# Boom or Bust?



## michael_selway (17 July 2006)

Boom or Bust?

http://sixtyminutes.ninemsn.com.au/sixtyminutes/stories/2006_07_16/story_1705.asp

Boomtime 
July 16, 2006 
Reporter: Ross Greenwood Producer: Nick Greenaway 

Mining 

This is as good as it gets. We're filthy rich. As fast as we can dig it up ”” iron ore, gold, nickel ”” you name it, we're selling it. 

The figures are just staggering. This boom is making $1000 a second. 

What's the secret of our success? Quite simply, China and its wild rush to capitalism. 

For us, this is the promised land, where the newly-rich middle class numbers 250 million. That's right, 250 million and they want to spend like mad. So, what's in it for you and me? 

After a mind-boggling journey through China and the far north-west of Australia, the Nine Network's financial editor Ross Greenwood has the answer.  

mms://netshow.ninemsn.com.au/60_min/2006/060717_60_boomtime.wmv







OR still 1 more up leg left?

Look at 1987 that little volatile bit, we are there atm? 

Then one more leg up for about 6-12 months, then crash?

So looks like crash in 2007, what do u guys think?

Cant believe the guy below is right? how do we prove him wrong?

http://www.depression2007.com

thx

MS


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## mit (17 July 2006)

Michael,

The recent bull market looks impresssive in absolute terms but the pre-1987 runnup was much more impressive in percentage terms. Change the scale to a log graph to get what the proportions look like.

MIT


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## Realist (18 July 2006)

This is ridiculous tripe designed to scare amateurs.

First of all he said "I predicted this, I predicted that"  Where are the facts he predcited this and that exactly?

Any idiot can tell you house prices will go up soon, and the sharemarket will correct itself soon. They always do and always will!!

Anyone who thinks we'll be in depression in 2007 needs their head read!!

As the CEO of Bluescope said, in 1890 Europeans were telling everyone that the new world's growth, i.e. the USA, was just a one off trend that would never last. Europe is where it is at financially and it'll always be that way.

Of course now the USA is more powerful than the whole of Europe combined.

That trend lasted over 100 years and is still going.

Anyone who thinks China's demand for resources is a 3 year trend is dreaming, they could quite easily be growing for the next 150 years along with India.

Where will the 2.5 billion Indians and Chinese get their resources to build buildings, power plants, jewellery, computer parts etc?  

Well they'll get alot of them off 20 million Aussies.     

Depression my ass!!  It's boom times for the rest of our lives possibly!


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## wayneL (18 July 2006)

Realist said:
			
		

> This is ridiculous tripe designed to scare amateurs.
> 
> First of all he said "I predicted this, I predicted that"  Where are the facts he predcited this and that exactly?
> 
> ...




....says the most experienced investor of our time! Why, you know more than even George Soros!  

By commentary such as that above you show your inexperience.

Cheers


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## Realist (18 July 2006)

wayneL said:
			
		

> ....says the most experienced investor of our time! Why, you know more than even George Soros!
> 
> By commentary such as that above you show your inexperience.
> 
> Cheers





Wayne, you are like chicken little,  "the sky is falling, the sky is falling."

In no way is it ridiculous to assume that Australia and Australians will only get wealthier over time.

It has happend for the past 70 years, why would it not continue to happen for many more years?

Sure there'll be minor corrections and minor booms. But over time people will get richer in Australia - there is no doubt about it.

What trends, facts or fundamentals are you basing this "sky is falling" theory on?

My facts are there for all to see. The average Aussie is way way richer than they were 30 years ago. What makes you think things will change?  And when will things change exactly?


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## RickG (18 July 2006)

Well the way I read that article he has got 5 things correct... out of how many I wonder  :evilburn: 

But this guy lost me at the end when he said :

_"You are going to learn that income tax (and the iniquitous GST) is neither legal nor necessary nor moral. The "tax cheats" are not those who try and hang on to the fruits of their own labour, as is their God-given right, "protected" by the "constitution" in most countries. The real "tax cheats" are the ones who impose it dishonestly and collect it and call Aussie Battlers "tax cheats.""_


To tell the truth I have no idea who this guy is, but after reading this tripe, geez I wouldnt waste my money subscribing.  There is just so much wrong with it.


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## wayneL (18 July 2006)

Realist said:
			
		

> Wayne, you are like chicken little,  "the sky is falling, the sky is falling."
> 
> In no way is it ridiculous to assume that Australia and Australians will only get wealthier over time.
> 
> ...




Realist,

I find your username quite ironic. Your style of debating does not display any rational thought, analysis, or the ability to see things other than what you want to believe. Trotting out the "chicken little" analogy confirms a closed mind.

Therefore I will not indulge in an exercize in futility. Do your own research.

Cheesr


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## Realist (18 July 2006)

wayneL said:
			
		

> Therefore I will not indulge in an exercize in futility.




I didn't think you would respond Wayne.

In poker terms, I raised you, and you folded.


You have no facts on why Australia would face a depression in the near future because quite simply there aren't any.


You bluffed, and you got called - simple as that.


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## wayneL (18 July 2006)

Realist said:
			
		

> I didn't think you would respond Wayne.
> 
> In poker terms, I raised you, and you folded.
> 
> ...




ROFL You remind me of "chemical" Ali.

No, it simply profits me not to argue. Why do I need to convince you against your will? I don't; no profit in that. Just had to point out the silliness of your statement above.

Professionals hedge. Amateurs hope.


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## Realist (18 July 2006)

Well, we'll have to agee to disagree. No probs.    

But I am interested in when and why there will be a bust - not (just) to argue, but on the chance you are right I'd like to know.


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## Smurf1976 (18 July 2006)

A phsical shortage of oil would virtually guarantee a worldwide economic bust. It is not simply a case of having to pay higher prices, in the event of serious shortage it is a case of having to use less, possibly quite a lot less if events in the Middle East turn nasty. Since practically all economic activity consumes energy and virtually all transport relies on oil, that means lower production of goods and services - the very definition of a recession (or depression if it's serious).

What are the chances of this? Next few years it's anyone's guess. Look ahead 10 or 20 years and it's highly unlikely that China can grow its oil consumption without a corresponding fall elsewhere (most notably in the USA). The supply simply isn't there to back up rising demand and, so far at least, is not being built on anywhere near a sufficient scale.

A risk that is difficult to quantify but a real one nonetheless. Never before has the world faced a serious, prolonged energy constraint - with the combined effects of 43 years of declining oil discoveries (trend terms) and climate change, we seem likely to be in truly uncharted waters in the years ahead.


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## Realist (18 July 2006)

Well price does come into it. Oil from the middle east is cheap but Canada has so much oil shale it could run the world itself for quite a while, even coal can be turned into diesel, and there is one hell of alot of oil elsewhere.

I can not see there being a "huge" oil shortage. It may get very expensive, we wont run out of it though.


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## YOUNG_TRADER (18 July 2006)

Realist said:
			
		

> Well price does come into it. Oil from the middle east is cheap but Canada has so much oil shale it could run the world itself for quite a while, even coal can be turned into diesel, and there is one hell of alot of oil elsewhere.
> 
> I can not see there being a "huge" oil shortage. It may get very expensive, we wont run out of it though.




He's right, at prices above $55 US bl Canadian Tar Sands, US Shale Oil and Coal to Oil Conversions are all economic and effcient, 

Why hasn't it happened yet? Why hasn't the world startd scrambling for these alternatives? Because the world thinks $55 + prices aren't here for long, they think long term Oil prices will drop below $50 a bl, so once the world accepts its fate we'll see a race to develop these new sources


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## swingstar (18 July 2006)

Realist said:
			
		

> You have no facts on why Australia would face a depression in the near future because quite simply there aren't any.




There are no facts. It's based on a relatively new study. Up to you if you want to research it or not.


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## Smurf1976 (18 July 2006)

All it takes is one war that blocks exports via sea from the Middle East and there's your oil shortage. Quite possible given the tensions there. 

Oil prices are up 600% from their lows so far and still rising. What happens if we go up another 600% from where we are now?   

I suppose we could all borrow money on the basis of the growing equity in the tank...    

I'm not saying that there WILL be a major oil shortage but the fundamentals of resource availability are far more supportive of a boom in oil prices than they are of a boom in the price of zinc, houses, coal, iron ore etc. With all those it is just a matter of building more or opening more mines whereas conventional oil production is limited by the lack of large undeveloped known resources.


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## CanOz (18 July 2006)

The only problem is that events of this nature also scare away investors....so until they come back, share prices suffer. I think the general outlook for oil will be bullish until we run out, but the geopolitical spikes won't always result in share price gains. In a way your right about the 'tank'. If you could buy oil, or better if you buy and trade oil futures, you could make some money.


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## wayneL (18 July 2006)

The thing is, permabulls suffer in recessions, because they fail to recognise the possibility of anything but rampant growth.

This is why Wall St bankers jumped out of windows in 1929. 

These days the retail traders has enourmous capacity to hedge their investments and even take advantage of downside.

It's true I am very bearish on the world economy, but I would be stupid in the extreme to discount the possibility of further upside. 

Bulls should have the same attitude. To discount the possibility of a recession/depression.... well, need I say more? 

Many people prosper in recessions. It is those who are prepared, that do so.

Cheers


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## bunyip (18 July 2006)

I personally have no idea if the forecast of a coming depression will be proven correct. But to discount it as being a virtual impossibility is none too bright.
Oil prices are a concern.....some forecasts suggest that petrol will go to $5 or $6 a litre in the next two or three years. If this proves to be correct, that alone would clearly have a serious effect on world economies.

In the roaring 20's nobody thought a depression was just around the corner in the 1930's. 
We're now in another roaring 20's situation, at least in Australia. Only a fool would think it can last indefinitely.

I really have no idea if we'll be in recession or depression this time next year. I'm just damn pleased I had considerable practise in shorting the market in 2002. I'll do the same again next time around, in fact I'm already doing it.

Recessions/depressions and bear markets can provide abundant opportunites for profiting from the financial markets.

Bunyip


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## CanOz (18 July 2006)

So are you shorting stocks, CFDs or trading options?


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## Realist (18 July 2006)

wayneL said:
			
		

> To discount the possibility of a recession/depression.... well, need I say more?




It is like a car driver discounting the possibility of dying in a car accident. It is of course very possible, statistics prove that. But worrying about it is utterly pointless. Even preparing for it by wearing a crash helmet, flame proof suit and driving at 20km/ph in a large bus so you are safer is ridiculous. If it happens to you so be it.

Live for the moment, and enjoy the moment!!  There's only one certainty in life, and that is you wont be around forever, and forever worrying about what might possibly happen in the future will spoil the good times you have now.


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## michael_selway (18 July 2006)

Realist said:
			
		

> There's only one certainty in life, and that is you wont be around forever, and forever worrying about what might possibly happen in the future will spoil the good times you have now.




ACctually i think theres 2 certainties in life, "death and taxes"   

thx

MS


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## Realist (19 July 2006)

michael_selway said:
			
		

> ACctually i think theres 2 certainties in life, "death and taxes"
> 
> thx
> 
> MS




Those that are unemployed, die as children, or live in the Bahamas or Cayman Islands would disagree of course.    



The only certainty in life is death.


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## wayneL (19 July 2006)

Realist said:
			
		

> It is like a car driver discounting the possibility of dying in a car accident. It is of course very possible, statistics prove that. But worrying about it is utterly pointless. Even preparing for it by wearing a crash helmet, flame proof suit and driving at 20km/ph in a large bus so you are safer is ridiculous. If it happens to you so be it.
> 
> Live for the moment, and enjoy the moment!!  There's only one certainty in life, and that is you wont be around forever, and forever worrying about what might possibly happen in the future will spoil the good times you have now.




Realist,

When one uses metaphore, there must be at least a reasonable parallel. At least this time you are closer than you think.

I can think of several gentlemen (and even some ladies I am given to understand) who do at least some of what you suggest. Mind you they don't ride around in buses. They ride around in the fine machines built by Ferrari et al.

Maybe that is the key do our different approaches. You seem to be content with the bus. I like something a bit racier.

Hence, it's crash helmet and flame proof suit for me. It appears it is me who lives for the moment, rather than for some distant retirement, don't you think?

Cheers


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## swingstar (19 July 2006)

Who's worrying anyway? As much as I wouldn't want to live through a depression, I still see it as great an opportunity as a continuous boom.


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## wayneL (19 July 2006)

swingstar said:
			
		

> Who's worrying anyway? As much as I wouldn't want to live through a depression, I still see it as great an opportunity as a continuous boom.




Exactly Swingstar.


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## clowboy (19 July 2006)

Wayne L,

"Many people prosper in recessions. It is those who are prepared, that do so."

As our resident bear I would be interested in your opinion as to how one prepares to "prosper" in a recession/depression?

Thanx


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## wayneL (19 July 2006)

clowboy said:
			
		

> Wayne L,
> 
> "Many people prosper in recessions. It is those who are prepared, that do so."
> 
> ...




For a trader, it should be business as usual, with two provisos.

1/ Have the ability to trade long and short

2/ Look outside the share market, to futures. The reason being, volume in a bear market gets very low in shares.

Otherwise, apparently booze sells pretty well in a recession... and there must be other stuff depressed people buy... a matter of research.

I'm happy to stay in derivatives trading... It's an ideal spot to handle a recession from  

Cheers


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## bunyip (19 July 2006)

CanOz said:
			
		

> So are you shorting stocks, CFDs or trading options?




I'm shorting CFD's on US stocks. There are thousands to choose from. 
I'll be delighted if the bear market continues. 
I'll be delighted if we go back into a bull market. 
I don't care which way it goes, I'll just trade it as it comes.

Bunyip


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## bunyip (19 July 2006)

wayneL said:
			
		

> For a trader, it should be business as usual, with two provisos.
> 
> 1/ Have the ability to trade long and short
> 
> ...




My thoughts exactly Wayne. Competent traders will clean up in a bear market or a recession/depression. 
It's the longer term hold and hope investors who stand to cop a real mauling, as past recessions/depressions and market slumps have proved.

After the 87 crash it took more than six years for the market to regain its losses. 
It took much longer to rebound from the 1929 crash.....decades later, the market was still below its pre-crash levels.
Many of the hold and hope investors who sunk money into the market before the '29 crash would have died of old age without recouping their losses.

It happened so long ago that the investment world has been lulled into complacency and believes it can't happen again. WRONG! It can happen again and it will ! When, I have no idea, but one day the buy and hold brigade could be in for a rude awakening.

Bunyip


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## Realist (19 July 2006)

wayneL said:
			
		

> It appears it is me who lives for the moment, rather than for some distant retirement, don't you think?




That is a good point Wayne, and it is the one thing that I hate about "investing".

If you put extra money into super BEFORE tax and you invest in boring and solid shares and reinvest dividends and just leave them, and you drive an oldish cheap car and buy a house and pay off the mortgage you are almost guaranteed to retire rich.

The problem is you live poor for 35 years and have no fun. you could carck it the day beofre you turn 65 and have almost ruined your life by being so cheap and boring.

It sucks I agree.     


But I suppose, once you get your plan started and have some funds in your super and investment accounts, and probably own a house, you can punt and trade away merrily with smaller amounts safe in the knowledge you have a solid nest egg waiting for you in latter life no matter what happens.  Graham himself knows the human weaknesses very well, he knows temptation and curiosity kicks in and he recommends the average person does speculate with 10% of their money - not for gain but for sheer fun and to appease the curiosity. He believes they are better off financially longterm not speculating at all though.


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## clowboy (19 July 2006)

Forgive me for my lack of knowledge with regards to options etc but,

If the recession was bad enough to take out some banks/finacial institutions and you where shorting stocks with such bank, where would that leave you?

Is it possible to lose money in this way?

As for beer, hmm should I start a wheat crop or start hoarding beer itself?


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## Realist (19 July 2006)

clowboy said:
			
		

> As for beer, hmm should I start a wheat crop or start hoarding beer itself?




Well I own FGL.

Should I start looking at buying into debt collecting agencies, repossesion companies, privatised jails, or investing in homeless shelters?


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## YOUNG_TRADER (19 July 2006)

Realist said:
			
		

> Well I own FGL.
> 
> Should I start looking at buying into debt collecting agencies?





Yeah buy KIA Knights Insolvency, oh wait there insolvent themselves!


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## silence (19 July 2006)

clowboy said:
			
		

> Forgive me for my lack of knowledge with regards to options etc but,
> 
> If the recession was bad enough to take out some banks/finacial institutions and you where shorting stocks with such bank, where would that leave you?
> 
> Is it possible to lose money in this way?





Correct me if I'm wrong, but if that happened you would get to keep 100% of the value of the shares.


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## bunyip (19 July 2006)

clowboy said:
			
		

> Forgive me for my lack of knowledge with regards to options etc but,
> 
> If the recession was bad enough to take out some banks/finacial institutions and you where shorting stocks with such bank, where would that leave you?
> 
> ...





With CFD's on stocks, if you're holding a short position in a company that goes broke, it's the best possible situation you can be in, according to two CFD brokers I spoke to. 
Say you went short with CFD's on a stock at $10, and you're still holding your short position when the company goes broke. Your trade is closed at a price of zero. Effectively you've paid zero for your position, and sold it at $10. Your profit is 100% of the price at which you went short.

However, you can't realise your profit until the liquidation process has been completed. This could happen quite quickly, or it could take quite a while. HWE was wound up in a few months after it went broke, meaning that short CFD holders got their hands on their profit fairly quickly.
The liquidation process in SGW is still going on, meaning that holders of SGW CFD short positions have been kept waiting for a considerable time for their profits.

Bunyip


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## Realist (19 July 2006)

The interesting thing about shorting is that the most you can ever make in any transaction is about 48% (after tax and fees)

That is if the company you buy goes under you get 100%minus fees of say 4% divided by 2 cause of tax = 48%.

Of course going long you always have that chance of a 10 bagger..  

Go Loooooooooooooong I say.*    

(*In no way do I know anything about going short - never done it, probably never will   )


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## Magdoran (19 July 2006)

bunyip said:
			
		

> With CFD's on stocks, if you're holding a short position in a company that goes broke, it's the best possible situation you can be in, according to two CFD brokers I spoke to.
> Say you went short with CFD's on a stock at $10, and you're still holding your short position when the company goes broke. Your trade is closed at a price of zero. Effectively you've paid zero for your position, and sold it at $10. Your profit is 100% of the price at which you went short.
> 
> However, you can't realise your profit until the liquidation process has been completed. This could happen quite quickly, or it could take quite a while. HWE was wound up in a few months after it went broke, meaning that short CFD holders got their hands on their profit fairly quickly.
> ...




Indeed, but if you held a put, you could exercise it and settle at T+1!


Magdoran


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## Magdoran (19 July 2006)

The issue of shorting needs to be cleared up:

If you sold BHP short today (and could hold above the 3 day ASX limit), at $27.23, and BHP went to $0.10, you could buy back to close with a gross return of $27.13 per share, less brokerage.  

The tax on this will vary depending on the way a person's finance is structured.  Traders for instance may be structured to count this as income, and not be subject to CGT.

Now if for example an August $25 put was purchased today at close at $0.48 ($480 per contract), and BHP fell to 0.10 tomorrow, depending on volatility the put may be worth around $24,420, a return of 5,087.50%.

Now I’m not suggesting this is likely, it isn’t.  But it illustrates the mechanics of some of the bearish strategies open to play the short side of the market.


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## wayneL (19 July 2006)

Realist said:
			
		

> The interesting thing about shorting is that the most you can ever make in any transaction is about 48% (after tax and fees)
> 
> That is if the company you buy goes under you get 100%minus fees of say 4% divided by 2 cause of tax = 48%.
> 
> ...




There is no question about those mathematics. I've brought this up many times before.

Longterm trend followers won't find a lot of advantage with shorting.

Swing trading is a whole 'nuther story however. I have consistently made most of my money from shorting the market. Yes have had a few multibaggers from longs (unleveraged) but bottom line, shorts win... for me anyway.

Add in leverage (as Mag points out) and going short and long makes a lot of sense for a full time trader... in fact, it is essential if you make your income from trading.

Cheers


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## Magdoran (19 July 2006)

Smurf1976 said:
			
		

> A phsical shortage of oil would virtually guarantee a worldwide economic bust. It is not simply a case of having to pay higher prices, in the event of serious shortage it is a case of having to use less, possibly quite a lot less if events in the Middle East turn nasty. Since practically all economic activity consumes energy and virtually all transport relies on oil, that means lower production of goods and services - the very definition of a recession (or depression if it's serious).
> 
> What are the chances of this? Next few years it's anyone's guess. Look ahead 10 or 20 years and it's highly unlikely that China can grow its oil consumption without a corresponding fall elsewhere (most notably in the USA). The supply simply isn't there to back up rising demand and, so far at least, is not being built on anywhere near a sufficient scale.
> 
> A risk that is difficult to quantify but a real one nonetheless. Never before has the world faced a serious, prolonged energy constraint - with the combined effects of 43 years of declining oil discoveries (trend terms) and climate change, we seem likely to be in truly uncharted waters in the years ahead.




Well said Smurf1976, fully agree with you...


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## Smurf1976 (1 August 2006)

Are we heading for rising unemployment? 

It's only anecdotal but this morning on talkback radio there was one of those "Joe* needs a job, does anyone have a job for Joe, will do anything and wants to work" etc calls. Haven't heard radio stations trying to match people with jobs for years and it immediately remineded me of the early 1990's. The person who called was based somewhere in regional NSW.

Is this just a one off or the sign of things to come? I noticed that the government has been arguing that unemployment is already rising in relation to the low paid workers pay claim.

*Not the caller's real name. Can't remember what their name was.


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## michael_selway (5 August 2006)

Smurf1976 said:
			
		

> Are we heading for rising unemployment?
> 
> It's only anecdotal but this morning on talkback radio there was one of those "Joe* needs a job, does anyone have a job for Joe, will do anything and wants to work" etc calls. Haven't heard radio stations trying to match people with jobs for years and it immediately remineded me of the early 1990's. The person who called was based somewhere in regional NSW.
> 
> ...




This might help solve the oil crises?



> Coal-To-Oil: Linc Energy Aspires To World Leadership
> FN Arena News - August 05 2006
> 
> By Greg Peel
> ...




http://www.fnarena.com/index2.cfm?type=dsp_newsitem&n=DCB1667B-17A4-1130-F573001DBFC7B7A4


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## michael_selway (26 August 2006)

> Nouriel believes US housing slowdown the worst in 40 years > recession in 2007.
> 
> here is article;
> 
> ...




Crazy any chance maybe that the below is right?

http://www.depression2007.com/

thx

MS


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## Smurf1976 (26 August 2006)

michael_selway said:
			
		

> This might help solve the oil crises?
> 
> 
> 
> http://www.fnarena.com/index2.cfm?type=dsp_newsitem&n=DCB1667B-17A4-1130-F573001DBFC7B7A4



The company says that the process is "five times more efficient than a coal burning power station". Given that a new black coal-fired power station has an efficiency around 40% and that the least efficient plant in service in Australia has efficiency around 27%, that's quite simply outright nonsense. You're just not going to get efficiency over 100% without some very "creative accounting".

As for the process, I can't see any reason to doubt that it works in a technical sense. But it's troublesome in terms of net energy yield and environmental impact.

The basic principle of coal gassification is anything but new. Reticulated gas for household use ("Town Gas") used to be produced from coal in Australian cities until 1964 (Hobart), 1969 (Bris, Melb, Adelaide), 1971 (Perth), 1976 (Sydney), 1978 (Launceston)) with those operations dating back to 1854 in Launceston (and even earlier in Sydney I think).

Whilst the process being used is different, it's coal gassification nonetheless. As for converting synthesis gas into liquid fuels, again nothing new. It dates back to the early 20th century as a technology and is the basis of virtually all methanol production (though that starts with natural gas as feedstock).

The questions relate to (1) financial viability (2) energy cost viability (if the yield is negative then it's pointless at ANY financial price) (3) scale and (4) environmental impact. 

Point 1 is probably doable at a moderate price.

Point 2 is THE big question about this technology and even the company's statements aren't too encouraging with comments about not much more out than goes in. Given that what goes in must itself be source from (most likely coal) it does raise serious doubts.

Point 3 is unlikely to be sufficient within the next 2 decades to offset oil shortages. Simply a case of having to build too many plants too quickly as demand rises and conventional supplies at best plateau.

Point 4. Given that oil itself is a major source of greenhouse gas emissions, and that is the "easy" oil to produce, it is unlikely that this won't emit more greenhouse gases than conventional oil. Whether or not that matters really comes down to attitude - does the world do something about global warming or choose to ignore it? The answer there lies in the hands of China especially - their annual growth in emissions eclipses Australia's total emissions so there's basically nothing we can do apart from taking an in-principle stand that would achieve nothing in practice (since industry would simply relocate). Best guess is it takes a major crisis (probably a weather-induced global food shortage that sees significant numbers actually starve) to bring action. When is anyone's guess.

Personally, I think this technology will be used and will supply significant amounts of liquid fuels, but not on the scale that facilitates unrestrained growth in consumption as we've seen over the past century and a half.


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## michael_selway (27 August 2006)

Smurf1976 said:
			
		

> The company says that the process is "five times more efficient than a coal burning power station". Given that a new black coal-fired power station has an efficiency around 40% and that the least efficient plant in service in Australia has efficiency around 27%, that's quite simply outright nonsense. You're just not going to get efficiency over 100% without some very "creative accounting".
> 
> As for the process, I can't see any reason to doubt that it works in a technical sense. But it's troublesome in terms of net energy yield and environmental impact.
> 
> ...




Thats true

http://www.fnarena.com/index4.cfm?type=dsp_newsitem&n=42A81483-17A4-1130-F50ACB68BE3E80A5



> Ongoing Tightness In The Oil Market Supporting Prices
> FN Arena News - August 25 2006
> 
> By Chris Shaw
> ...




thx

MS


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## michael_selway (11 September 2006)

http://www.smh.com.au/news/Business/Economic-downturn-expected-in-2008/2006/09/11/1157826822680.html

When the Beijing Olympics are over?



> Economic downturn 'expected in 2008'
> Email Print Normal font Large font September 11, 2006 - 1:04AM
> 
> Advertisement
> ...




thx

MS


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## noirua (11 September 2006)

"Boom and Bust is over", these words heralded the 1920's boom and the 1929 - 32 crash followed and ruined, not a few, but almost all who remained in the market. The exceptions being fixed interest and Gold, and it was the same in the 1973 - 6 slide. However, the 1987 crash finished off those gold investors, and those who chose fixed interest were dumped by high inflation well before that. The dot-com boom, once again, showed that no market can resist a crash. 

Once there are forced sellers there is no bottom for some stocks until they hit zero. 

It is more likely we are seeing a transfer from the mining and oil boom to the bread and butter stocks. It is my view that nervous investors are best holding at least half their portfolio in cash. Why nervous? - because they do not have a house that is paid for and a good certain income, so, if worse comes to the worse there is visible grief. 

The trap we can all fall into is one of buying on the way down, afterall, if a stock was cheap at $2 it must be a steal at 50 cents. If an investor has borrowed then they must sell at 50 cents and soon 50 cents is expensive as confidence drops. Ask those who remained holding in the dot-com crash, some hold stocks, to this day that peaked, for instance, at $5 and still jog along around 10 cents.

What is risk? I see it in my own way. Stocks given a risk number of 1 if they are issued by strong governments who can print their own money - cash is of course 0. 10 if they are one of those current Uranium floats with hope their only asset ------- so, if you are 75% in cash and 25% in uranium floats, an extreme, then your average risk is 2.5. It can be seen that it's fun to invest in high risk with a strong fall back.
Having a fantastic job and a house that is paid for may push the risk back down further to 1. 

Someone who has a job that is not secure, lives in rented property and has a portfolio of mostly hope and glory stocks, is riding a bike along a cliff edge. Some sadly even take the option of just going over the edge in a sadly depressed state. 

Take care my friends in these volatile " boom or bust " markets. Remember, " It's never wrong to take a profit ". Will I take my own advice, hmm, probably only partly, then that's probably because I have a lot to fall back on.  --- Good Luck


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## nioka (15 September 2006)

noirua said:
			
		

> "Boom and Bust is over",
> 
> Someone who has a job that is not secure, lives in rented property and has a portfolio of mostly hope and glory stocks, is riding a bike along a cliff edge. Some sadly even take the option of just going over the edge in a sadly depressed state.




One of the best quotes I have seen today. Add "those with big mortgages and/or leveraged stocks".


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## noirua (20 September 2006)

Following the coup in Thailand, it will be interesting to see if the ASX can resist a heavy mark down in a few minutes time.


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## michael_selway (1 October 2006)

http://www.europac.net/media/Schiff-Bloomberg-9-8-06_lg.wmv
http://www.thestreet.com/video/executiveinterviews/10307678.html

The above guy is really a bear! although hes bullish on commodities, something i not sure why he thinks that way

The below he argues with the bulls!

http://www.europac.net/media/Schiff-CNBC-8-28-06.wmv
http://www.europac.net/media/Schiff-CNBC-9-22-06.wmv

http://www.europac.net/video.asp

thx

MS


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## nizar (1 October 2006)

michael_selway said:
			
		

> The above guy is really a bear! although hes bullish on commodities, something i not sure why he thinks that way




commodities and equities usually move in opposite cycles.
its no coincidence commodites had their last cycle from 1960s peaking at 1980 and the DOW was sideways between 1966-1982.
in the next few years (at most) one of them will have to give. most likely it will be equities IMO while commodities continue their upwards trend...


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## michael_selway (2 October 2006)

nizar said:
			
		

> commodities and equities usually move in opposite cycles.
> its no coincidence commodites had their last cycle from 1960s peaking at 1980 and the DOW was sideways between 1966-1982.
> in the next few years (at most) one of them will have to give. most likely it will be equities IMO while commodities continue their upwards trend...




oh ok, below (at the end) they talk a little about that, like the bull asks the bear why he thinks commodities will go up when everything esle will be bearish

http://www.europac.net/media/Schiff-CNBC-7-18-06_lg.wmv

*actually I have another question, is USD collapses what happesn to Base Metal prices?*

thx

MS


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## wavepicker (2 October 2006)

michael_selway said:
			
		

> oh ok, below (at the end) they talk a little about that, like the bull asks the bear why he thinks commodities will go up when everything esle will be bearish
> 
> http://www.europac.net/media/Schiff-CNBC-7-18-06_lg.wmv
> 
> ...





somehow don't think the USD is gonna collapse anytime fast. In the long term yes, in the short to medium term (1-2 years), IMO it will be trending up


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## noirua (21 December 2008)

michael_selway said:


> oh ok, below (at the end) they talk a little about that, like the bull asks the bear why he thinks commodities will go up when everything else will be bearish
> 
> http://www.europac.net/media/Schiff-CNBC-7-18-06_lg.wmv
> 
> ...



We know the answer now in this post by m_s over two years ago. And so it came to pass.


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## noirua (22 December 2008)

noirua said:


> We know the answer now in this post by m_s over two years ago. And so it came to pass.



As the downturn starts to bite, it is businesses away from major Cities and towns that will feel the force of the cold winds.


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