The Crash of 05

[penfisher]

I am a professional philosopher with an interest in Alchemy. My reading of the Planets says that the markets will Crash down from 22 October till May 2006. Not a cliffhanger, more a downhill slippery slope.

 

[markrmau]

It is worth considering what COULD cause a crash (timing unknown).

First thing to leap to mind is a US currency crisis. We all know of the inherent instability of the US deficit - asian nations lending the US money so the US can buy the stuff that asia produces.

All we need to find is a trigger which could cause the US consumer to falter......

October 4 – Bloomberg (Kathleen M. Howley): “Manhattan apartment prices fell 13 percent in the third quarter, the most in 16 years, evidence the most expensive market in the U.S. may have peaked. The average apartment price dropped to $1.15 million from a record $1.32 million in the second quarter, according to a report today from Miller Samuel Inc…and Prudential Douglas Elliman, a Manhattan real estate broker. Prices had soared 30 percent in the previous three months.”



October 4 – New York Times (David Leonhardt and Motoko Rich): “A real estate slowdown that began in a handful of cities this summer has spread to almost every hot housing market in the country, including New York. More sellers are putting their homes on the market, houses are selling less quickly and prices are no longer increasing as rapidly as they were in the spring, according to local data and interviews with brokers. In Manhattan, the average sales price fell almost 13 percent in the third quarter from the second quarter… The amount of time it took to sell a home was also up 30.4 percent over the same period. In another sign that the housing market might have reached a peak, executives at big home builders have sold almost $1 billion worth of company stock this year. Outside Washington, in Fairfax County, Va., the number of homes on the market in August rose nearly 50 percent from August 2004.”

 

[Porper]

It is worth considering what COULD cause a crash (timing unknown).

First thing to leap to mind is a US currency crisis. We all know of the inherent instability of the US deficit - asian nations lending the US money so the US can buy the stuff that asia produces.

.”

It's amazing , a couple of down days in an otherwise Bull market and we get the doom and gloomers out predicting crashes (not you Markrmau).

The US is in the crap, definately, but the old saying "If the US sneezes we all catch a cold" may not be quite as true as it once was.It certainly hasn't got the might it once had, having said that it will affect world markets if it does hit recession.We are already seeing a change in sentiment with Gold rising recently with the $US going up, this has previously not happened.

I think Gold stocks are the way to go now, hence that is where most of my money is.:jump:

 

[tech/a]

It's amazing , a couple of down days in an otherwise Bull market and we get the doom and gloomers out predicting crashes (not you Markrmau).

I agree.
Mind you they predict at every down turn over 100pts---happened in April/May.

Eventually they get it right and are hero's in their own lunchtime.
I'm happy to knock them everytime as I know I'll be right 90% of the time and take long lunches.

 

[wayneL]

I agree.
Mind you they predict at every down turn over 100pts---happened in April/May.

Eventually they get it right and are hero's in their own lunchtime.
I'm happy to knock them everytime as I know I'll be right 90% of the time and take long lunches.

Some may try to call the crash, other just acknowledge the possibility.

I used to drive past this big shed in the middle of a paddock. (you could see it from the highway) This shed was old, rusted and dilapidated; and had a bit of a lean to it.

Everybody knew that one day it would fall over, heck, it looked as though it shoulda gone ages ago.

But there it stood resolutely and defiantly, against every storm and strong wind. We used to have bets on when it would go over. It never did....

....so we gave up betting on it. The bloody thing will never fall down!!!!

One day I was driving past not long after we had given up and there it lay, in a crumpled twisted heap! It had finally gone over.

I'm glad I never stored anything valuable in that shed.

Cheers

 

[tech/a]

Wayne.
I'll bet one of your mates who got sick of waiting went and cut it down!!

Now that could be likened to a few % rates rise.
Or a drop in the US$ of a few cents.
Rampant inflation.

Remember the recession we had to have.

This could be orchestrated/triggered by--- for the longterm ---errr--good.

 

[Knobby22]

I think we have to get around this US economy thing.
China is where it is happening and India, Asia, the US is losing influence.
I don't expect the US stockmarket to do well but the Aussie market is fairly priced. We had great returns last year and they won't suddenly stop.

We have no where to fall, if there are major falls then I will be borrowing as much as I can to buy. Also, there is the weight of money theory.

I am confident there will be no more than a 10% retrace AT WORST.

 

[johnno261]

It's amazing , a couple of down days in an otherwise Bull market and we get the doom and gloomers out predicting crashes (not you Markrmau).

The US is in the crap, definately, but the old saying "If the US sneezes we all catch a cold" may not be quite as true as it once was.It certainly hasn't got the might it once had, having said that it will affect world markets if it does hit recession.We are already seeing a change in sentiment with Gold rising recently with the $US going up, this has previously not happened.

I think Gold stocks are the way to go now, hence that is where most of my money is.:jump:

Porper in agreeance with you in regards to all of the pessimistic gurus come outta the woodwork after a couple of bad days on the ASX and all of these fiction predictions of a crash. Come on people do you think the rest of us are all that stupid too.
Have a look at the worlds economy's, sure I agree US economy is struggling, but hey we have China, India, Phillipines, and Australia's ecenomy's all pumpin along very well.
Simply market sentiment and behaviour for the Month of October. A healthy correction with what is generally a poor month on the markets!!!!

 

[tech/a]

I think we have to get around this US economy thing.
China is where it is happening and India, Asia, the US is losing influence.
I don't expect the US stockmarket to do well but the Aussie market is fairly priced. We had great returns last year and they won't suddenly stop.

We have no where to fall, if there are major falls then I will be borrowing as much as I can to buy. Also, there is the weight of money theory.

I am confident there will be no more than a 10% retrace AT WORST.

Very very good point.
Must remember that in my next discussion.

 

[wayneL]

All fine points.

But this all presupposes that the world economy will stay "as is" in its present or developing status quo.

I think there are great risks that things will change radically at some point or another. The whole health of the world economy hinges on the the contimued and growing consumption of consumer items.

This is a folly on a number of grounds.

I'm not calling a crash...perhaps a correction. What I see is a developing and extended bear '70's style. When this begins is anybodies guess.

But as always there will be opportunities. It is only doom and gloom for the unwary. It will make some of us rich.

Cheers

 

[tech/a]

All fine points.

But this all presupposes that the world economy will stay "as is" in its present or developing status quo.

I think there are great risks that things will change radically at some point or another. The whole health of the world economy hinges on the the contimued and growing consumption of consumer items.

This is a folly on a number of grounds.


Cheers

Ahhh Wayne---my next discussion!!

Wayne unless there is another WW
OR ZPG is finally declared.
OR an Asteroid hits.

Why wouldnt Asia,China,India continue to flood demand?
These countries have over 70% of the worlds population and have only just begun to consume a gluttonous rates.
When its been touted that China will over take the USA as the worlds richest economy---I think Knobby has a point--these guys will be throwing petrol on the growth sectors not water!!

Isnt it quite possible we could get the EXACT OPPOSITE--un precidented un paralleled growth.

Interested in your/my/our "Folly"?

 

[Smurf1976]

IMO the US Fed will carry on raising interest rates until something breaks.

That's the historic precedent and I see no reason for it to be any different this time. If they were going to go soft on the rate rises then surely after the hurricane was the time but even that wasn't enough to stop them.

So the question is what breaks, when does it break and what are the consequences? The break won't necessarily be in the stock market but will be somewhere in the economy.

Or is this the one time that really is different?

 

[el_ninj0]

I agree tech, I have been thinking the same thing since for quite some time. India/indonesia/china are the three biggest growth markets in the world at the moment. I can only see more positive growth. All we have seen in the past few days is rapid overselling of companies that are major players in growth all around the world, i.e BHP,MBL,RIO. Those industries are never going to cease to be profitable. I feel as though this whole situation has been ramped up.

 

[markrmau]

These countries have over 70% of the worlds population and have only just begun to consume a gluttonous rates.

I think you've hit the nail on the head here - it is all about consumption. No point in Oz digging up all our dirt if the rest of the world doesn't put up the manufacturing and consumption chain behind it.

The good news is that the Chinese are fantastic consumers when they have the spare dosh. They are even more frivolous and extravagent than the Americans (no offence intended).

The bad news is that it is only a minority of the masses of Chineese that are awash with cash. The rest are working for pittance and saving like buggery. Not consuming. I still think we need the US to power along for another few years yet.

India is coming up as a vital world economic player as well (with far freeer and open markets than china) however they may take even longer (10years?) to get going.

I don't mean to come accross as all doom and gloom. It is all about assessing risks to me.

 

[wayneL]

Ahhh Wayne---my next discussion!!

Wayne unless there is another WW
OR ZPG is finally declared.
OR an Asteroid hits.

Why wouldnt Asia,China,India continue to flood demand?
These countries have over 70% of the worlds population and have only just begun to consume a gluttonous rates.
When its been touted that China will over take the USA as the worlds richest economy---I think Knobby has a point--these guys will be throwing petrol on the growth sectors not water!!

Isnt it quite possible we could get the EXACT OPPOSITE--un precidented un paralleled growth.

Interested in your/my/our "Folly"?

This could happen, but the result will be more dire than ww etc. The planets ecology is in deep **** from the gluttonous consumption of the 30%.

If the eastern economies overtake the west, without destroying the planet somehow. This will be a negative for western economies. We will become the third world. The beginning stages of this as being seen in UK, US already. But as I say, there is opportunity in this for those with their eyes open.

A cleansing depression will be good for the long term health of both the world economy, and the planet.

Cheers

 

[Happy]

Once we realise what we have to do, 1 child per couple might be mandatory for a while,

(As a side thought, right might be traded for bonus from government or between couples, suppose single person could trade half – too much sidetrack already)

Of course, if the World doesn’t get derailed in some other catastrophic way.

 

[It's Snake Pliskin]

This could happen, but the result will be more dire than ww etc. The planets ecology is in deep **** from the gluttonous consumption of the 30%.

If the eastern economies overtake the west, without destroying the planet somehow. This will be a negative for western economies. We will become the third world. The beginning stages of this as being seen in UK, US already. But as I say, there is opportunity in this for those with their eyes open.

A cleansing depression will be good for the long term health of both the world economy, and the planet.

Cheers

I agree with you here Wayne. I once heard that it would take three Earth sized planets to sustain the consumption that we know if the entire population of the world lived like the western countries do.

Remember Japan, yes that infamous bubble. Their sharemarket is still running well low of its peak over a decade ago. Ask many Japanese what they think of the market. China is in for the same in the future. Economies can only grow so far and there is nothing to refute this.

 

[Smurf1976]

The growth in resource use and pollution from China alone dwarfs anything the developed world, USA included, could realistically do to cut consumption.

For example, greenhouse gas emissions are set to soar in the coming decades with or without the Kyoto Protocol that is supposed to reduce them. The only meaningful difference being that the point of discharge moves to the Kyoto-exempt countries (especially China) if the Protocol is in force.

ANY measure to cut resource use, pollution etc. only works if EVERY country is bound by the same terms. Just one exemption and the pollution simply shifts to that country. And since carbon dioxide (the main greenhouse gas) has long term global but not short term local effects the exempt country loses nothing in the short term whilst gaining economically.

The challenge is thus for a truly global system to protect the environment where every country is on exactly the same terms. Not likely until it's too late or technology renders it unnecessary.

 

[KaiserBun]

I am a professional philosopher with an interest in Alchemy. My reading of the Planets says that the markets will Crash down from 22 October till May 2006. Not a cliffhanger, more a downhill slippery slope.

As a Pisces, i guess i should stick to stocks that deal with water.

 

[Knobby22]

Planetary ecology problems -what happens in five years is another story.
Human greed is consistent -why can't the Chinese have TVs and cars?

Wars are fought over resources and resources are running out.

Global warming is real and thermal runaway is a real possibility - people dying as termperatures rise to 50 degrees and the polar caps melt.

There is a quick cure for thermal runaway however - remember the winter problem with nucleur war? A couple of nukes in well selected places will drop temperatures overnight!

Ahh technology - it will provide an answer to all our problems!

Cynical?