Recovery Time For This Correction?

[ducati916]

The Bond Yields have been inverted for the best part of a year in the US.
Maintained inversion almost guarantees a recession as it kills the credit cycle.

The first to go is always the Junk.
Sub-prime is imploding.

Quite a large number of the top tier banks have large exposure. Most will have covenants to cover the reselling...........but if your counter-party is already dead, then guess what you eat the consequences.

China was unrelated, but, it was the emotional trigger that may accelerate the process in the US.

China was political manipulation, and they will continue to crash only if for no other reason their *investor* is margined to the eyes, and inexperienced to boot.

Add to that the Yen Carry Trade and Greenspan and his comments and you have added to the *perfect storm* that is still brewing.............long way to go yet

jog on
d998

 

[rico01]

At 12.25 the hang seng is currently down another 604 points [ 3%] , I think we could in for a wild ride the next few days
Every body enjoy

 

[Magdoran]

I think you and Duc would be best to give us some light as to the various unwinding scenarious that may take place around the globe.....to me, a big drop like this should have rippling effects into hedge funds that would for huge losses.

Would this take days and weeks to settle?

Cheers,

Just consider the Enron scenario and how ling this took to unravel. Also, consider the Orange county scenario with CDOs and CMOs in the early 90s (around ’94) for a basis of potential time frame… months and years… but what this will do to the wider market Duc would be better at measuring this than I would, he sees the ledger better than I do.

 

[Bush Trader]

Beware of the Dead Cat Bounce! Remember back to May/June correction, I was sucked in to buying BHP & RIO etc (I was always taught to always to buy blue chip stock on a resources), sit back, relax, hold your nerve, watch China this arvo, US tonight. Friday will tell the true story of what's in stall as the big end of town weekly long positions are either held or exited. On the other hand there are fund managers with baby boomer's super cash being thrown at them left, right & centre that just have to park it somwhere, and none of them want to look silly having missed out on an oportunity.

Good Luck


Cheers

 

[carmo]

Ummm, change of strategy, hang on to stocks for 12m + , collect three dividends, then sell with a 50% discount on CGT.

 

[mmmmining]

Beware of the Dead Cat Bounce!

Where is the dead cat? It would not happen with out a few down days.

 

[Bush Trader]

Where is the dead cat? It would not happen with out a few down days.

Im Sorry mmmmmining

I meant Dead Cat Bounce that may happen after a few down days, that punters are likely to believe is the sign of a recovery.

Cheers

 

[Atomic5]

Any suggestions for tommorrow on the ASX if the US is down again tommorrow? (most likely)



GLOBAL MARKETS-Asian stocks skid after China, Wall St slides
Wednesday, February 28, 2007 2:19:30 AM
http://www.reuters.com


Perhaps the most remarkable sign of the recent irrational exuberance underpinning China's stock markets is that during the past year, when a company has announced bad news, its stock price has been shooting through the roof.

Early this year, for instance, when a group of 17 Chinese companies was cited by regulators for misappropriating corporate funds, their stock prices all skyrocketed. When the Tianjin Global Magnetic Card Company failed to report quarterly earnings last April, its stock doubled.

With shares in Shanghai tumbling, stocks listed in Shenzhen also collapsed, falling 9.3 percent. In Hong Kong, the benchmark Hang Seng Index fell 1.76 percent, and in Japan, the Nikkei dropped about half a percent to 18,119.92.

But none of the world's major stock markets has been as volatile as in China, where people refer to the stock market as "dubo ji," or the slot machine. The gyrations have become almost commonplace for a stock market that suffered through a five-year depression until 2006, when it rose more than 130 percent, the world's best performance.

The Chinese government, however, is worried about an exuberance that could produce a bubble and then a crash that could send bankrupt individual investors into the streets in protest.

 

[greggy]

After a strong rise thus far, this correction is unfortunately necessary before we reach new highs. I feel that at worst that this correction will be short term. This market will head to new record levels by Aug- Sep 07.
DYOR

 

[Atomic5]

Bright northern summer then hey?

 

[Dr Doom]

Sell in May & go away? Maybe nothing rhymed with February or March

 

[CanOz]

If Friday was the buying climax, then i'll be looking for volume to absord the selling before i get back in.

 

[greggy]

Bright northern summer then hey?

Too early to predict a crash. I feel that this market will recover strongly and go to 7,000 sometime this year before a major correction commencing in Oct 07, the 20th anniversary hoodoo.
DYOR

 

[>Apocalypto<]

latest from Shanghai exchange looks like the selling has stopped but Japan had a terror of a day.


China exchange is up selling has stopped

2007-02-28- 13:17
Indexes Prev. Closing Last High Low Change%
SSE 180 5629.34 5636.35 5697.72 5536.41 0.12
SSE New Composite 2359.52 2375.75 2396.05 2327.49 0.69
SSE A Share 2910.76 2929.10 2953.66 2870.31 0.63
SSE B Share 173.27 174.09 177.86 167.33 0.48

if you want to see then web address is http://www.sse.com.cn/sseportal/en_us/ps/home.shtml#

so has the government come to the rescue?

so as long as wall street has a recovery we could see it all over very soon

 

[Out Too Soon]

Sell in May & go away? Maybe nothing rhymed with February or March

It wasn't translated to Chinese!

 

[kerosam]

how about the listed investment companies? i would thought, though not bullet proof, they tend to move otherwise in a falling market or move north but slowly.

the ones like GFL, CDM, FAT & CAM didn;t move that much...

 

[2020hindsight]

sell in feb and watch the web?

 

[numbercruncher]

The Bond Yields have been inverted for the best part of a year in the US.
Maintained inversion almost guarantees a recession as it kills the credit cycle.

The first to go is always the Junk.
Sub-prime is imploding.

Quite a large number of the top tier banks have large exposure. Most will have covenants to cover the reselling...........but if your counter-party is already dead, then guess what you eat the consequences.

China was unrelated, but, it was the emotional trigger that may accelerate the process in the US.

China was political manipulation, and they will continue to crash only if for no other reason their *investor* is margined to the eyes, and inexperienced to boot.

Add to that the Yen Carry Trade and Greenspan and his comments and you have added to the *perfect storm* that is still brewing.............long way to go yet

jog on
d998

^ I concur with this Bloke ^


Perfect way to sum up China too, it was the " emotional " trigger.


g'Luck All!

 

[Kauri]

Reading the posts on this forum it seems confidence has been dented but not crushed, so I guess we have a ways to go yet.

 

[reece55]

Reading the posts on this forum it seems confidence has been dented but not crushed, so I guess we have a ways to go yet.

I agree Kauri........

Whilst it is difficult to look at some stocks (WPL comes to mind) because the brain inevitably says "but it's so cheap now, this would be a good fundamental buy....", now is no time for a long position! Every stock's market depth shows sellers are abundant... the bears are in full flight. I think tomorrow will test the wills of even the strongest buy and hold investors....... Most will sell I suspect.....

Personally, I am either short or cash.... No longs for me in this environment!

Cheers