Imminent and severe market correction

[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]

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]

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]

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]

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]

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]

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

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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).