Imminent and severe market correction

[dhukka]

Just nationalise the lot.. In the WSJ website ..a story that "the cities" Richmond Capital has seen off about half its money in January......

Thanks for the heads up Kauri, couldn't read the whole article as I'm not a subscriber but from the first few paragraphs it sounds like another hedge fund genuis who turned out not to be, surprise, surprise, not a genius.

U.K. Hedge Fund Plunges

London-based hedge fund Richmond Capital LLP has stumbled badly this year, losing about half its money in January alone, according to investor groups briefed on the results.

That makes Richmond, launched by Luca Bechis, an experienced trader with a track record of posting strong gains, among the biggest losers in a year that is already proving challenging for a number of funds.

January was one of the worst months for hedge funds in recent years, with funds down an average of 1.8%, according to data tracker Hedge Fund Research ...

 

[Uncle Festivus]

A good market commentary from Share Cafe - this bit caught my eye - sums it (the contagion/panic) up nicely.

http://www.sharecafe.com.au/fnarena_news.asp?a=AV&ai=7550

A bagel seller interviewed on CNBC on Friday (bagels are the staple diet of cosmopolitan Americans) noted that last year he was paying US$12 for a bag of wheat. On his latest price enquiry he was offered US$68.

 

[Kauri]

I hear that someone in the Peleton of the Tour De Hedgefunds has taken a tumble... I wonder if the some of the others in the group will be brought down or will manage to avoid the spill???
Cheers
>>>>>>>>Kauri

 

[ithatheekret]

UK Consumer inflation barometer up 86% , yikes there's a record .

What's the BoE gunna do now , hold 5.25 ?

Hmmm , safest bet .

Stuff having their job , better off working for the FSA , less rocks .

 

[wayneL]

UK Consumer inflation barometer up 86% , yikes there's a record .

What's the BoE gunna do now , hold 5.25 ?

Hmmm , safest bet .

Stuff having their job , better off working for the FSA , less rocks .

Link?

 

[ithatheekret]

Feed on broker platform . copyrighted .

 

[wayneL]

Feed on broker platform . copyrighted .

A little more info would be more helpful then, otherwise we don't know WTF your referring to

FYI: http://www.forbes.com/markets/feeds/afx/2008/03/02/afx4719422.html

AFX News Limited
UK consumers' fears of inflation rise to record levels - Lloyds TSB
03.02.08, 7:16 PM ET

LONDON (Thomson Financial) - UK consumers' fears about rising prices are worsening rapidly, according to a survey by a leading bank.

The Lloyds TSB (nyse: LYG - news - people ) Consumer Barometer for February found perceptions of current inflation and expectations for prices both at record highs, although consumers' worries about job security eased a touch.

The balance of consumers who believe inflation is higher now than at the same point last year jumped 8 percentage points to 86 pct -- a survey record.

The balance of consumers expecting inflation to rise in the coming year also hit a record, of 87 pct.

Consumers' rising inflation expectations reflect soaring energy bills, which the BoE acknowledges will probably push the consumer price index (CPI) above 3 pct this year, from 2.2 pct in January.

 

[ithatheekret]

Noted .


Your on the ground there Wayne , where do you think the rate will be this time next year ?

 

[wayneL]

Noted .


Your on the ground there Wayne , where do you think the rate will be this time next year ?

Haha! I can tell you where I think it *should* be, but where they will actually be is probably more the subject for a comedy sketch.

Merv the Swerve in now in between a rock and a hard place (as we all knew he would eventually be). Will the MPC exercise their independence and actually set rates according to their remit of targeting inflation? Or will they remain at the beckon of McBean & Daaaaaaaahhling?

The Doves have the likes of the ludicrous David Beltchflower (WTF is he doing on the MPC anyway?) and the imbecilic Rachel Lowbrow who can always be relied on to vote for a cut, and they have Gordo stamping his feet, shaking his fist and frightening the hawks with his considerable ugliness. So a raise will be pushing the brown stuff uphill.

To be honest, I'll take a straight out punt and say they'll be roughly where they are now, give or take 3%.

 

[MRC & Co]

To be honest, I'll take a straight out punt and say they'll be roughly where they are now, give or take 3%.

ha ha ha ha ha.

Looks like we might be getting caught up in this staglation also.

Makes policy writing a nightmare!

Anybody could have as good guess as the next person. 3% margin for error probably puts you in a 99% probability range.

 

[Kauri]

Haha! I can tell you where I think it *should* be, but where they will actually be is probably more the subject for a comedy sketch.

Merv the Swerve in now in between a rock and a hard place (as we all knew he would eventually be). Will the MPC exercise their independence and actually set rates according to their remit of targeting inflation? Or will they remain at the beckon of McBean & Daaaaaaaahhling?

The Doves have the likes of the ludicrous David Beltchflower (WTF is he doing on the MPC anyway?) and the imbecilic Rachel Lowbrow who can always be relied on to vote for a cut, and they have Gordo stamping his feet, shaking his fist and frightening the hawks with his considerable ugliness. So a raise will be pushing the brown stuff uphill.

To be honest, I'll take a straight out punt and say they'll be roughly where they are now, give or take 3%.

Now there is some innovative thinking.. salvation is at hand....

the Sunday
Times reports that PM Brown will move to prevent second home ownership to stop
rural houses prices from soaring.

Cheers
.........Kauri

 

[ithatheekret]

Yeah but that MPC rep Goodhart , could end up with the voting numbers soon , tipping the inflation jug over further . He's a pour it on kind of chap , got Rachel in his corner , yeah , cut after cut , sounds more like an execution . Quarter here , quarter there .......

What's Crash on , no second home ownership motions ?

How will he legislate that one ?


Anti productive twit he is . The only growth he's got is on his brain at this rate .

Next he'll be telling everyone how much ten years of no-fly zones cost Britain .

 

[Uncle Festivus]

Meanwhile, back in middle 'muni' America.....

Snips..

Feb. 29 (Bloomberg) -- U.S. municipal bonds are headed for their worst month in more than four years after collapsing demand for securities with rates set at periodic auctions sent debt costs for state taxpayers and hospitals as high as 20 percent.

Apparently a lot of otherwise successful, and conservative, business people have already gone into bankruptcy because of high cost's of funding imposed/demanded by their lenders.

The municipal market in the last week and a half or so has been in a free fall,'' Warren Pierson, vice president and municipal portfolio manager at Robert W. Baird & Co., said in an interview from Milwaukee

So they are or will be finding that it is increasingly difficult to fund local government projects & services eg health, transport, colleges. The bedrock of modern US society is being rattled, with possibly ominous consequences. This is not good. Is Bushs' middle name Nero? Riots in the streets.....

Almost 200,000 newly constructed single-family homes are sitting empty in the U.S., the most since Commerce Department statistics began in 1973. Partially completed developments reduce revenue for cities and towns and hurt businesses, said Nicolas Retsinas, the director of Harvard University's Joint Center for Housing Studies. Rising foreclosures and falling property values may cut tax revenue by more than $6.6 billion for 10 states, including New York, California and Florida, the U.S. Conference of Mayors said in a November report.

This will be an interesting week, maybe the tipping point?

 

[Aussiejeff]

Meanwhile, back in middle 'muni' America.....

Snips..


Apparently a lot of otherwise successful, and conservative, business people have already gone into bankruptcy because of high cost's of funding imposed/demanded by their lenders.


So they are or will be finding that it is increasingly difficult to fund local government projects & services eg health, transport, colleges. The bedrock of modern US society is being rattled, with possibly ominous consequences. This is not good. Is Bushs' middle name Nero? Riots in the streets.....


This will be an interesting week, maybe the tipping point?

Seems it can only get worse.... Hmmm. I seem to remember reading about how many of the down-trodden poor and middle class folk in the Great Depression pushed their barrows of worldy possessions from 'burb to 'burb, town to town, city to city in the never-ending quest for...

(a) a job,
(b) a feed,
(c) accomodation or,
(d) all of the above.

We all know we are much smarter and more civilised now and would NEVER let that situation develop... could we? Oh well, being cleverer, we can always avert our gaze and bury our heads in the quicksand if "it" starts looking "ugly"...

AJ

 

[Kauri]

Wall Street Gears for Its New Pain

Commercial Real Estate
To Yield Write-Downs;
Defaults Slim So Far

http://online.wsj.com/article/SB120450569895406511.html?mod=hpp_us_whats_news

 

[ithatheekret]

What will they spin out of the fact that consumer liquidity levels have reached their pinnacle and are now in decline ?

At a macro level , this is a rare and significant event , yet nada is said about it by Bill and Ben Inc . Gross Domestic Investment Rates will show the same tell tale signs if this is correct .

When did it happen before ? 19 what ...... ?

1928 ring any bells ?

 

[Kauri]

swiss UBer bank under pressure... again... over more writedowns... (-4% already)

Links..... Blumisberg
and reuters

 

[Miner]

Folks

Not sure if this is the right thread for posting the following message from Alan Kohler which I am sure many of the readers have read and acted on. Market will be probably further worsen with Reserve Bank and other Banks announcement.
Excepting few rays of light it all appear to be opaque .

Any way :

"That’s it. I’m cashing in
By Alan Kohler


PORTFOLIO POINT: There’s a good chance the market will head below the depths of November 22. It’s time to get defensive.


Last week I sold enough shares in my super fund to increase the level of cash to more than 50%. I sold Woodside, Oil Search, Clive Peeters, Mitchell Communications, FKP, some Transurban and some BHP Billiton. My portfolio has now been narrowed down mainly to BHP and Wesfarmers, with smaller investments in Transurban, Zinifex, Oncard and Freshtel.

Nothing personal against the stocks I sold – just that I think they are likely to be most affected by global and Australian economic downturn and I’m looking for cash.

Wesfarmers is a turnaround story I happen to believe in (while having some qualms about its level of debt) and BHP will probably get Rio Tinto and step up to a new level of scale and pricing power. Zinifex is very cheap and zinc looks set to rise (especially with a takeover offer on the table from Oxiana lodged today). Transurban is my long-term infrastructure investment and Oncard and Freshtel are the punts. To see my portfolio, click here.

Today’s column is not about those stocks, but about why I have switched to 55% cash.

To cut to the chase: I think there is now a better than even chance of the market going below its January 22 lows.

Another rate increase in Australia tomorrow appears to be a done deal and the pundits are only arguing about whether there will be one or two more, as the redoubtable Reserve Bank wrestles the rampant Australian economy to the mat.

Anyone would think things are going great. And indeed for the past six years, official interest rate increases have been sharemarket buy signals as the economy has sailed on. That was certainly true of May 2005 and May 2006, although last year’s two rises, in August and November, were clarion sell signals, as it turned out, but not because of anything happening in Australia.

But let’s face it, the Reserve Bank’s violin practice on the balcony as the orange glow of Rome’s flames lights the night sky has become just another big reason to worry. (My commentary : Yes, it is true for RBA, ASIC as well as Fed in USA since Mr Greenspan has left the power )

Bank bill rates have surged again and mortgage rates are going up more than the cash rate. The standard variable rate would already be sitting at 9% no matter what the cash rate was now, and seems to be heading for 10%. Putting up the official rate tomorrow will simply provide cover for the banks doing what they would have done anyway.

The idea that inflation is going to remain above 3% for another two years is based on a very narrow view of Australia’s place in the world. In my view, it is wrong. As I said on the 7.30 Report a couple of weeks ago, we’ll be lucky not to be in recession by then ("

Miner is bloody pessimistic to say I agree with Alan. No bull story - see the largest population states are keen to migrate WA. Overseas Visa 457 from some countries are gettng cleared in 2 weeks, some companies are paying $20000 bonus upfront to get a medium category engineer at the same time some organisations : DO NOT HAVE ANY WORK - LOT OF STUDIES WITH NO OUTCOME. Who will pay for them ? Some where money is earned to keep the hope to win the tnders. But with credit crisis every one at teh same story - shortage of cash. With high dollar thngs becoming more difficult. Only on China dependance. That is a big mistake like putting all eggs in one basket. By July 08 all demand for Olympic will be curtailed and the snow balling effect will be affecting most of us . Please remember I am not a day or night trader. Share market is not my lively hood but the 'hands on ' work miners like me do probably provides the impetus for companies to make money and hence the market to behave accordingly. Share market performance however governs my super fund

 

[Trembling Hand]

Not sure if this is the right thread for posting the following message from Alan Kohler which I am sure many of the readers have read and acted on. Market will be probably further worsen with Reserve Bank and other Banks announcement.
Excepting few rays of light it all appear to be opaque .

Bloody hell so after the whole thing has tanked his switched his tune from raving bull to Bear. After the market drops 20%. His words are worth nothing.

 

[Awesomandy]

Bloody hell so after the whole thing has tanked his switched his tune from raving bull to Bear. After the market drops 20%. His words are worth nothing.

Although, early last year, he did say something about selling into stupidity and greed (or something to that effect). That was a reasonable article, but given his commercial arrangments, I would think that it is his job to keep raving on with the bull until the very last second.

My views are similar, to a certain degree - I liquidated half of my (remaining) investments a couple of weeks ago.