Where are all the bears now?

[moXJO]

I'm getting bearish about the Australian economy.
When the $ drops petrol will go up, destroying confidence. Everyone counting on the real estate market to reignite. Can't see it happening. Sure the lower $A will help exports, but manufacturing has to rebuild, it will take many years...if ever.

I predict a short term squeeze.

There will probably be a good opportunity to get into some mining shares at some stage though.

In NSW it's like someone flicked the on switch with construction work for me. Started roughly a month or so ago. Talking to some of my old apprentices in sydney and all of them are flat out with work as well. I'm still of the opinion that we are in for a rough ride but I am getting to the stage where I might have to turn work down as I have to much on. It is a lot of new houses as well which I haven't seen this many in a few years now.
Perhaps its people taking advantage of the low interest rate?

 

[Intrinsic Value]

If the top end of the town in mining like BHP and RIO and making substantial cuts to CAPEX and labour costs and predicting a normalisation of commodity prices and much less demand from China then it would seem to me that Australia might even be heading into a significant downturn in the medium term.

Without the huge stimulus from mining I doubt that the rest of the economy can carry the country.

The so called two speed economy will disappear and then will only be one speed and that speed will be a very slow one.

 

[FlyingFox]

Thought I would share this. I am a collector and user of fountain pens. Don't ask why but I love them. Anyways, I also tend to use bottled ink and in particular inks from a company called Noodler's Ink. Noodler's ink is run by a gentleman by the name of Nathan Tardif.

Lets just say that Nathan has some strong views on many things including QE (a bit too far left for many here but humor him). As such he released a set of three inks that are designed to dry very very quickly. These are all named after Ben Bernanke.

In the link below he shows a mock video (upto 5:20) and then a bit more commentary and details on the ink.

http://www.youtube.com/watch?feature=player_embedded&v=ev1fVQFT0cE

I am not posting this as my opinion and I don't necessarily agree with everything Nathan says but I hope it proves interesting and/or entertaining to some.

 

[MrBurns]

Wilson HTM investment adviser Peter Esho told the ABC that the "yield trade is unwinding", as investors position themselves for the possibility of higher interest rates in the medium term.

That is why higher dividend paying stocks such as banks, telcos and retailers bore the brunt of today's sell-off, with telecommunications stocks down 3.8 per cent and the financial sector down 2.7 per cent.

Go figure

 

[Tyler Durden]

Seems like the market took a downturn due to Bernanke's somewhat equivocal comments about possibility of stopping any future QE.

So...the market was bumped up all this time because people thought more money would be printed and this money would end up in the market? And now that the money printing might stop, people are pulling out? Which would make sense, because I haven't seen any improvements in fundamentals within the global or national economy.

 

[Trembling Hand]

Seems like the market took a downturn due to Bernanke's somewhat equivocal comments about possibility of stopping any future QE.

He never said anything like that.

 

[white_goodman]

He never said anything like that.

+1

evans rule... its fairly clear what indicators they have said they need to achieve before they look at turning it off somewhat

 

[Tyler Durden]

He never said anything like that.

He may not have, but the market seems to have interpreted it like that.

 

[MrBurns]

He may not have, but the market seems to have interpreted it like that.

That and Ford ?

 

[Trembling Hand]

He may not have, but the market seems to have interpreted it like that.

That and Ford ?

No
NO!
NO!!!!

 

[Intrinsic Value]

You don't have to be a genius to figure that the US stock market has been significantly boosted by QED. The money has to go somewhere.

Similarly when that stimulus ends there will be a stampede to the exit doors and plenty of people wont make it.

 

[Uncle Festivus]

How are those big short positions going Festivus?

Just gotta go.....Oporto



BTFD?



TOKYO (MarketWatch) ”” Japan’s economy minister said Thursday that the government is not worried about a sharp decline in share prices earlier in the day, saying the move represented large-scale profit taking orders triggered by weak Chinese data.

Profit taking - all -1143 pts & -7.3% of it?

The global recovery is going well.....

The unexpected contraction in China's factory activity in May has heightened the risk of a further slowdown in the second quarter, after the world's second largest economy grew at its slowest pace in three years over January to March


The U.S. flash manufacturing purchasing managers' index fell to a 51.9 reading in May from 52.1 in April

 

[Porper]

Just gotta go.....Oporto

View attachment 52364

BTFD?

View attachment 52365

TOKYO (MarketWatch) ”” Japan’s economy minister said Thursday that the government is not worried about a sharp decline in share prices earlier in the day, saying the move represented large-scale profit taking orders triggered by weak Chinese data.

Profit taking - all -1143 pts & -7.3% of it?

The global recovery is going well.....

The unexpected contraction in China's factory activity in May has heightened the risk of a further slowdown in the second quarter, after the world's second largest economy grew at its slowest pace in three years over January to March


The U.S. flash manufacturing purchasing managers' index fell to a 51.9 reading in May from 52.1 in April

Yes, I apologise Uncle you have been correct all along. Dow up nearly 50.0% since Octber 2011. And crashed nearly 2.0% from all time highs. Yes, you have been right to be bearish all this time.

 

[Uncle Festivus]

Yes, I apologise Uncle you have been correct all along. Dow up nearly 50.0% since Octber 2011. And crashed nearly 2.0% from all time highs. Yes, you have been right to be bearish all this time.

Apology accepted. I would have used March 2009 as my starting point - 112%?

Also, thank you HPQ for saving the Dows' *rse on 'beating' expectations but stinking results all the same.....

A quarterly earnings report provided the evidence of Hewlett-Packard's deteriorating condition.

The results included the seventh consecutive decline in HP's quarterly revenue from the previous year.

The 10% decrease in revenue during the three months ending in April represented the largest drop so far during the downturn.

HP earned 1.1 billion dollars (£723 million), or 55 cents per share, during its fiscal second quarter. That was down 32% from 1.6 billion dollars (£1.05 billion), or 80 cents per share, last year.

Revenue in the period totalled 27.6 billion dollars (£18.1 billion), down from nearly 30.7 billion dollars (£20.1 billion) last year.

-------------------------------
Better-than-expected earnings from HP are great, but let's not forget that every operating segment is in decline, and profit only beat expectations by virtue of massive cost-cutting efforts.
-------------------------------

CEO Meg Whitman plans to continue cutting costs by axing another 29,000 jobs by the end of fiscal year 2014.

They can always flip burgers while not being counted as unemployed?

 

[FxTrader]

View attachment 52359

Seems like the market took a downturn due to Bernanke's somewhat equivocal comments about possibility of stopping any future QE.

So...the market was bumped up all this time because people thought more money would be printed and this money would end up in the market? And now that the money printing might stop, people are pulling out? Which would make sense, because I haven't seen any improvements in fundamentals within the global or national economy.

It would appear the bears have awoken (let's call it profit taking) from their slumber after a sustained period of irrational exuburance associated with unprecedented money creation by central banks led by helicopter Ben and co. The secret to economic prosperity it seems is magic pudding, just print/create money by the truckload, inject it into your economy and presto, economic growth with no consequences (LOL).

Just like the irrational sell-off during the GFC period, the recent irrational run-up in equity markets and ridiculous market "valuations" of many companies was overdue for correction. Helicopter Ben's utterances and the Fed's policies are the root cause of these boom and bust cycles. When operation "twist" unwinds (as it must at some point) the hope is that it will be orderly, don't bet on it!

 

[McLovin]

The S&P is off about 1% since the thunderous news that Ben is apparently, maybe, not sure going to end QE and this is evidence of???

Our trade position has significantly worsened, and the two speed economy is about to become the one, slow, speed economy, but the market has been rising and the dollar was staying high. So there was plenty of foreign money chasing yield. Pretty evident when you look at how lopsided the rally has been. It looks like those positions are being unwound. How much further could the banks and TLS realistically gone, they were already looking very stretched.

 

[Uncle Festivus]

The HPQ ramp is typical of the mindset currently and can apply to most of the underlying fundamentals for most US companies ie revenue misses but earnings rises from internal cost cutting etc plus share buybacks making P/E's look good.

Anyhow, something is happening that may render all that irrelevant. Here we go again as Japan wobbles again - Japan might just be the black swan event......watch the leveraged longs scramble to get out....and infect globally.

Bass Sees BOJ Bond Purchases Overwhelmed as Investors Dump Debt

 

[white_goodman]

When operation "twist" unwinds (as it must at some point) the hope is that it will be orderly, don't bet on it!

you don't seem to realise what operation twist is..

 

[FxTrader]

you don't seem to realise what operation twist is..

I certainly do, but just in case how is this...

"Operation Twist, or 'Twist', is a policy by which the Federal Reserve sells short-term government bonds and buys long-dated Treasuries, in an effort to push down long-term interest rates and therefore boost the economy". Over 2 trillion dollars now and growing at 85 billion/month. Also known as monetizing government debt, although this is denied by the Fed.

According to the Fed itself...

"The Federal Reserve System of the United States creates the country’s monetary base. The monetary base consists of currency (Federal Reserve notes and coins) in circulation and deposits (Federal Reserve credits) held by depository institutions at regional Federal Reserve Banks. Since August 2008, the Fed has tripled the monetary base from about $0.8 trillion to $2.7 trillion. More than half of this new money was used to purchase U.S. government bonds (Treasury debt)" Like I said, magic pudding money creation.

As opposed to QE purchases of MBS, yet more market meddling by the Fed.

Bernanke has been so wrong, so often for so long he is frankly an embarrassment to his position. I will be quite surprised if his and the Fed's market distorting policy experiments don't end very badly indeed.

 

[white_goodman]

I certainly do, but just in case how is this...

"Operation Twist, or 'Twist', is a policy by which the Federal Reserve sells short-term government bonds and buys long-dated Treasuries, in an effort to push down long-term interest rates and therefore boost the economy". Over 2 trillion dollars now and growing at 85 billion/month. Also known as monetizing government debt, although this is denied by the Fed.

According to the Fed itself...

"The Federal Reserve System of the United States creates the country’s monetary base. The monetary base consists of currency (Federal Reserve notes and coins) in circulation and deposits (Federal Reserve credits) held by depository institutions at regional Federal Reserve Banks. Since August 2008, the Fed has tripled the monetary base from about $0.8 trillion to $2.7 trillion. More than half of this new money was used to purchase U.S. government bonds (Treasury debt)" Like I said, magic pudding money creation.

As opposed to QE purchases of MBS, yet more market meddling by the Fed.

Bernanke has been so wrong, so often for so long he is frankly an embarrassment to his position. I will be quite surprised if his and the Fed's market distorting policy experiments don't end very badly indeed.

congrats youve mastered the stage 1 interpretation