The official "ASX is tanking!" panic thread

[Logique]

The accelerating trend in offshoring would magnify the employment losses compared to earlier decades.

An hour a week and you're considered employed, not much credibility in the way they express these figures.

 

[notting]

Yes I have that in mind, I am preparing for a 3800 entry and 3100, after that the spare cash will be almost gone, cheers.

I think it's unreliable to have a number in mind. Obviously the pivot low of the last panic Tuesday is worth keeping in mind. However I am whatching for something fundamental that will break the status quo before emptying the bucket.
Will they get a Euro bond up and running before there is some kind of collapse?
Either will be game changers.
Everyone has to print to counter what China a has done by manipulating it's currency and destroying manufacturing and employment all over the world.

 

[Uncle Festivus]

Everyone has to print to counter what China a has done by manipulating it's currency and destroying manufacturing and employment all over the world.

And therin lies the root cause of the problems the connected global economy faces, apart from the hangover from a 40 year credit binge....until China too cannot continue with it's 'forced demand' economic policies.

 

[So_Cynical]

Well actually no, it's not expected, at this point in the 'recovery'. It (the unemployment rate) should be a lot lower, if going by past 'recoveries'?

View attachment 44330

If you do some research into the 'birth/death' ratio you can see that a lot of the employment statistics for several qtrs have most likely overstated employment and that there probably has been a continuing decline in employment. And that's just for the U3 figure. What yo need to look at is the U6 -



View attachment 44332

So good luck with your call for next week..................

Uncle F

There seems to be something wrong with your chart

http://en.wikipedia.org/wiki/Early_1980s_recession

in May 1980. A mild recession from January to July 1980 kept unemployment high, but despite economic recovery unemployment remained at historically high levels (about 7.5%) through the end of 1981.[5] Unemployment continued to grow through 1982, reaching 10% nationally

I'm basing my "Fundamentally 9.1% at this point in the recovery is to be expected and no big deal." comment on the fact that the US and Euro financial system didn't stop working in the late 70's and early 80's like it did in the GFC and yet US unemployment reached 10% thus making the current 9% look reasonably upbeat in comparison.

 

[Chasero]

I'm guessing ALL ORDS are going tank by about 2.5% come Monday, we always seem to go 0.5% more than the U.S. movement.

Then shares will be volatile all September reaching highs of roughly 4,350 before the speech come September 20-21.

I'd say get in now while it tanks this week because QE 3 or some sort of US policy is coming (speculation)

 

[dhukka]

http://www.businessweek.com/news/20...s-report-shows-u-s-jobs-growth-stagnates.html



Standing still is not a decline...the uncomfortable will sell and the comfortable will exchange their money for the holdings of the weak...next Fridays US close will be higher than this Fridays close.

Fundamentally 9.1% at this point in the recovery is to be expected and no big deal.

As UncleF quite rightly points out this certainly wasn't expected at this point in the recovery. the US economy should be producing approximately 200k jobs a month at this point in the so-called recovery, you need around 125k a month just to keep up with population growth.

The unemployment rate has been over 9% for 27 months, a record in post WWII data, (previous record was 18 months in 82,83). The unemployment rate is higher today than it was 7 months ago, you don't expect that in any type of recovery, GFC or not. The US economy has clearly slowed and that is starting to show up in the employment numbers (lagging indicator) in recent months.

 

[dhukka]

Uncle F

There seems to be something wrong with your chart

http://en.wikipedia.org/wiki/Early_1980s_recession



I'm basing my "Fundamentally 9.1% at this point in the recovery is to be expected and no big deal." comment on the fact that the US and Euro financial system didn't stop working in the late 70's and early 80's like it did in the GFC and yet US unemployment reached 10% thus making the current 9% look reasonably upbeat in comparison.

There is nothing wrong with the chart except for the minor error that it has been 43 months not 44 since the peak in employment. I suspect calculatedrisk hasn't updated for the revisions.

The way unemployment rates were calculated during the 70's and 80's was different from now, (changes makes the headline number 'U3' look better today) so it's not an apples to apples comparison. Anyway the unemployment rate did reach 10% this time round.

In Dec 1982 the unemployment rate peaked at 10.8% and was back below 9% within 10 months. This time around the US unemployment rate peaked at 10.1% in Oct 2009, almost 2 years later and the unemployment rate is still above 9%.

 

[dhukka]

If you do some research into the 'birth/death' ratio you can see that a lot of the employment statistics for several qtrs have most likely overstated employment and that there probably has been a continuing decline in employment. And that's just for the U3 figure. What yo need to look at is the U6 -

Uncle, while it is certainly true that the B/D model tends not to anticipate turning points in the economic cycle, you have to be careful not to overstate it's effect. The monthly B/D adjustment is not seasonally adjusted so you can't subtract it from the seasonally adjusted nfp number to adjust for a possible overstatement.

 

[So_Cynical]

In Dec 1982 the unemployment rate peaked at 10.8% and was back below 9% within 10 months. This time around the US unemployment rate peaked at 10.1% in Oct 2009, almost 2 years later and the unemployment rate is still above 9%.

The other point is that the US in the late 70's and early 80's was very much an economy in transition (shedding jobs) from manufacturing to services...the US economy has now well and truly transitioned, unfortunately money/finance is at the core of many of those service industry's.

 

[skc]

Now that we are talking unemployment can someone enlighten me something?

We see weekly initial jobless claims in US around 400k. Over 4 weeks that's like 1.6m jobs.

Then we see 0 new jobs created this month.

But the data doesn't seem to suggest that US unemployment has increased by 1.6m.

How does one reconcile the two data serious?

 

[skc]

I'm guessing ALL ORDS are going tank by about 2.5% come Monday, we always seem to go 0.5% more than the U.S. movement.

Then shares will be volatile all September reaching highs of roughly 4,350 before the speech come September 20-21.

I'd say get in now while it tanks this week because QE 3 or some sort of US policy is coming (speculation)

US govn't sueing the banks for $196B...
http://www.bloomberg.com/news/2011-...d-by-fhfa-over-196-billion-in-securities.html

This news came after market close so expect more bloodbath in global markets, esp with the US on labour day holiday.

I think anyone expect QE3 to raise share prices any more than a blip will be sorely disappointed and greatly in the red...

 

[skyQuake]

US govn't sueing the banks for $196B...
http://www.bloomberg.com/news/2011-...d-by-fhfa-over-196-billion-in-securities.html

This news came after market close so expect more bloodbath in global markets, esp with the US on labour day holiday.

I think anyone expect QE3 to raise share prices any more than a blip will be sorely disappointed and greatly in the red...

News came out in fri noon aus time about banks being sued for $50bil.
So I'd guess a bit of it is expected

 

[Chasero]

US govn't sueing the banks for $196B...
http://www.bloomberg.com/news/2011-...d-by-fhfa-over-196-billion-in-securities.html

This news came after market close so expect more bloodbath in global markets, esp with the US on labour day holiday.

I think anyone expect QE3 to raise share prices any more than a blip will be sorely disappointed and greatly in the red...

So negative!

I for one expect shares to rally quite a bit if QE 3 or more talks of expansionary policies can somehow help the US economy.

I really think if we reach the lows of 2009 the market will bounce back up, or at worse move sideways.

US economy is NOT entering recession, and if it does, I'll be praying long and hard to not push the sell button on my portfolio..

Swings are just part of the game. I'm expecting a -2.5% net low for the week, really low on Monday and bouncing back later this week after the upcoming speeches.

 

[wayneL]

So negative!

I for one expect shares to rally quite a bit if QE 3 or more talks of expansionary policies can somehow help the US economy.

I really think if we reach the lows of 2009 the market will bounce back up, or at worse move sideways.

US economy is NOT entering recession, and if it does, I'll be praying long and hard to not push the sell button on my portfolio..

Swings are just part of the game. I'm expecting a -2.5% net low for the week, really low on Monday and bouncing back later this week after the upcoming speeches.

Sounds more like hope.

I "hope" it works out that way for you and I expect them to try to jawbone the market higher as well.

But in the end, we have to deal with reality. It's ok having a view and trading to it, but a plan B (C,D,E,F,G etc lol) is usually a good idea.

 

[dhukka]

Now that we are talking unemployment can someone enlighten me something?

We see weekly initial jobless claims in US around 400k. Over 4 weeks that's like 1.6m jobs.

Then we see 0 new jobs created this month.

But the data doesn't seem to suggest that US unemployment has increased by 1.6m.

How does one reconcile the two data serious?

That's because there wasn't zero jobs created this month, there was probably somewhere between 1 - 2 million jobs created, only problem is that the same number was lost, the number you see reported is just the net of the two. You should also be careful about putting too much credence in one month's data, particularly since it will be revised several times. The trend is what you need to pay attention to and that is clearly slowing, even if you add back the 45,000 striking Verizon workers this month.

A 4-week average of about 400,000 - 425,000 jobless claims is roughly where we would expect to observe flat jobs growth (excluding temporary factors like census hiring).

source

 

[Tysonboss1]

Now that we are talking unemployment can someone enlighten me something?

We see weekly initial jobless claims in US around 400k. Over 4 weeks that's like 1.6m jobs.

Then we see 0 new jobs created this month.

But the data doesn't seem to suggest that US unemployment has increased by 1.6m.

How does one reconcile the two data serious?

400K figure relates to how many people signed to claim unemployment, if after 4 weeks their have been 1.6M make the claim it does not mean their are 1.6M extra people that are unemployed.

For example, If this week 400K people get fired and claim unemployment, the figure will state there was 400K unemployment claims, But looking at the figure alone does not show the 400K who claimed in prior weeks who found employment, completely offsetting those that were fired to result in zero change.

 

[dhukka]

So negative!

I for one expect shares to rally quite a bit if QE 3 or more talks of expansionary policies can somehow help the US economy.

I'm more inclined to agree with skc about the magnitude of a QE3 induced rally. I'm sure markets will get a bounce but I think it will be of the dead cat type. Remember in 2008, the market rallied hard when the Fed cut interest rates for the first time. Then each subsequent rate cut was met with a rally that was shorter in magnitude and duration to the point where finally the rally lasted only a few hours.

I see the same type of trend with QE, we now know that QE2 didn't work except to kick the recession can down the road a bit. QE3 won't work either, below is good summary of what QE2 achieved:

Two One-Way Lanes on the Road to Ruin

Without question, one of the notions buoying Wall Street optimism here is the hope that the Fed will pull another rabbit out of its hat by initiating QE3. That's a nice sentiment, but it does overlook one minor detail. QE2 didn't work.

Actually, that's not quite fair. The Federal Reserve was indeed successful at provoking a speculative frenzy in the financial markets, which has now been completely wiped out. The Fed was also successful in leveraging its balance sheet by more than 55-to-1 (more than Bear Stearns, Lehman, Fannie Mae, Freddie Mac, or even Long-Term Capital Management ever achieved), and driving the monetary base to more than 18 cents for every dollar of GDP - a level that requires short-term interest rates to remain below about 3 basis points in order to maintain price stability ( see Charles Plosser and the 50% Contraction in the Fed's Balance Sheet ). The Fed was indeed successful in provoking a wave of commodity hoarding that affected global supplies and injured the poorest of the poor - particularly in developing countries. The Fed was successful in setting off a very predictable decline in the value of the U.S. dollar. The Fed was successful in punishing savers and the risk averse, and driving investors to reach for yield in risky investments that they would normally avoid were it not for the absence of yield. The Fed was successful in provoking those with strong balance sheets to pay down existing higher interest-rate debt, and in creating an incentive for those with weak balance sheets to issue more of it at low rates, resulting in a simultaneous deterioration of credit quality and compensation for risk in the financial system. The Fed was successful at boosting the trading profits of the banks that serve as primary dealers, by announcing precisely which securities it would be buying prior to Treasury auctions, and buying them on the open market a few days later from the dealers that acquired them. The Fed was successful in creating a portfolio of low yielding securities that will be almost impossible to disgorge without capital losses unless the Fed holds them to maturity. On proper reflection, the list of the Fed's successes from QE2 is nothing short of stunning.

US economy is NOT entering recession, and if it does, I'll be praying long and hard to not push the sell button on my portfolio..

You might want to take a look at the US economy again, while no single economic indicator gives a clear signal of recession, there currently exists a 'syndrome of conditions' that has always and only ever been observed immediately prior to or during recessions.

 

[Chasero]

Seems like everyone is a bear nowadays and expecting the US economy to TANK.

I do NOT see a lot of good news ahead, especially with the suing of US banks really going to negatively impact people this week holding financial stocks. I do however see some possible (money making) rallies.

I've looked at the US economic data and most analysts are saying it's looking at a slower rate of growth but with only 40% chance to lead to recession.

With so much negative outlook it's no wonder shares are dipping, then quickly rising. The volatility is so exciting!

Also, if you look at the weak job data that just came out PLUS the fact that banks are being sued, the US stock market didn't even dip that much heading to the long weekend! Volume remained quite low. Hence why I think everyone's waiting for some sort of policy being announced in Sept.

Nice little report to read:
http://www.tradingfloor.com/blogs/e...-report-but-theres-a-silver-lining-1496247708


Job data are not pointing towards recession


The flat reading for the August change in NFPs may have caught some bulls off guard, but when we dig deeper the report it was actually better than the headline flat reading suggests.

The ADP Employment Change of 91K may have given hopes of a better number, but methodological differences explain much of variation since the Verizon (-45K) strike does not feature in the ADP data but does in the Bureau of Labor Statistics. Adding the strike back, we land at +45K, not bad for a month mired by strikes, debt discussions and recessions fears. Though in no way does this mean that this is a good number by any means.

The unemployment rate held at 9.1% despite a gain in labour participation to 64% from 63.9%. This was due to a large influx of employees in the Household Surveys – on which the Unemployment Rate is based – of +331K. However, other measures of labour market health such as weekly hours and average hourly earnings deteriorated and thus this report cannot be labelled as anything but weak.

Overall, we deem this report to be positive given the news surrounding the report, but weak on an absolute basis. It is certainly not impressive by any standards, but also not the thing of recessions. The Verizon strike should add back in the September report (note how Household Employment grew despite the strike since it does not count such) and we remain faithful to our “not-recession, but bumbling-along scenario”.

 

[Tysonboss1]

Seems like everyone is a bear nowadays and expecting the US economy to TANK.

Not me.

The USA has some problems, There is no doubt about that, But the are not terminal.

The US economy will not disappear, It will be Lumpy for a while, But who cares.

The USA will definately be less important in 40years than it was in the 70's, obviously this will happen as the rest of the world grows up around them.

But, to say that the USA is doomed is crazy, there will still be consumption happening, and good and services will be moving, and profits will be made by business.

 

[Chasero]

September will definitely be an interesting month, probably not as brutal as August.

Can't wait! Everyone seems to be holding their breath for Obama's speech as much as they were with Bernanke's speech.

http://www.bloomberg.com/news/2011-...o-be-very-bold-in-jobs-address-next-week.html