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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
Have I mentioned the word "manipulation" yet?
Have a great day.....
aj
AJ, all markets are manipulated, you just have to know which way.
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=宋] [/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=宋] [/FONT][FONT=宋] [/FONT]China Should Raise ConditionsBut 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=宋] [/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)
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
Gotta wonder who is manipulating the US share market right now.... has the Fed "secretly" started buying those dud company shares already?
aj
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.
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.
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
Hooray. What are you buying?
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