Archive through August 08, 2007
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     holycow
Member
Username: holycow
Post Number: 2928
Registered: 08-2004
Rating: N/A
Votes: 0
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| | Tuesday, March 27, 2007 - 08:39 am: | 
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Tony,
I was going thru' the various indices last night and couldn't help but coming to the same conclusion that you have... but didn't really want to post the observation because of the unpleasantry that's going on in the other thread. I think I will wait for a few days for the situation to become clearer before making any comment.
Cheers.
HC
"According to some, reading and believing in what I have written can lead you down the road of misery, hence you are advised to eat more vegetables and drink plenty of water, or you'll end up with a big bad case of constipation..."
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holycow
Member
Username: holycow
Post Number: 2930
Registered: 08-2004
Rating: N/A
Votes: 0
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| | Tuesday, March 27, 2007 - 09:18 am: |
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The subprime contagion may spread...
In coming months and years, the credit crunch that's now squeezing mainly the poor is likely to hit millions of middle-class homeowners who took out risky loans during the great housing boom earlier in the decade. More than 1 million families will lose their homes in the next few years, by one estimate. Another study predicts 2.2 million foreclosures.
This threat is new in American history. Its impact on the economy, and upon the American Dream, is uncertain...
*** "new" = Big Ben needs a creative solution... is he a creative fellow?
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HC
"According to some, reading and believing in what I have written can lead you down the road of misery, hence you are advised to eat more vegetables and drink plenty of water, or you'll end up with a big bad case of constipation..."
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holycow
Member
Username: holycow
Post Number: 2931
Registered: 08-2004
Rating: N/A
Votes: 0
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| | Tuesday, March 27, 2007 - 09:36 am: |
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FORECAST production from Fortescue Metals' $3.7 billion Pilbara iron ore project is now fully sold after China's biggest steel maker, Baosteel, signed a supply agreement covering a game-changing 20 million tonnes a year.
Speculation about the agreement has been behind Fortescue's recent share price strength, with the 34 per cent price surge in the past 11 weeks carrying the value of the personal stake of the group's founder and chief executive, Andrew "Twiggy" Forrest, to more than $2 billion...more
*** in the 2000 tech bubble, many billion dollar companies in the USA were selling nothing but vapourware and promises of great technology. Now tell me, what's the difference between FMG and some of those companies?
HC
"According to some, reading and believing in what I have written can lead you down the road of misery, hence you are advised to eat more vegetables and drink plenty of water, or you'll end up with a big bad case of constipation..."
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holycow
Member
Username: holycow
Post Number: 2932
Registered: 08-2004
Rating: N/A
Votes: 0
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| | Tuesday, March 27, 2007 - 09:47 am: |
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The Reserve Bank's latest financial stability review suggests that households and businesses have their finances in order and, despite the growth in corporate leveraged buy-outs, companies had generally taken a conservative approach.
It suggests that growing forms of business debt such as private equity, hedge funds and credit derivatives are "rapidly transforming credit markets".
While the transformation is "mainly for the better" because it has improved the allocation of global capital and spread the risk, "there remains considerable uncertainty as to how the system would react to a very large shock".
"It is possible that the very developments that have contributed to the increased robustness of the financial system to most events, through the wider dispersion of risk, could actually amplify the disruption following a serious shock," the Reserve said.
It also pointed out the conflict of interest problem inherent in private equity deals. "(There is) increased potential for market abuse reflecting the sizeable flows of price-sensitive information in the period leading up to the transaction, and the conflicts of interest that can often exist for management and financial institutions over these deals," it said...more
*** I think the RBA is simply not bold enough. It's too conservative in expressing its doubts and worries. Most people remember the '80s LBO craze by the few big insider scams uncovered. With big money and easy access to such insider information, can't see why this time things will be different.
The recent SSE panick selling that triggered off a semi global financial meltdown is a good example of what "wider dispersion of risk" can do to the global system as a whole. It is much easier for the central banks to deal with one or two elephants, BUT, they can never deal with a million fire ants all biting them at the same time... let's just hope the recent history will not repeat.
HC
"According to some, reading and believing in what I have written can lead you down the road of misery, hence you are advised to eat more vegetables and drink plenty of water, or you'll end up with a big bad case of constipation..."
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holycow
Member
Username: holycow
Post Number: 2933
Registered: 08-2004
Rating: N/A
Votes: 0
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| | Tuesday, March 27, 2007 - 10:34 am: |
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From Big McL...
Please understand there is nothing new in these markets, everything is simply a repeat of the past.
For some time I have been saying the “pattern of trending” from 1946 would be a good roadmap for the current market and two weeks ago I put up this chart and indicated the pattern of trending continued to be exact...
HC
"According to some, reading and believing in what I have written can lead you down the road of misery, hence you are advised to eat more vegetables and drink plenty of water, or you'll end up with a big bad case of constipation..."
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holycow
Member
Username: holycow
Post Number: 2939
Registered: 08-2004
Rating: N/A
Votes: 0
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| | Wednesday, March 28, 2007 - 10:41 am: |
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And adding to mounting concerns about the housing market's woes, Standard & Poor's said U.S. home prices continued to fall in January, with prices in 10 major cities now down 0.7% year-over-year.
Meanwhile, consumer confidence dropped for the first time in 5 months in March, according to the Conference Board. See full story. While consumers cited rising gasoline prices and the recent turmoil in the stock market, some analysts believe that the stumbling housing market is also a key factor for consumers.
"The key here is consumer spending going forward," said Peter Cardillo, chief market economist at Avalon Partners. "As lenders continue to be restrictive, it's going to be harder for people to refinance their mortgages and to get more money in their pocketbooks."
"Consumers will spend a little bit less going forward," Cardillo told MarketWatch. "And that's a problem as two-thirds of the economy comes from consumer spending." more
HC
"According to some, reading and believing in what I have written can lead you down the road of misery, hence you are advised to eat more vegetables and drink plenty of water, or you'll end up with a big bad case of constipation..."
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msparks
Member
Username: msparks
Post Number: 833
Registered: 10-2004
Rating: N/A
Votes: 0
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| | Wednesday, March 28, 2007 - 11:17 am: |
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HC
Think i will cash out today.
House prices falling in US, builders all going ass up, all associated trades and suppliers will feel the pinch, job security and ability to pay back loans deteriorates as each step in the "chain reaction" unfolds, and as house prices drop the tendency to borrow against the house becomes a problem and this reduces the cash available for the housewives to spend at the shops every bloody day of the year, while their man goes to work with a packed lunch and a thermos 
Sorry for annoying you lately, been a bit naughty, i often wish i was more consistent but then it takes all sorts, positive and negative and half full and half empties.
It is Day number 8
“Girls have an unfair advantage over men: if they can't get what they want by being smart, they can get it by being dumb.” Yule Brenna
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ody
Member
Username: ody
Post Number: 814
Registered: 10-2006Rating: N/A
Votes: 0
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| | Wednesday, March 28, 2007 - 12:15 pm: |
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MSPARKS: WONDERFUL US NEWS FOR BEARS
Hi Mark, - Yes, it all does sound like a picnic for bears, doesn't it? Dole queues, soup kitchens - the mind boggles as to what may be in the offing. Look at this from CNN:
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Adding to the recent spate of weak economic reports was the March consumer confidence index, which sank to 107.2 from a downwardly revised 111.2 in February. Economists surveyed by Briefing.com thought it would fall to 109 in the month.
"I think one has to be careful not to read too much into these incremental changes in these reports," said Richard Hoyt, money manager at KDV Wealth Management. "We're at a point where bad news has twice the weight of good news, which is creating undue pessimism in the near term."
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Let me share my innermost thoughts with you - the most pessimistic ones:
Did you see that? The economists expected 109 - which is of course far too optimistic - and they got 107.2, which is a big difference. And of course these figures are all subjective anyway, and they misrepresent them, particularly in the US. You can see it in the opinion of that Richard Hoyt. He has got that dead wrong: you should ALWAYS pay attention only to the bad news, and ignore what may sound like good news (which is probably not real, and only a matter of subjective interpretation). Besides, I don't take someone like that Hoyt seriously anyway: he is in the financial industry, so it is always on the cards that he is saying something positive to protect his self-interest.
Also, those consumers are pessimistic about their house prices, and so they should be, for we are told that the subprime problem is not so serious, but I feel that it is much, much worse than anyone has said yet. I cannot prove that, and I may be wrong, but it is this sense of mine that is making me wonder whether I should sell all my shares. Indeed, I shall have a look at shorting them!
All the signs are that the chickens are coming home to roost, aren't they? We shall no doubt shortly get a rout which will make the great depression look like a picnic!
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msparks
Member
Username: msparks
Post Number: 834
Registered: 10-2004
Rating: N/A
Votes: 0
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| | Wednesday, March 28, 2007 - 12:56 pm: |
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Hi Ody
Your post is a little confusing ? I don't know if you think it is time to go to cash or are you takin the p...
Certainly wdc is looking weak along with rin, thank heavens for bhp,jbm and the ox.
If oil rises economies fail, but wpl,roc,bpt and COE - (should have bought at 40 cents but have attention span of a nat)may do well and BHP also.
It is certainly a confusing time and showing up in the posting by the bears and the bulls i think.
There is all that super money has to go somewhere ? and the us will print until they fix whatever problem arises so hard to call the future but it is obvious everyone is a little edgy and many IC'ers in cash, and they are the pro's like dug, tonym,rudy etc.
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ody
Member
Username: ody
Post Number: 816
Registered: 10-2006Rating: N/A
Votes: 0
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| | Wednesday, March 28, 2007 - 01:10 pm: |
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MSPARKS - My recent "bearish" post
Hi Mark,
I wasn't serious. I just couldn't resist following you in your parodic writing:
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House prices falling in US, builders all going ass up, all associated trades and suppliers will feel the pinch, job security and ability to pay back loans deteriorates as each step in the "chain reaction" unfolds, and as house prices drop the tendency to borrow against the house becomes a problem and this reduces the cash available for the housewives to spend at the shops every bloody day of the year, while their man goes to work with a packed lunch and a thermos.
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I thought all that was very witty, and that's why I elaborated a little on all the possible horrors that in one's wildest imagination might come to pass. I am not so inconsistent as to write a post like that in all seriousness. It would be a travesty of what we are seeing, and that is what it was meant to be. So - rate for me! - a joke.
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ody
Member
Username: ody
Post Number: 817
Registered: 10-2006Rating: N/A
Votes: 0
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| | Wednesday, March 28, 2007 - 01:23 pm: |
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MSPARKS
PROFESSIONALS IN CASH?
I don't know what you mean by "pro's", Mark, but I should have thought that hardly any of us are. Certainly Peter Loh is, and he is not in cash by a long shot. There is, in fact, an awful lot of "professional" money in the market.
Does it strike you as perhaps significant that at this very moment our market is actually UP a little? This though the US was well down overnight. Increasingly, the Oz market no longer blindly follows Wall Street. Our circumstances are on the whole significantly different from those in the US, and the Australian market has for some considerable time been a much better performer, reflecting both (a) economic facts, and (b) a less hysterical breed of investors operating in a calmer market. I don't imply, of course, that we shall only go up - far from it - but to hold cash only and not to invest seems to me a very exaggerated reaction. Of the money that I hold for the share market, I have about 25% in cash. That seems to me ample, and I am very happy to invest the remaining 75%. You don't make money in a share market by not investing in it, and have to accept a degree of risk in doing so.
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kate
Member
Username: kate
Post Number: 652
Registered: 04-2005Rating: N/A
Votes: 0
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| | Wednesday, March 28, 2007 - 01:27 pm: |
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Mark, somehow I don't think you would have had the patience to get out 7 or 8 weeks ago and stay out! Although oil looks tempting, its not worth the risk unless you are happy trading on a 1-3 day basis. At the moment its only trading as high as it is because short term traders are trading the few bits of bad news. Might be best to wait until the seasonal rise works in your favour.
Good luck.
Kate
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holycow
Member
Username: holycow
Post Number: 2946
Registered: 08-2004
Rating: N/A
Votes: 0
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| | Wednesday, March 28, 2007 - 01:51 pm: |
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