Australian (ASX) Stock Market Forum

The official "ASX is tanking!" panic thread

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3 hound said:
How does one disentangle the rise in the overall value of the stock market as a reflection of overall wealth generation versus the overall value of the stock market increase is more a reflection of the fact that it is made up of more dollars each worth less than dollars at a previous time..
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3 hound said:
Geez why would you ever lend to an unstable country and what happens if they outright refuse to make payments?
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USA a case in point? people are still giving their money with neg interest to France or Italy....not a joke
 
3 hound said:
Geez why would you ever lend to an unstable country and what happens if they outright refuse to make payments?
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one attraction is the high interest returns you are liable to get ( and if clever you have worked out ways to more than halve the risk ) ( sell the insurance derivatives to pension funds , perhaps )

this is usually HIGH risk-high reward investing , although some give it unpleasant names like vulture capitalism

the usual problem ( unless a political revolution ) is they CAN'T pay rather than won't , study drug addicts for some insight to a similar problem . ( the borrower NEEDS the money , but can't earn enough to repay in full in the time promised )

in the event of revolution ( the most common cause of refusal ) you are suddenly talking to all new people , so THEY do not feel responsible , and often will embrace violence to strengthen their position

oh , by the way have you ever heard of tax losses ( where you share the losses with the taxpayer )

the lenders doing this are usually very , very smart and greedy ( but not always so honest )
 
qldfrog said:
USA a case in point? people are still giving their money with neg interest to France or Italy....not a joke
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but it makes me curl up in laughter anyway ( and keep my cash far away from such places )

but to be fair , they are often using leverage to do so ( to amplify the gains and hope the government will help reduce the losses )
 
3 hound said:
Must be more to it than money eg getting political power over another country or some shady stuff like that.
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yes that also , try to find info on the Pfizer vaccine contracts signed by South American nations , some contracts demanded ports and even military bases as collateral ( which is why such contracts are normally state secrets )
 
This seems like the appropriate thread today since the ASX200 is in fact tanking in early trade, currently down 2.4% as the COVID situation in China worsens and weighs on local commodity stocks.

The strong rejection above 7600 to end last week left scope for a retest of the 200-day MA, but as things stand, the ASX looks on course to break this key support level.

Of course, all trading carries risk, and we could see a bounce if the outlook for commodities improves, but a close below the 200-day line does open the possibility to an even deeper pullback.
 
wayneL said:
ASX is looking technically bearish and with deeper cracks appearing in the bond market, are we starting to panic yet?
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Cracks starting to appear in the Chinese economy too, as the CCP doubles down on its "zero covid" strategy. The politics over pragmatism approach is coming at a heavy economic cost with some analysts predicting that Chinese economic growth will fall to under 4% this year. No doubt China will ramp up the economic stimulus if that happens, but that will be like putting a band-aid on an open wound.

Up until now, the Ukraine effect has been felt more in countries that sourced their food from that region. There are longer term macro reverberations to come that will have a wider impact.

I don't see a recovery anytime soon and am expecting a very rough ride for the ASX this year. Precious metals and cash look safest to me.
 
greggles said:
Cracks starting to appear in the Chinese economy too, as the CCP doubles down on its "zero covid" strategy. The politics over pragmatism approach is coming at a heavy economic cost with some analysts predicting that Chinese economic growth will fall to under 4% this year. No doubt China will ramp up the economic stimulus if that happens, but that will be like putting a band-aid on an open wound.

Up until now, the Ukraine effect has been felt more in countries that sourced their food from that region. There are longer term macro reverberations to come that will have a wider impact.

I don't see a recovery anytime soon and am expecting a very rough ride for the ASX this year. Precious metals and cash look safest to me.
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As I've said elsewhere there is a real concern about cash "in the bank".

It must never be forgotten your deposits are treated as an unsecured loan to the bank with the bank dictating the terms of the loan, (and not really in your favour). Additionally, those terms are variable at their discretion.

That is actually the worst deal in the financial world, which only ever becomes apparent when things turn to crap.
 
wayneL said:
As I've said elsewhere there is a real concern about cash "in the bank".

It must never be forgotten your deposits are treated as an unsecured loan to the bank with the bank dictating the terms of the loan, (and not really in your favour). Additionally, those terms are variable at their discretion.

That is actually the worst deal in the financial world, which only ever becomes apparent when things turn to crap.
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YEP , cash is trash according to one guru ( i prefer to think of it as a stepping stone to something better )
 
wayneL said:
As I've said elsewhere there is a real concern about cash "in the bank".

It must never be forgotten your deposits are treated as an unsecured loan to the bank with the bank dictating the terms of the loan, (and not really in your favour). Additionally, those terms are variable at their discretion.

That is actually the worst deal in the financial world, which only ever becomes apparent when things turn to crap.
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The thing is, if there is a crash, you have to have something to buy into the opportunity.
The last thing a first world country is going to do is let its citizens lose their savings, especially Australia which really only has four major banks, they also make up a huge amount of the superannuation savings of Australians.
Only my thoughts, I have lived through quite a few major financial system disruptions, the only ones who seem to come out of the crisis well are those who buy in at or near the bottom.
Keeping all your money in the mattress is risky and buying bullion is just as risky as money in the bank IMO.
So maybe someone can give me a tip on a safe, liquid and easily accessible reserve of collateral, that I can use on comsec.
 
sptrawler said:
The thing is, if there is a crash, you have to have something to buy into the opportunity.
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sptrawler said:
The thing is, if there is a crash, you have to have something to buy into the opportunity.
The last thing a first world country is going to do is let its citizens lose their savings, especially Australia which really only has four major banks, they also make up a huge amount of the superannuation savings of Australians.
Only my thoughts, I have lived through quite a few major financial system disruptions, the only ones who seem to come out of the crisis well are those who buy in at or near the bottom.
Keeping all your money in the mattress is risky and buying bullion is just as risky as money in the bank IMO.
So maybe someone can give me a tip on a safe, liquid and easily accessible reserve of collateral, that I can use on comsec.
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Actually a possible alternative u can use is to keep your spare cash as gold. U can keep your funds backed by gold in a perth mint gold account. And some in physical. Be your own bank. Maybe have enough cash just 10k to cover daily expenses and online purchases Don't need much if u have a few k income stream a month.

Just treat the gold as a store of wealth and alternative private currency. In the short term gold prices are usually as stable as currencies.

During a crash like during covid March 2020 if u like to time markets, u can always at a small expense convert your gold to cash then to stocks. And if u need to buy a car etc.. I am sure u be able to find someone willing to trade their car for physical gold.
 
bluekelah said:
Actually a possible alternative u can use is to keep your spare cash as gold. U can keep your funds backed by gold in a perth mint gold account. And some in physical. Be your own bank. Maybe have enough cash just 10k to cover daily expenses and online purchases Don't need much if u have a few k income stream a month.

Just treat the gold as a store of wealth and alternative private currency. In the short term gold prices are usually as stable as currencies.

During a crash like during covid March 2020 if u like to time markets, u can always at a small expense convert your gold to cash then to stocks. And if u need to buy a car etc.. I am sure u be able to find someone willing to trade their car for physical gold.
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theconversation.com

How the US government seized all citizens’ gold in 1930s

You’ve heard of compulsory purchase orders for houses, but few realise it has sometimes happened with the world’s favourite precious metal.
theconversation.com theconversation.com
From the article:
Many gold owners were understandably unhappy about the gold seizure, and some fought it in the courts. Ultimately, however, the government could not be stopped, and gold ownership remained illegal in the US until the 1970s.

This intervention was not unique, even in contemporary history. In 1959, Australia’s government put a law in place that allowed gold seizures from private citizens if “expedient to do so, for the protection of the currency or of the public credit of the Commonwealth [of Australia]”. And in 1966, to stop the decline in the pound, the UK government banned citizens from owning more than four gold or silver coins and blocked the private import of gold. This was only lifted in 1979.

So whether you get a surcharge on your savings, or have your gold in the Perth Mint confiscated is a similar scenario, if the manure hits the fan we are all in it together. :cry:
From memory it wasn't until the late 1970's that gold in Australia could be sold on the open market. before it was deregulated it could only be sold to the Government, it nearly sent Kalgoorlie broke.

 
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Here is a chart showing the jump in gold price in the 1970's, before deregulation from memory they could only sell it to the RBA for around $50 when on the open market it was around $250/oz.
If there is a massive crisis and gold becomes the only valuable asset, the Govt would just re regulate it IMO.

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sptrawler said:
The thing is, if there is a crash, you have to have something to buy into the opportunity.
The last thing a first world country is going to do is let its citizens lose their savings, especially Australia which really only has four major banks, they also make up a huge amount of the superannuation savings of Australians.
Only my thoughts, I have lived through quite a few major financial system disruptions, the only ones who seem to come out of the crisis well are those who buy in at or near the bottom.
Keeping all your money in the mattress is risky and buying bullion is just as risky as money in the bank IMO.
So maybe someone can give me a tip on a safe, liquid and easily accessible reserve of collateral, that I can use on comsec.
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ALL investing involves risk ( even doing nothing during an inflationary period )

buying bullion ( or other physical ) stashed somewhere close and secret has known risks if you keep the secret , if you survive the carnage , there is a fair chance your physical can be exchanged for something useful/essential ( silver for a bag of rice/wheat , gold for some milking cows or maybe even an operating business or home as examples )

buying at the bottom is a nice strategy if you can do it , the best i normally do is 'reasonably low ' often followed by a dead-cat bounce ( and a fall further )

who says Australia will stay a first world nation this time after we are talking war to China ( who threw us a lifeline in the GFC ) , sorry i can't assume that next crash , we have plenty of mineral resources but the government is offending a major customer ( China ) and neglected forming close ties with the world leader in waiting ( India )

the obvious way out of the next crash , is to use our resources and start manufacturing again ( but i bet we won't )

regarding citizens of a 'first world nation ' losing their savings look no further than the UK and US ( and you could probably add Japan ) , THAT is coming like a speeding train ( expect governments to limit pension fund draw-downs , assuming they survive the crash )

Greece and Cyprus changed the paradigm when an international debtor can take control of the local banking system

and NO i don't have the perfect strategy yet , i have resorted to multiple small strategies ( hoard some long-life food , hoard some hard commodities , a few collectibles , some shares , and hopefully look like too small a target for desperate banks and government

and yes i have SOME cash reserves but well under the 'deposit guarantee' ( per ADI invested with )

now i hope i am completely wrong , but i am certainly not taking sweet assurances from either government or banker ( both have lied to me before , and i expect they will do it again )

BTW check out what Australia did to it's citizens during WW2 ( 'cos ) Dutton is talking about a war with China so the Australian taxpayer will be excepted to suck up the pain and expense

cheers
 
sptrawler said:
Here is a chart showing the jump in gold price in the 1970's, before deregulation from memory they could only sell it to the RBA for around $50 when on the open market it was around $250/oz.
If there is a massive crisis and gold becomes the only valuable asset, the Govt would just re regulate it IMO.

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only through legal channels ( desperate people do desperate things ) ( that is way the crypto-fans see a place for their system , outside official channels )

i am told during the depression and WW2 bookie's markers ( betting debts ) was a tradeable commodity ( a specialty skilled slave for a while )
 
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