Who thinks there will be a slump?

[Garpal Gumnut]

It is all cyclical.
1,2,3,4,5,a,b,c,1,2.......

gg

 

[KurwaJegoMac]

Ouch! those knives are sharp!

View attachment 43835


Why would you buy at the start of GFC phase 2? I'll be the one shorting to your bid

Your only hope will be when they anounce QE3,4 & 5......timing.

ie don't you realise the world is entering a new, much worse, recession, perhaps depression?

When banks were collapsing and ours had lost 50% of their value i loaded up on them. Made close to double since then and of course enjoyed some lovely dividends too. This was at a time when credit had frozen around the world and there was blood on the streets.

Will it happen again? Quite possibly - and if we get some more capitulation i'll buy in again.

As the saying goes, "this too, shall pass".

 

[skc]

As the saying goes, "this too, shall pass".

Says the Japanese trader in late 1980s.

It may pass... but when?!

 

[Uncle Festivus]

As the saying goes, "this too, shall pass".

Maybe not. It's all about too much debt and not enough income to pay it off, only on a global scale. Turning Japanese

Do some study on debt to GDP ratios - Greece is just the warm up act........Italy is 10 times worse, the US is 7 times worse than Italy......a great period of austerity is here.

 

[notting]

Recovery is going to be slow just like Japan.
Markets, however, should perform strongly because there is so much money around.
There is also a stack of people waiting to get back in who off loaded during the last crisis.
Inflation may rise but that just means everything goes up in the end and it's another way of raising taxes without raising taxes because every things getting relatively less, including dept! Politically friendlier. Everyone's taking a hair cut but now the economy in general is holding the scissors not the leader etc.

The workers lose.

The last thing you want to be in is cash when it turns.
That's what really loses value.
Things just keep going up, service, materials, merchandise stocks - represent things! Money is money and loses and loses. There's stacks around everywhere!!
It has to be this way because of what China has done with their fake low currency.
It's the only way to balance things up a bit.

I'm not going in really hard till there's some real panic and people are throwing stocks out the windows in the mean time I'm just nibbling away.

 

[LifeChoices]

Do some study on debt to GDP ratios - Greece is just the warm up act........Italy is 10 times worse, the US is 7 times worse than Italy......a great period of austerity is here.

Where did you get this from? I did all the all right things: I punched "country debt to GDP ratios" into the google machine and didn't find the figures you see:

I found some wiki pages - but nothing that backs your claims:
http://en.wikipedia.org/wiki/List_of_countries_by_external_debt

This page suggests Ireland is the worst off.

 

[Uncle Festivus]

Where did you get this from? I did all the all right things: I punched "country debt to GDP ratios" into the google machine and didn't find the figures you see:

I found some wiki pages - but nothing that backs your claims:
http://en.wikipedia.org/wiki/List_of_countries_by_external_debt

This page suggests Ireland is the worst off.

Sorry, I said debt to gdp then put down the relative debt levels from memory

With the extra $900B for the US they are now over 100% debt/gdp or approx $15T
Italy has $2.4T debt, 119% debt to gdp
Greece has $300B debt (& counting), 143% debt to gdp
Ireland has for all purposes been written off already....

I think this can pass for a 'slump'? Another 80 pts off the XJO today by the looks......and we still have the abysmal US non farm employment number out tonight, which could go negative!!

 

[tminus]

That is a clear double top there, why was there a rapid sell off late in the day (in the Dow), were the unemployment figures leaked to the big firms?

 

[KurwaJegoMac]

Says the Japanese trader in late 1980s.

It may pass... but when?!

Very true. When will it pass? No one can tell you that of course - but is one to freeze in fear and never hold equities due to what happened in one country?

Still, while we have stuff to dig out of the ground and a growing population im not too worried. As mentioned above, inflation will be the kicker. Look what the US is doing - driving up inflation to inflate their debt away and lowering the USD to stimulate their exports. As the Russian President said, they're just leeching off the world rconomy - everyone knows it. Well worth taking advantage of the situation

 

[skc]

Sorry, I said debt to gdp then put down the relative debt levels from memory

With the extra $900B for the US they are now over 100% debt/gdp or approx $15T
Italy has $2.4T debt, 119% debt to gdp
Greece has $300B debt (& counting), 143% debt to gdp
Ireland has for all purposes been written off already....

I think this can pass for a 'slump'? Another 80 pts off the XJO today by the looks......and we still have the abysmal US non farm employment number out tonight, which could go negative!!

Last night was incredible. The fear got so bad even gold and silver took a dive.

I think the US debt isn't a problem anymore... they've just showed how people still tripping over themselves to lend them money (i.e. buying treasuries) in times of crisis... speaking of an irrational market.

It is hard to imagine the non-farm sparking further sell off tonight. The market has priced in very bad data. But I suppose extremely bad data will probably do it...

 

[sptrawler]

Yes I think last night on the U.S market will pull the plug on our market, margin calls will be the go today, that is if anybody was silly enough to have a margin loan.
Add to this the collapse of retail, the carbon tax fears and the ridiculous government undermining confidence.
We have a perfect recipie for a recession, the slump has begun. Wait untill the unemployment begins to kick in from retail.

http://www.smh.com.au/technology/te...net-sales-wont-save-shops-20110804-1idmu.html

 

[KurwaJegoMac]

Sorry, I said debt to gdp then put down the relative debt levels from memory

With the extra $900B for the US they are now over 100% debt/gdp or approx $15T
Italy has $2.4T debt, 119% debt to gdp
Greece has $300B debt (& counting), 143% debt to gdp
Ireland has for all purposes been written off already....

I think this can pass for a 'slump'? Another 80 pts off the XJO today by the looks......and we still have the abysmal US non farm employment number out tonight, which could go negative!!

View attachment 43839

I wouldn't compare the US with Italy, Greece or Ireland because the effects on the US and the countries in the Eurozone will be vastly different (in terms of GDP being over 100%).

The Eurozone countries have a fundamental difference to the US - the US issues its' own currency, while Greece, Italy and Ireland do not. That is why hardly anyone is blinking an eyelid about the US debt and they are focusing instead on the Eurozone. The Eurozone requires intervention from the EU (read: Germany) for funds to pay back its' debts (i.e. bailouts) because they cannot print their own money (like the US can) and cannot deflate their currency (as the US have) in order to stimulate exports.

That's why the Eurozone countries are the main focus - without 'bailouts' they will go bankrupt, so GDP is a bigger issue for them. The US, not so much - they can print their own currency and issue more debt to cover their debt (perhaps not the wisest sounding strategy but it will get them through the crisis). That's why no-one batted an eyelid about the US GDP and debt until such time as they neared their debt ceiling, because if they hit their debt ceiling then they default of course. My how the media picked up that story and it became the biggest issue!

Of course the US was always going to raise its' debt ceiling, as it has for the last 50 years+ (it's been raising its' debt ceiling almost once every year) so this is nothing new. There is even room in the American Constitution that the president can veto both houses and raise the debt limit (of course support from both parties is preferred, but don't think the president wouldn't hesitate to use that law to avert a default).

So the PIIGS and the US should not be compared regarding GDP - they both have fundamentally different economic structures.

Make no mistake - I do not think either the PIIGS or the US are ok, both have severe economic issues they need to muddle through. Both will experienced depressed or negative growth (read: recession) over the coming years. A default of the PIIGS will freeze up credit markets again and drive a 'flight to safety' resulting in the YEN, AUD, gold and silver to rise, similar to the GFC.

A default in the US would be quite catastrophic, but it's not going to happen because they can (and will!) print their own money. My concern is not the recession or slow growth - my concern is the inflation that's going to occur. We now have $2.3 trillion USD about to flow into the global monetary system - if you understand economics and money, you'll know that this means one thing: inflation. With $2.3 trillion USD that amounts to a LOT of inflation - I'll be holding some cash to buy assets on the cheap but for now it's go-go asset purchases.

 

[sptrawler]

Good summary Kurwa, I agree completly, the trick is timing there is no point in purchasing an asset that falls another 30% in value.
We always lag behind the U.S and Europe and the housing correction they have had is still to happen here. The government with their stupid policy on the run, has caused a nervousness in the economy and a crash on the world share markets will turn that into panic.
Picking the time to enter the markets is the trick, hopefully the learned members on the forum will have some tips.

 

[KurwaJegoMac]

Good summary Kurwa, I agree completly, the trick is timing there is no point in purchasing an asset that falls another 30% in value.
We always lag behind the U.S and Europe and the housing correction they have had is still to happen here. The government with their stupid policy on the run, has caused a nervousness in the economy and a crash on the world share markets will turn that into panic.
Picking the time to enter the markets is the trick, hopefully the learned members on the forum will have some tips.

The thing about markets is that you can never pick the top or bottom, nor can you forecast the future. A lot of people delude themselves in thinking that they can predict a bottom or top or where the next level will be. News, information and sentiment changes on a daily basis - I know a lot of people got caught with their pants down near the bottom of the GFC and missed a lot of the good gains. Likewise many got caught with their pants down during the peak leading to the GFC.

I'm a Technical Analyst, preferring analysis of the charts when I buy stocks. There's only one time I've ever switched to fundamental analysis (macro-fundamental if you will) and that was during the GFC. I was buying Aussie banks on the cheap - picking up bargains like ANZ at $15. I'm no "buffet" or particular expert at fundamental analysis (in fact I dislike fundamental analysis) but even I can see that a bank trading at 7 times forecasted earnings (including provisions and revised earnings estimates) with great dividends is a no-brainer for a 10 year + investment.

Right now it's trading below $19, so I'm sure you can guess where i'll be putting in more funds soon. While I cannot forecast the future and time the bottom, I sure as hell know a bargain when I see one.

As I've mentioned before, the 2nd opportunity for bargains is fast approaching. Enjoy.

 

[Calliope]

This Time it's Serious.

And for all those who talk about a soft landing for Australia? We are one of the most exposed nations on earth, a small economy that relies extensively on exports and trade. As for all those who reckon we have "decoupled" from America and that our relationship with China will save us, you are partly correct. But China is tied to the US courtesy of its huge exposure to American debt. That's only one degree of separation.

http://www.businessday.com.au/business/this-time-its-serious-20110805-1ie4t.html#poll

 

[sptrawler]

Well the Dow at 10800, should be some buying opportunities comming up this week.

 

[basilio]

Laughing as you sink.. A lighter look at lengthening losses.

http://www.youtube.com/watch?v=NOzR3UAyXao

 

[Julia]

So funny, thanks basilio. Tragically true, though.

 

[sptrawler]

And so the closures continue, add to this the flow on effect of the carbon tax fallout to unemployment and the gloom deepens.
http://www.smh.com.au/business/more-retail-woes-premier-shuts-50-fashion-shops-20110725-1hw37.html
Wonder who will be next?

The unemployment has got to start ramping up. Indicators are not looking good.

http://www.theage.com.au/business/more-empty-shops-in-cbd-20110812-1iqw9.html

 

[explod]

This bloke is epic and finally something on the TV media.

http://www.youtube.com/watch?v=OlSd9OURbCE&feature=related

But will someone get into power to stop the tide. I don't think so, the big crash will be stalled as long as possible in my view and then it will indeed be epic.