Imminent and severe market correction

[basilio]

In all the kerfuffle over Greece and the rest of the PIIGS we somehow overlooked Hungary!

So why are we surprised that the whole of Europe is in deep debt and ready to fall over with the next scare?

We don't have a financial system. We have a wreck of a financial system held together with smoke and mirrors. Any decent wind and the smoke will disappear, the mirrors fall over and we will all be looking at mountains of worthless scrip.

 

[wayneL]

So really, we have PHIIGS?

or...

PIIGSH(it)?

 

[explod]

In all the kerfuffle over Greece and the rest of the PIIGS we somehow overlooked Hungary!

So why are we surprised that the whole of Europe is in deep debt and ready to fall over with the next scare?

We don't have a financial system. We have a wreck of a financial system held together with smoke and mirrors. Any decent wind and the smoke will disappear, the mirrors fall over and we will all be looking at mountains of worthless scrip.

And a big add to that "the United States" who in fact have the greatest debt and (aided by the western press) the greatest illusions of all. Problem is, the reserve currency of the planet is intertwined within the entire developed banking system, so its failure is a horror too great to contemplate.

Meantime the dominos keep stacking beyond the edge on the hot air. Keep stocking that fire champ.

 

[skc]

In all the kerfuffle over Greece and the rest of the PIIGS we somehow overlooked Hungary!

So why are we surprised that the whole of Europe is in deep debt and ready to fall over with the next scare?

We don't have a financial system. We have a wreck of a financial system held together with smoke and mirrors. Any decent wind and the smoke will disappear, the mirrors fall over and we will all be looking at mountains of worthless scrip.

Hungary has its own currency so can probably undertake different measures compared to Greece in the Euro zone. The Germans and French won't have to bail out the Hungarians for a start.

I was travelling in Hungary not so long ago - they are quite an unlucky bunch of people in recent history. National psyche is not all that grand imo. They all hope the economic and political situation will improve in a generation's time, but not in the near future.

But for the sake of PIG****, definitely count the Hungarians in.

 

[Aussiejeff]

G-20 Coordination Fails as Governments Clash on Recovery Recipe

June 7 (Bloomberg) -- Global policy makers are starting to clash over their individual prescriptions for recovery as Europe demands lower budget deficits while the U.S. warns against pushing exports instead of domestic demand.

At a meeting of Group of 20 finance chiefs in Busan, South Korea, June 4-5, Treasury Secretary Timothy F. Geithner said the world cannot again bank on the cash-strapped U.S. consumer to drive growth and urged other nations to stimulate their own demand. European Central Bank President Jean-Claude Trichet said fiscal tightening in “old industrialized economies” would aid the expansion by shoring up investor confidence.

Each strategy carries threats for the global rebound that the G-20 said faces “significant challenges.” Continued stimulus risks bondholder revolt over rising debt burdens, while spending cutbacks could worsen unemployment. Relying on exports leaves the world prone to trade wars and competitive currency devaluations as countries seek to give their companies an edge.

“The world may end up in a period of sub-potential growth for two or three years,” said Venkatraman Anantha-Nageswaran, who helps manage about $140 billion in assets as global chief investment officer at Bank Julius Baer & Co. in Singapore. “We need to accept that all of us cannot simultaneously grow our way out of trouble.”

http://www.bloomberg.com/apps/news?pid=20601010&sid=ajCu8.BfseQE

Oh dear. Mr Geithner wants the world to start $elf-$timulating in an orgy of self-protectionism.

This could get REALLY messy now....

 

[Edwood]

http://www.hussmanfunds.com/wmc/wmc100628.htm

its all looking a bit ropey eh - key support levels going, could be time to batten down the hatches

 

[Bigukraine]

http://www.hussmanfunds.com/wmc/wmc100628.htm

its all looking a bit ropey eh - key support levels going, could be time to batten down the hatches

This morninng will be imo very ugly ,the US Market under the 10,000 points,europe looking worse,china figures of growth slump, ... if anyone thought we were on the road to recovery they didn't see the road littered with speed humps....

If this doesn't convince our stupid Aust Govt the folly of the RSPT and the "we will be in surplus by 2013" mantra nothing will....

The world fin markets are on the edge and will remain there for a long time to come yet.... Good luck everyone and hold your nerve and your hats it's the start of GFC mkII

 

[Aussiejeff]

http://www.hussmanfunds.com/wmc/wmc100628.htm

its all looking a bit ropey eh - key support levels going, could be time to batten down the hatches

Thanks for the article link Edwood. This bit is especially worthy of note when considering the veritable Mountains Of Spin that will be thrown at us over coming months by desperate gummints.

In short, my concerns about the economy and financial markets are escalating quickly. Given the already vulnerable condition of the U.S. economy, a second phase of weakness would most likely contribute to already troubling levels of mortgage delinquency and foreclosure, and could be expected to push the unemployment rate toward 12%. It is not useful to rule out unfavorable outcomes simply because they seem unpleasant or unthinkable. It is also not useful to place superstitious hope in the Fed and the Treasury to fix the consequences of irresponsible lending without any ill effect. In the coming quarters, remember that every time you hear an incomprehensibly large bailout commitment from government, it will equate to an unconscionably large extraction of public resources, possibly through overt taxation, but more likely through the long-term destruction of purchasing power.

 

[Bushman]

US bond yields are pricing in a double dip recession (sub 3%).

 

[sinner]

US bond yields are pricing in a double dip recession (sub 3%).

Hi Bushman,

Bond yields are declining sure. The market is demanding less yield to be willing to hold medium/long dated US debt.

But does that mean the bond market is pricing in a double dip recession?

The yield curve for US certainly does not look like it did in 2008. In fact, the yield curve looks right now just like it did in early 2003 right before the SPX took off from 900something to new all time highs.

If you hold any weight to the sector rotation cyclical view then we are much more likely in the tail end of "Full Recession or beginning "Early recovery" stage than the recessionary stages.

Full Recession - Not a good time for businesses or the unemployed. GDP has been retracting, quarter-over-quarter, interest rates are falling, consumer expectations have bottomed and the yield curve is normal.
Early Recovery -Finally, things are starting to pick up. Consumer expectations are rising, industrial production is growing, interest rates have bottomed and the yield curve is beginning to get steeper.
Late Recovery -In this stage, interest rates can be rising rapidly, with a flattening yield curve.Consumer expectations are beginning to decline, and industrial production is flat
Early Recession -This is where things start to go bad for the overall economy. Consumer expectations are at their worst; industrial production is falling; interest rates are at their highest; and the yield curve is flat or even inverted

http://article.wn.com/view/2010/06/16/Industrial_production_rises_12_pct_in_May_l/
http://www.financemarkets.co.uk/2010/06/25/us-consumer-sentiment-up-in-june/




Just a thought that is all.

It is certainly obvious that both money and credit markets are pricing differently to equities - but nobody really knows which is right at this point.

 

[Edwood]

http://seekingalpha.com/instablog/2...-puts-stocks-at-risk-says-veteran-sky-watcher

Hocus pocus maybe, and definitely not tradeable (in my opinion ) - but interesting nun-the-less.... article was written March 31 2010 & called an April / May top & August 1 meltdown

 

[professor_frink]

http://seekingalpha.com/instablog/2...-puts-stocks-at-risk-says-veteran-sky-watcher

Hocus pocus maybe, and definitely not tradeable (in my opinion ) - but interesting nun-the-less.... article was written March 31 2010 & called an April / May top & August 1 meltdown

Ed, I'm more concerned by this little bit:

We want to talk about the upcoming Cardinal Climax, which you say puts stocks””and perhaps humanity””in jeopardy.

That doesn't sound very promising at all!

 

[Edwood]

Hey G, good to see you around
Yeah I guess it'd be prudent to book something meaningful in the diary now for Aug 1 >> its a Sunday so no markets open >> maybe the event will be on the Monday, could be a good a day to take off & go fishing or something

 

[Tanaka]

http://seekingalpha.com/instablog/2...-puts-stocks-at-risk-says-veteran-sky-watcher

Hocus pocus maybe, and definitely not tradeable (in my opinion ) - but interesting nun-the-less.... article was written March 31 2010 & called an April / May top & August 1 meltdown

...could be true ...reminds me that the planets are aligned by a fibonacci number with the average distance between them equaling 1.618! If you are interested about how numbers affect the market and nature in general, I found 'Fibonacci Analysis' by Constance Brown a good read.

 

[professor_frink]

Hey G, good to see you around
Yeah I guess it'd be prudent to book something meaningful in the diary now for Aug 1 >> its a Sunday so no markets open >> maybe the event will be on the Monday, could be a good a day to take off & go fishing or something

Fishing may not be the best idea if humanity is at risk Ed. Perhaps hiding in a bomb shelter is in order

 

[Edwood]

reminds me that the planets are aligned by a fibonacci number with the average distance between them equaling 1.618! If you are interested about how numbers affect the market and nature in general, I found 'Fibonacci Analysis' by Constance Brown a good read.

Cheers Tanaka - see FTSE has hit some resistance this morning having retraced .618 of the recent decline

 

[Edwood]

Fishing may not be the best idea if humanity is at risk Ed. Perhaps hiding in a bomb shelter is in order

fishing is always a good idea Prof, particularly if the world is about to end - better than going out sitting in an office

 

[Edwood]

well made it through Aug 1 OK - but freakin hell got electrocuted on the 3rd!! a proper can't-remove-my-hand-from-the-socket & fry me for 15 seconds shock!! was very lucky to start to lose consciousness, collapsed & fell off the charge. All checked out on an ECG and all in order. glad to still be here today

 

[noie]

Geez.. that sound nasty!

at least you are all charged up for the rest of your life

 

[Edwood]

ha ha - yeah, the missus says she hopes I haven't gone all AC-DC on her