Depression greater than 1929 a possibility

[sammy84]

Not sure if the worst has been factored into the share market yet

If we start factoring worse then we are in big trouble. It wont only be our share portfolios that would be in trouble, capitalism would be dead ANZ for e.g, I think their P/E is around 8.7, that's a lot of bad news factored in. A P/E that low is enough for me to be buying

 

[MrBurns]

If we start factoring worse then we are in big trouble. It wont only be our share portfolios that would be in trouble, capitalism would be dead ANZ for e.g, I think their P/E is around 8.7, that's a lot of bad news factored in. A P/E that low is enough for me to be buying

We are in big trouble.

Share prices for banks are only a reflection their new depreciated value based on decreased profits, P/E of 8.7 is only based on todays share price compared to yesterdays earnings, not realistic or correct in real terms.

 

[IFocus]

The worst has been priced into the stock market. Those smashed by the credit crunch are slowly forming bottoms ala ANZ $13.07 (52-week low, P/E ratio 6.17, dividend yield 10.34%), NAB ($18.33 52-week low, P/E ratio 7, dividend yield 10.54%) etc. Based on FY08 earnings, these are stock prices that have priced in some serious nastiness.

Ahh Bushman attached charts for ANZ that's no bottom!

In terms of main street (ie unemployment, small business bankruptcy, Aussie housing declines) the worst is yet to come. This will be confirmed by stats over the next three to six months.

Yep serious falls in the market and we are still to see it flow into the real economy i.e. rising unemployment etc. Then it could get nasty if housing gets hit then impact on banks capital

Tech your talk of opportunity I find confusing if I think like a trader

When the conditions favor I go risk seeking when the conditions flag WTF is happening I become risk adverse

Doh forgot the chart see next post

 

[IFocus]

ANZ chart...........................

 

[juddy]

So yes GWB maybe a goose , Yes kevin 747 maybe a goose.........BUT they only relaying whats in front of them

Lordy, Lordy, you have great faith in our elected. You mean there is no spin at all?

 

[chops_a_must]

Yep serious falls in the market and we are still to see it flow into the real economy i.e. rising unemployment etc. Then it could get nasty if housing gets hit then impact on banks capital

What I don't get...

I can buy stocks in XYZ company, and be relatively sure I may get whatever yield over the long term. Same with cash, precious metal lending rates, whatever.

Yet... If I buy property, I will NEVER be able to get over the costs of owning it in return. That doesn't even take into account the risks of doing so.

Can someone explain to me under these market circumstances, how on earth property isn't going to fall to such a point where the likely returns become somewhat equitable?

I just can't see it, because long term investment decisions just seem like a complete no brainer to me at current pricings.

 

[nunthewiser]

Lordy, Lordy, you have great faith in our elected. You mean there is no spin at all?

personally thought howard was a goose too .... spin ?

 

[nunthewiser]

What I don't get...

I can buy stocks in XYZ company, and be relatively sure I may get whatever yield over the long term. Same with cash, precious metal lending rates, whatever.

Yet... If I buy property, I will NEVER be able to get over the costs of owning it in return. That doesn't even take into account the risks of doing so.

Can someone explain to me under these market circumstances, how on earth property isn't going to fall to such a point where the likely returns become somewhat equitable?

I just can't see it, because long term investment decisions just seem like a complete no brainer to me at current pricings.

what happens when earnings drop and they cut the divvies m8 ?

and re property there is always a time to return to it and produce a positive return in the form of cap gains/PLUS rental% to cost

that time is not now


i read your post wrong pay no heed

 

[noirua]

Australia in 1929: http://en.wikipedia.org/wiki/1929_in_Australia

 

[chops_a_must]

what happens when earnings drop and they cut the divvies m8 ?

and re property there is always a time to return to it and produce a positive return in the form of cap gains/PLUS rental% to cost

that time is not now

It's irrelevant if cuts are made to divvies etc. because there are products which will always provide some return.

And your conclusion in regards to property is exactly the point I'm making. Even if cuts are made to earnings, divvies et al. it doesn't matter at all, because chances are, you will get some return as opposed to not ever being able to get a return on the prices.

 

[noirua]

Australian Government, "The Great Depression": http://www.cultureandrecreation.gov.au/articles/greatdepression/

 

[tech/a]

Tech your talk of opportunity I find confusing if I think like a trader

Why?

If you think like a trader find something thats trending and trade in the direction of that trend.
There is nothing long that I can find (in stocks) so I'm not trading.
But there are shorts IB has many.
There are Forex trades,Eminis.

Opportunity is there.Even for traders.

 

[shaunQ]

Exactly.... Rudd should be talking things up. Governments should have done more when they could. It is not the time now to warn people. Encouragement is what is needed.

Ah, yes, the glory days of Howard and Liberal deception, where you covered it all up, deny all freedom of information requests, smile and blame it all on the Asians or Muslims.

Yes, can see it now... Everything is wonderful citizens, ignore Iceland, Europe, USA, New Zealand... we Australia, and therefore completely and utterly immune. Go out and loan more, splash out this christmas - we've got the dole if you lose your job... she'll be right.

 

[IFocus]

Why?

If you think like a trader find something thats trending and trade in the direction of that trend.
There is nothing long that I can find (in stocks) so I'm not trading.
But there are shorts IB has many.
There are Forex trades,Eminis.

Opportunity is there.Even for traders.

Tech for some reason I though you were talking outside of the market, just re-read your post again I guess you were generalizing

My thinking is that this current situation is the worst in terms of our generation and the bias is to the down side of even that so a defensive position or risk adverse position is the high probability play.

I am talking about dept levels etc, I am no dooms dayer by any means but the numbers currently are extreme. We are still to see that transfer though to the real economy.

As for the markets, best currency moves I have ever seen throw in oil and its been for me at least a great year looking forward to the same volatility levels to continue.

 

[IFocus]

What I don't get...

I can buy stocks in XYZ company, and be relatively sure I may get whatever yield over the long term. Same with cash, precious metal lending rates, whatever.

Yet... If I buy property, I will NEVER be able to get over the costs of owning it in return. That doesn't even take into account the risks of doing so.

Can someone explain to me under these market circumstances, how on earth property isn't going to fall to such a point where the likely returns become somewhat equitable?

I just can't see it, because long term investment decisions just seem like a complete no brainer to me at current pricings.

Chops I was in the same position in 1987 after returning from a 12 month trip overseas, jaysers am I that old.

I don't know when it will happen but property should return to the long term mean it did for me in the 90's in fact its likely to over shoot to the down side.

Its not now, when? no idea but it will come like BHP being $20 who would have thought

 

[Macquack]

Take a look at the difference in leadership quality shown by Obama when comparing to Bush and Rudd.

Obama---We CAN do it.--Frankly many feel they can.

Rudd---Things are going to get worse---They will!!!

Who would you want leading your place of employment---let alone your country!

I prefer the truthful person to the bull sh-t artist.

Has anyone noticed, no one tells the truth anymore. In business, if your not a bull sh-t artist, then you are not maximising your profit.

I say to the politicians - "Tell it to us straight and stop treating the public like children".

 

[Bushman]

Speaking of fear, seems deflation has you edgy ?

Why do people fear deflation when central banks are pumping trillions into the system? I just don't get it?

You are seeing a process of liquidation at the moment whilst banks hoard cash as they re-assess risk and repair balance sheets and business/consumer confidence plummets due to cash starvation. Governments around the world will not tolerate this for much longer especially now that banks have been socialised. It will be toughest in the US, easiest in BRIC with its 'unsophisticated' banking system and slighthly less entrenched adherence to free market principles. Banks will be forced to pull the levers sooner rather than later.

So we will all be awash with cash again...coming soon to an outlet near your! Who feeds on cheap debt - it is our inflation monster off course. I am giving it 12-15 months and you will have piroutte Swan talking up razor gangs again. Hooray for gold, for agriculture, for hard commodities and for property. Hoard cash at your peril, especially US dollars.

Still, as this thread alludes to, rather an inflationary monster in 18 months than a Great Depression. Lehman, AIG forced their hands - now everyone blow those bubbles as we reflate growth and employment, stocks and property. Awwwppppfffff, awwppppffff...

 

[chops_a_must]

Chops I was in the same position in 1987 after returning from a 12 month trip overseas, jaysers am I that old.

I don't know when it will happen but property should return to the long term mean it did for me in the 90's in fact its likely to over shoot to the down side.

Its not now, when? no idea but it will come like BHP being $20 who would have thought

No doubt.

It'd be pretty sweet if I could buy an apartment in the city with cash.

I prefer the truthful person to the bull sh-t artist.

Has anyone noticed, no one tells the truth anymore. In business, if your not a bull sh-t artist, then you are not maximising your profit.

Indeed.

And I too have had conversations with people about honesty in the market being punished, moreso than than the outright liars in the same industry. Seems like it is taken as a sign of weakness. I just don't get it at all.

 

[moXJO]

I was reading a thread on the possibility of a depression and realized it was from 1999. Some interesting stuff among the chaff and much the same questions as today.

http://www.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=000z68

 

[Glen48]

What is the general opinion of the G20?