Imminent and severe market correction

[kransky]

great read imo

http://www.portfolio.com/news-marke...1/The-End-of-Wall-Streets-Boom?tid=true#page9

 

[Aussiejeff]

goldman sachs gray-beard on lateline tonight says we are likely at bottom and the chinese stimulus package will stop us falling into a deep recession. He says australia is very well placed to take advantage of this.

i think its BS... we are not at the bottom yet imo..us consumer sentiment and housing prices are still falling... circuit city going under... gm...

the only issue is that markets generally lead economics... but by how much? i think its too early

Totally agree. Just gotta wonder how much Goldman-Sachs execs and hangers-on are manipulating this situation for their own SHORT TERM benefit. How many company SP's are they subtly or not-so-subtly "influencing". Hmmmm.

I think Total BS is the state of play at the moment. Gordon Brown seems to be advocating a Brave New World Order (obviously with England somewhere at the head of the pack) that will SPEND, SPEND, SPEND it's way out of the current mess, obviously bailing out companies left right and centre along the way. He calls it "FISCAL STIMULUS". Sounds like a wet dream to me. Unfortunately, now KRudd seems to be infected with the same terminal disease. Cheesus wept. That's the exact same policy BS that got us INTO the cesspit to start with

Every goddamn company around the planet that starts going downhill from here on till forever is going to put it's hand out for a GuvMint bailout (or if they are dismissed from a claim, might sue their GuvMint on the grounds of S.timulus T.echnical D.iscrimination - a new and virulent form of fiscally transmitted disease).

Let's get one thing straight here. Big Brother is aiming for Total Control.

Even now, I don't trust what I am seeing happening on share markets world wide. How much of what is happening is NOW being manipulated by governments interfering in the once-free markets? Can we be sure that a dead-cat bounce happens due to "free-market" activity?

Who wants to "invest" in a market when now the flamin' GuvMint$ can interfere at any moment and trash your plans? Let's see. Where are they at currently?

Interest rate manipulation? - CHECK
Currency manipulation? - CHECK
Share market over-regulation? - CHECK
Money Supply manipulation? - CHECK
Failed company bailout manipulation? - CHECK

Need I go on?

The World has suddenly changed forever - heavily in favour of the Body Politik and Big Bro. Somehow, we have to come to terms with that. It's not so much a case of the markets leading the economy, but politicians leading the markets to wherever they WANT them to be through overt and not-so-overt manipulation.

Have I mentioned the word "manipulation" yet?

Have a great day.....




aj

 

[Uncle Festivus]

Have I mentioned the word "manipulation" yet?

Have a great day.....

aj

AJ, all markets are manipulated, you just have to know which way. Don't fight it, go with the flow.

 

[Aussiejeff]

AJ, all markets are manipulated, you just have to know which way.

Ahhhhh. So, you are a GuvMint blacksuit?

Unfortunately, most of us "on the outside" don't know when or by how much GuvMint$ are going to hit the "Manipulate" button. Makes for treacherous punting conditions.

 

[kransky]

http://financialsense.com/fsu/editorials/willie/2008/1112.html

grim editorial... interesting times ahead most likely!

 

[Temjin]

Interesting read on China's unofficial position.

http://www.chinastakes.com/story.aspx?id=813

Before Saving the US
November 11,2008





by CSC staff

The nature of the current global financial crisis is the biggest debt crisis in America’s history. The issuer of the world’s reserve currency, the US has been borrowing for quite a long time without any limit. America’s trade, international payment and fiscal deficits have existed for over 40 years (a fiscal dividend once occurred during Clinton’s administration but deficit soon returned). Statistics show that America’s internal and external debt exceeds $60 trillion, over 400% of the country’s annual GDP of a bit over $14 trillion. Of that total, family debt (including mortgages), financial and non-financial firms’ debt, and municipal and national debt come to about $15 trillion, $17 trillion, $22 trillion, $3.5 trillion, and $11 trillion, respectively, though it is hard to tell how these debts have been split up among foreign governments, financial firms, companies, and individuals. [FONT=&#23435]　　[/FONT]​

To relieve the crisis, the US must repay its debts, and to do that it needs to live a more frugal life instead of asking others to continue lending it the money to maintain its over-consumption. ​

​

The first thing the government needs to do is reduce spending and the deficit. Correspondingly, the US needs to cut military disbursement, stop its global expansion and the robbing of oil resources from other countries. Companies should also become thrifty and avoid highly leveraged operation. Families and individuals should stop anticipating their income to buy houses and travel globally. Instead, they should warmly welcome foreigners to travel to and spend money in the US. [FONT=&#23435]　　[/FONT][FONT=&#23435]　　[/FONT]​

China Should Raise Conditions​

​

But if the US must ask China to buy some portion of its national debt, what kind of conditions and principles should China we raise?[FONT=&#23435]　　[/FONT]​

The principle should be the same as the basic principle upheld by the US and IMF when “saving” other countries in crisis: cut fiscal disbursement and both the government and the people should save money. Besides that, there are six points: first, the US should cancel the limits on high-tech exports to China, and allow China to acquire advanced technology and high-tech companies from the US; secondly, the US needs to open its financial system to Chinese financial institutions, allowing all Chinese financial firms to open branches and develop business in the US; third, the US should not prevent Europe from canceling the ban against selling weapons to China; fourth, the US should stop selling military weapons to Taiwan; fifth, the US should loosen its limits on numbers of Chinese tourists and allow them to travel freely to the US; and sixth, the US should never restrain China’s exports to the US and force RMB appreciation in the name of domestic protectionism and employment pressure.​

​

If the US should refuse to agree to the six principals, that only means it doesn’t really need China to save its market and buy its national debt. Then China’s choice is quite simple: rationally adjust the structure of its foreign exchange reserve assets and avoid the risk of the US national debt according to market rules. ​

​

What is worth special attention is that the prerequisite for China’s purchase of US national debt is that China has enough foreign currency to meet the exchange demand when hot money is flowing out in large scale. Otherwise China will have to sell US debt to relieve its lack of foreign exchange currency, which will lead to sharp depreciation of China’s dollar assets. What is even worse, China may immediately suffer a financial crisis led by the lack of foreign currency. ​

​

So if the US wants China to help save its market, the US government and the IMF must admit China’s right to manage its foreign exchange independently. Once large scale hot money outflows occurs, China has the right to take effective measures to restrain the speed and amount of hot money outflow, and the US and IMF can’t blame China for it. This is the most important prerequisite, even more important than the six principles mentioned above. If the US can’t agree to it, China may trap itself when saving the US. When exchange crisis happens in China, who can promise the US and the IMF won’t hit China when it’s down?​

​

(The author is a professor at Central China University of Science and Technology. The piece is translated from his article on China Business News)​

​

​

It has been said that the Chinese government has a habit of making official statements through non-government channels. ​

​

Their "demands" are quite reasonable to my eyes but probably totally unacceptable to the US. It's almost as if there is a direct transfer of power/wealth to them. If I were the US, I would rather inflate my debt out of existence rather than preventing the Chinese from taking over my countries' technologies/resources.
​

 

[CanOz]

I think China has the chance to do whatever it wants at this stage. The trick is to look like its saving the US, make it obvious to everyone. To come out like the more gracious is key here, but not all that hard to do.

The question is, will the world believe the truth?

CanOz

 

[Aussiejeff]

I think China has the chance to do whatever it wants at this stage. The trick is to look like its saving the US, make it obvious to everyone. To come out like the more gracious is key here, but not all that hard to do.

The question is, will the world believe the truth?

CanOz

Yee-haw!

Overnight their was another bout of totally ABYSMAL world economic news and outlooks - including pathetic US news. Yet the DOW has gone ballistic in the last couple of hours on what news? GWB's heroic "There ain't nuthin wrong with the free markets!" rallying speech? Ya gotta be kiddin'!

Gotta wonder who is manipulating the US share market right now.... has the Fed "secretly" started buying those dud company shares already?


aj

 

[MrBurns]

Gotta wonder who is manipulating the US share market right now.... has the Fed "secretly" started buying those dud company shares already?
aj

Even if they have been they'll run out of money sooner or later, even the great USA hasn't got enough moey to bail out the whole western financial system but I have to give it to them they're having a go.

added -

Market News
US budget deficit mounting at $10b a day
Spending by the US government to stem the sharp economic slowdown racks up a deficit of $10b a day.

 

[CAB SAV]

I'm going back to bed & try this again. After all the negative global news wake up to find US 500pts+ up. Am I dreaming or are they dreaming? What the. Will someone please predict new lows.

 

[Aussiejeff]

I'm going back to bed & try this again. After all the negative global news wake up to find US 500pts+ up. Am I dreaming or are they dreaming? What the. Will someone please predict new lows.

This might help to explain -

Today from AAP

-----------------

Wall Street launched a massive rebound Thursday, sending the Dow Jones industrial average up 550 points, or 6.7 per cent after earlier driving it down 300 points and below the 8,000 mark, as investors decided they did not want to miss out on buying stocks at cheap prices.

After three days of selling that wiped out about $1 trillion in shareholder value, many investors, though nervous about the economy, believed the market had priced in enough bad news. So when the Standard & Poor's 500 index managed to recover from multi-year trading lows, investors swarmed back in.

It's "a herd mentality," said Ryan Larson, senior equity trader at Voyageur Asset Management. "We started going higher -- and you don't want to be the last one on the boat."

The stock market's initial selloff began after the Labor Department reported that the number of newly laid-off individuals seeking unemployment benefits jumped last week to a level not seen since just after the Sept. 11, 2001, terrorist attacks.

And there were more signs of a severe pullback in consumer spending, a troubling trend that had pummeled stocks earlier in the week. Wal-Mart Stores Inc. trimmed expectations for full-year earnings, and Intel Corp. late Wednesday cut more than $1 billion from its sales forecast, providing more evidence that few industries are safe from a clampdown on spending by businesses and consumers alike.

But then the S&P lifted above its Oct. 10 trading lows, and a Treasury auction of 30-year bonds got decent demand from both domestic and foreign buyers, said Arthur Hogan, chief market analyst at Jefferies & Co. The auction results alleviated some fears that the government will have a hard time financing its costly bailout.

Hogan called it a "great sign" that the S&P recovered after falling below its Oct. 10 trading lows. "Historically, if you test a low within 45 days and close above it, it's very bullish," he said.

---------------------

Personally, I think the CIA covertly inserted some subliminal micro-second "BUY,BUY,BUY" messages into GWB's heart-warming G20 rah-rah broadcast.

As Mr Larson said - "It appears to be a herd mentality". So, that augers well for a sustained rally - until the lead Crazy Bull runs over the edge of the Grand Canyon...

So-called "investors" gambling on the dream that what has been happening in the economy is really only a bad dream and tomorrow they will wake up and smell the rose once more seems to be a tad insane to me. But hey, WHAT WOULD I KNOW??? :silly:

 

[Glen48]

It is easier to make a list of those countries not in a recession yet OZ still seems to be traveling ok??? Are we to get a big shock one day were every thing collapses over night or will it be slow day by day like the others?

 

[sassa]

The wit of the economist.

http://www.rgemonitor.com/blog/roubini/254403/explaining_todays_bounce

 

[Aussiejeff]

The wit of the economist.

http://www.rgemonitor.com/blog/roubini/254403/explaining_todays_bounce

Brilliant!

My thoughts exactly... LOL

 

[kransky]

Double bottom

The bear market is all over.. go the bulls!!!!!!!!!!!!!!!!!!!!!1



trouble is how long will it go for and can we take advantage of it

 

[Uncle Festivus]

Double bottom

The bear market is all over.. go the bulls!!!!!!!!!!!!!!!!!!!!!1



trouble is how long will it go for and can we take advantage of it

Double bottom indeed - hooray . What are you buying?

 

[MrBurns]

Hooray . What are you buying?

Food stamps

 

[Glen48]

I use a bottle of Head and Shoulders each night and still loosing money.
Buying Time is the only option even better doing time at least you get 3 meals a day and maybe all the sex as well whether you need it or not.

 

[kransky]

haha... i was tempted today but didnt have the balls to buy some "oversold" stocks... the bounce just seems too obvious i worry it wont last long at all..

i feel safer waiting for a small bounce then going short...

 

[chops_a_must]