V5 - "V" is for "Deja Vu"...
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     holycow
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Username: holycow
Post Number: 1882
Registered: 08-2004Rating: N/A
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| | Tuesday, October 18, 2005 - 01:29 pm: |  
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AORD 5-min Oct 18
... somehow there seems to be a pattern somewhere  , let's see if this rally has enough legs to climb over the wall and stay there!
HC
"... if you've got a chart, I have an opinion!"
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kate
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Username: kate
Post Number: 175
Registered: 04-2005Rating: N/A
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| | Tuesday, October 18, 2005 - 01:55 pm: |
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Just finished reading the Morgan Stanley link you posted on the I for conundrum thread, the two threads are overlapping at present so hope you don't mind if I just continue on this one.
From what I gather inflation isn't a major problem in the US or Europe, but maybe in the UK. So, if inflation isn't a problem what is? Can't find an answer.
The only thing I keep coming back to is that the US property market is only now beginning to cool and maybe the DOW is just behind our property - share market cycle.
Or is it just the perceived fear and uncertainty, terrorist attacks, oil prices, potential hurricane, Alan Greenspan retiring etc, etc.
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holycow
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Username: holycow
Post Number: 1885
Registered: 08-2004Rating: N/A
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| | Tuesday, October 18, 2005 - 03:08 pm: |
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Kate,
I think INFLATION is a concern. I also think interest rate hikes subsequent to the 11th hike are a BIG concern to the economy. From "zero" to 3.75%, or 4.5% as some analysts are anticipating, just imagine how much more a company like GM/FORD has to earn just to stay positive (let's not talk about beating analyst forecasts!).
There's a write up by Andy Xie saying China may be moving into non-deflationary economic activities for a while due to various factors like commodity price rise, etc.
In a nutshell, I think from now till Greenspanner walking into the sunset, there are a lot of uncertainties, and a lot of anxiety among those who are big borrowers and/or over leveraged in their biz/porfolio, etc.
Sure, there are always both sides on a coin, it depends on which side we want to look at - right now the market there doesn't seem to be looking at the positive side because of its trend. Until the trend turns bullish again, may be then we change out view and outlook?
Cheers.
HC
"... if you've got a chart, I have an opinion!"
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kate
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Username: kate
Post Number: 176
Registered: 04-2005Rating: N/A
Votes: 0
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| | Tuesday, October 18, 2005 - 03:29 pm: |
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I wonder if I didn't explain myself well enough. From all that I have been reading, and that includes the articles you posted, core inflation isn't a major problem at the moment. It may be sometime in the future but not now.
Kate
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holycow
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Username: holycow
Post Number: 1886
Registered: 08-2004Rating: N/A
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| | Tuesday, October 18, 2005 - 04:17 pm: |
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Kate,
I am disagreeing with what you have read, ie, the reports that I have posted - core inflation although is low, it is important ONLY to the Feds because they base their rate hike on "core inflation". By logic, if core is low then the Feds shouldn't have to worry about inflation and hence shouldn't raise rate or even talk about it. The fact remains though - they have hinted that they will continue to raise rate, probably in Nov, Dec and Jan if my memory is still good.
If by November they were to raise rate by .25%, then, this in effect will make "core inflation" a non-issue or anything worth watching. If they were to raise rate again in Jan, then, we can almost assume the Feds is raising rate basing on some other observations/data and they are not watching the "core". If that's the case, then, the core inflation has no meaning at all. Not to the ordinary Americans anyway.
Another point worth considering is the ABS has the habit of removing/adjusting items in the core inflation depending on what is important or introducing skews into their stats.
What matters to the market and businesses in general is the cost of money, in this case I believe every interest hike matters to them. So I reckon when the Feds came forth hawkishly telling the market and the whole world they will raise rate continuously to control inflation, what they were/are saying and the signals sending out is "the inflation is there, and it can create havoc to the economy hence they will use the only weapon they have - interest rate to combat it" - this is how I read them.
The bottom line is they have quite a few serious problems which I don't think they can have any quick fix to them, these are quite troubling really. I think this is what most economists and central bankers are watching. They want to know if Greenspanner can do something before he retires.
... and I reckon they all know there's not much he can do!
Cheers.
(Message edited by holycow on October 18, 2005)
HC
"... if you've got a chart, I have an opinion!"
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holycow
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Username: holycow
Post Number: 1888
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| | Tuesday, October 18, 2005 - 05:13 pm: |
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XAO 5-min Oct 18
... the "Wall" still stands! The bulls can have another go tomorrow but let's hope the US market will hold up tonight.
HC
"... if you've got a chart, I have an opinion!"
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holycow
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Username: holycow
Post Number: 1889
Registered: 08-2004Rating: N/A
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| | Tuesday, October 18, 2005 - 05:39 pm: |
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... interesting, and I agree!
Higher Rates Persist Despite Financial Stress
October 18 2005 - Australasian Investment Review – (AIR)
Macquarie notes that central bank inflation fears are clearly affecting financial markets, and as a result "financial distress" is no longer a guarantee of lower interest rates.
For many years financial disruptions have been swiftly followed by lower market interest rates, the analysts point out. Any time that there has been even a whiff of a systemic threat, global bond yields have fallen.
Macquarie highlights as an example that earlier in the year the upheaval at General Motors in the US triggered a powerful bout of risk aversion. The result was a significant drop in global bond yields.
Now, something has changed. Last week, the travails at Delphi and Refco did not have the expected impact on US fixed-interest markets Rather, long term yields actually increased.
Macquarie admits it is still early days. If shock waves spread, then one would expect there would be a view that the Fed would have to keep monetary policy on hold. At the moment, however, the Fed’s view is considered to be particularly "hawkish", such that oil price inflation fears are more likely to drive a continuation of the Fed’s tightening policy.
Last week’s shift in market sentiment is potentially very important, says Macquarie. It is a recognition that the options for central banks have narrowed. Inflation fears may force the central banks to adopt policies that would have been inconceivable just a few months ago.
Ominously, Macquarie analysts suggest that for equity markets, this is a significant development. The need for higher risk spreads and higher interest rates is now a "huge uncertainty" for equity markets.
HC
"... if you've got a chart, I have an opinion!"
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holycow
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Username: holycow
Post Number: 1890
Registered: 08-2004Rating: N/A
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| | Tuesday, October 18, 2005 - 06:30 pm: |
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A Cog In The Fed's Wheels... somehow I keep reading others' view that in a way agreeing with mine - like this meaningless "core inflation".
HC
"... if you've got a chart, I have an opinion!"
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holycow
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Username: holycow
Post Number: 1891
Registered: 08-2004Rating: N/A
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| | Wednesday, October 19, 2005 - 08:46 am: |
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US Major Indices Oct 18
...today we shall find out if the US market does exert any influence on ASX or not since last night the local bourse was green and strong.
HC
"... if you've got a chart, I have an opinion!"
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holycow
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Username: holycow
Post Number: 1896
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| | Wednesday, October 19, 2005 - 09:16 am: |
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The market internals...
HC
"... if you've got a chart, I have an opinion!"
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holycow
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Username: holycow
Post Number: 1906
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| | Wednesday, October 19, 2005 - 04:08 pm: |
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...just a question - will I be pushing it if I say the US market does INFLUENCE ASX in a big way especially when all the major indices are down big time?
... do I hear any dissenting voice? No? Okay, it's settled then!
HC
"... if you've got a chart, I have an opinion!"
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holycow
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Username: holycow
Post Number: 1909
Registered: 08-2004Rating: N/A
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| | Wednesday, October 19, 2005 - 06:16 pm: |
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