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Imminent and severe market correction
- Thread starter Uncle Festivus
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'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
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
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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
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
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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<
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by the way the news papers posters and all other commentators are sounding, it could just be about time to buy stocks!
wayneL
VIVA LA LIBERTAD, CARAJO!
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Contrarian theory is now to well known and is invoked way too early.by the way the news papers posters and all other commentators are sounding, it could just be about time to buy stocks!
Fade the faders I reckon. Fading the 'right' downage is trickier than we all think. IMO
>Apocalypto<
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was more of a joke WayneL!
wayneL
VIVA LA LIBERTAD, CARAJO!
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>Apocalypto<
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It wasn't a bottom-pickerist joke was it?
Some will get it.
Ha Ha Ha
Wysiwyg
Everyone wants money
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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.
Will wait and see if it happens this time.Too obvious I suppose.
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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
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
VIVA LA LIBERTAD, CARAJO!
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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
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
It's a small world
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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.
Attachments
Trembling Hand
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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!!
: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
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Cancelled because of a single payroll number? OK
Market up .85%.
Go permabulls!!
lolMarket 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)
Cancelled because of a single payroll number? OK
Market up .85%.
Go permabulls!!
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:
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
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Cancelled because of a single payroll number? OK
Market up .85%.
Go permabulls!!
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
Not a bad perspective on the destruction of credit growth and it's results, from the Netherlands..
http://atlanticfreepress.com/content/view/4131/32/
http://atlanticfreepress.com/content/view/4131/32/
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.
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