Australian (ASX) Stock Market Forum

The official "ASX is tanking!" panic thread

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Smurf1976 said:
Any mass adoption of electric vehicles, or a move away from car transport (noting that peak driving per capita has already occurred in some countries) will hit oil demand hard. In contrast, wind turbines and solar panels impact primarily in the demand for coal and gas, not oil as such. :2twocents
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Thanks for the excellent analysis. In terms of using electricity for transportation, where it would be a direct substitute for oil derived fuels, as an armchair observer of popular science, I, like many, am waiting for the technological breakthroughs in electricity storage to change the "paradigm" on making electricity versatile enough for transport.

If battery storage was cheap enough I'd be able to run my house 100% on solar year round. If battery storage was cheap enough it would remove the need for base load power stations altogether (reducing demand for coal, natural gas and uranium).
 
tinhat said:
Thanks for the excellent analysis. In terms of using electricity for transportation....
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To put it into perspective, in recent years we've seen considerable development of "alternative" energy in Australia. We've not got quite a bit of wind power and household solar too.

Oil consumption has continued to rise despite this, and oil is once again Australia's number 1 fuel (was coal from the early 1980's until quite recently).
 
If you thought the Swiss Army knife was a terrifying peace of weaponry
Here's what a Swiss Tank looks like ~

Swiss Tank.JPG

No longer a safe haven for about 35 years you might think
 
Sorry to put a dampner on the picnic, but ~

We aint seen this since the 1930's.

London Telegraph writes:

Beggar-thy-neighbour devaluations are spreading to every region. All the major central banks are stoking asset bubbles deliberately to put off the day of reckoning. This time emerging markets have been drawn into the quagmire as well, corrupted by the leakage from quantitative easing (QE) in the West.

"We are in a world that is dangerously unanchored," said William White, the Swiss-based chairman of the OECD's Review Committee. "We're seeing true currency wars and everybody is doing it, and I have no idea where this is going to end."

Mr White is a former chief economist to the Bank for International Settlements - the bank of central banks - and currently an advisor to German Chancellor Angela Merkel.

He said the global elastic has been stretched even further than it was in 2008 on the eve of the Great Recession. The excesses have reached almost every corner of the globe, and combined public/private debt is 20pc of GDP higher today. "We are holding a tiger by the tail," he said

He warned that QE in Europe is doomed to failure at this late stage and may instead draw the region into deeper difficulties. "Sovereign bond yields haven't been so low since the 'Black Plague': how much more bang can you get for your buck?" he told The Telegraph before the World Economic Forum in Davos.

"QE is not going to help at all. Europe has far greater reliance than the US on small and medium-sized companies (SMEs) and they get their money from banks, not from the bond market," he said.
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The economic co operative of the human race lasted surprisingly long.
It seems now we are reverting back to our basic instincts and behaving like mad free for all anarchic pack animals.
:p:
 
Rumor has it -

(Reuters) - The European Central Bank's Executive Board has proposed a programme that would enable the ECB to buy 50 billion euros ($58 billion) in bonds per month starting in March, a euro zone source said on Wednesday.

Reuters could not confirm reports from other media about the length of the proposed programme. The Wall Street Journal said it would last at least one year. News agency Bloomberg said the purchases would run to the end of 2016.
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This is pop gun, not a bazooka.
Markets should not be impressed. (It's well and truly priced in)

It is, however, a new precedent - a cultural shift.
The Euro zone is no longer a basket case because it can now print like the rest of the world.
Hence, that may take away from too much negativity and not be too confronting to the Germans at first look, as it can always be extended, if and when it is obviously going to be a balanced thing to do.
Market punters want a bazooka, sensible people want a solution to the unforeseen limitations of no real central bank manipulation capabilities for the Eurozone.
Business as usual, I guess.
 
With the leftist, anti-austerity Syriza party comfortably ahead in the Greek election, it's going to be interesting watching Euro markets this week.
 
Perhaps the Russian's have decided that they are going to default any way, so why not go the whole hog and take Ukraine as well.
It's only the creditors that will lose from this point.
 
Last of my major shorts just got cashed out.
Now's the time for me to start getting nervous.
China hasn't even opened yet. Please go up China, you know how much I love you.
Bear markets are very rare without a recession.
All China needs to do is announce a stimulus and the markets will catch fire to the upside, including commodities!!!
 
If sentiment isn't backed up by earnings, it's as if it never happened.

That's true on the way up as we saw in December-April and likely to be true for what we're seeing this seasonal period (5100 to 5900 to 4900 to ?).

All a sideshow for an actual economic event that leads to declining earnings in sectors that drove earnings this cycle, which has been banks / property. That means property prices and bad debts, which have been unaffected by whatever has actually happened in the past 2 weeks.
 
So perhaps it was just a seven year short squeeze. Given we haven't had a correction prior to going straight back into a bear market. :D
 
shouldaindex said:
If sentiment isn't backed up by earnings, it's as if it never happened.
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I think I understand your message but phrasing makes it confusing.

Assuming I do understand, this is referred to as the multiple of earnings that investors are willing to rate a stock or index. Depending on risk seeking sentiment in the market, investors might rate prices at a higher multiple of earnings regardless of lack of EPS growth and by the same token the market can decline as investors rate prices at a lower multiple of earnings even if there is EPS growth.

As per Hussman

http://www.hussmanfunds.com/wmc/wmc070730.htm
“Abrupt market weakness is generally the result of low risk premiums being pressed higher. There need not be any collapse in earnings for a deep market decline to occur. The stock market dropped by half in 1973-74 even while S&P 500 earnings grew by over 50%. The 1987 crash was associated with no loss in earnings. Fundamentals don't have to change overnight. There is in fact zero correlation between year-over-year changes in earnings and year-over-year changes in the S&P 500. Rather, low and expanding risk premiums are at the root of nearly every abrupt market loss. One of the best indications of the speculative willingness of investors is the ‘uniformity’ of positive market action across a broad range of internals."
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Commodities have been soft due to oversupply, apart from Gold. If that is true and markets had not been pricing in weakness in demand then we are in for a serious sh4t storm.
RIO finally conceded they had underestimated the weakening demand from China.
I have noticed that Oil is reacting to weakness in China not so much on the oversupply in a normal growing market.
If this is all priced in well OK then, so we'll have weakness for some time but if not this is going to get really really GFC like.

Preez Consider -
What would reverse look like after this kind of pace - Cement being pored -

Cement US 100years China 3.png

International Shipcare, a Malaysian company that mothballs ships and rigs, is busy taking calls from beleaguered operators with excess capacity. There are 102 vessels laid up at the company’s berths off the Malaysian island of Labuan, more than double the number a year ago. But wait there's more on the way. “There’s a huge demand,” he says. “People are calling us not to lay up one ship but 15 or 20.”

Ship container.jpg

Welcome to hell!
 
notting said:
Commodities have been soft due to oversupply
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Apart from a few very localised issues (Eg towns running out of water due to drought or a concert that sells out) there's basically nothing I can think of, either commodities, manufactured goods or services, that isn't in some degree of an over supply situation these days.

Pick something, anything really, and with very few exceptions there's more than enough of it to meet the actual demand from buyers. That doesn't give anyone pricing power really when practically everything is over or at least adequately supplied. It goes way beyond things like iron ore, coal, China etc and it's the same with practically everything. Very few things are in short supply right now. :2twocents
 
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