How Far Will The Market Fall?

[sptrawler]

Can you please explain to me how the economy is over?

There is also IMO a lot of 'fat' in the economy, which came about during the mining and property boom, every tradie put prices through the roof shops were opened to absorb the slush of money coming through the economy.
When that dries up there is a lot of over capacity, in the business sector, something has to give when there is less money to go around.
The retail sector has been struggling with it for a couple of years, this is really just taking it to another level of pain, only businesses with solid underpinnings will survive.
I know an older couple in there 70's have a small business, can't sell it and are struggling to run it, sad really he is coming down with alzheimer's.

 

[wayneL]

hahaha
That is a great political answer.

But people have to make decisions.
Every decision in life is a bet.
big decisions =big bet small decision =small bet.
Financial decisions have a big impact and sometimes require big bets.
Sitting in cash is a bet that has killed real returns.If you borrow up to the hilt to buy a property that is a big bet. If you invest a large portion of your wealth in etf passively that is still a bet. Both are socially acceptable bets. But are still bets.

If you wait for your price and put a large portion in the market that is a bet on a recovery. Recovery of confidence, earnings and stimulus

We cannot just give up and say I don't know.

No one knows because the future decisions have not been made yet.


I think what people have to decide : is this the one? Is this 1929?


1)Not the one, then buy the bargains and catch the recovery push along the debt cycle.

2)If this is the one everything that is structurally long goes down, property, stocks , money in the bank by bail in/bail out, private businesses. What use is debt if the interest is not paid back and no one wants to buy the debt.

Sheeeit! Thanks for the sermon.

I don't disagree with you at all there. However we must make our individual analyses and make our bets as we see them.

However are we to take outright gambles, educated guesses, or calculated risks based on data?

it's a tough thing because sometimes the market has already bolted by the time the data comes out.... But we can use every bit of Intel at our disposal beforehand.

My job as an investor / trader, as I see it is trying to get ahead of the curve and the way I see it the curve is about to recurve itself.

I may be wrong, who knows. But I am extremely confident that my opinion that for Australia to prosper in the world economy going forward we must change our economy, maybe radically so.

Equally I have no confidence that we should rely on our government to lead the way here, no matter what it's pathetic ideology.

It's up to us, the plebeians, but, government actions may expedite certain courses of actions which as yet remain to be revealed.

 

[aus_trader]

What use is debt if the interest is not paid back and no one wants to buy the debt.

Just to lighten the mood, I am just waiting for the interest rates to go deep into the -ve so I can start rolling it in with interest payments for taking on massive debts

 

[wayneL]

Just to lighten the mood, I am just waiting for the interest rates to go deep into the -ve so I can start rolling it in with interest payments for taking on massive debts

Oh yeah, pay me to take on the debt for the 3mil estate my missus dreams of... I'm in! LOL

 

[aus_trader]

Oh yeah, pay me to take on the debt for the 3mil estate my missus dreams of... I'm in! LOL

You won't believe it, my missus has also been sending me hints of a home upgrade for quite a while now, seeing how other friends and family have gone for the deluxe upgrade to mansions ! They all got tempted by Zero interest rates.

No I haven't given in, I can't see how we could be any happier leveraging up to the eyeballs. Happy to be paying the mortgage on our smaller home and still have leg room if interest rates rise.

 

[wayneL]

You want believe it, my missus has also been sending me hints of a home upgrade for quite a while now, seeing how other friends and family have gone for the deluxe upgrade to mansions ! They all got tempted by Zero interest rates.

No I haven't given in, I can't see how we could be any happier leveraging up to the eyeballs. Happy to be paying the mortgage on our smaller home and still have leg room if interest rates rise.

Right on!

I was joking about the Mrs' desires to be honest.

It's just the two of us, so what do we need? Not much more than a cottage really, well apart from a couple of stables for the nags, a veggie garden... And a fig tree if we want to be really high brow. LOL

All else is just serving the ego... Unhealthy.

 

[Smurf1976]

Can you please explain to me how the economy is over?

Not the economy as such but the recent one where Australia exports coal, gas, iron ore, "education" and tourism and buys pretty much everything else.

That's not going to work anymore, the economy as such isn't finished but that version of it is kaput and not likely to come back in our lifetime.

The future? Manufacturing is going to be part of it almost certainly. Most students at Australian universities will have grown up in Australia, there's not likely to be much "exporting" of education going forward. Etc. A stark change from the recent past.

 

[OmegaTrader]

Just to lighten the mood, I am just waiting for the interest rates to go deep into the -ve so I can start rolling it in with interest payments for taking on massive debts

Danish bank launches world’s first negative interest rate mortgage.

https://www.theguardian.com/money/2...-worlds-first-negative-interest-rate-mortgage

I didn't believe it at first when someone told me last year.

lol

Sheeeit! Thanks for the sermon.

I don't disagree with you at all there. However we must make our individual analyses and make our bets as we see them.

However are we to take outright gambles, educated guesses, or calculated risks based on data?

it's a tough thing because sometimes the market has already bolted by the time the data comes out.... But we can use every bit of Intel at our disposal beforehand.

My job as an investor / trader, as I see it is trying to get ahead of the curve and the way I see it the curve is about to recurve itself.

I may be wrong, who knows. But I am extremely confident that my opinion that for Australia to prosper in the world economy going forward we must change our economy, maybe radically so.

Equally I have no confidence that we should rely on our government to lead the way here, no matter what it's pathetic ideology.

It's up to us, the plebeians, but, government actions may expedite certain courses of actions which as yet remain to be revealed.

Do you think that stimulus now and coming up will not be enough to re pump ?

 

[OmegaTrader]

Not the economy as such but the recent one where Australia exports coal, gas, iron ore, "education" and tourism and buys pretty much everything else.

That's not going to work anymore, the economy as such isn't finished but that version of it is kaput and not likely to come back in our lifetime.

The future? Manufacturing is going to be part of it almost certainly.

Why won't it work anymore?
How will manufacturing in Aus come back in a globalised economy competing with second and third world countries?

 

[Smurf1976]

Why won't it work anymore?
How will manufacturing in Aus come back in a globalised economy competing with second and third world countries?

It won't work because every country is likely to look inward at this point - the shift was already underway and this will accelerate it almost certainly.

Governments are going to need to create work, not low prices for consumer goods, and in an environment where education and tourism are stuffed that doesn't leave too many options.

What that means for the market I'm not so sure but I think there's going to be some change in what sectors are dominant going forward.

 

[wayneL]

Do you think that stimulus now and coming up will not be enough to re pump ?

Maybe.... I don't really know.

But I do think that we really do need to change our economy. We really can't rely on inflating the real estate market and selling red dirt to China forever.

The sooner we become productive in different ways, value-adding etcetera, the better we can survive as a first world economy going forward.

Think about this, let's subtract real estate speculation and the minerals boom from our economy in the last 20 years, what do we have?

 

[OmegaTrader]

It won't work because every country is likely to look inward at this point - the shift was already underway and this will accelerate it almost certainly.

Governments are going to need to create work, not low prices for consumer goods, and in an environment where education and tourism are stuffed that doesn't leave too many options.

What that means for the market I'm not so sure but I think there's going to be some change in what sectors are dominant going forward.

Won't tourism and education rebound after the corana virus has spread and immunity is eventually achieved?
How is Australia looking inward?
How do governments create work?
Stimulus, lowering rate, loans, tax cut? Isn't gov doing that now+more in future

 

[aus_trader]

It won't work because every country is likely to look inward at this point - the shift was already underway and this will accelerate it almost certainly.

Governments are going to need to create work, not low prices for consumer goods, and in an environment where education and tourism are stuffed that doesn't leave too many options.

What that means for the market I'm not so sure but I think there's going to be some change in what sectors are dominant going forward.

Agree. I think we need to be innovative to be successful. We will do well with a few more CSL's, COH's etc. Hold neither but wouldn't mind getting on board at IPO stage for the next superstar if we can create any...

 

[basilio]

Think about this, let's subtract real estate speculation and the minerals boom from our economy in the last 20 years, what do we have?

3/5ths of FA.
Spot on

 

[satanoperca]

A stimulus will do nothing except give people a very very short term sugar hit, with a large national hangover, well actually it will do something, put the nation into further debt, which at some point will need to be paid back or bankrupt the country.

With the dollar at .60USD, this might benefit the education and tourism sector, but prolonged periods of no income will wiper the majority out anyway.

As for lowering the rates, that is a shoe in, will be 0% within 3 months. Which moving forward is going to cause even more issues.

Tax cut, might work, but if govnuts receipts drop, how do they provide services to the population.

This is going to get a lot worse before we can even talk about a recovery, sh--it we are only in it a few weeks, the layoffs will start in coming weeks, that is when it gets really interesting.

I am expecting unemployment to raise to 10%.

and the share to be under 4500 within 2 months

 

[sptrawler]

You won't believe it, my missus has also been sending me hints of a home upgrade for quite a while now, seeing how other friends and family have gone for the deluxe upgrade to mansions ! They all got tempted by Zero interest rates.

No I haven't given in, I can't see how we could be any happier leveraging up to the eyeballs. Happy to be paying the mortgage on our smaller home and still have leg room if interest rates rise.

When you too have quite finished, it is my nest egg in _ve, that will be buying your McMansion.

 

[aus_trader]

When you too have quite finished, it is my nest egg in _ve, that will be buying your McMansion.

It's bound to be tempting with -ve interest rates looming !

Looking for headlines like:
"Latest home loan paying you 2.5%pa to borrow up to $1,000,000"

 

[basilio]

Market is RS at the moment. ASX200 well under 5000
The economics of this situation will only get worse. We will really have to come up with creative solutions that keep our infrastructure mostly intact and not destroy peoples lives.
How ?

 

[sptrawler]

It won't work because every country is likely to look inward at this point - the shift was already underway and this will accelerate it almost certainly.

Governments are going to need to create work, not low prices for consumer goods, and in an environment where education and tourism are stuffed that doesn't leave too many options.

What that means for the market I'm not so sure but I think there's going to be some change in what sectors are dominant going forward.

You never know, the Government either sooner or later, may have to go back to the future and demand the miners build secondary industries again, as happened in the 1960's.
They need to do that or charge them a volumetric tax on resources, so that the Government can re build secondary and tertiary industries.
This is the perfect time to re think the forward plan, I think enough offshoring has been done, to satisfy any Lima agreement.

 

[sptrawler]

Market is RS at the moment. ASX200 well under 5000
The economics of this situation will only get worse. We will really have to come up with creative solutions that keep our infrastructure mostly intact and not destroy peoples lives.
How ?

Sit down, put your arms around your knees, lean well forward and kiss something goodby.