Imminent and severe market correction

[Aussiejeff]

Nice looking graph. So what! does not mean one iota. Onward and upward comrades !!!!!!!!!!!!!!!!:

Imminent and severe bubble of laughing gas forming....

ASX 5,000 by end of trade next week???

 

[Uncle Festivus]

Nice looking graph. So what! does not mean one iota. Onward and upward comrades !!!!!!!!!!!!!!!!:

Yes, I'm starting to think the same thing. It doesn't matter by what metric you try to gauge things in, it appears there is one last capitalistic splurge left in the system funded by the biggest debt binge in history. If the money shufflers won't lend it out to the real economy then why not throw it at financial intruments of leveraged destruction?

I want a peice of the Goldman pie....

 

[Sean K]

Yes, I'm starting to think the same thing. It doesn't matter by what metric you try to gauge things in, it appears there is one last capitalistic splurge left in the system funded by the biggest debt binge in history.

Anyway out of it, other than death and destruction?

 

[Uncle Festivus]

Anyway out of it, other than death and destruction?

Dunno, I've given up ie last week in the UK unemployment figures were the worst for (insert a long time here) and the market still surged. There ain't gonna be a sustainable recovery without job creation, I would have thought??

They can shuffle the money around and skim a bit off and then distribute it amongst the chosen few, but in the end it's all not real - nothing is being made or exported & imported - it's all bubbling entirely with borrowed stimulis money, or in the case of China, using up their foreign reserves creating their own mega bubbles.

 

[MrBurns]

So what will bring it down ?

There's still a lot of cash out there that has to go somewhere.

 

[skyQuake]

Dunno, I've given up ie last week in the UK unemployment figures were the worst for (insert a long time here) and the market still surged. There ain't gonna be a sustainable recovery without job creation, I would have thought??

They can shuffle the money around and skim a bit off and then distribute it amongst the chosen few, but in the end it's all not real - nothing is being made or exported & imported - it's all bubbling entirely with borrowed stimulis money, or in the case of China, using up their foreign reserves creating their own mega bubbles.

Agree with the China part. Their most recent industrial stimulus package has NOT been spent on industrials, but rather property, and to a lesser extent, the sharemarket. No-one wants to touch industry atm, so money is flowing into capital mkts...

 

[Sean K]

Dunno, I've given up ie last week in the UK unemployment figures were the worst for (insert a long time here) and the market still surged. There ain't gonna be a sustainable recovery without job creation, I would have thought??

They can shuffle the money around and skim a bit off and then distribute it amongst the chosen few, but in the end it's all not real - nothing is being made or exported & imported - it's all bubbling entirely with borrowed stimulis money, or in the case of China, using up their foreign reserves creating their own mega bubbles.

From my understanding, this is saving the day, but creating the mega bubble(s), as you say.

The unemployment numbers are probably factored in. Maybe the March lows factored in 15% world unemployment?

I keep on coming back to the fact that the economy and the stock market are not in synch.

The money being printed now may well cause a multi year boom until it all catches up on us.

Or, other international events may intervene in the mean time to alter all social and economic factors.

Makes it hard to be a long term buy and holder, that's for sure.

 

[Uncle Festivus]

There is still talk of second stimulis packages globally, yet the bill for the last lot is around the $6 Trillion mark! Australian companies have raised something like $88 Billion in new capital that won't be used to buy existing shares ie it's just to keep the current debt manageable?

Multiple these equity raisings by a global factor and you get a lot of money not actually being put to constructive use, other than shoring up existing balance sheets?

Combined with the GS algo trading playing silly buggers with volumes and we get a suedo bull market? All looks good on paper, like China's 8% GDP growth, but global trade is flatlining now after plunges of up to 50% or more.

Japan is simply a basket case! The worlds second biggest economy just isn't in a position to start buying Chinese good's whilever they have to start alowing for a problem that's just now starting to cause problems for all developed economies - the aging population.

The US is facing unfunded liabilities for pensions and health that they just cant pay for out of tax revenues.

Consumerist capitalism has hit the debt glass ceiling?

 

[Sean K]

There is still talk of second stimulis packages globally, yet the bill for the last lot is around the $6 Trillion mark! Australian companies have raised something like $88 Billion in new capital that won't be used to buy existing shares ie it's just to keep the current debt manageable?

From what I've seen a lot of the raisings have gone into paying off debt or lowering gearing and many companies are now sitting on loads of cash after raisings over the past year. Not sure where the money has come from, but it has happened.

It will be interesting to see how P/E's change after this reporting season.

Some big companies were on 10% plus yields and 5% or lower P/E's not long ago. That will surely change once the numbers come out. For example, BHP P/E was about 10 not long ago. I bet that will go to 20 soonish.

 

[Awesomandy]

So what will bring it down ?

There's still a lot of cash out there that has to go somewhere.

I think that as long as there is excess cash and greed in the system, the markets will find it difficult to move down. At the moment, governments around the world are printing cash like there's no tomorrow, and there just isn't enough fear to cause any severe jolts to the system - a lot of bad news have been factored in already (or at least that what most people tend to say). In a very simple sense, a drop in any market can only be caused by the lack of bidders/buyers at or around the last traded price.

 

[Uncle Festivus]

Ia lot of bad news have been factored in already (or at least that what most people tend to say).

You could add that a lot of good news has also been factored in, based on a V shaped recovery to materialise within the next 6 months. I guess if enough people keep saying it then it might happen, but the very same people got the call completely wrong going into this, so if records are anything to go by then 'investing' now based on the assumptons of these people is risky. But 'traders' have never had it so good.

You'd have to weigh in the 'burnt' investor sentiment too - how may of the mum & dad investors are willing to put what's left of their retirement funds into the share market again? The market is still at about the same level it was around May 05, ie 4 years of gains lost? I think it is mostly large investors & funds just churning the market, but have no way of knowing this?

Another interesting China fact - their money supply has been growing at the rate of 25% per month for the last few months - a great choice for the Chinese - invest it in a new bubble market like shares or RE or have your money inflated away?

 

[nomore4s]

You could add that a lot of good news has also been factored in, based on a V shaped recovery to materialise within the next 6 months.

Interesting comment. It is one I'm starting to side with but I think this rally has some legs in it yet.

 

[gfresh]

Some big companies were on 10% plus yields and 5% or lower P/E's not long ago. That will surely change once the numbers come out. For example, BHP P/E was about 10 not long ago. I bet that will go to 20 soonish.

I am not so sure about pricing for the miners either.. share prices are still looking well past current prices for iron ore, metallurgical coal, copper, oil, and other commodities... however the export price index still looks pretty ****house, which indicates these prices are still likely to go down, not up.

http://www.abs.gov.au/AUSSTATS/abs@...2B39AF3FD0099F0DCA256A8E0083907A?OpenDocument

Many of the commodity charts look good against the $USD, whereas in $AUD aren't exciting at all.

A lot of the so called "demand" is also at the moment China busy playing games and stockpiling many minerals, so it is hard to tell if this demand is 'real' or is simply temporary that could evaporate at any time.

EXPORT PRICE INDEX

* The Export Price Index decreased by 20.6% in the June quarter 2009, the largest quarterly decrease since the current series began in September quarter 1974. The decrease was driven mainly by falls in prices received for coal, coke and briquettes (-36.8%) and metalliferous ores and metal scrap (-23.5%), as well as the appreciation of the Australian dollar against all major trading currencies. These falls were partly offset by rises in prices received for petroleum, petroleum products and related materials (+12.9%). Through the year to June quarter 2009, the Export Price Index decreased by 0.2%.

 

[>Apocalypto<]

with the current patterns in the FX markets It looks as if this rally has further to go.

 

[GumbyLearner]

Another interesting China fact - their money supply has been growing at the rate of 25% per month for the last few months - a great choice for the Chinese - invest it in a new bubble market like shares or RE or have your money inflated away?

Just be careful what you reveal Unc.

You might get 'Sterned' or 'HUed'

Anyway great wake-up material! :

 

[Uncle Festivus]

I am not so sure about pricing for the miners either.. share prices are still looking well past current prices for iron ore, metallurgical coal, copper, oil, and other commodities... however the export price index still looks pretty ****house, which indicates these prices are still likely to go down, not up.

http://www.abs.gov.au/AUSSTATS/abs@...2B39AF3FD0099F0DCA256A8E0083907A?OpenDocument

Many of the commodity charts look good against the $USD, whereas in $AUD aren't exciting at all.

A lot of the so called "demand" is also at the moment China busy playing games and stockpiling many minerals, so it is hard to tell if this demand is 'real' or is simply temporary that could evaporate at any time.

Hey, the money tsunami has to find a home somewhere, even though it's gonna cause a glut?

Just be careful what you reveal Unc.

You might get 'Sterned' or 'HUed'

Anyway great wake-up material! :

Just between you and me then, China is about to have a problem with inflation

The broad M2 measure of money supply grew at a record pace of 28.5 percent in June, blowing past forecasts of a 26 percent rise and up from a 25.7 percent increase in May.
Yuan loans outstanding were 34.4 percent higher than a year earlier, also the highest on record, up from May's reading of 30.6 percent.

China’s government has failed to sell bonds in three separate auctions this month as the central bank tightened monetary policy to avoid the return of inflation. The People’s Bank of China has allowed interest rates in bill sales to jump to the highest this year after a government report showed M2, the broadest measure of money supply, rose by a record 28.5 percent in June.

Money on tap!

Annual growth in China's broad M2 measure of money supply surged in June on the back of breakneck bank lending ordered by Beijing to pump up the world's third-largest economy.

And in a sign that money is flowing back into China in anticipation that those stimulus efforts will succeed, the central bank's foreign exchange reserves leapt by $177.9 billion in the second quarter to $2.13 trillion.

 

[MRC & Co]

with the current patterns in the FX markets It looks as if this rally has further to go.

Yes, though this talk of a second stimulus in the US (completely against what Geithner has been recently stating on his globe trotter tour), could finally be the straw the breaks the camels back.

I wouldn't be surprised to see a few correlation breakdowns over the coming few wks.

 

[imagineer]

Hi Guys new poster enjoyed the discussions .

For my Pennys worth. China is not going to be the only inflation problem.
The Irish are stuffed, closing schools and 7000 teachers out of work.
50 - 80 k homes on the market. and ****ty weather ;-)

They have guards at popular beauty spots to stop suicides of the cliffs.

I reckon thats the future for countless millions more peolple zonally throughout the world. My money is in silver and gold and I am happy cause I know its worth something...... hopefully.

China is buying resouces and metals, Middle East is sitting on the Oil ,for, whats left.

And America and UK police have certainly been flexing their Tazers....and Australia

Smith and Wesson lead the way and Americans look like "waking up a slave in the country their ancestors conquered "" One of the presidents, ( not sure which but had brains so was probably a few decades ago....

Sorry for the rant, but look forward to reading more of your views.

Kindest Regards
Neil

 

[explod]

Hi Guys new poster enjoyed the discussions .

For my Pennys worth. China is not going to be the only inflation problem.
The Irish are stuffed, closing schools and 7000 teachers out of work.
50 - 80 k homes on the market. and ****ty weather ;-)

They have guards at popular beauty spots to stop suicides of the cliffs.

I reckon thats the future for countless millions more peolple zonally throughout the world. My money is in silver and gold and I am happy cause I know its worth something...... hopefully.

China is buying resouces and metals, Middle East is sitting on the Oil ,for, whats left.

And America and UK police have certainly been flexing their Tazers....and Australia

Smith and Wesson lead the way and Americans look like "waking up a slave in the country their ancestors conquered "" One of the presidents, ( not sure which but had brains so was probably a few decades ago....

Sorry for the rant, but look forward to reading more of your views.

Kindest Regards
Neil

Welcome imagineer,

you have a good hold on it. The money ponzi is just about falling over and I am also glad that I have physical gold and silver.

Many here do well trading the markets, long and short, but the gold thingo when it goes (the currencies will go the other way) will give no warning and we will be ok

 

[moXJO]

I'm hearing US "commercial mortgage", “alt-A” and “prime” mortgages are hitting record default levels. Will it be big enough to start the next leg down?
Or is the current spin enough to maintain more sideways action?