Our market crashes more than the US market - why?

[Nick Radge]

Been thinking about this one. Would it be prudent to suggest that the US authorities intervene much more in their markets compared to what occurs here? Last night being one heck of an example. We don't see that in Aust.

 

[sassa]

Been thinking about this one. Would it be prudent to suggest that the US authorities intervene much more in their markets compared to what occurs here? Last night being one heck of an example. We don't see that in Aust.

Could it be that we don't have the fanfare here like the Americans?The RBA pumped $720m into the system on Monday.

 

[bvbfan]

Agree with Nick.

Does the ASX have circuit breakers, don't think so.

Does it have trading curbs, again don't think so.

Has the Prime Minister/Parliament set up a group to intervene in markets like the Working Group on Financials Markets aka The Plunge Protection Team.
Again don't think so, although I suppose the Future Fund could be said to have a small effect like this at times.

Free markets my ar8e.
Funny how some commentators go on and on about social policies in Europe then in reality the US financial markets are just socialism for the rich

 

[Aussiejeff]

Could it be that we don't have the fanfare here like the Americans?The RBA pumped $720m into the system on Monday.

Then again, we had how many years of Lil' Johnny Whoward proclaiming "the markets will determine what's right". He had a definite "Government hands off" approach when it came to financial market policy. So it's no surprise that our Ruddy new guvmint still exhibits this carry-over behaviour.... IMO they fear a backlash from Joe Public if they are seen to be "meddling" in the way our puny financial markets operate.

Especially if they were to meddle and fail.....


AJ

 

[powerkoala]

does anyone here really can explain why ?
us market strong rally 4% down 1%
our market strong rally 4% profit taking down 2% and now down again 1.6%
what is really happening with our market ?
we already crash more than us and even now is still getting worse everyday
if recession factor fear in us, at least our market will follow the lead but not become the leader in falling down first.

 

[Aussiejeff]

does anyone here really can explain why ?
us market strong rally 4% down 1%
our market strong rally 4% profit taking down 2% and now down again 1.6%
what is really happening with our market ?
we already crash more than us and even now is still getting worse everyday
if recession factor fear in us, at least our market will follow the lead but not become the leader in falling down first.

As others have already opined, if you are a big player on the WORLD'S roulett... errr, financial markets, which *chips* would you cash in first to rebuild yer capital base? Yer platinum coated US Whizzbang chips or yer cold, greasy, slightly mouldy OZ chips?

There. I thunnk thet explains it better?




AJ

 

[Who Dares Wins]

does anyone here really can explain why ?
us market strong rally 4% down 1%
our market strong rally 4% profit taking down 2% and now down again 1.6%
what is really happening with our market ?
we already crash more than us and even now is still getting worse everyday
if recession factor fear in us, at least our market will follow the lead but not become the leader in falling down first.

I've been noticing the same thing. Why is the market down 90 odd points today? Resources were up last time I looked. It seems if the Dow goes down overnight then its almost a certainty the ASX will follow too. If the Dow goes up overnight, well we can still go down. No rhyme nor reason to it.

 

[waz]

I agree with you Powerkoala

Im still trying to find someone who can give me a mathmatical explanation as to how increasing interest rates in Australia will reduce inflation. Yes it does reduce demand, however the demand (quantity) for food, housing, oil will be the same regardless of i rates.

All the reserve is doing is decreasing spending in consumer goods within the local economy.

You have probably all heard of demand pull, cost push inflation. There should be another term, interest push inflation.

The way to reduce prices in Australia is to not use less, but to produce more. Increasing i rates is hampering our efforts to build projects to bring extra capacity.

 

[gfresh]

Maybe I'm off-track, but there does seem to be a lot of systematic targeting of large stocks (overseas hedge funds? index shorters?). They sit fairly static for a couple of days as everything else tumbles, and then without any announcement, any news whatsoever suddenly they'll drop by a few percent each day. Then it seems selling attention is focused on another stock(s), and the heavy selling stops.

Anything with a P/E greater than 15 really seems to be really copping this treatment... Even if the company is in a sector that has always traditionally had a higher P/E ratio, it seems "amost" as if it's simply hit a flag on a shorter's list. If the company is in an area that by most logic should survive some difficult times, or still forecasts strong growth is treated equally to that may suffer worse.

While it's quite across the board the selling, it seems to be going in waves, and possibly by sector. The other day for instance: XFJ (financials) was static, and XMJ was down 3-4% or so.. today it's reversed again- XMJ -0.7% and financials -2.8%.

Are there any investors whatsoever left in this market to keep things steady? Almost doesn't seem like it!

Anyhow, maybe I'm imagining it, just been noticing on a few blue chips .. Seems slightly less than random.

 

[Aussiejeff]

.... Increasing i rates is hampering our efforts to build projects to bring extra capacity....

I agree with you there. The higher the cost of borrowing funds to undertake infrastructure projects, the less willingness for companies to get involved....

As far as the government is concerned, Ruddy makes much re: the way of the future for our economy is to build heaps more infrastructure - but on the other hand says "oh well, if the independent Reserve Bank and other banks keep increasing rates, what can WE as a government do about it - oh yeah - we can always bring out the RAZOR GANG and slash government spending". Then splurge a motza on inflationary tax cuts? Hmmm. Something doesn't quite add up there.



AJ

 

[Aussiejeff]

Maybe I'm off-track, but there does seem to be a lot of systematic targeting of large stocks (overseas hedge funds? index shorters?). They sit fairly static for a couple of days as everything else tumbles, and then without any announcement, any news whatsoever suddenly they'll drop by a few percent each day. Then it seems selling attention is focused on another stock(s), and the heavy selling stops.

Anything with a P/E greater than 15 really seems to be really copping this treatment... Even if the company is in a sector that has always traditionally had a higher P/E ratio, it seems "amost" as if it's simply hit a flag on a shorter's list. If the company is in an area that by most logic should survive some difficult times, or still forecasts strong growth is treated equally to that may suffer worse.

While it's quite across the board the selling, it seems to be going in waves, and possibly by sector. The other day for instance: XFJ (financials) was static, and XMJ was down 3-4% or so.. today it's reversed again- XMJ -0.7% and financials -2.8%.

Are there any investors whatsoever left in this market to keep things steady? Almost doesn't seem like it!

Anyhow, maybe I'm imagining it, just been noticing on a few blue chips .. Seems slightly less than random.

Wouldn't you just love to have a few $Billion to throw your weight around with ATM? Imagine the fun you could have making and breaking stocks at the mere *tap* of a key....

MUHAHAHAAAAAA!

 

[waz]

Another thing, back in the 90's I though financial deregulation was a good thing. However we have gone to far.

As we have seen recently, the official reserve cash target has become less significant over the last few years. What the media should be reporting is the 90 day bank bill.

I find it weird that at a time when the economy is suffereing from sub-prime. My bank increases my credit limit on my credit card from 7000 to 9000 without me asking. Then 4 days after I got a bill saying I missed my last payment and you now need to pay a $20 late payment fee, this same bank again increases my credit limit to 12,000.

Credit cards are the australian version of american sub-crime. We may be a little more strict about giving away home loans, but when it comes to credit cards, any Australian over the age of 18 can get one, and we all get offered credit increases even though the bank has no idea what our debt servicing capability is. Whats to say that when I got my credit increases that I didnt loose my job?????

My opinion on how we got into this mess, from a personal credit point of view, was not that credit was cheap, but that credit was easily obtained. No matter what the level of interest rates, the demand for credit cards in Australia would have been almost exactly the same.

Keep in mind that like myself, many people have been switching credit cards every so often to take adavantage of 0% rate periods on balance transfers. Ive been doing this for the last 18 months, and I bet many others have too. However this cycle of transferring debt cant go on forever. I have been doing it in a similar fashion to the Yen carry trade, borrow at 0% int and earning 7% on my savings account. This handly little trick has earned me a couple of hundred dollars at the banks expense.

In short, deregulation has benefited the banks, not the Australian economy. Instead of increasing interest rates, why doesn't the reserve enforce limits on the amount of credit that individuals can borrow.

PS. When you apply for a credit card, you are asked to provide details of your job, income, dependants, current debts and a number to act as a referee (your company payroll). All these questions are meaningless, these forms dont get individually processed and a credit assesment obtained.

Everyone will pass this test, the only difference being that based on your age/income. A low income 18 year old will get $2000 credit, and a post 25 year old earning more than 50k a year will get $8,000

 

[Nick Radge]

We're getting sold off today because a $16 billion hedge fund in the US has just announced its fallen over.

 

[MRC & Co]

We're getting sold off today because a $16 billion hedge fund in the US has just announced its fallen over.

Incredible!

 

[Bill M]

"The Australian share market has been one of the worst performing in the world recently, losing more than 20 per cent since the start of the year."

Full Story Here

 

[Aussiejeff]

"The Australian share market has been one of the worst performing in the world recently, losing more than 20 per cent since the start of the year."

Full Story Here

Down 3% atm (1.35pm). Par for the course again..

 

[vishalt]

The way the Dow looks now, already -200, wow.

Tomorrow could be the worst day in the stockmarket in a very long time, worse - I'm talking 10% if the Dow takes the cake today.

I don't think Bernanke will come out tonght - he's due tomorrow for a rate cut.

**** I'm so glad I'm on the sidelines D:.