Imminent and severe market correction

[pepperoni]

Im an avid lurker on this thread but it seems pretty clear the bad news is accelerating ... which makes sense as by their nature all financials have some exposure to the others and the market generally.

There is no cause for any improvements in the foreseeable future - any support is limited to the extent to which the US Govt is prepared to commit taxpayer funds to supporting the markets and financial system.

ASX looks like its stabilising 2.5% down bringing yest + today to US fall level but I think they know but dont want to admit our investment banks are finished for at least a few year and are in complete denial about our banks.

 

[Awesomandy]

ASX looks like its stabilising 2.5% down bringing yest + today to US fall level but I think they know but dont want to admit our investment banks are finished for at least a few year and are in complete denial about our banks.

Given what happened overnight, it is actually not that bad at the moment, I think. It would be interesting to see what happens when Hong Kong opens though - they had a public holiday yesterday, so I'm guessing it'll be down around 4%. Japan is currently down around 4.7% as I type as well, although they had a public holiday yesterday as well. So, all in all, it's not too bad - things could've been worse.

 

[Calliope]

I have no doubt that the American Haters who infest the political chat threads of this Forum wiil be overjoyed at the bloodbath on Wall Street last night. Oh yes I can hear them saying...I love Americans...many of my best friends are American...I only hate the Republications and Big Business.

Before they pop the champagne corks they should be aware that any meltdown in the American economy will have a negative impact on the income of every Australian. (Even those on welfare and in government jobs)

It wiil affect the economy of every country in the world, including China and Saudi Arabia

All that is keeping Australia afloat at the moment is Business, both big and small, and those who work for them. It is not the government. It sees its role as putting obstacles in the path of entrepeneurs Those members who contribute to the stock threads know this. It has never sunk in with the idle chatterers.

 

[explod]

I have no doubt that the American Haters who infest the political chat threads of this Forum wiil be overjoyed at the bloodbath on Wall Street last night. Oh yes I can hear them saying...I love Americans...many of my best friends are American...I only hate the Republications and Big Business.

Before they pop the champagne corks they should be aware that any meltdown in the American economy will have a negative impact on the income of every Australian. (Even those on welfare and in government jobs)

It wiil affect the economy of every country in the world, including China and Saudi Arabia

All that is keeping Australia afloat at the moment is Business, both big and small, and those who work for them. It is not the government. It sees its role as putting obstacles in the path of entrepeneurs Those members who contribute to the stock threads know this. It has never sunk in with the idle chatterers.

Could not agree with you more, the entire post. Except BUSINESS, the USA stopped doing business and went on an uncontrolled borrowing and spending spree. And I have family whon are Americans living in America, (Deep south and republicans)

The reality check is difficult for all and not the fault of doomsayers, leftwingers or American haters.

 

[gfresh]

I think you'll find people in the 'idle chatter' threads have been sensible enough not to actually own any stocks for many months (or at least only a few) - so are happy to just watch it play out from the sidelines, and are more interested in the current "big picture" view right now. Most have suspected it would get worse many months ago, and here we are..

Yes, it will effect everybody. I don't think anybody here would be denying that it will. Those that play it well, and have even a basic understanding of the extent of the crisis faced should come out the other side much better off however..

Had people listened to the mainstream commentary, "it's a bargain", "banks are a buy now", "these things are just temporary blips in the long-term sharemarket", "we are nearing a bottom now", "china is the savior", etc, etc - no doubt they wouldn't be so happy now.

So thank god there are some independent thinkers out there, not just here, but over in the US (where one could read warnings 18+ months ago), that allow a different picture to be presented. Those that question government. Those that question big business. Those that question the whole system in many ways. It's damn healthy of a productive society to allow individuals to do that.

 

[Glen48]

The only small business in Oz making money are the ones who were a big business and few years ago.
OZ is just as much in Debt as the rest of the World except for Housing as we have the most over priced homes in the World.
The next question do we sell every thing in the red and bail out for awhile?
NAB is on the cards to take a dive.
AIG will most likely be next up there with JP Morgan, Citibank, and Bof A

 

[Uncle Festivus]

I have no doubt that the American Haters who infest the political chat threads of this Forum wiil be overjoyed at the bloodbath on Wall Street last night. Oh yes I can hear them saying...I love Americans...many of my best friends are American...I only hate the Republications and Big Business.

Before they pop the champagne corks they should be aware that any meltdown in the American economy will have a negative impact on the income of every Australian. (Even those on welfare and in government jobs)

It wiil affect the economy of every country in the world, including China and Saudi Arabia

All that is keeping Australia afloat at the moment is Business, both big and small, and those who work for them. It is not the government. It sees its role as putting obstacles in the path of entrepeneurs Those members who contribute to the stock threads know this. It has never sunk in with the idle chatterers.

Ditto as Gfresh. I guess it would come as a shock for those that believed the 'all is well' vested interest mobs, the 'markets always rise in the long term' spin. They go by the name of economists and analysts. The pyjama traders among us saw this coming for some time .

If you have been following this thread there is strangely nothing unusual about what's happening, & we don't even have to hate American's.

You are right in some of your observations but to blame people on this forum for enjoying what is unfolding is way off the mark. Why begrudge those who have done due diligence, a bit of research and a little bit of common sense when they turn out to be right after all. I'm sure the object for me & others here is to put forward perspectives which, up till recently, have been dismissed as lunatic fringe ramblings. Guess what, the lunatics were maybe the only sane ones after all.

The 'bloodbath' was remarkably contained & planned for by the Money Shuffler Junta ie the Fed. If it was put into context of what it was, and what has been happening for the last 12-16 months then the Dow would/should be much lower. It is abnormal that it is not?

What will be interesting is what happens in the next few trading sessions. The real test will be when 'the plan' unravels and the Fed looses the little credibility it has left. Then you will see the real scramble for the exits!

The contagion is now endemic, and several more companies have been reading the same book as Lehman etc, just finished Chapter 10 maybe? What happens when Boeing and General Motors file for bankruptcy?

Human weakness and inability to deal with adversity, mainly by politicians and regulators, has gotton us to this point, now all of us have to pay the price for the collective financial & environmental largesse of the last 75 years.

No doubt you are all the better for your vent, so now you can deal with reality & plan for 'it'.

 

[lumpdum]

Ditto as Gfresh. I guess it would come as a shock for those that believed the 'all is well' vested interest mobs, the 'markets always rise in the long term' spin. They go by the name of economists and analysts. The pyjama traders among us saw this coming for some time .

ur vent, so now you can deal with reality & plan for 'it'.

From the small segment of my interest, it's the "last on first off"
situation in terms of share price write-down. AMP SGB MQG

 

[dhukka]

Ditto as Gfresh. I guess it would come as a shock for those that believed the 'all is well' vested interest mobs, the 'markets always rise in the long term' spin. They go by the name of economists and analysts. The pyjama traders among us saw this coming for some time .

If you have been following this thread there is strangely nothing unusual about what's happening, & we don't even have to hate American's.

You are right in some of your observations but to blame people on this forum for enjoying what is unfolding is way off the mark. Why begrudge those who have done due diligence, a bit of research and a little bit of common sense when they turn out to be right after all. I'm sure the object for me & others here is to put forward perspectives which, up till recently, have been dismissed as lunatic fringe ramblings. Guess what, the lunatics were maybe the only sane ones after all.

The 'bloodbath' was remarkably contained & planned for by the Money Shuffler Junta ie the Fed. If it was put into context of what it was, and what has been happening for the last 12-16 months then the Dow would/should be much lower. It is abnormal that it is not?

What will be interesting is what happens in the next few trading sessions. The real test will be when 'the plan' unravels and the Fed looses the little credibility it has left. Then you will see the real scramble for the exits!

The contagion is now endemic, and several more companies have been reading the same book as Lehman etc, just finished Chapter 10 maybe? What happens when Boeing and General Motors file for bankruptcy?

Human weakness and inability to deal with adversity, mainly by politicians and regulators, has gotton us to this point, now all of us have to pay the price for the collective financial & environmental largesse of the last 75 years.

No doubt you are all the better for your vent, so now you can deal with reality & plan for 'it'.

Nothing to add, except great post unc.

 

[Calliope]

You are right in some of your observations but to blame people on this forum for enjoying what is unfolding is way off the mark. Why begrudge those who have done due diligence, a bit of research and a little bit of common sense when they turn out to be right after all

No doubt you are all the better for your vent, so now you can deal with reality & plan for 'it'.

Thanks Unc for your comments. I would like to state that I made no observations or cast any blame on any contributor to this thread. I was referring to a few people on political threads. Rather than begrudging your fellow contributors, I congratulate them on their research and common sense.

Secondly I get no pleasure out of my vent as you term it. I am as aware as you are that America's present problems are a result of uncontrolled and unregulated lending and irresponsible borrowing. I have never borrowed above my means, and my reality is that I feel as a result of sensible investment I can weather the storm.

 

[Greg71]

I found this site the other day. It has some interesting stuff about Elliot Wave, that we're in a 200-year pattern. Scroll down to the Elliot Wave heading.

http://www.babylontoday.com/stocks_bonds.htm

Also, there are a number of double-tops forming on long-term charts.

http://www.stockcharts.com/charts/historical/

 

[nioka]

The pyjama traders among us saw this coming for some time ..

Sure they did. However if I had taken notice of them when they first started to spruike doom I would be a hell of a lot worse off than I am today.

The same pyjama traders will now be able to spruike "recovery" and sooner or later they will be saying I told you so.

It is not ALL doom and gloom. There are some wonderful buying opportunities out there at the moment.

 

[pepperoni]

Sure they did. However if I had taken notice of them when they first started to spruike doom I would be a hell of a lot worse off than I am today.

The same pyjama traders will now be able to spruike "recovery" and sooner or later they will be saying I told you so.

It is not ALL doom and gloom. There are some wonderful buying opportunities out there at the moment.

.... for the omniscient, those with unfathomable investment skills and the extremely lucky. And if were talking going long thats assuming things will turn around very soon.

When funds (and banks!) headed by the brightest financial minds in the world are losing money hand over fist mere mortals like myself are far better off following this thread into something they can understand (even if its a term deposit thats earing 0% real after tax but not losing 20% plus).

 

[pepperoni]

All that is keeping Australia afloat at the moment is Business, both big and small, and those who work for them.

If the last few years characterise "floating" I think the sooner we "sink" the better for all.

 

[CamKawa]

The ABC's Stephen Long says it the way he sees it. Have a listen.
http://www.abc.net.au/news/audio/2008/09/16/2365912.htm

 

[Calliope]

If the last few years characterise "floating" I think the sooner we "sink" the better for all.

Okay. I exempt you from my reference to common sense in post 3131.

 

[Bushman]

It is not ALL doom and gloom. There are some wonderful buying opportunities out there at the moment.

Agreed. Look for mature assets without development risk and highly geared structures that provide basic human services and you will find a bargain. Infrastructure comes to mind but not of the 'toll road to be built on dodgy traffic numbers' variety. Utiities, communication monopolies like Telstra will serve you well. But there is also the 'what is cheap today will be cheaper tomorrow' argument.

I still think BRIC is here with us to stay as I see it as a once-in-a-generation emergence of a middle class. I am tipping that the sovereign states will be the ones who finance it now. Idle speculation off course...

The US will be a basket case until the ressie market stabilises. There is now talk of setting up another agency that buys houses in the US at 3 times household medium income. Could work? My bet is on another 'shock and awe' campaign by the Fed if it has much left in the tank.

PS: How are those odds going?
Lehman, Merrils and WaMu have gone. What price Morgan Stanley and Goldman Sachs? The shorters are running out of targets.

 

[Macquack]

.... When funds (and banks!) headed by the brightest financial minds in the world are losing money hand over fist ....

Dont over-rate these capitalist pigs.

They are no better than used car salesmen.

 

[nioka]

Dont over-rate these capitalist pigs..

Hardly something you expect from someone on a stock market forum to state. Aren't we all trying to be capitalists?

 

[pepperoni]

Okay. I exempt you from my reference to common sense in post 3131.

And if common sense means we should wish for more of the same then thank god i have none.

IMO The "correction" was brought about by absurd business models and practices - bring on its speedy downfall before it does more damage I say.

Ive sat in enough rooms with the BNBs and MQGs pulling rabbits out of hats in ways none of the rest of us *really* understood, and taking their cuts before the **** hits the fan.

And I dont think the insurers and rating agencies really understood either ... they just bet on model and took their cut.

Its been 99% financial trickery with 0% value add and no integrity over disclosure of the risks involved. Its more "parasitic" than "professional".

And as the paper said yest the private equity guys have no doubt been doing the same and may very well face the same fate.

"Over correct" for all I care as Ive bet against it the whole time.

We have to take our medicine after they have leveraged chunks of our future but the sooner the better. Its the ones that endorsed and bet on its success that suffer the most and to that I say hurrah.

Us average joes that didnt buy rivieras and ferraris on interest only will do alot better in relative terms through this period.

Loving or hating America has nothing to do with it ... or this thread for that matter.



Back on topic I read that the interbank lending rate is now suddenly 2% above the fed rate (triple the norm I think)... I really hope people are re-learning how to price risk and I really hope that the market does not take its cue from a fed drop this week to go dead cat bounce or raging bull for a few weeks.