very poor analogy. He was hit on the head by an apple(IIRC) and thought the sky was falling.
> 
> However, those of us who warned of problems in the economy were more like Paul Revere, who warned the revolutionary Americans of the approaching Redcoats,
> 
> Were those who warned of the Nazi danger Chicken Littles or Paul Reveres?




Waynel if only I had a fraction of your talent for compiling words into meaning like you do...............................


----------



## sassa

> China’s national pension fund said Wednesday it plans to adjust its investment portfolio this year by lowering its investment in bonds and increasing its direct equity investments as part of efforts to cope with the global and domestic economic downturns.
> 
> The pension fund also said it will invest more in equity funds and
> participate in investing in the country’s major infrastructure projects.
> 
> As it is the NATIONAL pension fund … others will follow …




http://www.ridingthedax.com/2009/02/25/be-aware-of-chinese-selling-of-bonds/

This could/will have a big effect on the U.S.Treasury bond sales.


----------



## Aussiejeff

sassa said:


> http://www.ridingthedax.com/2009/02/25/be-aware-of-chinese-selling-of-bonds/
> 
> This could/will have a big effect on the U.S.Treasury bond sales.




Just another predictable form of "protectionism".

Not to worry. OB promises all will be well soon.

Believe.....


----------



## nomore4s

GM loses another $9.6 billion and burns through $5.2 billion in cash in a 1/4

link


----------



## Aussiejeff

> *[size=+1]California’s Newly Poor Push Social Services to Brink [/size]*
> 
> Feb. 26 (Bloomberg) -- In California’s Contra Costa County, *40,000 families are applying for just 350 affordable-housing vouchers*. Church-operated pantries are running out of food. Crisis calls have more than doubled in the city of Antioch, where the Family Stress Center occupies the site of a former bank.
> 
> *The worst financial crisis in seven decades is forcing thousands of previously middle-income workers to seek social services, overwhelming local agencies, clinics and nonprofits. Each month 16,000 people, including many who were making $60,000 to $100,000 annually just a few years ago, fill four county offices requesting financial, medical or food assistance.*
> 
> “Unless we do things differently, not only will we continue to be on life support, but the power to the machine is going to die,” said county Supervisor Federal Glover, who represents Antioch and the cities of Pittsburg and Oakley about 50 miles (80 kilometers) east of San Francisco.
> 
> *Contra Costa, an East Bay suburban region of more than 1 million, turned thousands of farmland acres into housing in the past two decades, becoming an affordable alternative to San Francisco. Now, the area is being hit by a double whammy, as rising unemployment increases demand for social services, while plunging home values shrink tax revenue and squeeze agency budgets.*
> 
> County officials made $90 million in cuts during the current fiscal year, and plan to reduce another $56 million, out of a $1.2 billion general-fund budget, in the coming year. County administrator David Twa said he doesn’t expect to see a “gradual recovery” in property taxes until 2012 or 2013.



http://www.bloomberg.com/apps/news?pid=20601109&sid=as3PyDwmDEQY&refer=home

Couldn't possibly happen here, could it?


----------



## GumbyLearner

Aussiejeff said:


> http://www.bloomberg.com/apps/news?pid=20601109&sid=as3PyDwmDEQY&refer=home
> 
> Couldn't possibly happen here, could it?




Reality call

Great fiction! Did I say Fiction?

 yep FICTION


----------



## MrBurns

nomore4s said:


> GM loses another $9.6 billion and burns through $5.2 billion in cash in a 1/4
> 
> link




What a dog of a company, a complete drain on the taxes of the people , let it sink and take all the hangers on (execs) with it.


----------



## GumbyLearner

MrBurns said:


> What a dog of a company, a complete drain on the taxes of the people , let it sink and take all the hangers on (execs) with it.




totally agree


----------



## Aussiejeff

To Big To Fail.

BO would lose too much face.

Spare no expense in keeping it afloat.


----------



## gfresh

London down to new 6 year low.. 

http://www.telegraph.co.uk/finance/markets/4926462/FTSE-100-falls-to-six-year-low.html

Looks like it's really into panic mode now through most of the markets. "Late 2009 recovey" eh?


----------



## Sean K

gfresh said:


> Looks like it's really into panic mode now through most of the markets. "Late 2009 recovey" eh?



So, maybe we should buy before anyone else thinks it's the bottom?


----------



## nunthewiser

kennas said:


> So, maybe we should buy before anyone else thinks it's the bottom?




 no offense intended but geez m8 i been hearing that from a lot of so called "experts " in the media and stock circuits from 5000

patience will win the ladys on this one ....... 

plenny trades in the meantime tho


----------



## CanOz

Not allot of panic out there folks, methodical selling yes, panic?

Watch the VIX, i'm going to bed! (short several pairs i might add)

Cheers,



CanOz


----------



## theasxgorilla

CanOz said:


> Not allot of panic out there folks, methodical selling yes, panic?
> 
> Watch the VIX, i'm going to bed! (short several pairs i might add)
> 
> Cheers,
> 
> 
> 
> CanOz




Great work CanOz, hope it pans out for you.

The US looks screwed again...or is that, still screwed after all this time?


----------



## Aussiejeff

CanOz said:


> *Not allot of panic out there folks, methodical selling yes, panic?*
> 
> Watch the VIX, i'm going to bed! (short several pairs i might add)
> 
> Cheers,
> 
> 
> CanOz




Yeah. Just methodical selling down to 4,000 DOW or less.

No panic at all.


----------



## Green08

To big to fail,

Maybe they should have started with the HEALTH CARE SYSTEM

or GROWERS OF PRODUCE.

Epidemics and stravation are just sooo last century.


----------



## Bushman

iTraxx is still pricing in a depression - keep those equity raisings and dividend cuts coming (unless you are an energy player like Woodside it seems).

UFB this 'dislocation in credit markets'. Way, way oversold as the good are thrown out with the bad. 

As a mate of mine said, 'whatevs'. 

From Insto Bond Diary: 
The *Australian iTraxx credit index *has *widened past the 400 basis points mark* ,  trading above its all time wide of 400 basis points, reached in December 2008.

The Australian iTraxx is an actively traded basket of 25 Australian corporate credits and is regarded as a barometer for the health of Australian corporate credit. 

The index opened trading this morning 15 basis points wider than the overnight close, at a 400/415 bid offer spread and looks set to move even wider today.   

A sell off in global equities has put pressure on the Aussie iTraxx as weakening sentiment in credit markets and forcing corporate credit spreads wider.


----------



## Glen48

From Patrick.net:
Credit Card Desperate To Get Paid

Hey Patrick - I just got a letter from a credit card bank that I have had a card
with for five years, never been late once, offering me a $783 credit if I pay
them $1,174 within 15 days! This just so happens to calculate to my full
balance. So In other words, they will take 60 cents on the dollar from to clear
what I owe them - even though I've never, ever missed a single payment!

Things are getting scary - but you can bet they're getting paid off instantly
(40% guaranteed ROI in one day, plus savings in interest!) - The best part is I
had them slated to be paid (in full) next month because they just canceled my
card and raised my rate to 30% for no apparent reason other than they are
probably about to go under...

Just thought I would share that with your people. Insane.


----------



## MrBurns

Glen48 said:


> From Patrick.net:
> Credit Card Desperate To Get Paid
> 
> Hey Patrick - I just got a letter from a credit card bank that I have had a card
> with for five years, never been late once, offering me a $783 credit if I pay
> them $1,174 within 15 days! This just so happens to calculate to my full
> balance. So In other words, they will take 60 cents on the dollar from to clear
> what I owe them - even though I've never, ever missed a single payment!
> 
> Things are getting scary - but you can bet they're getting paid off instantly
> (40% guaranteed ROI in one day, plus savings in interest!) - The best part is I
> had them slated to be paid (in full) next month because they just canceled my
> card and raised my rate to 30% for no apparent reason other than they are
> probably about to go under...
> 
> Just thought I would share that with your people. Insane.




Well ..........share the banks name for goodness sake !


----------



## Glen48

Mr. B go to_ Partick.Net_ looks like some division of Visa.
They quote different rates depending on your payment....
ABC Lateline was good last night about the FHO going underwater and shop owners bailing out.

Don't worry it won't happen here......will it?


----------



## MS+Tradesim

I guess everyone was expecting it:



> GM: 'Substantial doubt' about continuing
> 
> By Ben Rooney, CNNMoney.com staff writer
> March 5, 2009: 6:51 AM ET
> 
> NEW YORK (CNNMoney.com) -- General Motors Corp. said Thursday that it hopes to get additional loans from the government and that there is "substantial doubt" about the automaker's ability to remain a "going concern."



http://money.cnn.com/2009/03/05/news/companies/GM_10K/index.htm


----------



## davo8

Anyone here follow the IRA? That is Institutional Risk Analytics. The latest article is plain scary.
http://us1.institutionalriskanalytics.com/pub/IRAMain.asp



> Remember, once we begin the inevitable unwind of AIG and Citigroup (NYSE:C), the beginning of the end of CDS and the derivative nightmare on Wall Street will have begun.
> 
> More, the US government cannot fund the operating losses of Fannie, Freddie, AIG and C. We do not have the money. Between now and the end of March, IOHO, the markets are going to force a resolution of AIG and C. We may never even see the much discussed stress tests promised for April by Secretary Geithner.




Translation: inside 30 days AIG and/or Citi go bust and the CDS detonation begins.

Now that's what I call SHTF on Wall Street time! :fan


----------



## Glen48

Just as I thought there goes the stock market and the Dow down 1k ???


----------



## noirua

These markets are being increasingly hit by peoples losses in other investments.  I was in a local pub last night and held a listening brief, my accent does annoy some over here, and a local said he lost £37,500 by advice to invest in a Lehman's backed investment.  These losses, that go unnoticed - people don't often speak about them - have put pressures on spending and investment. 

Are we missing these masked losses and think Government pumping money into the economy is very helpful. Australia, IMHO, needs to pump about $160 million more in, just to retain the position one year ago, imho.


----------



## dhukka

davo8 said:


> Anyone here follow the IRA? That is Institutional Risk Analytics. The latest article is plain scary.
> http://us1.institutionalriskanalytics.com/pub/IRAMain.asp
> 
> 
> 
> Translation: inside 30 days AIG and/or Citi go bust and the CDS detonation begins.
> 
> Now that's what I call SHTF on Wall Street time! :fan




Yeah, Chris Whalen is one of the most sane and intelligent voices around, a really clued up guy and the kind you want running the show rather than the clowns in Geitner and co. that currently pull the strings.


----------



## MR.

The debt/credit un-wind we had to have. 

Finally, now that it is here, I don't want to go through it........

From Steve Keen's Debtwatch.  
http://www.debtdeflation.com/blogs/ 



> The last quarter’s GDP figures, showing that Australia’s GDP contracted by 0.5% in the last quarter, ended the “phony war” debate over whether we’re in recession. The previous quarter’s 0.1% was so close to zero that it’s semantics to question whether we’ve seen six months of negative growth or not: we are in a recession.
> 
> Now that we’ve had our Dunkirk moment, it’s time to consider what policy should be, given that avoiding a recession is no longer an option.
> 
> A first step there is seeing why we recovered from previous recessions, and asking whether we can pull off the same trick again this time.
> 
> My answers are that our escape route from previous downturns was to renew the private lending engine, and that this is a trick that is one recession past its use-by date.
> 
> The 1990s recession saw private debt to GDP ratio top out at 85% in late 1990, and then fall to 76% by early 1994. From then it took off once more, with households taking over the borrowing binge mantle from business, which actually reduced its debt level from 56% of GDP to 40% in mid-1995. The household debt binge, which began in 1991 in the depths of Keating’ recession, took the household debt to GDP ratio from 30% to a peak of 99%, from which it is now falling.
> 
> Meanwhile, business borrowing likewise began a China and Private Equity fuelled blowout in mid-2004, rising rapidly from 46% of GDP to 66%–a new record–by early 2008. The combined debt total reached 165% of GDP in March 2008, and it has since fallen to 160%.
> 
> So what are the odds of encouraging businesses or household to start borrowing again, from their now record levels of debt?
> 
> Not good, I would think. Instead, they will be de-leveraging, not just for the duration of a standard recession but perhaps for a decade or more, to bring debt levels back to something like 1960-70 levels of 25-50% of GDP. Deleveraging has only just begun, and it has a long, long way to go.




Debt shouldn't exist.  Companies should only raise funds from investors cash, houses paid for by the family groups.  If you don't save you don't get.  Wouldn't the whole system be stable........!


----------



## Uncle Festivus

MR. said:


> The debt/credit un-wind we had to have.
> 
> Finally, now that it is here, I don't want to go through it........
> 
> From Steve Keen's Debtwatch.
> http://www.debtdeflation.com/blogs/
> 
> 
> 
> Debt shouldn't exist. Companies should only raise funds from investors cash, houses paid for by the family groups. If you don't save you don't get. Wouldn't the whole system be stable........!




Stable, but oh so boring and returning 4%, and banks wouldn't get deal fees eg Macquarie, people would actually live within their means without both partners having to work for their energy guzzling inefficcient McMansions. We wouldn't have to rely on skilled immigration to artificially raise the cost of everything. The false wealth created from housing the last decade or so is going to evaporate in a blink of an eye. 

And....



> the Labor Department reports on February nonfarm payrolls. Economists surveyed by MarketWatch expect payrolls to fall by 650,000, the worst job loss in nearly 60 years. They expect the unemployment rate to rise to 8% from 7.6%




Nothing like a headline - "Black Friday"? Happy buying.....soon?


----------



## Aussiejeff

Here ya go. This should restore bwanker's confidence in financial markets.



> *[size=+2]US bank deposit guarantee could go broke[/size]*
> 
> Agence France-Presse
> March 06, 2009 07:46am
> 
> 
> *THE US government is warning banks that its deposit insurance fund could go broke this year as bank failures mount.*
> 
> The head of the Federal Deposit Insurance Corporation, Sheila Bair, in a letter to bank chief executives dated March 2, defended the FDIC's plan to raise fees on banks and assess an emergency fee to shore up the fund and maintain investor confidence.
> 
> Ms Bair acknowledged the new fees, announced Friday, would put additional pressure on banks at time of financial crisis and a deepening recession, but insisted they were critical to keep the insurance fund solvent and protect.
> 
> "Without these assessments, the deposit insurance fund could become insolvent this year,'' Bair wrote.
> 
> *The FDIC chief said in the letter that the rapidly deteriorating economic conditions raised the prospects of "a large number'' of bank failures through 2010.*
> 
> "Without substantial amounts of additional assessment revenue in the near future, current projections indicate that the fund balance will approach zero or even become negative,'' she wrote.
> 
> The FDIC last Friday announced it would impose a temporary emergency fee on lenders and raise its regular assessments to shore up the rapidly depleting deposit insurance fund that insures individual customer deposits up to $US250,000.
> 
> A week ago the FDIC reported a sharp depletion of the deposit insurance fund in the fourth quarter due to actual and anticipated bank failures, to 19 billion dollars from 34.6 billion in the third quarter.
> 
> The FDIC said it had set aside an additional $US22 billion for estimated losses on failures anticipated in 2009.



http://www.news.com.au/business/story/0,23636,25146492-14334,00.html


----------



## MrBurns

A run on the banks over there ?


----------



## Uncle Festivus

MrBurns said:


> A run on the banks over there ?




Has been for some time?

I think this sums it up nicely, although even today's prices show a good premium for what are essentially insolvent companies? (What's that annoying green price bucking the trend?)


----------



## MrBurns

Uncle Festivus said:


> Has been for some time?
> 
> I think this sums it up nicely, although even today's prices show a good premium for what are essentially insolvent companies? (What's that annoying green price bucking the trend?)





Surely everyone would take their money out and put it under the bed with news like that.


----------



## Glen48

From Money & Markets:
AIG shares are now 30c, if we can't get insurance ship's don't sail , planes don't fly....and on it goes..

GM IS ON ITS DEATH BED: Two years ago, I warned you that General Motors was headed for bankruptcy. This morning GM’s own auditors revealed an unnamed “material weakness” in the company’s accounting ”” and warned that there’s serious doubt the automaker will survive.


BANK OF AMERICA, CITIGROUP AND AIG ARE ON LIFE SUPPORT: As soon as dire realities force Washington to pull the plug, these giant institutions will be in bankruptcy. 


GENERAL ELECTRIC IS IN INTENSIVE CARE: S&P has already issued a negative outlook on GE’s debt and, this week, Moody’s is considering slashing the company’s credit rating ”” a strong signal that the company may soon be fighting for its life. 


JPMORGAN CHASE NEXT? This morning, Moody’s slashed its outlook to negative. Ditto for Wells Fargo. 
To me, JPMorgan Chase is the most worrisome of all. After all ”” it is America’s largest bank with a market value that’s greater than Wells Fargo, Bank of America and Citigroup combined!

Remember: JPMorgan Chase & Co. holds $91.3 trillion in derivatives ”” a notional value that’s 40.6 times its total assets ”” including $9.2 trillion credit default swaps, hands-down the riskiest form of derivatives.

Worse, the U.S. Comptroller of the Currency warns that JPMorgan Chase Bank is also exposed to extremely large credit risk with its derivatives trading partners: For each dollar of capital, the bank has credit exposure of $4.00 ”” nearly twice the average exposure of Bank of America and Citibank.


----------



## sinner

Glen48 said:


> JPMORGAN CHASE NEXT? This morning, Moody’s slashed its outlook to negative. Ditto for Wells Fargo.
> To me, JPMorgan Chase is the most worrisome of all. After all ”” it is America’s largest bank with a market value that’s greater than Wells Fargo, Bank of America and Citigroup combined!
> 
> Remember: JPMorgan Chase & Co. holds $91.3 trillion in derivatives ”” a notional value that’s 40.6 times its total assets ”” including $9.2 trillion credit default swaps, hands-down the riskiest form of derivatives.
> 
> Worse, the U.S. Comptroller of the Currency warns that JPMorgan Chase Bank is also exposed to extremely large credit risk with its derivatives trading partners: For each dollar of capital, the bank has credit exposure of $4.00 ”” nearly twice the average exposure of Bank of America and Citibank.




What this article fails to mention is that yes JP has exposure but they will probably profit from bankruptcy of its trading partners (CDS). 

Regardless, why the "last standing" bank in US is allowed to have a credit and derivatives exposure to the tune of almost ten times the US national GDP, remains a glaringly unanswered question.


----------



## Bushman

sinner said:


> What this article fails to mention is that yes JP has exposure but they will probably profit from bankruptcy of its trading partners (CDS).
> 
> Regardless, why the "last standing" bank in US is allowed to have a credit and derivatives exposure to the tune of almost ten times the US national GDP, remains a glaringly unanswered question.




What I find amazing is that chumps like Moody's, which have an enormous responsibility to bear for this mess by rating sub-prime crap as investment grade, is now holding a gun to corporate America's head and is facilitating the collapse of the DJIA. Unbelievable.  

If GE and GM go, we are rooted! Make no mistake about it.


----------



## sinner

Bushman said:


> If GE and GM go, we are rooted! Make no mistake about it.




And JP Morgan will stand to benefit to the tune of 10s of trillions of dollars created from thin air and the misery of others which they helped create: as they are the CDS holders.

An even bigger coup than when JP Morgan himself stood in the NYSE in 1929 as the "last remaining buyer" buying up everything in sight for pennies.


----------



## Green08

Where do you draw the line?

Like silly children these companies played with fire. Now they want mum and dad to get them to the doctor and clean up the mess.

If Corporate USA want to play games they should fall. They didn't enter into Capitalism blind, they went in Greedy as Hell. Those human weeds should be stripped of all their assets and thrown in the gutter.  That's where you should find some funding.

Not just taking themselves down but the rest of the globe.

They will do anything to be "the greatest country on earth".  So passe.


----------



## dhukka

Aussiejeff said:


> Here ya go. This should restore bwanker's confidence in financial markets.
> 
> http://www.news.com.au/business/story/0,23636,25146492-14334,00.html




Nothing to worry about, they'll just go to congress and ask for a top up. They'll get it too, 25 FDIC insured banks filed for bankruptcy last year and 16 in the first two months of this year. Bankruptcies in the banking sector and going to be in the hundreds before we get through. I think the trend is clear....


----------



## Uncle Festivus

sinner said:


> And JP Morgan will stand to benefit to the tune of 10s of trillions of dollars created from thin air and the misery of others which they helped create: as they are the CDS holders.
> 
> An even bigger coup than when JP Morgan himself stood in the NYSE in 1929 as the "last remaining buyer" buying up everything in sight for pennies.




And Goldman Sachs ie the Paulsen insiders club. This is the bit I don't understand - for all of these billion dollar black holes there are counterparties on some of these instruments who are receiving billions back, indirectly from the Fed, some at the same time as they are getting a hand out from the Fed. Why don't they also suspend payments to counter parties where it can be shown that they won't be worse off? Or simply that they are already stinking rich? Or is that part of the humongous con? All getting too hard now to follow


----------



## Aussiejeff

Uncle Festivus said:


> And Goldman Sachs ie the Paulsen insiders club. This is the bit I don't understand - for all of these billion dollar black holes there are counterparties on some of these instruments who are receiving billions back, indirectly from the Fed, some at the same time as they are getting a hand out from the Fed. Why don't they also suspend payments to counter parties where it can be shown that they won't be worse off? Or simply that they are already stinking rich? Or is that part of the humongous con? *All getting too hard now to follow*




That's exactly what these MegaPonziMen are bwanking on. That the complications will blind everyone to what is REALLY happening - that they are getting richer, still, while "outsiders" get screwed ever harder.   

They have successfully devised "financial instruments" and schemes to baffle the best financial "brains" on the planet. 

No doubt they can barely wait for the "end game" to come, when their bits of CDS paper  will likely be worth multi-Trillions, as some others have outed. They have won before the game even started...  :angry:


----------



## sinner

Aussiejeff said:


> That's exactly what these MegaPonziMen are bwanking on. That the complications will blind everyone to what is REALLY happening - that they are getting richer, still, while "outsiders" get screwed ever harder.
> 
> They have successfully devised "financial instruments" and schemes to baffle the best financial "brains" on the planet.
> 
> No doubt they can barely wait for the "end game" to come, when their bits of CDS paper  will likely be worth multi-Trillions, as some others have outed. They have won before the game even started...  :angry:




Anyone who thinks this post is irrational or conspiratorial can just look here

http://www.marketwatch.com/news/sto...8AC4-4FFD-AE8C-3D8EE2F09C75}&dist=morenews_ts

AIG gets $85bn TARP, $40bn of this goes directly to counterparties of CDOs betting on bankruptcy. Below is a snippet of commentary on the above linked article



> Note that the Fed is picking winners and losers. There are other creditors of AIG who might have a better claim on its assets than who the Fed is picking. Remember that the Fed promised transparency. Instead, we have gotten noting but lies and secrecy from Bernanke, Paulson, and Geithner every step of the way.
> 
> Words cannot begin to express my disgust of the lies and secret shenanigans of the Fed and Treasury.
> 
> Mike "Mish" Shedlock


----------



## Bushman

sinner said:


> And JP Morgan will stand to benefit to the tune of 10s of trillions of dollars created from thin air and the misery of others which they helped create: as they are the CDS holders.
> 
> An even bigger coup than when JP Morgan himself stood in the NYSE in 1929 as the "last remaining buyer" buying up everything in sight for pennies.




Amazing isn't it - yet they are worried about hedge funds shorting shares?  This shadow banking farce will go down as the greatest redistribition of wealth since, well we have never had a shadow banking system like it!! 

Other side of the trade - US taxpayer backstopping AIG and the like and Western workers who will be sacrificed en masse . 

And don't get me started on the con job of 'globalisation! How can you have a global economy without the backing of a global banking, monetary and regulatory system? 

*What a disaster! * 

PS: anyone starting to notice the impact China is having on global sharemarkets? We had a rally on a rumour that Jeng was going to up the stimulus package yesterday. Still China are predicting GDP growth of 8%. Now it is the US trying to recouple with China? p


----------



## basilio

> *AIG failure would 'bring down Europe*
> March 6, 2009 - 11:16AM
> 
> The US government rescued giant insurer American International Group in part because its collapse would dramatically hurt European banks, a senior Democratic lawmaker said on Thursday, as US officials admit huge regulatory gaps on the insurer.
> 
> The US government has bailed out AIG three times since September 16 and committed about $US180 billion ($280 billion) to keep the insurer alive and doing business.
> 
> "One of the reasons we had to rescue AIG was the fact that it was going to bring down Europe," Pennsylvania Rep. Paul Kanjorski told reporters after his subcommittee held a hearing on systemic risk.
> 
> Kanjorski said he was told that a large number of AIG's counterparties were European.
> 
> "That's why we could not allow AIG to fail as we allowed Lehman (Brothers) to fail, because that would have precipitated the failure of the European banking system," he said.




The continuing bailout of AIG is a fiasco. But when you see comments like the above my blood practically freezes.

The full story outlines just how much of a disaster the Credit default swaps (CDS) can/will be to the financial markets. *In effect all of our collective savings*.

As I am seeing it when the Madoff and Stanford schemes broke open we saw $50-80 billion of assets  vapourise. The effects of this are still working their way through  individuals, charities, banks ect.

In the current circumstances the potential failure of AIG  on top of everything would be the last straw . (Actually more like a neutron star...)

*The current world economic system needs functioning banks if it is to survive.* This has to be a priority.(IMO)

http://business.theage.com.au/busin...re-would-bring-down-europe-20090306-8qgn.html


----------



## sinner

Ah yes, the Great Recoupling. 

The US need China to finance debt. We need them to buy our dug up dirt. 

I honestly doubt China will kickstart domestic consumption soon enough.


----------



## prawn_86

I've always said i want to work for JP Morgan. They are the only untouchable bank, as they ARE the Fed. The fed uses them to buy up stuff such as Bear Stearns etc etc.

How many JP employees have lost their jobs? SFA.

Old JP was a cunning one back in the day and the ties still run strong. Good on them, a true dynasty...


----------



## GumbyLearner

sinner said:


> Ah yes, the Great Recoupling.
> 
> The US need China to finance debt. We need them to buy our dug up dirt.
> 
> I honestly doubt China will kickstart domestic consumption soon enough.




How many monthly current account deficits has Australia racked up in the last 20 odd years? 

I'm pretty sure it would be at least 85-90% of them, if not more.

Does anyone know the actual stats? Is it best to use ABARE or ABS?

I saw Swan interviewed on the ABC yesterday stating that the stimulus had worked through the economy. It also mentioned that Australia achieved a trade surplus recently. Even though the report briefly if not belatedly mentioned that the sale of imported goods had dropped by 7% in one month right at the very end of the story.  

This means that Australia can only be in surplus, only when our consumers are not buying imports. Even when I/O and commodities spot prices went through the roof during the mining boom. We still weren't bringing the budget into surplus.

Is it just me or has consumption from China collapsed?


----------



## GumbyLearner

GumbyLearner said:


> How many monthly current account deficits has Australia racked up in the last 20 odd years?
> 
> I'm pretty sure it would be at least 85-90% of them, if not more.
> 
> Does anyone know the actual stats? Is it best to use ABARE or ABS?
> 
> I saw Swan interviewed on the ABC yesterday stating that the stimulus had worked through the economy. It also mentioned that Australia achieved a trade surplus recently. Even though the report briefly if not belatedly mentioned that the sale of imported goods had dropped by 7% in one month right at the very end of the story.
> 
> This means that Australia can only be in surplus, only when our consumers are not buying imports. Even when I/O and commodities spot prices went through the roof during the mining boom. We still weren't bringing the budget into surplus.
> 
> Is it just me or has consumption from China collapsed?




Just to correct my last post. 

It also mentioned that Australia achieved a reduced *trade deficit* recently. Even though the report briefly if not belatedly mentioned that the sale of imported goods had dropped by 7% in one month right at the very end of the story.  

It also appears near-impossible to go back into surplus any time soon. Whether it's Fraser, Hawke, Keating, Howard, Rudd or Turnbull/Costello ?

http://wopared.aph.gov.au/Library/pubs/msb/features/bop.htm

*Since 1959-60 Australia has had only one surplus on its current account and that was in 1972-73. A common concern has been the rise in the current account deficit from between 2 and 3 per cent of GDP in the 1960s and 1970s to between 4 and 6 per cent of GDP in the 1980s and 1990s.*


----------



## Glen48

B O told every one it is a good time to buy so the Dow shot trouble is B O didn't say what to buy.
Our Grand Kids will look back at this crash and think how could we be so stoopid  and then in 70 yrs time do the same themselves.


----------



## MR.

MR. said:


> Debt shouldn't exist.  Companies should only raise funds from investors cash, houses paid for by the family groups.  If you don't save you don't get.  Wouldn't the whole system be stable........!






Uncle Festivus said:


> Stable, but oh so boring and returning 4%, and banks wouldn't get deal fees eg Macquarie, people would actually live within their means without both partners having to work for their energy guzzling inefficcient McMansions. We wouldn't have to rely on skilled immigration to artificially raise the cost of everything. The false wealth created from housing the last decade or so is going to evaporate in a blink of an eye.




Boring .... maybe. 
But would we also miss the human toll. Family's falling apart, parents fighting, children in broken marriages as a result from too much debt and/or risk.  

And then there are the casualties, whom found no better way out.  The reason for some was not of their direct doing, just caught up in it all and/or had advise which went terribly wrong.


----------



## explod

On the big picture there does not seem to be much support for the dow to 2000

With UK printing money from nought how far behind will be the US.   Paper money is certqinly trash now.

Ed;  chart did not upload.   For a look open bigcharts as USJIA  set candles at quarterly and "all data" goes back to 1970

doom and gloom....   explod e


----------



## Glen48

[CHINA] National Energy Admin head Zhang Guobao said China should use part of its nearly $2 tln fx reserves to buy more gold, oil, uranium and other strategic commodities in order to diversity its reserves. Zhang said that SAFE could buy more gold and other strategic commodities while other agencies such as China's National Oil Reserves Centre should be allowed to issue foreign exchange bonds for overseas purchases. Comments are likely to be just proposals at this stage rather than official policy.

Thought this money was to bail out USA????


----------



## aleckara

GumbyLearner said:


> *Since 1959-60 Australia has had only one surplus on its current account and that was in 1972-73. A common concern has been the rise in the current account deficit from between 2 and 3 per cent of GDP in the 1960s and 1970s to between 4 and 6 per cent of GDP in the 1980s and 1990s.*




Australia having a trade surplus is nothing to boast about. Because of our past irresponsibility we need to look at the current account as a whole due to the interest rate burden we have accumulated in all the other previous deficits. Our interest burden is growing - and no matter how low interest rates go Australians just load up on more debt to compensate. I assume our dollar will go lower in the long run - however of course everyone else is devlauing their currencies as well. If we have a trade surplus but a current account deficit all our hard work in saving and not spending is just making the foreign investment yield slightly safer, and they get the proceeds before we do as creditors.


----------



## Aussiejeff

*Imminent and severe market correction* - [size=+2]UP![/size]

Courtesy of a "leaked" internal memo for Citigroup - a 100% trustworthy bwank.  



> March 10 (Bloomberg) -- Citigroup Inc. Chief Executive Officer Vikram Pandit said his bank is having the best quarter since 2007, when it last posted a profit. The shares rose as much as 38 percent and helped spur gains for finance company stocks.
> 
> “I am most encouraged with the strength of our business so far in 2009,” Pandit wrote in an internal memorandum obtained today by Bloomberg. “We are profitable through the first two months of 2009 and are having our best quarter-to-date performance since the third quarter of 2007.”



http://www.bloomberg.com/apps/news?pid=20601087&sid=aBYDSwW_8qak&refer=home

Most stock markets through the roof last night. 

ASX up 200 pts on massive speculative rally today?

Go, you speculators - GO-O-O-O!

Hmm. Think I'll just sit back awhile and guard the cashbox, ok? 

PS: Mr Pandit must feel like a god - his trustworthy word holds so much power - the world turns on it! I guess he is having champagne for brekky..


----------



## GumbyLearner

Aussiejeff said:


> *Imminent and severe market correction* - [size=+2]UP![/size]
> 
> Courtesy of a "leaked" internal memo for Citigroup - a 100% trustworthy bwank.
> 
> http://www.bloomberg.com/apps/news?pid=20601087&sid=aBYDSwW_8qak&refer=home
> 
> Most stock markets through the roof last night.
> 
> ASX up 200 pts on massive speculative rally today?
> 
> Go, you speculators - GO-O-O-O!
> 
> Hmm. Think I'll just sit back awhile and guard the cashbox, ok?
> 
> PS: Mr Pandit must feel like a god - his trustworthy word holds so much power - the world turns on it! I guess he is having champagne for brekky..




HAhaha 

Almost as bad as their employee "assassinate" program announced a few weeks ago. That was "leaked" too of course!


----------



## nizar

http://www.marketwatch.com/news/sto...-BD9C-4AC0-94D2-88F17FDB5E11}&dist=TNMostRead


----------



## Whiskers

Beggers can't be choosers... or can they! 

Some that had their hand out seem quite able to manage without.

I wonder, I suppose people will tend to support those that accept the bailout conditions and higher scrueteny. Will that mean some of those who turn down the bailout will find it tough gaining business?



> Some Banks, Citing Strings, Want to Return Federal Aid
> Published: March 10, 2009
> WASHINGTON ”” The list of demands keeps getting longer.
> 
> Financial institutions that are getting government bailout funds have been told to put off evictions and modify mortgages for distressed homeowners. They must let shareholders vote on executive pay packages. They must slash dividends, cancel employee training and morale-building exercises, and withdraw job offers to foreign citizens.
> 
> As public outrage swells over the rapidly growing cost of bailing out financial institutions, the Obama administration and lawmakers are attaching more and more strings to rescue funds.
> 
> The conditions are necessary to prevent Wall Street executives from paying lavish bonuses and buying corporate jets, some experts say, but others say the conditions go beyond protecting taxpayers and border on social engineering.
> 
> Some bankers say the conditions have become so onerous that they want to return the bailout money. The list includes small banks like the TCF Financial Corporation of Wayzata, Minn., and Iberia Bank of Lafayette, La., as well as giants like Goldman Sachs and Wells Fargo.
> 
> They say they plan to return the money as quickly as possible or as soon as regulators set up a process to accept the refunds. On Tuesday, Signature Bank of New York announced that because of new executive pay restrictions in the economic stimulus package, it notified the Treasury that it intended to return the $120 million it had received from the government only three months ago.
> 
> Other institutions like Johnson Bank of Racine, Wis., initially expressed interest in seeking bailout funds but have now changed their minds. Bank executives told The Milwaukee Journal Sentinel that one reason they rejected the government money was to avoid any disruption in the bank’s role in the local community, including supporting the zoo or opera company if they chose to.
> 
> One of the biggest concerns of the banks is that the program lets Congress and the administration pile on new conditions at any time.
> 
> continues... http://www.nytimes.com/2009/03/11/business/economy/11bailout.html?_r=1&hp


----------



## tommymac

It's wrong that congress and the administration can add new conditions at any time.

But let's hope that the administration questions these banks (BofNY) that are returning the money due to exec. pay restrictions. I think we all know that they won't but there may be a chance after congress queried the big car manufacturers. 

If the bank went bankrupt could the execs be sued by the shareholders for not looking after shareholder interests?


----------



## Aussiejeff

tommymac said:


> It's wrong that congress and the administration can add new conditions at any time.
> 
> But *let's hope that the administration questions these banks (BofNY) that are returning the money due to exec. pay restrictions*. I think we all know that they won't but there may be a chance after congress queried the big car manufacturers.
> 
> *If the bank went bankrupt could the execs be sued by the shareholders for not looking after shareholder interests?*




Hahaha! Only one thing is for certain in these volatile times - that fatcat bwankers will do ANYTHING to preserve their lurks 'n perks. Even if it risks the very survival of a bank itself. Well, what the hey? Who said anything about "loyalty"? They can always deploy the Golden Parachute and drift blissfully awaaaaayyyyy to Ponzi Paradise.... 

How many Fatcat Bwankers do you know who have actually had their a**es sued off and assets stripped to the bone for their snatch 'n grabs? A mere handful at best. Gummints world wide are currently forking out taxpayer BIG bucks for the privilege of paying mere lip service to these guys. Sickening.


aj


----------



## IFocus

Gary Shilling worth a look

http://leavittbrothers.com/stocks-options-futures-trading-videos/2009/03/Gary-Shilling-speaks.cfm


----------



## Gundini

Shilling is spot on IMO.

No substancial rise in the stock markets until we get capitulation. We definately haven't had that yet.

I guess the question is what sort of news could we fathom that would be frightening enough to start the capitulation phase?

We already know the whole world economy is a giant ponzi scheme.

Depression?

Another 9/11?

War?

All of the above? (They are all related)


----------



## grace

Gundini said:


> Shilling is spot on IMO.
> 
> No substancial rise in the stock markets until we get capitulation. We definately haven't had that yet.
> 
> I guess the question is what sort of news could we fathom that would be frightening enough to start the capitulation phase?
> 
> We already know the whole world economy is a giant ponzi scheme.
> 
> Depression?
> 
> Another 9/11?
> 
> War?
> 
> All of the above? (They are all related)




I think it will be some major country/s defaulting on their interest payment leading to collapses in currency etc.etc.  Just who will it be?


----------



## bunyip

*This is a pretty good analogy of what's happened...*


 The financial crisis explained in simple terms:

 Heidi is the proprietor of a bar in Berlin. In order to increase sales,
 she decides to allow her loyal customers - most of whom are unemployed
 alcoholics - to drink now but pay later. She keeps track of the drinks
 consumed on a ledger (thereby granting the customers loans).

 Word gets around and as a result increasing numbers of customers flood Into
 Heidi's bar.

 Taking advantage of her customers' freedom from immediate payment
 constraints, Heidi increases her prices for wine and beer, the
 most-consumed beverages. Her sales volume increases massively.

 A young and dynamic customer service consultant at the local bank
 Recognizes these customer debts as valuable future assets and increases
 Heidi's borrowing limit.

 He sees no reason for undue concern since he has the debts of the
 alcoholics as collateral.

 At the bank's corporate headquarters, expert bankers transform these
 customer assets into DRINKBONDS, ALKBONDS and PUKEBONDS. These
 securities are then traded on markets worldwide. No one really
 understands what these abbreviations mean and how the securities are
 guaranteed.

 Nevertheless, as their prices continuously climb, the securities become
 top-selling items.

 One day, although the prices are still climbing, a risk manager
 (subsequently of course fired due to his negativity) of the bank decides
 that slowly the time has come to demand payment of the debts incurred by
 the drinkers at Heidi's bar.

 However they cannot pay back the debts.

 Heidi cannot fulfil her loan obligations and claims bankruptcy.

 DRINKBOND and ALKBOND drop in price by 95 %. PUKEBOND performs better,
 stabilizing in price after dropping by 80 %.

 The suppliers of Heidi's bar, having granted her generous payment due
 dates and having invested in the securities are faced with a new situation.

 Her wine supplier claims bankruptcy, her beer supplier is taken over by a
 competitor.

 The bank is saved by the Government following dramatic round-the-clock
 consultations by leaders from the governing political parties.

 The funds required for this purpose are obtained by a tax levied against
 the non-drinkers.

 Finally - an explanation anybody can understand . . .


----------



## drsmith

and DRINKBOND, ALKBOND and PUKEBOND are all renamed HANGOVERBOND.


----------



## davo8

grace said:


> I think it will be some major country/s defaulting on their interest payment leading to collapses in currency etc.etc.  Just who will it be?




Yes, The US will eventually default on its debts, but it will find a novel and creative way to do it. The USD can't crash while there is nowhere else for capital to go.

This is not a "normal" recession, and there won't be a "normal" recovery. This is a finance sector debt deflation aka depression, and it will take 5 years plus.

My guess is the first signs of recovery will get hit by the next two disasters: energy shortages/peak oil ($200+) and food shortages (ammonia is now over $1000 a ton).

After that, who knows?


----------



## Sean K

davo8 said:


> Yes, The US will eventually default on its debts, but it will find a novel and creative way to do it. The USD can't crash while there is nowhere else for capital to go.
> 
> This is not a "normal" recession, and there won't be a "normal" recovery. This is a finance sector debt deflation aka depression, and it will take 5 years plus.
> 
> My guess is the first signs of recovery will get hit by the next two disasters: energy shortages/peak oil ($200+) and food shortages (ammonia is now over $1000 a ton).
> 
> After that, who knows?



Davo, what happened to your mantra?

"REPEAT AFTER ME, THIS IS *NOT* THE BOTTOM!!!"


----------



## davo8

kennas said:


> Davo, what happened to your mantra?
> 
> "REPEAT AFTER ME, THIS IS *NOT* THE BOTTOM!!!"




Hi kennas -- I'm genuinely touched -- you remembered!

A year ago it was easy. A deep US recession, market to drop at least 40%, bank failures, crises. Global coupling, therefore global recession and global bear markets. No-one believed me, but it was inevitable. 100% certainty.

Now it's harder, maybe 80% certainty. Markets have further to drop, but the main drivers are still toxic asssets, and nobody knows when or where they will blow up. I know what a bottom looks like, and this ain't it. I'm still betting on a drop in the local property market too. And another crisis in May.

Eventually there will be recovery, but slow. Deflation/deleveraging will continue and I don't expect bank profits to return to previous levels. It's not hard to see the broad themes, but seeing the details well enough to trade on them, now that's hard!


----------



## Glen48

It's been reported the "Spectacular" will feature 500 properties valued at a total of over $350 million. It will include residential, investment, commercial and rural properties. You will be able to turn up to one venue and bid on multiple properties - Wow!

But something strikes us about this. When a successful company decides to do something new and different from what it has done before, it means one of two things. Either they have recognized a niche in the market that will help them increase sells compared to what they would normally have sold...

Or it means they are desperate. In fact it almost has the ring of the Persian Rug Clearance Sale ads. Everything must go!

It doesn't really sound as though demand is outstripping supply if real estate agents are resorting to these tactics.
Money morning.


----------



## IFocus

Well their calls are still behind the curve in the UK as I suspect they are here too 

http://business.smh.com.au/business/world-business/uk-slump-worse-than-expected-20090328-9eh9.html


----------



## agathos

Just for curiosity sake, since someone posted about Property for sale en mass style:

Here in Western Australia, Ray White has been consolidating their EVER INCREASING collection of properties for Auctions in Sheraton Towers (one I know was today, 28th March 2009, from 12 noon onwards, etc). 

Even very good, non tired looking properties are UP FOR SALE in good non mortgage belt suburbs. 

And I do know for a fact that a very good property in Bullcreek that was for sale at exhorbitant prices, the sale didn't go through and the UNDER OFFER sign has to be removed because the potential sucker, oooops, sorry, buyer tried to bid with a very high price and the banks reject the loan!

I wish these suckers NEVER arrive at OZ land (though I too, am a migrant blending inot OZ from another part of the world).

They push property prices UP with their ignorance.....

I remember when I arrive in Australia on 7th Feb 2007 - one of the front page article, a small one on the newspaper was that the BOOm will lose steam in 2 years and property will drop...................

Whatever may be ,GOD looks from His throne
and He sees the ever increasing violence, greed, immorality and pure silliness of human kind...........

Regards, agathos.


----------



## psychic

Its time to bump this thread and remind all bulls that a Imminent and severe market correction will most likely take place within weeks.  A 5 week bull run causes me much distress  A heard mentality is appearing and its now very much a case of "everything is alright again"

Umm somebody once told me a "V" shap bottom is very dangerous


----------



## kransky

when will the next dose of reality hit the markets?

cant complain that life is boring with the markets the way they are now days..

looking to see volumes start to fall off.. or some other signal.. i can see this rally go for a while longer.. 

do tell when you see something people..


----------



## Glen48

Glen Miline in today's Sunday mail page 9 reports that there are 600K home owners using Bank card to make mortgage payment and that was before the credit crunch..


----------



## MrBurns

Glen48 said:


> Glen Miline in today's Sunday mail page 9 reports that there are 600K home owners using Bank card to make mortgage payment and that was before the credit crunch..




Rudd has created a bubble within a bubble, when the double FHBG finishes in June watch it all come home to roost.


----------



## Julia

MrBurns said:


> Rudd has created a bubble within a bubble, when the double FHBG finishes in June watch it all come home to roost.



Hah.  What do you reckon the gummint will extend the FHBG so as to avoid said bubble breaking and reality dawning?


----------



## MrBurns

Julia said:


> Hah.  What do you reckon the gummint will extend the FHBG so as to avoid said bubble breaking and reality dawning?




Well the chances of that happening are approx 100%


----------



## Uncle Festivus

Welcome to the welfare state of perpetual moral hazard? Until that is, the piper eventually has to be repaid, I think, won't he, or will they change the rules again? Is it even real anymore? What is money anyway? What's happened to gold? Why do I keep asking myself questions? Did the dingo really do it? I tired.......must sleep....


----------



## davo8

kransky said:


> when will the next dose of reality hit the markets?
> looking to see volumes start to fall off.. or some other signal.. i can see this rally go for a while longer..




Perhaps sooner than you think. See Denninger.



> 1. There is a major liquidity disruption under way right now in the markets.  Zerohedge put forward a rather esoteric diagram of this; I don't need one, as it is trivial to observe this in the form of real-time time-and-sales data.  Volume has been thin and declining while machine-driven ("quant") trading as a percentage of total volume has been flying higher.
> 2. There have been a series of overnight 'gap higher' moves in sequence followed by days that fail to follow through strongly (that is, larger than the overnight gaps.)  This is abnormal and points to "at the margin" price changes.  The key point here is that this is unsupportable over the longer term as the actual base of equity trading; "long-term" owners such as individuals and pension funds are NOT following through during market hours and those holders are not trading /ES futures overnight on Globex!
> 
> The effect of (1) and (2) is what is known in the investing marketplace as "distribution" - that is, you, the retail bag-holder, wind up with the shares at the end of the day, and the institutional and quant-driven "fast money" departs with your cash.  When they stop their high-frequency "pass across the table" game, and they will, you find yourself with some very expensive shares as the floor disappears.




The Piper will be paid.


----------



## Sean K

I wasn't sure where to put this, except here.

Quite shocking really.


*Fannie Mae CEO Allison nominated to run TARP*

PRESIDENT Barack Obama nominated Fannie Mae Chief Executive Herb Allison to oversee the Treasury Department's Troubled Asset Relief Programme, putting him at the heart of the administration's drive to bolster the US financial system.


Can someone please comfort me that Obama is not putting in place the same stooges that got them into this mess in the first place?

Please??


----------



## Uncle Festivus

kennas said:


> I wasn't sure where to put this, except here.
> 
> Quite shocking really.
> 
> 
> *Fannie Mae CEO Allison nominated to run TARP*
> 
> PRESIDENT Barack Obama nominated Fannie Mae Chief Executive Herb Allison to oversee the Treasury Department's Troubled Asset Relief Programme, putting him at the heart of the administration's drive to bolster the US financial system.
> 
> 
> Can someone please comfort me that Obama is not putting in place the same stooges that got them into this mess in the first place?
> 
> Please??




There, there Kennas (consoling pat's on back) everythings going to be allright. Allison took over from the previous incompetant last September or thereabouts, so can't really blame him for anything - so far


----------



## Sean K

Uncle Festivus said:


> There, there Kennas (consoling pat's on back) everythings going to be allright. Allison took over from the previous incompetant last September or thereabouts, so can't really blame him for anything - so far



Oh, that's not too bad then.

I thought a peadophile was being put in charge of the kindergarten ..... 


Looking forward to you calling a bottom UF. It will mean we have a few more months of shorts to put on! LOL :


----------



## drsmith

Market minima might have been a better phrase bearing in mind the analogy above.


----------



## Uncle Festivus

kennas said:


> Oh, that's not too bad then.
> 
> I thought a peadophile was being put in charge of the kindergarten .....
> 
> 
> Looking forward to you calling a bottom UF. It will mean we have a few more months of shorts to put on! LOL :




Hmm...not understanding that but...are the green sprouts frost hardy in a financial winter???


----------



## Sean K

Uncle Festivus said:


> Hmm...not understanding that but...are the green sprouts frost hardy in a financial winter???



 Just noting that this thread started in April 07.


----------



## CanOz

Apparently this was circulated before the open in the US.....its unsupported at this stage.


> The Turner Radio Network has obtained the stress test results. They are very bad. The most salient points from the stress tests appear below.
> 
> 1) Of the top nineteen (19) banks in the nation, sixteen (16) are already technically insolvent.
> 
> 2) Of the 16 banks that are already technically insolvent, not even one can withstand any disruption of cash flow at all or any further deterioration in non-paying loans.
> 
> 3) If any two of the 16 insolvent banks go under, they will totally wipe out all remaining FDIC insurance funding.
> 
> 4) Of the top 19 banks in the nation, the top five (5) largest banks are under capitalized so dangerously, there is serious doubt about their ability to continue as ongoing businesses.
> 
> 5) Five large U.S. banks have credit exposure related to their derivatives trading that exceeds their capital, with four in particular - JPMorgan Chase, Goldman Sachs, HSBC Bank America and Citibank - taking especially large risks.
> 
> 6) Bank of America`s total credit exposure to derivatives was 179 percent of its risk-based capital; Citibank`s was 278 percent; JPMorgan Chase`s, 382 percent; and HSBC America`s, 550 percent. It gets even worse: Goldman Sachs began reporting as a commercial bank, revealing an alarming total credit exposure of 1,056 percent, or more than ten times its capital!
> 
> 7) Not only are there serious questions about whether or not JPMorgan Chase, Goldman Sachs,Citibank, Wells Fargo, Sun Trust Bank, HSBC Bank USA, can continue in business, more than 1,800 regional and smaller institutions are at risk of failure despite government bailouts!
> 
> The debt crisis is much greater than the government has reported. The FDIC`s "Problem List" of troubled banks includes 252 institutions with assets of $159 billion. 1,816 banks and thrifts are at risk of failure, with total assets of $4.67 trillion, compared to 1,568 institutions, with $2.32 trillion in total assets in prior quarter.
> 
> Put bluntly, the entire US Banking System is in complete and total collapse.




Shorts finally kicked in last night, will the buyers come back this time?

Cheers,


CanOz


----------



## bowman

Financials down, gold up. Rings a bell somewhere.


----------



## Sean K

CanOz said:


> Apparently this was circulated before the open in the US.....its unsupported at this stage.



"The Turner Radio Network is described by some monitoring groups as a white supremacist organization."

Off CNBC.

Looks like a good rumour. 

The report's not supposed to be out till May isn't it?


----------



## shag

bowman said:


> Financials down, gold up. Rings a bell somewhere.




look thats no problem the old 308 or 30 wouldnt fix, then u have a great rug too.
thats why its handy to have an extra 'club' in the bag, with a few tinnies for afterwards....


----------



## bowman

shag said:


> look thats no problem the old 308 or 30 wouldnt fix, then u have a great rug too.
> thats why its handy to have an extra 'club' in the bag, with a few tinnies for afterwards....




Look you might well be right. It's just that my world seems a bit upside down atm.


----------



## CanOz

kennas said:


> "The Turner Radio Network is described by some monitoring groups as a white supremacist organization."
> 
> Off CNBC.
> 
> Looks like a good rumour.
> 
> The report's not supposed to be out till May isn't it?




No idea, like i said its unsupported at this stage. I find it interesting that banks are now reporting profits just after they changed the accounting standards.

CanOz


----------



## MrBurns

From Crikey - 



> Wall Street's white supremacist con job.
> 
> Glenn Dyer writes:
> 
> Here's how Wall Street was conned by a white supremacist who claimed he had a scoop on the US Treasury's "stress tests" of the 19 biggest banks.
> 
> The US market fell heavily, helped by some poor results from major companies, including a major bank. Big falls in Europe didn't help, but an early factor was a claim that the US Treasury's so-called stress tests of the country's 19 biggest banks had come up with some very poor results.
> 
> That news, on an obscure blog, got into the market and was reported. It was circulated around the world, including in Australia without too much checking. And yet by the time this had happened this morning, the US Treasury's rejection was in the market, as were details of Turner's background.




etc etc etc


----------



## CanOz

Nothing like a good scare to push things over the edge a bit. The question is, can the market bounce on this or will the current condition unwind some more?

Like they said even the rejection of the claim had little effect on the selling, which was relentless through the session, going by the 5 minute ES mini chart. I wonder what this says about the trust in the Treasury departments word?

The market was so overbought that once it pushed through support it just went into free fall for most of the session.

Cheers,


CanOz


----------



## Aussiejeff

CanOz said:


> *Nothing like a good scare to push things over the edge a bit.* The question is, can the market bounce on this or will the current condition unwind some more?
> 
> Like they said even the rejection of the claim had little effect on the selling, which was relentless through the session, going by the 5 minute ES mini chart. I wonder what this says about the trust in the Treasury departments word?
> 
> The market was so overbought that once it pushed through support it just went into free fall for most of the session.
> 
> Cheers,
> 
> 
> CanOz




Then again, there's nothing like a good "soothing" speech from one of the throng of esteemed ones (eg: Timmy Baby last night) to manufacture unrestrained, over-the-top joy and bullishness by the Big Bwanks.

What happened to reason and sanity?

What planet am I on now?

Hello?

..


----------



## Aussiejeff

Aussiejeff said:


> Then again, there's nothing like a good "soothing" speech from one of the throng of esteemed ones (eg: Timmy Baby last night) to manufacture unrestrained, over-the-top joy and bullishness by the Big Bwanks.
> 
> What happened to reason and sanity?
> 
> What planet am I on now?
> 
> Hello?
> 
> ..




Planet Geithner?



> US Treasury Secretary Timothy Geithner said *the [size=+1]"vast majority''[/size] of US banks have more capital than needed*, stoking a rally in stocks as investors await results of stress tests on the balance sheets of the biggest lenders.



http://business.theage.com.au/business/vast-majority-of-us-banks-healthy-geithner-20090422-ae7w.html

Stand by for blast off to Nirvana.... 

If not, drug test the guy. He might be poppin' something dangerous...


----------



## shag

doesnt that sort of depend on what your definition of 'more capital than you need' is.....
the imf report looked ominous if its true, for australasia. nz has far more borrowed funds used to inflate the property bubble than aus, plus bugger all earnings and assests left.


----------



## MS+Tradesim

Anyone have an idea why the US futs have been sold off today?


----------



## Sean K

MS+Tradesim said:


> Anyone have an idea why the US futs have been sold off today?



The flu thingy is spooking people I think.

Or, it's because it's a square of 9 wave 4 top.


----------



## MS+Tradesim

kennas said:


> Or, it's because it's a square of 9 wave 4 top.




You could be right. I was thinking it was a blow-off top from Uranus. 

[/senseofhumour]


----------



## Broadway

MS+Tradesim said:


> Anyone have an idea why the US futs have been sold off today?




Cant be bothered with charts, but this was due from friday night.

USD bought. Other currencies sold.
US bonds bought.
ES hit the top of its range on friday night late, and tried to collapse twice.
Oil got sold early this morning.
ES just completed a lower high on long term chart.

Fundamental  reasons?

Chrysler sinking, stress test rumour about someone 'needing more capital'.

Should turn soon I hope, volume has started to come in.


----------



## MS+Tradesim

Broadway said:


> Should turn soon I hope, volume has started to come in.




I hope not. I started shorting on Friday.


----------



## Uncle Festivus

So is this what you call a stunned mullet market - a severe case of denial - US GDP preliminary figure falls WORSE-THAN-EXPECTED -6.1% and the market futures go up? Wait for the revision into the -7's then? When will all the talking bobble heads on the various TV news shows finally admit it's a DEPRESSION out there people!



> *WASHINGTON (MarketWatch) - The U.S. economy contracted violently again in the first quarter of the year as business investment declined at a record rate, the Commerce Department reported Wednesday.*
> 
> Real gross domestic product - the inflation-adjusted, seasonally adjusted value of all goods and services produced in the United States - fell at a 6.1% annualized rate in the first quarter, nearly matching the 6.3% decline in the fourth quarter of 2008.
> *The two-quarter contraction is the worst in more than 60 years.* Since the 1947, the economy had never contracted by more than 4% for two consecutive quarters. With a 0.5% drop in the third quarter of 2008, it's the first time the economy has contracted for three consecutive quarters since 1975.



http://www.marketwatch.com/news/story/GDP-falls-61-record-drop/story.aspx?guid={F4F6A5E6-B2F9-43B4-876E-57D2DBC107F5}


----------



## Rick_Hunter

The markets have been really weird lately. Let's start guessing what the 'catalyst' needs to be for it to fall back to reality!

You'd think if it wasn't for the 'out of the blue' Flu case lately, that the S&P500 would be trying to break 1000 by now....

I wouldnt be surprised that May 6th announcement coming up about Stress Testing banks gonna give Wall St another reason to rally, with Government putting a positive spin on any results they get.....


----------



## Sean K

Uncle Festivus said:


> So is this what you call a stunned mullet market - a severe case of denial - US GDP preliminary figure falls WORSE-THAN-EXPECTED -6.1% and the market futures go up? Wait for the revision into the -7's then? When will all the talking bobble heads on the various TV news shows finally admit it's a DEPRESSION out there people!



Perhaps the market's not in denial, but has been expecting this, UF? The bad news has been flowing for months now. Even GM going into bankrupsy is mostly factored in perhaps. Or, perhaps we're all mullets? Whatever the case, been some great trading opportunities the past 2 months.


----------



## doctorj

Allegedly expectations were at -4.9%.

If you look into the detail, inventories were down significantly.  This is either positive (less inventory means less overhang and more jobs in the near future as production begins ramping up again) or negative (companies are predicting the woes will continue for some time) depending on how you look at it.  

Either way, the unexpected fall in inventories would have had a material downward impact on the GDP.  I guess the market is buying into the good story at the moment.


----------



## Aussiejeff

doctorj said:


> Allegedly expectations were at -4.9%.
> 
> If you look into the detail, inventories were down significantly.  This is either positive (less inventory means less overhang and more jobs in the near future as production begins ramping up again) or negative (companies are predicting the woes will continue for some time) depending on how you look at it.
> 
> Either way, the unexpected fall in inventories would have had a material downward impact on the GDP.  I guess *the market is buying* into the good story at the moment.




All you have to do is replace _"market"_ in the abouve sentence with _"bailed-out, cashed-up big banks"_ to understand what is primarily driving "the market" right now.

Big bailed out banks with loads of taxpayer cash buying up bigtime into their own and each other's stock portfolios.

Why?

(1) They are under backroom pressure by gummints to lend, lend, lend and to actively "support the markets" (how else other than buying into each other' stock portfolios?) following their humongous bailouts.

(2) They know they can afford to gamble virtually unlimited amounts on stocks atm because of the unprecedented level of sworn gummint protectionism & guarantees. Wouldn't you?

IMO it is completely logical that such a "gummint guaranteed & manufactured" rebound can occur with massive media support in the face of continuing bleak economic & unemployment data.


----------



## Sean K

Crysler goes into bankruptsy, Dow up 1%.

Might get a 2% jump if GM goes under.


----------



## Bobby

kennas said:


> Crysler goes into bankruptsy, Dow up 1%.
> 
> Might get a 2% jump if GM goes under.




Not sure how to take that second part  

Hope your well & happy  but


----------



## Sean K

Bobby said:


> Not sure how to take that second part
> 
> Hope your well & happy  but



Not happy, Peru is closing flight to and from Mexico where I was supposed to be going tomorrow. Maybe it's for the best, but the Yukatan Peninsula does not have any cases of flu. It's like cancelling flight to Melbourne because Perth has a cold. 

In regard to the GM comment, I think it's factored in that they will go into bankruptsy and if it's announced and Obama stands up and says the Gov has a plan to save all the workers and transform the company etc, like he has for Crysler, then the uncertainty will be gone and people will be happier. Maybe a 3% jump for GM bankruptsy! LOL


----------



## Bobby

kennas said:


> Not happy, Peru is closing flight to and from Mexico where I was supposed to be going tomorrow. Maybe it's for the best, but the Yukatan Peninsula does not have any cases of flu. It's like cancelling flight to Melbourne because Perth has a cold.
> 
> In regard to the GM comment, I think it's factored in that they will go into bankruptsy and if it's announced and Obama stands up and says the Gov has a plan to save all the workers and transform the company etc, like he has for Crysler, then the uncertainty will be gone and people will be happier. Maybe a 3% jump for GM bankruptsy! LOL




AT least your living a adventure , hope the cancellation is best in the long run.
Still not sure about the GM part ,  getting back to whats what I have that gut feel its all going to zoom down  kinda sudden..


----------



## ivant

kennas said:


> Not happy, Peru is closing flight to and from Mexico where I was supposed to be going tomorrow. Maybe it's for the best, but the Yukatan Peninsula does not have any cases of flu. It's like cancelling flight to Melbourne because Perth has a cold.
> 
> In regard to the GM comment, I think it's factored in that they will go into bankruptsy and if it's announced and Obama stands up and says the Gov has a plan to save all the workers and transform the company etc, like he has for Crysler, then the uncertainty will be gone and people will be happier. Maybe a 3% jump for GM bankruptsy! LOL




Dang about the flight! Bad luck! I don't think GM filing would go so well. Chrysler isn't really going under. They will still merge with Fiat. this is just a way of getting rid of debt. they will go under. the US creditors will be paid out through the government, the chinese creditors no one cares about, and we all go back to producing SUV's. It's a great circle of life


----------



## Uncle Festivus

What a wonderful bit of last minute window dressing that was from the Goldman Sachs boy's - this will make an interesting candle? Maybe instead of 15 min of fame it's 100 days of smoke & mirrors & 'yes we can' speaches, without actually doing anything?

Irrational ignorance at it's finest? 

Expect the worst then it's all better-than-expected??


----------



## Aussiejeff

kennas said:


> *Crysler goes into bankruptsy*, Dow up 1%.
> 
> Might get a 2% jump if GM goes under.




More like _"Chrysler goes into hiding behind Michelle Obama's skirt"_. LOL

This is a "faux bankruptcy". Hubby Obama promises this will be an "efficient" & "quick" process that will see Chrysler arise like a Phoenix from the ashes. Well, it's a turkey, Mr President.

Like Pontius Pilate washing his hands of guilt, Chrysler are allowed to wash their hands of private debt and place that debt into the hands of struggling taxpayers.

What sort of champagne-popping Ponzi scheme system do you call that?!!

Actually, I think the whole Global Response by gummints is nothing more than [size=+1]The Biggest Legalised Public Ponzi Scheme Ever In The History Of The Earth[/size]. 

Fair dinkum, how many corrupt/failed/mis-managed large/medium/small companies that DESERVED to go under have been bailed out worldwide so far with Trillion$ of current and future taxpayer money so far?

Thousands?

Hundreds of thousands?

Millions?

Meh....


----------



## sam76

ha ha ha ha! 

looks pretty pathetic now...


----------



## Aussiejeff

sam76 said:


> ha ha ha ha!
> 
> looks pretty pathetic now...




Yep. Some new headlines might read...

_"Mass Cull Of Bears Shocks Markets!" _

or,

_"Big Bust Goes Boom!"_


----------



## Sean K

Bank of America only needs around $35b, stock up 10%.

Market doesn't seem to need good, or bad, news. It just needs news.

BOA at $12 up from $3 lows. 

What a trading opportunity.

And what an opportunity it's been back here. If you had have picked the oversoldness (is that a word?) of the coal sector and jumped in, you'd be a rich man. Was a severe and imminent buying opportunity.


----------



## doctorj

Keep an eye on the cable and GBP/EUR cross for an indicator of people's willingness to take risk.  It's been a pretty good indicator over the past few months.

By all accounts Q1 numbers coming out of a lot of banks are generally looking pretty darn good.  It'll come down to how much Mr Market cares about this vs the real economy...


----------



## metric

Insiders Selling At A Furious Pace

Joe Weisenthal|May. 5, 2009, 
11:19 AM|21
PrintTags: Investing, Stock Market 

Last week there was a report that corporate insiders were selling at a faster rate that at any time since October, 2007 -- right near the top of the market.

Well, the market's only raged higher since then and insider selling is only getting more intsense.

The Pragmatic Capitalist ( http://pragcap.com/more-on-insider-selling) has aggregated recent insider transactions. As you can see from his data collected (unfortunately the tables won't fit here, do click over), insider sales dwarf insider buys both in frequency and in volume. Insiders are selling their stocks in multi-million dollar blocks, while the few buys are much smaller.

If nothing else, it means that a lot of executives probably saw the abyss (a violent drop from the ranks of the wealthy to poor) and want to de-risk to ensure that no matter what happens to their stock, they've taken some skin out of the game.

http://www.businessinsider.com/insider-selling-at-a-furious-pace-2009-5


----------



## metric

sells of insiders...


----------



## Aussiejeff

metric said:


> sells of insiders...




This data also shows the number of shares in the list sold by those scaredy-cat "insiders" was generally a miniscule proportion of the total number of shares traded.

With the direction the markets are headed (stratospheric) obviously the far greater proportion of trades were buys!

IMO the "insiders" can sell till the cows come home - as long as significantly more buyers (ie: the big banks with limitless cash) are buying, the "selling insiders" are an insignificant factor.

aj


----------



## metric

> obviously the far greater proportion of trades were buys!



 really...?


----------



## matty2.0

The bears on this thread must be getting killed.


----------



## Uncle Festivus

matty2.0 said:


> The bears on this thread must be getting killed.



You are assuming that bears don't go long??


----------



## matty2.0

Uncle Festivus said:


> You are assuming that bears don't go long??




I'm assuming bears are bears ... not unless you're a bear with with horns ... who is in disguise.


----------



## Aussiejeff

matty2.0 said:


> I'm assuming bears are bears ... not unless you're a bear with with horns ... who is in disguise.




A horny bear?


----------



## metric

matty2.0 said:


> I'm assuming bears are bears ... not unless you're a bear with with horns ... who is in disguise.




are you assuming that people cant think? is it possible to be a bull in good times, and a bear when things are grim?

what on earth can you see, to give you the impression that things are improving?

it is quite possible that there will be a major correction down within the next ten days..and its overdue!


----------



## Real1ty

metric said:


> are you assuming that people cant think? is it possible to be a bull in good times, and a bear when things are grim?
> 
> what on earth can you see, to give you the impression that things are improving?
> 
> it is quite possible that there will be a major correction down within the next ten days..and its overdue!




It is also quite possible that we will continue to push higher or consolidate then push higher or consolidate then push lower etc etc etc.

There is plenty of information to give a *hint* of improvement but whether it is just a false dawn or not is the question.

I certainly don't know so i just trade the trend and when it turns, i will trade that one.


----------



## Uncle Festivus

It's pretty obvious what's going on ie the so called 'stress' test of US banks - it's all going to be rosy beer & skittles time again, so why not trade that until it's not, again? After all, with all the good news going around I'm starting to wonder what all the fuss was about the last few years? 

We are obviously going to come out of it in a far better shape - the next few generations are going to have to pay for the new debt, on top of the old debt, on top of the derivatives debt, on top of the housing debt, on top of the consumer debt?

But in the meantime, go out and get more into debt & spend


----------



## metric

dont say you werent warned...twice.



> Insider selling climbing on the DJIA•May 7, 2009







http://www.bloomberg.com/apps/news?pid=20601213&sid=au8cyqeJFifg&refer=home



> April 24 (Bloomberg) — Executives and insiders at U.S. companies are taking advantage of the steepest stock market gains since 1938 to unload shares at the fastest pace since the start of the bear market.




Gap Inc.’s founding family sold $45 million of shares in the largest U.S. clothing retailer this month, according to Securities and Exchange Commission filings compiled by Bloomberg. Daniel Warmenhoven, the chief executive officer at NetApp Inc., liquidated the most stock of the storage-computer maker in more than six years. Sales by the co-founders of Bed Bath & Beyond Inc. were the highest since at least 2001.

While the Standard & Poor’s 500 Index climbed 28 percent from a 12-year low on March 9, CEOs, directors and senior officers at U.S. companies sold $353 million of equities this month, or 8.3 times more than they bought, data compiled by Washington Service, a Bethesda, Maryland-based research firm, show. That’s a warning sign because insiders usually have more information about their companies’ prospects than anyone else, according to William Stone at PNC Financial Services Group Inc.



> “They should know more than outsiders would, so you could take it as a signal that there is something wrong if they’re selling,” said Stone, chief investment strategist at PNC’s wealth management unit, which oversees $110 billion in Philadelphia. “Whether it’s a sustainable rebound is still in question. I’d prefer they were buying.”




Insiders Sell

Insiders from New York Stock Exchange-listed companies sold $8.32 worth of stock for every dollar bought in the first three weeks of April, according to Washington Service, which analyzes stock transactions of corporate insiders for more than 500 institutional clients.



> That’s the fastest rate of selling since October 2007, when U.S. stocks peaked and the 17-month bear market that wiped out more than half the market value of U.S. companies began. The $42.5 million in insider purchases through April 20 would represent the smallest amount for a full month since July 1992, data going back more than 20 years show. That drop preceded a 2.4 percent slide in the S&P 500 in August 1992.




http://pragcap.com/sold-to-you

As we mentioned earlier in the week, insider buying has been non-existent.  Even more alarming is this: insider selling is at its highest level since the bear market began.  Are you buying?  If so, you might just be buying from the very CEO who runs that company.    Fill out those Form 4’s ladies and gents.  You might run out of suckers (ahem, buyers) before long!

http://pragcap.com/more-on-insider-selling

I recently wrote about reports that insider selling was at record highs and buying was practically non-existent.  The selling has become even more alarming in the last week and the buying has slowed to an absolute trickle. Below you’ll find the list of latest insider buys and sells.  The sells are staggering with the amounts ranging from $3MM to $63MM (and I was only able to copy one page).  The buys, on the other hand, are meager and range from $100K to $635K (the $800K purchase is a few months old and shouldn’t be in the data).   You’ll also notice that the screen came up with just 18 total purchases vs 170 total sales (the lowest of sell screen data were sales of over $400K which is not shown here due to the large size of the results).

Sell chart here : http://pragcap.com/wp-content/uploads/2009/05/sales.png 

Buy chart here : http://pragcap.com/wp-content/uploads/2009/05/buys.png


----------



## shag

i dont want to be rude metric but maybe u should change yr name to imperial(or stick). 
u'd hope tonights labour budget has been pruned well by its design being undertaken at a very dark period economically, and treasury scared the daylights out of them during this period. 
labour in nz certainly made it hard for bussinesses to prosper, taxes, but worse, red tape upon red tape.
anyone any ideas on what bombs could be exposed to plunge the market, now the banks appear to generally seem like they will muddle thru this incident.
surely nowadays things like stagflation and such u should be able to engineer yr way out of?


----------



## Aussiejeff

shag said:


> surely nowadays things like stagflation and such u should be able to engineer yr way out of?




No engineering degree necessary.

Just SPEND, SPEND, SPEND.

It is the path to true happiness and eternal wealth for us all.

Believe.....


----------



## explod

Aussiejeff said:


> No engineering degree necessary.
> 
> Just SPEND, SPEND, SPEND.
> 
> It is the path to true happiness and eternal wealth for us all.
> 
> Believe.....




Trouble is the engineering got further ingineered and engineered and engineered again and the engineer forgot where go is, so they hiding or getting locked up.

Hows that leg now Aussie old pal


----------



## Aussiejeff

explod said:


> Trouble is *the engineering got further ingineered and engineered and engineered again and the engineer forgot where go is*, so they hiding or getting locked up.
> 
> Hows that leg now Aussie old pal




Ha! Them gingerbeers are a roight ol' mob, aren't they?

Me re-engineared ankle bone is feeling much relieved, now oi've lost 18kg!

Chiz matey...


----------



## Green08

> Just SPEND, SPEND, SPEND.
> 
> It is the path to true happiness and eternal wealth for us all.




Knew the Buddhist were on to something.


----------



## MR.

metric said:


> insider selling is at its highest level since the bear market began.  Are you buying?  If so, you might just be buying from the very CEO who runs that company.    Fill out those Form 4’s ladies and gents.  You might run out of suckers (ahem, buyers) before long!




Now that's also funny. 

Wouldn't happen to WBC, bought some last week to play with. Directors appeared all ok.....

%&*$% $#%@&  what the? When did she sell..... not "last week" classic..


----------



## Sean K

The market will be back to the same level that this thread started shortly.


----------



## MR.

Nothin suprises me anymore .......... GRR  rrrrrrrrrr......


----------



## Gundini

kennas said:


> The market will be back to the same level that this thread started shortly.




Around 6300....

Surely you jest Kennas...


----------



## MS+Tradesim

Nouriel Roubini thinks we will avoid a depression, or at least that the odds of it are much lower than previously.



> Roubini says he doesn’t see much in the way of “glimmers of hope” other economists have noted. Unemployment, capital investment, and exports are all worsening, and while there are a few signs of stability in housing, it’s not much. Overall, he figures, the odds of a prolonged “L-shaped” depression have fallen to less than 20%, from about 30%, thanks largely to the efforts of this administration and, to some extent, the last. He expects global contraction of 2% this year, and expansion of about 0.5% next year, “so small it’s going to feel like a recession still.”
> 
> Still, he adds: “I don’t worry as much as six months ago about a near depression.” From the man who has been called Dr. Doom – or, as he prefers, Dr. Realistic – that’s practically cheery.



http://www.rgemonitor.com/roubini-monitor/256661/a_conversation_with_nouriel_roubini


An interesting interview. He thinks the recession will end later in the year and a very slow recovery starting from next year. 
http://www.cnbc.com/id/15840232?video=1118149823&play=1


----------



## MrBurns

See what Chris Leithner says.

From his newsletter - 



> 1. Has the All Ordinaries Index “hit bottom”?
> 2. What is its “fair value”?
> 
> I believe neither that it’s hit bottom nor that it’s close to a bottom. The course of its descent to – and the level of – its eventual nadir depend partly upon the extent to which the AOI’s earnings fall; and that, in turn, hinges partly upon the severity of the recession. Earnings peaked in October 2008 at $489, and by March 2009 had shrunk to $365. If they revert to their long-term trend, then ca. 40% of this distance has been traversed. Of course, just as observations “overshoot” above a trend, they can also “undershoot” below it.
> 
> Given how we came to this pass, where Australia now stands, what the government is doing to us and what may lie before us, it’s difficult to conclude that stocks are cheap and easy to believe that they remain dear. True, the AOI is less overvalued now than it was, but “less overvalued” is not the same as “undervalued.”
> 
> Accordingly, Leithner & Co.’s plans include the possibility that an environment marked by recession and stagflation (like the one that plagued the early 1970s to the mid-1980s) prevails during the next several years.
> 
> *In such a climate, the fair value of the All Ordinaries Index would be ca. 1,700-2,300. That implies a fall of ca. 70% from the Great Bubble’s maximum and the harshest bear market in Australian history. Furthermore, taking 2,000 as the AOI’s “bottom” and assuming a long-run growth rate of 7.5% per annum, ca. 17.5 years will pass before the Index returns to its Bubble maximum of ca. 6,850. If so, this will be the most fraught recovery in Australian history*




Interview here - 

http://www.youtube.com/watch?v=wTFLM2KdPD4


----------



## MS+Tradesim

Missed the editing deadline on my last post but re: the Roubini interview I linked, he responds at the end to a throwaway question that Asia is not as weak as Europe. I'm looking to Asia to provide better clues to recovery than the majority who seem to be watching USA.

I'm thinking that China has seen how fragile its growth is and how systemically linked it currently is to US consumers and US dollars. It must occur to them that initiating internal growth directed policies is the only way to lessen their sensitivity to American ups and downs. It's clear that they do not want their businesses to be held to ransom by external resources companies. Their obvious focus on taking strategic stakes in miners shows their intent to manoeuvre beyond the current monopoly enjoyed by Rio, BHP and Vale. 

I think their infrastructure focused stimulus spending will become internally reflexive.


----------



## MR.

This from Inside Business this morning. "CHINA"

http://www.abc.net.au/insidebusiness/content/2009/s2572780.htm


----------



## MS+Tradesim

That's an interesting read MR. In this interview at about 12:30 onwards Roubini remarks similarly.

http://www.bloomberg.com/avp/avp.ht...//media2.bloomberg.com/cache/vCUErdtS6D0w.asf

However, where I differ is in the psychology of it. Right or wrong, I think their expanding middle class will become more consumption oriented, but probably not to the extent of Americans. Anecdotally, my sister-in-law is Chinese and her family, immediate and extended, enjoy their shopping in Shanghai. I don't think it's going to take 10 or 20 years.

Here's another article along similar lines to the one you posted:
http://news.xinhuanet.com/english/2009-05/03/content_11305373.htm

Also, very intriguingly I see Soros is thinking along the same lines as myself. Not surprising though, given it's his theory underlining my own thinking about the big picture. Medium to long term, this is the direction I'll be making bets.
http://news.smh.com.au/breaking-news-business/worst-of-economic-crisis-over-soros-20090511-b0i3.html


----------



## Uncle Festivus

Just postering the possible market correction part 2 coming up? An amazing sequence of Doji and similar candles over the last 10 trading days on stuff all volume helps make the not too subtle market massaging by the likes of JP Morgan & Goldman Sachs oh so simple, all with the apparent blessing of the regulatory authorities ie the last half hour of trading is just getting too obvious for the long trade? Just send me the cheque and be done with it 

And to think, only 15 more sleeps or so and then we finally get the much hoped/hyped second half recovery! It's almost unbearable having to wait for it to finally get here after all those annoying fundamentals keep getting in the way 

Got to go and stock up on some more Glad Gamer supplies like red cordial, some caffein and some sort of dillusionary supplements to keep the dream alive!


----------



## MRC & Co

Yes, as of Monday, I am turning bearish again, this rally looks once again, ripe for a  pullback.  I thought the better than expected industrial production and retail sales from China may be enough to keep the hopes alive, but there was no follow through, a very negative sign.

Though, I don't think it will be correction part 2, doubt we will test the lows, but I will be looking for a 50% retracement or thereabouts.


----------



## Muschu

If we are ripe for a pullback, and I would think this rally can't go on at it's current pace for too much longer, then what are the thoughts on 
- how low the All Ords and DOW will go? and
- whether such a pullback will be sustained?

Learner Rick who reads informed posters with interest.


----------



## MRC & Co

Hey Rick,

I would be looking for a 50% pullback from the high of this rally or perhaps slightly more, say around 7500 on the DOW chart above (given it would be the first pullback and subject to more panic selling).  The only thing that worries me with this rally is the liquidity being pumped in and the cash still on the sidelines.  A dip could potentially be bought heavily, so would have to watch volumes coming in and how price reacts.  

Though I am not one for making longer-term predictions on exact price movements, just got to see how sentiment plays out and how much hope any new figures bring (engineered or not).

Firstly I want to see a pullback out of this range and below a false break level, perhaps below the 917 area on the S&P to confirm a decent retracement IMO.  

I have shorts on the S&P at 950 FWIW.


----------



## vincent191

Is the cup half full or is it half empty? There will be a correction soon but is that an opportunity to buy or is it time to panic?

Personally, I have taken some profit especially in the resources sector, it has run hard and fast and in my opinion will have to stop to take a breather soon. I am kicking myself that perhaps I have sold too soon but I keep telling myself not to be silly and try to pick the very top. Somewhere near the top is good enough.

Again when the correction comes the challenge is to pick the bottom and buy back in. The next 3 months will be very interesting. Personally, I think the next 2 years will see the mother of all bull markets. Whether it will be V shape, U shape or W shape remains to be seen. 

I think it will be W shape so hopefully I can catch the troughs and the peaks. It is all about timing and luck and a sprinkle of blessings from above.


----------



## roysolder

hi guys,
         how do you think a pullback will effect gold prices and shares in mining companies.


----------



## MRC & Co

Vincent, I don't think we can see a mother of all bull markets for quite some time personally.  Any drive out of China for a recovery, is BOUND to see asset inflation which could plunge the US into staglfation.  Add in the US fundamental structure has to change (increase in domestic savings and cut in consumption once this QE process comes to an end), which will keep growth at very low levels (could see a similar fate to Japan over the last 20-30 years).  So the global economy is in a very tough place over the next few years.

Roy, that is a very good question.  Correlations are all over the shop at the moment, but I imagine a pullback in equities will hit mining shares, regardless of if commodites continue to rise. 

I'm still bullish gold, but if we get a short-term bounce of both US Treasuries and USD, gold may see another pullback.


----------



## Muschu

MRC & Co said:


> Hey Rick,
> 
> I would be looking for a 50% pullback from the high of this rally or perhaps slightly more, say around 7500 on the DOW chart above (given it would be the first pullback and subject to more panic selling).  The only thing that worries me with this rally is the liquidity being pumped in and the cash still on the sidelines.  A dip could potentially be bought heavily, so would have to watch volumes coming in and how price reacts.
> 
> Though I am not one for making longer-term predictions on exact price movements, just got to see how sentiment plays out and how much hope any new figures bring (engineered or not).
> 
> Firstly I want to see a pullback out of this range and below a false break level, perhaps below the 917 area on the S&P to confirm a decent retracement IMO.
> 
> I have shorts on the S&P at 950 FWIW.




Now MRC

I've decided that you guys with the expertise set out to make life difficult for us L-platers.  Especially when you don't all agree with one another....:  

So an XAO of 3800 before even 4200?  Or 3600 before 4400?

Time to phone a friend and ask if it's time to leave the rally and run to the bank account.... 

Wasn't retirement intended to be easier than this ---


----------



## So_Cynical

roysolder said:


> hi guys,
> how do you think a pullback will effect gold prices and shares in mining companies.




Roy u know very well that the October 08 pull back saw all the mining stocks get 
smashed...OGC under 20c per share etc, of course the commodity prices also 
collapsed and had there low in and around October as well.

Its a little different at the moment.


----------



## seasprite

http://www.cnbc.com/id/15840232?video=1150850552&play=1 , depends how this pans out this week


----------



## roysolder

thanks MRC and so_cynical for your thoughts. just a waiting game and in for the long term


----------



## Glen48

Hope the bail outs kick in soon:
http://www.voxeu.org/index.php?q=node/3421&ref=patrick.net


----------



## rainylake

After the bailouts have their affect we still have to pay for them.  Add to the cost of the bailouts all the other government gone wild spending on health care, cap and trade etc.... The US is so far in debt that it has to reduce our standard of living for many many years to come.  Our grandchildren will still be paying for this mess.


----------



## Uncle Festivus

And you thought _that_ was a correction! We have the left shoulder, a head and......?


----------



## Garpal Gumnut

Uncle Festivus said:


> And you thought _that_ was a correction! We have the left shoulder, a head and......?




Agree totally uncle. 

The funnymentalsits are in a Rudd/Obama made dead cat.

See my comments on the xao thread.

2400 is my prediction on ew analysis for the xao.

h and s is not surprising.

Thanks for the chart.

gg


----------



## explod

Glen48 said:


> Hope the bail outs kick in soon:
> http://www.voxeu.org/index.php?q=node/3421&ref=patrick.net




Looks like the're kicking in everywhere.   Have a scan of Bloomberge every week or so, and all the lead articles say they are "out of the woods", the "end is in sight"   "home sales *probably* rose"

Yee haaa, asx over 4000 this week.   Time to party again.


----------



## knocker

Uncle Festivus said:


> And you thought _that_ was a correction! We have the left shoulder, a head and......?




Nice looking graph. So what! does not mean one iota. Onward and upward comrades !!!!!!!!!!!!!!!!:


----------



## Aussiejeff

knocker said:


> Nice looking graph. So what! does not mean one iota. Onward and upward comrades !!!!!!!!!!!!!!!!:




Imminent and severe bubble of laughing gas forming....

ASX 5,000 by end of trade next week???


----------



## Uncle Festivus

knocker said:


> Nice looking graph. So what! does not mean one iota. Onward and upward comrades !!!!!!!!!!!!!!!!:




Yes, I'm starting to think the same thing. It doesn't matter by what metric you try to gauge things in, it appears there is one last capitalistic splurge left in the system funded by the biggest debt binge in history. If the money shufflers won't lend it out to the real economy then why not throw it at financial intruments of leveraged destruction?

I want a peice of the Goldman pie....


----------



## Sean K

Uncle Festivus said:


> Yes, I'm starting to think the same thing. It doesn't matter by what metric you try to gauge things in, it appears there is one last capitalistic splurge left in the system funded by the biggest debt binge in history.



Anyway out of it, other than death and destruction?


----------



## Uncle Festivus

kennas said:


> Anyway out of it, other than death and destruction?




Dunno, I've given up ie last week in the UK unemployment figures were the worst for (insert a long time here) and the market still surged. There ain't gonna be a sustainable recovery without job creation, I would have thought?? 

They can shuffle the money around and skim a bit off and then distribute it amongst the chosen few, but in the end it's all not real - nothing is being made or exported & imported - it's all bubbling entirely with borrowed stimulis money, or in the case of China, using up their foreign reserves creating their own mega bubbles.


----------



## MrBurns

So what will bring it down ?

There's still a lot of cash out there that has to go somewhere.


----------



## skyQuake

Uncle Festivus said:


> Dunno, I've given up ie last week in the UK unemployment figures were the worst for (insert a long time here) and the market still surged. There ain't gonna be a sustainable recovery without job creation, I would have thought??
> 
> They can shuffle the money around and skim a bit off and then distribute it amongst the chosen few, but in the end it's all not real - nothing is being made or exported & imported - it's all bubbling entirely with borrowed stimulis money, or in the case of China, using up their foreign reserves creating their own mega bubbles.




Agree with the China part. Their most recent industrial stimulus package has NOT been spent on industrials, but rather property, and to a lesser extent, the sharemarket. No-one wants to touch industry atm, so money is flowing into capital mkts...


----------



## Sean K

Uncle Festivus said:


> Dunno, I've given up ie last week in the UK unemployment figures were the worst for (insert a long time here) and the market still surged. There ain't gonna be a sustainable recovery without job creation, I would have thought??
> 
> They can shuffle the money around and skim a bit off and then distribute it amongst the chosen few, but in the end it's all not real - nothing is being made or exported & imported - it's all bubbling entirely with borrowed stimulis money, or in the case of China, using up their foreign reserves creating their own mega bubbles.



From my understanding, this is saving the day, but creating the mega bubble(s), as you say. 

The unemployment numbers are probably factored in. Maybe the March lows factored in 15% world unemployment?

I keep on coming back to the fact that the economy and the stock market are not in synch.

The money being printed now may well cause a multi year boom until it all catches up on us. 

Or, other international events may intervene in the mean time to alter all social and economic factors. 

Makes it hard to be a long term buy and holder, that's for sure.


----------



## Uncle Festivus

There is still talk of second stimulis packages globally, yet the bill for the last lot is around the $6 Trillion mark! Australian companies have raised something like $88 Billion in new capital that won't be used to buy existing shares ie it's just to keep the current debt manageable?

Multiple these equity raisings by a global factor and you get a lot of money not actually being put to constructive use, other than shoring up existing balance sheets? 

Combined with the GS algo trading playing silly buggers with volumes and we get a suedo bull market? All looks good on paper, like China's 8% GDP growth, but global trade is flatlining now after plunges of up to 50% or more.

Japan is simply a basket case! The worlds second biggest economy just isn't in a position to start buying Chinese good's whilever they have to start alowing for a problem that's just now starting to cause problems for all developed economies - the aging population.

The US is facing unfunded liabilities for pensions and health that they just cant pay for out of tax revenues.

Consumerist capitalism has hit the debt glass ceiling?


----------



## Sean K

Uncle Festivus said:


> There is still talk of second stimulis packages globally, yet the bill for the last lot is around the $6 Trillion mark! Australian companies have raised something like $88 Billion in new capital that won't be used to buy existing shares ie it's just to keep the current debt manageable?



From what I've seen a lot of the raisings have gone into paying off debt or lowering gearing and many companies are now sitting on loads of cash after raisings over the past year. Not sure where the money has come from, but it has happened. 

It will be interesting to see how P/E's change after this reporting season.

Some big companies were on 10% plus yields and 5% or lower P/E's not long ago. That will surely change once the numbers come out. For example, BHP P/E was about 10 not long ago. I bet that will go to 20 soonish.


----------



## Awesomandy

MrBurns said:


> So what will bring it down ?
> 
> There's still a lot of cash out there that has to go somewhere.




I think that as long as there is excess cash and greed in the system, the markets will find it difficult to move down. At the moment, governments around the world are printing cash like there's no tomorrow, and there just isn't enough fear to cause any severe jolts to the system - a lot of bad news have been factored in already (or at least that what most people tend to say). In a very simple sense, a drop in any market can only be caused by the lack of bidders/buyers at or around the last traded price.


----------



## Uncle Festivus

Awesomandy said:


> Ia lot of bad news have been factored in already (or at least that what most people tend to say).




You could add that a lot of good news has also been factored in, based on a V shaped recovery to materialise within the next 6 months. I guess if enough people keep saying it then it might happen, but the very same people got the call completely wrong going into this, so if records are anything to go by then 'investing' now based on the assumptons of these people is risky. But 'traders' have never had it so good.

You'd have to weigh in the 'burnt' investor sentiment too - how may of the mum & dad investors are willing to put what's left of their retirement funds into the share market again? The market is still at about the same level it was around May 05, ie 4 years of gains lost? I think it is mostly large investors & funds just churning the market, but have no way of knowing this?

Another interesting China fact - their money supply has been growing at the rate of 25% per month for the last few months - a great choice for the Chinese - invest it in a new bubble market like shares or RE or have your money inflated away?


----------



## nomore4s

Uncle Festivus said:


> You could add that a lot of good news has also been factored in, based on a V shaped recovery to materialise within the next 6 months.




Interesting comment. It is one I'm starting to side with but I think this rally has some legs in it yet.


----------



## gfresh

kennas said:


> Some big companies were on 10% plus yields and 5% or lower P/E's not long ago. That will surely change once the numbers come out. For example, BHP P/E was about 10 not long ago. I bet that will go to 20 soonish.




I am not so sure about pricing for the miners either.. share prices are still looking well past current prices for iron ore, metallurgical coal, copper, oil, and other commodities... however the export price index still looks pretty ****house, which indicates these prices are still likely to go down, not up. 

http://www.abs.gov.au/AUSSTATS/abs@...2B39AF3FD0099F0DCA256A8E0083907A?OpenDocument

Many of the commodity charts look good against the $USD, whereas in $AUD aren't exciting at all.

A lot of the so called "demand" is also at the moment China busy playing games and stockpiling many minerals, so it is hard to tell if this demand is 'real' or is simply temporary that could evaporate at any time. 




> EXPORT PRICE INDEX
> 
> * *The Export Price Index decreased by 20.6% in the June quarter 2009, the largest quarterly decrease since the current series began in September quarter 1974. The decrease was driven mainly by falls in prices received for coal, coke and briquettes (-36.8%) and metalliferous ores and metal scrap (-23.5%), as well as the appreciation of the Australian dollar against all major trading currencies.* These falls were partly offset by rises in prices received for petroleum, petroleum products and related materials (+12.9%). Through the year to June quarter 2009, the Export Price Index decreased by 0.2%.


----------



## >Apocalypto<

with the current patterns in the FX markets It looks as if this rally has further to go.


----------



## GumbyLearner

Uncle Festivus said:


> Another interesting China fact - their money supply has been growing at the rate of 25% per month for the last few months - a great choice for the Chinese - invest it in a new bubble market like shares or RE or have your money inflated away?




Just be careful what you reveal Unc.

You might get 'Sterned' or 'HUed'

Anyway great wake-up material! :


----------



## Uncle Festivus

gfresh said:


> I am not so sure about pricing for the miners either.. share prices are still looking well past current prices for iron ore, metallurgical coal, copper, oil, and other commodities... however the export price index still looks pretty ****house, which indicates these prices are still likely to go down, not up.
> 
> http://www.abs.gov.au/AUSSTATS/abs@...2B39AF3FD0099F0DCA256A8E0083907A?OpenDocument
> 
> Many of the commodity charts look good against the $USD, whereas in $AUD aren't exciting at all.
> 
> A lot of the so called "demand" is also at the moment China busy playing games and stockpiling many minerals, so it is hard to tell if this demand is 'real' or is simply temporary that could evaporate at any time.




Hey, the money tsunami has to find a home somewhere, even though it's gonna cause a glut?



GumbyLearner said:


> Just be careful what you reveal Unc.
> 
> You might get 'Sterned' or 'HUed'
> 
> Anyway great wake-up material! :




Just between you and me then, China is about to have a problem with inflation 


> The broad M2 measure of money supply grew at a record pace of 28.5 percent in June, blowing past forecasts of a 26 percent rise and up from a 25.7 percent increase in May.
> Yuan loans outstanding were 34.4 percent higher than a year earlier, also *the highest on record*, up from May's reading of 30.6 percent.





> China’s government has failed to sell bonds in three separate auctions this month as the central bank tightened monetary policy *to avoid the return of inflation*. The People’s Bank of China has allowed interest rates in bill sales to jump to the highest this year after a government report showed M2, the broadest measure of money supply, *rose by a record 28.5 percent in June*.



Money on tap!



> Annual growth in China's broad M2 measure of money supply surged in June on the back of breakneck bank lending ordered by Beijing to pump up the world's third-largest economy.
> 
> And in a sign that money is flowing back into China in anticipation that those stimulus efforts will succeed, the central bank's foreign exchange reserves leapt by $177.9 billion in the second quarter to $2.13 trillion.


----------



## MRC & Co

>Apocalypto< said:


> with the current patterns in the FX markets It looks as if this rally has further to go.




Yes, though this talk of a second stimulus in the US (completely against what Geithner has been recently stating on his globe trotter tour), could finally be the straw the breaks the camels back.  

I wouldn't be surprised to see a few correlation breakdowns over the coming few wks.


----------



## imagineer

Hi Guys new poster enjoyed the discussions .

For my Pennys worth. China is not going to be the only inflation problem.
The Irish are stuffed, closing schools and 7000 teachers out of work.
50 - 80 k homes on the market. and ****ty weather ;-)

They have guards at popular beauty spots to stop suicides of the cliffs.

I reckon thats the future for countless millions more peolple zonally throughout the world. My money is in silver and gold and I am happy cause I know its worth something...... hopefully.

China is buying resouces and metals, Middle East is sitting on the Oil ,for, whats left.

And America and UK police have certainly been flexing their Tazers....and Australia 

Smith and Wesson lead the way and Americans look like "waking up a slave in the country their ancestors conquered "" One of the presidents,   ( not sure which but had brains so was probably a few decades ago....

Sorry for the rant, but look forward to reading more of your views.

Kindest Regards
Neil


----------



## explod

imagineer said:


> Hi Guys new poster enjoyed the discussions .
> 
> For my Pennys worth. China is not going to be the only inflation problem.
> The Irish are stuffed, closing schools and 7000 teachers out of work.
> 50 - 80 k homes on the market. and ****ty weather ;-)
> 
> They have guards at popular beauty spots to stop suicides of the cliffs.
> 
> I reckon thats the future for countless millions more peolple zonally throughout the world. My money is in silver and gold and I am happy cause I know its worth something...... hopefully.
> 
> China is buying resouces and metals, Middle East is sitting on the Oil ,for, whats left.
> 
> And America and UK police have certainly been flexing their Tazers....and Australia
> 
> Smith and Wesson lead the way and Americans look like "waking up a slave in the country their ancestors conquered "" One of the presidents,   ( not sure which but had brains so was probably a few decades ago....
> 
> Sorry for the rant, but look forward to reading more of your views.
> 
> Kindest Regards
> Neil




Welcome imagineer,

you have a good hold on it.   The money ponzi is just about falling over and I am also glad that I have physical gold and silver.   

Many here do well trading the markets, long and short, but the gold thingo when it goes (the currencies will go the other way) will give no warning and we will be ok


----------



## moXJO

I'm hearing US "commercial mortgage", “alt-A” and “prime” mortgages are hitting record default levels. Will it be big enough to start the next leg down?
Or is the current spin enough to maintain more sideways action?


----------



## MrBurns

From Crikey - 




> The next big problem for US banks
> by Glenn Dyer
> 
> Judging by their latest results, the next big problem for major US banks appears to be their interests in the commercial property sector: all $US6.7 trillion of it. This is while their problems with home mortgages, foreclosures and bad corporate loans show no sign of improving.
> 
> Some of America’s major banks, including Morgan Stanley, Well Fargo, Key Corp, Bank of New York Mellon, Regions Bank and US Bancorp have sent unwanted messages to American investors, markets and regulators that the commercial property sector is tanking quickly.
> 
> Money centre giants Morgan Stanley (which lost $US159 million in the second quarter overall) and Well Fargo (a $US3.17 billion profit) confirmed the mounting pressures on the US commercial property market when they reported large losses and surging bad loans in their second quarter reports.
> 
> US banks have already lost tens of billions of dollars in home mortgages and corporate loans (and been brought to their knees and saved by the US Government). Now poor quarterly figures for two of the largest lenders and investors in office, retail and industrial property across the US suggest that commercial real estate will be the next front in the financial crisis after the collapse of the housing market. And results from other banks support the notion of a commercial property implosion.
> 
> Shopping centres, office blocks and commercial industrial property are selling for huge discounts. General Growth, American’s second largest shopping centre operator is in bankruptcy and the John Hancock Building in Boston was earlier this year sold in a bankruptcy auction for $US660 million, half its purchase price three years ago.
> 
> Late last week, in a move little noticed by the markets, Macquarie CountryWide trust sold 75%% of its US holding of 86 retail properties for $US1.3 billion, or around 24% less than it had paid for them in 2005. Its exposure to the US has been cut from 70% to around 25% of its assets.
> 
> In recent events:
> 
> •Morgan Stanley reported a $US700 million cut on its $US17 billion commercial property portfolio in the second quarter.
> •Well Fargo saw its non-performing loans in commercial real estate soar 69%, from $US4.5 bullion to $US7.6 billion in the second quarter.
> •Regions Bank, a big regional institution based in the Alabama, saw a $US1.7 billion jump in new problem loans and a $US977 million, or 60% jump in non-performing loans in the second quarter.
> •Keycorp reported rising commercial real estate loan losses: it set aside 31% more in provisions for bad loans.
> •US Bancorp, based in Minneapolis, said profit fell 76% to $US221 million and its set aside and charge-off for bad loans more than doubled in the quarter.
> •SunTrust, based in Atlanta, had a second quarter loss of $US164.4 million, compared with a year-earlier profit of $US530 million and non- performing loans were $US5.5 billion of loans, or a worrying 4.48% of all loans.
> Earlier this month the Federal Reserve’s Associate Director of Banking Supervision and Regulation Jon Greenlee said, “…at the end of the first quarter [of 2009], about seven percent of commercial real estate loans on banks’ books were considered delinquent. This was almost double from the level a year earlier.”
> 
> Greenlee said there is about $US3.5 trillion of outstanding debt associated with commercial real estate, and banks had about $US1.8 trillion of that in their loan books. That means around $US126 billion of delinquent commercial mortgages on the banks’ books, so far. He said an additional $US900 billion represented collateral for securitised home loans through what’s called Collaterised Mortgage Backed Securities.
> 
> “The pace of property sales has slowed dramatically since peaking in 2007, from quarterly sales of roughly $195 billion to about $20 billion in the first quarter of 2009,” he said.
> 
> And on Tuesday, the softening commercial property market was a big focus of the questioning of Fed Chairman, Ben Bernanke in his Capitol Hill appearance.
> 
> Bernanke warned that a continued deterioration in commercial property, where prices have fallen by about 35% since the market’s peak and defaults have been rising sharply, would present a “difficult” challenge for the economy. He added that one of the main problems was that the market for securities backed by commercial mortgages had “completely shut down”, as it has for home mortgages.


----------



## Real1ty

moXJO said:


> I'm hearing US "commercial mortgage", “alt-A” and “prime” mortgages are hitting record default levels. Will it be big enough to start the next leg down?
> Or is the current spin enough to maintain *more sideways action*?




We may also keep going higher. Many on this thread, and others, talk as if the next leg down is a guarantee.

Many have been doing so for months.

Where is this sideways action you speak of?


----------



## moXJO

Real1ty said:


> We may also keep going higher. Many on this thread, and others, talk as if the next leg down is a guarantee.
> 
> Many have been doing so for months.
> 
> Where is this sideways action you speak of?




Higher on what though? The world was a different place pre crash and at some point all this new debt has to affect the economy negatively. And there is still plenty of bad news.

Drop two horizontal lines on a daily djia chart at roughly 8080 and 9180. Apart from the low (and subsequently V reversal to waterline) I would say at this time the market is still pretty indecisive. The coming weeks might change that if this rally takes a hold.


----------



## Real1ty

moXJO said:


> Higher on what though? The world was a different place pre crash and at some point all this new debt has to affect the economy negatively. And there is still plenty of bad news.
> 
> Drop two horizontal lines on a daily djia chart at roughly 8080 and 9180. Apart from the low (and subsequently V reversal to waterline) I would say at this time the market is still pretty indecisive. The coming weeks might change that if this rally takes a hold.




Higher on improving sentiment and economic statistics.

"End of the world" prices were priced in on the legs down, reality hits, prices rally based on oversold conditions and expected upcoming results ( Earnings and Economic ), results exceed expectations

That is what we are higher on.

It makes no difference if there is bad news, as long as the bad news isn't as bad as what it is expected to be. If it continues to improve on expectations, we will continue to rally.

However if it starts to not meet expectations on a regular basis, we head lower.


----------



## Uncle Festivus

Real1ty said:


> Higher on improving sentiment and economic statistics.
> 
> "End of the world" prices were priced in on the legs down, reality hits, prices rally based on oversold conditions and expected upcoming results ( Earnings and Economic ), results exceed expectations
> 
> That is what we are higher on.
> 
> It makes no difference if there is bad news, as long as the bad news isn't as bad as what it is expected to be. If it continues to improve on expectations, we will continue to rally.
> 
> However if it starts to not meet expectations on a regular basis, we head lower.




Yes, that's exactly the point - a bunch of 'analysts' estimates driving the market because, on average, they low balled the earnings estimates, and now, as Gomer Pile would say, 'surprise, surprise' all can now say those familiar words 'better-than-expected'.

It still belies the fact that earnings are simply abysmal, on average down between 30-35%. So, when do they start pricing in reality of how to pay for stimulis debt and the still growing unemployed?

Check out the earnings figures, for those that actually bother to look past the fluff?


----------



## Real1ty

Uncle Festivus said:


> Yes, that's exactly the point - a bunch of 'analysts' estimates driving the market because, on average, they low balled the earnings estimates, and now, as Gomer Pile would say, 'surprise, surprise' all can now say those familiar words 'better-than-expected'.
> 
> It still belies the fact that earnings are simply abysmal, on average down between 30-35%. So, when do they start pricing in reality of how to pay for stimulis debt and the still growing unemployed?
> 
> Check out the earnings figures, for those that actually bother to look past the fluff?




I agree with that and furthermore if you look deeper into the earnings you will see that very few were achieved on increased revenue or margins but from cost cutting.

This is not healthy and does cast looming black clouds on the horizon imo but it is still early in this recovery, if that is what it is, so there is room for this to improve and some economic indicators are pointing to this happening.

Having said that, it still won't matter all that much. Many will see my views as too basic but the only things that matter on the stock market are the expectations of the majority.

Meet or beat expectations, we go up, miss, we go down.


----------



## Whiskers

I've only skimmed over the last couple of pages, so don't know if this has been mentioned... in the short to medium term the US treasury now has a sizeable portfolio of 'assets' that they can float off again when the markets recover some... to bolster their coffers a bit. It would be interesting to see some sums on what those strategic stakes are worth and could be worth at nominal market levels. If Aus can sell off a chunk of it's stake in Telstra along with tight fiscal policy and make enough to wipe out a substantial amount of debt, then what might the US do in the future.

It's quite significant to me that with the current administration working harder to build consensus and cooperation around the world on a wide range of issues as a high priority, that they will engineer a recovery of sorts, maybe for some years while they try to get their balance sheet and cash flows in better shape. 

At the end of the day I think Obama will maintain the confidence of the people and better international cooperation than Bush did and lead to more optimism to trend the market up a bit for some time.


----------



## Uncle Festivus

Welcome back Whiskers, from wherever you have been 

--------------

And now for something completely different - reality 

Hey dude, where's my earnings????


----------



## skyQuake

Uncle Festivus said:


> Welcome back Whiskers, from wherever you have been
> 
> --------------
> 
> And now for something completely different - reality
> 
> Hey dude, where's my earnings????




Hi uncle, where does Casey Research get that data from? Personally i would take it with a grain of salt as I do not believe earnings have dropped by such a magnitude. 
McDonalds selling big macs for 20c? Nope.
Exxon mobil selling oil for $5/Barrel? Nope.
Windows 7 freeware? Nope.
Wollies giving out cheap veggies? NEVER.
etc etc.


----------



## Silus

I agree analysts bump the market. People should stay closer to what's really going on, sticking to the numbers. But by looking at the numbers you can still find great stocks out there, so no reason to panic..


----------



## Uncle Festivus

skyQuake said:


> Hi uncle, where does Casey Research get that data from? Personally i would take it with a grain of salt as I do not believe earnings have dropped by such a magnitude.
> McDonalds selling big macs for 20c? Nope.
> Exxon mobil selling oil for $5/Barrel? Nope.
> Windows 7 freeware? Nope.
> Wollies giving out cheap veggies? NEVER.
> etc etc.




This is their explanation - 

"Today's chart illustrates how earnings are expected (38% of S&P 500 companies have reported for Q2 2009) to have declined over 98% since peaking in Q3 2007, making this by far the largest decline on record (the data goes back to 1936). In fact, real earnings have dropped to a record low and if current estimates hold, Q3 2009 will see the first 12-month period during which S&P 500 earnings are negative.”

I guess the main point being 'inflation adjusted'? Actually, the prices in your examples above, if adjusted for inflation, would be a lot lower  - that's the way inflation works? Fruit & veges are at least actually cheaper than last year apparently?


----------



## Whiskers

Uncle Festivus said:


> Welcome back Whiskers, from wherever you have been




Thanks Uncle... How you been going?

Well for me it's a long story, but basically I had a retinal tear and some urgent laser treatment. Since I only have one eye it was some anxious moments. But all's well now and while I was travelling back and forth to Bris  for treatment I started collecting a few (second hand) things for myself and got a bit sidetracked into trading/refurbishing/recycling second hand timber furniture and tools.

I found there were a lot of fire-sale goods around Bris and the Gold Coast due to the economy. A lot of people were saying they were clearing out surplus items and trading down their premises etc. I found a unique niche picking up these generally quality items and taking them to other areas where there was good competition for them.

Had been making 50%, 100% even an odd 200% return in a few days to a couple of weeks much easier than I was in shares and forex. 

I reckon the larger economy is a bit the same way. Just a matter of time until people particularly the yanks re-organise their 'households' to be more comfortable with their circumstances amidst the confidence of the Obama administration and start spending a bit again.

With the way commodity prices have moved in the last few days it may be that a growing number of buyers have cleaned out their cupboards so to speak and have been on the prowl in competition for a shrinking number of fire-sale sellers.

Btw, I'm not overly bullish on the US, but think this is the bit of a recovery they will have before they start to fade away again in terms of being world financial superpowers... that 'classic' comment of mine from some time ago.


----------



## gfresh

Worth a read.. not so much for what is said but the implications. China basically wants to slow down their economy, but will they do it correctly without crushing some of the optimism? 70% reduction of lending is a very large amount. This has some large consequences for our exporters I believe in the 2nd half of this year (that we are now in). Might take a while for the market to catch on, but it will help stifle some expectations I think. 

http://www.bloomberg.com/apps/news?pid=20601087&sid=a42KFUylZPog



> China Construction Bank Corp. President Zhang Jianguo said yesterday that *the nation’s second-largest bank will cut new lending by about 70 percent in the second half* to avert a surge in bad debt. Construction Bank plans to extend about 200 billion yuan ($29 billion) of loans, down from 708.5 billion yuan in the preceding six months. The company’s new lending through June 30 was 42 percent more than for all of 2008.
> 
> “We noticed that some loans didn’t go into the real economy,” Zhang, 54, said in an interview at the bank’s headquarters in Beijing. “I feel that some industries are expanding too rapidly. For example, housing prices are rising too fast, and housing sales are growing too fast.”




Latest chart shows the Chinese market forming a broadening top and then beginning a downtrend in the last 30 days. And as can be obvious looking at the chart for the last few years, it either goes pretty much straight up for months and months, or straight down.. and we may be embarking on the latter: 

http://www.google.com/finance?chdnp...ddm=5543&chls=IntervalBasedLine&q=SHA:000001&






I know the Shanghai exchange is a bit of a casino, but I still think it has some merits in analysing what happens on our markets than some give it credit for. Note it both started falling (although so did the US markets), and made a bottom first, before our market (or the US market) did..


----------



## CamKawa

Who's supervising these loans in China? How does money meant for infrastructure projects end up in the stock market? Does someone just knock on the banks door and ask for some money to build a road, then take the cash and dump the money in the shock market? Whose running that joint?


----------



## MACCA350

gfresh, here's a chart of the three indexes combined on a 2 year time scale:

Link





And a 3 month time scale:






Over the last 3 months the SSE has increased 30% in comparison to 10% by both the Dow and the All Ords. I don't see that the slight pull back of the SSE over the last few days is a solid indication that we will...............then again I'm no expert.

cheers


----------



## explod

> Harry Schultz newsletter
> 
> Conclusion: Stand by for a possible bank run & bank holiday on Aug 26th, after the news breaks on the 25th. (FDIC 2nd Qtr. Report)
> 
> This is in line with the HSL prediction of a US bank holiday in Aug/Sept.
> 
> If you live in the US, get 3 to 6 months household expense money out of banks now.





Could there be a bit of contagion here if there is truth in it and what impact on the markets if money freezes.                                                          --------------


----------



## grace

explod said:


> Could there be a bit of contagion here if there is truth in it and what impact on the markets if money freezes.                                                          --------------




explod, could you explain your post a bit more thanks.


----------



## explod

grace said:


> explod, could you explain your post a bit more thanks.




There is discussion around Wall Street that the money puored in by the Fed and Government is still short of that required to hold the US banking system afloat.   That date is around where some predict (On thier rekoning of the figures) that money will freeze, and like Argentina (I think about 20 years ago, and the UK almost a year or so back) the banks will shut the doors.

Only a rumour mind.


----------



## >Apocalypto<

explod said:


> There is discussion around Wall Street that the money puored in by the Fed and Government is still short of that required to hold the US banking system afloat.   That date is around where some predict (On thier rekoning of the figures) that money will freeze, and like Argentina (I think about 20 years ago, and the UK almost a year or so back) the banks will shut the doors.
> 
> Only a rumour mind.




LOL more comedy gold!!!   

So you know the wall street insiders personally implod? let me guess you take the personal jet over there for lunches!

Ha HaHa


----------



## MrBurns

explod said:


> Could there be a bit of contagion here if there is truth in it and what impact on the markets if money freezes.                                                          --------------




He's not cheap 
http://www.hsletter.com/index.html

Do you subscribe ?

Is it any good ?


----------



## explod

MrBurns said:


> He's not cheap
> http://www.hsletter.com/index.html
> 
> Do you subscribe ?
> 
> Is it any good ?




No, my quote came directly from and lifted from J S Minesite.   So would take it with a grain of sault.   The bombardment of conflict both here and on the newswires would indicate huge uncertainty in the minds of most.   Maybe the sky is not falling in but just maybe something big is afoot in the financials.   The green shoots seem to me to built only on hope and euphoria.

But just my


----------



## CamKawa

If the Bankers can see "green shoots" everywhere why is this still going on?

Around $25bn still locked in frozen funds


----------



## Aussiejeff

CamKawa said:


> If *the Bankers can see "green shoots" everywhere* why is this still going on?
> 
> Around $25bn still locked in frozen funds




Do you mean those greener than green Chimerican GM Bamboo Shoots (Tm) that michelle Obama planted out back of that Whiter than White House?

Sure looks purdy, huh?


----------



## Real1ty

And the louder you guys protest the higher the Market goes.

It is a thing of beauty :jump:


----------



## MACCA350

Real1ty said:


> And the louder you guys protest the higher the Market goes.
> 
> It is a thing of beauty :jump:



 you're not wrong there.........Dow futures currently up 96 points

cheers


----------



## Buckeroo

Real1ty said:


> And the louder you guys protest the higher the Market goes.
> 
> It is a thing of beauty




Yep, unbelievable isn't it - could someone pinch me, I'm having a dream but I get the feeling its going to turn into a friggin nightmare

Cheers


----------



## Uncle Festivus

Standby for Market Correction Part II (or, some light reading for the week end)

http://www.scribd.com/doc/18558353/The-New-Bull-Market-Fallacy


----------



## h3ath

Terry Laundry reckons we're in a strong bull market until August 2010. 

The next correction of any significance won't occur until mid October.

http://ttheory.typepad.com/

Even Mc Hugh (the mega bear) sees only sideways action until the next leg up.


----------



## Gordon Gekko

Nice one Uncle!!

It's been hard sitting on the sidelines Calculating how much I could have made by simply holding and not even trading for the past couple of months.

It may be all just a bunch of noise and I may just miss (or already have) out on the chance of a lifetime but in my heart of hearts I just don't buy it!

I am one of the ones one the sidelines with zero debt and enough to buy a house in cash but that is where it will stay until the time is right. 

When it all comes crashing down I will be smiling ear to ear baby!

If it keeps going to the moon well than that ****ing sucks and I will have learned a valuable lesson.

Either way I'll still have enough for a house!

Best

G


----------



## Buckeroo

Gordon Gekko said:


> Nice one Uncle!!
> 
> It's been hard sitting on the sidelines Calculating how much I could have made by simply holding and not even trading for the past couple of months.
> 
> It may be all just a bunch of noise and I may just miss (or already have) out on the chance of a lifetime but in my heart of hearts I just don't buy it!
> 
> I am one of the ones one the sidelines with zero debt and enough to buy a house in cash but that is where it will stay until the time is right.
> 
> When it all comes crashing down I will be smiling ear to ear baby!
> 
> If it keeps going to the moon well than that ****ing sucks and I will have learned a valuable lesson.
> 
> Either way I'll still have enough for a house!
> 
> Best
> 
> G




Well said Gek - although I have jumped just a little on shares, I'm also holding back and gritting my teeth because of the lost opportunities. 

I'm waiting till after October to see what eventuates - if its still hunky dory by November then I might relax & jump in feet first

Cheers

Cheers


----------



## CamKawa

Has China turned a corner?


----------



## So_Cynical

Gordon Gekko said:


> It's been hard sitting on the sidelines Calculating how much I could have made by simply holding and not even trading for the past couple of months.
> 
> I may just miss (or already have) out on the chance of a lifetime
> 
> If it keeps going to the moon well than that ****ing sucks and I will have learned a valuable lesson.







Buckeroo said:


> I have jumped just a little on shares, I'm also holding back and gritting my teeth because of the lost opportunities.




And to think im pissed off because i haven't taken full advantage of the turn around and didn't take enough risks  if i had sat on the side lines like u guys id be going for the razorblades about now.


----------



## Knobby22

So_Cynical said:


> And to think im pissed off because i haven't taken full advantage of the turn around and didn't take enough risks  if i had sat on the side lines like u guys id be going for the razorblades about now.




I agree Cynical. Its like a club of mutual support and destruction.

I have taken pretty good advantage and am now almost totally invested. 
Some of these guys let politics get in front of their decision making.  

The stimulus package has worked, and whether you like Labor or not is besides the question, and as a result the national debt  will not be as big as the Libs want us to believe.  Yet when I pop my head up I get shot down. 

Even if you disagree as traders and investors you should have bought. If 
there is a downturn now then those who have will sell for a big profit and buy back lower.

Some good news for you guys, I in my opinion we are getting overbought and there will be small correction soon but not back to where we were.


----------



## wayneL

Knobby22 said:


> *The stimulus package has worked,* and whether you like Labor or not is besides the question, and as a result the national debt  will not be as big as the Libs want us to believe.




Yep, just like a bottle of tequila works on the DTs. It remains to be seen what happens in the proverbial morning. It's a bit early to say "it worked".

Agree with the rest of your points, but hindsight is a wonderful thing, isn't it.


----------



## MRC & Co

wayneL said:


> Yep, just like a bottle of tequila works on the DTs. It remains to be seen what happens in the proverbial morning. It's a bit early to say "it worked".
> 
> Agree with the rest of your points, but hindsight is a wonderful thing, isn't it.




hahahahahahaha.  That and the seagul comment were classics!!!!

Soon we can all go home and enjoy some efficient German sex with the wives with all the machine traders around here lately!


----------



## Knobby22

Aw come on!

Put me out of my misery.

Where is the seagull comment?


----------



## Glen48

Nothing repeats like history and this is the biggest rally since 1930 and the depression didn't really start until 32 so watch the USD as soon as it goes down hold on for the ride but in the mean time there will be a few highs and lowes


----------



## Knobby22

Knobby22 said:


> Aw come on!
> 
> Put me out of my misery.
> 
> Where is the seagull comment?




Found it!


----------



## Buckeroo

So_Cynical said:


> And to think im pissed off because i haven't taken full advantage of the turn around and didn't take enough risks  if i had sat on the side lines like u guys id be going for the razorblades about now.




Ok, have your day in the sun lads, but we may still have the last laugh yet. You may yet have to buy those razor blades for yourselves and use them just prior to jumping out of a 20 story building.

And its far too early to tell if KRudd has done anything positive for the economy apart from sh*tn in his own nest.

Cheers


----------



## nunthewiser

im a nun , i have contact with the main man 

we will hit new lows before this is through and i will be messagin Mrc for details on these german wives whilst i trade whats in front of me in the meantime


----------



## Nyden

Buckeroo said:


> Ok, have your day in the sun lads, but we may still have the last laugh yet. You may yet have to buy those razor blades for yourselves and use them just prior to jumping out of a 20 story building.
> 
> And its far too early to tell if KRudd has done anything positive for the economy apart from sh*tn in his own nest.
> 
> Cheers




What is wrong with you? You speak as though there are teams, the bull team, and the bear team. Why be either? Judge your investments based on their own individual merit, nothing else.

I'm sorry, but the world isn't ending


----------



## nomore4s

Buckeroo said:


> Ok, have your day in the sun lads, but we may still have the last laugh yet.




Maybe it's the bears who have already had their day in the sun and are yet to realise it's over? The longer this rally lasts & the economy stabilises the more likely the bottom is in imo.

The economy in Aust is nowhere near is bad as what the bears were forecasting and the stockmarket is reacting to that realisation imo. I was also in Singapore last week and the amount of development going on over there was amazing. At this stage we have seen no more then a mild recession and unless the economy does start to go downhill in a big way I think we may have seen the bottom, but who knows how the next few years will play out.


----------



## Gordon Gekko

Nyden said:


> What is wrong with you? You speak as though there are teams, the bull team, and the bear team. Why be either? Judge your investments based on their own individual merit, nothing else.
> 
> I'm sorry, but the world isn't ending





Well not yet, but shipping is!

"But now the global financial and economic crisis has stifled the boom in container shipping, and it has happened almost overnight. For the first time in its history, the industry has stopped growing and, in fact, is shrinking. In the first six months of this year alone, the shipping industry declined by close to 16 percent"

We may be doing better thus far than allot of other countrues but I think of it more as a long line of domino's.
We will be hit and it will be ugly! It's just a matter of time.
I can afford to be patient!

Best
G
...

---article continues---

http://www.spiegel.de/international/business/0,1518,641513,00.html


----------



## Nyden

Gordon Gekko said:


> Well not yet, but shipping is!
> 
> "But now the global financial and economic crisis has stifled the boom in container shipping, and it has happened almost overnight. For the first time in its history, the industry has stopped growing and, in fact, is shrinking. In the first six months of this year alone, the shipping industry declined by close to 16 percent"
> 
> We may be doing better thus far than allot of other countrues but I think of it more as a long line of domino's.
> We will be hit and it will be ugly! It's just a matter of time.
> I can afford to be patient!
> 
> Best
> G
> ...
> 
> ---article continues---
> 
> http://www.spiegel.de/international/business/0,1518,641513,00.html





You cannot state it as fact, sorry. (That Australia is going to be 'hit' - I thought we already had? A 50% drop in market prices ... hmm, nah, that's not a hit! Nutcakes want the XAO at 0, don't they?)

I could go and find an article to counter that, and state that the world is recovering, and how it's just a matter of time. I can afford to wait! Gosh, don't I look like a whiz now?

Not one person I know has felt *any* effect of this recession here in Australia, not one single person. I haven't seen any distressed house sales, I haven't seen any shops close down, there's simply very little consumer fear out there anymore.

Just remember, the markets are forward thinking; and by the time the 'fundamentals' change, any possible recovery may have already passed by.


----------



## Gordon Gekko

Not one person I know has felt any effect of this recession here in Australia, not one single person. I haven't seen any distressed house sales, I haven't seen any shops close down, there's simply very little consumer fear out there anymore.


Sweet! You must live in Canberra.

I'm in the resort/ hotel buisness and average occupancy is running at 15%!
Even major hotels in Melbourne 15%, heavy discounts.
We layed off a 3rd of out staff last X-mas.
Low interest rates are doing well to keep this ponzi going but a few % increase will see large amounts of over debted young and old couple's on struggle street.

And markets are forward looking and at this point with regard to price earnings must be set to soar! But if these better than expected results are a result of one off cost cutting and market to market accounting changes than what happens if the consumer does not return when expected becauce they are broke. Green shoots extending to 2011,2012??
The ice has been getting thiner for  months.



Time will tell!

G


----------



## Glen48

USA is paying $1M a second in interest, 10% of the World's shipping is tied up out side Singapore well out side so they don't have to pay charges, China's power usage is down and any thing which is produced and has left the factory is considered sold to keep the figures up, Chinese bank's are told to lend money to any one the same Ponzi scheme USA has. China is trying to save face and show the rest of the World how clever they are and the green shoots and about to be hit by a lawn mower.


----------



## Real1ty

Gordon Gekko said:


> We will be hit and it will be ugly! It's just a matter of time.
> I can afford to be patient!
> 
> Best
> G
> ...




When does this call become redundant or is it an open ended call that could be right next month, next year or next decade?

Your patience is costing you money in the biggest rally since the 30's.

Meanwhile money is being made and if it turns around, we can sell out and go short.

This is one of the biggest differences of many on here. The Bears have no doubt in their mind at all and continue to swim against the tide while others, just play what they see while keeping an open mind to possibilities on both sides of the fence.


----------



## grace

Real1ty said:


> Meanwhile money is being made and if it turns around, we can sell out and go short.



Should some major horrific news come through (likely source the US), then gaps down will not allow you to do this.  There are quite a few possible catalysts capable of causing such a thing IMO.  We are in very fragile times.  I hope it doesn't happen, but I'm certainly keeping some cash up my sleeve just in case.


----------



## gfresh

CamKawa said:


> Has China turned a corner?




The downtrend continues .. Looks like something (the talk of credit rationing?) has put some fear into the general punters over there. Not far off 3000 points (presently 3046), a break of that is likely to be significant. 

That along with the BDI starting to now look weak, really should be a good advanced warning, especially for our commodity stocks which have been boosted by the thought that Chinese demand is still strong. 

All we'd need is those tipping off first, and then followed by a sell of our own financial sector as the sugar coating of the US financials may wear off when the next quarter results are published... and we would be seeing a significant retracement in our index, and a sap of confidence. 

Bit early to say though, all speculation above presently.


----------



## knocker

gfresh said:


> The downtrend continues .. Looks like something (the talk of credit rationing?) has put some fear into the general punters over there. Not far off 3000 points (presently 3046), a break of that is likely to be significant.
> 
> That along with the BDI starting to now look weak, really should be a good advanced warning, especially for our commodity stocks which have been boosted by the thought that Chinese demand is still strong.
> 
> All we'd need is those tipping off first, and then followed by a sell of our own financial sector as the sugar coating of the US financials may wear off when the next quarter results are published... and we would be seeing a significant retracement in our index, and a sap of confidence.
> 
> Bit early to say though, all speculation above presently.




Yep punters paradise
Enjoy the ride down suckers lol


----------



## Buckeroo

Nyden said:


> What is wrong with you? You speak as though there are teams, the bull team, and the bear team. Why be either? Judge your investments based on their own individual merit, nothing else.
> 
> I'm sorry, but the world isn't ending




Who said anything about not investing? I'm just not exposing too much of my capital to high risk. Heck, in a bull market, you have to be a doofus not to make money and it takes no effort.

So, I'm in the bear team - what can I say, its fun. And I think the world just might end

Cheers


----------



## Edwood

Shanghai closed down 5.8%


----------



## gfresh

Chinese market leads again..


----------



## Aussiejeff

Edwood said:


> Shanghai closed down 5.8%




Down around 18% since start of August.

Yet all other world markets continued popping champagne corks? China will save us all?

What happened? Where have the media prophets & market gurus been hiding in the last week? All I have seen is MegaPositive Spin. Oh, of course. They were all at the Big Bwanker's Champagne Party?  Hardly any experts "foresaw" a collapse in the Shanghai market, which was happening before their very eyes???

Hmmm.

Funnily enough, Ken Henry's warning yesterday (before last night's market rout) to hold back the euphoria, since there was "the possibility of a second shockwave" coming, might yet prove prophetic??   

Time to put the helmet back on???


----------



## CamKawa

The media have forgotten about China now, apparently Japan will save us.


----------



## Aussiejeff

CamKawa said:


> The media have forgotten about China now, apparently Japan will save us.




*Phew*

Thank gawd for that!!

Anyway, I'm sure ObamSan will flash his toothy grin sometime soon and assure us all that Michelle, the kidz and Bozo are doin' just fine.

Yeehaaar!!


----------



## Real1ty

Aussiejeff said:


> What happened? Where have the media prophets & market gurus been hiding in the last week?




We could say the same about you jeff.

Your posting certainly takes on a new lease of life after down days.


----------



## Aussiejeff

Real1ty said:


> We could say the same about you jeff.
> 
> Your posting certainly takes on a new lease of life after down days.




Yep.

Nothing like a bit of cointrarian optimism from an old bear, eh?


----------



## trainspotter

Jump on in the water is fine !


----------



## Uncle Festivus

Nyden said:


> You cannot state it as fact, sorry. (That Australia is going to be 'hit' - I thought we already had? A 50% drop in market prices ... hmm, nah, that's not a hit! Nutcakes want the XAO at 0, don't they?)




None of the nutcakes I know want the XAO at 0. Some of the Nutcakes are merely pointing out the obvious to the same people who didn't see Correction Part I coming. As long as the gov keeps pouring the cordial into the whisky bottle people will think they are getting drunk, but will get dissapointed when they are told it's just a placebo, but still have to pay whisky prices.



Nyden said:


> I could go and find an article to counter that, and state that the world is recovering, and how it's just a matter of time. I can afford to wait! Gosh, don't I look like a whiz now?




Please do - post some data that shows that the world is recovering, and it's not just a stimulis bounce? Perhaps global trade, shipping, US house foreclosures, UK unemployment and GDP, global debt to GDP ratios etc etc and not some of these low balled 'better-than-expected' guesstimates put out by discredited economists and analysts, all trying to get some cred back after failing to pick the GFC. 



Nyden said:


> Not one person I know has felt *any* effect of this recession here in Australia, not one single person. I haven't seen any distressed house sales, I haven't seen any shops close down, there's simply very little consumer fear out there anymore.
> 
> Just remember, the markets are forward thinking; and by the time the 'fundamentals' change, any possible recovery may have already passed by.




No, markets are forward 'hoping' at best in this climate - we are supposed to be smack bang in the middle of a 'second half recovery', yet US foreclosures have hit yet another record the last month, and if the beer and skittles mob can recall all of 2 years back, this is what started the whole thing off in the first place.



> Aug. 13 (Bloomberg) -- Foreclosure filings in the U.S. climbed to a record for the third time in five months in July as falling home prices and the recession left more homeowners unable to keep up payments or refinance.
> 
> 
> “We’re in a deep hole,” Diane Swonk, chief economist at Chicago-based Mesirow Financial Inc., said in an interview. “There is a whole new wave of foreclosures tied to the cyclical dynamics of the economy.”



For Oz, 20,000 full time jobs vaporised last month, and was regarded as a good outcome, while part time and casual employment is rising rapidly. 



> *Total personal insolvency activity*
> 
> Total personal insolvency activity (36,479) increased by 11.00% in 2008-09.
> 
> *Bankruptcies*
> 
> New bankruptcies increased by 5.90% during 2008-09 (27,503) and decreased by 0.50% in the June 2009 quarter (7,014) compared to the June 2008 quarter (7,049).
> 
> *Part IX debt agreements*
> 
> There was a 29.45% increase in debt agreements (8,567) in 2008-09, an increase of 13.53% in the June 2009 quarter (2,316) compared to the June 2008 quarter (2,040).
> 
> *Part X arrangements*
> 
> There was a 47.65% increase in personal insolvency agreements in 2008-09 (409), and an increase of 3.88% in the June 2009 quarter (107) compared to the June 2008 quarter (103).



http://www.itsa.gov.au/dir228/itsaw...l Personal Insolvency Statistics?OpenDocument



> *THE number of households struggling to make their monthly home loan repayment could double to more than one million by June next year, as higher interest rates and rising unemployment batter working families, according to researcher Fujitsu Consulting.*
> 
> Mortgage stress was at its worst in August last year when 900,000 families were under pressure to meet repayments.
> 
> But the $52 billion in *government handouts* and interest rate cuts totalling 425 basis points since September eased family budgets and by June this year the situation had reversed, Fujitsu says.
> 
> In July, mortgage stress again began creeping up, its first rise in 12 months with the 546,000 households in some degree of stress representing a 1.1 per cent increase on the previous month.



http://www.theaustralian.news.com.au/business/story/0,,25926623-25658,00.html


----------



## trainspotter

ZZZZZZZZZZZZZZZZZZZZZZZZZzzzzzzzzzzz ... Huh ? ..... Wha ?


----------



## Sean K

Uncle Festivus said:


> No, markets are forward 'hoping' at best in this climate - we are supposed to be smack bang in the middle of a 'second half recovery', yet US foreclosures have hit yet another record the last month, and if the beer and skittles mob can recall all of 2 years back, this is what started the whole thing off in the first place.



Forward 'expecting' more like it. Both up and down. Second half recovery by whose accounts? Are we in the middle of the 'second half recover?' Once again, maybe the records are factored in. Foreclosures at a record what?


----------



## Uncle Festivus

kennas said:


> Forward 'expecting' more like it. Both up and down. Second half recovery by whose accounts? Are we in the middle of the 'second half recover?' Once again, maybe the records are factored in. Foreclosures at a record what?




'Expecting' based on the probability that things can't get any more worse, which is not yet certain, so they hope & pray 

Um....house mortgage foreclosure in the US......the highest it's ever been ie a record?

Every second story on Marketwatch or Bloomberg or ??? quote some analyst or economist who is predicting recovery. For some reason they all seem to have selected this half of the year for _the_ recovery, but a nagging little thing called the real economy keeps getting in the way? Do a Google for "second half recovery"


----------



## Aussiejeff

Uncle Festivus said:


> 'Expecting' based on the probability that things can't get any more worse, which is not yet certain, so they hope & pray
> 
> Um....house mortgage foreclosure in the US......the highest it's ever been ie a record?
> 
> Every second story on Marketwatch or Bloomberg or ??? quote some analyst or economist who is predicting recovery. For some reason they all seem to have selected this half of the year for _the_ recovery, but a nagging little thing called the real economy keeps getting in the way? Do a Google for "second half recovery"




Damn Green Shoots.

Unca ObamaSan needs a good dose of Rudds Red Roots!!!


----------



## Donga

This thread is most probably redundant. It seems those who are convinced of "imminent and severe" are conservatives who can't get their arms around the notion that the "left" in the form of China, Obama and Rudd are steering us through the crisis created by the privileged (and often clueless) of this world. _What's more these interlopers are spending our hard earned taxes, goddam it. _

Unless China/Asia fall over, another 9/11 event or along those lines, we won't see the ASX at 3900 again. So hop on board fellas or wait for a few hundred of points rest at some time, but imminent and severe ain't going to happen. 

Comprehensive economic policies with some debt when it is needed (get over it, won't kill us) will also fix some schools, hospitals and those things the conservatives couldn't give a rat's **** about. It's win win guys


----------



## Buckeroo

Donga said:


> This thread is most probably redundant. It seems those who are convinced of "imminent and severe" are conservatives who can't get their arms around the notion that the "left" in the form of China, Obama and Rudd are steering us through the crisis created by the privileged (and often clueless) of this world. _What's more these interlopers are spending our hard earned taxes, goddam it. _
> 
> Unless China/Asia fall over, another 9/11 event or along those lines, we won't see the ASX at 3900 again. So hop on board fellas or wait for a few hundred of points rest at some time, but imminent and severe ain't going to happen.
> 
> Comprehensive economic policies with some debt when it is needed (get over it, won't kill us) will also fix some schools, hospitals and those things the conservatives couldn't give a rat's **** about. It's win win guys




Aha...obviously a young'n of a socialist persuasion soon to be lining up at the nearest soup kitchen.

Cheers


----------



## Gordon Gekko

Donga said:


> This thread is most probably redundant. It seems those who are convinced of "imminent and severe" are conservatives who can't get their arms around the notion that the "left" in the form of China, Obama and Rudd are steering us through the crisis created by the privileged (and often clueless) of this world. _What's more these interlopers are spending our hard earned taxes, goddam it. _
> 
> Unless China/Asia fall over, another 9/11 event or along those lines, we won't see the ASX at 3900 again. So hop on board fellas or wait for a few hundred of points rest at some time, but imminent and severe ain't going to happen.
> 
> Comprehensive economic policies with some debt when it is needed (get over it, won't kill us) will also fix some schools, hospitals and those things the conservatives couldn't give a rat's **** about. It's win win guys






Hahahaha
I laughed so hard reading your post beer came out my nose!!! Hahahaha.
Thanks, I was having a down night but the combination of beer and your post has shocked me out of it!!
Best of Luck

G


----------



## nomore4s

Buckeroo said:


> Aha...obviously a young'n of a socialist persuasion soon to be lining up at the nearest soup kitchen.
> 
> Cheers




Either that or very rich

Those that saw opportunity amid all the fear have now been rewarded.


----------



## Uncle Festivus

Donga said:


> This thread is most probably redundant. It seems those who are convinced of "imminent and severe" are conservatives who can't get their arms around the notion that the "left" in the form of China, Obama and Rudd are steering us through the crisis created by the privileged (and often clueless) of this world. _What's more these interlopers are spending our hard earned taxes, goddam it. _
> 
> Unless China/Asia fall over, another 9/11 event or along those lines, we won't see the ASX at 3900 again. So hop on board fellas or wait for a few hundred of points rest at some time, but imminent and severe ain't going to happen.
> 
> Comprehensive economic policies with some debt when it is needed (get over it, won't kill us) will also fix some schools, hospitals and those things the conservatives couldn't give a rat's **** about. It's win win guys




The only thing I can't get my arms around is the Fat Debt Lady (Mrs Creosote ?)
Look into the data from China - made to order to what ever the Central Committee require? 

Some debt - please sir, can I have some more??


----------



## Knobby22

Note, most debt occurred during supposedly conservative reigns of Republicans. Obama is between a rock and a hard place. I think what he is doing is good and will allow the debt to be reduced over the medium term.


----------



## Uncle Festivus

Knobby22 said:


> Note, most debt occurred during supposedly conservative reigns of Republicans. Obama is between a rock and a hard place. I think what he is doing is good and will allow the debt to be reduced over the medium term.



How will he/they do that


----------



## Knobby22

Uncle Festivus said:


> How will he/they do that




Raise taxes!! Won't be popular such as the medicare levy that we have.
There is plenty of wealth in the US. Firstly he has to kickstart the economy.

Bush lowered taxes and raised spending. 

I would expect Obama to raise taxes and lower spending eventually by getting out of all the wars they are engaged in and reduce defence spending. The old different priorities routine.

If you look at the budget in relation to defence spending it is astounding the USA can afford it. Just shows what a superpower they are.


----------



## Bushman

Uncle Festivus said:


> How will he/they do that




Inflation.


----------



## Edwood

(apologies for adding to the bear pr0n)
but Mr Black Swan say Obama taknig wrong way

http://www.businessinsider.com/henry-blodget-taleb-you-fools-dont-understand-that-were-doomed-2009-8


----------



## Knobby22

Bushman said:


> Inflation.




Yea, that too.


----------



## Uncle Festivus

Edwood said:


> (apologies for adding to the bear pr0n)
> but Mr Black Swan say Obama taknig wrong way
> 
> http://www.businessinsider.com/henry-blodget-taleb-you-fools-dont-understand-that-were-doomed-2009-8




Bear pr0n - conjures up an interesting image 

Taleb summary(from link)
We're all in denial
We're replacing private debt with public debt.
We're not dealing with the cancer in our banking system.
We're not making the structural changes we need to make.
We're not being aggressive enough about restructuring debt (debt for equity swaps).
Bernanke is a wimpy Greenspan sycophant
Obama's rewarding the fools who got us here (Summers, Bernanke, Geithner)
The banksters are taking over again
Other vid opinion

http://www.msnbc.msn.com/id/21134540/vp/32385463#32385463


----------



## Edwood

Uncle Festivus said:


> Bear pr0n - conjures up an interesting image




oo-er don't want to go there! 

this bearish f-undie stuff makes for a great story, but as Ivant knows you can't trade off it, gotta respect the market and wait for signals

Of which McHugh today reckons the markets are lining up a batch of Hindenburg's for us, but likely not till later in the year


----------



## moXJO

Edwood said:


> this bearish f-undie stuff makes for a great story, but as Ivant knows you can't trade off it, gotta respect the market and wait for signals




Agree.... best to trade what is in front of you. But because I have a bearish outlook, people seem to think I can only trade in one direction

I also agree with a lot of what UF is saying about the debt.

On taxes



> Washington (CNSNews.com) – Americans had to work from January 1 until August 12 this year just to cover the cost of government. That is 26 days more than they had to work last year to cover the cost of government.
> 
> “Cost of Government Day” this year fell on Wednesday, August 12, according to Americans for Tax Reform, the conservative group that calculates when the day occurs. Cost of Government Day is the day in the year when the American people have earned enough income to pay the total cost of the spending and regulatory burden imposed by government at the federal, state, and local level.
> 
> The August 12 date is 26 days later than Cost of Government Day came last year, when it fell on July 16.
> 
> In fact, this is the first time the day has fallen in August. Until this year, July 20 was the latest date marking Cost of Government Day. That happened in 1982.


----------



## Gordon Gekko

China Stocks Enter Bear Market as Index Falls 20% From High 

"China follows Russia among the so-called BRIC bloc of major emerging economies to have entered bear markets."


Didn't I hear the BRIC economies were going to get us all out of this mess? 






http://www.bloomberg.com/apps/news?pid=20601087&sid=auVL4UJfdoJU


----------



## Aussiejeff

Gordon Gekko said:


> *China Stocks Enter Bear Market as Index Falls 20% From High *
> 
> "China follows Russia among the so-called BRIC bloc of major emerging economies to have entered bear markets."
> 
> 
> Didn't I hear the BRIC economies were going to get us all out of this mess?
> 
> http://www.bloomberg.com/apps/news?pid=20601087&sid=auVL4UJfdoJU




Well, SHOOT!

GREEN shoots, that is!!

Pardon my inane ignorance, but IF the *world* is relying on China to help pull its head out of its :arsch: , why the response of "No Big Deal" when the 2nd Shock Wave from a recent Chinese Market Quake appears to be breaking over us?

Oh yeah. Everyone is sipping their dailly tincture of Obama'sGreenShoots & Rudd'sRedRoots? 

Anyone care to explain what is happening to the CSI300 (volumes tanking, values tanking)?

IF markets are forward looking (as we are told by experts), then surely, what is happening in China NOW is going to flow through into the REAL economy within 6mths?

Man, I am so dumb. Enlighten me....


----------



## moXJO

Gordon Gekko said:


> China Stocks Enter Bear Market as Index Falls 20% From High
> 
> "China follows Russia among the so-called BRIC bloc of major emerging economies to have entered bear markets."
> 
> 
> Didn't I hear the BRIC economies were going to get us all out of this mess?




One thing that peeves me off is the dodgy numbers that come out, and the confused and conflicting media reporting. Even the RBA and IMF don't seem to have any clear idea past a week.


----------



## Sean K

Aussiejeff said:


> Man, I am so dumb. Enlighten me....



Doesn't that graph indicate the market is back to where it was 2 months ago? Holy goat Batman! Set the Ark afloat!!


----------



## Uncle Festivus

Since weez talkin' China, tis but a bogus boom? Pity weez have all our eggs in the China basket though 

http://www.scribd.com/doc/18854834/Bogus-Boom


----------



## Knobby22

kennas said:


> Doesn't that graph indicate the market is back to where it was 2 months ago? Holy goat Batman! Set the Ark afloat!!




LOL


----------



## Uncle Festivus

Bushman said:


> Inflation.




The Oracle speaketh.......



> With government expenditures now running 185 percent of receipts, truly major changes in both taxes and outlays will be required. A revived economy can’t come close to bridging that sort of gap.
> 
> Legislators will correctly perceive that either raising taxes or cutting expenditures will threaten their re-election. To avoid this fate, they can opt for high rates of inflation, which never require a recorded vote and cannot be attributed to a specific action that any elected official takes.
> 
> In fact, John Maynard Keynes long ago laid out a road map for political survival amid an economic disaster of just this sort: “By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens.... The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”



http://www.nytimes.com/2009/08/19/opinion/19buffett.html?pagewanted=2&_r=2


----------



## Aussiejeff

kennas said:


> Doesn't that graph indicate the market is back to where it was 2 months ago? Holy goat Batman! Set the Ark afloat!!




Doh.... silly me ... I must have been looking at the somewhat precipitous trend which if continues for 2 more weeks would have that chart back to end of 2008 parity! Best to ignore stoopid developing trends then, eh?


----------



## Donga

Good grief - the conservatives in this thread keep coming out of their holes to bang away about impending doom every time an index heads south for a couple of days. Bit like the coalition with their dire predictions but no hard forecasts. In Texas they talk about such folk as wearing big hat, no cattle. So let's have some predictions before retreating into your holes again. What will XAO fall to, assuming impending and severe means sometime in the next few weeks? For what it's worth I'll forecast fairly lateral movement, between 4200 and 4500 .


----------



## Sean K

Aussiejeff said:


> Doh.... silly me ... I must have been looking at the somewhat precipitous trend which if continues for 2 more weeks would have that chart back to end of 2008 parity! Best to ignore stoopid developing trends then, eh?



Yes, the 17 day trend is down in China. I've bought my ticket for the Ark and have rounded up a couple of guinea pigs, llamas and alpacas to go with me. The anacondas can stay.


----------



## skyQuake

kennas said:


> Yes, the 17 day trend is down in China. I've bought my ticket for the Ark and have rounded up a couple of guinea pigs, llamas and alpacas to go with me. The anacondas can stay.




Did the bears already go in the ark?


----------



## swm79

kennas said:


> Yes, the 17 day trend is down in China. I've bought my ticket for the Ark and have rounded up a couple of guinea pigs, llamas and alpacas to go with me. The anacondas can stay.




be sure to let the baltic dry know


----------



## Sean K

skyQuake said:


> Did the bears already go in the ark?



Bears live above 3000m here, they should be safe.


----------



## explod

kennas said:


> Bears live above 3000m here, they should be safe.




That near the old Mount Ararat kennas, maybe you can do an Orwell and go back to the good old days.

But 3000 metres high, you want the poor bears to kill emselves.


----------



## Edwood

US consumer is under pressure there is no doubt about that.  I think we have to expect  some shocks from that area next results season.  Just my


----------



## nunthewiser

i met a 17 yr old kid today that played the ASX game at school ........

he assured me the market would hit new lows before this bear was over .. i agreed with him .........he owned a cute lil porsche and was sober so i guess he knows just as much as anyone else here


----------



## knocker

nunthewiser said:


> i met a 17 yr old kid today that played the ASX game at school ........
> 
> he assured me the market would hit new lows before this bear was over .. i agreed with him .........he owned a cute lil porsche and was sober so i guess he knows just as much as anyone else here



What? the end of the year? No way it will be shorter lol:


----------



## nunthewiser

knocker said:


> What? the end of the year? No way it will be shorter lol:




that pommy beer sent ya crosseyed

Bfor bear


----------



## knocker

nunthewiser said:


> that pommy beer sent ya crosseyed
> 
> Bfor bear




Not the beer, the cider is the killer lol


----------



## kotim

I have attached apicutre that came thorugh in a futures forum I am part of of.

One of the groups sent it through.  It is actually a very scary picture about the posssibilities that are waiting and I don't mean the bullish ones.

The size ofthe PE ratio is astounding


----------



## kotim

sorry about the picture size but what it actually is is a chart of Price earnign ratios for the s and P 500 since the early 1930's til now.  You will see that with the 2nd quarter 2009 earnings basically allready reported on, the PE ratio for the S&P is at 129 which is far far far above theaverage into the late 1980's which was between 20-30 at its highest.  It effectively has gone higher since the 1990's but currently it is humungus and the picture says it all, even though its small


----------



## trainspotter

https://www.aussiestockforums.com/forums/showthread.php?p=478450#post478450

Is the bigger version? With an outstanding answer as well.


----------



## metric

*Insiders Selling Stocks at Highest Level Since May 2008*

Insiders Selling Stocks at Highest Level Since May 2008 

Washington’s Blog
Monday, August 31, 2009

Best buying opportunity since the Great Depression?

TrimTabs is reporting that insiders know better:

Selling by corporate insiders in August has surged to $6.1 billion, the
highest amount since May 2008. The ratio of insider selling to insider buying
hit 30.6, the highest level since TrimTabs began tracking the data in 2004.

“The best-informed market participants are sending a clear signal that the
party on Wall Street is going to end soon,” said Charles Biderman, CEO of
TrimTabs.

TrimTabs explained that insider activity is not the only sign the rally is
about to end. The TrimTabs Demand Index, which tracks 18 fund flow and sentiment
indicators, has turned very bearish for the first time since March.

For example, short interest on NYSE stocks plummeted by 10.3% in the second
half of July and margin debt on all US listed stocks spiked 5.9% in July, while
51.6% of advisors surveyed by Investors Intelligence are bullish, the highest
level since December 2007.

“When corporate insiders are bailing, the shorts are covering and investors
are borrowing to buy, it generally pays to be a seller rather than a buyer of
stock,” said Biderman.

TrimTabs also reports that the actions of U.S. public companies have been
bearish. In the past four months, companies have been net sellers of a record
$105.2 billion in shares.

“Investors who think the U.S. economy is recovering are going to get a big
shock this fall,” said Biderman. “Companies and corporate insiders are signaling
that the economy is in much worse shape than conventional wisdom believes.”
http://www.prisonplanet.com/insiders-selling-stocks-at-highest-level-since-may-2008.html


----------



## explod

> metric
> 
> “Investors who think the U.S. economy is recovering are going to get a big
> shock this fall,” said Biderman. “Companies and corporate insiders are signaling
> that the economy is in much worse shape than conventional wisdom believes.”




So Jim Sinclair on Minesite is pretty right.

Not sure how many days he is down to now but must be only a few months to the total collapse of the financial system.   

Keep stocking those baked beans comrades


----------



## noirua

Looks as if markets are in for a considerable correction after the big run up.  Even better stocks in the market can be unfairly sold, so it seems at times, and it may well be best to return to the sidelines for a while. You can't fight the trend.


----------



## Sean K

Oh dear, Australia's unemployment rate has skyrocketted to 5.8% during the worst economic disaster since Leonardo sank the Titanic. Run for the life boats! 

http://www.news.com.au/business/story/0,27753,26052644-462,00.html

Yes, we've put people on half pay and forced holidays. That has saved us. Of course.  

The US is over a year into disaster and unemployment is 9.5 ish.

Uneployment is a lagging indicator of course. 

Is that both ways?

Just wondering how that debt is going to be sorted that's all ....


----------



## MrBurns

I'm just about to dive into the market I cant see things actually going over the edge any more. If i stick with the 4 banks Rio and BHP not a lot can go wrong.


----------



## Uncle Festivus

kennas said:


> Oh dear, Australia's unemployment rate has skyrocketted to 5.8% during the worst economic disaster since Leonardo sank the Titanic. Run for the life boats!
> 
> http://www.news.com.au/business/story/0,27753,26052644-462,00.html
> 
> Yes, we've put people on half pay and forced holidays. That has saved us. Of course.
> 
> The US is over a year into disaster and unemployment is 9.5 ish.
> 
> Uneployment is a lagging indicator of course.
> 
> Is that both ways?
> 
> Just wondering how that debt is going to be sorted that's all ....




20,000 full time jobs lost last month, 30,000 this month. Green shoots just keep sprouting up everywhere? 

Oh to be one of those helping out the economy on reduced pay & hours, not to mention the freeze in the minimum wage rate. I can see them all lining up at the check out helping to keep us out of recession. Woops, retail sales down worse-than-expected last month?

US underemployed rate is 17%. 

Apparently debt is not a problem anymore, just mark it to market peak?

Meanwhile, back in the real economy, the banking system continues to play hide & seek, with their fat pink arses hanging out from under the mahogany desks......not a pretty sight 

http://www.scribd.com/doc/19144533/Slide-Show-2q-2009-Final


----------



## Average Joe

*US Insider selling/buying ratio reaches 95x*

$35 million to insiders buy of a whopping $367,720 in insider sales.

http://www.zerohedge.com/article/most-recent-insider-sellingbuying-ratio-hits-95x


----------



## Glen48

The F H B ends this month , the talk or a I R rise has stopped the economy dead it is tracks. House prices should start coming down soon. Unemployment is higher than the Fed's are letting on.


----------



## gooner

MrBurns said:


> I'm just about to dive into the market I cant see things actually going over the edge any more. If i stick with the 4 banks Rio and BHP not a lot can go wrong.




If the crap hits the fan again, then those are the stocks that you really do not want to be in. A crap economy means low resource prices (BHP, RIO) and huge bad debts (ANZ, CBA, NAB, WBC).

TLS and WOW are fairly defensive if the crap hits.

Of the above stocks, I hold TLS


----------



## MrBurns

gooner said:


> If the crap hits the fan again, then those are the stocks that you really do not want to be in. A crap economy means low resource prices (BHP, RIO) and huge bad debts (ANZ, CBA, NAB, WBC).
> 
> TLS and WOW are fairly defensive if the crap hits.
> 
> Of the above stocks, I hold TLS




Thanks, I've decided to sit on my hands for a while longer.


----------



## Uncle Festivus

Average Joe said:


> *US Insider selling/buying ratio reaches 95x*
> 
> $35 million to insiders buy of a whopping $367,720 in insider sales.
> 
> http://www.zerohedge.com/article/most-recent-insider-sellingbuying-ratio-hits-95x




Do you see more red than green???

http://www.finviz.com/insidertrading.ashx


----------



## Real1ty

Glen48 said:


> Unemployment is higher than the Fed's are letting on.




Any facts to back up that statement or is it just more conspiracy rantings?

Oh, no need to answer i just realised which thread i am in


----------



## Uncle Festivus

Real1ty said:


> Any facts to back up that statement or is it just more conspiracy rantings?
> 
> Oh, no need to answer i just realised which thread i am in




Most people read this thread to get the facts, instead of blind hope & rhetoric.

Go to the Feds own site for the real facts, or choose to ignore, which most do anyway?

http://www.bls.gov/news.release/empsit.t12.htm

Have a look at U-6 and explain that away.


----------



## dhukka

Uncle Festivus said:


> 20,000 full time jobs lost last month, 30,000 this month. Green shoots just keep sprouting up everywhere?
> 
> Oh to be one of those helping out the economy on reduced pay & hours, not to mention the freeze in the minimum wage rate. I can see them all lining up at the check out helping to keep us out of recession. Woops, retail sales down worse-than-expected last month?
> 
> US underemployed rate is 17%.
> 
> Apparently debt is not a problem anymore, just mark it to market peak?
> 
> Meanwhile, back in the real economy, the banking system continues to play hide & seek, with their fat pink arses hanging out from under the mahogany desks......not a pretty sight
> 
> http://www.scribd.com/doc/19144533/Slide-Show-2q-2009-Final




Good post uncle. I think the US Recession has finished, US 3Q09 GDP growth will be around 3% (mostly stimulus induced) and job losses are slowing. However the source of the problems emanated from the banks and as Uncles charts show, nothing has really changed, in fact it has gotten worse. This is one of the biggest risks to a sustainable recovery scenario and why more than a few are looking for a double dip sometime in 2010. 

Sure the so-called stress tests gave a false sense of confidence that banks were OK and enabled some to raise capital, however the losses in the banking system are outstripping their ability to provide for them. The Commercial Real Estate debacle is only just starting to heat up and another wave of Alt-A mortgage rests will kick off toward the end of the year.

There will be more capital raisings needed in the US banking system, count on it.


----------



## explod

dhukka said:


> Good post uncle. I think the US Recession has finished, US 3Q09 GDP growth will be around 3% (mostly stimulus induced) and job losses are slowing. .




My sources, particularly "the Pravateer newsletter" which is one of the best independant sources of the real economic situation, paint a very different picture to that.

I would be interested in the sources for your particular take ?


----------



## Uncle Festivus

dhukka said:


> Good post uncle. I think the US Recession has finished, US 3Q09 GDP growth will be around 3% (mostly stimulus induced) and job losses are slowing. However the source of the problems emanated from the banks and as Uncles charts show, nothing has really changed, in fact it has gotten worse. This is one of the biggest risks to a sustainable recovery scenario and why more than a few are looking for a double dip sometime in 2010.
> 
> Sure the so-called stress tests gave a false sense of confidence that banks were OK and enabled some to raise capital, however the losses in the banking system are outstripping their ability to provide for them. The Commercial Real Estate debacle is only just starting to heat up and another wave of Alt-A mortgage rests will kick off toward the end of the year.
> 
> There will be more capital raisings needed in the US banking system, count on it.




GDP = Government Derived Propaganda 

Yes, as long as the money keeps rollin' in the show will continue, but Geithner has just said the show is about to come to an end. Surely we can take him at his word, so it looks like the banks can now bank roll the recovery by themselves, seeing how they are now flush with profits. 

It's remarkable that nobody cares that the GDP figures are almost entirely made up of government spending; even China's GDP would be around 2% without it, when they need around 8% just to stand still. The export market to the USA fell again the last month, another 25% yoy fall.

The US debt to GDP percent will be over 100 next year ie they will be flat out just paying the interest bill, let alone the principle. BTW, current interest bill is approx $10BILLION per week.

Meanwhile, our very own sub prime bubble is percolating away not so quietly, thanks to the RBA caught between a rock & a hard place with the interest rate increase button covered by glass marked <break in case of runaway inflation - caution - takes 6 months for effect>


----------



## dhukka

explod said:


> My sources, particularly "the Pravateer newsletter" which is one of the best independant sources of the real economic situation, paint a very different picture to that.
> 
> I would be interested in the sources for your particular take ?




On the jobs front the evidence couldn't be clearer, US job losses have slowed considerably as shown below. 

Remember that US GDP is reported at an annual rate so for a *3%* annual rate of growth the third quarter would need to grow at *0.75%*. I think that is realistic given the cash for clunkers stimulus to industrial production and the fact that housing and employment will be less of a drag.


----------



## Donga

I might live to eat these words, but even from sunny Barcelona where I am this week, as compared to the lucky country, I am staggered this thread still exists. Guys give up, the recovery is well underway and while some of you have been waiting for this I & S correction, a wonderful bull opportunity is passing you by. See you at the ASX 5000 ticker tape by the end of the year.


----------



## Real1ty

Uncle Festivus said:


> Most people read this thread to get the facts, instead of blind hope & rhetoric.
> 
> Go to the Feds own site for the real facts, or choose to ignore, which most do anyway?
> 
> http://www.bls.gov/news.release/empsit.t12.htm
> 
> Have a look at U-6 and explain that away.




I would say that most people that contribute to this thread do so to try to discredit the up move in the market, not fact just my opinion.

Not sure why you replied to my post as i didn't quote your statement but that of another poster or was it the "conspiracy rant" part that caught your attention :

I asked a poster if he had facts to back up his claim that the unemployment figures are higher than are being reported. 

You then gave a link to the official reported stats from the official USDOL site.

So how are they being hidden when they are there for all to see?


----------



## jiggy

I think most bm's Uncle festivus and co posting their rantings on this thread also believe the US gov't has aliens at their military bases and that we also never landed on the moon.

I think these guys have become even more delusional because they have either been shorting this market on their distorted beliefs and blown themselves up or have missed the 40% plus upward movement in the share market and are obviously very bitter.

Can't wait until they stop blaming the Fed, US gov't etc and start blaming the aliens instead 

There's always going to be a few who post who have obviously lost some of their marbles


----------



## Macquack

jiggy said:


> I think most bm's Uncle festivus and co posting their rantings on this thread also believe the US gov't has aliens at their military bases and that we also never landed on the moon.
> 
> I think these guys have become even more delusional because they have either been shorting this market on their distorted beliefs and blown themselves up or have missed the 40% plus upward movement in the share market and are obviously very bitter.
> 
> Can't wait until they stop blaming the Fed, US gov't etc and start blaming the aliens instead
> 
> There's always going to be a few who post who have obviously lost some of their marbles




So jiggy, you reckon the Global Financial Crisis didn't happen either?


----------



## Nyden

Macquack said:


> So jiggy, you reckon the Global Financial Crisis didn't happen either?




I don't think anyone believes that, but many of us are merely playing with what's actually happening, and what's being presented - not what we hope will happen. In other words, the recession may be over 

If you go back to threads in 01-02, I'm sure there were many calling for the last recession to keep on going as well. For new lows to be reached, idiots completely cashed up, waiting for the 'grand fall', guess what happened to them? They're money was enormously eroded, and they lost huge amounts of spending power (vs property, shares, basically everything).

At the moment, the risks of not being in the market still greatly outweigh the risks of being in it. I've been averaging 3-4% a blooming week! Anyone not seeing what is going on, is completely blind. Simple as that


----------



## Uncle Festivus

jiggy said:


> I think most bm's Uncle festivus and co posting their rantings on this thread also believe the US gov't has aliens at their military bases and that we also never landed on the moon.
> 
> I think these guys have become even more delusional because they have either been shorting this market on their distorted beliefs and blown themselves up or have missed the 40% plus upward movement in the share market and are obviously very bitter.
> 
> Can't wait until they stop blaming the Fed, US gov't etc and start blaming the aliens instead
> 
> There's always going to be a few who post who have obviously lost some of their marbles




That's a nice reposte but as usual zero facts to back any of it up with, just some unsubstantiated conjecture, especially the bit about going short etc. You must have some special power to be able to know how & what I trade? 

Apparently you are unable to appreciate someone trying to put forward an apparently alternative view, based on facts and government data, fwiw. 

The central banks have done an excellent job in passing the current problem into the future but basically the same fundamental problems, which got us here in the first place, still exist, as per charts from FDIC.

Perhaps you can explain how these charts are incorrect, or for that matter, do you actually understand them?


----------



## Knobby22

True Festivus.
Even the regulation of banking in the US is going badly. If we are not careful, it will all happen again within 10 years and this time there will be no escape.

I can see the USA becoming a socialist state in the future where socialism is practised on companies and banks but not individuals. 

The bipartinship over there is frightening. I am usually pretty positive but am really starting to get scared.


----------



## Uncle Festivus

Simple mathematics for the USA (and others ie debt to GDP ratio's) - money coming in does not equel money going out = huge deficit(s)

Only the timing is unknown???


----------



## Sean K

Uncle Festivus said:


> Simple mathematics for the USA (and others ie debt to GDP ratio's) - money coming in does not equel money going out = huge deficit(s)
> 
> Only the timing is unknown???



Any chance this will be fixed over time?


----------



## swm79

China is four or five times as big in population, but on a per capita basis they still are 1/25 the earnings power of the US. 

*John R Talbott is a former investment banker with Goldman Sachs and author of Obamanomics and The 86 Biggest Lies on Wall Street:*



> Australia is heavily import and export dependent and so I’ll bet businessmen in Australia looks mostly to China, Japan and the US to predict Australia’s export function and China right now is doing very well and Australia is seeing a big commodities boom because of it. But whereas it was real over the last 20 years, this year, I don’t think it’s real. This year I think the Chinese government is just propping up commodity prices. They’re making too many purchases, given the economic outlook. China itself is not an independent economy. They produce and manufacture for the US, so if the US is not consuming, China is going to have to slow down. They are not going to be able to replace all of their exports to the US with domestic consumption.






> The way I would draw it is I don’t think this is the recovery we’re experiencing now. I think what we’re on is a 'straight down' slope and if you’re seeing any positive numbers coming out of Australia or China or the US, they’re a direct result of huge government interference. The Chinese economy is less than a $2 trillion economy when measured at market exchange rates and yet they have a stimulus plan of over $500 billion. The US economy spent $700 billion overnight on a TARP [Troubled Asset Relief Program] plan and there are suggestions that they may have either given away or invested or spent or guaranteed something like $23 trillion of commercial paper and bank deposits and money market funds. Fannie Mae, Freddie Mac debt, etc, etc, etc.
> 
> So, with that huge level of government involvement, there’s got to be some sort of blip in the short run, but again, you don’t get out of the downward spiral unless you address the fundamental issues and the fundamental issues are too much borrowing, too much corrupt practice, too much criminal practice going on on Wall Street and a huge amount of government, corporate and individual debt that has to be repaid. People were borrowing against their homes in the US for decades and that’s all stopped and now they’ve got the debt and they don’t have the house and now they’ve got to pay all that back. That’s got to slow consumption.






> It took a major financial crisis that almost bankrupted the global financial system to make people realise that we had a very serious problem occurring in our financial system and what did we do? We raced around like Humpty Dumpty soldiers and horses trying to put the old system back together again and we put together these banks that were too big to fail. We put back together the credit default swap market and the derivatives market which is so interconnected you can’t allow anybody to claim bankruptcy. We tried to put back together the securitisation market which allowed banks to completely flush assets with no risk to their balance sheets and to throw all the risk onto other parties and so, you know, there’s a reason why the global financial system almost collapsed. It seems silly to me for our reforms to put that same system back together again and if they’re successful in doing it, then all we’re doing is delaying the day of mourning when this all happens again.


----------



## lasty

"China is four or five times as big in population, but on a per capita basis they still are 1/25 the earnings power of the US."

Yup but those figures of wealthy US citizens is some what misleading. 
A small percentage holds the wealth in the US 
Take Leichenstein for example GDP per capita the rank number 1 in the world.


----------



## swm79

lasty said:


> "China is four or five times as big in population, but on a per capita basis they still are 1/25 the earnings power of the US."
> 
> Yup but those figures of wealthy US citizens is some what misleading.
> A small percentage holds the wealth in the US
> Take Leichenstein for example GDP per capita the rank number 1 in the world.




thats all well and good but that misses the point.

the point is that China produces for US to consume... therefore any slow down in the rate of consumption in the US is going to have a negative effect in china.... and therefore australia.

America doesnt consume -> china doesnt produce -> china doesnt purchase our resources

Then add to that the fact that nothing has been fixed in the US - TARP was given to Paulson's friends on Wall Street and that China is trying to get rid of their US bonds by issuing quazi-sub-prime loans and its 2008 all over again!

What happens when the stimulus packages are wound back? The US has got $23 trillion of guarantees out there. 

How do you go into a market place like the money market or the commercial banks and tell their investors 'by the way you no longer have a government guarantee' and how do you scale back huge government programs when that’s the only thing that’s supporting any type of GDP growth?


----------



## Uncle Festivus

kennas said:


> Any chance this will be fixed over time?




Yes, if they reduce Social Security and Medicare to minimum?, a 50% or more cut to the military budget, and an elimination of *all* other federal programs? Apart from that, there shouldn't be too much disruption to daily life?


----------



## swm79

Uncle Festivus said:


> Yes, if they reduce Social Security and Medicare to minimum?, a 50% or more cut to the military budget, and an elimination of *all* other federal programs? Apart from that, there shouldn't be too much disruption to daily life?




Obama's got a social security and Medicare deficit that has a negative present value of something like $35 trillion to $40 trillion and Americans have started savings, but they’re not saving that many trillion dollars a year. To get to fund $2 trillion, they need all of America’s savings and all of China to continue their savings in US Treasury securities, like they have historically, and then they need some more....


----------



## jiggy

I wish i could copy and paste paragraphs and pull up charts that that try to justify the distorted beliefs of those on the extreme. 

Sounds like there are alot of shorters who have blown themselves up 

maybe if you didn't believe in so much of the rubbish and conspiracy theories u purport you might not be so bitter and make some money.

A good book called - Sharemarket investing for dummies.  ......................could be a good start 

Just to add to the common theme on this thread........................Aliens are buying treasuries not the chinese


----------



## Uncle Festivus

jiggy said:


> I wish i could copy and paste paragraphs and pull up charts that that try to justify the distorted beliefs of those on the extreme.
> 
> Sounds like there are alot of shorters who have blown themselves up
> 
> maybe if you didn't believe in so much of the rubbish and conspiracy theories u purport you might not be so bitter and make some money.
> 
> A good book called - Sharemarket investing for dummies. ......................could be a good start
> 
> Just to add to the common theme on this thread........................Aliens are buying treasuries not the chinese




That doesn't make sense, but good luck to you. Why are _you_ trying to justify the distorted beliefs of those on the extreme?

I wish you were smart enought to post some sort of supporting documentation too, but as that's not possible you should just stick to being a Lemming 

Where are these shorters that have blown themselves up - any facts to back that up??

Now about the 'rubbish & conspiracy theories', which would they be exactly?

The ones that show charts and stats from the US Federal Reserve, or maybe the FDIC, or various government released statistics?? Make some money - where did that $130k come from??

Start posting something factual to back your, loosly termed "argument", or go back to the kiddies creche in PollyAnna land.


----------



## swm79

jiggy said:


> I wish i could copy and paste paragraphs and pull up charts that that try to justify the distorted beliefs of those on the extreme.
> 
> Sounds like there are alot of shorters who have blown themselves up
> 
> maybe if you didn't believe in so much of the rubbish and conspiracy theories u purport you might not be so bitter and make some money.
> 
> A good book called - Sharemarket investing for dummies.  ......................could be a good start
> 
> Just to add to the common theme on this thread........................Aliens are buying treasuries not the chinese




hahahahahahahahahaha

GREAT argument... who mentioned anything about being short or making losses???

i've made money on the rally... but the "cut and paste jobs" are indicating that this rally may be running out of steam

if you want me to back that up with some "facts" (or leading indicator alarm bells) then i've got some for you: iron ore spot price down 25% since 2009 highs, chinese HRC price down 20%, Baltic dry down over 40% from 09 peak, base metal pirces down 5-10%, chinese equity market fallen 205 recently... gold up... US bond yeilds weak indicating downturn, but markets indicate a recovery???

by all means keep playing your "conspiracy theory" drum.... each to their own


----------



## communique

Have a little respect jiggy.  The reason this thread is in existence is because of Uncle.  His first post alerted everyone to what eventually happened.


----------



## swm79

communique said:


> Have a little respect SWM.  The reason this thread is in existence is because of Uncle.  His first post alerted everyone to what eventually happened.




huh? if you read my posts me and UF agree... my last post is to jiggy


----------



## communique

swm79 said:


> huh? if you read my posts me and UF agree... my last post is to jiggy




Apologies.  I should have said Jiggy.


----------



## swm79

communique said:


> Apologies.  I should have said Jiggy.




ok.

he discredits the thoughts of everyone by talking about "conspiracy theories" and "aliens" because he doesnt understand the consequences of what he's reading. he obviously doesnt know what any of it means. 

he cant provide any counter arguments or facts... even if they are cut and paste


----------



## wayneL

jiggy said:


> I wish i could copy and paste paragraphs and pull up charts that that try to justify the distorted beliefs of those on the extreme.
> 
> Sounds like there are alot of shorters who have blown themselves up
> 
> maybe if you didn't believe in so much of the rubbish and conspiracy theories u purport you might not be so bitter and make some money.
> 
> A good book called - Sharemarket investing for dummies.  ......................could be a good start
> 
> Just to add to the common theme on this thread........................Aliens are buying treasuries not the chinese




There is a certain sort of person who feels the need to go all ad hominem and build silly straw man arguments against those who hold the opposite view.

It's childish!

Why should you give a rat's jiggy? There is something pathological about your post here. It's an opinion and people will trade to it for better or for worse.

As it happens, economy bears are doing pretty OK on gold.

BTW, how many Sharemarket Investing for Dummies bought at 6500? 

...and FWIW, I'm pretty much a market neutral and or MOMO trader. I couldn't give a **** which way the market is going. Actually, I do best when not much is happening at all.


----------



## GumbyLearner

jiggy said:


> Aliens are buying treasuries not the chinese




And aliens are also controlling the mark-to-market accounting rules of the major banks on Wall Street. 

You really should dyor jiggy. 

You sound like a jerk!


----------



## nunthewiser

2700- 2900 overall bottom .......... no time  limit given ............ china will be the catalyst for the final leg down ..... merely opinion only 

happy to trade either direction in the meantime 

please take a number on any attempts at discrediting my opinion .


----------



## Sean K

GumbyLearner said:


> You sound like a jerk!



Kettle, this is pot, over.


----------



## nunthewiser

kennas said:


> Kettle, this is pot, over.





LOL ..... sorry for my low content post but THAT deserved a giggle


----------



## Whiskers

jiggy said:


> I think most bm's Uncle festivus and co posting their rantings on this thread also believe the US gov't has aliens at their military bases and that we also never landed on the moon.
> 
> I think these guys have become even more delusional because they have either been shorting this market on their distorted beliefs and blown themselves up or have missed the 40% plus upward movement in the share market and are obviously very bitter.
> 
> Can't wait until they stop blaming the Fed, US gov't etc and start blaming the aliens instead
> 
> There's always going to be a few who post who have obviously lost some of their marbles




Hey jiggy, I am one who has dissagreed with Uncle about the severity of the current/past correction... BUT I don't discount the seriousness of the statistics he refers too and the associated economic problems. 

Page 114 - 12 April 2008


> [ QUOTE=Whiskers;282078]My main arguement why this downturn will not be as severe as some expect.
> 
> The residue will carry over for another day.




I just dissagree a bit about the timeframe and cycles that it will fall out in. I suspect that is because I place a greater emphasis on the psychology of the markets and regulators than the economic data itself.

Assuming the market has bottomed for the time being, maybe a year or two, the economic mess the US is in can't be just patched up and deferred indeffinately by political will.


----------



## Uncle Festivus

Risking the rath of the Pollyanna Brigade to quote a bear journalist (Ambrose Evans-Pritchard), the heart of the problem is not only still there, but is getting worse. So it may have been an equity bottom, but yet to reach an economic bottom? 

Negative money velocity & trade wars.......the globalised race to the bottom for the cheapest labour & the end of the consumer middle classes?



> Both bank credit and the M3 money supply in the United States have been contracting at rates comparable to the onset of the Great Depression since early summer, raising fears of a double-dip recession in 2010 and a slide into debt-deflation.
> 
> Professor Tim Congdon from International Monetary Research said US bank loans have fallen at an annual pace of almost 14pc in the three months to August (from $7,147bn to $6,886bn).
> 
> "There has been nothing like this in the USA since the 1930s," he said. "The rapid destruction of money balances is madness."




http://www.telegraph.co.uk/finance/...-prompting-fears-of-double-dip-recession.html


----------



## GumbyLearner

kennas said:


> Kettle, this is pot, over.




I know Kennas. I'm a hypocrite of the highest order and make outlandish claims without using any substantive argument or evidence to back up my posts. If you weren't a Mod I'm sure you would put me on Ignore. 

I'm sure my ranting contributions to ASF are useless and mostly bordering on the ridiculous.

But at least, I know I'm still a Gumby and still a Learner.


----------



## swm79

Uncle Festivus said:


> Risking the rath of the Pollyanna Brigade to quote a bear journalist (Ambrose Evans-Pritchard), the heart of the problem is not only still there, but is getting worse. So it may have been an equity bottom, but yet to reach an economic bottom?
> 
> Negative money velocity & trade wars.......the globalised race to the bottom for the cheapest labour & the end of the consumer middle classes?
> 
> 
> 
> http://www.telegraph.co.uk/finance/...-prompting-fears-of-double-dip-recession.html




if thats the case (banks reducing ratios refered to in the article) that means divs by the banks will have to be cut - that will be a first - alternatively we may see banks holding on to more profits OR issuing more equity.... 

therefore, banks will be re-rated downwards 

hhhhmmmmm big issues there


----------



## swm79

i read this quote somewhere.... exactly how i see it at the moment

well... maybe not EXACTLY... there are still SOME cheap(ish) stocks out there worth getting on.... but not many!



> ...as long as the economy seems to be on the mend, investors' "appetite for risk" improves. They want to speculate on the recovery. But then, when the recovery proves an illusion...they're going to run for cover.


----------



## swm79

Good article from The Daily Reckoning:



> We continue to laugh at recovery sightings. Yesterday, for example, the Fed reported to the nation that a recovery was underway. But even the Fed couldn't ignore the fact that consumers aren't spending money the way they used to. The New York Times comments:
> 
> "The prolonged slump in consumer spending has been one of the most serious points of worry for economists, and the Fed's warning about it deflated some of the market's optimism. About 70 percent of the economy depends on spending by consumers."
> 
> The other sticky wicket in this game is unemployment. Jobless ranks are swelling like a floating corpse. But the jobless numbers don't tell the whole story. There are 34 million Americans who live on food stamps. One out of every nine people depends on the government for his daily bread. The Financial Times fills in the details:
> 
> "Less attention has been paid to those still in the workforce, whose incomes are also being squeezed. The average working week is now about 33 hours, the lowest on record, while the number forced to work part- time because they cannot find full-time work has risen more than 50 per cent in the past year to a record 8.8m. Wages and benefits have decelerated.
> 
> "The food stamp data suggest that 'the labour market problems are more significant than you would expect, given just the unemployment rate', said John Silvia, chief economist at Wells Fargo. 'For me it suggests the consumer is not going to rebound or contribute to economic growth for the next year, as the consumer would in a traditional economic recovery.'
> 
> "Consumer spending has traditionally been the engine of the US economy, making up about two thirds of GDP. Economists fear that people may be unwilling to resume that role.
> 
> "Food stamps are distributed once a month on electronic cards that can be spent at many grocery stores. The $787bn stimulus bill added about $80 (â‚¬55, £50) to a family's monthly allowance, which now stands at an average $290.
> 
> Nothing very original about keeping the masses fed with government food. The Romans figured it out 2,000 years ago. You have to distract the mob with pane et circenses (bread and circuses). Otherwise, they vote you out of office...or burn down the capitol.
> 
> "Everything, now restrains itself and anxiously hopes for just two things: bread and circuses," wrote Juvenal.


----------



## grace

nunthewiser said:


> 2700- 2900 overall bottom .......... no time  limit given ............ china will be the catalyst for the final leg down ..... merely opinion only
> 
> happy to trade either direction in the meantime
> 
> please take a number on any attempts at discrediting my opinion .




Hey nun, I hope you are right actually.  Why do you think china will be the catalyst for the final leg down....what news do you expect?  Just curious.


----------



## jonojpsg

grace said:


> Hey nun, I hope you are right actually.  Why do you think china will be the catalyst for the final leg down....what news do you expect?  Just curious.




Hey grace, sorry to butt in, but I would have thought the bad news from China would be along the lines of, "Hey, we've spent all we can for the moment on stimulus and our banks have lent all they can for the purposes of increasing the value of real estate and we've bought up all the spare base metals we need for the moment, and, oh yes, our domestic demand isn't quite enough to make up for the massive drop in US/other demand so our GDP figures for the next year(or year after next) will actually be more like 4% rather than 8% - sorry"

That might shake the index down a thousand  IMO of course


----------



## nunthewiser

grace said:


> Hey nun, I hope you are right actually.  Why do you think china will be the catalyst for the final leg down....what news do you expect?  Just curious.





basically a wake up call on the big "china dream" everyone counting on to continue the wheels turning ... not many ppl actually looking at some of the facts re industry in china ie stell mills closing by the dozen , stockpiles building ....... trade negotiations getting tightened ....... money lending tightening . . china is the "great white hope" everywhere one looks and they have the power to put the screws on currencies , resources , precious metals at any time they wish ..... 

i could be wrong but i truly believe that china is where this game of chess hits checkmate ...... i could be wrong ........ i am often ......

i am no economist , just a dude with an opinion on what i see around me and what i read between the lines in the media/business pages 

but i truly think we and the rest of the so called develpoed world in for a major shakeup when the master chess players decide they have positioned themselves to there full advantage for pulling the rug out 

OPINION ONLY 

take from it what you wish


----------



## nunthewiser

in my dribbling all that it does NOT mean i will sit on my hands waiting for my thoughts to come true either .. happy to trade and add to various long term positions when i see fit and in no way going to waste time over it waiting for something that MAY never happen 

my posts are my thoughts only , i am in no way qualified in economics, i cant even bloody spell .....

just my thoughts


----------



## grace

nunthewiser said:


> basically a wake up call on the big "china dream" everyone counting on to continue the wheels turning ... not many ppl actually looking at some of the facts re industry in china ie stell mills closing by the dozen , stockpiles building ....... trade negotiations getting tightened ....... money lending tightening . . china is the "great white hope" everywhere one looks and they have the power to put the screws on currencies , resources , precious metals at any time they wish .....
> 
> i could be wrong but i truly believe that china is where this game of chess hits checkmate ...... i could be wrong ........ i am often ......
> 
> i am no economist , just a dude with an opinion on what i see around me and what i read between the lines in the media/business pages
> 
> but i truly think we and the rest of the so called develpoed world in for a major shakeup when the master chess players decide they have positioned themselves to there full advantage for pulling the rug out
> 
> OPINION ONLY
> 
> take from it what you wish




Yes, it is a very dangerous game we play indeed.  My thoughts perhaps more on the line of how the USA/China financial conflict will play out.


----------



## nunthewiser

grace said:


> Yes, it is a very dangerous game we play indeed, pegging all of our dreams on a communist country.




yep a country thats already proven that contracts agreed on are not worth a pinch of poo when it comes to the crunch 

we are on one playing field with our rules/ways of doing business . they play on there field and play the ggame how it suits them best in the long run REGARDLESS of our rules 

who,s gunna argue with them over it , who is going to enforce any break of queensbury rules when it comes to the crunch ...


----------



## nunthewiser

maybe im just paranoid and its all sunshine and lollipops after all


----------



## jono_oz

grace said:


> Yes, it is a very dangerous game we play indeed, pegging all of our dreams on a communist country.




I totally agree - you just have to see how commodities go up and down on the mere mention of a Chinese slow down - let alone an actual one!! 

So many people forget that they are indeed still a communist country where the only rights are those of the Supreme Council.

Ask Mr Hu - he knows just what that means.


----------



## jiggy

swm79 said:


> Good article from The Daily Reckoning:




Lol ...Daily Reckoning is such a "balanced" newsletter to refer to lol......says it all really.........:fu::321::headshake:shake:

I thoughts bonds were at current levels due to the spectre of coming deflation??!!!!!!


----------



## Sean K

jiggy said:


> Lol ...Daily Reckoning is such a "balanced" newsletter to refer to lol......says it all really.........:fu::321::headshake:shake:
> 
> I thoughts bonds were at current levels due to the spectre of coming deflation??!!!!!!



I didn't see anything in that related to bonds and deflation. 

What's your 'balanced' view?


----------



## wayneL

jiggy said:


> Lol ...Daily Reckoning is such a "balanced" newsletter to refer to lol......says it all really.........:fu::321::headshake:shake:
> 
> I thoughts bonds were at current levels due to the spectre of coming deflation??!!!!!!




Speaking of balanced...


----------



## swm79

jiggy said:


> Lol ...Daily Reckoning is such a "balanced" newsletter to refer to lol......says it all really.........:fu::321::headshake:shake:
> 
> I thoughts bonds were at current levels due to the spectre of coming deflation??!!!!!!




just becuase i quoted it doesnt mean i believe its the gospel

what does it "say"? i'm interested to hear what quoting the Daily Reckoning says about me?

havent heard anything but snide remarks out of you yet jiggy


----------



## moXJO

Might take a while before any correction. Market just wants to keep moving up, even the down days of the Dow quickly turn around. Lay back and enjoy the sunshine


----------



## swm79

moXJO said:


> Might take a while before any correction. Market just wants to keep moving up, even the down days of the Dow quickly turn around. Lay back and enjoy the sunshine




we're just sitting in a little holding pattern at the moment me thinks...

two months ago better than expected retail sales and NY manufacturing data, PLUS positive commentary from Bernake and Buffett would have put a rocket under the Dow.... but 0.59% isnt doing anything for me  

i think once the market realises that the times for the laggards switch is over and they see that the stimulus has run out/is put on hold and reality sets in i.e. the rally was due to the thirst for risk on FY10 figures (even though MONTHLY figures werent good enough for the market in the years gone by) and that the FY09 figures leave a lot to be desired... PLUS nothing has been fixed - infact its WORSE because banks and big business are falling back on the "the govt will just bail us out if the s*%t hits the fan".... add to that the fact that chinas domestic consumption is NO WHERE NEAR where it need to be to pull everyone else out.... plus about 13 other things.... and you can hear the distant grumble of bears


----------



## Real1ty

swm79 said:


> *we're just sitting in a little holding pattern at the moment me thinks...*
> 
> *two months ago better than expected retail sales and NY manufacturing data, PLUS positive commentary from Bernake and Buffett would have put a rocket under the Dow*.... but 0.59% isnt doing anything for me
> 
> i think once the market realises that the times for the laggards switch is over and they see that the stimulus has run out/is put on hold and reality sets in i.e. the rally was due to the thirst for risk on FY10 figures (even though MONTHLY figures werent good enough for the market in the years gone by) and that the FY09 figures leave a lot to be desired... PLUS nothing has been fixed - infact its WORSE because banks and big business are falling back on the "the govt will just bail us out if the s*%t hits the fan".... add to that the fact that chinas domestic consumption is NO WHERE NEAR where it need to be to pull everyone else out.... plus about 13 other things....* and you can hear the distant grumble of bears*




Of course 2 months ago better retail sales would see a bigger rally but look where the market was then compared to now.

The market has been factoring in these expectations and if they are met then the market won't rally hard although if they were exceeded they might and conversely if they miss we will sell off.

Not a bad "holding pattern" to be in when in the last 9 days each daily candle is green and we have gone from 991 to 1051.

How is the stimulus going to run out when the US and China stimulus is over 2 years?

My take on things is that there is also a possibility of further stimulus.

For all the negative figures that can be assumed there are probably more positive figures or at least less bad/improving that either have been released or can be expected.

The grumbling of the bears has been anything but distant and has been a roar for months.

They are going to be right eventually but when?


----------



## moXJO

swm79 said:


> we're just sitting in a little holding pattern at the moment me thinks...
> 
> two months ago better than expected retail sales and NY manufacturing data, PLUS positive commentary from Bernake and Buffett would have put a rocket under the Dow.... but 0.59% isnt doing anything for me
> 
> i think once the market realises that the times for the laggards switch is over and they see that the stimulus has run out/is put on hold and reality sets in i.e. the rally was due to the thirst for risk on FY10 figures (even though MONTHLY figures werent good enough for the market in the years gone by) and that the FY09 figures leave a lot to be desired... PLUS nothing has been fixed - infact its WORSE because banks and big business are falling back on the "the govt will just bail us out if the s*%t hits the fan".... add to that the fact that chinas domestic consumption is NO WHERE NEAR where it need to be to pull everyone else out.... plus about 13 other things.... and you can hear the distant grumble of bears




Yeah some quick play US shorts I have on are turning against me pretty fast atm (dare say I will be out or hedge tonight).  I agree that it probably is worse now than then. Also you have to wonder if any lessons were learnt, as we now go into greed overdrive. But it has surprised to the upside and may continue to do so for a while? 
The US media and Govt seem to be working together in blasting sunshine. And lets face it - if Rudd can become so popular to so many, by doing so little then it is possible they can talk this market run up for a while yet. Of course in the end you realize its all smoke and bs.
I dare say greed is just back in the house


----------



## swm79

Real1ty said:


> Of course 2 months ago better retail sales would see a bigger rally but look where the market was then compared to now.




Granted. We were miles off where we are now two months ago... but 0.59% on some good news that exceeded expectations AND Buffett telling the market HE'S fully invested and sees some really good opportunities out there... PLUS Bernake saying the US is out of the slump... that would HAVE to be worth more than 0.59% normally.



> The market has been factoring in these expectations and if they are met then the market won't rally hard although if they were exceeded they might and conversely if they miss we will sell off.




will be interesting to see what the Q3 numbers say then!... S&P trading at 19x - thats the highest level since... thats pricing in SIGNIFICANT earnings uplift in that quarter.... hows that going to happen with millions and millions out of work.... its almost as though the GFC never happened



> How is the stimulus going to run out when the US and China stimulus is over 2 years?




well, they can only issue SO many bonds before they start screwing up the monetisation policy... no one's going to be buying US bonds shortly - China and Japan are offloading them as quick as they can... i understand what you're saying but Obama is already talking about doing away with the next lot of stimulus - good job OB... and where did the stimulus go anyway? it didnt pay out toxic debts like it was supposed to!



> My take on things is that there is also a possibility of further stimulus.




i dont doubt it... but it would be silly



> For all the negative figures that can be assumed there are probably more positive figures or at least less bad/improving that either have been released or can be expected.




agreed, there probably is a lot of positive figures.... just hard to see them



> The grumbling of the bears has been anything but distant and has been a roar for months.
> 
> They are going to be right eventually but when?




i dont know... i started hearing them a few weeks ago... as for when they come out of their hibernation - thats anyone's guess... but hopefully SOMEONE lets me in on the info!!!

with all that said - i still remain fully invested - I'm bearish... not 100% bear


----------



## jiggy

lol   all this wishful thinking for the bears to come out is becoming a joke ....you guys have been saying this now for 4 months.

I suggest you close out all the short positions alot of you have obviously blown yourself on and do something that really isn't rocket science.........................follow the market.

yes yes yes one day the market will fall and retrace and you can all claim what big gun traders you were for predicting falls in the market 4 to 6 months out but missed out on 45% plus gains when the market went up.:321:

You will all be big heroes............heroes in your own mind


----------



## moXJO

jiggy said:


> lol   all this wishful thinking for the bears to come out is becoming a joke ....you guys have been saying this now for 4 months.
> 
> I suggest you close out all the short positions alot of you have obviously blown yourself on and do something that really isn't rocket science.........................follow the market.
> 
> yes yes yes one day the market will fall and retrace and you can all claim what big gun traders you were for predicting falls in the market 4 to 6 months out but missed out on 45% plus gains when the market went up.:321:
> 
> You will all be big heroes............heroes in your own mind




Wow... your wisdom knows no bounds

Do you know what everyone is trading and over what timeframe then? 
What is the problem with discussing the numbers or concerns out loud? 
Or must we all be sheep and follow the leader, on some idiots guide to stock investing

Keep the trolling to a minimum. 
Honestly it adds nothing by acting like a five year old with a big stick and poking at the bears.


----------



## cutz

jiggy said:


> You will all be big heroes............heroes in your own mind




Hey dude, you seem to think the market is a one way street, it's not.

Analogy >> The market is like an elastic band, the further you stretch it the harder it'll snap back into place, and when it does we can all get jiggy with it.


----------



## explod

> jiggy
> lol all this wishful thinking for the bears to come out is becoming a joke ....you guys have been saying this now for 4 months.




he he, some of us have been saying it would happen for four years and last October it did.   



> I suggest you close out all the short positions alot of you have obviously blown yourself on and do something that really isn't rocket science.........................follow the market




A suggestion like that is close to financial advice, which is illegal unless you are a qualified financial adviser.



> yes yes yes one day the market will fall and retrace and you can all claim what big gun traders you were for predicting falls in the market 4 to 6 months out but missed out on 45% plus gains when the market went up




How do you know we mised the 45% plus, what and how we trade has little to do with our discussions on world economics.  I have had a number of trades in the last few months very much better than that.   Some also not so, but that's trading.  I know others more active than I doing very much better and you can track them on  ASF and they still discuss the bad economic fundamentals on this thread with the same concerns as most for the longer term.



> You will all be big heroes............heroes in your own mind




You seem to be doing a very good job of that yourself, except you back it up with around about ziltch


----------



## mazzatelli

Is jiggy Wheep0 reincarnated?


----------



## moXJO

mazzatelli said:


> Is jiggy Wheep0 reincarnated?




Not enough bragging from jiggy about his huge portfolio, or that we have reached 4600. 
Hmmm.... but there is a lot of useless content and bear bashing in jiggys posts, so the possibility is there.


----------



## explod

Thought the following rather cute from Cuck Butlers daily blog today:-



> "Reason Magazine is one of the few magazines I read with any regularity. In the current edition, they had a couple of items that I thought were especially interesting. Ironic, actually.
> 
> The first was about a comic book the Fed has published discussing inflation, as well as defending its autonomy. You can view it by following the link below. What you should find interesting is that they make several clear mistakes in describing inflation – for instance, by saying that if the price of oil goes up, that causes inflation. And on the very first page, they state that “The dictionary defines inflation as a substantial and continuing rise in the general price level.”
> 
> But that is not what the dictionary says – every entry I checked always includes “… related to an increase in the volume of money,” or words to that effect. Kind of scary, when the organization charged with fighting inflation doesn’t actually know what it is.
> 
> You can read the comic yourself here, straight off the New York Fed’s website. http://ia301540.us.archive.org/2/items/gov.frb.ny.comic.inflation/gov.frb.ny.comic.inflation.pdf


----------



## swm79

explod said:


> Thought the following rather cute from Cuck Butlers daily blog today:-




they know what it is - they create it but they dont want to be seen to be creating it.

there's two ways the govt can take money off you 1) tax 2) inflation... everyone knows about tax... but inflation is the "hidden tax"

the reason gold was taken off the standard i.e. money not backed by gold anymore was to "allow expansion of world trade"... backing a currency with gold helps to maintain the value of the paper currency. if you know that your $1 note is redeemable for a set quantity of gold then it will maintain value. It means the banks cant - or shouldnt - create more paper money than the reserves they have in gold to back it up.

The 'inflexibility' of gold makes it harder to for governments to spend and makes it harder for banks to lend. gold forces a govt and its central bank to be disciplined - they cant circulate more money without having an increase in their gold reserves.

if they did then the paper money would not be fully backed by gold and that would cause the value of money to decrease. 

every currency you can name is worth significantly less today than it was thirty years ago... thats not (for the most part) because prices have risen, its because currencies have been devalued... central banks and governments have printed MASSIVE amounts of money.

if money still had the backing of gold then global economies would not have one-hundredth of the current problems we have

the fact that the UN and other government organisations are proposing to replace one currency backed by nothing with another currency backed by nothing tells me that they are intentionally pursuing *guaranteed* economic destruction.

and the devaluation of your money and wealth.

why does the UN want to create a universally backed reserve currency???? because if you can control that, you'll control the world. 

Rothschild quote: Give me control of a nation's money and I care not who makes the laws.


----------



## Nyden

swm79 said:


> they know what it is - they create it but they dont want to be seen to be creating it.
> 
> there's two ways the govt can take money off you 1) tax 2) inflation... everyone knows about tax... but inflation is the "hidden tax"
> 
> the reason gold was taken off the standard i.e. money not backed by gold anymore was to "allow expansion of world trade"... backing a currency with gold helps to maintain the value of the paper currency. if you know that your $1 note is redeemable for a set quantity of gold then it will maintain value. It means the banks cant - or shouldnt - create more paper money than the reserves they have in gold to back it up.
> 
> The 'inflexibility' of gold makes it harder to for governments to spend and makes it harder for banks to lend. gold forces a govt and its central bank to be disciplined - they cant circulate more money without having an increase in their gold reserves.
> 
> if they did then the paper money would not be fully backed by gold and that would cause the value of money to decrease.
> 
> every currency you can name is worth significantly less today than it was thirty years ago... thats not (for the most part) because prices have risen, its because currencies have been devalued... central banks and governments have printed MASSIVE amounts of money.
> 
> if money still had the backing of gold then global economies would not have one-hundredth of the current problems we have
> 
> the fact that the UN and other government organisations are proposing to replace one currency backed by nothing with another currency backed by nothing tells me that they are intentionally pursuing *guaranteed* economic destruction.
> 
> and the devaluation of your money and wealth.
> 
> why does the UN want to create a universally backed reserve currency???? because if you can control that, you'll control the world.
> 
> Rothschild quote: Give me control of a nation's money and I care not who makes the laws.




And, just how the hell would a gold backed currency work? Please explain it to me.

Because, as far as I can gather - it would, and cannot work with our current levels of population, and population growth. As more people are born, more people need actual money, to hold and to purchase goods and services, yes? So, as populations continue to double, and triple in size - more paper money is needed. 

How does the world keep up with gold production as to ensure that the gold backing is not diluted? Gold is freaking finite!! My god, gold would be worth $100,000 per ounce, who in the right mind would accept that a yellow rock, the size of my finger nail would equal to the price of half a house?

So, the dilemma over time? Either print more money, and dilute the backing, to a point where a $100 bill represents 1/100th of a nanometer of gold, or never print more money again, and have money exponentially *increase* in value over time, leaving zero reason for anyone who has it to actually work, or place their money into *productive* endeavors!

Yeah, money backed by gold would be fan-freaking-tastic for future generations.

So sick of these nonsensical conspiracy theories, and hatred of fiat money. If you're so clever, come up with a * feasible* alternative, that doesn't involve your yellow rock buried in the hard making you a millionaire overnight.

Rant over.


----------



## Knobby22

I agree. Even after all this time we have people wanting to go back to the 19th century way of doing things. Basing everything on a bit of metal. The ultimate conservatives.

Look at history. The countries that first came out of the Great Depression wrer the ones that decided to get rid of the gold standard and put liquidity into the system.

The current malaise is caused by poor government regulation and poor central bank decisions. Australia's success shows that if you control these things you won't go broke. 

There are a lot of interest groups influencing the media particuarly in the USA to get their short terms aims up against the good of the world. Take what they say with a kilo of salt.


----------



## swm79

Nyden said:


> And, just how the hell would a gold backed currency work? Please explain it to me.
> 
> Because, as far as I can gather - it would, and cannot work with our current levels of population, and population growth. As more people are born, more people need actual money, to hold and to purchase goods and services, yes? So, as populations continue to double, and triple in size - more paper money is needed.
> 
> How does the world keep up with gold production as to ensure that the gold backing is not diluted? Gold is freaking finite!! My god, gold would be worth $100,000 per ounce, who in the right mind would accept that a yellow rock, the size of my finger nail would equal to the price of half a house?
> 
> So, the dilemma over time? Either print more money, and dilute the backing, to a point where a $100 bill represents 1/100th of a nanometer of gold, or never print more money again, and have money exponentially *increase* in value over time, leaving zero reason for anyone who has it to actually work, or place their money into *productive* endeavors!
> 
> Yeah, money backed by gold would be fan-freaking-tastic for future generations.
> 
> So sick of these nonsensical conspiracy theories, and hatred of fiat money. If you're so clever, come up with a * feasible* alternative, that doesn't involve your yellow rock buried in the hard making you a millionaire overnight.
> 
> Rant over.




ok, have you settled down now?

i never passed any judgment. i never said get rid of it and i'm not proposing an alternative

merely stating the way things happen. 

i havent developed a "faith" in gold... just a respect for the current trend. i dont even own gold and i only have one stock in my portfolio that is a gold producer

so if you think i'm part of the tin hat brigade, you're wrong


----------



## nunthewiser

I hold physical Gold 

have done for years , im fine with it ...... i dont trade the actual physical metal it was merely bought as a "rainy day" item 

just another diversification of assets to me 

i have no problems with anything you guys arre saying regarding Gold but my reasons for owning have nothing to do with your reasons 

nice to see it growing in value over the time tho 

one day i might need it .. if not it will give my kids something to do for years trying to work out my treasure map when i kark it


----------



## Uncle Festivus

cutz said:


> Hey dude, you seem to think the market is a one way street, it's not.
> 
> Analogy >> The market is like an elastic band, the further you stretch it the harder it'll snap back into place, and when it does we can all get jiggy with it.




Especially when that elastic band is the DXY/USD? When things, commodities & stock markets, rise in price solely because of exchange rate variations and not intrinsic supply/demand fundamentals, this is telling me there is something seriously wrong with the currency in which they are all priced in?

The green light to unrestrained money making has been given by Bernanke, so make it while we can?



Nyden said:


> And, just how the hell would a gold backed currency work? Please explain it to me.
> 
> Because, as far as I can gather - it would, and cannot work with our current levels of population, and population growth. As more people are born, more people need actual money, to hold and to purchase goods and services, yes? So, as populations continue to double, and triple in size - more paper money is needed.




This is the fatal flaw part of anti gold standard arguments - an increasing population  does not come with the guaranteed right to 'money', there has to be a 'living within ones means' component as well. All the current system does, as shown so spectacularly recently, is to waive the right of money creation to a select group of people who may or may not have the best interests of the rest of the population in mind when they make laws & decisions.

I'm not sure even if it's practical to go to a pure gold standard any more as we are too far down the fiat road, although it's technically possible. No central banker or politician in their right mind would cede control of the money machine to one that restricts debt & credit to a sustainable growth rate anyway, so we might as well go along for the ride and keep guessing as to when it & how it will ultimately end.


----------



## swm79

Uncle Festivus said:


> so we might as well go along for the ride and keep guessing as to when it & how it will ultimately end.




with Joe Citizen losing i'd say!

Bernake: "yyyeeeesssss, yes, you like the credit dont you???... thats it... yes, of course you want the plasma... here, here's an advance... take two!... dont worry you can pay for it later!... here take another credit card!"


----------



## Average Joe

*Thousands Of Rusting Ship Hulls Are A Fitting Tribute To The Speculative Market Bubble*

Great post from Zerohedge, using vesseltracker.com to track out of charter ships. Looks like th ebaltic dry index is not going up anytime soon.

Singapore:






Chinese coast:





more pictures on link:
http://www.zerohedge.com/article/thousands-rusting-ship-hulls-are-fitting-tribute-speculative-market-bubble


----------



## Ato

Knobby22 said:


> I agree. Even after all this time we have people wanting to go back to the 19th century way of doing things. Basing everything on a bit of metal. The ultimate conservatives.
> 
> Look at history. The countries that first came out of the Great Depression wrer the ones that decided to get rid of the gold standard and put liquidity into the system.
> 
> The current malaise is caused by poor government regulation and poor central bank decisions. Australia's success shows that if you control these things you won't go broke.
> 
> There are a lot of interest groups influencing the media particuarly in the USA to get their short terms aims up against the good of the world. Take what they say with a kilo of salt.




Fwiw I think this comment is rather insightful. 

The issue seems less to do with a fiat currency versus a hard currency such as gold, and alot more to do with the failure of poor government and poor central bank (and the possibly continued failure).

I understand both sides of the currency argument, I think, but in this day and age going back to the gold standard I think is not really possible. Surely it could be abused to keep wealth in the hands of a few, just as a fiat currency can be manipulated.


----------



## explod

Ato said:


> Fwiw I think this comment is rather insightful.
> 
> The issue seems less to do with a fiat currency versus a hard currency such as gold, and alot more to do with the failure of poor government and poor central bank (and the possibly continued failure).
> 
> I understand both sides of the currency argument, I think, but in this day and age going back to the gold standard I think is not really possible. Surely it could be abused to keep wealth in the hands of a few, just as a fiat currency can be manipulated.




The way things are going it wont matter, the only things that will have value soon are those that you can eat or those things that you can use to get something to eat.   Money is fast losing its value and food is becoming scarce and so on.

If you have some land, you can live on it.  If you do some work of  value you will want to get paid by either food of something that will get you food.

Too many wines, must be another bright spark that can finish it off.  Anyhow get the drift.  Even gold will be useless.  On second thoughts another wine while I v got some.


----------



## MrBurns

explod said:


> The way things are going it wont matter, the only things that will have value soon are those that you can eat or those things that you can use to get something to eat.   Money is fast losing its value and food is becoming scarce and so on.
> 
> If you have some land, you can live on it.  If you do some work of  value you will want to get paid by either food of something that will get you food.
> 
> Too many wines, must be another bright spark that can finish it off.  Anyhow get the drift.  Even gold will be useless.  On second thoughts another wine while I v got some.




Real estate - no matter how it's value fluctuates you can always live in it camp on it or work in it, the intrinsic value is always there.

As long as there is no debt on it of course.


----------



## Ato

explod said:


> The way things are going it wont matter, the only things that will have value soon are those that you can eat or those things that you can use to get something to eat.   Money is fast losing its value and *food is becoming scarce* and so on.




I enjoy reading your posts, explod, so please dont think I'm having a go. But can you back any of that up with concrete details? In particular the last part I bolded. While I personally think things will get somewhat worse than they currently are, speaking very generally, I dont think we're heading for some kind of Malthusian catastrophe. I'm pretty pessimistic, but even I have trouble being that pezzy   (I could very well be wrong though, in which case I guess I'll see most of you guys in hell?   )


----------



## explod

Ato said:


> I enjoy reading your posts, explod, so please dont think I'm having a go. But can you back any of that up with concrete details? In particular the last part I bolded. While I personally think things will get somewhat worse than they currently are, speaking very generally, I dont think we're heading for some kind of Malthusian catastrophe. I'm pretty pessimistic, but even I have trouble being that pezzy   (I could very well be wrong though, in which case I guess I'll see most of you guys in hell?   )





People are starving across the planet, in third world countries particularly(largely ignored by the polular press mind), even in the good ole US of A the issue of food stamps is increasing exponentially.  Why, overcrowding, even the UK;     seasonal problems effecting crop production, increase of deseases hitting livestock.  Oceans being fished out.

A bit of googling will back it up.

And hell does not exist IMHO so have a good time while you can.


----------



## MrBurns

explod said:


> And hell does not exist IMHO so have a good time while you can.




Hell exists on earth for those that deserve it.


----------



## gooner

explod said:


> People are starving across the planet, in third world countries particularly(largely ignored by the polular press mind), even in the good ole US of A the issue of food stamps is increasing exponentially.  Why, overcrowding, even the UK;     seasonal problems effecting crop production, increase of deseases hitting livestock.  Oceans being fished out.
> 
> A bit of googling will back it up.
> 
> And hell does not exist IMHO so have a good time while you can.




China and India will start moving to more meat based diets which requires more feedstock.  Once economy kicks up again, POO up to what US$200-US$300. Fertilisers will start getting expensive. All impacts the food chain.


----------



## Ato

explod said:


> People are starving across the planet, in third world countries particularly(largely ignored by the polular press mind), even in the good ole US of A the issue of food stamps is increasing exponentially.  Why, overcrowding, even the UK;     seasonal problems effecting crop production, increase of deseases hitting livestock.  Oceans being fished out.
> 
> A bit of googling will back it up.
> 
> And hell does not exist IMHO so have a good time while you can.




Fair enough, I'll have a look around for info. What's your time frame for the 'event' then?

(Yes, sorry, the hell thing was just a figure of speech, a bad one >_>  I believe all religion belongs in the realm of fiction.)


----------



## trainspotter

Reply to post by Average Joe ..... Ummmmmm having sailed through the Singapore Straits and the South China Sea those amount of ships waiting/not moving is not uncommon. Most of the time they are waiting to be loaded as there is not enough facilities to handle the amount of ships. TRUE many of them will not be seaworthy but I do not think they will leave them to rust? I would be thinking they would scrap them for the metal PRONTO.

Fire up Google Earth and have a look at Surabaya if you want to see ships jammed in on top of each other. The picture below is of Freighters unloading and jostling for positions.


----------



## Glen48

I agree with the above have my 2 acres for 4 K and hope to be there end of next month to build a house, no rules over there pick a place and start work ride out the depression and hope Rudd leaves enough n money for a small pension.
 Who else is coming?


----------



## explod

Ato said:


> Fair enough, I'll have a look around for info. What's your time frame for the 'event' then?
> 
> (Yes, sorry, the hell thing was just a figure of speech, a bad one >_>  I believe all religion belongs in the realm of fiction.)




Nothing in the hell thing but good to have some banter in among the gloom, so keep it up

Time frame, for a lot of people we are there now.  Here in Aus., unemployment is starting to bite.  The loss of confidence from last October, and the asset contractions are yet to bite.  I think we will see a very clear picture of the real state of things in 12 months and IMHO (emphasize that) it will be dismal for the lower and into the middle classes.


----------



## dhukka

explod, 

re positive US GDP growth in 3Q09, the charts below tell the story, Industrial production up in July and August, retail sales up strongly in August. If you want to claim that the bump in growth in the third quarter is entirely due to government stimulus on cash for clunkers and inventory restocking etc. then you'll get no argument from me. The big question is whether the 3Q09 can generate a self-reinforcing positive growth cycle. I remain skeptical on that score.


----------



## Gone Fishin

trainspotter said:


> Reply to post by Average Joe ..... Ummmmmm having sailed through the Singapore Straits and the South China Sea those amount of ships waiting/not moving is not uncommon. Most of the time they are waiting to be loaded as there is not enough facilities to handle the amount of ships. TRUE many of them will not be seaworthy but I do not think they will leave them to rust? I would be thinking they would scrap them for the metal PRONTO.
> 
> Fire up Google Earth and have a look at Surabaya if you want to see ships jammed in on top of each other. The picture below is of Freighters unloading and jostling for positions.




Great thanks. Any proof when the photos were actually taken? I know I looked at google on my house two years ago, and exactly the same photo today. Care to explain?


----------



## Uncle Festivus

dhukka said:


> explod,
> 
> re positive US GDP growth in 3Q09, the charts below tell the story, Industrial production up in July and August, retail sales up strongly in August. If you want to claim that the bump in growth in the third quarter is entirely due to government stimulus on cash for clunkers and inventory restocking etc. then you'll get no argument from me. The big question is whether the 3Q09 can generate a self-reinforcing positive growth cycle. I remain skeptical on that score.




Dhukka, Would it be possible to overlay the Dow or SP500 on the industrial production chart? Interesting to see just how muchfuture expectation is being 'priced in' to this rally compared to where index's were previously compared to IP?

Nice charts BTW


----------



## Ato

explod said:


> Nothing in the hell thing but good to have some banter in among the gloom, so keep it up
> 
> Time frame, for a lot of people we are there now.  Here in Aus., unemployment is starting to bite.  The loss of confidence from last October, and the asset contractions are yet to bite.  I think we will see a very clear picture of the real state of things in 12 months and IMHO (emphasize that) it will be dismal for the lower and into the middle classes.




Goodo, well in that case I think perhaps I misinterpreted your earlier comment about trading services for food. I was interpreting it as a close Malthusian catastrophe (MC) type event, but if your timeframe is now, and maybe 12 months from now, then I dont think it is anything near as bad as a MC event. It is certainly sad for those people who find themselves suffering, but I dont think things are going to fall apart for society en masse, as suggested in a MC event.

I've lived in Japan for the past decade and while things here havent been so great, they havent been utterly terrible either. There have certainly been no four horsemen ride in or the like, as some would have suggested.

All that said, please dont think I'm a bull in disguise. I think that things are bad, and will probably get worse before they get better. But I just dont see some kind of MC event happening. Humans are too resilient for that, we've had so many chances to destroy ourselves till now, and yet managed to pull through.


----------



## dhukka

Uncle Festivus said:


> Dhukka, Would it be possible to overlay the Dow or SP500 on the industrial production chart? Interesting to see just how muchfuture expectation is being 'priced in' to this rally compared to where index's were previously compared to IP?
> 
> Nice charts BTW




Uncle there is definitely a correlation, note that in the early 90's the stock market anticipated the rise in IP but in 2002 the stock market continued to fall even after IP had turned up. This time round the market has clearly preempted the rise in IP but I think the case can be made that a lot of expectation has been built into the market already.


----------



## swm79

i agree dhukka 

the problem is, is that the market is pricing in short term earnings recovery. but the numbers on short term earnings recovery just dont add up... most of those being the big weights in the ASX200: i.e. CBA WBC ANZ WES WOW

and all of these coys have indicated worse than expected earnings for FY10

but market is pricing in FY11 earnings forecasts


----------



## Real1ty

swm79 said:


> i agree dhukka
> 
> the problem is, is that the market is pricing in short term earnings recovery. but the numbers on short term earnings recovery just dont add up... most of those being the big weights in the ASX200: i.e. CBA WBC ANZ WES WOW
> 
> and all of these coys have indicated worse than expected earnings for FY10
> 
> but market is pricing in FY11 earnings forecasts




Many companies are now running a lot leaner than they were, something that was highlighted during the last US reporting season especially.

A lot of companies beat expectations as the bottom line was better than was expected and we rallied accordingly.

This was met with laughter and derision by many who believed the world was being fooled as expectations were not based on revenue growth but cost cutting.(They must have thought they were the only ones that could see this )

The market has continued to rally with hardly a blip on the radar since then.

A lot of companies have the possibility (And that is what it is, not a guarantee but a possibility or maybe opportunity is a better word) to produce excellent results from greater margins, less competition, bargain based purchases etc etc.

Conversely they have headwinds as well, of course, especially reduced consumer spending and increased debt costs etc

I don't agree that companies have indicated worse earnings than last year but imo they have been cautiously optimistic.

You don't know what the market is pricing in nor do i or anyone else but i believe that many that query the sustainability of this rally and believe that the next reporting season will see disappointing results will be disappointed once again.

Of course like everything in life, time will tell.


----------



## moXJO

When things like this happen, you start to wonder though.
http://money.cnn.com/2009/09/17/news/economy/Philadelphia_budget_crisis/index.htm?postversion=2009091711



> *Showdown over Philadelphia budget crisis*Philadelphia will shut libraries, playgrounds and courts by Oct. 2 if the state doesn't grant a tax hike and pension relief. Other cities also could face dire straits.
> 
> NEW YORK (CNNMoney.com) -- Hard times are hitting the people of Philadelphia, one way or another.
> 
> The best-case scenario: Philadelphians will pay 14.3% more in sales taxes for the next five years. This is on top of earlier cuts that already reduced library hours, tree trimming, snow plowing and collection of tires and bulk items.
> 
> At worst, they'll lose their libraries, courts, playgrounds and senior centers. Residents will have nearly 1,050 fewer police officers and firefighters to protect them, and they'll have to hold onto their garbage for two weeks.
> 
> What ultimately happens hinges on whether the Pennsylvania Legislature approves the city's request to hike its sales tax by 1 percentage point and defer pension payments for two years. Mayor Michael Nutter has said he'll send out 3,000 layoff notices and order the shutdowns to begin Oct. 2 if lawmakers don't give him an answer by Friday.
> 
> "We deeply regret to inform you that due to the lack of State budget authority, the City of Philadelphia may no longer have the funds to provide a full range of critical services, severely impacting our residents, businesses and visitors," according to a message posted on the city's Web site. Nutter declined a request for comment.


----------



## Wysiwyg

moXJO said:


> When things like this happen, you start to wonder though.




That blokes a nutter isn`t he.


----------



## moXJO

Wysiwyg said:


> That blokes a nutter isn`t he.




Mayor Nutter


----------



## Uncle Festivus

swm79 said:


> i agree dhukka
> 
> the problem is, is that the market is pricing in short term earnings recovery. but the numbers on short term earnings recovery just dont add up... most of those being the big weights in the ASX200: i.e. CBA WBC ANZ WES WOW
> 
> and all of these coys have indicated worse than expected earnings for FY10
> 
> but market is pricing in FY11 earnings forecasts




We are already back to pe trend, but probably overshoot to the upside?

https://www.aussiestockforums.com/f...attachmentid=32986&stc=1&thumb=1&d=1252287724




Real1ty said:


> Many companies are now running a lot leaner than they were, something that was highlighted during the last US reporting season especially.
> 
> A lot of companies beat expectations as the bottom line was better than was expected and we rallied accordingly.
> 
> This was met with laughter and derision by many who believed the world was being fooled as expectations were not based on revenue growth but cost cutting.(They must have thought they were the only ones that could see this )




Isn't 'running a lot leaner' meaning that they have sacked people and cut inventories simply because nobody is buying their stuff? There was simply no revenue growth at all from the majority of SP500 companies.

'Beating expectations' & 'better than expected' is an economists way of saying they stuffed up with their projections - "so now we will lower our expectations so low that even a loss will be 'better-than-expected'"



Real1ty said:


> The market has continued to rally with hardly a blip on the radar since then.
> 
> A lot of companies have the possibility (And that is what it is, not a guarantee but a possibility or maybe opportunity is a better word) to produce excellent results from greater margins, less competition, bargain based purchases etc etc.
> 
> Conversely they have headwinds as well, of course, especially reduced consumer spending and increased debt costs etc
> 
> *I don't agree that companies have indicated worse earnings than last year but imo they have been cautiously optimistic.*
> 
> You don't know what the market is pricing in nor do i or anyone else but i believe that many that query the sustainability of this rally and believe that the next reporting season will see disappointing results will be disappointed once again.
> 
> Of course like everything in life, time will tell.




They will still have to sell things to people who have jobs, but unfortunately the jobs lost have been exported to places like China who has huge excess productive capacity (and about 30 million unemployed?) and can make things for cheaper than the US. These jobless consumers won't be consuming again any time soon, if at all. It's a major structural shift in the US consuming middle class?

The transition from being too pessimistic to being too optimistic?



> The blended earnings growth rate for the *S&P 500 for Q3 2009*, combining actual numbers for companies that have reported, and estimates for companies yet to report has improved from *-21.9% from -22%* in the last week.
> As of *July 1st*, the earnings growth rate was -*20.9%*.Of the *499 S&P 500* companies who have reported *Q2*, *73% beat estimates, 8% were in-line, and 19%* were below estimates.  The blended earnings growth rate for the *S&P 500 for Q2 2009 **remains unchanged at -27.3%.*


----------



## Gordon Gekko

I'm more of a bear than ever!!!

http://www.businessinsider.com/the-journey-into-deflation-video-2009-9

http://www.zerohedge.com/article/full-blown-deflationary-episode-coming

"The media's desire to ignore this metric, which convincingly indicates that deflation is among us, despite the wanton destruction of US Dollars by Chairman Ben, is not surprising: the last thing US consumers need to know is that a dollar today may be worth less than a dollar tomorrow, and thus drive them to save even more, further crippling the Ponzi monster that the US economy has become."

“Once again, equity participants are missing the big picture. For despite clear signs from the business surveys of some sort of second half recovery, firm evidence is emerging that the global economy is sliding towards a full-blown deflationary episode once this recovery falters."

“We heartily concur with GMO’s Jeremy Grantham who remarked recently that after 20 years of more or less permanent overvaluation of US equities, we saw just five months of under-pricing through the March trough. Do bursting global equity valuation bubbles really end like this? Of course they don’t.”

Best

G


----------



## Real1ty

Uncle Festivus said:


> Isn't 'running a lot leaner' meaning that they have sacked people and cut inventories simply because nobody is buying their stuff? There was simply no revenue growth at all from the majority of SP500 companies.
> 
> 'Beating expectations' & 'better than expected' is an economists way of saying they stuffed up with their projections - "so now we will lower our expectations so low that even a loss will be 'better-than-expected'"
> 
> 
> They will still have to sell things to people who have jobs, but unfortunately the jobs lost have been exported to places like China who has huge excess productive capacity (and about 30 million unemployed?) and can make things for cheaper than the US. These jobless consumers won't be consuming again any time soon, if at all. It's a major structural shift in the US consuming middle class?
> 
> The transition from being too pessimistic to being too optimistic?







Uncle Festivus said:


> Isn't 'running a lot leaner' meaning that they have sacked people and cut inventories simply because *nobody* is buying their stuff? There was simply no revenue growth at all from the majority of SP500 companies.




Nobody?

You either missed it or chose to ignore it but part of my argument highlighted reduced consumer spending, i can see both sides.

You are highlighting lagging indicators and the market is clearly pricing in improved revenue and what ever else it deems necessary to justify its pricing.

What you don't take into account is the possibility, which again i mentioned, of increased revenue due to reduced competition.



Uncle Festivus said:


> 'Beating expectations' & 'better than expected' is an economists way of saying they stuffed up with their projections - "so now we will lower our expectations so low that even a loss will be 'better-than-expected'"




It makes no difference, and they are usually wrong, as all that matters is the expectations of the majority of the money.


----------



## Uncle Festivus

Real1ty said:


> Nobody?
> 
> You either missed it or chose to ignore it but part of my argument highlighted reduced consumer spending, i can see both sides.
> 
> You are highlighting lagging indicators and the market is clearly pricing in improved revenue and what ever else it deems necessary to justify its pricing.
> 
> What you don't take into account is the possibility, which again i mentioned, of increased revenue due to reduced competition.
> 
> 
> 
> It makes no difference, and they are usually wrong, as all that matters is the expectations of the majority of the money.




Yes, sorry I don't follow your logic there. You say 'reduced consumer spending' but then say 'improved revenue'? You can't have one without the other, unless you increase efficiency, which I think is happening now via job cuts, but this too will eventually have reduced impact on earnings?

In a deflationary depression, which it is despite what _they_ say, unemployment is a leading indicator of things to come? Combine this with still high debt levels and the current program of bringing forward future consumption, again payed for out of debt, and we have yet to see the full impact of the so called GFC ie we are still firmly 'in the woods' as Glorious Leaders keep telling us.

The 'metric' to watch is tax revenues - still falling even in the seasonal surplus months so far. How else are they gonna pay for it in the end?



> Sept. 18 (Bloomberg) -- Britain posted the biggest budget deficit for any August since modern records began in 1993 as the recession destroyed tax revenue and welfare costs soared.
> The 16.1 billion-pound ($26.3 billion) shortfall compared with a deficit of 9.9 billion pounds a year earlier, the Office for National Statistics said in London today. The median of 16 forecasts in a Bloomberg News survey was 17.6 billion pounds.
> Britain will have to cut spending at the fastest pace since the 1970s to repair the damage the slump has inflicted on the public finances, economists warned this week. The International Monetary Fund expects the budget deficit to exceed 13 percent of gross domestic product next year, the most in the Group of 20.
> “We have a huge underlying deficit caused by a collapse in tax revenues,” said Richard Snook, senior economist at the Centre for Economics and Business Research. “There is an enormous black hole in the public finances which only major spending cuts can fill.”



http://www.bloomberg.com.au/apps/news?pid=20601068&sid=a19rKWZ8GxFM


> The Reserve Bank of India (RBI) today said that revenue deficit would be at its highest-level ever while primary deficit would both be at its highest in India's post-reform period.





> WASHINGTON – The federal government’s tax revenue is on track to drop 18 percent this year, the biggest annual decline since the depths of the Great Depression, according to an analysis by The Associated Press.
> Individual income tax revenue is down 22 percent and corporate income tax receipts have fallen 57 percent compared with 2008, according to the AP. Social Security tax revenue might have only its second year-over-year decline since 1940, and Medicare tax receipts could fall for only the third time since they started being collected in the 1960s.


----------



## swm79

add to that the fact that they've lost 6.9million jobs since the US recession began in Dec 2007.... and the fact that that number is STILL increasing - 42 states in the US reported job losses rising in August vs 29 states in July

then add that to the fact that 65-70% of US GDP is consumer spending

then add that the 93rd and 94th (FEDERALLY INSURED) US banks have gone under and that the "dead bank" list has risen from 305 MORE baks to go under to 416 more banks to go under!!!

THEN that the spending etc that has gone on since the stimuli was just re-stocking (which is now ending - and which is where your increased revenue has come from) in china (who are now fully stocked)

and there is SOME mess to be sorted out!


----------



## Real1ty

Uncle Festivus said:


> Yes, sorry I don't follow your logic there. You say 'reduced consumer spending' but then say 'improved revenue'? You can't have one without the other, unless you increase efficiency, which I think is happening now via job cuts, but this too will eventually have reduced impact on earnings?




I acknowledged that there is now reduced spending, that is obvious to everyone whether you are bullish or bearish.

However some businesses, and some sectors more than others, will offset some of this reduced spending due to their competitors going out of business.
Some have also had the opportunity to pick up distressed assets at bargain based prices or mergers/takeovers, hence increased revenue and possible margin gains.

And yes i believe that we will see improved revenue going forward as it has most likely bottomed out and will improve, and obviously the market is pricing this in.

Yes your revenue example is a lagging indicator as it is past revenue, not future.

My point is that all these things are known and the market is pricing in what it is expecting and what you, I or others minorities think, is irrelevant.

The only relevant thing is the expectations of the majority of money.


----------



## Knobby22

What if this is a corrective wave from an overshooting fall? Where do you go from there?


----------



## Uncle Festivus

An interesting read....

http://www.foolingsomepeople.com/main/about-david/recent-talks.html

May 27 2009 speech


----------



## swm79

Real1ty said:


> The only relevant thing is the expectations of the majority of money.




thats true, but do you think the big players tell you where ALL their money is???

its easier to hedge and make FAR more money than purely investing!


----------



## marketmania

This is what could send the market down:

"New regulations from G-20 could hurt banks, brokerages
PLI SmartBrief | 09/21/2009

A major push on banking regulation planned for the G-20 meeting this week could hit profits at major banks and brokerages. Many of the leaders who will be at the meeting, including President Barack Obama, are committed to forcing banks to keep larger capital reserves, to control risks more carefully, and to limit executive compensation. "Regulation will make banks less profitable by increasing the cost of doing business," said Andrew Clare, a professor at Cass Business School in London and a former Bank of England official,"if banks are going to benefit from taxpayer largesse then they need to act in a way that doesn't hurt taxpayers or the economy." Bloomberg (09/21) "


FTSE 100 and NIkkei shows an interesting cycle of 800 days reversal.
Ftse also has a smaller cycle of 187 days. Major turning points have occurred when 187 and 800 both are close. We are in such a situation NOW.

Nikkei also at long term resistance level.

Check out my other posts on ASX  where I've show that the 1987 crash was on a 800 Days cycle !!!! and BHP which tells its own bearish story

I am not a scare monger. This is just my observation. And history repeats in the market so its time to be careful.

Cheers


----------



## sinner

Hi guys,

Have you missed me?

It's October so I am back posting on ASF  Bears come out of their cave and all that.

Here is the snippet of an article from August 08:

http://www.hussmanfunds.com/wmc/wmc080825.htm



> Years ago, Larry Williams used to look for a situation he called the
> “Jaws of Death” – noting that when bond prices were weakening but
> stock prices were strengthening, the two differing trends opened a set
> of “jaws” that tended to snap shut, usually due to abrupt weakness in
> stocks. On that note, Bill Hester sent a chart over the weekend noting
> “I thought this was an interesting graph. The blue line is the 5-Yr
> Swap Spread, and the red line is the VIX. Credit investors are getting
> very nervous while equity investors are mostly whistling Dixie. It
> looks like a variation on the jaws of death that you've mentioned to
> me before….”




The comment my friend gave when he sent me this article:



> In short, the markets are presently trading on a theme that largely
> overlooks the potential (and in my view, the reality) of a significant
> U.S. recession.







So in Aug 08, the signs were there as plain as day for anyone to see.

Anyone wondering how the Jaws of Death look today? Do you really want to see?


----------



## sinner

The above was jaws from 2008.

How does 2009 look?

That is one mean lookin' set of chompers...looks like it is starting to close too.


----------



## GumbyLearner

Good to hear you're back Sinner.

http://abcnews.go.com/Business/lied-watchdog-treasury-fed-knew-bailed-banks-healthy/story?id=8748299

*
They Lied: Watchdog Says Treasury and Fed Knew Bailed-Out Banks Were Not 'Healthy'
Before the $700B Bailout, Senior Government Officials Had Financial Concerns About Nine Bank Instiutions Receiving TARP Funds
*

*By MATTHEW JAFFE
*WASHINGTON, Oct. 5, 2009 

The Treasury Department and the Federal Reserve lied to the American public last fall when they said that the first nine banks to receive government bailout funds were healthy, a government watchdog states in a new report released today.
PHOTO In a new report obtained by ABC News, the chief watchdog for the government's $700 billion bailout program refutes the Treasury Department's claim that banks cannot be asked to account for their use of taxpayer money.
The chief watchdog for the government's $700 billion bailout program says federal officials were... Expand
The chief watchdog for the government's $700 billion bailout program says federal officials were trying to contain the worst financial crisis in decades last year with the Troubled Asset Relief Program, but they had concerns about the bank institutions' financial health. Collapse
(ABC News Photo Illustration)

Neil Barofsky, the special inspector general for the Troubled Asset Relief Program (SIGTARP), says that despite multiple statements on Oct. 14 of last year that these nine banks were healthy and only receiving government funds for the good of the country's economy, federal officials knew otherwise.

"Contemporaneous reports and officials' statements to SIGTARP during this audit indicate that there were concerns about the health of several of the nine institutions at that time...


----------



## GumbyLearner

and another from ABC

http://abcnews.go.com/Business/Politics/story?id=8127005&page=1

$23.7 Trillion to Fix Financial System?

Sitting down?

"The total potential federal government support could reach up to $23.7 trillion," says Neil Barofsky, the special inspector general for the Troubled Asset Relief Program, in a new report obtained Monday by ABC News on the government's efforts to fix the financial system.

*Yes, $23.7 trillion.*

"The potential financial commitment the American taxpayers could be responsible for is of a size and scope that isn't even imaginable," said Rep. Darrell Issa, R-Calif., ranking member on the House Oversight and Government Reform Committee. "If you spent a million dollars a day going back to the birth of Christ, that wouldn't even come close to just $1 trillion -- $23.7 trillion is a staggering figure


----------



## Edwood

careful, the bears are revolting....


An American woman has been mauled to death by her pet black bear as she cleaned its cage.

Pennsylvania police said 37-year-old Kelly Ann Walz was killed on Sunday by the 350lb (160kg) beast.

The victim had been keeping the animal inside a 15ft by 15ft steel cage near her house in Ross Township.

Ms Walz had thrown some dog food to one side of the enclosure to distract the bear while she cleaned the other side, officials said.

But, at some point, it turned and attacked her. The beast was shot and killed.

Tim Conway, of the Pennsylvania Game Commission, told the Morning Call local newspaper: "These animals, even though they may be very docile one day, you never know.

"They are wild animals and they're very powerful and they could easily destroy your day."

"I don't know what makes an individual want to have a pet or animal like this in captivity. I just don't," Mr Conway said.

An investigation into the bear attack is continuing, police said.


----------



## satanoperca

GumbyLearner said:


> *Yes, $23.7 trillion.*




WTF - green shoots my ****. When will the world realise that America has fooled us all.



Edwood said:


> The victim had been keeping the animal inside a 15ft by 15ft steel cage near her house in Ross Township.




Why shoot the bear, lock me up in a cage that size and I too would maul my captor.


----------



## Uncle Festivus

sinner said:


> Anyone wondering how the Jaws of Death look today? Do you really want to see?




Jaws Of Death eh?  Is that a ride at the US Fed Theme park?

Here's another JOD chart -


----------



## swm79

Uncle Festivus said:


> Jaws Of Death eh?  Is that a ride at the US Fed Theme park?
> 
> Here's another JOD chart -




and the only reason they crossed over in early 2000 (i.e. surplus) is because Clintons admin counted certain amounts as income that no other administration has ever done... or done since.


----------



## freebird54

From the latest Harry Dent newsletter....


"Even in the least bearish of our scenarios, with a
near-term top closer to 10,000, the downside for the
Dow is at least 49% in the next year. If the Dow
reaches 10,550 and then falls to as low as 2,710 then
the downside is 74%."


----------



## jancha

I just wonder with the bears out there if any of you still hold any shares? With the GFC eg. There were many who were predicting a fall but it tooks years before it actually happened.  Of coarse there'll be another correction to the bull we're having now but when is the question. In the mean time the market  keeps going up & the ones not holding any shares are missing out while waiting on a correction which could take years. What makes you think a correction isn't far away would more to the point?


----------



## satanoperca

Because you do not get over the flu in one day.


----------



## DB008

I agree. There has to be another dip soon. The market has had a very strong rally since march this year. Sooner or later some hedge funds will be wanting to take some profits.


----------



## jancha

satanoperca said:


> Because you do not get over the flu in one day.




Yes and some just never recover.


----------



## skyQuake

DB008 said:


> I agree. There has to be another dip soon. The market has had a very strong rally since march this year. Sooner or later some hedge funds will be wanting to take some profits.




Yup, and they've almost always bought back 2 or 3 days later. (usually at a prem)


----------



## Uncle Festivus

jancha said:


> I just wonder with the bears out there if any of you still hold any shares? With the GFC eg. There were many who were predicting a fall but it tooks years before it actually happened.  Of coarse there'll be another correction to the bull we're having now but when is the question. In the mean time the market  keeps going up & the ones not holding any shares are missing out while waiting on a correction which could take years. What makes you think a correction isn't far away would more to the point?




Another assumption - bulls never short??


----------



## Ato

WayneL posted in the gold price thread:

http://globaleconomicanalysis.blogspot.com/2009/10/gold-and-watched-pot-theory.html



> Message Of Gold
> 
> The reason for the strength in gold is not US inflation. As I have pointed out many times, gold fell from 850 to 250 over the course of 20 years, with inflation every step of the way. Thus, the inflation story just does not fit.
> 
> However, it should be clear that a major financial crisis is in store following a long period of competitive currency devaluation and massive debt and derivatives expansion by nearly every major country on the planet.
> 
> The G-7 agreed to do nothing to fix this mess, nor did the previous G-20 meeting. Countries are going to do what they are going to do: follow misguided Keynesian logic that suggests one can spend one's way to prosperity even though the problem is excessive spending across the board.
> 
> Might the US dollar blow up? Yes it might. But so could the RMB if China floated it, and so could the British pound. *No one seems to see the crisis brewing in Japan with a huge demographic problem, a shrinking population, falling exports, and no way to pay back its national debt.*
> 
> There is seldom a mention of the problems in European banks who foolishly lent money to the Baltic States in Euros or Swiss Francs and now those Baltic country currencies have collapsed and the loans cannot be paid back. European banks also lent to Latin America and those loans are also suspect. Arguably, European banks are in worse shape than US banks, but no one talks about it, at least in the US.
> 
> Spain has unemployment approaching 20% yet must suffer through the same interest rate policy as Germany. Seldom does one hear about this either.
> 
> Certainly the UK is a complete basket case with its banks on government life support. Iceland has already blown up, who is next?
> 
> Most are not aware of the problems in China, Japan, or Europe. However, the problems in the US are universally well understood. Indeed all eyes are on the dollar and everyone is talking about deficits, monetary printing, and especially unfunded liabilities even though the latter is tomorrow's problem, not today's.
> 
> Watched Pot Theory Revisited
> 
> A watched pot may boil, but it's not likely to explode, especially when everyone watching the pot expects an explosion any second.
> 
> Indeed, it would be fitting if the Ridiculous Hype Over Secret Oil Meetings, helped form a bottom on the US dollar.
> 
> Yet, it's easy to see that a financial crisis is brewing.
> 
> *Somewhere, something is going to blow sky high, but from where I sit, it's as likely to be in the Yen*, the Swiss Franc, the British Pound, or something no one is watching at all as opposed to the US dollar specifically.




I've bolded and made larger the relevant parts to me. What are the implications of the yen going belly up, or Japan not being able to pay back all the money it owes? Would it mean utter ruin for the country? African basketcase style? I live in Japan, and upon reading that I suddenly feel ill...


----------



## wayneL

Ato said:


> WayneL posted in the gold price thread:
> 
> http://globaleconomicanalysis.blogspot.com/2009/10/gold-and-watched-pot-theory.html
> 
> 
> 
> I've bolded and made larger the relevant parts to me. What are the implications of the yen going belly up, or Japan not being able to pay back all the money it owes? Would it mean utter ruin for the country? African basketcase style? I live in Japan, and upon reading that I suddenly feel ill...



Ato,

Even Mish has a few plates spinning on the possible outcome. We're deep into chaos theory territory with the world financial system. The butterfly in San Francisco is furiously flapping it's wings, but where the typhoon strikes could be anywhere.

The future relies on the societies inventing their way out of trouble. If anyone can, the Yanks can (with a few caveats... a discussion for another time). I don't know Japan well enough to say, but the question is whether they, as a society, can pull a rabbit out of the hat.


----------



## Aussiejeff

Ato said:


> WayneL posted in the gold price thread:
> 
> http://globaleconomicanalysis.blogspot.com/2009/10/gold-and-watched-pot-theory.html
> 
> 
> 
> I've bolded and made larger the relevant parts to me. What are the implications of the yen going belly up, or Japan not being able to pay back all the money it owes? Would it mean utter ruin for the country? African basketcase style? I live in Japan, and upon reading that I suddenly feel ill...




Simple.

Follow OZ example & open up the immigration floodgates to import say, 10,000,000 young, wealthy families each year for a bit. All that extra demand for everything under the rising sun will boost Japan's fortunes.

Chiz.


aj


----------



## Ato

wayneL said:


> Ato,
> 
> Even Mish has a few plates spinning on the possible outcome. We're deep into chaos theory territory with the world financial system. The butterfly in San Francisco is furiously flapping it's wings, but where the typhoon strikes could be anywhere.
> 
> The future relies on the societies inventing their way out of trouble. If anyone can, the Yanks can (with a few caveats... a discussion for another time). I don't know Japan well enough to say, but the question is whether they, as a society, can pull a rabbit out of the hat.




Fair enough. Funnily enough we had a typhoon strike here today   The Japanese are pretty inventive and hard workers with a superb quality of service. Guess we'll have to see where that butterfly effect eventually lands though.



Aussiejeff said:


> Simple.
> 
> Follow OZ example & open up the immigration floodgates to import say, 10,000,000 young, wealthy families each year for a bit. All that extra demand for everything under the rising sun will boost Japan's fortunes.
> 
> Chiz.
> 
> 
> aj




Yeah, immigration gets talked about here, but mainly from the point of view where the elites will allow it only after a snowflakes chance in hell has become commonplace. I really think Japan (as a state) would rather suffer than allow mass immigration.


----------



## Awesomandy

Aussiejeff said:


> Simple.
> 
> Follow OZ example & open up the immigration floodgates to import say, 10,000,000 young, wealthy families each year for a bit. All that extra demand for everything under the rising sun will boost Japan's fortunes.
> 
> Chiz.
> 
> 
> aj




I know of some administrations that specifically target wealthy and/or high skilled immigrants, but Australia seems to open its doors up to anyone, including those who are looking for support rather than supporting the system. I won't go into the immigration debate here, but purely in terms of finding more people to support the local economy/wealth, I don't think it would have the desired result.


----------



## Uncle Festivus

The US Fed is printing money by the back door - buying back bond issues 5 days later.....which then goes in to ......equity markets to the tune of $35B a week. So long as they can keep this going all will be fine......

Insider selling to insider buying now 45:1



> If you start me up
> If you start me up I'll never stop
> If you start me up
> If you start me up I'll never stop
> I've been running hot
> You got me ticking gonna blow my top
> If you start me up
> If you start me up I'll never stop - Rolling Stones






> Banks have $687 billion of outstanding loans to companies as at July 2009. Five years ago that number was $326 billion. That is a 110% increase in total bank loans to companies in five years.  Corporate Australia is significantly more indebted than it has ever been.  The standout increase is in loans greater than $2million which has increased from $124 billion in 1998 to $486 billion in 2009, being a 291% increase.




http://www.restructuringworks.com.au/Bank-Lending-Business.html


----------



## cutz

jancha said:


> I just wonder with the bears out there if any of you still hold any shares?




Yeah i hold stocks always have, but I'm also a bear, waiting for an massive correction and subsequent explosion in volatility.

Uncle Festivus,

Have you got a link to the insider to mug buy/sell ratio.


----------



## explod

Ato said:


> WayneL posted in the gold price thread:
> 
> http://globaleconomicanalysis.blogspot.com/2009/10/gold-and-watched-pot-theory.html
> 
> 
> 
> I've bolded and made larger the relevant parts to me. What are the implications of the yen going belly up, or Japan not being able to pay back all the money it owes? Would it mean utter ruin for the country? African basketcase style? I live in Japan, and upon reading that I suddenly feel ill...




Yeh a good one Waynel, Japan has been a cot case for more than a decade, and does the potential for all the other economies to blow up somehow insulate the US.

Great jawboning indeed


----------



## Uncle Festivus

cutz said:


> Yeah i hold stocks always have, but I'm also a bear, waiting for an massive correction and subsequent explosion in volatility.
> 
> Uncle Festivus,
> 
> Have you got a link to the insider to mug buy/sell ratio.




Sorry, I've lost the actual source for that figure, but there are several ways to get this data - 

http://www.finviz.com/insidertrading.ashx

http://online.wsj.com/mdc/public/page/2_3024-insider1.html?mod=mdc_h_usshl

No surprise consumer services has a massive imbalance?


----------



## MR.

> No one seems to see the crisis brewing in Japan with a huge demographic problem, a shrinking population, falling exports, and no way to pay back its national debt.




The following figures are a few years old but perhaps you get my drift.
The following countries national debts in 2006 totalled in “equivalents of US dollars” divided by population:

USA = $8600- per person
Australia = $19400- per person
Europe = $3500- per person
UK = $5600- per person 
Japan = $12,000- per person 

Japan definitely has some huge challengers as a nation.  However don’t forget Japan has huge private savings and had the “equivalent in USD’s” in 2006 of $68,000- in cash deposits per person. Is it fair in a way to assume that really Japan might have (68k savings – 12k national debt)  = $56,000- each in cash savings? I’m sure the people of Japan will come to the rescue of the nation before it became a state of China! That is for sure! 

Take a look at home or some of the other countries.  How well do our/their  totals stack up?


----------



## Gordon Gekko

An excellent summary and well worth a read.


"The trick is to get the credulous masses to join the bubble game at high prices. When the bubble bursts, even though asset prices may be the same as they were at the beginning, most people lose money to the few. What's occurring now is another bubble that is again redistributing income from the masses to the few."



http://english.caijing.com.cn/2009-09-28/110267252.html


----------



## Uncle Festivus

MR. said:


> The following figures are a few years old but perhaps you get my drift.
> The following countries national debts in 2006 totalled in “equivalents of US dollars” divided by population:
> 
> USA = $8600- per person
> Australia = $19400- per person
> Europe = $3500- per person
> UK = $5600- per person
> Japan = $12,000- per person
> 
> Japan definitely has some huge challengers as a nation.  However don’t forget Japan has huge private savings and had the “equivalent in USD’s” in 2006 of $68,000- in cash deposits per person. Is it fair in a way to assume that really Japan might have (68k savings – 12k national debt)  = $56,000- each in cash savings? I’m sure the people of Japan will come to the rescue of the nation before it became a state of China! That is for sure!
> 
> Take a look at home or some of the other countries.  How well do our/their  totals stack up?




Is there an extra zero for Oz, seems a bit high?

Have a look at this site - 

http://buttonwood.economist.com/content/gdc


----------



## Mr J

Yes, I'd like to know how we went from being a country with one of the lower public debts, to one with one of the highest :. While we like to whinge about our debt, we're still far better off in that respect than most other countries.


----------



## MR.

MR. said:


> USA = $8600- per person
> Australia = $19400- per person
> Europe = $3500- per person
> UK = $5600- per person
> Japan = $12,000- per person






Uncle Festivus said:


> Is there an extra zero for Oz, seems a bit high?
> 
> Have a look at this site -
> 
> http://buttonwood.economist.com/content/gdc






Mr J said:


> Yes, I'd like to know how we went from being a country with one of the lower public debts, to one with one of the highest :. While we like to whinge about our debt, we're still far better off in that respect than most other countries.





Doesn’t “look” right Australia vs other countries, agree....   Think the figures were from the ABC News before I divided by populations.  Australia’s  $19,400 per person is Public debt plus Private debt.  Not “National” (Public) debt as I claimed. 

However, thanks for the link UF. It appears that Japan’s figures quoted above also have private cash savings already calculated.  I can’t go adding private cash savings in Japan again to Public debt. Lucky you all didn’t make me treasurer!  

Japan just took a turn for the worst (for me)...... But is Japan’s  “Public Debt as a % of GDP” as bad as it really looks? The Japanese people do have 8 trillion equivalent of USD’s socked away for a rainy day!
Perhaps explains why the figure for Australia looks so bad.


----------



## cutz

Thanks for the links Uncle Festivus,

Good stuff.


----------



## Uncle Festivus

> Oct. 21 (Bloomberg) -- Wal-Mart Stores Inc., the world’s largest retailer, expects a “tough” holiday shopping season with consumers delaying purchases, said John Fleming, chief merchandising officer.
> Walmart plans to reduce prices as the season advances in areas including home, food and gifts, Fleming told analysts today at a conference in Rogers, Arkansas.
> Consumers’ wallets “are challenged,” Fleming said. The holiday season “is going to be tough, it is going to be late.”



Translations - 

"tough" - no one is buying anything at all
"delaying purchases" - we hope they will buy, something, anything, eventually.....pleeeease
Consumers’ wallets “are challenged" - empty!
it is going to be late - um, try 2015

Classic quotes - 



> Walmart, based in Bentonville, Arkansas, fell $1.07, or 2.1 percent, to $50.63 at 4:15 p.m. in New York Stock Exchange composite trading. The stock has declined 9.7 percent this year.
> *Cleaner, less-cluttered stores and faster checkout will help keep new customers as the economy improves,* said Eduardo Castro-Wright, vice chairman and U.S. stores chief.



Well that's right Eduardo, if there's no-one buying anything then why stock the stuff! Hand that man some in-the-money stock options for that observation , so he can promptly sell them, like everyone else is doing these days.

The WSJ insider table is again severely lopsided with insider selling.



> Oct. 21 (Bloomberg) -- Wells Fargo & Co. dropped 5.1 percent in New York trading after Rochdale Securities LLC analyst Dick Bove cut the stock to “sell,” saying third-quarter profit was “unsustainable” and included a swing in mortgage servicing fees that is “*impossible to explain*.”



All was going so nicely today on Wall St, that was until somebody shouted "the Emperor has no clothes on". Finaly someone has said out loud what everyone has been saying in private - the figures just don't add up? Or at the least, are not sustainable. Now when they figure out the better-than-expected profits form the other money shufflers bears little resemblance to support a recovery in the real economy then last one out turn the lights off......



> Servicing fees on mortgages rose $1.1 billion, or 15 cents a share, and a lower tax rate gave a 2-cent boost, Bove said in a note to clients. Hedges tied to mortgage servicing rights produced a $3.6 billion gain, compared with a $1.3 billion loss in the second quarter, he wrote. The impact on earnings per share was 68 cents, he said.
> “This is more money than the bank earned, overall, including the hedge profit, in the third quarter,” he wrote. “The remaining businesses of the bank were very mixed in the quarter. *Most disturbing is that loan losses seem to be accelerating on the negative ide*.”


----------



## gfresh

US consumer going to get squashed before they recover, due to the rapidly bleeding dollar.. price of consumer imports UP, fuel price UP.. something they are not really used to. May take a while to kick in, but kick in it shall to squash that consumer even further.  

dive dive..


----------



## Donga

Thought I'd beat the bears in resuming this thread. Surprised the usual suspects hadn't already come out of their caves to display their latest charts and gloomy articles. 

So the correction is underway, how far do we think XAO will fall?

I'll venture 4600 before recovering back to 4800s during November and still optimistic of 5000 by Christmas.


----------



## drsmith

Donga said:


> Thought I'd beat the bears in resuming this thread. Surprised the usual suspects hadn't already come out of their caves to display their latest charts and gloomy articles.



That could be the best bear indicator of all.


----------



## Mr J

4600 wasn't a healthy break for the SPI. 



> I'll venture 4600 before recovering back to 4800s during November and still optimistic of 5000 by Christmas.




The markets can't keep rising forever.


----------



## Wysiwyg

Unemployment claims lessening and real GDP figures looking good so don't get too carried away with the downside.


----------



## Timmy

Mr J said:


> The markets can't keep rising forever.




LOL! Did you forget to add a smiley to this, or is it meant to be insightful?


----------



## Nyden

Donga said:


> Thought I'd beat the bears in resuming this thread. Surprised the usual suspects hadn't already come out of their caves to display their latest charts and gloomy articles.
> 
> So the correction is underway, how far do we think XAO will fall?
> 
> I'll venture 4600 before recovering back to 4800s during November and still optimistic of 5000 by Christmas.




Am I crazy, or was the market already lower than 4600 when you posted this?


----------



## WinnieBlues

i hope this bloke isn't right....super depression dead ahead as soon as USD collapses

http://www.youtube.com/watch?v=UkYYuNIIv2M&feature=related


----------



## nomore4s

Mr J said:


> The markets can't keep rising forever.




Surely that depends on time frame and perspective?

:


----------



## WinnieBlues

mortgage rests coming next year....

and uncle ben has run out of bullets.....look out below

http://www.bearishnews.com/wp-content/uploads/2009/05/mortgage-reset-chart.jpg

his judgement cometh, and that time soon!!!!


----------



## WinnieBlues

I hope that the world doesn't turn out like this......if it is, we are majorly screwed...

http://www.youtube.com/watch?v=4122Cx-HHmo&feature=related

this bloke has got it right...check out the trends research institute on google...they are amazingly accurate....

time to batten down the hatches


----------



## nunthewiser

loves this thread on red days ......... um Guys can hardly call it a correction /crash as yet ....... currently sitting on a major pivot point .

Will it go quiet here if it bounces off it ?

As stated previously here i am a major bear expecting a retest if not a break of the past lows but geez everytime the market drops its guts a cupla points all the doomsyaers come flying through the door.

The sky is still there , no need for sqwarking yet.


----------



## nunthewiser

Trailing stops anyone ?

Or  is it better to dump everything because you get a scare? .......

I know where i am.

Do you ?


----------



## WinnieBlues

nunthewiser said:


> loves this thread on red days ......... um Guys can hardly call it a correction /crash as yet ....... currently sitting on a major pivot point .
> 
> Will it go quiet here if it bounces off it ?
> 
> As stated previously here i am a major bear expecting a retest if not a break of the past lows but geez everytime the market drops its guts a cupla points all the doomsyaers come flying through the door.
> 
> The sky is still there , no need for sqwarking yet.




nun.....the only reason the markets up is through fabricated govt spending, stimulus and QE

we are majorly screwed.....your world and my world will change forever...

am sitting 100% cash at the moment

this won't be pretty....most of the smart movers on wall street have already made it to the exits

ordinary people are going to get crushed, as usual


----------



## explod

nunthewiser said:


> Trailing stops anyone ?
> 
> Or  is it better to dump everything because you get a scare? .......
> 
> I know where i am.
> 
> Do you ?




Stick to the stops, and the chart language, saw the doji on sss last night and got out at .028, a great trade, could not care less about the tipping, when you pick up 150% on a big play you just think if Christmas.


----------



## WinnieBlues

Looking into 2012........from celente....google him....he has been amazingly correct in the last 20 years....and predicted the course of events over the last 2 years...this is part of his latest report.....

Episode V Autumn 2012, the “Greatest Depression” has spread worldwide. Billions are unemployed, homeless and desperate. Countries bankrupt, trade pacts broken, tariffs rise, borders close.
Protectionist, nationalist and anti-globalization movements have moved out of the margins and into the mainstream. Immigrants brought in during boom times ”” blamed for bringing down wages, stealing jobs and rising crime ”” are being rounded up and deported.
Despite differences between the 1930’s Great Depression and today’s “Greatest Depression,” unsettling similarities conjure up memories of pre-World War II. From the United Kingdom to Russia, war drums eerily beat.
China, Vietnam, Indonesia, Singapore ”” all countries that ramped up production to meet insatiable business and consumer demands of the prior decade ”” fight for survival.
Japan, Taiwan and South Korea, long industrialized and export driven, blame China for their mounting trade imbalances, internal strife and Southeast Asian instability.
Mexico, once the US resort/retirement retreat, is as dangerous as the Congo, and its government ”” what’s left of it ”” is equally ruthless.
Across much of South America, depression, coups and wars prevail; few nations have been spared.
In Afghanistan, Iraq and Pakistan it’s the same news, different year, different body count: “Five US

The 2nd American Revolution troops killed in Afghanistan.” “US drone attack kills 60 civilians in Pakistan.” “Car bomb blast kills 47 in Iraq.”
In the eleven years since President George W. Bush promised to bring Osama bin Laden back “dead or alive,” there have been more Elvis sightings than traces of bin Laden.
The US military asks for more troops, more money and more time. The President and Congress plunder the treasury and sacrifice more lives all under the pretext of keeping America Al Qaeda-free.
The Israeli-Palestinian peace process remains permanently and violently stalemated.
Iran, having forged a business/military alliance with China and Russia, is now a Nuclear Club member, and the world is forced to deal with it.
Oil-rich nations, having sunk trillions and lost trillions in high stakes investments, are trying to cope with internal rebellion and decreased demand for their only cash crop.
India’s miracle economy has run out of miracle, pushing it back into Third World conditions. Incessant flare-ups with Pakistan carry nuclear implications.
Canada, Australia and New Zealand are not in great shape, but compared to most other nations, they seem like paradise.
Africa is Africa. Not much has changed. Corruption, poverty and conflict prevail. Despots and dictators vie for control. 

I am glad i am in 100% cash now....this is serious, and will affect all of us......this is more than the market.......this is nation changing stuff...massive deflation ahead in almost every asset class, bar gold and safe currencies...


----------



## nunthewiser

WinnieBlues said:


> nun.....the only reason the markets up is through fabricated govt spending, stimulus and QE
> 
> we are majorly screwed.....your world and my world will change forever...
> 
> am sitting 100% cash at the moment
> 
> this won't be pretty....most of the smart movers on wall street have already made it to the exits
> 
> ordinary people are going to get crushed, as usual





Um i know why the markets are up and yes agree it is a fabricated fairyland .

Whats that got to do with trading ?

Can you show me figures for this alleged exodus on wall street or is that merely an opinion or an opinion off some doom and gloom media article?

Ordinary People always get crushed , thats not my problem nor is it my concern as a trader ... Goes with the turf....... If the game isnt morally suitable for you i suggest you pick another form of wealth creation .

No offense intended


----------



## nunthewiser

explod said:


> Stick to the stops, and the chart language,  .




Amen.


Well done


----------



## WinnieBlues

nunthewiser said:


> Um i know why the markets are up and yes agree it is a fabricated fairyland .
> 
> Whats that got to do with trading ?
> 
> Can you show me figures for this alleged exodus on wall street or is that merely an opinion or an opinion off some doom and gloom media article?
> 
> Ordinary People always get crushed , thats not my problem nor is it my concern as a trader ... Goes with the turf....... If the game isnt morally suitable for you i suggest you pick another form of wealth creation .
> 
> No offense intended




search for the buy to sell ratios of dow and sp companies....

good luck for your trading.....i am out after buying macq gp at 16 bucks in march....sold recently...

the drums r beating...don't be the last to the exits


----------



## nunthewiser

WinnieBlues said:


> good luck for your trading.....i am out after buying macq gp at 16 bucks in march....sold recently...
> 
> the drums r beating...don't be the last to the exits





And you can prove that legendary hindsight trade?

In fact from the reasons you gave already for staying out of the market ie manufactured rise etc im rather surprised you entered anything SEEING as the reasons for the manufactured rise were available when you ALLEGEDLY bought at the lows .... whats changed ? Still same reasons then , same reasons now.

I hear Drums , i am not a fool but i do have a plan and happy to stick to MY strategies ..... However i think it would be rather foolish to listen to some anomonous poster thats obviously great in hindsight trading and sell everything on his say so ......... I think i,m better off sticking with my trailing stops and other forms of personal guesstimation methods and leave the genius stuff to others that can call it afterwards.

Lol re last to the exit ....... I dont have the benefit of hindsight selling or buying but am very aware of how much Profit or how much loss i am happy to take and ok with hitting the button on either scenario.


----------



## WinnieBlues

nunthewiser said:


> And you can prove that legendary hindsight trade?
> 
> In fact from the reasons you gave already for staying out of the market ie manufactured rise etc im rather surprised you entered anything SEEING as the reasons for the manufactured rise were available when you ALLEGEDLY bought at the lows .... whats changed ? Still same reasons then , same reasons now.
> 
> I hear Drums , i am not a fool but i do have a plan and happy to stick to MY strategies ..... However i think it would be rather foolish to listen to some anomonous poster thats obviously great in hindsight trading and sell everything on his say so ......... I think i,m better off sticking with my trailing stops and other forms of personal guesstimation methods and leave the genius stuff to others that can call it afterwards.
> 
> Lol re last to the exit ....... I dont have the benefit of hindsight selling or buying but am very aware of how much Profit or how much loss i am happy to take and ok with hitting the button on either scenario.




Nows not the time to be playing games with the markets IMO......massive govt stimulus was always going to see a massive rally from march onwards....the g20 meeting and mark to market changes in the US saw to that....

good luck in your trading mate.....

tight stops and all that...


----------



## Donga

WinnieBlues said:


> Looking into 2012........from celente....google him....he has been amazingly correct in the last 20 years....and predicted the course of events over the last 2 years...this is part of his latest report.....
> 
> Episode V Autumn 2012, the “Greatest Depression” has spread worldwide. Billions are unemployed, homeless and desperate. Countries bankrupt, trade pacts broken, tariffs rise, borders close.
> Protectionist, nationalist and anti-globalization movements have moved out of the margins and into the mainstream. Immigrants brought in during boom times ”” blamed for bringing down wages, stealing jobs and rising crime ”” are being rounded up and deported.
> Despite differences between the 1930’s Great Depression and today’s “Greatest Depression,” unsettling similarities conjure up memories of pre-World War II. From the United Kingdom to Russia, war drums eerily beat.
> 
> etc etc
> 
> I am glad i am in 100% cash now....this is serious, and will affect all of us......this is more than the market.......this is nation changing stuff...massive deflation ahead in almost every asset class, bar gold and safe currencies...




Whoa loosen up fella. Could paint you a similar picture pretty much at anytime in history as we know it. You're not recognising the progress in recent years let alone last few months economically in the world. I love the mining activity in West Africa. Maybe you need a spell in some of these countries to see how people are reallly living and give up your  subscription to armchair journos. 

Hey Nyden - you're right that I didn't check the level before I posted LOL, however was rooting for the good guys after the bell, as for a while it looked like we'd get within coo-ee of a 4600 close. 

So tomorrow will be interesting, obviously I'm expecting some bounce  As a LT guy am not fussed as the markets do go up forever, depending on time frame thanks nomore4s, at least until armegeddon which I'm not counting on soon, Celente's (who is this guy) prophecies notwithstanding.


----------



## nunthewiser

Jobless Claims 
Oct 29  GDP 
Oct 29  President Obama Speech 
Oct 29  EIA Natural Gas Report 
Oct 29  Money Supply 
Oct 29  Equity Settlements 
Oct 29  ALL - 5 Yr TIPS Settlement 
Oct 29  President Obama Speech 


Should be an intresting night at least ........... got to love volatility.


----------



## Putty7

I won't deny the fact that the market could retreat in the short term but I won't jump on the doom and gloom bandwagon just yet, Celente hopefully has better insite than Nostradamus,  he was sure we would be fighting each other with sticks and stones 10 years ago, as for this recession comparing to the great depression, people were lucky to be able to buy a bag of flour during the great depression of the 30's to make bread, that is not the case today, the world was less advanced and less populated, traders back then were traders, not as many of the big institutions manipulating the market as we have now, I think things have to be taken into perspective when making comparisons, but I'm fairly new to trading and my opinions may be out of line with the general consensus.


----------



## Gordon Gekko

"he was sure we would be fighting each other with sticks and stones 10 years ago, as for this recession comparing to the great depression, people were lucky to be able to buy a bag of flour during the great depression of the 30's to make bread"




I wonder if people actually realize the amount of stock that stores such as coles or wollies have in our recent age of you want it you got it.
Supply chain management has been massive in the profitability of these stores, but if **** hits the fan these stores will be cleaned out in hours and good luck after that.
Not saying this will happen far from it but if there is a national emergency for what ever reason would it be any different than times past with regard to your availability of flour example?


G


----------



## skc

WinnieBlues said:


> nun.....the only reason the markets up is through fabricated govt spending, stimulus and QE
> 
> we are majorly screwed.....your world and my world will change forever...
> 
> *am sitting 100% cash at the moment*
> 
> this won't be pretty....most of the smart movers on wall street have already made it to the exits
> 
> ordinary people are going to get crushed, as usual




If you truly believe what you are saying, and you are of course entitle to your own opinion, then being in 100% cash is just plain silly. Go exchange that for food, water, underground shelter, gun and ammunition before the shelves are empty. Then exchange whatever is left in to physical gold bullion.

Here's a quote that I like:



> I know not with what weapons World War III will be fought, but World War IV will be fought with sticks and stones. _Albert Einstein_


----------



## Putty7

You make a very good point Gordon, with the efficiency in which information is sent and received now compared to the 30's, a national emergency that cleaned out the stores would have to be almost totally unseen until it happened, not impossible but we have more transperency and clarity into these events at our fingertips now compared to then. 

The likes of farmers, truck drivers, vegie growers, butchers, bakers etc etc having to go off to fight a war and leaving us with a skilled labour shortage is pretty much a thing of the past (maybe) with conventional warfare being a different animal to the world war days.

I'm not an expert and don't claim to be, things are different in most ways now compared to the 30's and 40's which people like to throw in as a comparison, lets face it if the mailman didn't show up back then you were stuffed for the day, now if your computer goes down you are stuffed until you can get it fixed or get to Harvey Norman to buy a new one  

Things are not as rosey as we are being lead to believe, sure I agree with that, but to pull all your money out of the market when opportunities are still around on a daily basis to make money, well that's not for me, good traders trade in all markets and seem to do it well, something I still have to learn.


----------



## Garpal Gumnut

We'll all be rooned, in the second leg of the Global Financial Crisis.

An Islamist hit on the US, a collapse of building figures and banks in the US, a plague or flu, and numerous other possible disasters may be the fundamental drivers of a further imminent and severe market correction.

gg


----------



## Nyden

Garpal Gumnut said:


> We'll all be rooned, in the second leg of the Global Financial Crisis.
> 
> An Islamist hit on the US, a collapse of building figures and banks in the US, a plague or flu, and numerous other possible disasters may be the fundamental drivers of a further imminent and severe market correction.
> 
> gg




But, is this what you *want* to happen, or is it what you expect to happen? There still seems to be a fair bit of sour-grapes about, perhaps those that missed much, if not all of the recent run up - are now wishing ill against those that enjoyed it?

I'm not saying which way it will go tonight, or what will happen next week - all I'm saying is that people should be looking for signs for either the downside,  *or* the upside. A trend really is quite simple to follow, and if you consider yourself a long term investor, then you need to have a plan. A vague notion that the world will end simply isn't enough, I'm afraid. Anyone with that sort of thought-process, just may end up way behind in an inflationary environment.


----------



## explod

Nyden said:


> But, is this what you *want* to happen, or is it what you expect to happen? There still seems to be a fair bit of sour-grapes about, perhaps those that missed much, if not all of the recent run up - are now wishing ill against those that enjoyed it?
> 
> I'm not saying which way it will go tonight, or what will happen next week - all I'm saying is that people should be looking for signs for either the downside,  *or* the upside. A trend really is quite simple to follow, and if you consider yourself a long term investor, then you need to have a plan. A vague notion that the world will end simply isn't enough, I'm afraid. Anyone with that sort of thought-process, just may end up way behind in an inflationary environment.




Now to be fair, if you read back on his posts, Uncle has provided very clear evidence that we are indeed in trecherous waters.  Debt to GDP is way out of whack (just for one).  It is not possible in one post to restate the obvious that has been well laboured in previous posts.  We give credit that posters are congnisant with what has been said in plain and strong terms. 

I am a trend follower and have recently made some fantastic trades, but with a watchful eye on the big picture.  In times like these I stick to small speckies and that has paid off.  If you look at the blue chips, they have gone up, but overll by not a great deal.

I have picked up enough to be aware that Uncle is a very selective and savvy investor.  Not just sticking up for him.  But if you are going to go right off suggest you look at the target with a bit of backtesting before pulling the trigger.


----------



## nunthewiser

nunthewiser said:


> loves this thread on red days ......... um Guys can hardly call it a correction /crash as yet ....... currently sitting on a major pivot point .
> 
> Will it go quiet here if it bounces off it ?
> 
> The sky is still there , no need for sqwarking yet.






WinnieBlues said:


> nun.....the only reason the markets up is through fabricated govt spending, stimulus and QE
> 
> we are majorly screwed.....your world and my world will change forever...
> 
> am sitting 100% cash at the moment
> 
> this won't be pretty....most of the smart movers on wall street have already made it to the exits
> 
> ordinary people are going to get crushed, as usual






explod said:


> Stick to the stops, and the chart language,  .




AMEN!


----------



## Uncle Festivus

nunthewiser said:


> Um i know why the markets are up and yes agree it is a fabricated fairyland .
> 
> Whats that got to do with trading ?
> 
> *Can you show me figures for this alleged exodus on wall street or is that merely an opinion or an opinion off some doom and gloom media article?*
> 
> Ordinary People always get crushed , thats not my problem nor is it my concern as a trader ... Goes with the turf....... If the game isnt morally suitable for you i suggest you pick another form of wealth creation .
> 
> No offense intended




Check this out every week end to see if the "people who know" are confident enough to buy in earnest, and the pic below of the last 3 weeks of data for insider buy/sell - 

http://online.wsj.com/mdc/public/page/2_3024-insider1.html?mod=mdc_h_usshl

Not having a go at you personally Nun, just general comments. 

From the start of this thread there has been confusion about the content posted & how it relates to trading. Generally, unless stated by the poster, there is very little correlation with data trends analysis posted here and how the poster trades on a daily basis. I try to post some sort of objective analysis of data, after stripping out all of the headline grabbing crap which the permabull ra ra cheer sqaud base their justification for only going long?

For ie, Chinese GDP. If ever there was a set of basically total garbage purporting to be an indicator of growth! They measure how much is produced instead of how much is consumed (sold). So if they throw $500B at the productive sector in stimulis then it will show a growth in GDP - simple. But has it resulted in someone somewhere consuming the product? It certainly has not been exported to the US or Japan or Europe ie global trade figures? Probably still sitting some factory in some province somewhere?

US GDP - ditto - as long as they keep the gov handouts going then we will get figures like this, but it is ultimately unsustainable as long as the budget is paying out more than it is receiving (see previous chart on Jaws of Death)

The UK is still a basket case - no rebound there yet - ie the market has priced in some ways ahead of itself.

US unemployment and continuing claims does not indicate a recovery - still! Goldman Sachs has done an excellent job in raising global stock markets - the ultimate in leverage.

Global markets in commercial real estate have yet to even get close to bottoming out, in fact the worst is yet to come for them, and will ultimately ensure a severe global depression and capitulation of the current capitalist system as we know it?

All these revolving credit loans (if they can get one in the first place) will have to be rolled over, or if the data is correct then they will not. Have a look at what the implications are if CIT was to do a Lehmans.

Australia's reliance on China means we are at the mercy of a corrupt junta controlling some sort of hybrid experiment of pseudo communism and moral hazard capitalism of the worst type. We really do have all our eggs in the Chinese basket, because we have stuff all left to sell to the rest of the world other than what comes out of big hole in the ground?

Aussie banks now have $32BILLION set aside for dodgy loans - not a good confirmation indicator for the 'all is good again' lemming crowd?

Trade what you see but plan for reality?


----------



## swm79

Uncle Festivus said:


> US unemployment and continuing claims does not indicate a recovery - still! Goldman Sachs has done an excellent job in raising global stock markets - the ultimate in leverage.




did anyone else think that Goldman Sachs revising their GDP figure down only a few days or so before the official figures come out... which are 30% ABOVE their figure

betting against themselves maybe...


----------



## Timmy

swm79 said:


> did anyone else think that Goldman Sachs revising their GDP figure down only a few days or so before the official figures come out... which are 30% ABOVE their figure




First I heard of it was at about 9.30 am (NY time) Wednesday, so 23 hours before the official release (but I don't _think _I am the first guy Goldman's call when they have market-moving info )



swm79 said:


> betting against themselves maybe...




This GS revision was released into an already falling equity market, but the Wednesday session was when the big fall to 1035 (ES) took place, the week's lows (so far anyway ).  

Could it have been GS tempting the sellers (successfully), loading up on Wednesday into the selling, and then taking their profits on Thursday when the GDP comes out better than even previous consensus forecasts?
I am not into conspiracies ... but if I was it was a pretty cool move.


----------



## Uncle Festivus

swm79 said:


> did anyone else think that Goldman Sachs revising their GDP figure down only a few days or so before the official figures come out... which are 30% ABOVE their figure
> 
> betting against themselves maybe...




The Dow chart was at risk of 2 weekly doji's  at the 50% retracement level, macd toppping out, so _they _need a ranging market to continue to make the terrabucks, so a bit more manipulation won't hurt anybody, eh? The whole week has been one of setting up for the better GDP figures that the insiders were privy to?


----------



## Timmy

Uncle Festivus said:


> From the start of this thread there has *been confusion about the content posted & how it relates to trading.* Generally, unless stated by the poster, there is very little correlation with data trends analysis posted here and how the poster trades on a daily basis. I try to post some sort of objective analysis of data, after stripping out all of the headline grabbing crap which the permabull ra ra cheer sqaud base their justification for only going long?




Just bolded this bit Uncle F.
When the thread has a title that includes "Imminent correction", quite understandable if people read it as that is what the bears on the thread are expecting and trading for.  So good you cleared this up.

I, for one, read this thread as a good exposition of the bear case.  And, generally, the case is well put, logical, and cogent.  Just the 'imminent' bit is where the problem lies .... unless we are talking geological time (joke).


----------



## Uncle Festivus

Timmy said:


> Just bolded this bit Uncle F.
> When the thread has a title that includes "Imminent correction", quite understandable if people read it as that is what the bears on the thread are expecting and trading for.  So good you cleared this up.
> 
> I, for one, read this thread as a good exposition of the bear case.  And, generally, the case is well put, logical, and cogent.  Just the 'imminent' bit is where the problem lies .... unless we are talking geological time (joke).




Yes, the 'imminent' bit is prob past it's use by date, or at least refers to 'imminent correction Part 1'? S'pose it could now refer to Part 2 being imminent??

There could always be a wager on the future - global equity markets will be lower than they are now, this time next year?


----------



## Timmy

Uncle Festivus said:


> There could always be a wager on the future - global equity markets will be lower than they are now, this time next year?




There's the 'imminent' conundrum again, a one-year horizon probably doesn't qualify as imminent for traders?


----------



## Real1ty

Uncle Festivus said:


> There could always be a wager on the future - global equity markets will be lower than they are now, this time next year?




I will take that bet. Which market will be the indicator, S&P500?

If i am right, you no longer post here under any user name. 

If i am wrong i will no longer post here under any user name.

Deal?


----------



## drsmith

Real1ty said:


> If i am right, you no longer post here under any user name.
> 
> If i am wrong i will no longer post here under any user name.



That's a bet from which someone can only lose.


----------



## Out Too Soon

drsmith said:


> That's a bet from which someone can only lose.




& both your opinions are valuable to us so drop the bet


----------



## swm79

glad i'm not the only one seeing GS's little gambit pay off BIG time for them.

nice set up guys...


----------



## explod

For my take I have not seen the word *Imminent*  As a time thing, to me it says close at hand and that it *will*happen  .  (Dictionary "likely to occur at any moment, her death is imminent)  Yes we tend to intuit "immediately", but that is not the word being examined

I look at the Dow as my big picture guide, what the Dow does we do and look no further than the last 3 or 4 days.   From the October crash the Dow has recovered little more than a third of its loss from 14,000   The uptick from 6400 has (as has been pointed out by Uncle in previous posts) seen volume halve.  It is saying that very reduced interest in this stock market rise.  Some say the fed are propping at particular technical levels.  Be that as it may.

The rise from 01/02 was built on cheap money so of course there was no substance and it crashed in 08.  This latest rise was built on both cheap money and huge stimulas courtesy the US taxpayers.  They are fed up and the Fed point blank now refuses to answer straight questions etc., etc., etc...

A crash is *imminent* (maybe tomorrow or they can bluff through for 12 months yet)  and it will be *servere*

On the charts, value support kicks in around 4,000 the floor of support at 2,000 but do not be surprised if it overshoots to 1,000

*In this most intersting contest I will back uncle*

and bet he will not be the one leaving

cheers on this lovely Friday on the Peninsular, lovely mix of rain and sunshine at 25 degeees.


----------



## Wysiwyg

explod said:


> On the charts, value support kicks in around 4,000 the floor of support at 2,000 but do not be surprised if it overshoots to 1,000




Extra-terrestrial alien invasion is also a possibility and ironically enough would cause such an index value. 


p.s. anything you say can and will be held against you in a court of law.


----------



## Timmy

I wont get into a semantic argument explod, but will just say that I wont use your definition of imminent but rather will stick with what the rest of the English speaking world accept as its reasonable definition.  

Here is a Google link to "define: imminent"
http://www.google.com.au/search?hl=en&source=hp&q=define:+imminent&btnG=Google+Search&meta=&aq=f&oq=

Having your own personal definition may help to avoid having to admit that the calls made here are vague and imprecise.  Nothing wrong with that, but just helpful to recognise them for what they are, background market commentary.


----------



## GumbyLearner

I think the longevity of this thread is a testament to it's originator. How many views, contributors and how long has it been on ASF?

And Unc hasn't even used the word *prop* once in any of his posts with regard to the global banking industry or the automobile sectors since he gave birth to this Momma of a thread. 

Anyway I'm sure he doesn't work for Gold man Sucks or GMAC Financial. So I wouldn't be dismissing his posts or sentiments just yet. 

Definitions of *prop* on the Web:

    * *a support placed beneath or against something to keep it from shaking or falling*
    * property: any movable articles or objects used on the set of a play or movie; "before every scene he ran down his checklist of props"
    * prop up: support by placing against something solid or rigid; "shore and buttress an old building"
    * airplane propeller: a propeller that rotates to push against air
      wordnetweb.princeton.edu/perl/webwn


----------



## Donga

Uncle Festivus said:


> I try to post some sort of objective analysis of data, after stripping out all of the headline grabbing crap which the permabull ra ra cheer sqaud base their justification for only going long?
> 
> For ie, Chinese GDP. If ever there was a set of basically total garbage purporting to be an indicator of growth! They measure how much is produced instead of how much is consumed (sold). So if they throw $500B at the productive sector in stimulis then it will show a growth in GDP - simple. But has it resulted in someone somewhere consuming the product? It certainly has not been exported to the US or Japan or Europe ie global trade figures? Probably still sitting some factory in some province somewhere?
> 
> US GDP - ditto - as long as they keep the gov handouts going then we will get figures like this, but it is ultimately unsustainable as long as the budget is paying out more than it is receiving (see previous chart on Jaws of Death)
> 
> The UK is still a basket case - no rebound there yet - ie the market has priced in some ways ahead of itself.
> 
> US unemployment and continuing claims does not indicate a recovery - still! Goldman Sachs has done an excellent job in raising global stock markets - the ultimate in leverage.
> 
> Global markets in commercial real estate have yet to even get close to bottoming out, in fact the worst is yet to come for them, and will ultimately ensure a severe global depression and capitulation of the current capitalist system as we know it?
> 
> Australia's reliance on China means we are at the mercy of a corrupt junta controlling some sort of hybrid experiment of pseudo communism and moral hazard capitalism of the worst type. We really do have all our eggs in the Chinese basket, because we have stuff all left to sell to the rest of the world other than what comes out of big hole in the ground?
> 
> Trade what you see but plan for reality?




Uncle F, perhap you just like being a bear, a glass half empty guy as your assessments above can be challenged on so many levels, e.g. myriad of Chinese data will show how much is being consumed (cars, telephones, TVs, housing). Perhaps you see infrastructure as production until people start using the subways etc. The business I'm involved in is booming in China, health care. Having travelled to China last year to visit my brother who lives there, I find your comments on pseudo communism, moral hazard capitalism and corrupt junta as naive and condescending. 

The "jaws of death" charts I've seen remind me of Nostradamus, fanciful but useless in predicting the immediate future. Pity you didn't get time to respond to my other post requesting a redraw of your chart using a different year base on the DOW and XAO comparatives. Nor did you advise what you thought the divergence represented in any case. Hint: could it be that Australia has simply outperformed US economy or resources have been more important than American motor vehicles, etc. Not sure what you were thinking - just two lines with a dubious base that showed XAO had outperfomed DOW, so what?

Not just your good self Uncle F, but so many posts go back on this thread about imminent and severe etc and the same people come out and bang away again, without ever saying oh shucks got that wrong last time. I wouldn't mind but find much of the purported logic and reasoning fairly shallow, often conspiracy laced about official data and ulterior motives. 

Now good bear talk is fun, but please don't expect me to take you guys seriously until you get it right at least once.


----------



## explod

Timmy said:


> I wont get into a semantic argument explod, but will just say that I wont use your definition of imminent but rather will stick with what the rest of the English speaking world accept as its reasonable definition.
> 
> Here is a Google link to "define: imminent"
> http://www.google.com.au/search?hl=en&source=hp&q=define:+imminent&btnG=Google+Search&meta=&aq=f&oq=
> 
> Having your own personal definition may help to avoid having to admit that the calls made here are vague and imprecise.  Nothing wrong with that, but just helpful to recognise them for what they are, background market commentary.




My definition just happened to be from Google also, read it as you want and so will I, but the one read by me is certainly not my creation.  Nor is my technical and fundamental understanding of Wall Street.


----------



## swm79

the Wall Street equivalent of circle jerking 

http://www.zerohedge.com/sites/default/files/images/Circle%20Jerk.png

except for Calyon.... whats wrong there guys? bitter? unloved?


----------



## Cam

Donga said:


> so many posts go back on this thread about imminent and severe etc and the same people come out and bang away again, without ever saying oh shucks got that wrong last time.




Yeah, but as the saying goes, "if you can't predict right, you had better predict often."


----------



## nomore4s

Donga said:


> Now good bear talk is fun, but please don't expect me to take you guys seriously until you get it right at least once.




Don't worry, when they do get it right, we will all know about it and  then probably keep hearing about it for years:


----------



## Uncle Festivus

Real1ty said:


> I will take that bet. Which market will be the indicator, S&P500?
> 
> If i am right, you no longer post here under any user name.
> 
> If i am wrong i will no longer post here under any user name.
> 
> Deal?




Gee, I can hardly refuse that one, but I graciously decline your terms 

The problem all along is that all the 'yardsticks' for measuring things economically have been watered down to various extents over the years to either suit political or business interests, so even just nominating some data grouping like an stock index to measure the health of an economy is basically useless, but, for the fun of it we shall go with the SP500 (1100) and the FTSE (5300) by 1 Nov 2010 .

Despite the earnings 'better than expected' results, the average SP500 earnings is still down 24% YOY. What we need to see is revenue growth from sales, not cost efficiencies or inventory rebuilds as seen in the GDP figure?

And a chart with fancy lines 'n all..............she's either gonna blow up or down in a big way if you believe that sort of stuff?


----------



## Timmy

Timmy said:


> Nothing wrong with that, but just helpful to recognise them for what they are, background market commentary.




Sorry, that should read "background economic commentary".


----------



## explod

There is no prediction of anything, and statements of most are backed up by facts that can be substantiated.

I say that the stock markets and financial systems will collapse *period* for all the reasons I have stated for the last three years and have known for many more years back from that,  "it is imminent and it will be servere" IMVHO and I respect yours without going crook or taking up bets.   Democracy is a wonderful thing

In the meantime the volatility is creating some very good trading opportunities.


----------



## Timmy

explod said:


> I say that the stock markets and financial systems will collapse *period* for all the reasons I have stated for the last three years and have known for many more years back from that,  "it is imminent and it will be servere" IMVHO and I respect yours without going crook or taking up bets.   Democracy is a wonderful thing




Agree, explod, nothing wrong with having a view.  You have been on the right side of gold for a long time now.


----------



## Timmy

swm79 said:


> the Wall Street equivalent of circle jerking
> 
> http://www.zerohedge.com/sites/default/files/images/Circle%20Jerk.png
> 
> except for Calyon.... whats wrong there guys? bitter? unloved?




swm, do you read ZH?
I do, every day.  The depth of knowledge of some of those posters to the blog is excellent and great learning material.  BUT, you are right about the tone of bitterness etc.  Very wearing after a while.


----------



## Uncle Festivus

Donga said:


> Uncle F, perhap you just like being a bear, a glass half empty guy as your assessments above can be challenged on so many levels, e.g. myriad of Chinese data will show how much is being consumed (cars, telephones, TVs, housing). Perhaps you see infrastructure as production until people start using the subways etc. The business I'm involved in is booming in China, health care. Having travelled to China last year to visit my brother who lives there, I find your comments on pseudo communism, moral hazard capitalism and corrupt junta as naive and condescending.




It is corrupt. Is there a waiting list for organ transplants for party elite?

How is Chinese GDP data calculated then? How is it that what takes other countries several weeks to determine just preliminary data only takes China several days to calculate?



Donga said:


> The "jaws of death" charts I've seen remind me of Nostradamus, fanciful but useless in predicting the immediate future. Pity you didn't get time to respond to my other post requesting a redraw of your chart using a different year base on the DOW and XAO comparatives. Nor did you advise what you thought the divergence represented in any case. Hint: could it be that Australia has simply outperformed US economy or resources have been more important than American motor vehicles, etc. Not sure what you were thinking - just two lines with a dubious base that showed XAO had outperfomed DOW, so what?




The 'Jaws of death' chart referring to the US income/expenditure data is straight from the fed itself, resulting in a small matter of a deficit of some $1.4TRILLION and still trending in the wrong direction. 

As for the currency, if we were/are better performed than the US then why are we not already at parity, having not reached that mark previously when the terms of trade were supposedly much better?

Stimulis measures are ephemeral, and have not resulted in a reduction in under or un employment, so how much more will be needed?

45 million Americans, 1in 6, are below the poverty line; 18 million are underemployed; they now get a full year of unemployment benefits before they drop off the statistics?



Donga said:


> Not just your good self Uncle F, but so many posts go back on this thread about imminent and severe etc and the same people come out and bang away again, without ever saying oh shucks got that wrong last time. I wouldn't mind but find much of the purported logic and reasoning fairly shallow, often conspiracy laced about official data and ulterior motives.
> 
> Now good bear talk is fun, but please don't expect me to take you guys seriously until you get it right at least once.




Do you seriously think that there is no connection between the US Fed, Treasury & Goldman Sachs that gives GS an unfair advantage to everyone else on the planet? All been said before.......ad nauseum.....

I can assure you, any bearish posts based on factual data is more than offset by bullish post based on hope & rhetoric.


----------



## Donga

Uncle Festivus said:


> It is corrupt. Is there a waiting list for organ transplants for party elite? Or indeed many countries' party elite?
> 
> How is Chinese GDP data calculated then? With an abacus. How is it that what takes other countries several weeks to determine just preliminary data only takes China several days to calculate? Because they just make it up, lol.
> 
> The 'Jaws of death' chart referring to the US income/expenditure data is straight from the fed itself, resulting in a small matter of a deficit of some $1.4TRILLION and still trending in the wrong direction.  And your prediction? Will it ever gradually correct?
> 
> As for the currency, if we were/are better performed than the US then why are we not already at parity, having not reached that mark previously when the terms of trade were supposedly much better?  Many  factors in why DOW and XAO have different lines, not about list the ones I can think of.
> 
> Stimulis measures are ephemeral, and have not resulted in a reduction in under or un employment, so how much more will be needed? Lessons from The Great Depression, rather be safe than sorry, and I don't mind govt spending my taxes.
> 
> 45 million Americans, 1in 6, are below the poverty line; 18 million are underemployed; they now get a full year of unemployment benefits before they drop off the statistics? Poverty line is so relative. I'm not an apologist for US policy makers or their values but nor am I gearing up for armageddon.
> 
> Do you seriously think that there is no connection between the US Fed, Treasury & Goldman Sachs that gives GS an unfair advantage to everyone else on the planet? All been said before.......ad nauseum..... the conspiracy stuff again
> 
> I can assure you, any bearish posts based on factual data is more than offset by bullish post based on hope & rhetoric. Phew, thought you were going to refer to me




Uncle F, you ask more questions than you give answers. It's easy to criticise how the world ticks, I do it as well. Struggle in this thread with the constant apocalyptic sentiments that don't materialise, reminds me of some religions out there. But as I said before it is kinda fun, but don't expect me to take it seriously.


----------



## explod

Donga said:


> Uncle F, you ask more questions than you give answers. It's easy to criticise how the world ticks, I do it as well. Struggle in this thread with the constant apocalyptic sentiments that don't materialise, reminds me of some religions out there. But as I said before it is kinda fun, but don't expect me to take it seriously.





There is an old saying "you cant put an old head on young shoulders"

It is obvious that the real content of some threads are just not taken in, it appears that good comprehension only comes for bitter experience.  And having had that a few years ago I got my head into the economic books and have done a virtual Phd in it (jezz sounds like Robots)  But having a tertiary background did know how to go about that.

If you are not able to evaluate the real content of the basic posts then we may as well not post at all.    In cool hand Luke * there are some people you just cant reach*


----------



## GumbyLearner

Donga said:


> but so many posts go back on this thread about imminent and severe etc and the same people come out and bang away again, without ever saying oh shucks got that wrong last time. I wouldn't mind but find much of the purported logic and reasoning fairly shallow, often conspiracy laced about official data and ulterior motives.
> 
> Now good bear talk is fun, but please don't expect me to take you guys seriously until you get it right at least once.




Another conspiracy laced website devoid of reality  

*GMAC in talks for 3rd loan from bailout fund*
Some wonder when auto aid will end

October 29, 2009
BY GREG GARDNER
FREE PRESS BUSINESS WRITER

As talks continued over an additional loan of up to $5.6 billion to GMAC Financial Services Inc., the Obama administration's involvement in the turnarounds at General Motors Co. and Chrysler Group LLC deepened and raised questions about how much more taxpayer aid will be needed to stabilize the automakers' retail businesses.

"It's like the scene from 'The Godfather.' Despite the best intentions to let go, they keep getting pulled back in," said Martin Zimmerman, a professor of business administration at the University of Michigan.

http://www.freep.com/article/200910.../GMAC-in-talks-for-3rd-loan-from-bailout-fund

Also, check out the Madoff thread on ASF and GMAC's financial links to Madoff! 

Here's some more conspiracy theory cake icing for your enjoyment Donga.

Which bank did that Timothy Geithner work for again? 

*China's Geely up, bucking market, on parent's Volvo bid*
Wed Oct 28, 2009 10:34pm EDT

http://www.reuters.com/article/rbssConsumerGoodsAndRetailNews/idUSHKG29469720091029

Geely shares rose to a high of HK$3.0 before paring gains to 2.4 percent at HK$2.94, beating the benchmark Hang Seng Index .HSI, which was down 2.19 percent at 0209 GMT.

The stock has more than quadrupled this year on the Volvo hope and strong car sales in China, as well as an investment by Goldman Sachs (GS.N) in the company's convertible bonds. [ID:nHKG311594]


----------



## Macquack

Donga said:


> Uncle F, perhap you just like being a bear, a glass half empty guy as your assessments above can be challenged on so many levels, e.g. myriad of Chinese data will show how much is being consumed (cars, telephones, TVs, housing). Perhaps you see infrastructure as production until people start using the subways etc. The business I'm involved in is booming in China, health care. Having travelled to China last year to visit my brother who lives there, I find your comments on pseudo communism, moral hazard capitalism and corrupt junta as naive and condescending.
> 
> The "jaws of death" charts I've seen remind me of Nostradamus, fanciful but useless in predicting the immediate future. Pity you didn't get time to respond to my other post requesting a redraw of your chart using a different year base on the DOW and XAO comparatives. Nor did you advise what you thought the divergence represented in any case. Hint: could it be that Australia has simply outperformed US economy or resources have been more important than American motor vehicles, etc. Not sure what you were thinking - just two lines with a dubious base that showed XAO had outperfomed DOW, so what?
> 
> Not just your good self Uncle F, but so many posts go back on this thread about imminent and severe etc and the same people come out and bang away again, without ever saying oh shucks got that wrong last time. I wouldn't mind but find much of the purported logic and reasoning fairly shallow, often conspiracy laced about official data and ulterior motives.
> 
> Now good bear talk is fun, but please don't expect me to take you guys seriously *until you get it right at least once*.




Is it Donga or Drongo?

Show some respect to the creator of this thread (Uncle Festivus).

If you read the whole thread (instead of just mouthing off) you would know that Uncle Festivus *has already got it right once *(Global Financial Crisis) and is now going for his quinella.


----------



## Donga

GumbyLearner said:


> Another conspiracy laced website devoid of reality
> 
> http://www.freep.com/article/200910.../GMAC-in-talks-for-3rd-loan-from-bailout-fund
> 
> Also, check out the Madoff thread on ASF and GMAC's financial links to Madoff!
> 
> Here's some more conspiracy theory cake icing for your enjoyment Donga.
> 
> Which bank did that Timothy Geithner work for again?
> 
> *China's Geely up, bucking market, on parent's Volvo bid*
> Wed Oct 28, 2009 10:34pm EDT
> 
> http://www.reuters.com/article/rbssConsumerGoodsAndRetailNews/idUSHKG29469720091029
> 
> The stock has more than quadrupled this year on the Volvo hope and strong car sales in China, as well as an investment by Goldman Sachs (GS.N) in the company's convertible bonds. [ID:nHKG311594]




Hey GL - I can add a lot more conspiracy stuff. The misleading messages by governments and media on the incidence of smoking related lung cancer being my favourite (pharma industry loves it). Can post NIH data and meta analyses which show nearly 90% of smokers will not succumb to cancer and of those that do 90% reach 40 pack years, i.e. pack a day for 40 years. The odds of someone my age, in their fifties, who has a smoke with a beer of getting cancer is less than 0.2%. I'm not about to say the campaign to stop kids smoking should be canned though would like a little more honesty and less anti smoking hysteria. 

There are heaps of flaws in the world order, e.g. I detest gain through  connections and not abilities, but it is part of life. I don't see the impact of these flaws heading us towards an imminent and severe market correction.

Macquack - you're kidding aren't you. Just a cursory look at thread one and Kennas response did it for me.  Early 2007, well there were a few folk talking about it then, the market had steamed up to 5500 from low 3000s eclipsing all previous records. But still didn't happen until end of the year by which time XAO had reachedf 6700, so imminent?  And dine out on it in finitum? If someone continually bleats they will definitely tip the next one.


----------



## GumbyLearner

Donga said:


> Hey GL - I can add a lot more conspiracy stuff. The misleading messages by governments and media on the incidence of smoking related lung cancer being my favourite (pharma industry loves it). Can post NIH data and meta analyses which show nearly 90% of smokers will not succumb to cancer and of those that do 90% reach 40 pack years, i.e. pack a day for 40 years. The odds of someone my age, in their fifties, who has a smoke with a beer of getting cancer is less than 0.2%. I'm not about to say the campaign to stop kids smoking should be canned though would like a little more honesty and less anti smoking hysteria.
> 
> There are heaps of flaws in the world order, e.g. I detest gain through  connections and not abilities, but it is part of life. I don't see the impact of these flaws heading us towards an imminent and severe market correction.




Off topic there Donga.

Do you believe that the current rise since March is influenced by private capital or government capital? Or maybe a combination of the two?

And to what degree is it sustainable to produce returns for a lay investor interested in making a return?


----------



## Donga

GumbyLearner said:


> Off topic there Donga.
> 
> Do you believe that the current rise since March is influenced by private capital or government capital? Or maybe a combination of the two?
> 
> And to what degree is it sustainable to produce returns for a lay investor interested in making a return?




Yeah apologies for my anti anti smoking bleat  will refrain. 

My lay investor response would be combination of gov't lead stimulus, especially in China and private response, particularly consumers and include my favourites at the moment being miners. 

Not sustainable given the returns that have been made by the average punter in the RECOVERY from the panic induced by X - generation traders, many of whom had never experienced a recession before  Now that was chicken little stuff. Being a little facetious as don't pretend to understand  high level banking mechanics involved but expect panic had a large influence in the magnitude of the GFC. 

Not sure where you're heading but believe unsustainable doesn't lead to imminent and severe market correction. 

Now GL - When do you think the i & s m c will occur and to what magnitude? Missus and I going to walk down to Wharf Bar for a beer and a smoke, so will check in later. Good banter


----------



## Macquack

Donga said:


> Macquack - you're kidding aren't you. Just a cursory look at thread one and Kennas response did it for me.  Early 2007, well there were a few folk talking about it then, the market had steamed up to 5500 from low 3000s eclipsing all previous records. But still didn't happen until end of the year by which time XAO had reachedf 6700, so imminent?  And dine out on it in finitum? If someone continually bleats they will definitely tip the next one.




Sorry there Donga that Uncle Festivus could not give you a more accurate timing on the "imminent and severe market correction". 

This post by Uncle Festivus (number 7) dated 4 April, 2007 may have been to early for you and the market but was *ultimately correct.*


> The crux of the post was that here was obviously a very successful fund manager taking a fairly decisive stance due to fundamentals of the US housing market, which cannot be glossed over by vested interests - *it's a timebomb ready to explode with global implications*.


----------



## GumbyLearner

Donga said:


> Yeah apologies for my anti anti smoking bleat  will refrain.
> 
> My lay investor response would be combination of gov't lead stimulus, especially in China and private response, particularly consumers and include my favourites at the moment being miners.
> 
> Not sustainable given the returns that have been made by the average punter in the RECOVERY from the panic induced by X - generation traders, many of whom had never experienced a recession before  Now that was chicken little stuff. Being a little facetious as don't pretend to understand  high level banking mechanics involved but expect panic had a large influence in the magnitude of the GFC.
> 
> Not sure where you're heading but believe unsustainable doesn't lead to imminent and severe market correction.
> 
> Now GL - When do you think the i & s m c will occur and to what magnitude? Missus and I going to walk down to Wharf Bar for a beer and a smoke, so will check in later. Good banter




Well there is nothing wrong with being anti-smoking for starters. Fair point you made, but you did reach for a scientific analogy to extrapolate your position. As I'm sure you are aware economics is the bastard of all sciences, I'm sure Gauss would be offended at such a suggestion when people who are interested occasionally hear of the actions of the monetary magicians of Central Banks. If he were alive I'm pretty sure he would be dispelling myths and advocating conspiracy theories left right and centre. If your posts are anything to go by.

You see the problem created here lies and remains to lie with the financial capitalists of Wall St. Don't mis-interpret that because I'm a proud capitalist myself. Yet these people have all of a sudden changed tact and have decided to be recipients of public money. Feeding a chasm beyond their control. 

It would be great if I could be bullish and obtain all the affluence that my financial longterm milestones had envisioned A.S.A.P. Everyone who is a member of ASF is in the game for their own reason. 

But really my friend, you came onto this thread knocking a poster who would have made you multiple double-triple digit returns had you followed his advice starting from almost three years ago. I'm a little pessimistic myself, so I'm quite happy to sleep in the bed I made.

Maybe you need to think about that?

Anyway have a good night with your bird.

Cheers
Gumby


----------



## MrBurns

I have only about 10% in shares the rest still in cash.

I smell a rat and I wouldn't be suprised to see things go backwards before too long.

Sometimes research can consist of a feeling gained from multiple news items and others opinions collected over as period of time and that research can sometimes be very accurate.


----------



## Real1ty

Uncle Festivus said:


> Gee, I can hardly refuse that one, but I graciously decline your terms
> 
> The problem all along is that all the 'yardsticks' for measuring things economically have been watered down to various extents over the years to either suit political or business interests, so even just nominating some data grouping like an stock index to measure the health of an economy is basically useless, but, for the fun of it we shall go with the SP500 (1100) and the FTSE (5300) by 1 Nov 2010 .
> 
> Despite the earnings 'better than expected' results, the average SP500 earnings is still down 24% YOY. What we need to see is revenue growth from sales, not cost efficiencies or inventory rebuilds as seen in the GDP figure?
> 
> And a chart with fancy lines 'n all..............she's either gonna blow up or down in a big way if you believe that sort of stuff?




Now i'm confused Uncle.

You suggested a bet on the markets price in 1 years time.

I put forward something that could be enforced and gave the bet a real interest. You declined (That's fine and i have no issue with that) but further in your post you suggest for the fun of it we will use my suggestion of the S&P 500 and you have added the FTSE.
*
Here is where i get confused*.You have nominated 1100 for the S&P and 5300 for the FTSE. Are these your targets or are you saying that is the starting point for our fun bet?

Because if they are your targets then your opinion of the markets being lower in 1 year time has changed in the space of a few hours and if they are your suggested starting points, which i highly doubt, then you are weighing the bet heavily in your favour as they are not the current prices.

I do agree with your statement that economic indicators have been watered down, there is no doubt about that but of course we weren't talking about measuring the health of an economy, but rather where the market would be in a years time.
They are linked, sometimes very strongly, others very loosely, now is loose, this time next year i expect them to be tightly linked.

EDIT:I have no idea what number either of those indexes will be next year and i'm not one for really making predictions, i usually leave that for the smarter people but i made a prediction a few months ago on this forum that we will have a V shaped recovery (Depending on your definition of a V, there will be pullbacks on the way up) and will grind our way higher and i will stick to that prediction until i am shown to be wrong.


----------



## GumbyLearner

Real1ty said:


> Now i'm confused Uncle.
> 
> You suggested a bet on the markets price in 1 years time.
> 
> I put forward something that could be enforced and gave the bet a real interest. You declined (That's fine and i have no issue with that) but further in your post you suggest for the fun of it we will use my suggestion of the S&P 500 and you have added the FTSE.
> *
> Here is where i get confused*.You have nominated 1100 for the S&P and 5300 for the FTSE. Are these your targets or are you saying that is the starting point for our fun bet?
> 
> Because if they are your targets then your opinion of the markets being lower in 1 year time has changed in the space of a few hours and if they are your suggested starting points, which i highly doubt, then you are weighing the bet heavily in your favour as they are not the current prices.
> 
> I do agree with your statement that economic indicators have been watered down, there is no doubt about that but of course we weren't talking about measuring the health of an economy, but rather where the market would be in a years time.
> They are linked, sometimes very strongly, others very loosely, now is loose, this time next year i expect them to be tightly linked.




Well it will be great to see what unfolds for the markets.
And for this thread?

Whose backing Unc and whose backing the carpetbagger? I'm taking bets!


----------



## explod

Ill have UNC thanks Joe, 

opps:.............  backing Uncle thanks Gumby Learner

And a good night to you all


..


----------



## GumbyLearner

explod said:


> Ill have UNC thanks Joe,
> 
> opps:.............  backing Uncle thanks Gumby Learner
> 
> And a good night to you all
> 
> 
> ..




Shh! Me too explod!


----------



## grace

GumbyLearner said:


> Shh! Me too explod!




My money is on Unc too thanks.


----------



## drsmith

An interesting long term ratio.

http://home.earthlink.net/~intelligentbear/com-dow-au.htm


----------



## Wysiwyg

All the doomsayers that have a bunt on this thread slip away into the night and never post again (oh i`m all cash, i`m a teapot etc.). At least Unc. stays with his convictions and always has an interesting yarn.


----------



## GumbyLearner

Wysiwyg said:


> All the doomsayers that have a bunt on this thread slip away into the night and never post again (oh i`m all cash, i`m a teapot etc.). At least Unc. stays with his convictions and always has an interesting yarn.




what's a doomsayer?

You are throwing a very generalized wide net there wysi.

Look at the thread in it's entirety and you will quickly surmise that Unc is a a poster you ignored?

What do you say??


----------



## Uncle Festivus

Real1ty said:


> Now i'm confused Uncle.
> 
> You suggested a bet on the markets price in 1 years time.
> 
> I put forward something that could be enforced and gave the bet a real interest. You declined (That's fine and i have no issue with that) but further in your post you suggest for the fun of it we will use my suggestion of the S&P 500 and you have added the FTSE.
> 
> *Here is where i get confused*.You have nominated 1100 for the S&P and 5300 for the FTSE. Are these your targets or are you saying that is the starting point for our fun bet?
> 
> Because if they are your targets then your opinion of the markets being lower in 1 year time has changed in the space of a few hours and if they are your suggested starting points, which i highly doubt, then you are weighing the bet heavily in your favour as they are not the current prices.
> 
> I do agree with your statement that economic indicators have been watered down, there is no doubt about that but of course we weren't talking about measuring the health of an economy, but rather where the market would be in a years time.
> They are linked, sometimes very strongly, others very loosely, now is loose, this time next year i expect them to be tightly linked.
> 
> EDIT:I have no idea what number either of those indexes will be next year and i'm not one for really making predictions, i usually leave that for the smarter people but i made a prediction a few months ago on this forum that we will have a V shaped recovery (Depending on your definition of a V, there will be pullbacks on the way up) and will grind our way higher and i will stick to that prediction until i am shown to be wrong.




I'm sorry now that I even flippantly remarked on where a market would be in 12 months time - the fact is I don't know either, nobody does. I declined your _terms_ of the 'bet', but if you want to have something to look back on and have chuckle, coz I've been wrong plenty of times here before, then the figures I quoted are that this time next year the market will not be higher than them . In any event, I probably would have lost interest by then and drifted off somewhere else, I really don't care that much if you read my posts or not.

I've been trying to wean myself off this forum for a while, but it's comments like the last line about 'predictions' which usually draws me from my apathy to comment viz if you make a prediction then put forward your reasoning to support it - grinding higher means nothing to me? Forums are for informed discussion - I would welcome some constructive critique of my posts as sometimes I think I'm just whistling Dixie....woops, I'm bored again (sometimes I feel just like Mr Kruger from Seinfeld http://www.youtube.com/watch?v=z6kVBGeQeR4)

If you follow the herd you will be _just_ average? Be one step ahead of average?

And to finish, some more junk from the US Commerce Dep

Have a good weekend 



> WASHINGTON (MarketWatch) -- U.S. consumer spending fell sharply in September after the government's cash-for-clunkers program ended, while after-tax incomes fell for the fourth month in a row, the Commerce Department estimated Friday.
> 
> Real (inflation-adjusted) consumer spending dropped a seasonally adjusted 0.6% in September after a 1% gain in August, the government said. It was the largest decline in spending since December. Real disposable incomes after taxes fell a seasonally adjusted 0.1%, the fourth decline in a row.
> 
> *Despite overall growth in the economy in the third quarter, incomes aren't growing and jobs are still being lost at a rapid pace.*


----------



## explod

Well the Dow made a clear statement this morning, down 240 poins (2.4%) biggest fall since the bottom of the crash from October.

So looks like the sheeple are getting the message now.  All the big green results of Thursday down the tubes in one trading session.  Gold recovered from a down tick during the session too.   Ingrediants very bearish for next week IMHO


----------



## seasprite

here's my fancy diagram , I went 70% cash on the 22nd and there was no way I was buying on friday even with the +199, the cross to 9763 wasn't convincing enough and USD/INX was just hanging about with no where to go. If the DOW drops below my new 2nd target I'm out.


----------



## Donga

Macquack said:


> Is it Donga or Drongo?
> 
> Show some respect to the creator of this thread (Uncle Festivus).
> 
> If you read the whole thread (instead of just mouthing off) you would know that Uncle Festivus *has already got it right once *(Global Financial Crisis) and is now going for his quinella.






GumbyLearner said:


> But really my friend, you came onto this thread knocking a poster who would have made you multiple double-triple digit returns had you followed his advice starting from almost three years ago. I'm a little pessimistic myself, so I'm quite happy to sleep in the bed I made.




Whoa, have I stumbled into cult territory "don't challenge the master" type stuff. No intention of taking out the man, just the sentiments. Have noticed people here ask a lot of quesions but don't like answering them. Never mind, still some interesting posts. 

Don't pretend to be a master in economics or finer details of share trading, however have been around the block a few times and not done too badly. 

o Fact is over the long term indices rise because global economy keeps expanding. How efficient and how fair is what we like discussing with mates and on ASF threads.     

 o If you're going to buy and sell whenever you think market is heading for a major correction or rise, you wanna be pretty damn good cos it does rise over time so you're swimming against the tide when you sell. Then there is the timing of re-entry. 

 o So applying this to GFC - I held all the way down, so yes Macquack or is it Goose, I didn't bail out when Uncle F rang the bell in April 2007 when the XAO was around 5700, nor did I sell when it hit the floor finally at 3100 in early 2008. 

 o Market is now 4500-4700 and I'm back in the black, over the high achieved when XAO achieved 6700 in late 2007.   

 o Could not have done this if I'd been out of the market when it reached 3800 and the Imminent & Severe cult started to call the end of the world again. This period has been terrific for selective oversold small/mid cap miners, and many have a way to go yet in outperforming XAO mid term IMO. 

If you look back at posts in August you'll see my predictions and still stick by them, 5000 by Christmas with a few minor corrections along the way. 

I'm not been an active trader except for last few months, so respect the folk that do this for a living and appreciate you play a more complicated game than me. Just not convinced that selling off the portfolio and trying to time the re-entry is a good strategy and sounds like a poor option to LT or daily trading. Expect most of you do both so perhaps you're not really selling off your entire share holdings?  

And thanks GL, had a good night with my bird - beer and ciggies were most enjoyable and will probably imbibe again after my run this arvo


----------



## explod

*DONGA old son* if you want to get with it a bit its always good to fill between the ears with some information full of ion.   Not read much, well in the big game that is dangerous.   I dont' give recommendations, first you cant and second I am often wrong.

But if I thought like you I would get my hands on a book straight away called "Financial Armeggedon by Micheal Panzer, think it was first published about 06, he has been spot on and is still spot on and he also has a Web page under the same name.   Everything he states is backed by full authority of sources which you can back test.   Ought to be able to get a copy second hand now though I would not part with my copy.  When you have read that come back and I will tell you what else I would read in your position, if I was in your position.

*so Donga, my message, GET SOME GOOD ION BETWEEN THE EARS PAL*

First good hot day down here on the beautiful peninsula today and the VB's are going down very well.


----------



## Donga

Thanks Explod I'll take a look though note my play fund which has doubled in value over past few months now represents around 15% of our investments and my day job more than caters for my short and long term needs. I have no intention of living off the XAO. 

I have enough ION for my industry, global understanding having lived abroad extensively and investments, but doesn't mean I can't learn more. 

Still not seeing any quantified predictions from the bears, but getting used to that and the high degree of *SMUGNESS* around given the low level of guidance other than how bad the global economy is. Hope our man Panzer did well with his book and tend to place a little more respect with the likes of our top economists in Canberra and industry who don't write books for a living.

We'll saunter down to Manly again after the rugby and hope one of our teams can get up tonight.


----------



## explod

Donga said:


> Thanks Explod I'll take a look though note my play fund which has doubled in value over past few months now represents around 15% of our investments and my day job more than caters for my short and long term needs. I have no intention of living off the XAO.
> 
> I have enough ION for my industry, global understanding having lived abroad extensively and investments, but doesn't mean I can't learn more.
> 
> Still not seeing any quantified predictions from the bears, but getting used to that and the high degree of *SMUGNESS* around given the low level of guidance other than how bad the global economy is. Hope our man Panzer did well with his book and tend to place a little more respect with the likes of our top economists in Canberra and industry who don't write books for a living.
> 
> We'll saunter down to Manly again after the rugby and hope one of our teams can get up tonight.




Was not talking of making money Donga, anyone can put the head down and do that.   Few of us in fact are bears, most are super optimists.  But some of us do know that the financial system is in a mess and a huge correction has to occur based on reality.  Just thought you would like to find out about it for yourself so that you can judge us with a bit more au*****ity.


----------



## GumbyLearner

Donga said:


> *Whoa, have I stumbled into cult territory "don't challenge the master" type stuff.* No intention of taking out the man, just the sentiments. Have noticed people here ask a lot of quesions but don't like answering them. Never mind, still some interesting posts.
> 
> Don't pretend to be a master in economics or finer details of share trading, however have been around the block a few times and not done too badly.
> 
> o Fact is over the long term indices rise because global economy keeps expanding. How efficient and how fair is what we like discussing with mates and on ASF threads.
> 
> o If you're going to buy and sell whenever you think market is heading for a major correction or rise, you wanna be pretty damn good cos it does rise over time so you're swimming against the tide when you sell. Then there is the timing of re-entry.
> 
> o So applying this to GFC - I held all the way down, so yes Macquack or is it Goose, I didn't bail out when Uncle F rang the bell in April 2007 when the XAO was around 5700, nor did I sell when it hit the floor finally at 3100 in early 2008.
> 
> o Market is now 4500-4700 and I'm back in the black, over the high achieved when XAO achieved 6700 in late 2007.
> 
> o Could not have done this if I'd been out of the market when it reached 3800 and the Imminent & Severe cult started to call the end of the world again. This period has been terrific for selective oversold small/mid cap miners, and many have a way to go yet in outperforming XAO mid term IMO.
> 
> If you look back at posts in August you'll see my predictions and still stick by them, 5000 by Christmas with a few minor corrections along the way.
> 
> I'm not been an active trader except for last few months, so respect the folk that do this for a living and appreciate you play a more complicated game than me. Just not convinced that selling off the portfolio and trying to time the re-entry is a good strategy and sounds like a poor option to LT or daily trading. Expect most of you do both so perhaps you're not really selling off your entire share holdings?
> 
> And thanks GL, had a good night with my bird - beer and ciggies were most enjoyable and will probably imbibe again after my run this arvo




That's a pretty outlandish statement Donga. 
I don't see how you can accuse anyone of cult-like behaviour for posting their own opinion or views on the future of the global economy whether they are bullish or bearish. I just tend to disagree with a lot of the Bulls with regard to this matter. 

Just like explod has suggested some reading, I'll also offer another title you should consider.

*Combatting Cult Mind Control by Steven Hassan.*

http://en.wikipedia.org/wiki/Combatting_Cult_Mind_Control

It's worth a read. 

Just my


----------



## Donga

GumbyLearner said:


> That's a pretty outlandish statement Donga.
> I don't see how you can accuse anyone of cult-like behaviour for posting their own opinion or views on the future of the global economy whether they are bullish or bearish. I just tend to disagree with a lot of the Bulls with regard to this matter.




This is getting a little silly. 

1. Posting information and oinions is what ASF is all about. My response was directed at the quotes referring to claims that I didn't respect Uncle F after he raised i & s m c early 2007, hence my cult analogy. No disrespect to Uncle intended, just don't agree with his current assessments and couldn't help commenting on the way you and explod reacted.  

2. This is a thread within a stock market forum and I approach it as being mostly about investment strategies, especially as to whether:

a) we are facing i & s m c, which I'm challlenging and have done since August and 

b) even if a major correction, my view to ride it out as I have in the past. I also referred to the i & s m c mutterings of the past few months while bulls made hay and some others were cashed up 

3. Still waiting for some quantification from those who belive in i & s m c.   

Not sure where this is heading, guess it wil be all be overtaken by other posts. Not going to recommend recent books I've read as prefer quite different subject matters. I did do a quick google on Panzer and his book and others may wish to get the gist of his views see http://www.financialsense.com/transcriptions/2007/0303.html

I'll ride out this correction no matter how far it falls and have tried to explain my rationale and provide a counter balance as I worry about folk who might panic in an ongoing recovery market (US has just come out of their recession if you believe the data) albeit within a flawed financial system. 

Feeling somewhat vindicated after my August intrusions, let's see where we are in another two months time.

Best wishes in your pursuits.


----------



## drsmith

Donga said:


> Feeling somewhat vindicated after my August intrusions, let's see where we are in another two months time.



4000.

My confidence in that number is not great but it's higher than an outcome of 5000. Thursday's rally was a one day wonder unlike the other uplegs since the bottom in March.


----------



## Sean K

I'm in the Marc Faber school at the moment. Stocks and commodities will be well supported as the economy worsens and more 'stimulous' is thrown at the problem until inflation _really_ kicks in and the current system collapses. It's 10 or so years away perhaps.


----------



## Timmy

Donga said:


> This is getting a little silly.
> 
> 1. Posting information and oinions is what ASF is all about.




This thread is basically an exercise in defending a view.  Nothing wrong with having a view, but the confirmation bias here does become wearing if your expectation of the thread is for something else.  It is best viewed as "The case for a bearish view".
To his credit, Uncle F. has said that the 'imminent' part of the title is probably past its use-by date (post #4501), a point his followers haven't caught onto yet, or have chosen to disregard.


----------



## Uncle Festivus

Timmy said:


> To his credit, Uncle F. has said that the 'imminent' part of the title is probably past its use-by date (post #4501), a point his followers haven't caught onto yet, or have chosen to disregard.




LOL - 'Look into my eyes, you are feeling sleeeeeeeepy' 

That cracked me up! If you 'follow' me you can get chicks like this - me with one of my 'followers'


----------



## Macquack

Uncle Festivus said:


> LOL - 'Look into my eyes, you are feeling sleeeeeeeepy'
> 
> That cracked me up! If you 'follow' me you can get chicks like this - me with one of my 'followers'



Uncle Festivus/Guru, where do I sign up?


----------



## Timmy

Uncle Festivus said:


> LOL - 'Look into my eyes, you are feeling sleeeeeeeepy'
> 
> That cracked me up! If you 'follow' me you can get chicks like this - me with one of my 'followers'




I am so there.  Getting fitted for the orange robe as we speak!


----------



## Gordon Gekko

Timmy said:


> I am so there.  Getting fitted for the orange robe as we speak!




Hey Uncle, I had no idea that you are from Canada!
You have just gone to all star status in my book!

Uncle 1
Drongo 0

In my book anyway


G


----------



## noirua

After dramatic falls in mining stocks in Europe and America on Friday, expect falls of up to 15% on Monday on the ASX, including major stocks.


----------



## oztrades

Scared of US markets? Then bring your money here because we are going to leave the US behind. Appreciating dollar, less worldwide debt, aussie enthusiasm, trade capacity and better markets. Im buying.

Interesting 3 month chart follows for your information. Cheers


----------



## Aussiest

Donga said:


> I held all the way down, so yes Macquack or is it Goose, I didn't bail out when Uncle F rang the bell in April 2007 when the XAO was around 5700, nor did I sell when it hit the floor finally at 3100 in early 2008.




But, wouldn't you have been better to sell and then re-enter at a much lower point? Nobody knew how low it was going to go, but for experienced traders (not saying i was one back then), the signs must have been there.

Imagine how in the black you'd be now  Anyway, well done for not wigging out if you had faith in your shares.


----------



## MrBurns

noirua said:


> After dramatic falls in mining stocks in Europe and America on Friday, expect falls of up to 15% on Monday on the ASX, including major stocks.




Tell you what, if it really tanks tomorrow I think I might be buying.


----------



## oztrades

Aussiest said:


> But, wouldn't you have been better to sell and then re-enter at a much lower point? Nobody knew how low it was going to go, but for experienced traders (not saying i was one back then), the signs must have been there.
> 
> Imagine how in the black you'd be now  Anyway, well done for not wigging out if you had faith in your shares.




Quite agree Aussiest but you do say "Nobody knew how low it was going to go".
Unlike today where we are climbing out of recession back then was the height of the boom so it would have been more prudent to sell and wait for the bottom.
Now its ride the volatility wave all the way up till the same signs that were present in stock valuations rear their ugly head again. So far the 2 minor corrections we have had wouldnt pay the brokerage fees IMHO.


----------



## Wysiwyg

MrBurns said:


> Tell you what, if it really tanks tomorrow I think I might be buying.



Plenty catch falling knives.


----------



## skyQuake

noirua said:


> After dramatic falls in mining stocks in Europe and America on Friday, expect falls of up to 15% on Monday on the ASX, including major stocks.




15%? That's a bit extreme for the majors... The dow is just down 2.5%
BHP would tank 2.75~3% at open~
We faded pretty heavily on Fri, so I doubt even the small end of the market will tank that hard, let alone the majors.


----------



## Beej

Aussiest said:


> But, wouldn't you have been better to sell and then re-enter at a much lower point? Nobody knew how low it was going to go, but for experienced traders (not saying i was one back then), the signs must have been there.
> 
> Imagine how in the black you'd be now  Anyway, well done for not wigging out if you had faith in your shares.




Hah! So much easier said in hind sight than done at the time! Just read this and other threads (especially the "rally or dead cat bounce" thread started in March). Nothing is ever certain and anything can happen until it has already happened. Many of those who were "scared" enough of the signs to sell out on the way down (usually booking significant losses already) have mostly remained too scared to buy back in during the subsequent rally - and in the meantime have also missed out on some serious dividend flows (talking about portfolio holders rather than active pure traders here).

A few people in hindsight made both the exit and entry calls reasonably well and acted on them, they have done very well, but I suspect they represent a small minority of investors. Wish I was one of them but I'm not, but I am in the "held through the doom and gloom" camp, and have benefited immensely from portfolio pruning and dividend re-investment during this period. Slow and steady wins the race when you have a day job and a well selected/managed long term portfolio IMO.

Will be very interesting to see what happens over the next 6-12 months!

Cheers,

Beej


----------



## explod

> CIT failure to leave small businesses floundering
> Sun Nov 1, 2009 4:36pm EST
> By Elinor Comlay
> 
> NEW YORK, Nov 1 (Reuters) – CIT Group Inc’s (CIT.N) bankruptcy filing, while long expected, could still trigger a financing crunch for many of the hundreds of thousands of small businesses it finances.
> 
> CIT filed for bankruptcy protection on Sunday, and said its creditors have already approved the century-old commercial lender’s reorganization plan.[ID:nN01408863]
> 
> The bankruptcy followed a failed struggle to refinance its debt amid the credit crunch and recession, and paves the way for it to restructure.
> 
> Under the plan announced on Sunday, the lender expects to reduce total debt by about $10 billion.
> 
> But the company’s long-term prospects are uncertain and the bankruptcy could leave more than one million small and medium-sized businesses looking for another source of funding, lawyers said.
> 
> More…



  From Jim Sinclair's Minset.

And US taxpayers bailed this mob out awhile back to the tune of 2.6 billion, aaahh well its only somebody elses money.

They have been in the business for 100 years.


----------



## Donga

Good to see the bears and cultists are all hibernating in their cave


----------



## Joules MM1

Donga said:


> Good to see the bears and cultists are all hibernating in their cave




really............surpriiiiiiiiiiiiise


:fan


----------



## Porper

Donga said:


> Good to see the bears and cultists are all hibernating in their cave




The press is bullish, the world is back on track and smart comments about bears are being banded around....perfect time for some reality to kick in.

Remember in March many were predicting Armageddon and look what has happened since.


----------



## explod

Donga said:


> Good to see the bears and cultists are all hibernating in their cave




Or just maybe the calm before the storm.  Looks like Dubai having to refinance, cant meet their repayments.   Business Age paints a picture of world market jitters on the issue.


----------



## CamKawa

I'm standing at the entrance of my cave.

An article on how the Dubai fiasco could hit us.


----------



## Aussiejeff

CamKawa said:


> I'm standing at the entrance of my cave.
> 
> An article on how the Dubai fiasco could hit us.




Oh dear.

Too many speculative eggs in an Arabian basket eh?

If you had speculated 20 years ago that the future prosperity of The World would in no small part depend on an Arabian fantasy, would you hgave laughed till you choked?

Who's laughing now?

 

Better hope the trillions of Chinese Fortune Cookies the west are now holding don't turn rotten in time too...


----------



## Mc Gusto

Aussiejeff said:


> Oh dear.
> 
> Too many speculative eggs in an Arabian basket eh?
> 
> If you had speculated 20 years ago that the future prosperity of The World would in no small part depend on an Arabian fantasy, would you hgave laughed till you choked?
> 
> Who's laughing now?
> 
> 
> 
> Better hope the trillions of Chinese Fortune Cookies the west are now holding don't turn rotten in time too...




comment of the year!!


----------



## lukeaye

Look, somebody is going to have to do this.

Im going to call it, this is it, Expect a very large IMPULSIVE, not corrective move, down from here.

Both fundamental and technical aspects align at the moment.

There is some very very concerning momentum and breadth issues, as well as some very nasty fundamentals comming out.

If you notice the last week, the SPI has not managed to move up at all, and the last few weeks very few stocks have actually strengthed, only the stocks large enough to move the index slightly have moved, the likes of BHP etc. 

If you track the majority of other stocks, you will notice they have actually tracked backwards. There is a lot of money comming out of the markets. It starts with the more speculatives, and then the bluechips will follow.

I for one will start taking some shorts from any strength.


----------



## sammy84

There was a fault in london overnight, no trades on the FTSE for three hours. During that time the sell side loaded up. That combined with a knee jerk reaction to a piece of news that markets shoud've already absorbed (Dubai unable too meet debt repayments, who would've thought) could make this a bear trap. Follow through selling on Monday would have me worried however....


----------



## Bushman

sammy84 said:


> There was a fault in london overnight, no trades on the FTSE for three hours. During that time the sell side loaded up. That combined with a knee jerk reaction to a piece of news that markets shoud've already absorbed (Dubai unable too meet debt repayments, who would've thought) could make this a bear trap. Follow through selling on Monday would have me worried however....




Agree - bear trap. Dubai has been a basket case for 12 months and the exposure should be priced in. 

However notice again the great predictive powers of Moodies/S&P in declaring a ratings downgrade after the horse has bolted. Lol.


----------



## Broadway

Spi is being bought today for a swing up. Might take a few days, but this is only a dip-buying opportunity, in my opinion. After that I dont know, but short term im in.

(ps been wrong before)


----------



## lukeaye

Broadway said:


> Spi is being bought today for a swing up. Might take a few days, but this is only a dip-buying opportunity, in my opinion. After that I dont know, but short term im in.
> 
> (ps been wrong before)




Im sorry i disagree completely. Buying today imo would be madness, even if the market pulls back up, it will pull back from much lower prices. I would look to buy after a lot more of a pullback.

But i could be wrong.


----------



## adobee

Is there a difference between Dubai's money and the UAE Royal Families money or is all one  ?  At last reports the Royal Family was worth around $150 Billion ...  You would think they can bail out there cousins interest payments if need be for a while ?


----------



## skyQuake

lukeaye said:


> Im sorry i disagree completely. Buying today imo would be madness, even if the market pulls back up, it will pull back from much lower prices. I would look to buy after a lot more of a pullback.
> 
> But i could be wrong.




Today could be the false brk to the downside. Bearish sentiment has been building up in Aus pretty heavily, and all the retail punters would short this break.
US futs are down atm (obviously) but the US has a fine history of squeezing the other way if futs are way high or way low.
Pretty sure the dubai mess would be cleaned up fairly easily.

Disc: got me some longs


----------



## CAB SAV

Will Bernwanke  pull another rabbit/hair out of his .... this weekend or early next week declaring retail sales/forget profits,  well up on thanksgiving weekend last year & the party continues?


----------



## swm79

skyQuake said:


> Today could be the false brk to the downside. Bearish sentiment has been building up in Aus pretty heavily, and all the retail punters would short this break.
> US futs are down atm (obviously) but the US has a fine history of squeezing the other way if futs are way high or way low.
> Pretty sure the dubai mess would be cleaned up fairly easily.
> 
> Disc: got me some longs




and heading into xmas.... sure people wouldnt NOT buy their kids that bike they wanted 

time to crack out the credit card

VISA: "EEEEEEEEEEEXCELLENT"


----------



## swm79

CAB SAV said:


> Will Bernwanke  pull another rabbit/hair out of his .... this weekend or early next week declaring retail sales/forget profits,  well up on thanksgiving weekend last year & the party continues?




throw in a "strong dollar... strong dollar" and he'll get the hat-trick!!!


----------



## Donga

lukeaye said:


> Im sorry i disagree completely. Buying today imo would be madness, even if the market pulls back up, it will pull back from much lower prices. I would look to buy after a lot more of a pullback.
> 
> But i could be wrong.




Don't think buying today would be madness. This morning would have been good. Some folk have been waiting for a major pullback since 3800 and I just don't think it's gonna happen in the short term. Recently had 6% retreat and we'll see if this deteriorates into something worse, but doubt it. Now if China starts choking, I'm outa here!


----------



## sammy84

Seems to be the same pattern recurring in the market...push higher, consolidate, down day, wash out the dead wood, then trudge higher again. I removed my stops this morning as I have been caught in the white wash to often with this market behaviour. Stops will be replaced for Monday. Risky stratergy I know, but seemed that today was always going to be an over reaction on the open.


----------



## jancha

sammy84 said:


> Seems to be the same pattern recurring in the market...push higher, consolidate, down day, wash out the dead wood, then trudge higher again. I removed my stops this morning as I have been caught in the white wash to often with this market behaviour. Stops will be replaced for Monday. Risky stratergy I know, but seemed that today was always going to be an over reaction on the open.




I agree. That does seem to be the pattern of late. However how we go on Monday tho would depend on what the Dow finishes on overnight. Yes?


----------



## Aussiejeff

Our Big Bwanks are either denying any exposure or refusing to speak.

Hmmm.

Wasn't that their EXACT SAME response at the start of the "1st" World Financial Crisis that happened ages ago - way back in 2008?

Sure, sure... I believe.......


----------



## CapnBirdseye

Well... I'm out.  Gold stocks only.  A correction was due and this is the catylyst.

If I'm wrong, I'm sure if I'm patient I won't get back in too far from where I left. 

Strengthening USD?  Whats that all about.


----------



## skc

According to Wikipedia, Dubai GDP was only $37B in 2005... a couple more good years in 06 and 07 probably push the figure up to say $50B? But over 20% was construction which is now busted, while only 6% is oil and gas.

Their national debt on the other hand is $100B... so 2-3 times the GDP. It is also important to think about GDP. It's really only the equivalent of "revenue" to a country. The "profit" is the tax receipts. And Dubai is well known for having the lowest tax rate in the world (something like 5% for individual income). So I hate to think really what's their "interest cover" ratio.

One would think that the UAE will just announce some sort of bail out over the weekend and calm things over.. but I don't know of any precedence of the UAE federation bailing out the member states.



sammy84 said:


> Seems to be the same pattern recurring in the market...push higher, consolidate, down day, wash out the dead wood, then trudge higher again. I removed my stops this morning as I have been caught in the white wash to often with this market behaviour. Stops will be replaced for Monday. Risky stratergy I know, but seemed that today was always going to be an over reaction on the open.




That surely is not the most prudent risk strategy? The Aussie market hasn't been able to move up even with the DOW making new highs, it will be very surprising if we bolt up Monday. Esp considering that US is half day tonight and unlikely to provide clear leads. 

My punt is that the attention will be turned next to those Eastern EU countries who are about to go bust.


----------



## jancha

CapnBirdseye said:


> Well... I'm out.  Gold stocks only.  A correction was due and this is the catylyst.
> 
> If I'm wrong, I'm sure if I'm patient I won't get back in too far from where I left.
> 
> Strengthening USD?  Whats that all about.




 » BREAKING NEWS  » News
Stocks plunge on Dubai debt news Australian shares have plunged in the wake of the government of Dubai asking for a six-month debt moratorium for its investment vehicle, Dubai World.

Austock Securities senior client adviser Michael Heffernan said the market wasn't too upset and he was confident that Dubai would not default.

"If it was anybody I owed money to I would love it to be the Dubai royal family," he said.

"They have oil dripping out of them and have plenty of dough pouring into them.

"This doesn't affect whether shoppers going to Woolworths or Safeway - and they're both down and all the banks are down - and I don't think they have any extensive lending to the Dubai royal family."

Mr Heffernan said the drop in the market meant it would be a buying day, with retail and banking stocks selling at good value.

He said Leighton Holdings and WorleyParsons were two companies with exposure to Dubai.


----------



## adobee

I think everyone needs to pick up the balls and start buying ..  The Royal Family have substanial worth and income and I think can cover this money in a worst case scenario .. If you have an opportunity to resturcture and ask for a 6 month grace period why wouldnt you take it .. I dont think the hole debt falls due right now anyway..  They just need to give a personal guarantee on the debt and all will be fine. .


----------



## sammy84

skc said:


> That surely is not the most prudent risk strategy? The Aussie market hasn't been able to move up even with the DOW making new highs, it will be very surprising if we bolt up Monday. Esp considering that US is half day tonight and unlikely to provide clear leads.
> 
> My punt is that the attention will be turned next to those Eastern EU countries who are about to go bust.




Not prudent on face value, however the end result should be the same unless if we gap down on Monday. I knew the intial wave of selling would knock my stops out, and when the market has news like this before the open, 9/10 the lowest point of the day with be the open. Stops will be replaced tonight under the lows of the day. It still comes within managing my risk given that I have kept an extra allocation of risk up my sleave on each purchase lately, so they I can try and move my stop away from these short down moves which are just taking me out of far too many profitable trades. I will see how it goes, this is the first time I have attempted not buying my full allocation of shares (i.e normally 1%, I have now done .7% and have left .3% to allow the stop extra room if need be). I will quickly learn whether this is suited current market conditions or not


----------



## skyQuake

sammy84 said:


> Not prudent on face value, however the end result should be the same unless if we gap down on Monday. I knew the intial wave of selling would knock my stops out, and when the market has news like this before the open, 9/10 the lowest point of the day with be the open. Stops will be replaced tonight under the lows of the day. It still comes within managing my risk given that I have kept an extra allocation of risk up my sleave on each purchase lately, so they I can try and move my stop away from these short down moves which are just taking me out of far too many profitable trades. I will see how it goes, this is the first time I have attempted not buying my full allocation of shares (i.e normally 1%, I have now done .7% and have left .3% to allow the stop extra room if need be). I will quickly learn whether this is suited current market conditions or not




Hi sammy, we fell 40 odd points after the open today but bounced straight back up; If you're not looking to trade intraday then I guess thats fine, but IMO you should haev let yourself get stopped out, reasses; and then possibly re-enter.

Cheers


----------



## Nyden

Could it be a bad sign, that in the thread titled "Imminent and sever market correction", the majority of the last few posts are in fact bullish - calling for a big swing up on Monday? 

This whole week, heck, even the previous week has had me a little worried. Every day we seem seem to be led downwards by selling pressure. And, as mentioned already, the US kept making new highs this week, yet we kept floundering in a sideways-down motion.

We could very well head right back up, though.  It just seems odd, that we're heading back down so quickly after our previous dip. Doesn't seem to be the same pattern as before.

I tend to get a little uneasy when the doomsayers are no where to be found, is all. Perhaps they're all long.


----------



## pilots

jancha said:


> » BREAKING NEWS  » News
> Stocks plunge on Dubai debt news Australian shares have plunged in the wake of the government of Dubai asking for a six-month debt moratorium for its investment vehicle, Dubai World.
> 
> Austock Securities senior client adviser Michael Heffernan said the market wasn't too upset and he was confident that Dubai would not default.
> 
> "If it was anybody I owed money to I would love it to be the Dubai royal family," he said.
> 
> "They have oil dripping out of them and have plenty of dough pouring into them.
> 
> "This doesn't affect whether shoppers going to Woolworths or Safeway - and they're both down and all the banks are down - and I don't think they have any extensive lending to the Dubai royal family."
> 
> Mr Heffernan said the drop in the market meant it would be a buying day, with retail and banking stocks selling at good value.
> 
> He said Leighton Holdings and WorleyParsons were two companies with exposure to Dubai.




Jancha, Dubai oil is running out fast, a lot of the money that was pouring in to them was BLACK money from Russian and china. I just hope our banks are not in bed with them.


----------



## sammy84

skyQuake said:


> Hi sammy, we fell 40 odd points after the open today but bounced straight back up; If you're not looking to trade intraday then I guess thats fine, but IMO you should haev let yourself get stopped out, reasses; and then possibly re-enter.
> 
> Cheers




Agreed, was just trying to find innovate ways to stop my current draw down. Also re-entry is a lot harder mentally than defending positions on a down day. 

Back on topic, not worried by Dubai. Dubai was always a bubble, I would hope most market participants were smart enough to price that in. Nevertheless, Abu Dahbi has over $150b cash in reserves. Considering they only have a GDP of $37m, the ramifications for us should not be too large. I'm just glad I don't own leightons


----------



## Taltan

Nyden said:


> I tend to get a little uneasy when the doomsayers are no where to be found, is all. Perhaps they're all long.




I think the doomsdayers are there reminding us that what caused the GFC hasn't been solved. The thing is with Bernake determinded to hold rates at 0% and govts spending like crazy there obviously a lot of money around and so up in the short-term seems logical. I too have been getting the downward vibe lately however I think its irrelevant to look at our market in isolation. If the S&P picks up so will we.


----------



## explod

sammy84 said:


> Agreed, was just trying to find innovate ways to stop my current draw down. Also re-entry is a lot harder mentally than defending positions on a down day.
> 
> Back on topic, not worried by Dubai. Dubai was always a bubble, I would hope most market participants were smart enough to price that in. Nevertheless, Abu Dahbi has over $150b cash in reserves. Considering they only have a GDP of $37m, the ramifications for us should not be too large. I'm just glad I don't own leightons




Crowd sentiment/behaviour is very powerfull and infectious, add fear and you have a bad mix.  The Dubai issue will make many more question the fundamentals of many other financial weeklings, it was already in the last week or so looking a bit dodgy again in the US, this could tip things a great deal now.   When minds drift bact to the October 08 crash it may not be pretty at all.

Just my humble overview.


----------



## GumbyLearner

Nyden said:


> I tend to get a little uneasy when the doomsayers are no where to be found, is all. Perhaps they're all long.




Yeah I'm long but only like Norman May calling the action from the pool. LOL


----------



## Aussiejeff

I just took a peek at the Hang Seng index...

DOWN -666 points

Omen??



Errr.. make that -765 after another 2 mins....


----------



## jancha

Aussiejeff said:


> I just took a peek at the Hang Seng index...
> 
> DOWN -666 points
> 
> Omen??
> 
> 
> 
> Errr.. make that -765 after another 2 mins....




That has to be a definate omen Aussiejeff. When did you wakeup from out of the cave?


----------



## ROE

Please another 20% drop then follow by margin call and another panic 
I been saving cash since August

4 stocks I like to have but people need to start throw them out of the windows because of margin call.


----------



## Nyden

ROE said:


> Please another 20% drop then follow by margin call and another panic
> I been saving cash since August
> 
> 4 stocks I like to have but people need to start throw them out of the windows because of margin call.




There you are! Looks like we're headed up on Monday after all :


----------



## stretchie

I think you'll find people are a lot more wary of doubling down on margin like they did in October 08. If there's another big fall it might not be as far as you'd think. I'm certainly a LOT less geared up than I was last time, and can pay out my margin loan within a few weeks if absolutely necessary. 

I was rather stupid last time and _increased _my holdings when the stock I owned (ZFX) went down 40% because I didn't think it could fall much further. Had I put a stop loss in place or let it sell when I got my 1st margin call I'd be sitting on a lot more money than I am right now.


----------



## lukeaye

Donga said:


> Don't think buying today would be madness. This morning would have been good. Some folk have been waiting for a major pullback since 3800 and I just don't think it's gonna happen in the short term. Recently had 6% retreat and we'll see if this deteriorates into something worse, but doubt it. Now if China starts choking, I'm outa here!




I hate to say i told you so, but do you still think buying today was a good idea?

Have a look at commodities, gold off $60 in a day, thats unheard of.

The markets are going to tank. Futures on DOW are down 110 already.


----------



## skyQuake

lukeaye said:


> I hate to say i told you so, but do you still think buying today was a good idea?
> 
> Have a look at commodities, gold off $60 in a day, thats unheard of.
> 
> The markets are going to tank. Futures on DOW are down 110 already.




Don't count your chickens before they're hatched; 
Currently pricing in a 270 point fall on the DOW.

If it opens down there imo they'll squeeze it green.


----------



## ROE

This is just the beginning, more bad times ahead

Once the automatic stop loss come in and traders stop loss lower and lower at some point people going to pull the plug and people without real knowledge of what they are holding start to panic and just want out all together.

some do it because they are force to do so, other do it because they cant face the music any more...some has too much debt....but the end game is human cant take seeing their asset plummet fearing their live will forever change  and out they go in large number.

it happen many time before and it shall happen again, that is the only predictable human behavior.

I be waiting at the bottom filter out stuff I want to buy and throw the rest
back to Mr Market.

You only need to this a few times every decade then you just sit back relax
and retire in comfort 

The only hard thing is waiting  and not getting itchy ..


----------



## ROE

stretchie said:


> I think you'll find people are a lot more wary of doubling down on margin like they did in October 08. If there's another big fall it might not be as far as you'd think. I'm certainly a LOT less geared up than I was last time, and can pay out my margin loan within a few weeks if absolutely necessary.
> 
> I was rather stupid last time and _increased _my holdings when the stock I owned (ZFX) went down 40% because I didn't think it could fall much further. Had I put a stop loss in place or let it sell when I got my 1st margin call I'd be sitting on a lot more money than I am right now.




I have no idea how much people gear up but I do know this stuff happen all the time going back as long as 100 years 

every decades we have a heart attack, whether it due to gearing or people too pessimistic or traders going on holiday or some country go into default and play with human emotions and send shock waves around the globe. 

That why my uncle Warren told me always have cash ready and never borrow to play in the stock market even when interest is at historic low 

It could be historic low today but historic high next year and Mr Market may have a heart attack to go along with it and that is one lethal combination


----------



## explod

ROE said:


> This is just the beginning, more bad times ahead
> 
> Once the automatic stop loss come in and traders stop loss lower and lower at some point people going to pull the plug and people without real knowledge of what they are holding start to panic and just want out all together.
> 
> it happen many time before and it shall happen again, that is the only predictable human behavior.
> 
> ..





Yep, the power of sentiment is the greatest driver of market behaviour and it could not have been said better ROE


----------



## Gundini

So this is really the big one?

I don't think so. Who gives a rats about Dubai.

The real problem is in America, and they will print all sorts of money to stem the tide until they manufacture the correction.

This is just an excuse to profit take IMO.

I am only 30% invested and have been waiting for an opportunity like this to top up while the printing presse are still rolling.

Bring it on!


----------



## ROE

Gundini said:


> So this is really the big one?
> 
> I don't think so. Who gives a rats about Dubai.
> 
> The real problem is in America, and they will print all sorts of money to stem the tide until they manufacture the correction.
> 
> This is just an excuse to profit take IMO.
> 
> I am only 30% invested and have been waiting for an opportunity like this to top up while the printing presse are still rolling.
> 
> Bring it on!




Who knows if it is a big one or not, as a buyer I rather see the market lower than higher  even though 90% of my money in currently in the market


----------



## Macquack

Gundini, I noticed you have a "ark" on standby if the sh*t really hits the fan. That is what I call being prepared for the worse.


----------



## Gundini

ROE said:


> Who knows if it is a big one or not, as a buyer I rather see the market lower than higher  even though 90% of my money in currently in the market




But you only have 10% left to go shopping? How many bargain can you buy? 

If you had 90% invested, and the market went down by 20%, surely your 10% is not going to save your bacon, and that's *IF* you pick the bottom? 

I'm thinking you want a rally here


----------



## GumbyLearner

Gundini said:


> So this is really the big one?
> 
> I don't think so. Who gives a rats about Dubai.
> 
> The real problem is in America, and they will print all sorts of money to stem the tide until they manufacture the correction.
> 
> This is just an excuse to profit take IMO.
> 
> I am only 30% invested and have been waiting for an opportunity like this to top up while the printing presse are still rolling.
> 
> Bring it on!




Totally!

Many US & Europe financials remain mired in what I can only proffer as "denial dodgyland". The old schoolyard tactical axiom of Don't look at me, look at him. In other words, don't look at my balance sheets, profit/loss statements, mark-to-market illusions etc... look at theirs!  WAJ  


Like Buffet has been noted as saying 
"You don't know who's swimming naked until the tide goes out."

About time some more major players have to give up skinny-dipping.

Bring it on!

Yes.


----------



## Gundini

Macquack said:


> Gundini, I noticed you have a "ark" on standby if the sh*t really hits the fan. That is what I call being prepared for the worse.




I have better than that Mac, I have no debt and own a trailer full of baked beans. From the end of the world till the future I am to be known as:

fartusmaximuscolonicgasius....  

I am seeking carbon credits as I speak...


----------



## CanOz

I think its a bit overdone really, I'm betting on buyers coming in, if they haven't already.

Cheers all,



CanOz


----------



## Wysiwyg

skyQuake said:


> Don't count your chickens before they're hatched;
> Currently pricing in a 270 point fall on the DOW.
> 
> If it opens down there imo they'll squeeze it green.




Yes, as expected the bounce turned green. Say skyQuake, I visualise you as someone with their finger on the pulse so to speak. Not just an ordinary player trying to eke out an existence from stock markets. This lead me to think you may have some corporate connections but at the same time I thought you don't seem to be of that ilk either.


----------



## GumbyLearner

CanOz said:


> I think its a bit overdone really, I'm betting on buyers coming in, if they haven't already.
> 
> Cheers all,
> 
> 
> 
> CanOz




I'm betting they are ****ed at present.


----------



## skyQuake

GumbyLearner said:


> I'm betting they are ****ed at present.




**** = very happy?



Wysiwyg said:


> Yes, as expected the bounce turned green. Say skyQuake, I visualise you as someone with their finger on the pulse so to speak. Not just an ordinary player trying to eke out an existence from stock markets. This lead me to think you may have some corporate connections but at the same time I thought you don't seem to be of that ilk either.




Ehh a bit of both so to speak, but not in the IBs or buy/sell side rat race if thats what you mean.
Think we'll get a decent squeeze on monday right from the open


----------



## inenigma

ROE said:


> I be waiting at the bottom filter out stuff I want to buy and throw the rest
> back to Mr Market.




Do let us know when we have hit the bottom....


----------



## skyQuake

skyQuake said:


> Think we'll get a decent squeeze on monday right from the open




Well the squeeze is well and truly underway, godsend this morning when SPI opened at 24!
I reckon we'll have a bit of a followthrough tomorrow
Guess afterwards its all eyes on Dubai..


----------



## skc

skyQuake said:


> Well the squeeze is well and truly underway, godsend this morning when SPI opened at 24!
> I reckon we'll have a bit of a followthrough tomorrow
> Guess afterwards its all eyes on Dubai..




Great call.

ASX up 3%, Japan 2.7%, HK 3.5%, China H shares 4%+

Dow futures up 0.4%... the big guns are still on holidays.

Arbitrage!!!


----------



## Broadway

lukeaye said:


> I hate to say i told you so, but do you still think buying today was a good idea?
> 
> Have a look at commodities, gold off $60 in a day, thats unheard of.
> 
> The markets are going to tank. Futures on DOW are down 110 already.




Jumped out today, spi lost momentum. Grabbed 180+ on the spi.

Ive learned skyquake is rarely wrong.


----------



## skyQuake

Broadway said:


> Jumped out today, spi lost momentum. Grabbed 180+ on the spi.
> 
> Ive learned skyquake is rarely wrong.




Haha still wrong more often than I'd like (eg Lotto numbers all wrong again )

That was a ripper of a trade, I'm still trailing a small part; trailing stops will probably close that tomorrow.
Also, to be honest I took ur post as some confirmation


----------



## noirua

:topic  If you have a moment to vote at the following link, thank you.  As ASF has suffered a correction from 48% down to 40% in the poll, and we don't want anything more imminent occuring:  http://www.thebull.com.au/the_stockies_list.php?c=Forums


----------



## adobee

Lateline business last night Stephen Roach of Morgan Stanley whom I think is pretty knowledgable is predicting correctiong mid 2010.. 

follow link for the interview  -

http://www.abc.net.au/lateline/business/


----------



## dutchie

Spring has just started and the bears will be out soon to gorge themselves mightily.


----------



## Wysiwyg

An outcome from the imminent and severe market correction is the Americans hopefully enforcing the following reforms. There are many, many trusting people exploited in the securities markets.



> The legislation gives regulators the power to dismantle such giants, and lays out a systematic way to unwind them in case of collapse that *ensures shareholders and unsecured creditors, not taxpayers, bear the losses.*
> 
> *It also reinforces the powers of the Securities and Exchange Commission to detect irregularities *that could provide an early warning of fraudulent investment schemes, like the fraud perpetrated by Wall Street swindler Bernie Madoff.
> 
> *The measure also includes a first-of-its-kind plan to regulate the vast market in arcane financial products called derivatives. *




Source: home page of ASF.


----------



## Donga

lukeaye said:


> I hate to say i told you so, but do you still think buying today was a good idea? Have a look at commodities, gold off $60 in a day, thats unheard of. The markets are going to tank. Futures on DOW are down 110 already.




After a couple of weeks lukeaye, reckon it's a draw, depending on what anyone bought on 27th Nov - Dubai sure freaked a few people put though. Here we are nearly Christmas and no closer to a severe correction. My ASX 5000 prediction during Aug/Oct won't come true, though will be happy if we get around 4750 and Dr Smith at 4000 still has a chance to grab a draw as well. 

I'm very bullish for 2010 especially with my band of small/mid cap miners that have been taking a breather and in many cases reaching into my pocket for SSPs. Wonder whether the instos decided to just stop buying on market and simply snap up the bargains on the capital raisings, e.g. ESG, PRU, KGL, ORD, JPR. All have great prospects in the New Year and suspect the resources and energy sector will reignite after the past few months drifting, the breather we had to have to keep the bears away.


----------



## Donga

lukeaye said:


> I hate to say i told you so, but do you still think buying today was a good idea? Have a look at commodities, gold off $60 in a day, thats unheard of. The markets are going to tank. Futures on DOW are down 110 already.




After a couple of weeks lukeaye, reckon it's a draw, depending on what anyone bought on 27th Nov - Dubai sure freaked a few people out though. Here we are nearly Christmas and no closer to a severe correction. My ASX 5000 prediction during Aug/Oct won't come true, though will be happy if we get around 4750 and Dr Smith at 4000 still has a chance to grab a draw as well. 

I'm very bullish for 2010 especially with the miners that have been drifting and in many cases reaching into my pocket for SSPs. Wonder whether the instos decided to just stop buying on market and simply snap up the bargains on the capital raisings, e.g. FMS, PRU, ESG, KGL, ORD, JPR. All have great prospects in the New Year and suspect the resources and energy sector will reignite after the past few months breather, the one we had to have to keep the bears away.


----------



## Edwood

is there an echo in here?

Read a report earlier identifying the purchasers of USTs - appears the 'household sector' increased its purchases by 35 times, from $15bn in 2008 to $528bn by Q3 2009.   errr meanwhile Foreign & International Buyers (the big foreign boys) purchased $697bn to the same period in 2009.

I smell a rat....  roll on 2010!


----------



## Uncle Festivus

Edwood said:


> is there an echo in here?
> 
> Read a report earlier identifying the purchasers of USTs - appears the 'household sector' increased its purchases by 35 times, from $15bn in 2008 to $528bn by Q3 2009. errr meanwhile Foreign & International Buyers (the big foreign boys) purchased $697bn to the same period in 2009.
> 
> I smell a rat.... roll on 2010!






> NEW YORK (MarketWatch) -- Treasury prices declined on Monday, pushing yields on 10-year notes to a four-month high, after the government's first of three auctions this week was met with lackluster demand.
> 
> Traders noted very low volume, which could be a problem as the government sells a total of $118 billion in debt in this holiday-shortened week.
> 
> Benchmark 10-year yields /quotes/comstock/31*!ust10y (UST10Y *3.84*, +0.05, +1.19%) rose 3 basis points to 3.84%, the highest level since early August.
> 
> *Indirect bidders, a group that includes foreign central banks, bought 34.8%, compared to an average of 46% in recent sales*.
> 
> However, direct bidders -<_mates of the Fed???-UF>-_ which include managers buying for their own funds -- bought another 19.5%, versus an average of 11.4%.
> 
> On Tuesday, the government will sell $42 billion in 5-year notes /quotes/comstock/31*!ust5yr (UST5YR *2.59*, +0.06, +2.41%) , followed by $32 billion in 7-year notes the following day.




The problem with this type of 'recovery' is that it is being financed with other peoples money at essentially zero % interest, so what happens when all of this 'new' debt needs to rolled over at, if a 'recovery' does eventually unfold, higher rates? What happens if there is no recovery and the debt is being raised and expensed into a waste pit for no return?

Federal debt still going up (yes, that's nearly $3.6 TRILLION!), while income is still going the other way - the jaws of death getting wider still!


----------



## Edwood

hi Uncle - sad state of affairs hey?  I sent you the report as well - dodgy business, appears this "household sector" group is just someone cooking the books.  No way has the household sector had enough $$ to increase UST purchases by 35x.  Someone's been taking tips from Madoff....


----------



## Donga

Edwood said:


> is there an echo in here?




No just double happy to come in here again and read the usual inane intellectualising from the bears and cultists. 

So are we calling an imminent and severe in 2010 guys? Or is this not the right thread, being a rather smug thinkwank of what will go wrong with the world economy and not necessarily putting money where mouth is?


----------



## cutz

Donga said:


> Or is this not the right thread, being a rather smug thinkwank of what will go wrong with the world economy and not necessarily putting money where mouth is?




Hi dude,

I'm sure there are plenty around here putting the money where the mouth is.


----------



## Donga

Edwood said:


> is there an echo in here?




No just double happy to visit again and read the calls of doom from the bears and the cultists. 

So are we calling an imminent and severe in 2010 guys? Or is this not the right thread, being a collection of what could go wrong articles and best sellers without necessarily putting money where mouth is?


----------



## nunthewiser

Donga said:


> No just double happy to visit again and read the calls of doom from the bears and the cultists.
> 
> So are we calling an imminent and severe in 2010 guys? Or is this not the right thread, being a collection of what could go wrong articles and best sellers without necessarily putting money where mouth is?





LOL .......we hit another top today ..... personally think around 4500 first stop may be fair for now ...... as far as money and mouths i took a small short entry on a market darling resource today .......

I could always be wrong but happy to add the odd sour taste to them sunshine and lollipops


----------



## Donga

cutz said:


> Hi dude, I'm sure there are plenty around here putting the money where the mouth is.




You're probably right - rankle against mediocrity and get more on this thread than the others. Compare articles and books of doom etc with the work of astrologers. So little accountability or later reassessment (mmm, got that wrong). Every now and then they make a good call and dine off that until they hit another. Wouldn't want them running my business or my portfolio.


----------



## cutz

Hi Donga,

I'm actually one of those Bears ATM, loaded up on back month puts waiting for a volatility explosion .


----------



## Donga

Thanks guys - feel like Lulu . 

The market may take a breather and best wishes with your short term positions. Medium/long term, never been more convinced about the XAO direction and our role with Asia and resources. 

Incredible opportunies and don't like people telling me bad bedtime stories


----------



## satanoperca

Just got to love what the markets can through at you.
Go long or short the possibilities to profit are always present.
The last week of trading for XJO has been stella, can it hold, we will see. 

Holding both ways.

Cheers


----------



## Ardyne

Donga , love the echo joke


----------



## Uncle Festivus

Donga said:


> Thanks guys - feel like Lulu .
> 
> The market may take a breather and best wishes with your short term positions. Medium/long term, never been more convinced about the XAO direction and our role with Asia and resources.
> 
> Incredible opportunies and don't like people telling me bad bedtime stories




(I know you are only flaming here so I will take up your troll, coz you can't be that naive can you - can you????)

Would you like to back your comments up with some facts, which you are continually short of? If you had even the slightest comprehension of economics you would see that there is a huge disparity between what the stock markets are doing and what the underlying economies are doing - the disparity of which is occasionally presented here - and does not, in my case anyway, have anything to do with how I trade. Investing is a different matter though (buy & hold is dead??)

Presenting factual data for discussion has been the point of this thread, and all threads generally, but the majority of your posts are based on your Lemming-like follow-the-herd opinion and rhetoric only. It does however show everyone your psychology for trading/investing, so when the next round begins you will be severely disappointed.

Now, back to some facts. Here is the problem for the USA - increasing debt (previous post) but decreasing income with which to pay it off. Combine that with the fact that a lot of the (manufacturing) jobs lost in this depression will not return, having been exported to China & India, and you have a continuing quantitative easing program by the US Fed & Treasury in order to 'create' more dollars with which to pay for it all, meaning a dilution of existing dollars ei lower living standards and lower consumption. Lower consumption of goods made in China - who's economic management is probably the biggest Government sponsored Ponzi scheme ever seen?

PS if you think Australia is going to ride off into the sunset on the back of China, how about you have a look at the LME metal data every now and then and tell me if there is a shortage of commodities ie the coming glut? 

Oh, the FTSE is severely overbought too, considering the basket case they are, even worse than the USA as they can't print their way out of this mess.

What do you think of this chart? Some tin foil hat wearing rantings of the loonatic fringe dwellers who occasionally get the call right? Please enlighten us all with some analysis rather than the usual Pollyanna only-look-at-the-good-news ignorance!


----------



## communique

Hi uncle, I hear what you say!!!

Most people only learn from experience and until it happens to them it won’t sink in.  

It is clear that as you show there will be a correction of magnitude.  However, when do you believe it will occur?  What will be the trigger.  Will it be when interest rates start climbing in the US?


----------



## Edwood

Donga said:


> No just double happy to visit again and read the calls of doom from the bears and the cultists.
> 
> So are we calling an imminent and severe in 2010 guys? Or is this not the right thread, being a collection of what could go wrong articles and best sellers without necessarily putting money where mouth is?




we'll see another push higher in 2010 before the plug is pulled.  It'll be worse than most expect.  Be sure to load up on longs on the way down Dongle


----------



## Uncle Festivus

communique said:


> Hi uncle, I hear what you say!!!
> 
> Most people only learn from experience and until it happens to them it won’t sink in.
> 
> It is clear that as you show there will be a correction of magnitude.  However, when do you believe it will occur?  What will be the trigger.  Will it be when interest rates start climbing in the US?




They will start rising when China, and others, is unable or willing to continue filling the leaking Treasury bucket with purchases of debt $USD's I-owe-you-nothings? I think Bernanke & Geithner have essentially lost control of the interest rate lever in this climate and only manage to keep market forces from taking them higher through continued debt issuance to China etc

Here is an interesting read on the whole global dynamics of how it is all connected, and how it will come apart?

http://www.businessday.com.au/business/the-china-syndrome-and-the-crisis-20091227-lg83.html


----------



## wayneL

Uncle Festivus said:


> (I know you are only flaming here so I will take up your troll, coz you can't be that naive can you - can you????)
> 
> Would you like to back your comments up with some facts, which you are continually short of? If you had even the slightest comprehension of economics you would see that there is a huge disparity between what the stock markets are doing and what the underlying economies are doing - the disparity of which is occasionally presented here - and does not, in my case anyway, have anything to do with how I trade. Investing is a different matter though (buy & hold is dead??)
> 
> Presenting factual data for discussion has been the point of this thread, and all threads generally, but the majority of your posts are based on your Lemming-like follow-the-herd opinion and rhetoric only. It does however show everyone your psychology for trading/investing, so when the next round begins you will be severely disappointed.
> 
> Now, back to some facts. Here is the problem for the USA - increasing debt (previous post) but decreasing income with which to pay it off. Combine that with the fact that a lot of the (manufacturing) jobs lost in this depression will not return, having been exported to China & India, and you have a continuing quantitative easing program by the US Fed & Treasury in order to 'create' more dollars with which to pay for it all, meaning a dilution of existing dollars ei lower living standards and lower consumption. Lower consumption of goods made in China - who's economic management is probably the biggest Government sponsored Ponzi scheme ever seen?
> 
> PS if you think Australia is going to ride off into the sunset on the back of China, how about you have a look at the LME metal data every now and then and tell me if there is a shortage of commodities ie the coming glut?
> 
> Oh, the FTSE is severely overbought too, considering the basket case they are, even worse than the USA as they can't print their way out of this mess.
> 
> What do you think of this chart? Some tin foil hat wearing rantings of the loonatic fringe dwellers who occasionally get the call right? Please enlighten us all with some analysis rather than the usual Pollyanna only-look-at-the-good-news ignorance!




Some people know that I am a VW enthusiast. At many VW events they take a type 4 engine (out of a later model  bay window combi for eg), put it on a stand and run it hard, *without oil*, to see how long before it blows up.

It ALWAYS blows up eventually.
But it ALWAYS runs much longer than anyone expects.

So it is with our pseudo-Keynesian (but actually mongrelized Laissez Faire/Monetarist/Keynesian) economies. 

They WILL blow up eventually. 
But they WILL run longer than expected.

I think the trick is to drink beer and whoop it up while the type 4 is running at full revs... have a laugh and enjoy the fun while it lasts.

But know when to hide when molten fragments of metal threaten to ventilate several vital organs. There is an art to this and it is better to err on the side of caution than end up in casualty with an exhaust valve embedded in your @ss.

Professionals hedge - Amateurs hope (and ridicule the hedgers).

Conclusion - Be a cowardly bull IMO.


----------



## nunthewiser

Nicely put and well explained ...

avaniceday wayne


----------



## Timmy

wayneL said:


> Professionals hedge - Amateurs hope (and ridicule the hedgers).




I would suggest a refinement, in that professionals make an effort to know _when _to hedge.  It is expensive to be hedged when a market is tearing along (in either direction).


----------



## wayneL

Timmy said:


> I would suggest a refinement, in that professionals make an effort to know _when _to hedge.  It is expensive to be hedged when a market is tearing along (in either direction).




A very fine refinement indeed. 

As a further refinement for option traders, professionals know _what_ to hedge... sometimes.


----------



## condog

Always hedge with some gold / silver or at least some gold / silver miners...

Physical gold is expensive but if you have enough wealth worth preserving its essential to hold some...

Uncle nice graph, but dont ever forget about the time  lag effect with tax reciepts and employment.....the dip in that graph is not alarming or belated its normal...of concern will be if its still heading south in 6-12 months with no signs of stabilizing.

I too very much believe some currencies are stuffed, but that does not necesarilys mean the end of the world...there have been, I think its 13 US fiat currency crashes in the past, with the most recent in 1971.....

The US would probably actually like a currency crash to sort this mess out.... bang. Make all private holdings of gold illegal, and issue a new currency. repay debts in the new currency and bang uncle sams back in business........

Its not quiet that simple, cause the little credibility the yanks have left would be squandered and the nutbags around the rest of the world would go into party mode, driving tanks into foreign countries...... but hey they will easily pull through a currency collapse....theyve certainly done it in the past no problems...its the suckers who are dependent on the US or Uro that will be in trouble.

Maybee its Obama's strange way of appreciating the Chinese currency. smash your own with a printing press.

This is over simplistic and inaccurate, tongue in cheek.....but enjoy


----------



## Timmy

condog said:


> Maybee its Obama's strange way of appreciating the Chinese currency. smash your own with a printing press.




The Chinese currency is pegged to the USD, so if the USD gets smashed against other currencies so does the Yuan.  Next conspiracy, please


----------



## lukeaye

Donga said:


> After a couple of weeks lukeaye, reckon it's a draw, depending on what anyone bought on 27th Nov - Dubai sure freaked a few people out though. Here we are nearly Christmas and no closer to a severe correction. My ASX 5000 prediction during Aug/Oct won't come true, though will be happy if we get around 4750 and Dr Smith at 4000 still has a chance to grab a draw as well.
> 
> I'm very bullish for 2010 especially with the miners that have been drifting and in many cases reaching into my pocket for SSPs. Wonder whether the instos decided to just stop buying on market and simply snap up the bargains on the capital raisings, e.g. FMS, PRU, ESG, KGL, ORD, JPR. All have great prospects in the New Year and suspect the resources and energy sector will reignite after the past few months breather, the one we had to have to keep the bears away.




Yes i did it get it wrong. But thats ok, i get it wrong alot.

I did however buy many longs about 1 and a half weeks ago. I bought RIO, STO, CTX, AQP, MPO, SGT and am making fantastic money.

Just because i have a feeling or think something is going to happen, doesnt nessacarily mean i will act on it. For example. If i think the markets are going to roll over, and i have a host of longs, i wont exit the trades. I stick to my plan and if my exits are triggered then i will exit.

I learnt that mistake making my trading diary thread a while back. And its worked up til now, and still working


----------



## Donga

Uncle Festivus said:


> (I know you are only flaming here so I will take up your troll, coz you can't be that naive can you - can you????)
> 
> Would you like to back your comments up with some facts, which you are continually short of? If you had even the slightest comprehension of economics you would see that there is a huge disparity between what the stock markets are doing and what the underlying economies are doing - the disparity of which is occasionally presented here - and does not, in my case anyway, have anything to do with how I trade. Investing is a different matter though (buy & hold is dead??)
> 
> Presenting factual data for discussion has been the point of this thread, and all threads generally, but the majority of your posts are based on your Lemming-like follow-the-herd opinion and rhetoric only. It does however show everyone your psychology for trading/investing, so when the next round begins you will be severely disappointed.
> 
> Now, back to some facts. Here is the problem for the USA - increasing debt (previous post) but decreasing income with which to pay it off. Combine that with the fact that a lot of the (manufacturing) jobs lost in this depression will not return, having been exported to China & India, and you have a continuing quantitative easing program by the US Fed & Treasury in order to 'create' more dollars with which to pay for it all, meaning a dilution of existing dollars ei lower living standards and lower consumption. Lower consumption of goods made in China - who's economic management is probably the biggest Government sponsored Ponzi scheme ever seen?
> 
> PS if you think Australia is going to ride off into the sunset on the back of China, how about you have a look at the LME metal data every now and then and tell me if there is a shortage of commodities ie the coming glut?
> 
> Oh, the FTSE is severely overbought too, considering the basket case they are, even worse than the USA as they can't print their way out of this mess.
> 
> What do you think of this chart? Some tin foil hat wearing rantings of the loonatic fringe dwellers who occasionally get the call right? Please enlighten us all with some analysis rather than the usual Pollyanna only-look-at-the-good-news ignorance!




Ouch - hit a few nerves  Learn't much of this stuff at college and a stint at Harvard so pls spare me Economics 101. The chart shows declines in income and tax receipts though don't need a chart to understand that, especially one where the axis is out of scale and exaggerates accordingly. Uncle - the US went into a deep recession, a pretty bad one, some could say it hasn't come out yet. Lot's of unemployed people, really bad crime. I try to avoid the place after living there a few years in the 90's. Could have told you then it's halycon days were coming to an end. 

Also lived in Africa, Canada and Asia a couple of times. Have worked in a number of reasonably senior roles in Finance and General Management so been around a while, learnt a bit and won't be working much longer. Though will be one or two years longer if I get spooked about that VW running without any oil 

If the good people in here want to swap spooky stories that's fine. Just don't want the youngsters to have any nightmares and take their "play" money out of the Australian mining industry which probably leads the world today in terms of skills, access to capital, offshore experiences and opportunities. 

The end will come for the US just as it did for Great Britain and there will be another major economic crisis. Now if you wish to discuss what may happen around the world in the next ten years that will have a part in that crisis and explore the events and timing that could be interesting. Better than the articles and books which tend to portray events closer and more dramatically to compete for attention. And let's leave the graphs at school.


----------



## Uncle Festivus

Donga said:


> The end will come for the US just as it did for Great Britain and there will be another major economic crisis. Now if you wish to discuss what may happen around the world in the next ten years that will have a part in that crisis and explore the events and timing that could be interesting. Better than the articles and books which tend to portray events closer and more dramatically to compete for attention. And let's leave the graphs at school.




Now we are talking, but why does your time frame go out to 10 years for the next big crisis? Any company with a problem with cash flow out being more than cash flow in doesn't last long, unless it get's funding from a sympathetic creditor? Extrapolate that several magnitudes to a national level and you have what's happening around the globe? 

The recovery talk is presaged on the credit/debt cycle repeating itself as in the past ie boom/bust/boom. As in employment suddenly going back to pre-recession levels. Only this time some countries are so indebted they might be beyond the point of no return without some major intervention. 

China has given the world the toxic gift of limitless cheap labour, and in so doing is & will slowly lower the living standards of the established 'developed' economies by exporting employment from these countries. So you get a polarising of wealth - the haves and have not's. Or, the people who shuffle money for a living and the people who work and create real things for a living? What do we manufacture anymore?

Graphs? Straight form the horses mouth those are - *ALFRED*. Find one that shouts out 'Recovery is imminent' 

Recovery - return to an original state. Not there just yet - perhaps we could say, in the words of Man Of The Year Bernanke, that the recession is "contained"


----------



## condog

Timmy said:


> The Chinese currency is pegged to the USD, so if the USD gets smashed against other currencies so does the Yuan.  Next conspiracy, please




Really...........I never new (not) LOL ...........Hence the word strange.....and the tongue in cheek .....


----------



## Donga

Uncle Festivus said:


> Now we are talking, but why does your time frame go out to 10 years for the next big crisis?




On my run thought about ten years and yes, it's probably too far out. Willing to consider three to five, however unsure of the extent. 

Various initiatives may soften the blow, e.g. US & China form strategic & economic alliance, or Middle East debacle is sorted out leading to new economies as well as oil security while new energy sources are patented out of MIT and HUST (Huazhong University of Science and Technology). 

Recall Prof George Lodge in 1995 telling the class how Japan would lead the world in the late 90's, into the new millenium and he was utterly convinced the US economy was heading for a major crisis before 2000. Even used those graphs . Within 2 years Japan crashed and the US like the movies lived to fight another day. At same time, bright economist Michael Porter advised us Russia was a basket case and would take generations to recover, maybe half right. Have some faith in good economists, little with those selling something. 

Will poke my head in here every now and then to ensure you and your tribe aren't overly spooking the youngsters. May even consider starting a new thread along the lines of Fanciful Forecasts - events leading to the next economic crisis. But that may contradict one of my resolutions to reduce time on shares blogs


----------



## Uncle Festivus

Donga said:


> Will poke my head in here every now and then to ensure you and your tribe aren't overly spooking the youngsters. May even consider starting a new thread along the lines of Fanciful Forecasts - events leading to the next economic crisis. But that may contradict one of my resolutions to reduce time on shares blogs




So it's looking like it's a timing thing then before :fan?? Your problem is that it might not be 'imminent'? The X axis keeps contracting though in these times?

I'd like to think that what is presented is an alternative to the vested interests cheering the market up. I think the 'enlightened age' is around 40'ish or so - the last real recession - so most of those youngsters have only ever known prosperity based on credit and living beyond their means ie 'everything always goes up' mentality.

2010 will be interesting for the Oz markets because it will be the first wave of baby boomers retiring - drawing down their super, putting pressure on funds who will have to redeem out of shares into cash? The weight of super money crutch just got taken away from the Oz bourse?



> *AUSTRALIA is on the crest of a demographic tsunami, with the first wave of 5.3 million baby boomers eligible for the age pension from next week.*
> *The country's money box faces the double whammy of paying for older Australians who need extra care and for workers who are retiring in greater numbers than ever before.*




*http://www.news.com.au/couriermail/story/0,1,26530549-952,00.html*


----------



## haunting

Donga said:


> Recall Prof George Lodge in 1995 telling the class how Japan would lead the world in the late 90's, into the new millenium and he was utterly convinced the US economy was heading for a major crisis before 2000. Even used those graphs . Within 2 years Japan crashed and the US like the movies lived to fight another day.




In hindsight, Japan's biggest mistake was to adopt a free and open currency exchange regime which in effect had subjected her monetary policy and the whole economy open to foreign currency manipulation, allowing hot money to speculate without control, resulting in an overheated economy, with extreme bubble forming in the property sector amidst wild and runaway consumption; with an ultimate and unavoidable outcome, that is, Japan through her open currency exchange regime has effectively allowed the USA to "rebalance" its deficit economy through its control of US$, the defacto global reserve currency.

This time around, things are different, China has learned from Japan and she is doing what is necessary for her self preservation, by pegging her currency to the US$ and by doing so has effectively removed the "leverage" used by the USA in the past to "rebalance" her deficit economy through her export of the US$.  Do you still reckon the USA will recover as in the past few instances if China as of today is still maintaining a fixed currency regime? 

With the Chinese government emphasising there will not be drastic changes to their currency policy into the future, do you reckon the US recovery as it stands, financed totally through excessive debts,  and with bulk of the debts paid for by the Chinese and not through their own internal means and funding (like increasing taxes), is still achievable without the US$ leverage and without the Chinese help?

Comparing Japan with China and quoting Japan's experience against what China is facing currently, and assuming a similar outcome, I reckon is a big mistake considering the vast differences in terms of financial capital, human, material, mineral and other natural resources. Like it or not, the USA is facing a similar "lost decade" the Japan was facing back in the 80's and chances are quite high that the "rebalance" they have got so used to as in the past few instances would not come about without they, the Americans themselves begin to spend the next two decades overhauling their economy inside out.


----------



## grace

Uncle Festivus said:


> I think the 'enlightened age' is around 40'ish or so - the last real recession - so most of those youngsters have only ever known prosperity based on credit and living beyond their means ie 'everything always goes up' mentality.




Yep, agree with this.  My friends who are about 35 think everything goes up in a straight line.  Please don't think I'm referring to those on this site, you are all here because you are interested in the markets.  A lot of people are not.

My friends who are about 40 do remember.  They are slightly more cautious.  They remember having to wait 10 years for their first home to go up in value.


----------



## lasty

Japan under cut the west and wins. China undercuts Japan and wins.
It's that simple.


----------



## Donga

haunting said:


> Comparing Japan with China and quoting Japan's experience against what China is facing currently, and assuming a similar outcome, I reckon is a big mistake considering the vast differences in terms of financial capital, human, material, mineral and other natural resources.




My reference to Japan in the 90's was to illustrate how a leading economics Professor who was so convincing with his data and got it so terribly wrong, not with any comparison with China in mind. 

Uncle - not sure about timing nor severity as will depend on how effective US is in addressing their fundamental problems of debt, spending and income. 

Their Administration would have taken some lessons from GFC which may soften the next crisis. US has incredible R&D capacity to partly compensate for their high labour rate and they are not afraid of legislating for changes to their system once they run the gauntlet of their lobbyists. No denying US has serious challenges with their existing debt as well as pension and medical obligations, I'm just not convinced the next crisis will be as severe as what they're going through now. By which time would expect our economy to be even less depedent on the US as it is now. 

This is the rub - how enlightened will their government be in addressing their challenges? The outcomes from their current medical system overhaul may give us some clues.


----------



## jonojpsg

The US is essentially bankrupt - their obligations into the future (pension, health, debt) are far greater than their capacity to pay, at least at current projections of income and expenditure.  

Sure they can try reining in spending, but then they'd have to stop going to war to do that, and they've just embarked on spending a lot more with the new health system, so can't see it happening.

Going to be a REALLY interesting decade IMO.

Oh and I'm only 37 so can only remember 90-91 recession here, although that was pretty ordinary from what I can recall.  Tassie was a bit worse than the rest though, house prices went backwards/sideways for about 3-4 years in early mid 90s.  Just spewing I didn't borrow to the hilt and buy a couple of streets worth at $50k a house!!


----------



## Uncle Festivus

Donga said:


> My reference to Japan in the 90's was to illustrate how a leading economics Professor who was so convincing with his data and got it so terribly wrong, not with any comparison with China in mind.
> 
> Uncle - not sure about timing nor severity as will depend on how effective US is in addressing their fundamental problems of debt, spending and income.




debt - much higher now than when times were _good_ - in 2010 will be approx 100% of GDP
spending - much higher now than when times were _good_
income - much lower now than when times were _good

_50% of states now require federal assistance, in the form of multi billion dollar _loans_, to pay welfare & unemployment benefits_._ Several states are already insolvent without federal aid. It's happening now ie we won't have to wait too long?



> It is exceedingly difficult to convey exactly how much we are spending on bailouts. Start talking trillions (versus mere billions) and you get puzzled looks from people. Humans have a hard time conceptualizing any number that large. I wanted a graphic way to clearly show how astonishingly ginormous the amounts involved were. This Bailout Nation graphic shows the the total costs to the taxpayer of all the monies spent, lent, consumed, borrowed, printed, guaranteed, assumed or otherwise committed. It is nothing short of astonishing. In one short year the bailouts managed to spend far in excess of nearly every major one-time expenditure of the USA, including WW2, the moon shot, the New Deal, Iraq, Viet Nam and Korean wars -- COMBINED. 206 years versus 12 months. Barry Ritholtz







​


----------



## Beej

Uncle Festivus said:


> [/I]50% of states now require federal assistance, in the form of multi billion dollar _loans_, to pay welfare & unemployment benefits_._ Several states are already insolvent without federal aid. It's happening now ie we won't have to wait too long?
> 
> ... [snip chart]....







UF - surely there is a "fundamental" flaw with that picture? Ie it used $$ in nominal amounts instead of in real/inflation adjusted terms? Ie the Vietnam war cost was MASSIVE in real $$$ terms (not to mention the human cost) compared to the Iraq war, yet the cost appears equal in that picture as you are comparing 1960s dollars with naughties $$$? It seems to be a pattern amongst many of the D&G blogs to ignore inflation and attempt to 'wow' people with big nominal $$$ figures, without providing any context (such as the shear massive value of production of goods and services in the US every year), or by ignoring inflation when comparing expenses/debt from different era's as is the case with this chart, or through the use of linear scale vs log scale long term charts of various things. It's all a bit of sleight of hand to me if you are interested in a proper analysis of the situations at hand.

PS (Edit): Also don't some of the larger blocks there represent money that has since been paid back? Ie it was temporary liquidity? And some it it represents money that may not end up being spent, but having it available has rebuilt confidence and avoided further need for some it?

Cheers,

Beej


----------



## questionall_42

Beej said:


> UF - surely there is a "fundamental" flaw with that picture? *Ie it used $$ in nominal amounts instead of in real/inflation adjusted terms? *Ie the Vietnam war cost was MASSIVE in real $$$ terms (not to mention the human cost) compared to the Iraq war, yet the cost appears equal in that picture as you are comparing 1960s dollars with naughties $$$?




It is clear in the text that it is adjusted for inflation:

"It is exceedingly difficult to convey exactly how much we are spending on all these bailouts.  Whenever I start talking trillions (versus mere billions), I get puzzled looks from people. Humans have a hard time conceptualizing any number that large.  I wanted a graphic way to clearly show how astonishingly ginormous the amounts involved were.

So I once again went to Jess Bachman at Wallstats. I gave him my list of expenditures *(inflation adjusted of course!) *and he went to work."

Also,  you said:



Beej said:


> PS (Edit): Also don't some of the larger blocks there represent money that has since been paid back? Ie it was temporary liquidity? And some it it represents money that may not end up being spent, but having it available has rebuilt confidence and avoided further need for some it?




I agree that the image can be misleading, but he does say:

"This early Bailout Nation graphic shows the *the total costs to the taxpayer of all the monies spent, lent, consumed, borrowed, printed, guaranteed, assumed or  otherwise committed*." (my highlights)

It is not supposed to represent money that needs to be paid back or is lost, but rather representative of all commitments. 

Source: http://www.ritholtz.com/blog/2009/06/bailout-costs-vs-big-historical-events/


----------



## Beej

questionall_42 said:


> It is clear in the text that it is adjusted for inflation:
> 
> "It is exceedingly difficult to convey exactly how much we are spending on all these bailouts.  Whenever I start talking trillions (versus mere billions), I get puzzled looks from people. Humans have a hard time conceptualizing any number that large.  I wanted a graphic way to clearly show how astonishingly ginormous the amounts involved were.
> 
> So I once again went to Jess Bachman at Wallstats. I gave him my list of expenditures *(inflation adjusted of course!) *and he went to work."
> 
> Also,  you said:
> 
> 
> 
> I agree that the image can be misleading, but he does say:
> 
> "This early Bailout Nation graphic shows the *the total costs to the taxpayer of all the monies spent, lent, consumed, borrowed, printed, guaranteed, assumed or  otherwise committed*." (my highlights)
> 
> It is not supposed to represent money that needs to be paid back or is lost, but rather representative of all commitments.
> 
> Source: http://www.ritholtz.com/blog/2009/06/bailout-costs-vs-big-historical-events/




All fair enough - the bit about being adjusted for inflation, was that from the linked website? As I couldn't see that in the originally quoted text posted. Must say I'm surprised that the Iraq war cost the same in real terms as the Vietnam war then - there were many more troops in Vietnam for a longer period of time, much higher loss of life, many planes etc shot down (which didn't happen in Iraq), so to me something doesn't look quite right with those figures still to me?

For context, I'd still like to see a block on there that represents the annual GDP of the USA economy.

Cheers,

Beej


----------



## questionall_42

Beej said:


> All fair enough - the bit about being adjusted for inflation, was that from the linked website? As I couldn't see that in the originally quoted text posted.




Yep - the bit about being adjusted for inflation was in the text before the graph in the source (link at the end of my last post), but it wasn't in the text that UF quoted. 

FYI - here are the raw #s and the #s adjusted for inflation:

• Marshall Plan: Cost: $12.7 billion, Inflation Adjusted Cost: $115.3 billion
• Louisiana Purchase: Cost: $15 million, Inflation Adjusted Cost: $217 billion
• Race to the Moon: Cost: $36.4 billion, Inflation Adjusted Cost: $237 billion
• S&L Crisis: Cost: $153 billion, Inflation Adjusted Cost: $256 billion
• Korean War: Cost: $54 billion, Inflation Adjusted Cost: $454 billion
• The New Deal: Cost: $32 billion (Est), Inflation Adjusted Cost: $500 billion (Est)
• Invasion of Iraq: Cost: $551b, Inflation Adjusted Cost: $597 billion
• Vietnam War: Cost: $111 billion, Inflation Adjusted Cost: $698 billion
• NASA: Cost: $416.7 billion, Inflation Adjusted Cost: $851.2 billion

TOTAL: $3.92 trillion

Source: http://www.ritholtz.com/blog/2008/11/big-bailouts-bigger-bucks/


----------



## Edwood

absence of 'real money' driving last years rally

http://www.smartmoney.com/Investing/Stocks/Why-This-Man-Sees-a-Secret-Market-Cabal/


----------



## Nyden

Edwood said:


> absence of 'real money' driving last years rally
> 
> http://www.smartmoney.com/Investing/Stocks/Why-This-Man-Sees-a-Secret-Market-Cabal/




So, umm - the guy has a hunch? That about covers it, right?


----------



## Edwood

yeah, a well respected analyst who has nearly half of the top 30 hedge funds as clients has a hunch - based on their own analysis they have been unable to determine a valid source of funds driving the rally.

clearly he's no chump Nyden


----------



## Wysiwyg

Never underestimate the combined financial muscle of ASF members.


----------



## Uncle Festivus

Nyden said:


> So, umm - the guy has a hunch? That about covers it, right?



It's all about confidence ie a confidence trick funded by massive debt on behalf of taxpayers?

His theory is based on the numbers not adding up, as has been posted here for several months ie Goldman has been the governments financial stand over man, doing the covert work through futures etc

Have a look at the volume and insider sales - still giving signals loud & clear - it's a Lemming Bull market - you have to be in it just because everybody else is, not because it presents any compelling fundamental value, especially now after such a manipulated advance?

Put it this way, if Bernanke & Co have indeed succeeded in steering the US economy on a new sustainable bull market, then Harvard and all those other business schools are pretty much redundant because all we/they have to do is know how to issue more money ie be a banker? How hard is that then?

China is getting a bit nervous about the runaway stimulis train it has created. Standby for commodities glut and price drops?


----------



## Trembling Hand

Uncle Festivus said:


> China is getting a bit nervous about the runaway stimulis train it has created. Standby for commodities glut and price drops?




Yes interesting point we are at Unc. If they have started a runaway then its inflation we would be worried about not gluts?


----------



## Aussiejeff

Uncle Festivus said:


> It's all about confidence ie a confidence trick funded by massive debt on behalf of taxpayers?
> 
> His theory is based on the numbers not adding up, as has been posted here for several months ie Goldman has been the governments financial stand over man, doing the covert work through futures etc
> 
> Have a look at the volume and insider sales - still giving signals loud & clear - it's a Lemming Bull market - you have to be in it just because everybody else is, not because it presents any compelling fundamental value, especially now after such a manipulated advance?
> 
> Put it this way, if Bernanke & Co have indeed succeeded in steering the US economy on a new sustainable bull market, then Harvard and all those other business schools are pretty much redundant because *all we/they have to do is know how to issue more money ie be a banker? How hard is that then?*
> 
> China is getting a bit nervous about the runaway stimulis train it has created. Standby for commodities glut and price drops?




That's it, Unc.

The "Secret To Eternal Profits"... has been discovered by those far cleverer than us mere mortals.

Thus, NO MORE SEVERE MARKET CORRECTIONS TO THE DOWNSIDE!

The evidence is clear - hedgies, bwankers & speccies are home and hosed. There is nothing that can touch them, now that gummints worldwide have shown their winning hands.

Party on, man!!


----------



## Timmy

Thanks for the link Edwood - good info to ponder.

What does anyone think about the last point Biderman has made in the article:



> “If somebody’s been buying,” he says, “at some point they’ll have to sell.”




Contracts such as the S&P500 futures and the Emini S&P500 futures are cash settled, no selling required?


----------



## motorway

> Some market watchers say the question of who’s been doing the buying in the rally is a good one ””
> but there are other explanations beyond the U.S. government making secret purchases. “From one perspective, we know it’s not retail or institutional investors,” says Jamie Selway, managing director of White Cap Trading.
> 
> But “it could be not necessarily buying, but an absence of forced selling,” he says. “We had incredibly violent selling pressure in the end of 2008. It was liquidity oriented -- you remove the forced selling and the imbalance, and things are going to bounce a bit.”




ALL YOU NEED IS FOR TIME HORIZONS TO EXPAND --> 

THEN The Volume NOT TRADED is as important as the VOLUME TRADED 

and YES look were it came from.. The "BUYING" was way down ( back ) there and YOU can_Bounce a LOT_

Motorway


----------



## Uncle Festivus

Trembling Hand said:


> Yes interesting point we are at Unc. If they have started a runaway then its inflation we would be worried about not gluts?




Yes, stimulis money inflation causes bubbles (demand) in <insert asset class here>, which causes a head fake rise in raw materials _prices_ that is not supported by inventory (supply). Add in the $USD exchange rate price movement and we have a Claytons bull in commodities?






Japan again! Please catch up to US in your recovery! Please China buy some more machines to make more $2 junk! Woops, over-supply of production capacity already? 



> Japan's core machinery orders, seen as a key leading indicator for capital spending there, took a sharp drop in November despite expectations for a rise, according to data released Thursday.                                   Core machinery orders *fell 11.3% during the month*, the Cabinet Office reported.
> The result was well below estimates: A Kyodo News survey had expected a 1.1% rise from October, while a survey by Dow Jones Newswires and the Nikkei had indicated a rise of 1.2%.
> Compared to November 2008, the orders dropped 20.5%, the Cabinet Office said.


----------



## derty

This has been worrying me for a while UF. You can see the same in most commodities. It's very pronounced in Ni where LME stocks are three times greater than they have been for the last 5 years and climbing. 
http://www.kitcometals.com/charts/nickel_historical.html


----------



## Trembling Hand

derty said:


> This has been worrying me for a while UF. You can see the same in most commodities. It's very pronounced in Ni where LME stocks are three times greater than they have been for the last 5 years and climbing.
> http://www.kitcometals.com/charts/nickel_historical.html




I guess the perception by the suits is that the consummation will _soon _take off. We are only just seeing the start of goodish news. :sheep:


----------



## eddyeagle

Recently I have been pondering over whether now is the best time to get OUT of stocks completely or start selling down my holdings. 

Everyone seems to be predicting problems in the second half of 2010 but I’ve learnt from experience that when the falls kick in, they kick in fast! 

Seems that a few of the older wiser heads on here have moved to cash recently. 

In 2008 I got absolutely smashed. But I held on. And I made up for a lot of those losses in 2009. I view that as a ‘get out of jail free’ card! 

But now I am getting a little edgy again. There is a little too much confidence and a lot of complacency in these markets. 

Just today, ‘The Daily Reckoning’ posed the question - _Has there been a better time in the past two years to liquidate your entire share portfolio?_

I’d be interested to hear what people have to say.


----------



## CanOz

eddyeagle said:


> Recently I have been pondering over whether now is the best time to get OUT of stocks completely or start selling down my holdings.
> 
> Everyone seems to be predicting problems in the second half of 2010 but I’ve learnt from experience that when the falls kick in, they kick in fast!
> 
> Seems that a few of the older wiser heads on here have moved to cash recently.
> 
> In 2008 I got absolutely smashed. But I held on. And I made up for a lot of those losses in 2009. I view that as a ‘get out of jail free’ card!
> 
> But now I am getting a little edgy again. There is a little too much confidence and a lot of complacency in these markets.
> 
> Just today, ‘The Daily Reckoning’ posed the question - _Has there been a better time in the past two years to liquidate your entire share portfolio?_
> 
> I’d be interested to hear what people have to say.




The last two declines, i got out way too early and missed the irrational exuberance rally. The markets seem overbought, but so far the technical s are still in ok shape. Besides, my stops will take me out this time.


CanOz


----------



## GumbyLearner

CanOz said:


> The last two declines, i got out way too early and missed the irrational exuberance rally. The markets seem overbought, but so far the technical s are still in ok shape. Besides, my stops will take me out this time.
> 
> 
> CanOz




Time is what you need. In the words of Benny Benazzi.
Don't bank on anything for 2010 IMHO!


----------



## CanOz

GumbyLearner said:


> Time is what you need. In the words of Benny Benazzi.
> Don't bank on anything for 2010 IMHO!




I'll be right, i'm not a buy and hold type, i'll be out when the market gets me out.

CanOz


----------



## Wysiwyg

> But now I am getting a little edgy again. There is a little too much confidence and a lot of complacency in these markets.




The market always goes more than we think one way or the other. The bull top, the bear bottom. It's happening again. In a sadistic way it squeezes out the exuberant shorters, squeezes out the nervous longs and when the collective financial elite give the thumbs up, then she lets go.


----------



## noirua

Wysiwyg said:


> The market always goes more than we think one way or the other. The bull top, the bear bottom. It's happening again. In a sadistic way it squeezes out the exuberant shorters, squeezes out the nervous longs and when the collective financial elite give the thumbs up, then she lets go.




If that's what you think is happening then perhaps my 90% - 92% cash stance may be proved right shortly. Are AUDs and USDs the right currencies though?


----------



## Uncle Festivus

noirua said:


> If that's what you think is happening then perhaps my 90% - 92% cash stance may be proved right shortly. Are AUDs and USDs the right currencies though?



The 'right' currencies are those not printed on paper or plastic and backed by promises? Stay away from the rest 
Actually, I think physical dollars in either currency will suffice?? Just don't get them stuck in a bank........


----------



## brty

Uncle Festivus,



> I think physical dollars in either currency will suffice?? Just don't get them stuck in a bank......




If the banks look dodgy again, the govt will just print more money and guarantee them further.

brty


----------



## Trembling Hand

brty said:


> If the banks look dodgy again, the govt will just print more money and guarantee them further.
> 
> brty




Of course with CBAs 6 bil upgrade on Friday arvo thinking that they are in trouble is so so last year 

(which in fact was already so 2008)

Get over it bears the worlds moved on & you are being left behind. Printing press won - you lost :


----------



## Uncle Festivus

Trembling Hand said:


> Of course with CBAs 6 bil upgrade on Friday arvo thinking that they are in trouble is so so last year
> 
> (which in fact was already so 2008)
> 
> Get over it bears the worlds moved on & you are being left behind. Printing press won - you lost :




Chill dude, I'll take the bait - round 2 is just beginning..................:alcohol:

Gee, stock markets are up, we must be back to _normal_ - let's see what another $5Trillion buy's us? Another 70% rise this year? Just the small matter of paying it all back now or doing a Greece? Just a few more reverse slinkies on the charts by Goldmans :evilburn: work experience boys to keep the techo's happy......

Hers a chart - dunno what it means but it looks nice ?


----------



## brty

> Just the small matter of paying it all back




Considering that they borrowed lots of it from themselves, ie Quantitative easing/ printing money, to whom are they paying it back to??

TH,


> Get over it bears the worlds moved on & you are being left behind. Printing press won - you lost




I agree about the get over it bit, but there was a 'severe market correction', the bears were right, they just forgot to stop being bears, which tends to happen during every pullback in every market.

brty


----------



## eddyeagle

It's articles like this from The Age that have me concerned. Be fearful when others are greedy etc:


Running with the market RICHARD WEBB 
January 17, 2010 
Shares have soared 55 per cent since March, but experts say there's loads more to come.

THE resource giants, mining and engineering services companies, retailers, financials and internet-related stocks are some of the places to be to take advantage of what is expected to be a solid year on the sharemarket, stock experts say.

But go easy on telecommunication companies such as Telstra and property trusts, for now at least.

With stock watchers predicting another good year for local shares - most tipping an overall market gain of about 15 per cent for 2010 - many mum and dad investors are wondering where to invest to take advantage of the expected continuing bull run. The simple answer is: pretty much where you should have made your investments last year, too!

Broad consensus is that the major resource companies of BHP and Rio are on a roll, with the Chinese economy expected to power ahead at a 10 per cent growth rate in 2010 despite the monetary tightening in China that began last week. Commodity prices will continue to head higher because of Chinese demand, and BHP and Rio are also expected to secure big gains in the imminent coal and iron ore contract price talks with the Japanese steel mills.

Macquarie Equities associate director Lucinda Chan says the outlook is positive for offshore economies so companies such as BHP and Rio with big overseas exposure are poised to do particularly well.

"It's our view that Australia is travelling well and that we will get about 15 to 20 per cent out of the Australian sharemarket," she says. "But at Macquarie we believe that overseas markets will do better and we will get 20 to 25 per cent as overseas economies improve."

Ms Chan says Woodside is another to look at with the oil price continuing to climb. She also likes engineering companies that service the resource majors such as Transfield Services and Boart Longyear.

Peter Russell, head of research at Intersuisse, adds WorleyParsons to that list, while Michael Heffernan, at Austock senior adviser, also likes Leighton and United Group as well as smaller operators Neptune Marine and Mermaid Marine.

Mr Russell says the sharemarket has now clawed back about half the points it dropped from its all-time closing high of about 6828 in November 2007 to its March 2009 low of 3145, and some investors are becoming cautious because of it.

"It's becoming a glass half-full, glass half-empty situation," he says. "But when you look at the outlook for Australia and China, we are encouraging clients to take a positive view. We are saying let's be 100 per cent invested and go for it."

Mr Russell likes some of the employment and office services companies, too - such as online job advertising group SEEK and global serviced office provider Servcorp (given the strength of the Australian dollar and historically cheap office rental rates in many major European and US cities).

Austock's Mr Heffernan believes there is plenty of upside in the retail and banking sectors, too (even though the banks are much closer to their all-time highs already), and he likes industrial stocks such as GUD, which is benefiting from a strong dollar in the offshore sourcing of the products it sells locally under brand names such as Sunbeam.

"What I don't like at the moment are the telecoms, which is essentially Telstra, and the property trusts. Telstra continues to disappoint and the property trusts have big debt constraining them."

But overall Mr Heffernan is positive for shares. "It's the economy that always underpins the sharemarket and we are expecting to see economic growth triple in Australia this year, from 1 per cent to 3 per cent," he says. " Earnings are going to be the real driver of the market and I think they're going to be really good."


----------



## Edwood

see Prechter has put a call out recommending 200% short position (on the Dow)


----------



## brty

Good grief....



> Prechter has put a call out recommending 200% short position (on the Dow)




He did that when the DOW was at 3000 and again at 3500, how did that work out for long term holders??

Why do people pay any attention to such nonsense?? 

brty


----------



## Edwood

brty said:


> Good grief....
> 
> He did that when the DOW was at 3000 and again at 3500, how did that work out for long term holders??
> 
> Why do people pay any attention to such nonsense??
> 
> brty




"Good grief"? lol

yep he got it wrong, but pretty certain he uses stops brty so doubtful it wiped him out 

The signal to "long term holders" would be to tighten stops imo, after all he called the 2007 top very well.  In my experience its useful to hear & listen to what the market is saying - but make your own judgements

if we get a general call for a top then a squeeze will be a good bet imo.  what do you think brty?  Would be interested to hear your opinion


----------



## brty

> In my experience its useful to hear & listen to what the market is saying - but make your own judgements




I listen to the market, or should I say watch the market action, not the musings of persistent doomsayers. 
Prechter is always predicting something, usually the end of the grand superdooper wis-bang thingy-majig. Of course he got the 2007 top correct, he makes enough guesses, err predictions.

brty


----------



## Edwood

brty said:


> I listen to the market, or should I say watch the market action, not the musings of persistent doomsayers.
> Prechter is always predicting something, usually the end of the grand superdooper wis-bang thingy-majig. Of course he got the 2007 top correct, he makes enough guesses, err predictions.
> 
> brty




thanks for your insight brty.  Interesting that you read this thread if you don't watch the "musings of persistent doomsayers" 

So where do you see things going?  do you think we're in a similar position to the 3000-3500 action?  or more aligned with 2007 action?

Ed


----------



## brty

I read The Elliott Wave Theorist newsletter 20 years ago, I was slow and it took me time to realise that rubbish did not help in my trading.



> So where do you see things going?




I don't particularly care to forecast where things are going, as I take individual signals according to how I trade. Some things will go up others will go down, just a matter of taking the right signals. 

Predicting the future is always perilous, and those that do eventually make right Bourkes of themselves. Think of the myriad of economists that get their 5 minutes of fame at the new year in the papers, most of the time they are totally wrong about the upcoming year, occassionally guessing correctly.

brty


----------



## Edwood

Thanks Brty 

I'm sure you could do a lot better with a prediction than the year end economists in the papers, don't you?  you obviously have superior knowledge

Not sure I follow tho where you say you don't watch the musings of persistent doomsayers but hang around this thread??


----------



## Beej

Is it perhaps time to close this particular thread??? 

It was first created on 4th-April-2007, by UF posting an article warning about a coming market crash/prediction. It turned out to be a timely call, and there was lot's of discussion prior to and then since the March 09 bottom as to how far the crash/recovery would go.

The thread has now morphed into more of a "bad/bear news discussion and retort" thread, rather than a discussion of an imminent market correction threat.

Perhaps a new thread could be started by those so inclined for ongoing discussion? Maybe something like "Is the bear market over? Or Worse to come?", or something like that? That would be a good place for those who hold strong views about the inherit instability of the global financial system and the inevitability of it's demise to air their views within the current market context?

I think a new thread would make it easier for people browsing the forum to understand the context of much of the discussion that goes on here?

Cheers,

Beej


----------



## Trembling Hand

Maybe you are right Beej. Its been a good thread. I would like to see Unc stick around and start another one about when our funny money rally is going to bite use in the back side.

2twocents i think the broad rallies are over, its sorting the wheat from the caff from now on)


----------



## Edwood

that'd be a shame the fun is about to begin again


----------



## Trembling Hand

Edwood said:


> that'd be a shame the fun is about to begin again




Interesting that generally the bears think the troubles coming with another collapse?

When the banana republic of UK just recorded the biggest jump in inflation in 12 years.

Pile in friends asset inflation here we come? And as usual I reckon gold will lag real "assets".


----------



## Edwood

Trembling Hand said:


> Interesting that generally the bears think the troubles coming with another collapse?
> 
> When the banana republic of UK just recorded the biggest jump in inflation in 12 years.
> 
> Pile in friends asset inflation here we come? And as usual I reckon gold will lag real "assets".




hi TH - yeah its all very well having the currency off 25% in the hope of lifting exports but unfortunately leads to increased import costs.
Not sure we're going to have another outright collapse, but the levels of complacency are high so can't rule it out.

See GS are bullish on UK to outperform all other majors next year.  It can't be too hard after the year they've had.  Fingers crossed its a rally in part due to the departure of Gordon Brown


----------



## sammy84

Edwood said:


> that'd be a shame the fun is about to begin again




That chart demonstrates nothing to me. I would love to know how you could possibly use this as part of a trading plan?!


----------



## Trembling Hand

sammy84 said:


> That chart demonstrates nothing to me. I would love to know how you could possibly use this as part of a trading plan?!




You are kidding? If thats not the basis for a long term trading plan I'm a :bunny:


----------



## Temjin

sammy84 said:


> That chart demonstrates nothing to me. I would love to know how you could possibly use this as part of a trading plan?!




Umm..it means the level of bulls sentiment verse bear today is just as high as it were back when the market crashed in the late 2007/early 2008.

Haven't you heard of the famous investment rule? 

"When everybody agrees on one thing, the opposite tends to happen"

This contrarian thinking has been the dominate strategy used by some of the most famous and rich investors / entrepreneurs everywhere. 

If you want to think like a sheep and agree what the "mainstream" thinks, then go ahead and play the market. 

This is a good article on Contrarianism that I subscribe to. 

http://www.travismorien.com/FAQ/portfolios/contrarianism.htm

Unfortunately, most people DO NOT have the right "psychological make up" to think like a contrarian. There are simply too much peer pressure and ego gets in the way. 

Doomsday prophets like Gary Shiller, Nouriel Roubini, were heavily ridiculed by the mainstream media before the GFC occurred. They believed the housing market in the US would collapse and everybody else think it's impossible. Obviously, they were right at the end.

Of course, these aren't the only examples of how being a contrarian in the investment world may pay off big. It takes advantage of the inherent, irrational herding behavior of human beings. When too much people were on one side of the trade, the opposite tend to happen.

I've already said the US dollar would bounce back several weeks ago when practically almost everybody in the world believe the dollar is doomed. Indeed it has started to happen already and most people still don't understand why. 

Of course, the same thing cannot apply to other things in life. i.e. if 9 out of 10 car mechanics say your car is not safe, then you probably shouldn't be driving it!


----------



## Edwood

sammy84 said:


> That chart demonstrates nothing to me. I would love to know how you could possibly use this as part of a trading plan?!




Hi Sammy - like most technical strategies its a matter of finding repeating events that swing the probabilities in your favour.  Bulkowski has a good book on chart patterns if you're not familiar with them.
Then its up to you as to how you fit soemthing into your plan

Cheers

>> edit: good post Temjin, sums it up nicely


----------



## Temjin

Here is an article on Gary Shiller's latest predictions for 2010.

http://www.investorsinsight.com/blo...tegies-six-areas-to-buy-11-areas-to-sell.aspx

A summary



> Buy
> 
> - Buy Treasury Bonds (on the basis of further deflation/deleveraging)
> - Buy Income-Producing Securities (dividend plays win)
> - Buy Consumer Staples and Foods.
> - Buy Small Luxuries.
> - Buy The Dollar. (as I have believed, further deflation/deleveraging, shock to market, bull/bear sentiment extreme, temp reverse of carry trade and more short covering would feed the trend)
> - Buy Eurodollar Futures.
> 
> Sell or avoid
> 
> - Sell U.S. Stocks in General.
> - Sell Homebuilder and Selected Related Stocks.
> - Sell Selected Big-Ticket Consumer Discretionary Equities
> - Sell Banks and Other Financial Institutions
> - Sell Consumer Lenders' Stocks.
> - Sell Many Low and Old Tech Capital Equipment Producers
> - If You Plan to Sell Your House, Second Home or Investment Houses Any Time Soon, Do So Yesterday.
> - Sell Junk Bonds.
> - Sell Commercial Real Estate. (can try selling the index like buying SRS, already brought them a few weeks ago)
> - Sell Most Commodities. (Mostly oil/energy/base metals. Surprisingly, this was also my believe as well. I only hold them for the run but never brought more. As for precious metals, he did not mention anything)
> - Sell Developing Country Stocks and Bonds.




Regardless, the article is an excellent read. Apparently, his record for 2009 was perfect.


----------



## Timmy

Temjin said:


> I've already said the US dollar would bounce back several weeks ago when practically almost everybody in the world believe the dollar is doomed.




Kudos on that call Temjin - you had it spot on.


----------



## sammy84

Temjin said:


> Umm..it means the level of bulls sentiment verse bear today is just as high as it were back when the market crashed in the late 2007/early 2008.
> 
> Haven't you heard of the famous investment rule?
> 
> "When everybody agrees on one thing, the opposite tends to happen"
> 
> This contrarian thinking has been the dominate strategy used by some of the most famous and rich investors / entrepreneurs everywhere.
> 
> If you want to think like a sheep and agree what the "mainstream" thinks, then go ahead and play the market.
> 
> This is a good article on Contrarianism that I subscribe to.
> 
> http://www.travismorien.com/FAQ/portfolios/contrarianism.htm
> 
> Unfortunately, most people DO NOT have the right "psychological make up" to think like a contrarian. There are simply too much peer pressure and ego gets in the way.
> 
> Doomsday prophets like Gary Shiller, Nouriel Roubini, were heavily ridiculed by the mainstream media before the GFC occurred. They believed the housing market in the US would collapse and everybody else think it's impossible. Obviously, they were right at the end.
> 
> Of course, these aren't the only examples of how being a contrarian in the investment world may pay off big. It takes advantage of the inherent, irrational herding behavior of human beings. When too much people were on one side of the trade, the opposite tend to happen.
> 
> I've already said the US dollar would bounce back several weeks ago when practically almost everybody in the world believe the dollar is doomed. Indeed it has started to happen already and most people still don't understand why.
> 
> Of course, the same thing cannot apply to other things in life. i.e. if 9 out of 10 car mechanics say your car is not safe, then you probably shouldn't be driving it!





From what I can see in the bulls/bear difference chart, 2/3 times the chart has reached it's bullish peak, the rally continued, not exactly a robust indicator. One the second chart, 2/4 times the spread was large, yet the rally continued or the market merely consolidated. Hence why I said this chart is of little value. There needs to be some confluence of other indicators pointing towards a larger decline (as opposed to a mere correction!).

Thanks for explaining contrarian thinking to me Temjon, thankfully I am aware of what this concept is. There is also the concept of irrational exuberance and bull market rallies outstretching the fundamentals underpinning them- a lot of money can be lost in this time picking tops. 

Not sure about your dominant strategy comment and accusing me of thinking like a sheep. I am admittedly a trend follower, a tactic followed by many others. I am happy to stay this way so long as my trading account balance keeps growing in size. 

From memory Nouriel Roubini came out early last year and said he was bullish.  Moreover, recently he has maintained his bullish attitude towards China and India. On the one hand we praise him for picking the GFC, yet we now ignore his comments when it doesn’t fit within our own analysis?


----------



## Temjin

sammy84 said:


> From what I can see in the bulls/bear difference chart, 2/3 times the chart has reached it's bullish peak, the rally continued, not exactly a robust indicator. One the second chart, 2/4 times the spread was large, yet the rally continued or the market merely consolidated. Hence why I said this chart is of little value. There needs to be some confluence of other indicators pointing towards a larger decline (as opposed to a mere correction!).




Yes, I agree the chart is of little "tactical" value as it only merely shows the bigger trend but will never predict the actual turning point. No indicators of any kind would have give you a tactical view with 100% certainly.

Strategic wise, I would say the chart is a lot of value depending on how one interprets it. 

Based on that, I would say the market is at an irrational high point, not only from a sentiment aspect, but from any traditional fundamental indicators including PE ratio and even the normalised version. Technical indicators are obviously indicating an overbrought market, but not as overbrought yet as the last crash. This is, of course, a longer term look and each traders would have their own "system" for trading it. 



> Thanks for explaining contrarian thinking to me Temjon, thankfully I am aware of what this concept is. There is also the concept of irrational exuberance and bull market rallies outstretching the fundamentals underpinning them- a lot of money can be lost in this time picking tops.
> 
> Not sure about your dominant strategy comment and accusing me of thinking like a sheep. I am admittedly a trend follower, a tactic followed by many others. I am happy to stay this way so long as my trading account balance keeps growing in size.




Sorry if I had offended you by my claims of "thinking like a sheep". I will take that back. In a better way, you are a trend follower as you have suggested and I would agree with you that most people are that. 

But going back to the concept of being a contrarian, does being among the "most" would make you rich in the longer term? If almost every financial planners/economists/friend investors say this is a bull market and everyone should ride it, do you smell something fishy around it?

I don't know why I have this sort of thinking. I tend to look the other way when everyone else is looking the same way. So when we contrarians try to debate our points with those who just can't understand our thinking, we tend to usually just stop and keep it to ourselves.  

I guess I wouldn't comment too much on your investment/trading strategy. Like I said, everyone have their own ways.  I just take advantage of opportunities "differently". 



> From memory Nouriel Roubini came out early last year and said he was bullish.  Moreover, recently he has maintained his bullish attitude towards China and India. On the one hand we praise him for picking the GFC, yet we now ignore his comments when it doesn’t fit within our own analysis?




Actually, based on my readings of his analysis, I do not think he is "bullish" on the state of the developed countries' economy. He is still clearly gloom and doom about the US, UK and Europe. 

Everything I hear about China and India so far has been bullish in the "very" long term. (talking about decades here) The only diverging view was of the shorter term where the Chinese growth story wouldn't be one straight line up, and they will certainly face more trouble along the way that would certainly affect one's investment portfolio. (i.e. someone buys the China story and start leveraging like crazy on their stock market, etc.) 

On the last part, I admit I have a confirmation bias on the whole doom and gloom thing. (more like I'm a deflationist who is still a bull in gold) But seriously, who doesn't have that bias here?  It's impossible.


----------



## Temjin

Timmy said:


> Kudos on that call Temjin - you had it spot on.




Heh thanks, but not on the timing, I was too early.  

My next prediction would be that the trend reversal in US dollar may see it go higher than most would expect and surprise a lot of people. That is, until the Federal Reserve decide to halt their planned liquidity withdrawal in March and start dropping dollars from REAL helicopters. 

Sold another few k of AUD for HKD for my trip back to Hong Kong in March. It's a good time to spend it all!


----------



## GumbyLearner

Temjin said:


> That is, until the Federal Reserve decide to halt their planned liquidity withdrawal in March and start dropping dollars from REAL helicopters.



HE he he yes :

Credit Suisse report suggest SELL, SELL, SELL for gold holders

*Credit Suisse: There's A Huge Gold Oversupply, Time To Sell*

A report from Credit Suisse (via ZeroHedge) argues against all this peak gold nonsense, and claims the price of the yellow metal will collapse amidst a downdraft in investor demand and a huge oversupply.

http://www.businessinsider.com/credit-suisse-theres-a-huge-gold-oversupply-time-to-sell-2010-1

Soon enough pigs might be flying those helicopters. What do you think Temjin?


----------



## Edwood

Beej said:


> Is it perhaps time to close this particular thread???




talking of contrarian indicators....


----------



## Temjin

GumbyLearner said:


> HE he he yes :
> 
> Credit Suisse report suggest SELL, SELL, SELL for gold holders
> 
> *Credit Suisse: There's A Huge Gold Oversupply, Time To Sell*
> 
> A report from Credit Suisse (via ZeroHedge) argues against all this peak gold nonsense, and claims the price of the yellow metal will collapse amidst a downdraft in investor demand and a huge oversupply.
> 
> http://www.businessinsider.com/credit-suisse-theres-a-huge-gold-oversupply-time-to-sell-2010-1
> 
> Soon enough pigs might be flying those helicopters. What do you think Temjin?




Haha Seriously, sentiment wise, I am not all that comfortable with gold right now. 

The bullish sentiment is certainly much higher than it was when I first invested it, but it is still not as "extreme" (and volatile!) for the equity market.

Jim Rogers and alike have been talking about the potential for gold to go below $1000 as the next dip in the economy begins to become more apparent. (or the pigs realise things isn't seem to be as good as they thought to be) 

Gold prices could possibly go lower as the speculative (or weak) positions are taken out en mass in the next leg down. 

Fundamental wise, I'm still quite bullish with gold in the longer term as it seem to be a win-win hedge against either inflation (lost of faith with fiat money) or deflation (lost of faith with banking system/certain sovereigns to maintain solvency). 

Until my fellow taxi driver or administration staff start advising me to buy gold, I may just keep them a little longer. 

Do note that Credit Suisse seem to be quite bullish on the global economy and certainly believes the worst is behind us as the stimulus packages had worked its "magic". What if their assumptions are wrong? And I wondered if they have took the Chinese government's strategy into account? Forgot where the article was, but part of their strategy was to allow everyone in their China to accumulate hard assets in full anticipation of future devaluation of US dollars. This is why the Chinese government have encouraged private investment in gold. You don't see that in the US publicly (or Australia), do you? 



Edwood said:


> talking of contrarian indicators....




Heh, I saw that. I just didn't want to comment on it.


----------



## Beej

Edwood said:


> talking of contrarian indicators....




No not at all - I made/make no prediction about what the markets are likely to do from here (especially in the short term). I was merely pointing out that the original point of this thread has clearly been and gone. 

If you are confident of a *new* impending and severe correction, by all means please start a new thread and outline your rationale and then we can all discuss it. This particular thread just does not seem useful anymore as it has no real point other then being a general "air my bearish view" thread? It is not about anything specific, which it was when it began.



			
				Temjin said:
			
		

> Heh, I saw that. I just didn't want to comment on it.




Same goes for you Temjin!! Showing your own "confirmation bias" a bit there by presuming what my views are. Why don't you actually read my post again and see if I really wrote what you seem to think I wrote?

Cheers,

Beej


----------



## Edwood

Beej said:


> No not at all - I made/make no prediction about what the markets are likely to do from here (especially in the short term). I was merely pointing out that the original point of this thread has clearly been and gone.
> Beej




Hi Beej - no offence intended mate, twas the fact that folk are suggesting we shut this thread just at a time when markets are threatening to roll over that made me smile.  Didn't realise you was a 'Mod'

I don't mind if the thread shuts tbh if thats what the ASF community wants.  Happy to continue to talk to myself on the International Index thread


----------



## Beej

Edwood said:


> Hi Beej - no offence intended mate, twas the fact that folk are suggesting we shut this thread just at a time when markets are threatening to roll over that made me smile.  Didn't realise you was a 'Mod'
> 
> I don't mind if the thread shuts tbh if thats what the ASF community wants.  Happy to continue to talk to myself on the International Index thread




PS -No offense taken! And I'm not a "mod" BTW  I'm just saying, if you think the next big roll over is coming that's fine - I'm just expressing the personal opinion that I'd rather see a discussion of that possibility on a new thread, rather than out of context here on this old one. So please start one and outline why you see the next big correction as imminent?

Cheers,

Beej


----------



## Edwood

Beej said:


> PS -No offense taken! And I'm not a "mod" BTW  I'm just saying, if you think the next big roll over is coming that's fine - I'm just expressing the personal opinion that I'd rather see a discussion of that possibility on a new thread, rather than out of context here on this old one. So please start one and outline why you see the next big correction as imminent?
> 
> Cheers,
> 
> Beej




oke-doke - thing is I like to trade reversals so maybe it'd be better to start a "reversals" thread, which will have some longevity - i.e., won't matter if there's an imminent crash or an imminent bounce it can be used for either.  And they may not be 'severe' for that matter.

Also I'm not an uber-bear so maybe its just as well to leave them to it over here (altho they seem to enjoy some of the bear-pr0n I dig out every now & then )


----------



## professor_frink

Beej said:


> PS -No offense taken! And I'm not a "mod" BTW  I'm just saying, if you think the next big roll over is coming that's fine - I'm just expressing the personal opinion that I'd rather see a discussion of that possibility on a new thread, rather than out of context here on this old one. So please start one and outline why you see the next big correction as imminent?
> 
> Cheers,
> 
> Beej




I suppose it's all a matter of context Beej. Most bears don't really see this current rally as a new multi year bull market, and that the problems that caused the bear market in the first place are still in play for further economic trouble down the track, which would explain why this thread still gets some regular posts.


----------



## Temjin

Beej said:
			
		

> Same goes for you Temjin!! Showing your own "confirmation bias" a bit there by presuming what my views are. Why don't you actually read my post again and see if I really wrote what you seem to think I wrote?




I'm sorry then for not reading your post before commenting on it. 

Like I said, I am not afraid to admit that any of my opinions is completely free from confirmation bias. 

Back to your suggestion, I can understand where you are coming from. 

However, I also agree with professor_frink, it is all a matter of context. Where do we draw the line in closing off this thread? When the market has rallied 30%? Or it has not crashed (by how much too) after how many months? Or when the mainstream economists suggest that there is no risk of another crash? 

In practice, a crash could happen to the market at any time regardless of the economic circumstances. So the thread title is applicable at any time of the history. There will be reasons to suggest that an imminent market correction is coming. (technical or fundamentals factors, black swan events, etc)


----------



## Aussiejeff

Hmm....we might just have got the straw that broke the Gold Camel's back...



> Jan. 21 (Bloomberg) -- President Barack Obama, tapping into voter anger over bank bailouts, called for limiting the size and trading activities of financial institutions as a way to reduce risk-taking and prevent another financial crisis.
> 
> The proposals, to be added to an overhaul of regulations being considered by Congress, would prohibit banks from running proprietary trading operations solely for their own profit and sponsoring hedge funds and private equity funds. He also proposes expanding a 10 percent market-share cap on deposits to include other liabilities such as non-deposit funding to restrict growth and consolidation.
> 
> “While the financial system is far stronger today than it was one year ago, it’s still operating under the same rules that led to its near collapse,” Obama said at the White House after meeting with former Federal Reserve Chairman Paul Volcker, who has been an advocate of taking such steps.* “Never again will the American taxpayer be held hostage by a bank that is too big to fail.”*



http://www.bloomberg.com/apps/news?pid=20601087&sid=aGwoMdcKbVFk&pos=1

.... and this from the same article...



> The new rules, Obama said, would close loopholes that allow big financial firms to trade products like credit-default swaps and other derivatives without oversight and while benefiting from Federal Reserve lending programs and taxpayer insurance of consumer deposits.
> 
> “When banks benefit from the safety net that taxpayers provide,” Obama said, “it is not appropriate for them to turn around and use that cheap money to trade for profit.”
> 
> Additionally, Obama said caps on deposits that prevent too much risk from being concentrated in a single bank will be applied to other types of funding to prevent firms from growing too large.
> 
> *“The American people will not be served by a financial system that comprises just a few massive firms,”* Obama said.




Oh yeah? And who pray tell HELPED create these Too Big Too Fail Behemoths during the recent fracas by handing out $USTrillions of taxpayers hard-earned rather than make 'em take some nasty medicine? Is this the Obama Way? To help create Financial & Commercial Monsters then be seen to be "The Champion Who Saved The Sheeple" by slaying these same Monsters?

Madness...... 

Maybe fellow Chairman KRudd can talk some sense into him?


----------



## Sean K

Aussiejeff said:


> Oh yeah? And who pray tell HELPED create these Too Big Too Fail



That was to stave off TOTAL global meltdown. Now, perhaps, there's some breathing space and companies who should fail, will fail in an orderly fashion, as they should. A 'W' shaped recovery is best case now in think once reality hits in regard to this fundamentalless stock rally. We will eventually wake up. I hope...eeek


----------



## skyQuake

Whats really interesting is this part:
_
The rules, which must be agreed by Congress, would also bar institutions from proprietary trading operations, unrelated to serving customers, for their own profit._

Goodbye prop desks? Where GS earns such a substantial chunk of its revenue? Not if they can help it!


----------



## Trembling Hand

skyQuake said:


> Whats really interesting is this part:
> _
> The rules, which must be agreed by Congress, would also bar institutions from proprietary trading operations, unrelated to serving customers, for their own profit._
> 
> Goodbye prop desks? Where GS earns such a substantial chunk of its revenue? Not if they can help it!




LOL. there goes 90% of market volume


----------



## skyQuake

sammy84 said:


> Personally, if Obama can't get health care reform through, there is no way he will have enough muscle in the senate to get this through. With the money that is on the line the next few months will be a lobbyists dream




Good point, Long lobby groups! They're going to be swimming in so much cash. Obama is trying to take away the livelihoods of the rich and filthy-rich.


----------



## Sean K

GS employees are in the poo all right.



> On average, each of the bank's 32,500 employees would have received nearly $US500,000 dollars in compensation and benefits in 2009.


----------



## skc

If the Obama talk was truely the reason for the fall last night then I'd expect a bounce tonight - really the chance of Obama getting some of those things through are pretty low... in the short term anyway.

Having said that, the media headline of what caused overnight market movements are usually not correct anyway.


----------



## Trembling Hand

skc said:


> If the Obama talk was truely the reason for the fall last night then I'd expect a bounce tonight - really the chance of Obama getting some of those things through are pretty low... in the short term anyway.
> 
> Having said that, the media headline of what caused overnight market movements are usually not correct anyway.




China's been leading this fall or the actual cause.

China's the new black.


----------



## Sean K

Trembling Hand said:


> China's been leading this fall or the actual cause.
> 
> China's the new black.



Not sure if China caused this one, but as the market is a forward looking beast, it will surely hinge on the prospects of the developing countries. The US and Euro is old news now.


----------



## noirua

Staying mostly in cash may yet prove to be masterly inaction after-all. Markets appear to have very little upside going for them at present and a lot of worry going forward, whether that be on production at home; very strong but now dipping a bit currency; Europe's concerns over Greece; China's worries over the booming again property sector, and interest rates versus inflation:  All this is bringing back the bears to feed on market concerns.


----------



## Wysiwyg

Many stocks peaked September/October and have come back to better prices. Don't mind if the seppos drop it some more though. Sifting, sifting all day long.


----------



## voigtstr

CanOz said:


> Besides, my stops will take me out this time.
> 
> 
> CanOz




Are they automatic stops or manual stops? If they are automatic, do you mind telling me which online broker you use? I'd like to compare features and costs against what I'm using at the moment.


----------



## Aussiejeff

skyQuake said:


> Good point, Long lobby groups! They're going to be swimming in so much cash. Obama is trying to take away the livelihoods of the rich and filthy-rich.




Hey skyQuake, you forgot THE most important group - the _Stinking-Filthy-Rich_ 

We all know a worldwide cabal of _Stinking-Filthy-Rich_ essentially runs the planet (including the US congress), so Chairman Obama ultimately has NO chance of cutting off their collective hands and feet.... I'll eat my hat if this crazy scheme gets up in its current guise!


----------



## Aussiejeff

kennas said:


> That was to stave off TOTAL global meltdown. Now, perhaps, there's some breathing space and companies who should fail, will fail in an orderly fashion, as they should. A 'W' shaped recovery is best case now in think once reality hits in regard to this fundamentalless stock rally. We will eventually wake up. I hope...eeek




Hmmmm. I would have thought the "breathing space" bought by the massive bailouts is very tight - even asthmatic! What happens if all that cash is to NO avail and the next leg down bites hard?

How much is left in kitty now to stave off a very-much-possible-at-anytime global meltdown Part Deux?

If this does turn into another significant slump, even worse will be the lack of confidence "the market" will have in political leadership to drag everything back up again....and again...and again...

IMO


----------



## GumbyLearner

Trembling Hand said:


> LOL. there goes 90% of market volume




Why? Whose money will be withdrawn from the market? Public bailout money?


----------



## Trembling Hand

GumbyLearner said:


> Why? Whose money will be withdrawn from the market? Public bailout money?




yeah grumby I forgot that commsux going to start let mums & pops run high frequency BOTs.


 FFS!!


----------



## GumbyLearner

Trembling Hand said:


> yeah grumby I forgot that commsux going to start let mums & pops run high frequency BOTs.
> 
> 
> FFS!!




Unbelievably oblivious as to what caused the GFC in the first place.

Too many BOTS in the public trough who can't make their own money.

http://dictionary.reference.com/browse/bot

bot
2  /bɒt/ Show Spelled Pronunciation [bot] Show IPA
–noun Australian Slang.
a person who cadges; scrounger.
Origin:
1915–20; perh. shortening of botfly


----------



## skyQuake

GumbyLearner said:


> Unbelievably oblivious as to what caused the GFC in the first place.
> 
> Too many BOTS in the public trough who can't make their own money.
> 
> http://dictionary.reference.com/browse/bot
> 
> bot
> 2  /bɒt/ Show Spelled Pronunciation [bot] Show IPA
> –noun Australian Slang.
> a person who cadges; scrounger.
> Origin:
> 1915–20; perh. shortening of botfly




Fairly sure he was referring to 

bot
3  /bɒt/ Show Spelled Pronunciation [bot] Show IPA
–noun
a device or piece of software that can execute commands, reply to messages, or perform routine tasks, as online searches, either automatically or with minimal human intervention (often used in combination): intelligent infobots; shopping bots that help consumers find the best prices.


----------



## GumbyLearner

skyQuake said:


> Fairly sure he was referring to
> 
> bot
> 3  /bɒt/ Show Spelled Pronunciation [bot] Show IPA
> –noun
> a device or piece of software that can execute commands, reply to messages, or perform routine tasks, as online searches, either automatically or with minimal human intervention (often used in combination): intelligent infobots; shopping bots that help consumers find the best prices.




Yeah I should read further down the page. Excuse my reckless impropriety.


----------



## brty

Aussiejeff,



> How much is left in kitty now to stave off a very-much-possible-at-anytime global meltdown Part Deux?




As I have stated elsewhere, money is created out of thin air, there is no limit. The quantitative easing is just borrowing from yourself (if you are a central bank   )

If things look like they are going too far south again, another $500b-$1t will just be created out of fresh air, like the last lot.

brty


----------



## MRC & Co

brty said:


> Aussiejeff,
> 
> 
> 
> As I have stated elsewhere, money is created out of thin air, there is no limit. The quantitative easing is just borrowing from yourself (if you are a central bank   )
> 
> If things look like they are going too far south again, another $500b-$1t will just be created out of fresh air, like the last lot.
> 
> brty




So why all the record bond issuance?


----------



## Edwood

"must be about time we closed this thread"

LOL!


----------



## Aussiejeff

brty said:


> Aussiejeff,
> 
> 
> 
> As I have stated elsewhere, money is created out of thin air, there is no limit. The quantitative easing is just borrowing from yourself (if you are a central bank   )
> 
> *If things look like they are going too far south again, another $500b-$1t will just be created out of fresh air, like the last lot.*
> 
> brty




Hark!!

Doth mine ears heareth the booming intonation of chairman Obama _"MAN THE PRESSES!!! ALL HANDS ON DECK!!!"_ & the sudden ensuing chatter of a 1,000 shiny new US printing presses starting on another $US6Trillion run?


----------



## brty

> So why all the record bond issuance?




To fool the masses.

I think all money is created out of thin air, where do you think it comes from??

brty


----------



## MRC & Co

brty said:


> To fool the masses.
> 
> I think all money is created out of thin air, where do you think it comes from??
> 
> brty




You think?  I thought with the way you were talking you must have known.


----------



## Macquack

brty said:


> To fool the masses.
> 
> I think all money is created out of thin air, *where do you think it comes from*??
> 
> brty




I always thought it grew on trees.

One thing is for sure, the best way to rob a bank is to own one.


----------



## brty

MRC,

I'll ask again.....

where do you think it comes from??

Yes I think, can you prove otherwise??

Did you know that the largest holder of US govt debt, was the US govt departments in various guises, of over $5T.

brty


----------



## MRC & Co

I agree, to an extent.  What bothers me is the crude information and condescending sarcasm (yes yourself and others), when really, your views are elementary at best.

If the US Government does need to raise capital, how will they go about doing this other than, 'they will print more off the pressers'?  If they truly can drop it from helicopters, how do they put this into the budget as part of their fiscal position?  If they raise money through bond issuance (even if they buy it themselves), what impact will this have on the bond markets and short-term money markets?  How will you determine what is happening and put it into context to actually make it of any use?  How will you profit off it?  

How about some useful information here for all us who don't understand the system as well as you? 

I guess I just get sick of sifting through opinions for little value.  Your kind of statements are made by so many these days, it isn't even contrarian anymore.....what will that mean.......

BTW, I haven't seen the kind of action in Asian order flows as I did on Friday, since 2008, make of it what you will...........


----------



## jonojpsg

Edwood said:


> see Prechter has put a call out recommending 200% short position (on the Dow)




I know I'm a bit of a goose admitting this, but I jumped right on board when I read this   I guess I've been waiting for some signal to short the Dow given that the fundamentals are so out of whack with the *current Dow PE ratio of 29* being way too rich for my liking 

Have seen technical (wave) analysis saying we're heading into wave 5 with a *target of 7550 *  Mate, if that comes off, this trade will net me a cool $60k  Question is, will I be disciplined enough to hold that long??  

Any suggestions of how I should play it from here, now that I've entered?  Short 2 Dow contracts from 10618, current profit $8000ish in four days.

Oh, and if a drop from 10600 to 7600 isn't severe then we should rename the thread - for mine, it still seems to fit with the general idea.


----------



## GumbyLearner

Macquack said:


> I always thought it grew on trees.
> 
> One thing is for sure, the best way to rob a bank is to own one.




or rob the people.

http://projects.propublica.org/unemployment/

The unemployment insurance system is in crisis. A record 20 million Americans collected unemployment benefits last year, and so far twenty-five states have run out of funds and been forced to borrow from federal government, raise taxes, or cut benefits. In many other states the situation is deteriorating fast. Using near real-time data on state revenues and the benefits they pay out, we estimate how long state trust funds will hold up. Click on a state to find the latest, plus historical data, and details on tax increases and benefit cuts.

  	Bankrupt and Borrowing: The state's unemployment fund is currently bankrupt and the state is borrowing from the federal government.
  	In Trouble: The state's unemployment fund will likely be depleted in six months or less.
  	In the Clear: The state's unemployment fund is solvent.

http://www.propublica.org/feature/how-we-did-the-math-on-our-unemployment-insurance-tracker-0119


----------



## brty

MRC,

and you accuse others of sarcasm....



> How about some useful information here for all us who don't understand the system as well as you?






> How will you determine what is happening and put it into context to actually make it of any use? How will you profit off it?




Inflation. Destroying the value of cash savings. Destroying the value of the super funds of the baby boomers, is what will pay for the mess. Look at the Bank of England website for history dating back 300 years that shows when a large increase in money supply occurs, inflation occurs, usually with a lag time.

Are you of the "we are all doomed, there is too much debt" brigade?? There cannot be more debt than money.



> I guess I just get sick of sifting through opinions for little value.




Good, then offer some facts that show my opinions to be incorrect.

bye


----------



## yonnie

I agree with MRC that you do have some people here who are quick to judge,
quick to rubbish others with their limited knowledge and have an opinion about everything under the sun. I dont think they`re here to learn about trading `cos its too hard, but just for "un"-social contact.

In my opinion a good trainee trader realises he/she doesn`t know much, is keen to learn, knows very quickly that there are more ways to skin a cat, is open to new ideas to improve his/her trading and is HUMBLE.


----------



## Aussiest

MRC & Co said:


> BTW, I haven't seen the kind of action in Asian order flows as I did on Friday, since 2008, make of it what you will...........




That sounds scarey. I'm gathering they were on the "sell" side? (I really must get an IB account).


----------



## MRC & Co

Sorry brty, I'm not targeting you personally or your posts in general, just comments about the financial crisis appear so vague in general and of little use.  

Aussiest, there are both buyers and sellers in the order flow, the difference is, there is a LOT of paper (institutional money), so obviously a lot of speculation about this being the 'top' by the guys who really move the market.  There is no doubt in my mind, that the guys who move the US market, are the same ones who move the Australian market.  You could see someone holding down the SPI in the order flow for 4 days before the US came off, obvioulsy knew what was coming, a very good leading 'indicator' IMO!


----------



## skc

MRC & Co said:


> Aussiest, there are both buyers and sellers in the order flow, the difference is, there is a LOT of paper (institutional money), so obviously a lot of speculation about this being the 'top' by the guys who really move the market.




So the recent order flow is very different to what you may have seen in Jun 09 or Nov 09?



MRC & Co said:


> There is no doubt in my mind, that the guys who move the US market, are the same ones who move the Australian market.  You could see someone holding down the SPI in the order flow for 4 days before the US came off, obvioulsy knew what was coming, a very good leading 'indicator' IMO!




I must say it seemed obvious in hindsight. But would you have shorted the SPX on that alone or did you have to hedge with a long in the SPI or something? Not sure if that would work out as SPI seems to have fallen quicker than SPX?



Aussiest said:


> That sounds scarey. I'm gathering they were on the "sell" side? (I really must get an IB account).




Don't be too excited. This information is not from an IB account. It's from a seasoned trader who can read the market...


----------



## MRC & Co

SKC, yes, I haven't seen anything like this throughout the entire 2009.  There were big volume days last year and some big moves, but it looked like just a big execution algo going off, not sheer emotion which is what it currently looks like and is what it looked like in 2008.

I didn't and wouldn't short based on that alone.  I had quite a few factors of why I thought it was coming off and I actually went short S&P (ES) with quite a bit of leverage for a position trade the night it first came off, but got stopped out by 2 ticks before it went (after they squeezed it following the reports of Wells Fargo, Bank of America etc)!    So I can now only catch it through scalping bits and pieces of it.

Seasoned?  Not me........yet, maybe in a few more years.    But a seasoned trader (the most seasoned I've ever met) did tell me it was going to come off Friday night in the US.    I was actually going to PM Broadway after seeing he bought banks and tell him I would hedge it for the night........could have should have would have......


----------



## Edwood

jonojpsg said:


> I know I'm a bit of a goose admitting this, but I jumped right on board when I read this   I guess I've been waiting for some signal to short the Dow given that the fundamentals are so out of whack with the *current Dow PE ratio of 29* being way too rich for my liking
> 
> Have seen technical (wave) analysis saying we're heading into wave 5 with a *target of 7550 *  Mate, if that comes off, this trade will net me a cool $60k  Question is, will I be disciplined enough to hold that long??
> 
> Any suggestions of how I should play it from here, now that I've entered?  Short 2 Dow contracts from 10618, current profit $8000ish in four days.
> 
> Oh, and if a drop from 10600 to 7600 isn't severe then we should rename the thread - for mine, it still seems to fit with the general idea.




yeah well if its any consolation there were no doubt many of Prechters subscribers who joined you 

but you want to be careful jumping in without checking the validity of any post for yourself - especially ones on free bb's!

for what its worth there are EW counts around suggesting this is the top of wave B, and wave C is about to kick off - which will be fast & messy and catch most unaware because complacency is high with the general belief seeming to be that we're out of the woods.  In the 30's more lost money on the second leg down than the first, because everyone thought the damage had been done and loaded up on the bounce.  Market bounced similarly to now (up 60%-odd) before finishing the fall down 89% high-to-low.  Recent stats out of the UK show retail sharetrading volumes are higher than 2000 (albeit trader profile is more sophisticated than in 2000).

The key thing is you're on the right side of the trade - enjoy


----------



## skc

MRC & Co said:


> Seasoned?  Not me........yet, maybe in a few more years.    But a seasoned trader (the most seasoned I've ever met) did tell me it was going to come off Friday night in the US.    I was actually going to PM Broadway after seeing he bought banks and tell him I would hedge it for the night........could have should have would have......




Please PM me the re same next time


----------



## Aussiejeff

Heads up chaps & chapettes.... 

*Possible* stock market Mega-Tsunami looming - IF Obama goes along with this "wacky" idea.



> Jan. 29 (Bloomberg) -- *Taxing equity trades may reduce U.S. stock market volume by 90 percent*, Interactive Brokers Group Inc. Chief Executive Officer Thomas Peterffy said.
> 
> A transaction tax was first discussed in February and revived in December, when Iowa Senator Tom Harkin and Oregon Representative Peter DeFazio said it is the “most painless way” to fund the government’s deficit and curb speculation. French President Nicolas Sarkozy said Jan. 27 that a European debate on the subject is unavoidable.
> 
> *“The mother of all creators of havoc on Wall Street is this looming transaction tax,”* said Peterffy, who is also president of the brokerage and automated market-making company, in an interview yesterday. Interactive Brokers is based in Greenwich, Connecticut. *“Trading volumes would plunge by about 90 percent, markets would become illiquid and tens of thousands of people would lose their jobs.” *
> 
> Sending a fee to the government for every transaction would hurt asset managers, brokerages and so-called high-frequency traders, a group that accounts for 61 percent of volume, according to New York-based research firm Tabb Group LLC. Interactive Brokers handles about one-seventh of U.S. options that change hands.
> 
> An average of 10 billion shares has traded each day on U.S. exchanges since the beginning of 2009, according to data compiled by Bloomberg.
> 
> $5.93 Trillion
> 
> The debate follows the biggest U.S. stock market rally since the Great Depression. The Standard & Poor’s 500 Index jumped 70 percent between March 9 and Jan. 19, restoring $5.93 trillion to American equity markets. It has fallen 5.7 percent in the past two weeks as President Barack Obama proposed limiting the size of financial institutions and their proprietary trading.
> 
> *The proposals from Harkin and DeFazio, both Democrats, would impose a fee on transactions of stocks and derivatives, aiming to raise money for economic stimulus plans. The U.S. government’s budget deficit in the fiscal year that ended Sept. 30 was a record $1.42 trillion.*



http://www.bloomberg.com/apps/news?pid=20601109&sid=aUFMGaqiHYaA&pos=15

Nah. They wouldn't would they????


----------



## satanoperca

Hi AussieJeff,

They are broke and getting desperate as the ship slowly takes on water.

So yes it is possible that they will introduce a 0.25% tax on transactions. Will stop those algorithmic traders in their tracks if they do and recently effect the US markets.

All this uncertainty is surely weighing on the US market.

Cheers and thanks for the link.


----------



## lasty

Naturally a broker would say that it's bad having a transaction tax.
Volumes of course would decrease however there is an enquiry into algo trading which although appears to add liquidity they do infact destroy it.
Algo's have become so intelligent they can identify buyers and sellers behavioural patterns.
Brokers couldn't care less as they work on volume however for the retail player it's an unfair advantage.
Volume equals price stability but that's no good for traders.
Traders need movement and the more movement we have the less capital is needed for profit gains.


----------



## cutz

Aussiejeff said:


> *Possible* stock market Mega-Tsunami looming - IF Obama goes along with this "wacky" idea.




What a joke,

Traders have become the public whipping boys.

Property market rampant speculation, the primary cause of problems and it's associated tax rorts doesn't even get a look in.


----------



## Aussiest

MRC & Co said:


> You could see someone holding down the SPI in the order flow for 4 days before the US came off, obvioulsy knew what was coming, a very good leading 'indicator' IMO!




Thanks MRC, that's what i thought.

But, _where _did you see the order flow? I'm gathering through an IB Account, as you can't see this through market makers.


----------



## Aussiest

Aussiejeff said:


> *Possible* stock market Mega-Tsunami looming - IF Obama goes along with this "wacky" idea




When is the decision expected to be made? I wonder how much it would effect the Aussie equities market?


----------



## lasty

Aussiest said:


> When is the decision expected to be made? I wonder how much it would effect the Aussie equities market?




Our market has been offered mainly on concerns of our interest rates moving higher along with China's. Our market has been over extended and a correction was warranted.
As for a transaction tax happening here it would be political suicide as we have a far greater concentration of super funds in equities than any other nation.
Once the dust settles with Obamas stupidity financial decisions will be made by organizations on where to play.
Remember the growth areas are in Asia not the US.
Market mentality has yet to let go of the US but it's a matter of time.
Financial centres compete for business and Asian centres must be licking their lips everytime Obama puts his foot in his.


----------



## explod

lasty said:


> As for a transaction tax happening here it would be political suicide as we have a far greater concentration of super funds in equities than any other nation.
> .




Cannot agree, most super funds here are run conservatively and transaction numbers miniscule to those of the big trading funds.  In fact some computor currency trading systems do many to the second.   A concern on this type of trading offshore (to the US mind, Wall Street starts to get done they wanna change the goal posts) was mentioned in Obamas memos some few months back.

Of course reps of the big tradies will be screaming, and via ASF too.


----------



## MRC & Co

Aussiest said:


> Thanks MRC, that's what i thought.
> 
> But, _where _did you see the order flow? I'm gathering through an IB Account, as you can't see this through market makers.




TT, but yeh, you can see the same through IB.


----------



## lasty

Conservaive or not 9% is added to every Payg employees Superfund each year. Already there has been an enquiry over fees.
The govt would look stupid imposing a transaction tax when it's trying to bring down fees.
Currency trading is unregulated except for futures. Already some FX platforms have moved to Australia to escape certain capital requirements.
The US thinks it's nÃºmero uno in financial centres but London still runs the show.
Once China gets it act together with financial compliance expect it to muscle in.


----------



## MRC & Co

lasty said:


> there is an enquiry into algo trading which although appears to add liquidity they do infact destroy it.
> 
> Algo's have become so intelligent they can identify buyers and sellers behavioural patterns.




Who is conducting this enquiry and where?

Algo's certainly do identify buyers and sellers behavioural patterns, but the major victims of this are locals, who trade regularly in big volumes.  Many have fallen by the wayside and others now alter lot sizes consistently to try avoid being tracked.


----------



## Trembling Hand

explod said:


> Cannot agree, most super funds here are run conservatively and transaction numbers miniscule to those of the big trading funds.  In fact some computor currency trading systems do many to the second.   A concern on this type of trading offshore was mentioned in Obamas memos some few months back.
> 
> Of course reps of the big tradies will be screaming, and via ASF too.



Not sure I follow your point. Do you agree with a transaction tax? Or do you think that Obama can legislate Asian markets? Or something else.



MRC & Co said:


> Who is conducting this enquiry and where?



 Treasury have a inquiry into it, anther one 

http://www.theaustralian.com.au/business/super-inquiry-targets-fees/story-e6frg8zx-1225704710838


----------



## explod

As there does seem to be some real concern that markets are turning down have been considering the quarterly chart for the Dow since 1970.

My chart would not be clear posted up so if someone feels my rationale worth consideration they may post for me.

This current quarter sees the Dow down, the previous three quarters have been up the second highest since 1970 and just short of the jump up in 1999 (3 straight quarters also)

The overall feel of this chart says to me that we will probably be sideways for 2 or 3 quarters then a large down spike to test the 8000 support level for the third time.   

Talking to a friend yesterdays and mused on how markets seem to be held together in election years (UK, US and Aus, )

So could the end of 2010 be the big one down  ?


----------



## MRC & Co

Trembling Hand said:


> Treasury have a inquiry into it, anther one
> 
> http://www.theaustralian.com.au/business/super-inquiry-targets-fees/story-e6frg8zx-1225704710838




Couldn't find the part in the link about an enquiry into algos or the fact they destroy rather than boost liquidity?


----------



## Trembling Hand

MRC & Co said:


> Couldn't find the part in the link about an enquiry into algos or the fact they destroy rather than boost liquidity?




Oh ok sorry I thought you meant who was inquiring about super fees.


----------



## Sean K

explod said:


> So could the end of 2010 be the big one down  ?



Could be, any time from now really. 

No one can predict this. 

Gann and _enhanced_ EW 'experts' have proved that 'timing' is impossible. 

The only ones who seem successful are those that continue to post and post and post and eventually they get it right. One success and they are God. 

I love Marc Faber's approach to comment. Every time he has been introduced as someone who has called a top (or bottom) he simply says, 'I called it many times, eventually I will be right'. 

I thought we had a chance to get out of this mess with a mild depression, but we've now put the same type of people in charge who got us into the crap in the first place.

I really thought international government minds would work a way out of this but the next phase of the solution has not come about. 

Their own jobs are more important....


----------



## Aussiejeff

Thank god Mr Benwankee will again be flying his trusty BailOutDollaBomber on regular missions over the flaming wreck of Wall St!  

Where would we be without Him?


----------



## Atlas79

explod said:


> Talking to a friend yesterdays and mused on how markets seem to be held together in election years (UK, US and Aus, )
> 
> So could the end of 2010 be the big one down  ?




This may be true, but what if it were not a normal election year? In America right now, it does not look like politics as normal to me. I would elaborate but would possibly be called a conspiracy nut.

Suffice to say a war in South America isn't too far away. Don't go to Venezuala on holiday any time soon, or to Columbia (or Mexico). The organic waste is to impact with the rotating airfoil in the not too terribly distant future.


----------



## lasty

MRC & Co said:


> Who is conducting this enquiry and where?
> 
> Algo's certainly do identify buyers and sellers behavioural patterns, but the major victims of this are locals, who trade regularly in big volumes.  Many have fallen by the wayside and others now alter lot sizes consistently to try avoid being tracked.




The SEC has certainly been investigating.

Liquidity has been eroded at certain pricing levels from Algo's identifying orders and pushing the market against them.

There has been complaints in retail trading platforms in particular market makers that pricing is skewed against some of their profitable clients.

A large complaint against a feature called " last look" on a certain platform is being investigated by authorities.


----------



## MRC & Co

lasty said:


> There has been complaints in retail trading platforms in particular market makers that pricing is skewed against some of their profitable clients.
> 
> A large complaint against a feature called " last look" on a certain platform is being investigated by authorities.




But wouldn't MM retail trading platforms be immaterial as the volumes would be tiny and the platform itself makes the market, i.e. it is not the 'real' maket?


----------



## lasty

MRC & Co said:


> But wouldn't MM retail trading platforms be immaterial as the volumes would be tiny and the platform itself makes the market, i.e. it is not the 'real' maket?




There is one platform that both wholesale players and retail brokers get a feed off.
It's currently under investigation with that feature.


----------



## Naked shorts

lasty said:


> Algo's have become so intelligent they can identify buyers and sellers behavioural patterns.





lasty said:


> Liquidity has been eroded at certain pricing levels from Algo's identifying orders and pushing the market against them.




Are you really that stupid? If its not "big bad algos" then its some random trader doing it. All an algo is, is a trading strategy that is automated.

You should be laughing at the algo boys for being too stupid to make it as discretionary traders... and besides, do you really think that all algos have some magical edge that automatically gives them money? Just because you have a team of PHDs, co-location super computers and RT fees in the cents, doesnt mean you will make easy money. Its still hard. There are plenty of algo teams out there losing money like no tomorrow.


We dont need regulation to help save poor retail investors from their own ignorance. If they dont like the platform offered by any broker, why dont they just find another one?! Its not like any broker has a monopoly over the markets. Its a waste of our tax dollars.


----------



## Naked shorts

Naked shorts said:


> There are plenty of algo teams out there losing money like no tomorrow.




Have a look at the average returns the systematic traders make. Have a look at what Winton Capital can make, have a look at their website to see what resources are available to them.


----------



## lasty

Naked shorts said:


> Are you really that stupid? If its not "big bad algos" then its some random trader doing it. All an algo is, is a trading strategy that is automated.
> 
> You should be laughing at the algo boys for being too stupid to make it as discretionary traders... and besides, do you really think that all algos have some magical edge that automatically gives them money? Just because you have a team of PHDs, co-location super computers and RT fees in the cents, doesnt mean you will make easy money. Its still hard. There are plenty of algo teams out there losing money like no tomorrow.
> 
> 
> We dont need regulation to help save poor retail investors from their own ignorance. If they dont like the platform offered by any broker, why dont they just find another one?! Its not lik any broker has a monopoly over the markets. Its a waste of our tax dollars.




Am I really that stupid ?
Could be or am I just in the know of what's going on after a few years in this game.
Algo's do more than create modelling for hedgefunds.
Just like any casino there are those who are out there to try and beat the system ethically or unethically.


----------



## MRC & Co

lasty said:


> Am I really that stupid ?
> Could be or am I just in the know of what's going on after a few years in this game.
> Algo's do more than create modelling for hedgefunds.
> Just like any casino there are those who are out there to try and beat the system ethically or unethically.




I would bet the 2nd option.  Definately some unethical algos out there.  See it all day long in order flows, the exact same thing that discretionary traders get done for, the algos get away with all day long on huge volumes!


----------



## Aussiejeff

MRC & Co said:


> I would bet the 2nd option.  Definately some unethical algos out there.  See it all day long in order flows, the exact same thing that discretionary traders get done for, the algos get away with all day long on huge volumes!




I'm glad Algobots are driving the world's stock markets.

Humans are too prone to mistakes.


----------



## Naked shorts

MRC & Co said:


> I would bet the 2nd option.  Definately some unethical algos out there.  See it all day long in order flows, the exact same thing that discretionary traders get done for, the algos get away with all day long on huge volumes!




Thats an issue of market regulation. If they cant stop algos doing it then they should never of stopped discretionary traders doing it. Im sure someone has been paid a lot to make sure things are the way they are


----------



## Aussiest

MRC & Co said:


> TT, but yeh, you can see the same through IB.




MRC & Co, or anybody else (?), what is "TT"? Is it free?


----------



## skyQuake

Aussiest said:


> MRC & Co, or anybody else (?), what is "TT"? Is it free?




Trading Technologies - powerhouse in futures platform. Very definitely not free. Quite expensive; know for the "Ladder"

You can see it in the Macq bank employee busted vid:

http://www.youtube.com/watch?v=v1m8a4Jl4ZI&feature=related

The blue and red price ladder.


----------



## Aussiejeff

Ha!

The Algobots had fun last night.....

SELL, SELL, SELL....


----------



## GumbyLearner

Aussiejeff said:


> Ha!
> 
> The Algobots had fun last night.....
> 
> SELL, SELL, SELL....




Gopd to know you are still around AJ.

Just remember those parasitical algobots at the cash register.

That's where they are most noticable.

That's why when in OZ, I buy my fruit and veg at markets. Uh..Oh
the ATO are onto this thread. 

Buy local and stuff em I say


----------



## Aussiejeff

GumbyLearner said:


> Gopd to know you are still around AJ.
> 
> *Just remember those parasitical algobots at the cash register*.
> 
> That's where they are most noticable.
> 
> That's why when in OZ, I buy my fruit and veg at markets. Uh..Oh
> the ATO are onto this thread.
> 
> Buy local and stuff em I say




Let's not forget those cynical, sinister Adbots  - screeching, bellowing &
 hollering from the IdiotScreen 30 times every hour of every day of every week of every month of every year forever and ever... _"SPECIAL SALE - BUY, BUY, BUY!!!"_ 

The daily finance merry-go-round appears to be spinning faster and faster.

To whit - "With what shall I buy them, dear 'Liza, dear 'Liza, with what shall I buy them, dear 'Liza, with WHAT??"

"With CREDIT dear Jeffrey, dear Jeffrey, dear Jeffrey, with CREDIT dear Jeffrey, dear Jeffrey, with CREDIT!!" - to be intoned faster and faster until we all disappear in a big *poof* of smoke and mirror shards.....




PS:  Back on  topic, DOW tanked *-268 (-2.61%)* overnight on a raft of *suddenly grim* financial/economic news worldwide. Of course, Chairman Obamasan will no doubt cook up some razzamattaz figures to soothe the Big Boyz in Wall St within the next 24 hours.


----------



## basilio

Gee it looks like we are back to "terror land" in the stockmarkets. And this time all the governments are way out of their depths in terms of "saving" companies.

I also can't remember when markets were  looking at possible sovereign debt defaults by multiple large first world economies ie Spain, Portugal, Greece Eastern Europe. That's 1930's and beyond stuff.. 

Best thing to do today? Get out the gardening tools and start weeding the vegie patch. And while your at it consider  a garage sale for all the stuff that's been piling up in the spare bedroom. There may be a more urgent use  in the near future.

Cheers


----------



## Atlas79

My shares are getting hammered after a really good week...

Anyone else? Is this because the dow dropped or because of the crap in Europe? (I hear we are looking at a decent chance of the EU breaking up...)


----------



## Aussiejeff

basilio said:


> Best thing to do today? *Get out the gardening tools.... **snip*
> Cheers





Yes. Apparently pitchforks and scythes were very handy during the French Revolution. A hoe or two wouldn't go astray either...


----------



## Bigukraine

Atlas79 said:


> My shares are getting hammered after a really good week...
> 
> Anyone else? Is this because the dow dropped or because of the crap in Europe? (I hear we are looking at a decent chance of the EU breaking up...)




Imho the chicken is comming home to roost..... i can see that the eu countries that can look after themselves in this fragile recovery don't want to really help their neighbours out so the result i believe is what we are seeing now. China is curbing lending which is to try to put a slight dampner on their rampent growth and here in oz the RBA not putting up rates, banks tightening on lending, small bus. can't get loans......... looking like lots of trouble on the horizon!!


----------



## Aussiest

skyQuake said:


> Trading Technologies - powerhouse in futures platform. Very definitely not free. Quite expensive; know for the "Ladder"
> 
> You can see it in the Macq bank employee busted vid:
> 
> http://www.youtube.com/watch?v=v1m8a4Jl4ZI&feature=related
> 
> The blue and red price ladder.




Thanks very much skyQuake! I saw that in the background of the Mac "busted" vid, and was interested in a platform where i can see market depth of Futures etc.


----------



## Edwood

Russell in a recent interview seems to be quite cheery on it all:


 from richard russell

Question -- Russell, over recent months, your instinct or something else told you that the market was in trouble. Your bearishness was in the face of your bullish PTI and in the face of the improving Lowry's figures. So far you appear to be right. But right -- only over the short term. Can you pull your "crystal ball instinct" out of its bag and tell us what you see ahead over the long term?

Answer -- I hesitate to do this, because I'm afraid it may sound outlandish, but here goes.

I think this bear market rally is in the process of breaking up. I'm guessing that the Dow is going to run into some panic action early this year, and I think the Dow will violate first its November low and then its March low.

I believe we're heading into something that nobody, in their wildest dreams, is thinking about. What will it be? It will be a full correction of the entire rise from the 2002 low of 7286 to the bull market high of 14164.53 set on October 9, 2007. Remember, I warned about the 50% Principle which came into play at the halfway level of the Dow 2002 to 2007 advance? That halfway level was 10725. After topping out in late 2007, the Dow turned down and violated the 10725 level. After bearishly breaking the 50% level, the Dow continued its decline and sank to 6547.05 on March 9, 2009.

Since that March low we've experienced a bear market rally. The rally that advanced the Dow to 10725.43 on January 10, 2010.

Thus, and it's really incredible, the Dow rallied exactly back to the 50% Principle level. Having risen to 10725.43 on January 10, the Dow then turned down. I consider this extremely bearish action. It's as if the market see-saw swung all the way back to the old 50% level and then turned down.

Picture a child's see-saw. The heavy end rises to exactly its horizontal level, but it stops there. From the horizontal position, the heavy end of the see-saw sinks down again to the ground. The market can act, physically, like a see-saw.

Working again with the 50% Principle, I now see the market sinking down, much like the heavy side of a child's see-saw. I see the Dow declining to the low from which the entire rise started. That low was the 2002 low of 7286. If the Dow does not halt its decline at 7286, I see it sinking down to its 1980-82 area, which would be around Dow 1000.

Older subscribers who were with me over the years probably remember that the Dow pushed time and time again against that resistance ceiling of 1000. On November 20, 1980, the Dow finally broke out above the 1000 level to close at 1000.17. In 1981 the Dow hit a higher high of 1024.05. In 1982 the Dow hit still another high of 1070.55. Thus, the Dow finally left the 1000 resistance level behind. Therefore, I consider the level of Dow 1000 to be first a powerful resistance level and now a powerful support level

Thus, if the 7286 level recorded in 2002 is violated, I see the Dow declining to the 1000 level. Seems impossible? Seems out of the question? Call it anything you want, but that's where I stand. That's what I believe could happen if the advancing structure from the March low breaks down. And it does appear to be breaking down. The current market action is the worst.


----------



## matty77

scary stuff!


----------



## Market Sniper

not if you are short


----------



## Trembling Hand

Market Sniper said:


> not if you are short




Touche


----------



## Bushman

Range bound market for the next few as the 'wall of worriers' look to see if the PIIGS (Portugal, Italy, Ireland, Greece and Spain) can avoid defaulting on their debt and then get nervous about US debt now being above 80% of GDP. 

My 2c


----------



## explod

basilio said:


> Best thing to do today? Get out the gardening tools and start weeding the vegie patch. And while your at it consider  a garage sale for all the stuff that's been piling up in the spare bedroom. There may be a more urgent use  in the near future.
> 
> Cheers




Good one basilio, we have been doing that in our place and said we were heading this way a few years back but regarded as nutters.

Did a techo on the Dow back then saying Dow could go to 1 or 2 g's  They will all prolly start listening to the Russell fella.


----------



## Beej

explod said:


> Good one basilio, we have been doing that in our place and said we were heading this way a few years back but regarded as nutters.
> 
> Did a techo on the Dow back then saying Dow could go to 1 or 2 g's  They will all prolly start listening to the Russell fella.




I know you love the odd equity sell off day but you don't think you might be getting a bit ahead of yourself there explod??  Let's see what pans out over the next few months.....


----------



## Garpal Gumnut

Atlas79 said:


> My shares are getting hammered after a really good week...
> 
> Anyone else? Is this because the dow dropped or because of the crap in Europe? (I hear we are looking at a decent chance of the EU breaking up...)




It is because we are in a BEAR MARKET.

The market moves up and down. As it does the financial journalists concoct a reason why it goes up and down. They do this on a daily basis. 

So for example if it goes *up* they will say it is because of a steady interest rate or a war somewhere or the price of oil or balance of payments or labour market figures or some other horse****.

Another day if it goes *down* they will say it is because of a steady interest rate or a war somewhere or the price of oil or balance of payments or labour market figures or some other horse****.

So the reasons for the rise or fall post date the rise or fall. They are made up by analysts and journalists and are often the same for a rise or fall..

It is SENTIMENT that drives the markets. 

I agree with Russell re the Dow.

It is a very sick little puppy, about to get sicker.

I am in cash. Because we are in a BEAR MARKET.

I don't trade the short side. If I did I'd be trading at present.

gg


----------



## satanoperca

Love a post that makes sense.


Garpal Gumnut said:


> It is because we are in a BEAR MARKET.



Yes and this last burst in prices from lows is just a corrective pattern helped with a little sugar from world govnuts.


Garpal Gumnut said:


> It is because we are in a BEAR MARKET.
> It is SENTIMENT that drives the markets.



Emotion is often based on assumptions and *bias*. Impossible to model with a mathematical formulae.


Garpal Gumnut said:


> It is because we are in a BEAR MARKET.
> I don't trade the short side. If I did I'd be trading at present.



Got to love the availability of access to markets and trading instruments. It is some much fun and test of one’s whits playing a game where you can switch to the winning team whether short or long depending on the prevailing market conditions and profit. 
Being a bear can be so much fun.


Garpal Gumnut said:


> It is a very sick little puppy, about to get sicker.



Yes, the US and other western economies. The burden of debt cannot be resolved without some change to fundamentals, whether asset prices and/or standard of living. Wealth has increased by selling ones sole to the devil, debt and massive amounts of debt and must be paid back at some cost. 

Cheers and all have a good weekend.


----------



## IFocus

Beej said:


> I know you love the odd equity sell off day but you don't think you might be getting a bit ahead of yourself there explod??  Let's see what pans out over the next few months.....




Maybe Explode is but when the risk of default moves from private to sovereign then the consequences are far more extreme than what we have seen in the run down from Nov 2007.

I guess we will see if there are more cockroach's to fall out and what the knock effects are but serious civil unrest in Greece is a starter.

Rising US$ is a concern as the market is pricing risk world wide


----------



## explod

Beej said:


> I know you love the odd equity sell off day but you don't think you might be getting a bit ahead of yourself there explod??  Let's see what pans out over the next few months.....




As a matter of fact and as most will know from my posts over the years I do not like any of what is happening.  Having listened to my Grandparents on the Great Depression and having read widely on financials for a number of years my words are loaded, but have come to comment less in the face of skepticism.

I do know that the paper money makers are ponzi-ing the value of it out of existence.

And I could go on, but plenty of other good contributers now.   I just feel as a fellow human, sincerely sorry for those who are not prepared, for those many millions across the globe already out of work and losing their jobs, for how on the fundamentals now, it is going to spread and be felt here also.

Remain skeptical as you wish, but continue to borrow to buy the rainbow at your preril   IMHO.

And thanks for consideration Ifocus


----------



## moXJO

Beej said:


> I know you love the odd equity sell off day but you don't think you might be getting a bit ahead of yourself there explod??  Let's see what pans out over the next few months.....




I personally blame this correction on you Beej. After you called for this thread to be shut down there has been all sorts of problems.:


----------



## MRC & Co

Garpal Gumnut said:


> I don't trade the short side. If I did I'd be trading at present.
> 
> gg




Why not?


----------



## Garpal Gumnut

MRC & Co said:


> Why not?




I'm no good at it. Lose money every time I've tried it.

gg


----------



## MRC & Co

Garpal Gumnut said:


> I'm no good at it. Lose money every time I've tried it.
> 
> gg




Fair enough fair enough, though you would have this time!


----------



## Donga

Bushman said:


> Range bound market for the next few as the 'wall of worriers' look to see if the PIIGS (Portugal, Italy, Ireland, Greece and Spain) can avoid defaulting on their debt and then get nervous about US debt now being above 80% of GDP.
> 
> My 2c




I'll second that emotion - PIIGS won't fly and then we'll move on.


----------



## drsmith

The ultimate bear's chart.

http://home.earthlink.net/~intelligentbear/com-dow-au.htm


----------



## Nero64

> Thus, if the 7286 level recorded in 2002 is violated, I see the Dow declining to the 1000 level. Seems impossible? Seems out of the question? Call it anything you want, but that's where I stand. That's what I believe could happen if the advancing structure from the March low breaks down. And it does appear to be breaking down. The current market action is the worst.




This will only happen if major panic selling kicks (3 times as bad as Lehmann collapsing) in which i doubt and how many times will they be closing the market and prevent trading of the DOW companies to prevent the slide. How many times will the government intervene and the specialists propping up the market. Break down the DOW components and see how implausible 1000 would be. Who gives a damn about Greece it's a little cog in the wheel. China, Japan and India will be buying our commodities. 

What do you suggest our market to be at 500 - 1000. BHP at $7 and Rio at $12, throw in CBA at $9 and WBC at $6. Billion dollar companies with earnings going for the price of penny stocks. Good luck, I better start saving I guess.

You can have your view but numbers mean nothing except when somebody in the know like George Soros comes out and says we're in big trouble and there will be a lot of panic.


----------



## Wysiwyg

> Thus, if the 7286 level recorded in 2002 is violated, I see the Dow declining to the 1000 level. Seems impossible? Seems out of the question? Call it anything you want, but that's where I stand. That's what I believe could happen if the advancing structure from the March low breaks down. And it does appear to be breaking down. The current market action is the worst.



I hope the prune doesn't make a brass razoo from spreading this horse manure.


----------



## CanOz

Correction over???

CanOz


----------



## IFocus

Nero64 said:


> Who gives a damn about Greece




Exactly I don't think the Germans or French feel the love.



> It's a little cog in the wheel.



 Yep but its the knock on effect like what happens with the Euro etc




> China, Japan and India will be buying our commodities.




China is running on stimulus, Japan's dept is as described as a bug looking for a windscreen so that leaves India.

Where it all goes who knows but there is plenty there for a heads up in risk management. 





> You can have your view but numbers mean nothing except when somebody in the know like George Soros comes out and says we're in big trouble and there will be a lot of panic.




George pretty much runs his own agenda


----------



## Aussiejeff

Hark!

All is well once more.

Chairman Obamasan has smiled before the assembled media and imparted "some" positive spin on the Democruds' heavily massaged "unemployment" figures to cheer his Wall St buddies.

GOBama!!

So, watch the rally on Monday.... fizzle on Tuesday...??


----------



## Naked shorts

MRC & Co said:


> Fair enough fair enough, though you would have this time!




lol at ur avatar


----------



## explod

> Sovereign Debt Is ALWAYS The End Of The Line:
> 
> The decade which ended last December 31 was the biggest borrowing and spending decade in global
> history. It saw three of the biggest credit crashes in global history too. There was the global stock market
> crashes at the beginning and the end of the decade. And in between there was the global real estate crash,
> the one which ushered in the Global Financial Crisis.
> 
> The global financial system did make it through the last decade, by the skin of its teeth, on the back of
> direct monetisation of government debt by central banks and a refusal to let the “collateral” which had
> underpinned the earlier credit booms be valued by anyone. By the end of the decade, banking systems
> everywhere had been nationalised in all but name. Valuations on almost every type of investment “asset”
> were either being artificially propped up by government guarantee or hidden from impolite eyes in
> bloated central bank “balance sheets”. Through all this, the question of “sovereign debt” was
> successfully kept out of public debate, at least until very late in 2009. With 2010 still just getting started,
> that is no longer the case, as a glance at the news of the past two weeks should have made very clear.
> 
> Since before the start of the GFC, The Privateer has warned that the LAST stage of the debt deflation
> which has swept the world would take place when GOVERNMENTS started to go broke. On their
> present trajectory, governments WILL start to go broke, in public, in the not too distant future. One thing
> is certain. This decade will not be successfully navigated using the methods of the previous one.




I have posted this from the most recent issue of "the Privateer" newsletter (07/02/2010).   To be fully realised one needs to be cognisant with the overall newsletter. *(I have no financial or other connection just a subscriber of many years)* 

For a real explanation of where we are in the world today we need to look well beyond the popular press and just bits and pieces.  Your financial future is for yourself and family one of the most important aspects of life and certainly survival, yet little attention is really paid to it.   Of course the financial industry wants you to pay them (drakula in the blood bank) so what are they going to say in the popular press,,he.he., except bleeding you is not funny.


----------



## GumbyLearner

explod said:


> I have posted this from the most recent issue of "the Privateer" newsletter (07/02/2010).   To be fully realised one needs to be cognisant with the overall newsletter. *(I have no financial or other connection just a subscriber of many years)*
> 
> For a real explanation of where we are in the world today we need to look well beyond the popular press and just bits and pieces.  Your financial future is for yourself and family one of the most important aspects of life and certainly survival, yet little attention is really paid to it.   Of course the financial industry wants you to pay them (drakula in the blood bank) so what are they going to say in the popular press,,he.he., except bleeding you is not funny.




The most populous US states unemployment insurance schemes with some of the highest rates of unemployment are bankrupt. They are borrowing at a rapid rate. The money they continue to borrow from the US Fed's printing press is no lagging indicator, it is a daily continual conundrum for the US market. That is a fact. Very concerning indeed explod.


----------



## Aussiejeff

Overnight - DOW sinks below 10,000. 

So, next stop 9,000 (within a few weeks if this IS the breaking of the last straw of resistance)?

Then...?


----------



## CanOz

Aussiejeff said:


> Overnight - DOW sinks below 10,000.
> 
> So, next stop 9,000 (within a few weeks if this IS the breaking of the last straw of resistance)?
> 
> Then...?




I think someone mentioned it before and i tend to agree that DJIA at 10k doesn't really mean much. S&P levels seem more relevant lately. Personally i'll get bullish on the S&P again over 1105ish. 

I'm expecting that last hammer on the SPY to give a few days reprieve from the big selling before something else big happens.

In the meantime its getting choppy out there so its time to reduce the risk a little until the trend is clearer again.

Cheers,


CanOz


----------



## Edwood

threads very quiet - no-one thinks we're close to a major down move then?  have seen a couple of calls for topping out dates aroudd this time >> McHugh and Bradley.  
Given how everyone jumped on this thread during the move down from Jan highs but haven't this time makes me assume everyone is a little complacent?


----------



## Bushman

Edwood said:


> threads very quiet - no-one thinks we're close to a major down move then?  have seen a couple of calls for topping out dates aroudd this time >> McHugh and Bradley.
> Given how everyone jumped on this thread during the move down from Jan highs but haven't this time makes me assume everyone is a little complacent?




Next debt shoe to drop will be the $700b US commercial property CMBS market. Regional banks are up to their necks in these loans with underlying asset values dropping 30-50% and rental markets hurting. There is stress there and the dollars are big. 

Ouch! Question for the market is 'is this priced in?' I would say given reaction to entirely predictable sovereign debt issues, I would say NO! 

From Reuters/Credit Suisse: 

'NEW YORK (Reuters)””The amount of distressed loans in commercial mortgage-backed securities *may more than double to at least $60 billion by year-end*, creating a logjam that could hinder the U.S. economic recovery, Credit Suisse said on Monday [Feb. 22]. 

The increase in troubled loans in the $700 billion CMBS market accelerated to $2.7 billion a month last quarter, compared with about $1.4 billion a month in the first three months of 2009, Credit Suisse analysts said in a report. 

A buildup of loans either 90 days delinquent, in foreclosure or bank-owned is overwhelming companies charged with fixing mortgages that are souring due to the economic malaise or as investors hold back on credit, the report said. Loans delinquent at least two months have increased more than ten-fold since the end of 2008, to 5%, it said.' 

PS: Aussie CMBS market is only $4b-odd with most commercial exposure held by the Big 4.


----------



## Edwood

cheers Bushman.  Saw in todays SMH the story about Chinese property / construction as well, with rail projects costing more than the three gorges and also aiming for 2nd tallest building in the world.  Like commercial property loans as you say the impacts will be felt in the future at some point, hard to say when.

However on the technicals there are some interesting parallels between current market action and 2004 - meaning its feasible the next major correction has already started 

http://www.safehaven.com/article-15866.htm


----------



## wayneL

Edwood said:


> threads very quiet - no-one thinks we're close to a major down move then?  have seen a couple of calls for topping out dates aroudd this time >> McHugh and Bradley.
> Given how everyone jumped on this thread during the move down from Jan highs but haven't this time makes me assume everyone is a little complacent?




I haven't said much, but I'm still a bear. Whether we're close to a major down move I just don't have a clear opinion. The complacency is palpable and that can continue for some time.

... just don't know atm.


----------



## Edwood

wayneL said:


> I haven't said much, but I'm still a bear. Whether we're close to a major down move I just don't have a clear opinion. The complacency is palpable and that can continue for some time.
> 
> ... just don't know atm.




PHEW!  good to see you're still a bear Wayne 
must be nice down the Bay at this time of year.

If you're out here you probably noticed NZD getting spanked against GBP last night - very solid move, often a sign that risk levels are rising.  See Vix looks to be putting in a higher low as well...


----------



## Edwood

SPX currently off 1.7%, gapped down at the open.  Vix up 8%.  Fun & games are underway


----------



## Tukker

Looks like it could be a slaughter today. In the US, all 10 major sectors are down by 1% or more. 

Fun times for those in the short.


----------



## Edwood

some have probably already seen this


----------



## wayneL

Ed,

I just hope the world learns what a poison Keynesianism (as currently practised) actually is. If we do get a double dip, it is going to be a very nasty affair with all sorts of unintended consequences arising from the "stimulus".


----------



## Tukker

Excuse my ignorance, but what would this suggest? More confidence in assets vs cash?  Not a lot of cash? Sell off expected?


----------



## Edwood

Tukker said:


> Excuse my ignorance, but what would this suggest? More confidence in assets vs cash?  Not a lot of cash? Sell off expected?




mutual funds are fully invested - ie bullish - at tops


----------



## Edwood

wayneL said:


> Ed,
> 
> I just hope the world learns what a poison Keynesianism (as currently practised) actually is. If we do get a double dip, it is going to be a very nasty affair with all sorts of unintended consequences arising from the "stimulus".




hi Wayne - you must be expecting a double dip tho yeah?  I can't see how it can be avoided (not being a pessimist just realistic fwiw)


----------



## MRC & Co

wayneL said:


> I haven't said much, but I'm still a bear. Whether we're close to a major down move I just don't have a clear opinion. The complacency is palpable and that can continue for some time.
> 
> ... just don't know atm.




Yeh agreed there. 

From what I've seen of quantatative, forward looking models which predict trends in figures and estimates well, the results are still to the upside, so, along with the charts, at this moment, I think we will probably get back up through the highs of this rally in most 'risk assets'.  

However, a few correlations are breaking down at the moment so it is becoming a bit more muddy as opposed to the previous 'risk on, risk off' trade.  Europe could definately act as a drag, but so far, the rest of the world is trying to break free and 'decouple' from the problems there in some parts.  

No doubt though, there well and truly could be a nasty double dip coming in the next year or so, perhaps after one more surge through the previous swing high this year........this may coincide with the 'multiplier' effect of this stimulus running out........


----------



## MACCA350

Thought it might be time to throw this graph back in:





They also have this one:





cheers


----------



## drsmith

The inflation adjusted DJIA bear from the late 60's to the early 80's should also be on the second graph. That was a fall in real terms of ~75%.

http://home.earthlink.net/~intelligentbear/com-dj-infl.htm

The 30's, 70's and current DJIA crrections also conicide with major corrections in the DJIA/gold ratio.

http://home.earthlink.net/~intelligentbear/com-dow-au.htm

If in real terms we have seen the bottom of the current mega-bear then it will be the mildest of the three.


----------



## Bushman

Gotliebsen in today's Eureka has outlined four threats to a global recovery and good old Aussie 'baby boomer' wealth (or what is left of it). 

1. Chinese commercial property bubble causing stress on the fledgling banking system (i.e. like Malaysia in the '90s post Petronas Towers and Dubai now). To quote the report, there is now '30 billion square feet now under construction – that’s 23 square feet for every man, woman and child in China.'

2. Higher cost of capital (and permanently so it would seem).

3. The old chestnuts of inlfation and another oil crises. 

The hedge he suggested were all listed stocks or hybrid bank securities which I thought was a bit old school. 

Hedges: 
1. CSL, Resmed etc 
2. Bank hybrids
3. Resource plays.  

The Chinese shock would wipe Australia out initially but the devaluation in our dollar can only be healthy for our manufacturing base and aide diversification of our GDP. 

One thing Gottie didn't mention about the China bubble is the massive amounts of foreign currency reserves the Chinese autocracy holds. So they would most probably be able to prop up the banks to a degree. But, as we have seen elsewhere, rampant property speculation, while delivering fat short-term profits for the builders/developers/bankers, always ends in tears!


----------



## Aussiejeff

Bushman said:


> Gotliebsen in today's Eureka has outlined four threats to a global recovery and good old Aussie 'baby boomer' wealth (or what is left of it).
> 
> 1. Chinese commercial property bubble causing stress on the fledgling banking system (i.e. like Malaysia in the '90s post Petronas Towers and Dubai now). To quote the report, there is now '30 billion square feet now under construction – that’s 23 square feet for every man, woman and child in China.'
> 
> 2. Higher cost of capital (and permanently so it would seem).
> 
> 3. The old chestnuts of inlfation and another oil crises.
> 
> The hedge he suggested were all listed stocks or hybrid bank securities which I thought was a bit old school.
> 
> Hedges:
> 1. CSL, Resmed etc
> 2. Bank hybrids
> 3. Resource plays.
> 
> The Chinese shock would wipe Australia out initially but the devaluation in our dollar can only be healthy for our manufacturing base and aide diversification of our GDP.
> 
> One thing Gottie didn't mention about the China bubble is the massive amounts of foreign currency reserves the Chinese autocracy holds. So they would most probably be able to prop up the banks to a degree. But, as we have seen elsewhere, rampant property speculation, while delivering fat short-term profits for the builders/developers/bankers, always ends in tears!




Then again, as Saviour Of The Financial World As We Know It, China has become "too big to fail".

The Rest Of The World will have to band together and go into hock with each other to bail out the Chinese Communist Part.. errr.. Government when the inevitable time comes.

Won't THAT be interesting?

After that....?? *coff*


----------



## Trader Paul

Hi folks,

Using some astoanalysis, the time cycles suggest, that we should be
expecting the European mess to continue throughout  2010, with some 
particularly nasty stuff, around:

... 03082010 
... 10082010 (currencies ... UK???) 
... 13-31082010 (a very critical period for Europe) 
... September 2010 ..... 24-27092010 
and October ... more negative news, about 04102010 ... 

.... and, if you think it is over in USA ... just wait, 
until December 2010 and again, in March-April 2011 ..... 
some seriously negative stuff expected, during those 
periods, unfortunately ..... 

have a great day

   paul



=====


----------



## Bushman

29% of all US houses are in negative equity territory, with nearly 13% showing negative equity of negative 25% (of the mortgage value). This is important as it is a key indicator of future foreclosure.

View attachment Neg Equity total.bmp

Source: First American CoreLogic 4th Quarter Survey of Negative Equity. See www.loanperformance.com

Deleveraging of the US consumer still has some way to go!

In terms of the basket cases (% mortgages >-25% negative equity), the top 5 are: 
Nevada @ 53% 
Arizona @ 32% 
Florida @ 29% 
California @ 20% 
Michigan @ 16%.


----------



## Timmy

Bushman said:


> Deleveraging of the US consumer still has some way to go!




Bushman, check out the latest consumer credit figures from the US, showing an expansion.  
Releveraging?


----------



## Bushman

Timmy said:


> Bushman, check out the latest consumer credit figures from the US, showing an expansion.
> Releveraging?




 Using what as equity? Kidneys, heart, the family dog. Jeepers. 

Yet in Australia, the news today is that we are deleveraging. 

From The Age today: 

'The total value of credit and charge card transactions, including advances, fell by 22 per cent in January, Reserve Bank of Australia figures released today show.

Australians spent $17.18 billion on their credit and charge cards, compared to $22.02 billion in December, according to the figures which are not seasonally adjusted.'


----------



## Timmy

Bushman said:


> Using what as equity? Kidneys, heart, the family dog. Jeepers.




I don't know ... just reading the data ... & while


Bushman said:


> 29% of all US houses are in negative equity territory, .




that means 71% have positive equity?  Also, S&P500 made a new high last night, on this rally from the March 2009 lows, (just barely) ... so going to be equity built up there too.  Not saying its all beer and skittles, but its not all bad news either.


----------



## moXJO

Bushman said:


> Australians spent $17.18 billion on their credit and charge cards, compared to $22.02 billion in December, according to the figures which are not seasonally adjusted.'




That would just be Christmas rush wouldn’t it?


----------



## Bushman

Timmy said:


> I don't know ... just reading the data ... & while
> 
> 
> that means 71% have positive equity?  Also, S&P500 made a new high last night, on this rally from the March 2009 lows, (just barely) ... so going to be equity built up there too.  Not saying its all beer and skittles, but its not all bad news either.




I guess the issue with this thread is the title. It should be called the 'Risks to the Recovery' thread or some such title. Its not all bad news. But we need to deleverage and stories like Dubai, Greece, US comm, property and the like will keep propping up in the next 1-3 years given we are 1-2 years into this cycle. 

That is the way credit busts have operated over time. So there will be hiccups along the way. 

Whether this leads to an 'Imminent and Severe' correction depends what is under stress and not yet disclosed and the impact of this. 

But the US household will not be the saviour for some time with 10% unemployment and 29% negative equity. So 'imminent and stratospheric' growth might also be some time off for the global economy.


----------



## Timmy

Bushman said:


> stories like Dubai, Greece, US comm, property and the like will keep propping up in the next 1-3 years .... So there will be hiccups along the way.




Yep, plenty of hiccups & more to come.



Bushman said:


> But the US household will not be the saviour for some time with 10% unemployment



 Agree, the employment situation in the States is terrible ... but at least there have been signs of a slowing in the job losses ... which is a start.  Long and bumpy road to come for the US economy ...


----------



## Uncle Festivus

Bushman said:


> Whether this leads to an 'Imminent and Severe' correction depends what is under stress and not yet disclosed and the impact of this.




Now that you mentioned it....

I think that we may be getting to some sort of 'decision' point in the equity markets, and by extension the global economy - it's make or break time for the Lemmings. There seems to be a number of converging or peaking trends appearing, apart from the usual bi-monthly 'unexpected' issues like sovereign debt debacles, US housing & employment, China overproduction & inflation etc - 

- the new bull rally is fully 12 months old and has regained approx 70% or so of what was lost, and the double top is currently being formed and challenged. Now if you combine this with the 3rd qtr reporting season, which will show up the 'flat' market for the last 3 months, then some of the 'profit stars' banking companies will have some trouble showing an improvment from their investing divisions over pcp's. Considering that their other 'real economy' divisions like loans and credit cards are still losing money from housing and now CRE, then they have or are peaking on the profit 'surprise-to-the-upside' scenario?

- the effects of stimulis are wearing off - the 'bringing future consumption forward' policies designed to stimulate did exactly that - a supernova of activity and now that they have finished or are being wound down, so too does economic activity 

- China inflation - any question of tightening the rampant money supply in China sends markets into turmoil. Stimulis booms turn into stimulis busts?

- the UK is an economic basket case - the stats speak for themselves, despite what some people would like to _think_ is happening over there...the Emporor is nude...the tide is out etc


Index of production - 1.5% annual fall
Factory gate inflation up 4.1%
GDP up by 0.3% last qtr
Index of services - down 1.4%
Business investment down 5.8%
The structural deficit - To paraphrase the Sage of Omaha, Warren Buffet, this is the deficit left behind when the economic tide goes out. According to the Organisation of Economic Development and Cooperation, the UK will be running the largest structural deficit of all the major economies by 2011. The financial crisis and the recession added GBP 73 billion, or 5.2% of GDP to the structural deficit.
if the credit ratings agencies were themselves creditable then they would be taking a good look at a credit downgrade for the UK, and all the negative effects that would entail re paying back debt
In summary, the Fed & central banks know that the current resistance levels need to be convincingly broken for the next leg of the 'recovery' to continue? Failure will mean, in the best case, a trending sideways ranging market. Worst case would be a resumption of the underlying structural bear.....at least the Poms are trying to get over the line but the Yanks are not playing the game......insider sales have exploded the last few weeks....what do they know?


----------



## Timmy

Bushman said:


> Deleveraging of the US consumer




Bushman - more on deleveraging, this time from a WSJ article (12MAR10):

http://online.wsj.com/article/SB10001424052748703625304575115672827553404.html



> Total U.S. household debt, including mortgages and credit-card balances, fell 1.7% in 2009 ...
> The drop reflects the extent to which job losses and a moribund housing market are forcing people to default on mortgages and other obligations...
> At the same time, the defaults are leaving many people with more cash to spend and save, jump-starting the financial rehabilitation, or "deleveraging," that economists see as a crucial prerequisite to robust growth.


----------



## Whiskers

Interesting article: http://finance.yahoo.com/banking-budgeting/article/109184/five-suggestions-for-banking-reform

My highlights.



> Five Suggestions for Banking Reform
> by Peter Atwater
> Friday, March 26, 2010
> 
> First, as much as I admire Mr. Volcker and the noble intentions of the "Volcker Rule," I'm afraid that attempting to re-silo the financial services industry is akin to trying to unscramble an egg. In fact, with all due respect to the myriad of regulators currently in place, I think our existing silo'ed regulation contributed mightily to our crisis. *How can it be that no single regulator had a full grasp of the "too entangled to fail" world of OTC derivatives along with the authority to deal with it?*




As is most, but if you have the power to make the rules and don't really want transparent compliance, then I guess it won't happen.



> Second, and at the risk of being bold, I believe the time has come to eliminate FDIC insurance. When the FDIC was created in the 1930s, it was intended to be a temporary solution. Today, it puts the US taxpayer on the hook for more than $7 trillion in bank liabilities. But as a consequence, depositor due diligence is non-existent. And putting Wall Street aside, this crisis has shown, even with specific oversight, hundreds of now-failed banks took excessive risk in their traditional banking businesses and their insured depositors neither cared nor were adversely impacted. Their risk was borne by the government, while they earned returns far in excess of comparable US Treasuries. *If we're truly going to eliminate "moral hazard"/"too big to fail" we must eliminate deposit insurance in the process.*




Dangerous move imo... unless the trading divisions are completely seperated from the investment arm's and run by different rules.



> Third, we must demand that the rating agencies disregard "systemic support" when ascribing debt ratings. *The fact that we still have some financial institutions receiving "uplifts" of as many as five ratings levels because of their systemic importance is unacceptable *and I believe currently poses one of the greatest financial risks to our nation.




Why uplifts, if they are systemically important it seems logical they would/should incur a handicap.



> Fourth, we must repeal the "Levitt Rule." In good times, loan loss reserves must be built in anticipation of bad times. And, should FDIC deposit insurance not be repealed, as I recommend, fund premiums must also adopt a countercyclical methodology. That banks were releasing reserves and the FDIC was reducing/eliminating premiums at the top of the market defies basic logic.






> Finally, our regulators must act courageously. This past week Moody's wrote:
> 
> " we believe that *the benefits of a revamped regulatory regime will depend more upon how regulators implement and execute the law -- rather than depend on the words of the law itself* -- because the proposed regulatory framework doesn't appear to be significantly different from what exists today."




That's going to be the proof in the pudding.


----------



## Bushman

Bushman said:


> I guess the issue with this thread is the title. It should be called the 'Risks to the Recovery' thread or some such title. Its not all bad news. But we need to deleverage and stories like Dubai, Greece, US comm, property and the like will keep propping up in the next 1-3 years given we are 1-2 years into this cycle.
> 
> That is the way credit busts have operated over time. So there will be hiccups along the way.
> 
> Whether this leads to an 'Imminent and Severe' correction depends what is under stress and not yet disclosed and the impact of this.
> 
> But the US household will not be the saviour for some time with 10% unemployment and 29% negative equity. So 'imminent and stratospheric' growth might also be some time off for the global economy.




*The answer is contagion to the rest of Europe has not been priced in. *This at a time when there are starting to be signs of a mild recovery in US industrials. 

Down we go. What a day for a trader to make a trading error (Proctor and Gamble was down 23% at one stage). Lol; err there is the exit door my friend. 

Greece is to big to fail as all the EU countries  have been lending heavily to each other. It will be interesting to see the impact on European society. Austerity packages and European society to not mix well, the treaty of Versaille being to most obvious example of this.


----------



## Temjin

I clearly remember someone once posted on this thread stating it should be closed because the subject title is no longer relevant as they do not "believe" it will happen anytime soon.

A typical contrarian signal at market tops. 

Trading error or not, the confidence level is already crushed.


----------



## Uncle Festivus

Well it's a correction, and it looks severe, so off we go again.....

Where's all the permabulls gone?


----------



## nomore4s

Uncle Festivus said:


> Well it's a correction, and it looks severe, so off we go again.....
> 
> Where's all the permabulls gone?




Probably the same place all the Doom & Gloomers have been hanging out since March.


----------



## Whiskers

Just on the point of uptomism (or pessimism) and conspiracy theories... for those who are moved predominately by the 'News'...  interesting how the headlines of the day tend to make (or mimic) the market moves with so much volitility around again.

Maybe it's just me, but often I see a headline or story as a narative, of sentiment or the days data releases etc, but wonder how many interpret it more as a still unfolding (selffulling) prediction.

I'm not convinced the Bull is dead just yet. It seems to me there could be further rises in inyernational markets once the Greece bailout is put to bed.

The real test will come a bit later yet, when it's seen whether or not the other debt laden countries do something substantial on their own initiative to increase taxes and cut services, or whether they keep putting it off.

Then there's the corporate regulation improvement issues that have been floundering along a bit too much that Angela Merkel is trying to kick along. If they also don't come to a meaningful fruition, that will no doubt be the fodder for the mother of all market corrections down the track.

But for the time being, I'm not quite sure this little bull run is over yet.


----------



## Aussiejeff

Whiskers said:


> But for the time being, I'm not quite sure this little bull run is over yet.




US market rockets 150+pts in last 1/2 hour of trading???

You win today's bottle of Champers, sir!!!


----------



## lesm

Uncle Festivus said:


> Well it's a correction, and it looks severe, so off we go again.....
> 
> Where's all the permabulls gone?




Possibly on the run from the Bear Cavalry


----------



## Whiskers

Aussiejeff said:


> US market rockets 150+pts in last 1/2 hour of trading???
> 
> You win today's bottle of Champers, sir!!!




Bit early to celebrate yet Aussiejeff... but, I'll keep the bottle of Champers for later, anyway.


----------



## explod

Aussiejeff said:


> US market rockets 150+pts in last 1/2 hour of trading???
> 
> You win today's bottle of Champers, sir!!!




Yep, they are doing a good job of holding fundamentally hot air together and looks like the attemp to regulate the bad guys has not a hope of getting through the Senate.  Then we could have a Presidential decree I suppose.

Anyhow, good luck with the charting but gravity pulls down hard.


----------



## Aussiejeff

explod said:


> Yep, they are doing a good job of holding fundamentally hot air together and looks like the attemp to regulate the bad guys has not a hope of getting through the Senate.  Then we could have a Presidential decree I suppose.
> 
> Anyhow, good luck with the charting but *gravity pulls down hard.*




Looks like the _"gravity"_ of the appalling US jobs data + Eurozone suddenly punch drunk from Hungary's left hook to their glass jaw wins this round! 

Wot?

No Phatt Phinga$ this time?

Oh, maybe $ticky Fingaz??

Or Oily Finga$???


----------



## dutchie

You can tell which way the market is headed by the number of name calling, nasty posts etc that is happening now.


----------



## basilio

In all the kerfuffle over Greece and the rest of the PIIGS we somehow overlooked Hungary!  

So why are we surprised that the whole of Europe is in deep debt and ready to fall over  with the next scare? 

We don't have a financial system. We have a wreck of a financial system held together with smoke and mirrors. Any decent wind and the smoke will disappear, the mirrors fall over and we will all be looking at mountains of worthless scrip.


----------



## wayneL

So really, we have PHIIGS?

or...

PIIGSH(it)?


----------



## explod

basilio said:


> In all the kerfuffle over Greece and the rest of the PIIGS we somehow overlooked Hungary!
> 
> So why are we surprised that the whole of Europe is in deep debt and ready to fall over  with the next scare?
> 
> We don't have a financial system. We have a wreck of a financial system held together with smoke and mirrors. Any decent wind and the smoke will disappear, the mirrors fall over and we will all be looking at mountains of worthless scrip.




And a big add to that "the United States" who in fact have the greatest debt and (aided by the western press) the greatest illusions of all.  Problem is, the reserve currency of the planet is intertwined within the entire developed banking system, so its failure is a horror too great to contemplate.

Meantime the dominos keep stacking beyond the edge on the hot air.  Keep stocking that fire champ.


----------



## skc

basilio said:


> In all the kerfuffle over Greece and the rest of the PIIGS we somehow overlooked Hungary!
> 
> So why are we surprised that the whole of Europe is in deep debt and ready to fall over  with the next scare?
> 
> We don't have a financial system. We have a wreck of a financial system held together with smoke and mirrors. Any decent wind and the smoke will disappear, the mirrors fall over and we will all be looking at mountains of worthless scrip.




Hungary has its own currency so can probably undertake different measures compared to Greece in the Euro zone. The Germans and French won't have to bail out the Hungarians for a start.

I was travelling in Hungary not so long ago - they are quite an unlucky bunch of people in recent history. National psyche is not all that grand imo. They all hope the economic and political situation will improve in a generation's time, but not in the near future.

But for the sake of PIG****, definitely count the Hungarians in.


----------



## Aussiejeff

> *G-20 Coordination Fails as Governments Clash on Recovery Recipe *
> 
> June 7 (Bloomberg) -- Global policy makers are starting to clash over their individual prescriptions for recovery as Europe demands lower budget deficits while the U.S. warns against pushing exports instead of domestic demand.
> 
> At a meeting of Group of 20 finance chiefs in Busan, South Korea, June 4-5, *Treasury Secretary Timothy F. Geithner said the world cannot again bank on the cash-strapped U.S. consumer to drive growth and urged other nations to stimulate their own demand*. European Central Bank President Jean-Claude Trichet said fiscal tightening in “old industrialized economies” would aid the expansion by shoring up investor confidence.
> 
> Each strategy carries threats for the global rebound that the G-20 said faces “significant challenges.” Continued stimulus risks bondholder revolt over rising debt burdens, while spending cutbacks could worsen unemployment. Relying on exports leaves the world prone to trade wars and competitive currency devaluations as countries seek to give their companies an edge.
> 
> “The world may end up in a period of sub-potential growth for two or three years,” said Venkatraman Anantha-Nageswaran, who helps manage about $140 billion in assets as global chief investment officer at Bank Julius Baer & Co. in Singapore. “We need to accept that all of us cannot simultaneously grow our way out of trouble.”



http://www.bloomberg.com/apps/news?pid=20601010&sid=ajCu8.BfseQE

Oh dear. Mr Geithner wants the world to start $elf-$timulating in an orgy of self-protectionism.

This could get REALLY messy now....


----------



## Edwood

http://www.hussmanfunds.com/wmc/wmc100628.htm

its all looking a bit ropey eh - key support levels going, could be time to batten down the hatches


----------



## Bigukraine

Edwood said:


> http://www.hussmanfunds.com/wmc/wmc100628.htm
> 
> its all looking a bit ropey eh - key support levels going, could be time to batten down the hatches




This morninng will be imo very ugly ,the US Market under the 10,000 points,europe looking worse,china figures of growth slump, ... if anyone thought we were on the road to recovery they didn't see the road littered with speed humps....

If this doesn't convince our stupid Aust Govt the folly of the RSPT and the "we will be in surplus by 2013" mantra nothing will....

The world fin markets are on the edge and will remain there for a long time to come yet.... Good luck everyone and hold your nerve and your hats it's the start of GFC mkII


----------



## Aussiejeff

Edwood said:


> http://www.hussmanfunds.com/wmc/wmc100628.htm
> 
> its all looking a bit ropey eh - key support levels going, could be time to batten down the hatches




Thanks for the article link Edwood. This bit is especially worthy of note when considering the veritable Mountains Of Spin that will be thrown at us over coming months by desperate gummints. 



> In short, my concerns about the economy and financial markets are escalating quickly. Given the already vulnerable condition of the U.S. economy, a second phase of weakness would most likely contribute to already troubling levels of mortgage delinquency and foreclosure, and could be expected to push the unemployment rate toward 12%. *It is not useful to rule out unfavorable outcomes simply because they seem unpleasant or unthinkable. It is also not useful to place superstitious hope in the Fed and the Treasury to fix the consequences of irresponsible lending without any ill effect. In the coming quarters, remember that every time you hear an incomprehensibly large bailout commitment from government, it will equate to an unconscionably large extraction of public resources, possibly through overt taxation, but more likely through the long-term destruction of purchasing power*.


----------



## Bushman

US bond yields are pricing in a double dip recession (sub 3%).


----------



## sinner

Bushman said:


> US bond yields are pricing in a double dip recession (sub 3%).




Hi Bushman,

Bond yields are declining sure. The market is demanding less yield to be willing to hold medium/long dated US debt. 

But does that mean the bond market is pricing in a double dip recession?

The yield curve for US certainly does not look like it did in 2008. In fact, the yield curve looks right now just like it did in early 2003 right before the SPX took off from 900something to new all time highs.

If you hold any weight to the sector rotation cyclical view then we are much more likely in the tail end of "Full Recession or beginning "Early recovery" stage than the recessionary stages.


> Full Recession  - Not a good time for businesses or the unemployed. GDP  has been retracting, quarter-over-quarter, interest rates are falling, consumer expectations have bottomed and *the yield curve is normal.*
> Early Recovery -Finally, things are starting to pick up.* Consumer expectations  are rising, industrial production is growing*, interest rates have bottomed and the yield curve is beginning to get steeper.
> Late Recovery -In this stage, interest rates can be rising rapidly, with a flattening yield curve.Consumer expectations are beginning to decline, and industrial production is flat
> Early Recession -This is where things start to go bad for the overall economy. Consumer expectations are at their worst; industrial production is falling; interest rates are at their highest; and the yield curve is flat or even inverted



http://article.wn.com/view/2010/06/16/Industrial_production_rises_12_pct_in_May_l/
http://www.financemarkets.co.uk/2010/06/25/us-consumer-sentiment-up-in-june/






Just a thought that is all.

It is certainly obvious that both money and credit markets are pricing differently to equities - but nobody really knows which is right at this point.


----------



## Edwood

http://seekingalpha.com/instablog/2...-puts-stocks-at-risk-says-veteran-sky-watcher

Hocus pocus maybe, and definitely not tradeable (in my opinion ) - but interesting nun-the-less.... article was written March 31 2010 & called an April / May top & August 1 meltdown


----------



## professor_frink

Edwood said:


> http://seekingalpha.com/instablog/2...-puts-stocks-at-risk-says-veteran-sky-watcher
> 
> Hocus pocus maybe, and definitely not tradeable (in my opinion ) - but interesting nun-the-less.... article was written March 31 2010 & called an April / May top & August 1 meltdown




Ed, I'm more concerned by this little bit:



> We want to talk about the upcoming Cardinal Climax, which you say puts stocks””*and perhaps humanity””in jeopardy*.




That doesn't sound very promising at all!


----------



## Edwood

Hey G, good to see you around  
Yeah I guess it'd be prudent to book something meaningful in the diary now for Aug 1 >> its a Sunday so no markets open >> maybe the event will be on the Monday, could be a good a day to take off & go fishing or something


----------



## Tanaka

Edwood said:


> http://seekingalpha.com/instablog/2...-puts-stocks-at-risk-says-veteran-sky-watcher
> 
> Hocus pocus maybe, and definitely not tradeable (in my opinion ) - but interesting nun-the-less.... article was written March 31 2010 & called an April / May top & August 1 meltdown




 ...could be true  ...reminds me that the planets are aligned by a fibonacci number with the average distance between them equaling 1.618! If you are interested about how numbers affect the market and nature in general, I found 'Fibonacci Analysis' by Constance Brown a good read.


----------



## professor_frink

Edwood said:


> Hey G, good to see you around
> Yeah I guess it'd be prudent to book something meaningful in the diary now for Aug 1 >> its a Sunday so no markets open >> maybe the event will be on the Monday, could be a good a day to take off & go fishing or something




Fishing may not be the best idea if humanity is at risk Ed. Perhaps hiding in a bomb shelter is in order


----------



## Edwood

Tanaka said:


> reminds me that the planets are aligned by a fibonacci number with the average distance between them equaling 1.618! If you are interested about how numbers affect the market and nature in general, I found 'Fibonacci Analysis' by Constance Brown a good read.




Cheers Tanaka - see FTSE has hit some resistance this morning having retraced .618 of the recent decline


----------



## Edwood

professor_frink said:


> Fishing may not be the best idea if humanity is at risk Ed. Perhaps hiding in a bomb shelter is in order




fishing is always a good idea Prof, particularly if the world is about to end - better than going out sitting in an office


----------



## Edwood

well made it through Aug 1 OK - but freakin hell got electrocuted on the 3rd!!  a proper can't-remove-my-hand-from-the-socket & fry me for 15 seconds shock!!  was very lucky to start to lose consciousness, collapsed & fell off the charge.  All checked out on an ECG and all in order.  glad to still be here today


----------



## noie

Geez.. that sound nasty!

at least you are all charged up for the rest of your life


----------



## Edwood

ha ha - yeah, the missus says she hopes I haven't gone all AC-DC on her


----------



## todster

Edwood said:


> ha ha - yeah, the missus says she hopes I haven't gone all AC-DC on her




Lucky your not dedwood


----------



## Edwood

another Hindenburg Omen overnight - that's 4 now, they're clustering....!


----------



## Edwood

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10669448

unfortunately it looks as tho the taxpayer will be on the hook again


----------



## Uncle Festivus

Good effort boys, time to take some profits??

Market sell-offs in the last few months have coincided with Fed meetings ie Ben would like to tell the Market, in a round about sort of way, that we are stuffed! Fire up the copter for some more money drops......in light of such positive economic news - 



> WASHINGTON (MarketWatch) — U.S. house prices fell 0.5% in July to the lowest level in nearly six years, according to data released Wednesday by the Federal Housing Finance Agency.
> 
> U.S. home prices dropped 3.3 percent in July from a year earlier, the eighth consecutive decline , as foreclosed properties flooded the market.






> LONDON (MarketWatch) — Ireland on Tuesday saw its borrowing costs rise, but managed to sell 1.5 billion euros ($2 billion) of government bonds in an auction viewed as an important test of sentiment against a backdrop of renewed worries over euro-zone sovereign debt.
> 
> The average yield on the 2014 bond was 4.77%, while the average yield on the 2018 bond was 6.05%. That compares to an August auction for the 2014 bond that produced a yield of 3.63% and a June sale of the 2018 issue that produced a 5.09% yield.




ie relief that Ireland will now pay 25% more (in 1 month!) in interest for their play money ? Similar story for Portugal. An omen for the US? Compensation for risk and the cost of debt is rising but the stock markets still defy gravity? I forgot - there is a 'recovery' underway, all back to normal??



> U.S. home seizures reached a record for the third time in five months in August as lenders completed the foreclosure process for thousands of delinquent owners, according to RealtyTrac Inc.
> Bank repossessions climbed 25 percent from a year earlier to 95,364, the most since the Irvine, California-based data provider began keeping records in 2005.
> 
> Foreclosures are contributing to a growing housing supply that may add as many as 12 million homes to the U.S. market. Demand is crumbling amid high unemployment and following the expiration of a federal homebuyer tax credit in April. Sales of new and existing homes fell in July to the lowest level on record.
> 
> “We’re on track for a record year for homes in foreclosure and repossessions,” Rick Sharga, RealtyTrac’s senior vice president, said in a telephone interview. “*There is no improvement in the underlying economic conditions*.”




95,000 A MONTH! Nice recovery?


----------



## Whiskers

Uncle Festivus said:


> Good effort boys, time to take some profits??
> 
> Market sell-offs in the last few months have coincided with Fed meetings ie Ben would like to tell the Market, in a round about sort of way, that we are stuffed! Fire up the copter for some more money drops......in light of such positive economic news -
> 
> 
> 
> 
> 
> ie relief that Ireland will now pay 25% more (in 1 month!) in interest for their play money ? Similar story for Portugal. An omen for the US? Compensation for risk and the cost of debt is rising* but the stock markets still defy gravity*? I forgot - there is a 'recovery' underway, all back to normal??
> 
> 
> 
> 95,000 A MONTH! Nice recovery?




Not just stocks... gold, base metals and from an Aus perspective the AUD/USD all together. There seems money everywhere to buy up everything!

I'm thinking the FED has overdone their quantitative easing (QE) a bit atm in a frantic bid to avoid deflation and as you suggest run the risk of everything coming off the boil together and starting another confidence crisis if not financial one.

At the end of the day, the US has to transform their QE into reduced unemployment pretty quickly for it to have any chance of a medium to longer term benifit. I suppose letting the USD slide is also part of their stratergy to help US manufacturing and exporters employ more staff... but will they in the near term!?


----------



## OldFart

I don't know if any of you live in the USA, but in my opinion, there is no recovery in progres here. I live in Florida, and it is very bad right now as far as housing and unemployment, with no relief in sight.

I hope you Aussies are doing better than us.


----------



## Apollo_kk

OF - we seem to be going OK.  Our central bankers have behaved well and much better than Greenspan and big Ben.  The only worry over here is that we are now one big hole - mining.  If China has any problems in the near future then look out below.   I feel for you guys in good ole US of A - people must be hurting bad.


----------



## OldFart

Apollo_kk said:


> OF - we seem to be going OK.  Our central bankers have behaved well and much better than Greenspan and big Ben.  The only worry over here is that we are now one big hole - mining.  If China has any problems in the near future then look out below.   I feel for you guys in good ole US of A - people must be hurting bad.




Greenspan & big Ben...oh God...don't remind me......LOL

Miners in the USA have faired pretty well, for some strange reason. Is it the South American mining that's hurting the Australian miners? I think the Chinese and South America are in cahoots...just opinion.


----------



## Whiskers

OldFart said:


> I don't know if any of you live in the USA, but in my opinion, there is no recovery in progres here.* I live in Florida*, and it is very bad right now as far as housing and unemployment, with no relief in sight.
> 
> I hope you Aussies are doing better than us.




I thought 'oldFart' was classic Aussie slang... so I presumed you were Aussie! 

But now that I think about it, maybe it was English and they exported it to Aus and probably the US too! 

Anyway OldFart, good to have you as an insider on US affairs.


----------



## OldFart

Whiskers said:


> I thought 'oldFart' was classic Aussie slang... so I presumed you were Aussie!
> 
> But now that I think about it, maybe it was English and they exported it to Aus and probably the US too!
> 
> Anyway OldFart, good to have you as an insider on US affairs.




Whiskers,

Thanks for the welcome....


----------



## Edwood

been quiet here lately.  lots of bad news coming out of Europe, would've thought there would be a bit of bearishness amongst the campers - but I guess the little bearded man with the printing machine has everyone thinking we're safe for now


----------



## mr. jeff

Edwood said:


> been quiet here lately.  lots of bad news coming out of Europe, would've thought there would be a bit of bearishness amongst the campers - but I guess the little bearded man with the printing machine has everyone thinking we're safe for now




Yep. Safe as houses. US houses. Good time to buy!


----------



## Whiskers

mr. jeff said:


> Yep. Safe as houses. US houses. Good time to buy!




It seems people are a bit wary of even buying foreclosed houses over there for fear that they might not have been legally foreclosed and sold... ie that they might have to be returned to the original owner.

Still a lot of uncertainty and some big law suits to come.


----------



## sinner

Edwood said:


> been quiet here lately.  lots of bad news coming out of Europe, would've thought there would be a bit of bearishness amongst the campers - but I guess the little bearded man with the printing machine has everyone thinking we're safe for now




So far this year I had three extreme bear signals, one on the DAX night before flash crash, one on the DAX at 6050 and recently one on the SPX at 1180. Only the flash crash trade was profitable. I don't think we're safe for now, I'm just not wasting more money trying to short this until a proper down cycle starts.


----------



## Edwood

http://www.ritholtz.com/blog/2010/11/california-muni-bond-fund-shellacking/

looks like another bear signal for you sinner


----------



## Aussiejeff

Edwood said:


> http://www.ritholtz.com/blog/2010/11/california-muni-bond-fund-shellacking/
> 
> looks like another bear signal for you sinner




Good link.

"Ill be baaaaack" declares fiscal emergency - http://alaricinvestments.blogspot.com/2010/11/who-wants-to-jump-in-front-of-this.html

The court's in session..... here come da Judge!




PS: Another sure bear signal is the recent un-nerving quietness of our Dear Professor Robots. He seems a bit rusty of late... only a few posts a day vs the usual torrent.


----------



## Uncle Festivus

The 'known unknowns' becoming 'known'?

Capitalism is insolvent.......


----------



## wayneL

Uncle Festivus said:


> The 'known unknowns' becoming 'known'?
> 
> Capitalism is insolvent.......




I would argue that what we have is corporate socialism, not true capitalism.


----------



## sinner

Edwood said:


> http://www.ritholtz.com/blog/2010/11/california-muni-bond-fund-shellacking/
> 
> looks like another bear signal for you sinner




As I posted March 2 2010:
http://www.forexfactory.com/showpost.php?p=3512134&postcount=18108


> Alright bugger it. I will make an AUD call and nobody can stop me:
> 
> Until the next major credit crisis occurs in the US (Corporate Bonds blowup or State/Muni Bonds blowup would be my two top picks) the price of AUD will remain coupled to gold and equities prices.
> 
> So until gold is convincingly breaking 1120, don't bother shorting unless you expect to wake up to the next Lehman tomorrow (and hey, I wouldn't fault you).




Apparently, oil priced above $80 is crucifying various economies. With the Euro below 1.36, muni crapout in motion, all we need is the TED spread jumping above 0.2-0.25 and we could see some serious pain.

Liquidity is the key though. Without a liquidity crisis, this will just be a huge range. Euro goes down, therefore German exports pick up, therefore Euro goes up, ad infinitum (and similar such ranging macro flows all over the world).


----------



## Sean K

wayneL said:


> I would argue that what we have is corporate socialism, not true capitalism.



Yep. Maybe this is a Chinese version of  Animal Farm?


----------



## Uncle Festivus

Is it that time of the year again? Only 9 sleeps til Festivus!

It's also that time of the year known as the silly season, and this year is shaping up to be one of the silliest - in financial terms that is. For we find ourselves with compelling fundamentals that Mr Market is simply ignoring or is at least going to have one last hurrah before going out with a good old bang!!

Now the various central banks can paste freshly printed money over any leaks appearing in the debt dykes for as long as the market goes along with the ponzi scheme, but the underlying deteriorating global economy will eventually dictate the terms of capitulation.

Is the global economy deteriorating?

We only have to look at the poster child of 'growth', which when applied to China may or may not mean anything at all as most of their figures are 'made to order', the order of the central gov. Chinas' massive money and goods inflation problem(s), which has resulted in a huge property & infrastructure construction bubble, has not been addressed as they steal one of the capitalists Achilles heals - failing to take the hard decisions. Chinas' version of QE 1 finished last month, so now we wait and see how many bubbles go pop!



> The overdependence on new real estate in China, when the demand isn't there, will cause the nation to eventually "hit a wall," hedge fund manager James Chanos told CNBC Friday.​



http://www.cnbc.com/id/40605908

The US has so many problems it's hard to know where to start!

Property is still taking a fall and will continue to - 



> U.S. home values are poised to drop by more than $1.7 trillion this year amid rising foreclosures and the expiration of homebuyer tax credits, said Zillow Inc., a closely held provider of home price data.
> This year’s estimated decline, more than the $1.05 trillion drop in 2009, brings the loss since the June 2006 home-price peak to $9 trillion, the Seattle-based company said today in a statement.
> “It’s definitely going to continue into 2011,” Stan Humphries, Zillow’s chief economist, said in an interview on Bloomberg Television today. “The back half of 2010 looked horrible and 2011 should look like the mirror image of that.”



Article here

The cost of money is going up! Bond massacre continues......so when will Bernanke start to raise rates - never! Interest on interest now........








Muni debt - Build America Bonds scheme is finishing up end of 2010 - at the lowest level of government they are - _*broke!

*_The US government will most likely raise the budget debt ceiling, somewhere around 16 trillion or so now - the US is insolvent.

Markets at extremes_* - 
*_
VIX getting lower
Commodites longs at all time high
ARMS (TRIN) extreme - an abnormal level of 'up' volume versus 'up' issues ie the old plunge protection team is tricking the market, again
Insider sales continue at vastly disproportionate rate to buys
etc etc

Give it a Christmas rally or so then the fireworks will start in earnest..........??


----------



## Aussiejeff

Heard a rumour that Robots will be posting a pair of cheap, Made-in-China, Rose-tinted glasses to each and every ASF'er for Xmas!

That should brighten us all up for the New Year. 

Thanks, Botty.....



Merry Xmas to all...


----------



## Uncle Festivus

> Adjusted for inflation, the economy is back to its peak prior to the recession of 2008-09




So say's Rupert Murdocks' Perma-Positive plaything Marketwatch. 

Yet it only takes a few minutes to get the facts from the Fed to blow that 'assumption' out of the water, amongst other 'made to measure' data releases interpreted by financial commentators with the usual negative news dismissiveness and anything remotely positive as heralding the end of the global recession. The word 'unexpectantly' will be used a lot in the next few months? 

Time to update the Jaws Of Death, but this time also add a lovely chart for the UK, which possibly is in a worse predicamet, yet employees of 'The City' still blissfully ignorant of pricing in the future further than their next bonus?

US debt = approx 14 TRILLION dollars
UK debt = approx 1 TRILLION pounds


----------



## Uncle Festivus

A great day to lay back & think of England 

There's that word again - *unexpectedly!*

Very bullish news - market must go - UP!

VAT goes up to 20% in Jan.

2011 - the year of payback and reality........



> *UK budget deficit balloons to record high*
> 
> *Britain's public borrowing unexpectedly hit a record £23.3bn in November, the Office for National Statistics (ONS) said on Tuesday. *
> 
> The figure, which *excludes* financial interventions by the Government, was a marked increase on the £17.4bn a year earlier and beat the previous highest monthly borrowing record of £21.1bn in December 2009, according to the official figures.




Full story

Everyones got an opinion - 



> Chinese media reported that Commerce Minister Chen Deming saying that the crisis may worsen in January and February, and that the â‚¬750bn (£635bn) European and International Monetary Fund rescue fund would not solve the problem as the rescue financing would eventually have to be repaid at high interest rates.
> 
> “*These measures just turn an acute disease into a chronic one, and it’s really hard to say whether these countries that are in deep trouble over the debt crisis can recover in the coming three or five years,” Mr Chen was quoted as saying. *




Maybe he should be more concerned with his own backyard, an inflation melt-up, blow-off top, and will have to take the bitter medicine eventually.........

What recovery?


----------



## satanoperca

Cheers Uncle, you make everything sound OK, the UK travelling along well and the US almost back from the jaws of death.

Must return to backtesting of shorting systems for the future that lies ahead. 

May 2011 be a great year for all.


----------



## Garpal Gumnut

Uncle Festivus said:


> A great day to lay back & think of England
> 
> There's that word again - *unexpectedly!*
> 
> Very bullish news - market must go - UP!
> 
> VAT goes up to 20% in Jan.
> 
> 2011 - the year of payback and reality........
> 
> 
> 
> Full story
> 
> Everyones got an opinion -
> 
> 
> 
> Maybe he should be more concerned with his own backyard, an inflation melt-up, blow-off top, and will have to take the bitter medicine eventually.........
> 
> What recovery?
> 
> View attachment 40509




agree Uncle,

All gumnuts back in market.

gg


----------



## Aussiejeff

Uncle Festivus said:


> Maybe he (Chen) should be more concerned with his own backyard, *an inflation melt-up*, blow-off top, and will have to take the bitter medicine eventually.........




Indeed....



> *‘Long-term Battle’*
> 
> China raised gasoline and diesel prices by as much as 4 percent on Dec. 22 to reflect higher global costs of oil. Still, the increase was less than half of the gain in crude prices over the previous month and the nation’s planning agency said it limited the rise because of the “rapid increase in overall prices.”
> 
> The nation must prepare for a “long-term battle” against price increases, Peng Sen, vice chairman of the National Development and Reform Commission, told state television on Dec. 21. The root causes of inflation have yet to be resolved, he said, citing domestic supply shortages, gains in global commodity prices and excessive liquidity.
> 
> Inflation is likely to reach 3.3 percent for the whole of this year, breaching the government’s target of 3 percent, Peng said. The commission raised its expectation of average gains in consumer prices next year to 4 percent, state television reported on Dec. 14.




http://www.bloomberg.com/news/2010-...25-basis-points-in-bid-to-curb-inflation.html

They are reluctantly fiddling with miniscule doses of Chinese medicine. 0.25%? Pffft. Classic Catch-22 situation. The flood of money into China has given them wealth beyond imagination - but it is a double-edged sword that will smite them  hard if they don't curb their binge drinking of too much Capitalist Fizzy Pop. 

It appears interest rates world wide next year (and beyond?) are only going to go one way. As a result, I suspect many economies already screaming out in deep debt are going to start going backwards even faster as the interest repayment bills soar.

Australia will NOT be immune from this.

IMO

Happy New Year?


----------



## xenith69

great time to be in gold then?


----------



## Miner

satanoperca said:


> Must return to backtesting of shorting systems for the future that lies ahead.
> 
> May 2011 be a great year for all.




Satanoperca

greetings for a Happier New Year.
Your shuttle comment on GFC 2 coming is very much frightening. Personally I can only worried the Satan to arrive and can do nothin.
But I am interested to learn your thoughts and readings/analysis to support this wisdom statement . I hate to see you to be right but in this ASF thread there have been excellent comments which should not be discarded. I am treating your one as a valuable and seeking more information.


----------



## GumbyLearner

GumbyLearner said:


> The most populous US states unemployment insurance schemes with some of the highest rates of unemployment are bankrupt.


----------



## GumbyLearner

The Wall Street Money Machine

http://www.propublica.org/series/the-wall-street-money-machine


----------



## Uncle Festivus

> “And so, you know, we’ve just got to juice this, and pump it up, and get it going faster, but that’s clearly the direction that we’re headed.”
> 
> Austan Goolsbee, chairman of the U.S. Council of Economic Advisers, said if Congress fails to raise the debt ceiling, the “impact on the economy would be catastrophic.”
> “I don’t see why anybody’s playing chicken with the debt ceiling,” Goolsbee said today on ABC’s “This Week” program. “If we get to the point where we damage the full faith and credit of the United States, that would be the first default in history caused purely by insanity.”
> 
> The government is slated to hit the legal limit on borrowing, $14.3 trillion, early this year. Congress must agree to raise that ceiling or the U.S. could be forced to default on its obligations.




A shrill cry of desperation as polititians again ponder whether to raise the US debt ceiling to somewhere like $16TRILLION, and the consequences of not raising it. But they have little choice but to continue the Ponzi scheme.



> The U.S. debt will top $13.6 trillion this year and climb to an estimated $19.6 trillion by 2015, according to a Treasury Department report to Congress.
> The report that was sent to lawmakers Friday night with no fanfare said the ratio of debt to the gross domestic product would rise to 102 percent by 2015 from 93 percent this year.




2015! Only 4 years away? Mr Market has not priced that one in yet?

Maybe the 'leaders' have a grand plan? Still, plenty of time to act??



> Bernanke talked about the need for U.S. leaders to take control of the nation’s deficits over the medium term, some three to six years from now, in a way “that will allow us to bring our fiscal house in order over a long period of time.”
> 
> But when asked if the nation has such a plan, or if he’s seen one, Bernanke said: “No. Not yet. I don’t.”




The theme for 2011 continues previous themes - DEBT, Deficits & defaults.......will the REAL GFC stand up?

Fancy Number Machine


----------



## Garpal Gumnut

From today's Wall St. Journal a warning about an imminent correction, a big one.

The VIX presaged the 2007 correction. Low volumes and disinterested investors indicate little strength in the recent bull run.

gg



> Even the optimism of investors””and their complacency about the market's current run””are sell signals, according to some technical analysts. The Chicago Board Options Exchange's Volatility Index, the "fear gauge" known as the VIX, closed on Friday at 15.46, lower than in April and near its lowest level in three years. The VIX has fallen 34.3% since the beginning of the rally in late November.
> 
> The American Association of Individual Investors' weekly survey has registered above-average bullishness for 19 straight weeks, the longest such stretch since 2004. For years, some investors have looked to the AAII survey as a compelling contrarian signal. An ebullient reading often is a clue that the market is due for a fall.
> 
> The VIX can be a contrary indicator, too, reflecting the prices investors are willing to pay for portfolio insurance on the S&P 500. The VIX tends to drop when stocks rise and investors grow less anxious. The last two times the VIX was trading around these levels, the market headed for a tumble””once in April during the Greek debt crisis, and before that in the fall of 2007, just ahead of the subprime crisis woes.
> 
> "The ultimate high tick [on the stock market] usually comes when hardly anyone cares, and our client base is the least engaged in the market as I've ever seen," says Christopher W. Dieterich, technical trading strategist at FBN Securities. "They're monitoring it, but they don't seem to be terribly involved. That's usually how a top feels."


----------



## Uncle Festivus

It doesn't really mean much, along with several other overbought indicators, so long as share prices are rising GG?

I guess that's what $600 BILLION buys you these days 

Smells like a top, looks like a top, but we won't know till it goes POP!



> The market is rallying "as if propelled by some mysterious force," says  Mark Arbeter, the lead technical analyst for Standard & Poor's, who  reckons the market is showing signs of fatigue for the first time in  nine months. A stumble could claw back about half of the S&P 500's  four-month, 23% rally, he says.




Mysterious Force = US Fed...............


----------



## Garpal Gumnut

Uncle Festivus said:


> It doesn't really mean much, along with several other overbought indicators, so long as share prices are rising GG?
> 
> I guess that's what $600 BILLION buys you these days
> 
> Smells like a top, looks like a top, but we won't know till it goes POP!
> 
> 
> 
> Mysterious Force = US Fed...............
> 
> View attachment 40926




As my old mate Joh, used say if it looks like a chook, walks like one, and looks like one,it is a chook. 

All the mugs are in.

This has to be a top. 

gg


----------



## So_Cynical

Uncle Festivus said:


> Smells like a top, looks like a top, but we won't know till it goes POP!




Uncle F .. im not much for advanced chart reading, but aren't the smaller candles (over the last few months) a sign of exhaustion.?


----------



## Garpal Gumnut

So_Cynical said:


> Uncle F .. im not much for advanced chart reading, but aren't the smaller candles (over the last few months) a sign of exhaustion.?




check with Uncle, but it is.

gg


----------



## chrislp

So_Cynical said:


> Uncle F .. im not much for advanced chart reading, but aren't the smaller candles (over the last few months) a sign of exhaustion.?




The chart your'e referring to is in logarithmic scale that is why the candles look so much smaller.


----------



## drsmith

To me, the primary considerations are the stability of chinese economic growth or the impact of inflation on the bond market and asset prices generally.


----------



## satanoperca

Agree with the last few posts, but one must also consider the unprecidented amount of freshly printed $US notes flooding the market that my alter ones analysis of reading charts.

Cheers


----------



## tinhat

I'll join this argument when the XAO hits 5000.


----------



## Garpal Gumnut

satanoperca said:


> Agree with the last few posts, but one must also consider the unprecidented amount of freshly printed $US notes flooding the market that my alter ones analysis of reading charts.
> 
> Cheers




snp mate, the charts factor everything preceding in.

Its in.

Its the funnymentalists who have a short memory and try to predict the far future.

gg

gg


----------



## Uncle Festivus

satanoperca said:


> Agree with the last few posts, but one must also consider the unprecidented amount of freshly printed $US notes flooding the market that my alter ones analysis of reading charts.
> 
> Cheers




I think this aspect, money flooding the market from QE1,2,3 etc, doesn't take into account that the 'too big to fail' US banks are _still_ bleeding from falling home prices, insolvencies and bad loans, and it is only because of the change in accounting rules that allows the banks to report ANY sort of 'profit' when in fact if it were still the 'mark to market' old rules they would be reporting severe losses, still. (Goldman has only just come clean with it's real losses from Sub Prime *recently*)

$600 BILLION does not cover the losses of the system let alone add to liquidity? It's just that the _new_ money is being directed to create bubbles ie hard & soft commodities ie inflation? Netted out, I'm not sure there are vastly more dollars in circulation now than when the GFC Part 1 commenced? I think from memory that the M aggregates data has been showing this?

It's pretty obvious that the banking 'profits' are fictitious and are coming from less provisions for bad loans and accountancy magic and that their cash flows are abysmal. Even 'The Big Squid' can't hide the truth with everything in it's favour....



> Goldman Sachs Group Inc. shares fell the most in almost two months after the firm reported its third straight quarterly earnings decline, led by a slowdown in trading and investment banking revenue.
> Fixed-income, currencies and commodities trading, the firm’s largest source of revenue, tumbled 48 percent from a year earlier to $1.64 billion, the New York-based company said today in a statement. Equities-trading revenue dropped 5 percent to $2 billion and investment banking fell 10 percent to $1.5 billion.



Thanks to IBM and the usual 3pm window dress the *Dow* finished virtually unchanged, while the banks took a hammering. Taking shorts......like *AAPL* last week.....



tinhat said:


> I'll join this argument when the XAO hits 5000.




Can we wait that long


----------



## Gundini

tinhat said:


> I'll join this argument when the XAO hits 5000.






Uncle Festivus said:


> Can we wait that long




Didn't have to wait too long Uncle...


----------



## tinhat

Woo-hoo - let's party. Buy buy buy! Print that money Big Bad Ben!

They're dancing in the streets of Cairo...
They're dancing in the streets of Sana...
They're dancing in the streets of Tunis...
They're dancing on the Arab street.

Food inflation, speculation! Just keep printing that money Big Bad Ben!



Gundini said:


> Didn't have to wait too long Uncle...




No cheating now - I was waiting for the close > 5000.


----------



## Noddy

tinhat said:


> I'll join this argument when the XAO hits 5000.




Reached it today 5001.7


----------



## basilio

Maybe it's time to reconsider the question.  Japan's stock market is falling like a stone. There is a real risk that Toyko Electric Power company (a very, very big company)  could be bankrupted by the consequences of the  disintegration of the nuclear power plants.

For all their resolve and efficiency  the damage caused by the earthquake, tsunami and now nuclear reactor breakdown could unwind Japan's financial stability. And this is the 3rd largest economy in the world.

Where is the good news going to come from ?


----------



## drsmith

basilio said:


> For all their resolve and efficiency  the damage caused by the earthquake, tsunami and now nuclear reactor breakdown could unwind Japan's financial stability. And this is the 3rd largest economy in the world.(



The interesting thing to watch may be for any panic in credit (TED Spread). If that does not happen, then this is most likely just a short term dip.

The terrorist attacks of September 11 2001 on the USA resulted in a sharp dip in share prices, but a recovery quickly followed.


----------



## tothemax6

drsmith said:


> The interesting thing to watch may be for any panic in credit (TED Spread). If that does not happen, then this is most likely just a short term dip.
> 
> The terrorist attacks of September 11 2001 on the USA resulted in a sharp dip in share prices, but a recovery quickly followed.



BOJ will not let that happen, I believe their policy is quite firmly "print money, print money". Or 'provide liquidity' as their governor calls it.


----------



## skc

drsmith said:


> The interesting thing to watch may be for any panic in credit (TED Spread). If that does not happen, then this is most likely just a short term dip.
> 
> The terrorist attacks of September 11 2001 on the USA resulted in a sharp dip in share prices, but a recovery quickly followed.




There are a lot of similarities between this and 9/11... the US market was already in a down trend and dropped ~10% in the following week. Stocks like QBE and QAN absolutely plummeted.  The market then went up ~20% in the following 2 months.

Will history repeat?

Japan is probably in worse shape then US at the time...


----------



## builder2818

skc said:


> There are a lot of similarities between this and 9/11... the US market was already in a down trend and dropped ~10% in the following week. Stocks like QBE and QAN absolutely plummeted.  The market then went up ~20% in the following 2 months.
> 
> Will history repeat?
> 
> Japan is probably in worse shape then US at the time...




If Bob Prechter has finally got his 'Bear Market Correction' theory right this time we are heading for armageddon - AGAIN

I was not surprised to see his email in my junk mail folder speaking about his predictions - he's only been bearish this market since 2009 and seems to need any negative news to reignite a pathetic reason to short this market.

I think this will be a correction that was expected to happen. I am positive on the market, and my prediction on the market is the opposite to the elliot wave subscribers out there. But my timeline is the same - gonna give it 2 or 3 years to see if I am right.


----------



## Whiskers

builder2818 said:


> If Bob Prechter has finally got his 'Bear Market Correction' theory right this time we are heading for armageddon - AGAIN
> 
> I was not surprised to see his email in my junk mail folder speaking about his predictions - he's only been bearish this market since 2009 and seems to need any negative news to reignite a pathetic reason to short this market.
> 
> *I think this will be a correction that was expected to happen. I am positive on the market,* and my prediction on the market is the opposite to the elliot wave subscribers out there. But my timeline is the same - gonna give it 2 or 3 years to see if I am right.




Agree re Pretcher.

I also see this as a minor correction. I think it was always coming with global growth recovering from the GFC forcast to slow down a bit for a couple of years. The Japenese disaster will cause some short term stalling of economic activity, but once the rebuilding starts it will balance out over time.


----------



## Edwood

interesting take on Silver c/- Bigcharts daily timeframe today - clearly dodgy data but likely foretells the shape of things to come


----------



## Uncle Festivus

Edwood said:


> interesting take on Silver c/- Bigcharts daily timeframe today - clearly dodgy data but likely foretells the shape of things to come




? What would that be??


----------



## Edwood

Uncle Festivus said:


> ? What would that be??




silver is in a major bubble
once the DXY turn gets going it will be lights out 
DXY has given turn signals on 5min, 15min & 1hr.  still a bit of work to do on the longer timeframes but looks promising


----------



## Edwood

add in the CME margin changes and the picture is not so shiny any more for Silver


----------



## Market Sniper

Edwood said:


> add in the CME margin changes and the picture is not so shiny any more for Silver




Yeah 3 in 7 days - that we have to shake alot of people out...


----------



## explod

Market Sniper said:


> Yeah 3 in 7 days - that we have to shake alot of people out...




Yep, part of the manipulation to save the bullion banks to the extreme.

However physical holders will win the day eventually.

It took gold 4 attempts over 18 months to break US$1000, it will take awhile I suspect for silver to pass $50


----------



## Edwood

explod said:


> it will take awhile I suspect for silver to pass $50




you could be right Explod, not looking too rosy at the moment


----------



## Edwood

explod said:


> Yep, part of the manipulation to save the bullion banks to the extreme.




out of interest which part was the 'manipulation' do you think?  
looks to me like it was the push up to 50 given how quick it was.  clearly the market doesn't seem to think thats an accurate value given recent behaviour


----------



## Edwood

that big 'dodgy' Big Charts candle slowly getting filled  
but out the bottom bolly now so might see a bounce (for a bit)


----------



## tothemax6

Edwood said:


> out of interest which part was the 'manipulation' do you think?
> looks to me like it was the push up to 50 given how quick it was.  clearly the market doesn't seem to think thats an accurate value given recent behaviour



Yeah whats with the word 'manipulation'? There are so many youtube videos claiming various things are being 'manipulated' by <insert bogey-man here>. Especially gold and silver. Whenever the price is going up they chant "see, we told you so", and whenever the price is going down they chant "the manipulators are doing this!". It's a hoot .
Don't we all 'manipulate' prices when we buy or sell?


----------



## Uncle Festivus

And to think that just when all those 'green shoots' have germinated into a 'recovery', the Fed takes away the drugs? I'm no TA, but the Fed will need to 'support' the Dow above 12500 for the 'recovery' to continue? A little bit of distribution happening.......and a descending triangle.....? 






The debt ceiling is to be debated in CONgress, to ensure CONfidence in $USD's and avoid CONfusion in markets. How long can the Fed CONtinue to CONtrol the DOW? Is it just one, big, CON???

Even though the planets aligned on Friday 13th, the end of the world didn't eventuate. The end of the financial world is a different matter....... 



> WASHINGTON ”” Three days before the US public debt hits its legal limit, US Treasury Secretary Timothy Geithner urged lawmakers to lift the ceiling to ensure *confidence* remains in the world's largest economy.
> 
> "On Monday, May 16 -- just three days from today -- the United States will reach the debt limit set by Congress," Geithner said.
> 
> "I want to again encourage Congress to move as quickly as possible, so that all Americans will remain *confident* that the United States will meet all of its obligations -- not just our interest payments but also our commitments to our seniors," he said.
> The limit will be hit next Monday, after this week's Treasury Department debt auctions are settled.
> 
> Geithner said that because of Congress's failure to act in a timely manner to raise the debt ceiling, the Treasury had begun a series of extraordinary measures that will give the legislature extra time to raise the ceiling and *avert a government default* on its obligations.




Sorry Tim, can't say default, must say 're-profiling'


----------



## cudderbean

>>Even though the planets aligned on Friday 13th, the end of the world didn't eventuate. The end of the financial world is a different matter....... 

Maybe the day will be* 21st May*... a nutty US preacher is predicting the end of the world* in a week’s time*.

Don’t panic yet. He has got it wrong several times previously. http://en.wikipedia.org/wiki/2011_end_times_prediction

Not that I believe such BS but many of his followers do. I’ve even seen adverts for it in the back of taxis here in Thailand. It may be an opportunity to profit from an unusual glitch in the market due to others’ actions.

Catch 22... if he is right, I won’t be around to collect my profits.

See you in hell, folks.  hehe


----------



## davede

Update: Bernanke further warns of potential issues with not raising the debt ceiling:



> Recently, negotiations over our long-run fiscal policies have become tied to the issue of raising the statutory limit for federal debt. I fully understand the desire to use the debt limit deadline to force some necessary and difficult fiscal policy adjustments, but the debt limit is the wrong tool for that important job. Failing to raise the debt ceiling in a timely way would be self-defeating if the objective is to chart a course toward a better fiscal situation for our nation




source: http://www.federalreserve.gov/newsevents/speech/bernanke20110614a.htm


----------



## davo8

Whatever happened to this great old thread?

Seems strangely topical (again).


----------



## Aussiejeff

davo8 said:


> Whatever happened to this great old thread?
> 
> Seems strangely topical (again).




Yeah. Maybe the time for an imminent & severe correction is close at hand. 

C'mon folks. It's only a few piddly % points, after all. We could be down like Argentina last night (-11%!)

But, we are the strongest economy in the world - I believe Waynee babe implicitly - AND the play money is only virtual too, right?


----------



## Broadway

davo8 said:


> Whatever happened to this great old thread?
> 
> Seems strangely topical (again).




Someone always comes back and bumps this thread *after* a 10% fall.

Why not say something before it happens....

And the irony is that its probably time to buy.


----------



## Aussiejeff

Broadway said:


> Someone always comes back and bumps this thread *after* a 10% fall.
> 
> Why not say something before it happens....
> 
> *And the irony is that its probably time to buy.*




Big insto shorters already seen to that. They had to cash their chips sooner or later and with such a large, prolonged short run, the cover rally WAS going to be a biggie. They've made stonking huge profits overnight and will be all cashed up, ready and drooling for the next opportunity to plunge the indexes.... just a matter of economic news & market timing as usual.

The funniest part is that the media NEVER talks about massive short covering "rallies". They always couch such moves in terms like "investors showed faith in stocks around the world" or some such rubbish. Obviously they have never read Share Trading For Dummies 101. 

Getting giddy? I'm orf back to tha cave for a nap..... nothing more to see for a few days... *yawn*

LOL


----------



## davo8

Broadway said:


> Someone always comes back and bumps this thread *after* a 10% fall.
> 
> Why not say something before it happens....
> 
> And the irony is that its probably time to buy.




Point taken. As it happens, I have been expecting this crash for months because of the convergence of the end of QE2 and the debt woes in Euro-land, but I was expecting it in September, after everyone had a nice holiday. Sorry I forgot to mention it on this list. 

Since nobody ever has a crash in August (cuts into your holidays in the Bahamas), I figure all the people in the know actually knew that and tried to get in first. So it's serious.

The only reason to buy now is if you solemnly believe in QE3. I admit to missing most of the V-shaped rally in March 09 because I couldn't believe the US Fed could spend so much money so fast and for so long. TARP, QE1, QE2...

Now there are 2 choices. The charts say this is a bear market with months or years to run. If you buy now, it's because you're expecting a rerun of March 09, or you're very nimble. Which is it?


----------



## drsmith

Some interesting commentary from Marc Faber.

Amongst other things, he describes US long dated treasuries as the short of the century.

http://www.washingtonpost.com/busin...asury-market/2011/08/09/gIQATzsR5I_video.html


----------



## Uncle Festivus

Uncle Festivus said:


> And to think that just when all those 'green shoots' have germinated into a 'recovery', the Fed takes away the drugs? I'm no TA, but the Fed will need to 'support' the Dow above 12500 for the 'recovery' to continue? A little bit of distribution happening.......and a descending triangle.....?






Broadway said:


> Someone always comes back and bumps this thread *after* a 10% fall.
> 
> Why not say something before it happens....
> 
> And the irony is that its probably time to buy.




Well, I gave you the top back then? And still shorter than a midget at a urinal.....

Nothing really new with what's going on, it's been predicted here for several years now. The extra debt just needed time to percolate through the corrupt system into the right pockets, if the money wasn't already there from bailing out the 'too big to fail' banking system?

What's happening now is the gutting of the middle class consumer segment, ie the bit that actually spends money in the economy, and creating an even greater chasm between the rich & the rest. 

It is a structural deformity that cannot be fixed, that is, not without a major failing of the current system, a work in progress???

The Philly Fed Manufacturing Index couldn't have tanked at a worse time in the dead cat bounce cycle - a truly dismal number indicating that the double dip recession is a matter of months away, at least officialy - the US may already be in recession if you strip out all the misdirected stimulis moneys and schemes....

It's soon going to be a free for all in the upper levels of finance & politics - all trying to cover their hides. Meanwhile, if you remember what the LA riots were like you will have an idea of what's about to happen in the US.........the UK was a practice run


----------



## notting

Lynas LYC and Panaust PNA are sitting on support. 
They both had a strong 18months.
So if you wanna put your money where your mouths are.
You could go short them.
I'm too chicken.


----------



## nioka

davo8 said:


> Now there are 2 choices. The charts say this is a bear market with months or years to run. If you buy now, it's because you're expecting a rerun of March 09, or you're very nimble. Which is it?




There is a third choice. Trade between stocks even if it means catching a falling knife. This is a time to trade without the capital gains tax problem. Some stocks fall faster than others. Some offer better value related to the SP at a particular time than others. This is a time to accumulate numbers of shares even if the value is falling. Different stocks have the lemming rush on different days. Fundamentals are important. Research is the key. Know your stocks. Stay cool.

(Look for stocks that will not run short of cash.)


----------



## DB008




----------



## skc

DB008 said:


>





"Governments don't rule the world. Goldman does."

Classic.


----------



## hja

DB008 said:


>





How inspiring to compare it to the 1930s depression 

What's the point of making money if the rest of society falls around him? I suppose he could afford to barricade himself in a castle like a King and get a taster to test all his meals for poison when rioters call for his head. What a vision! 

Well that's how he makes it sound. He could be a lot more tactful than this cocky little show he puts on.

He sounds like a pharmaceutical rep unwittingly showing delight in profiting from sick people's misery.


----------



## Uncle Festivus

hja said:


> How inspiring to compare it to the 1930s depression




Welcome to reality??

Looking for support here otherwise goodbye - time resolution = 2 weeks......


----------



## hja

Uncle Festivus said:


> Welcome to reality??



Except that wasn't the supposed "inspiring" part. His cavalier way of embracing it was... wait, I did make that obvious if you read the rest.

Unless of course you find our demise motivational and something to look forward to.


----------



## nomore4s

hja said:


> Except that wasn't the supposed "inspiring" part. His cavalier way of embracing it was... wait, I did make that obvious if you read the rest.
> 
> Unless of course you find our demise motivational and something to look forward to.




He does make some good points though.
-It is an opportunity.
-There is plenty of prior warning that the chances of a crash and serious depression is quite high so there is time to get positioned to protect your assets and set yourself up to make the most of it.


----------



## Trembling Hand

Ahhh..... Remember the good times when the Bears were right... and telling everyone about it.... 8 years ago!!!

Then remember them telling us about its gonna get worse. 

What has happened to all the bears lately?


----------



## tech/a

It's winter when bears hibernate.
They will be out in summer


----------



## MrBurns

tech/a said:


> It's winter when bears hibernate.
> They will be out in summer



I know exactly where they are, I have BEN and they are on my doorstep.


----------



## noirua




----------



## Miner

noirua said:


>




Thanks, Noriua.
Whereas reading everywhere a correction is at the door and today's share price slump is just the beginning (probably)
However, I have a strong allergy against two experts - Jim Rogers who always predicted negativity knowing it is head or tail. He was so politically bias against Biden and open-handedly called him in many names, I always wondered why we need to listen to this person.
Maybe a coincidence but most of the time I have noticed Jim's interviewers are not experienced male or female but very young (inexperienced ) female journalists. I am not envious however but it shows some trend that Jim avoids experienced journalists excepting the promoters who take glowing interviews.

The second person is Vern - from the day he was born probably all he was calling BEAR.
Apology for my blasting against the two so called experts - as I said it is allergic reaction - No Telfast stops the itching


----------



## barney

Miner said:


> - as I said it is allergic reaction - No Telfast stops the itching




Lol ......


----------



## divs4ever

Miner said:


> Thanks, Noriua.
> Whereas reading everywhere a correction is at the door and today's share price slump is just the beginning (probably)
> However, I have a strong allergy against two experts - Jim Rogers who always predicted negativity knowing it is head or tail. He was so politically bias against Biden and open-handedly called him in many names, I always wondered why we need to listen to this person.
> Maybe a coincidence but most of the time I have noticed Jim's interviewers are not experienced male or female but very young (inexperienced ) female journalists. I am not envious however but it shows some trend that Jim avoids experienced journalists excepting the promoters who take glowing interviews.
> 
> The second person is Vern - from the day he was born probably all he was calling BEAR.
> Apology for my blasting against the two so called experts - as I said it is allergic reaction - No Telfast stops the itching




 now i read somewhere March 2020  was only a sharp correction NOT a full-on crash  , because the market ( i assume the ASX 200 ) did not penetrate convincingly the long-term trend line 

 now IF the XJO is still in a continuing bull trend it isn't very convincing  , HOWEVER if you use the US indexes  you just have to scratch your head in amazement  , the glitch in a l-o-n-g bull run looks a fair comment 

 by the way  i have been waiting for that wretched CRASH since the middle of 2013 .. just as well i disn't rush to cash every 10% drop


----------



## Miner

divs4ever said:


> now i read somewhere March 2020  was only a sharp correction NOT a full-on crash  , because the market ( i assume the ASX 200 ) did not penetrate convincingly the long-term trend line
> 
> now IF the XJO is still in a continuing bull trend it isn't very convincing  , HOWEVER if you use the US indexes  you just have to scratch your head in amazement  , the glitch in a l-o-n-g bull run looks a fair comment
> 
> by the way  i have been waiting for that wretched CRASH since the middle of 2013 .. just as well i disn't rush to cash every 10% drop



@divs4ever  good write up.
Your patience is adorable.
So what do you think now - a crash or still a correction?
I struggle to differentiate a 20 pc as a correction and a crash..
Some thing Luke we were not in a recession on technical grounds?
Thanks in advance.


----------



## divs4ever

Miner said:


> @divs4ever  good write up.
> Your patience is adorable.
> So what do you think now - a crash or still a correction?
> I struggle to differentiate a 20 pc as a correction and a crash..
> Some thing Luke we were not in a recession on technical grounds?
> Thanks in advance.



 well when i first started studying this game i THOUGHT a crash was below 25%   but recently read an article which presented the reasoning that a crash  had to break the long term trend line ( since 2008 ) and used the recent quick recovery to further argue the view 

 so i thought about it  , and asked myself 'what if' the opinion is correct  ??  this time there were NOT major banks falling , major businesses closing spilling out millions of new unemployed , home-owners being evicted in the thousands ( true i never dreamed of the interventions in place for over a year )   the pain that SHOULD have happened to rectify previous excesses , hasn't happened .. yet 

 about now ... gee all my understanding in economics  has been ignored  , debt is now no longer a liability or obligation but a tradeable asset 
 irrational exuberance ..  dystopia , pick a crazy name 

  i see bailouts  , rent moratoriums , mortgage delays  , the Central banks BUYING bonds and mortgage-backed securities  , AND giving short-term emergency loans  billions of dollars a MONTH

 now one thing not ( officially ) widespread is central banks buying company stocks via ETF purchases like Japan has done for years 

( IMO ) the goal-posts have been shifted so far and so often  i can't remember what the playing field looks like 

 my understanding of a crash  .. is that it is loss of faith in the economy ( or market )   , whereas a correction   ( normally ) finds where cautious buyers are willing to come back into the market ( bargains too good to resist )

 think of your favourite stock .. how low would it go  , before you jumped in and bought some with your last thousand dollars ( assuming no terrible company news )

 lets say BHP  which had a mediocre report today  , would you buy at $25  , maybe $20  or would you be too nervous to buy ( the last option is a crash  .. almost not a buyer to be found  anywhere in the market )

 cheers 

 the market SHOULD have imploded ( earnings fell through the floor in many places ) by now but we have had all these extraordinary ( official) interventions  you can bet half this stuff happened behind closed doors in 2008 , but this time we can see the tip of the iceberg


----------



## divs4ever

now in March 2020 i had too many tempting prices to decide between  , but was i terrified about buying  .. not me i normally have very low debt , so no worries  about a nervous banker  ( obviously others following the popular 'easy credit ' style argued by some political leaders  , had a very stressful time  .. as did the lenders ) 

 but where next 

 there is a LOT of future tax-money pulled forward  to intervene almost everywhere , how will it be paid back ?? your children , grand children , great grand children  .. there are roughly 330 million US citizens  and in the last two years they have created at least an extra 10 trillion dollars ( in 'borrowed  money' ) and the US had heavy debt BEFORE all this  , say September 2019 

 BTW this is NOT just a US problem , it is a UK problem , EU problem , Japanese super problem  , and plenty of other nations are on the ropes ( hanging off a cliff )


----------



## Miner

divs4ever said:


> now in March 2020 i had too many tempting prices to decide between  , but was i terrified about buying  .. not me i normally have very low debt , so no worries  about a nervous banker  ( obviously others following the popular 'easy credit ' style argued by some political leaders  , had a very stressful time  .. as did the lenders )
> 
> but where next
> 
> there is a LOT of future tax-money pulled forward  to intervene almost everywhere , how will it be paid back ?? your children , grand children , great grand children  .. there are roughly 330 million US citizens  and in the last two years they have created at least an extra 10 trillion dollars ( in 'borrowed  money' ) and the US had heavy debt BEFORE all this  , say September 2019
> 
> BTW this is NOT just a US problem , it is a UK problem , EU problem , Japanese super problem  , and plenty of other nations are on the ropes ( hanging off a cliff )



Well said @divs4ever for a very thoughtful share. Looks like it is a crash and 1930 is returning.
BTW, welcome to ASF - noticed you only joined today.


----------



## divs4ever

yes i am a refugee  from the Commsec community ( which is closing soon ) and have been a member of some other forums ( some which are fading away ) ( PS i always use a different user name on every account  .. just basic security to me )

 i join them to learn new points of view ( here and internationally )

 i need at least 30 years of wisdom before the train wreck ( i reckon )

  sorry i can't guess what will happen next  , all my reference points are shattered 

 way back about 2018 a few bankers argued they saw no way out without a major war  ( i assume a near global one like WW2  ) , happily that hasn't happened so far 

 but if SOME smart money worked out they were trapped in a very dark place  , where are we now 3 years later 

 thanks for the welcome  , it is nice to see some current share talk ( although i and a big fan of LICs and use ETFs as well )


----------



## Miner

divs4ever said:


> yes i am a refugee  from the Commsec community ( which is closing soon ) and have been a member of some other forums ( some which are fading away ) ( PS i always use a different user name on every account  .. just basic security to me )
> 
> i join them to learn new points of view ( here and internationally )
> 
> i need at least 30 years of wisdom before the train wreck ( i reckon )
> 
> sorry i can't guess what will happen next  , all my reference points are shattered
> 
> way back about 2018 a few bankers argued they saw no way out without a major war  ( i assume a near global one like WW2  ) , happily that hasn't happened so far
> 
> but if SOME smart money worked out they were trapped in a very dark place  , where are we now 3 years later
> 
> thanks for the welcome  , it is nice to see some current share talk ( although i and a big fan of LICs and use ETFs as well )



Nice. Hope our ASF will be enriched with your experience .  This forum is very ably managed by @Joe Blow  with  the support from few other active members. 
Hope you will stay and the ship continue sailing.
BTW saw the commodity prices overnight . Massive change will be seen on asx. 
All the best.


----------



## StockyGuy

Nice little tremor running  thru things ATM.  Most Asian markets finished in red (including ASX), Europeans did, USA futures all in red, important commodities in red (excluding gold, which has turned green again).


----------



## divs4ever

Miner said:


> Nice. Hope our ASF will be enriched with your experience .  This forum is very ably managed by @Joe Blow  with  the support from few other active members.
> Hope you will stay and the ship continue sailing.
> BTW saw the commodity prices overnight . Massive change will be seen on asx.
> All the best.



 am happy to find a forum that isn't a 'boiler room '  , but i don't have that much market experience just realized i had to learn and THINK  quickly to accomplish my aims in 2011  , now if thank helps other novices  , well that's excellent 

  i see 'greedy ' as what is best for YOU ( not owning everything you see )

 staying might be harder  , you don't have Centrelink approve your disability pension in just 6 days ( after the independent consultation  ) because  i am in excellent health .( and i was only applying for sickness benefits to boot )

 now i was ready for a reaction to the yield-curve inversion signal we had  18 months  back  , but no luck there ( except some reasonable gold-producer prices )

 there seems to be a massive disconnect between the market  , and any economy or reality  and i doubt the economy or reality  are going to change to prove the market is correct 

 oil seems too high , gold/silver too low  , and where the hell is all that iron ore going ( i suspect i will NOT like that answer  , but my iron stocks are traveling well currently )

 many G7 nations are printing cash  faster than confetti and a wedding 

 i hope i inspire more novices to ask questions , i have learned so much from novices  doing stuff i hadn't previously thought about 

what i HAVEN'T noticed much lately  are producers  mentioning their hedging contracts  , surely they are locking in some  future income in such a climate


----------



## aus_trader

StockyGuy said:


> Nice little tremor running  thru things ATM.  Most Asian markets finished in red (including ASX), Europeans did, USA futures all in red, important commodities in red (excluding gold, which has turned green again).



Certainly turned to reality as predicted by the futures...


----------



## greggles

You know a market correction can't be too far away when even CNN is talking about a correction being "right around the corner".

A stock market correction may be right around the corner

We've all had plenty of warning about this one. The pain is starting to set in as the economic stimulus in the US is wound down.


----------



## Dona Ferentes

He's at it again



> Jeremy Grantham, the famed investor who for decades has been calling market bubbles, said the historic collapse in stocks he predicted a year ago is under way and even intervention by the Federal Reserve cannot prevent an eventual plunge of almost 50 per cent.
> In a note posted on Thursday (Friday AEDT), Grantham, the co-founder of Boston asset manager GMO, describes US stocks as being in a “super bubble”, only the fourth of the past century.
> And just as they did in the crash of 1929, the dotcom bust of 2000 and the financial crisis of 2008, he is certain this bubble will burst, sending indexes back to statistical norms and possibly further.
> That, he said, involves the S&P 500 dropping some 45 per cent from Wednesday’s close – and 48 per cent from its January 4 peak – to a level of 2500. The Nasdaq Composite, already down 8.3 per cent this month, may sustain an even bigger correction.
> 
> “I wasn’t quite as certain about this bubble a year ago as I had been about the tech bubble of 2000, or as I had been in Japan, or as I had been in the housing bubble of 2007,” Mr Grantham said in a Bloomberg interview. “I felt highly likely, but perhaps not nearly certain. Today, I feel it is just about nearly certain.”






> In Grantham’s analysis, the evidence is abundant. The first sign of trouble he points to came last February, when dozens of the most speculative stocks began falling.
> One proxy, Cathie Wood’s Ark Innovation ETF, has since tumbled by 52 per cent. Next, the Russell 2000, an index of mid-cap equities that typically outperforms in a bull market, trailed the S&P 500 in 2021.
> Finally, there was what Mr Grantham calls the kind of “crazy investor behaviour” indicative of a late-stage bubble: meme stocks, a buying frenzy in electric-vehicle names, the rise of nonsensical cryptocurrencies such as dogecoin and multimillion-dollar prices for non-fungible tokens, or NFTs.
> “This checklist for a super bubble running through its phases is now complete and the wild rumpus can begin at any time,” Mr Grantham, 83, writes in his note. “When pessimism returns to markets, we face the largest potential markdown of perceived wealth in US history.”
> It could, he said, rival the impact of the dual collapse of Japanese stocks and real estate in the late 1980s. Not only are equities in a super bubble, according to Mr Grantham there’s also a bubble in bonds, “the broadest and most extreme” bubble ever in global real estate and an “incipient bubble” in commodity prices.
> 
> Even without a full reversion back to statistical trends, he calculates that losses in the US alone may reach $US35 trillion ($48 trillion).
> Mr Grantham is a dyed-in-the-wool value manager who has been investing for 50 years and calling bubbles for almost as long. He knows his predictions are fodder for sceptics.






> One obvious question: How could the S&P 500 advance 26.9 per cent in 2021 – its seventh-best performance in 50 years – if stocks were poised to plummet?
> Rather than disprove his thesis, Grantham said the strength in blue-chip stocks at a time of weakness in speculative bets only reinforces it.
> “This has been exactly how the great bubbles have broken,” he said. “In 1929, the flakes were down for the year before the market broke, they were down 30 per cent. The year before they’d been up 85 per cent, they had crushed the market.”
> 
> Seeing the same pattern that played out in every past super bubble is what gives him so much confidence in predicting this one will implode similarly.
> Mr Grantham pins the blame for bubbles of the past 25 years mostly on bad monetary policy. Ever since Alan Greenspan was Fed chairman, he argues, the central bank has “aided and abetted” the formation of successive bubbles by first making money too cheap and then rushing to bail out markets when corrections followed.
> 
> Now, investors may no longer be able to count on that implied put. Inflation running at the fastest clip in four decades “limits” the Fed’s ability to stimulate the economy by cutting rates or buying assets, Mr Grantham said.
> “They will try, they will have some effect,” he added. “There is some element of the put left. It is just heavily compromised.”
> 
> Under these conditions, the traditional 60/40 portfolio of stocks offset by bonds offers so little protection it is “absolutely useless”, Mr Grantham said.
> He advises selling US equities in favour of stocks trading at cheaper valuations in Japan and emerging markets, owning resources for inflation protection, holding some gold and silver, and raising cash to deploy when prices are once again attractive.
> “Everything has consequences and the consequences this time may or may not include some intractable inflation,” Mr Grantham writes.
> “But it has already definitely included the most dangerous breadth of asset overpricing in financial history.”
> 
> _Bloomberg_


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## finicky

I was on a phone hook-up with Jeremy Grantham. The old man has put out almost word for word what I said (unattributed)


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