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     resillent1
Member
Username: resillent1
Post Number: 182
Registered: 10-2006Rating: N/A
Votes: 0
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| | Saturday, August 25, 2007 - 04:08 pm: | 
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Is anyone allowed to spin a bear view on this thread? Hope so, heres mine.
I just don’t see the US trade deficit as sustainable. I do not believe their debt has been used for productive domestic expansion so they have limited means of paying it off, other than reducing their consumption and standard of living to repay the debt.
I don’t see the possibility for ongoing smooth global consumption as America reduces its consumption and hands the ability to consume over to the creditor countries.
Power just doesn’t transfer like that. Also the production capability to meet America’s consumption is not immediately suitable to meeting developing countries consumption. How many Chinese and Indians really want big screen plasma TV’s before electricity?
I think both creditor and debtor countries will take hits (inflation, currency revaluations etc) as the power to consume transfers. Creditors won’t get what’s owed to them in absolute terms but they will get an equivalent percentage of a smaller pie.
With every hit to both creditor and debtor countries, overall consumption will be hit, but power will transfer from debtor to creditor, the subsequent rebuilds of consumption will reflect the new power to consume paradigm.
So while I think the growth of China and India provide opportunities, I expect that it could be a wild ride and there is always the question as to whether nature is willing to accommodate current global consumption let alone more.
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hilarius
Member
Username: hilarius
Post Number: 2774
Registered: 04-2004
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Votes: 0
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| | Saturday, August 25, 2007 - 04:23 pm: |
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Yonder Friar Resillent is a Deep and Weighty Thinker !!!
Who is going to buy all our lovely iron ore and alumina?
And what are they going to do with it?
Not to mention our lovely natural gas and uranium?
Here's an idea ... how about World War III and IV so that they can throw it all at each other? Missing us I hope ... not in our backyard please.
Now there's a chance for a bull market if anyone lives to see it
Hilarius
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I come in peace to share my thoughts and to shine my candle light on possible long term opportunities
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hilarius
Member
Username: hilarius
Post Number: 2775
Registered: 04-2004
Rating: N/A
Votes: 0
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| | Saturday, August 25, 2007 - 04:30 pm: |
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Can anyone think of any peaceful uses for the world's excess production?
I can, but they don't make money directly for investment banks
Creating equality of opportunity, justice and peace are not bull market commodities
What a great world we would have if the provision of those things could be measured and traded in a bull market
Hilarius
I come in peace to share my thoughts and to shine my candle light on possible long term opportunities
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holycow
Member
Username: holycow
Post Number: 3054
Registered: 08-2004
Rating: N/A
Votes: 0
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| | Saturday, August 25, 2007 - 06:01 pm: |
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Resillent,
That's a very revealing graph you have posted. The trend - going down, is clear and distinct! My gut reaction is this chart probably is applicable to the US$, roughly I guess.
~~~~~~~~~~
I have been trying hard to dig for some Chinese stats just to see what kind of breakdown they have in terms of import/export, so, I can build some kind of bear case. Not so much to scare the investors witless, but more to highlight a caution. This, is my objective anyway.
I have found this: http://tinyurl.com/2cbnw6, out of date as usual.
1) Briefly, the import side, Agri prod: 6.8 (% I believe), Fuel & mining prod 18.1%, manufactures 74.7% (I believe these are semi-finished goods, to be value added for re-export)
The export side: Agri Prod: 3.8%, Fuel & Mining prod: 4.1%, manufactures: 91.9%
The main customers: USA 21.4%, EU: 18.9%, HK: 16.3%(I believe HK is just a transit point here), Japan: 11%, S.Korea:4.6%
2) I think it is quite clear that bulk of the imports are processed or semi-processed goods. Processed goods I believe would include manufacturing machinery, hardware, etc.
Bulk of the exports? Manufactures! Finished goods, and bulk of them go to the West (USA+EU), including some poisoned toys, poisoned dog/cat food, poisoned bedding and clothings, etc.
...now I am beginning to question the argument that the Chinese internal infrastructural needs plus internal consumption will form the new basis for on going Aussie commodities. I am not sure how valid is this argument now, but since my data is vague and out of date, I think the proponents should provide their set of data to convince the doubters!
Just how much of Aussie commodities are going into local consumption?
3) Another 'concern" that I have been having - the fear campaign against the Chinese goods, will it make a big dent on the demand? And will it indirectly affect the demand on Aussie commodities? Not sure, but this is still an arguable point.
4) But the point of debate (of a bull market) is not really all about the economy in my view. It's more about liquidity. In this case, liquidity moving onshore. The recent spike down was a clear indication of what happen when liquidity moves out of this country. The liquidation of equity as carry trades are winding up created a one-off sales of the century...
Will it happen again? Don't know, but it would be nice to scare them one more time and see if the market will plunge another 5%! This time, I will be ready!
Cheers.
ps: If I may, economy is like a flower bed, while the stock market is the flowering plant you are planting on it. If the flower bed is made of poor soil and is weak in nutrients, you can't possibly expect a strong healthy plant and nice big blooms... to get nice big "blooming" and "booming" flowers, what else do you need, Mr. Gardener?
A, you need water ($$$), the liquid of life, and liquidity is what will nourish your plant. B, you need fertilisers, the X-factors thingy like a good story, convincing story, a believable story, a faith inducing story, like the dotcom, high tech, new tech, new economy, new paradigm kind of "fertiliser" to create a mass consciousness - a belief so strong that the public investors would practically ignore and throw their commonsense out of the window turning themselves into mindless money chasing, stock chomping robots!
Currently in ASX, the "fertiliser" and the X-factor are the Chinese/Indian miracles and the commodity demand generated by their insatiable want of good life that is driving the boom in ASX.
There are also other x-factors like the cheap money thanks to Uncle Greenspanner, the super fund liquidity, thanks to Uncle Costello, and the recent (but now back?) currency carry trades flowing into this lucky country thanks to Mr Abe Yamamoto-san, the taxi driver from Tokyo who got really peeved with his 0.5% interest rate he is getting from his retirement fund.
Due to these cosmic events that happen probably once in a life time, the local bourse has never had it this good since the '87 crash, and the local investors' most favourite fashion?
Designer leather jacket! ... and this is no bull!
HC
"... he ain't no chart addict, but a TA junkie"
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hilarius
Member
Username: hilarius
Post Number: 2776
Registered: 04-2004
Rating: N/A
Votes: 0
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| | Saturday, August 25, 2007 - 06:38 pm: |
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HC
Do you have a psychological bias which causes you to need to see failure by the world economy?
All the evidence is that this is the most prosperous period in world history
What recommendations do you have to enable it to continue at an optimum level of growth?
Hilarius
I come in peace to share my thoughts and to shine my candle light on possible long term opportunities
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holycow
Member
Username: holycow
Post Number: 3055
Registered: 08-2004
Rating: N/A
Votes: 0
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| | Saturday, August 25, 2007 - 07:38 pm: |
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H,
I am so psychologically impaired to a stage that I am now thinking of changing my nick to holybear... :-} other than seeing a bear market, even just for a brief period, I don't think I can be cured. I find it hard to accept at "face value" that this bull market is the only market that we can have from now on to the next donkey years.
It is not impossible of course since it is a common market knowledge that nothing is impossible in a bull market. But still for some one who is a diehard in commonsense and uncommonsense, I think, this is one battle I will soldier on, even if I were to face the wrath of 3 million ASX bulls alone!  Sorry! A bear gotta do what a bear gotta do!
I firmly believe the current global economic trend is unsustainable as pointed out by Resillent. The question is more of when rather than if - WHEN the world wakes up to the fact that the US$ is not worth the value it is representing. And the Japanese, the Chinese, the S.Korean and the petra countries swap over to a new or more stable currency, that is the day we find out if the US$ and the US economy is bullet proof!
I am too myopic to provide a recommendation for optimum growth frankly. But I do subscribe to the idea that optimum growth has just passed us, what it needs now is a consolidation, a slowing down in extracting and optimising maximum benefits out of the recent past investment, allowing the streamlining and smoothening of operations in preparation for a renew phase of growth.
To gauge how wasteful it has become, just take a look at the over subscription of a new rabbit warren, new mines with nothing but just a plot of land with plenty of dirts are worth multimillions easily! 90% of these investment are going no where!
Without a phase of slowing down and cutting back on such wasteful spending of resources and capital, the current growth frankly is unsustainable, if you note the recent cost blowups as reported by various big miners and you'd have an idea. Time is wasted for equipment to arrive. Project is delayed or called off because of lack of manpower, etc... you name it, they have it!
Pushing more investment for growth is not a solution. A slow down and/or a shake out is! If we have that, and after a good consolidation, I think I will don my bear suit and start believing... that stronger for longer argument.
Cheers.
HC
"... he ain't no chart addict, but a TA junkie"
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lafee
Member
Username: lafee
Post Number: 641
Registered: 04-2003
Rating: N/A
Votes: 0
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| | Saturday, August 25, 2007 - 09:50 pm: |
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A question for the contributors
If one decided that one wanted to allocate money to trend trading the highest of high growth companies, which stockmarket would one choose to invest in and why?
Cheers Lafee
Don't ask an academic if what he does is relevant
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hilarius
Member
Username: hilarius
Post Number: 2777
Registered: 04-2004
Rating: N/A
Votes: 0
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| | Saturday, August 25, 2007 - 11:06 pm: |
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Officer Lafee
Shanghai ... large population with high proportion of unsatisfied needs ... labour availability ... scope for skills development ... better work ethic than in the luxury laden Western economies
HC
Isn't a free market economy supposed to ensure the efficient distribution of resources in the most sustainable form ... the best projects attracting the cheapest capital and the worse projects failing? Waste can never be eliminated totally ... but the wasters pay the price?
What would you do to eliminate waste besides generating an economic crash?
[PS I do recognise that recessions provide curative effects, as do amputations, but can it not be done by better less painful means?]
With Best Wishes
Hilarius
(Message edited by Hilarius on August 25, 2007)
I come in peace to share my thoughts and to shine my candle light on possible long term opportunities
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lafee
Member
Username: lafee
Post Number: 643
Registered: 04-2003
Rating: N/A
Votes: 0
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| | Sunday, August 26, 2007 - 12:15 am: |
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Hilarius,
Is China likely to invent the next google or will it's progress be inwardly focused to bring a standard of living to its people up to that of the 'West'. Is China's progress restricted or is it open ended?
Cheers Lafee
(Message edited by lafee on August 25, 2007)
Don't ask an academic if what he does is relevant
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hilarius
Member
Username: hilarius
Post Number: 2778
Registered: 04-2004
Rating: N/A
Votes: 0
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| | Sunday, August 26, 2007 - 12:38 am: |
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Officer Lafee
You make a good case for a Pacific Nations Common Market
Proposed Currency Name DolYenYuan
You could then concentrate on the DolYenYuan/Euro ratio
My suggestion to China, Japan and America :-
"If you can't beat them join them"
History is against it
It was also against the Euro
Hilarius
I come in peace to share my thoughts and to shine my candle light on possible long term opportunities
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hilarius
Member
Username: hilarius
Post Number: 2779
Registered: 04-2004
Rating: N/A
Votes: 0
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| | Sunday, August 26, 2007 - 01:02 am: |
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Officer Lafee
It is difficult to answer your question
Both the USA and China have histories of isolationism and expansion of interests ... with China winning ... look at Hong Kong, Singapore and Chinese populations around the world
If your deeper question is which country has the greater inventiveness and imagination my answer would be :-
Position 1 ... the United States but the lead is fading
Position 2 ... China but rising fast
The Chinese appetite for education astounds me
Add imagination and inventiveness and you will get a powerful result ...
If Silicon Valley has many Chinese I would not be in the least surprised ... and I expect to hear of a Chinese Silicon Valley equivalent as an urgent priority
For all I know it has already been happening ... I hear that the Shanghai skyline is breathtaking and the pace of development of some major provinces outstanding
I take your point and America currently has the lead, but I see China as having the greater opportunity
Who has the greater incentive and will?
I see America as like the declining Roman Empire, declining in its depraved taste for luxury & difficult foreign wars & ill fated occupations
If Afghanistan and Iraq were now thriving and secure I would have a different view
Hilarius
PS Brief History of the World :-
(1) Adam and Eve left Eden ... too perfect
(2) People of Israel left Israel ... God was cross with them
(3) People of Israel left Egypt ... too dusty and hot
(4) Romans left Britain ... too wet
(5) France left Russia ... too cold
(5) Germany left Russia ... too cold
(6) America about to leave Iraq ... too dusty and hot
I come in peace to share my thoughts and to shine my candle light on possible long term opportunities
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resillent1
Member
Username: resillent1
Post Number: 183
Registered: 10-2006Rating: 
Votes: 1
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| | Sunday, August 26, 2007 - 06:41 am: |
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Lafee
I think you might be confusing wealth creation with wealth concentration.
The next Google will more than likely do for USA what current innovations are doing, moderate and waning GDP growth.
China has the resources particularly human, to grow far in excess of USA. It doesn’t have the transparent rules for how financial markets and intellectual capital can concentrate that growth – perhaps that’s not a bad thing.
Hilarius
I say long live the economic cycle.
I’m not sure why you would dislike the contraction phase so much. It is the period when the best asset allocation decisions are made and productivity gains are the greatest.
Its the short sighted and poorly prepared that are hurt by normal economic contractions and well that is the whole idea of it I guess.
I have seen a bush fire analogy used for describing the benefit of regular contractions, which I quite like. - A regular low intensity burn is good for regeneration, remove it and you will eventually get a high intensity burn that is devastating.
That’s my thoughts.
Cheers
Resillent
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