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Merged: Is the worst of the Global Financial Crisis behind us?

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Merged: Is the worst of the Global Financial Crisis behind us?

Old 7th Oct 2009, 00:29
  #221 (permalink)  
Foie gras
Posts: n/a
Interest rate up one quarter.

Perhaps we are sliding off the back end of the curve.
Over did the quantitative easing?
Time will tell.

At the end of the day we have to get back to basics:-

"The only way to increase the MONEY supply is to get off your ass and grow, mine or manufacture something.

Currency (and credit) are abstractions. Gold is "money" but so does a tree that I cut down and turn into lumber - the lumber is, in fact, "money", in that it is the product of an actual endeavor.

We abstract this into currency for convenience but the abstract is NOT "money", irrespective of claimed conversion rights, particularly when that claimed conversion right is only to ONE thing that is actual money. Indeed, such a conversion limitation is in and of itself a further act of fraud."
Old 7th Oct 2009, 00:59
  #222 (permalink)  
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VBA share price will go back past .50 cents today
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Old 8th Oct 2009, 13:38
  #223 (permalink)  
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It is a mathematical fact that 0.25% interest under John Howard is a greater amount than 0.25% interest under Kevin Rudd. The media seems to think so anyway.
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Old 1st Nov 2009, 23:34
  #224 (permalink)  
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Market dives 100 points this morning - is this the start of the "W" recovery?
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Old 2nd Nov 2009, 03:57
  #225 (permalink)  
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No, it's the start of the third wave.

The first wave (down) began in July 2007, ending in March 2009.

The second wave (up) began March 6, 2009 and ended October 21.

Each turn was noted at the time by way of a complete internal formation.

Wave three (down) will be harsher than the devastation of wave one down.


The world is not ending; that's ridiculous.

But a lot of things will come to end, like the massive debt overhanging the world's economy's. The rush will be to sell assets to cover debt.

Given the lion's share of the world's debt is denominated in USDs, the USD will be in demand.

You pay back debt denominated in dollars with dollars, not oranges or fig leaves...or IOUs on real estate or anything else that has been inflated with credit these last 25 years.

Credit withdrawal is the opposite of credit expansion. The latter is inflation, which has been the buzz word for all assets basis the expanding money supply. The former leads to a deflation of credit, which is the opposite of inflation. We're now entering a deflationary depression. It is inevitable. The US Fed cannot stop it anymore than they could stop Lehman going broke.
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Old 2nd Nov 2009, 04:23
  #226 (permalink)  
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On 13 Sep 4PW's said
The USD is about to enter a multi-year bull move.

Don't be caught short.
Then, again on 26th Sept
Sell them now, Hat.

Only asset that'll be appreciating is the USD.

Mark this moment in time.
So, how much money have you actually lost, following your own advice? Perhaps you are not a complete fool- rather a dishonest tout, as in "As these are anonymous forums the origins of the contributions may be opposite to what may be apparent"?

Will be impressive to see the USD entering a bull run while one arm of the government is buying the treasuries another is printing, just so there appears to be 100% take-up.

You keep touting, though.
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Old 2nd Nov 2009, 04:47
  #227 (permalink)  
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I don't think you have the faintest idea of how markets work, ferris. But you do seem to be quite good at throwing barbs.

Making money has never been made simple, contrary to what Noel Whittaker once said. But if one keeps at it, one finds what works and what doesn't.

In both cases, the lessons take time to absorb.

Good luck with increasing your patience and tolerance of the perspectives and opinions of others, and with increasing your own store of wealth, be that in lumber, brains or fiat money.
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Old 2nd Nov 2009, 04:47
  #228 (permalink)  
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Agreed completely with all comments!
Check this out for further info: HS Dent | Economic Research, Trends, Forecast, Asset Protection

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Old 2nd Nov 2009, 11:39
  #229 (permalink)  
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Yeah was a decent size drop today. If it does that again tomorrow and the day after I'll sit up.
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Old 2nd Nov 2009, 19:26
  #230 (permalink)  
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As for the Global Financial Crisis, we have only reached the end of the beginning.

Fasten your seatbelts.

These guys have been right each time since 2006.

English | LEAP/Europe 2020

The major trends at work in the 4th and 5th phases of the global systemic crisis (the decanting phase and the global geopolitical dislocation phase) are unveiling every day (1). Everyone has now realized that the United States is being swept into an uncontrollable spiral involving widespread insolvency of the country and gross incompetence of the U.S. elite in implementing the necessary solutions. The foretold US default is well underway as exemplified by the falling dollar and the flight of capital from the country: only the name of the liquidator and the recognition of the bankruptcy are still missing, but it shouldn’t be long now. Following the example of its leader, the Western bloc (which Japan has undertaken to move away from, implementing completely new political, economic, financial and diplomatic policies (2)), is in total decay symbolized by NATO’s coalition in Afghanistan (3).

According to LEAP/E2020, in 2010, the European Union having four strategic core requirements, will be compelled to take a number of urgent decisions in a context of a fast collapse of the Western camp that could be summed up as the US Dollar’s fate. The decisions taken by the EU will define the role the Europeans will be playing in the post-crisis world: either they start to appear as key-players in recasting tomorrow’s world and bring forward their own vision of the future, seeking the partners they need with no exceptions; or they remain the willing victims of a sinking Western Bloc, blindly following Washington's descent into hell. In the first case, the EU fulfills its historic purpose of restoring the Europeans’ command over their collective destiny; in the latter, it would just prove to be the Western equivalent of the Comecon (4), a futureless appendix of the protective superpower.

Heavy trends are already visible which, according to our team, have began to push Europe in a number of predictable directions. However, the intellectual weakness of Europe’s present political leadership (in the EU and member-states alike) compels us to soften our forecasts.

In all cases, since the EU is the world’s largest economic and trade power (5), the continuing development of these trends will soon impact directly on a large number of major economic, financial, and strategic factors: exchange rates, commodity prices, growth, social systems, budget balances, global governance…

In this 38th issue of the GEAB, besides ‘strategic and operational recommendations to survive the crisis’ and their ‘crisis-related country-risk anticipations for 2009-2014’, our team has decided to analyze these four requirements to which the EU will be compelled to find answers full of consequences:

1. Addressing the failure of the monetary system based on the USD and not becoming helpless when 1EUR=2USD
2. Avoiding exploding budget deficits like those in the US and UK
3. Responding to the aggravation of the Iran/Israel/USA crisis and war in Afghanistan by defining a specific European position
4. Learning to deal independently and constructively with the new key players of the post-crisis world: China, India, Brazil and Russia in particular.

It impossible to envisage waiting later than 2011 to deal with everyone of these crucial aspects (crucial for both the Europeans and the rest of the world). Just imagine what would happen if the Europeans remained passive beyond 2010, while faced with these four requirements:

1. If the Europeans are content to watch the Dollar sink, their exports to the US and the dollar-pegged countries will fall dramatically, exacerbating the economic and social crisis in the EU.
2. If the Europeans, their leaders in particular, are content to let public deficits swell, like France is currently doing, the Eurozone will soon become prey to profound disagreements between Northern and Southern Europe.
3. If European leaders are content to follow the Israel/Washington line in dealing with Iran’s nuclear issue and to fall in behind the Obama administration regarding Afghanistan, they will soon be faced with growing public dissatisfaction which they are not prepared nor in a good position to face, a guarantee of serious political instability in every member state.
4. If the Europeans are content to refuse independently debating the interests they have in common with the Chinese, Indians, Brazilians and Russians, they willingly deprive themselves of any means to bring forward their perspective on the previous three issues, as no significant move can be accomplished without them (6).

Historical change in China-India share of global GDP (1500-2008) - Sources: Bloomberg / Gluskin Sheff - 2009
Historical change in China-India share of global GDP (1500-2008) - Sources: Bloomberg / Gluskin Sheff - 2009
According to our researchers, 2010 is certainly a crucial year for the Europeans and their collective future. The relationship of the EU, and particularly of the Euro, with the dollar will be decisive for the Europeans, as much as for the Dollar and the global monetary order altogether. Not that the Europeans chose the year (2010) or the subject (the Dollar) (the leaders of the Euroland would certainly prefer to go on with their « business as usual »), but History is very ironical in calling the US “allies” bluff: sinking now with Washington or swimming without Washington.

In the image of all the developments involved in the ongoing global systemic crisis, time is going through a process of contraction: events are happening a lot faster. On this subject, we are surprised to hear various « experts » describing Robert Fisk’s article entitled « The Demise of the Dollar » (7) - where the author suggests that the Russians, Chinese, French, Japanese and Gulf oil-producing countries would be discussing the idea of pricing oil in a currency other than the US Dollar within nine years - as eccentric. According to LEAP/E2020, the only surprising element in this analysis is in the nine year delay. In fact, this development will occur much earlier, within two years, under the pressure of events.

In order to realize the extraordinary speeding up of History created by the crisis, let’s remember what kind of a place the world was nine years ago. Nine years ago, G. W. Bush had recently been elected; 9/11 would take place in two years from then; the US were neither stuck in Afghanistan nor in Iraq; Katrina had not yet destroyed New-Orleans; one Euro was worth 0.9 USD; Russia was a country adrift the EU was preparing a constitution meant to be popular; China was a poor international player; the US economy was shown to the world as an example and the United Kingdom was preaching ultra-liberalism throughout Europe; Wall Street’s investment banks seemed invincible,… the list could go on and on. What is highlighted is that each of these events seemed unthinkable to most “experts” just a few weeks before they happened. Therefore it is, in fact, very naïve to consider that it will take nine years until oil is priced other than in dollars, a currency utterly dependent on central banks’ will (increasingly a « bad » will, by the way) to buy, buy and buy more just for the sake of its survival.

As early as the second quarter of 2009, central banks from all over the world undertook to stop accumulating US dollars (dollars accounted for 37 percent only of their currency purchases while they account for 63 percent of their reserves) (8). As early as July 2009, close to USD 100 billion worth of net capital fled the US (9), at the precise moment when the US was claiming to be able to attract more than USD 100 billion a month to help finance the federal deficit (not to mention the other deficits).

In this situation, a fundamental question must be asked: who is really buying these USD 100 billion worth in Treasuries each month? Certainly not US citizens, indebted beyond any reason and left without savings or credit. Certainly not foreign private investors, more and more concerned about the economic health of the US. Certainly not the Chinese, Russian or Japanese central banks, more concerned about curbing their purchases of long-term bonds, and even starting to sell their Treasuries or exchange their long-term bonds against short-term ones. Strangely enough, the Bank of England alone seems to still have this appetite (10). Therefore, we are left we the “usual suspects’, i.e. the Fed and its network of « primary dealers ». “Money printing” is taking place on a far greater scale than acknowledged by the Fed under its official policy of « quantitative easing ».

Change in foreign purchases of Long-Term US securities (1979 – 2009) - Source: Market Oracle / Sean Brodick - 09/2009
Change in foreign purchases of Long-Term US securities (1979 – 2009) - Source: Market Oracle / Sean Brodick - 09/2009
As the US announced a federal budget deficit of USD 1,000 billion a year over the next decade (11), who can honestly believe that the rest of the world would accept nine more years being paid in funny money? Maybe those who found it impossible that Wall Street could collapse in September 2008? Or those who thought Obama would change America and the world (12)? Or else those who persist in thinking that the American consumer will rise from his ashes and fuel the « impossible recovery » (13)?

Unlike last year, no panic will come to the rescue of the dollar. This time, the US currency is seen more as a sham than as a safe haven. Indeed decoupling of the rest of the world (Asia, South America and Europe in particular) is underway (14) and it is precisely the reason why 2010 is such a crucial year for the Europeans. If they don’t do anything about it, the Euro will become a safe-haven currency and it will rise until it suffocates the European economy. The Eurozone must therefore become more aggressive and discuss with the other big economic and financial players how to avoid the Euro soaring against the Yuan, the Yen and all the other currencies of its trade partners.

On this aspect, the EU doesn’t have a choice: it cannot be lasting policy to purchase billions of USD every day that lose value every day as a result of the increasing pace at which they are printed (15). Moreover, the EU is in the strongest position to negotiate with the IMF for the suppression of the US right of veto and for sharing power with the « re-emerging » powers (16).

Relative weight of big players in global wealth - Source: IMF - 2009
Relative weight of big players in global wealth - Source: IMF - 2009
As usual, external events will push the Europeans to act in a united and proactive manner. In the present case, according to LEAP/E2020, the issue of the Dollar will be a powerful stimulus for European action in 2010. History, whose only “sense” is the sense of irony as often recalled by our team, is apparently ready to give the Europeans the role everyone thought would be played by the Chinese…


(1) See previous GEABs.

(2) See GEAB N°37 on this subject. Their radical monetary policy change is itself the hardest blow cast on the US Dollar and T-Bonds on the part of a decade-long “ally”.

(3) From the Netherland to Germany or Italy, NATO countries involved in the Afghan conflict increasingly state their desire to disengage from Afghanistan in 2010. Meanwhile Japan has announced it would freeze all logistical support to the coalition.

(4) An organization of mutual economic assistance led by the USSR, the COMECON was disbanded two years after the fall of the Berlin wall. Source: Wikipedia

(5) The EU is also the only economic power with a currency likely to become an alternative to the US Dollar. It also owns the world’s largest USD-denominated reserve assets and the largest gold reserves, and doesn’t depend heavily on the US consumer for its foreign trade. Caught in an impossible situation, the EU is a very powerful player which became, this year, the world’s richest region, ahead of North America. Source: Bloomberg, 09/15/2009

(6) Clearly remarked on by Barack Obama in declaring the end of the G7, and as illustrated in the chart below. In effect, not only has the Sino-Indian partnership seen the share of world GDP increase by almost a third in 10 years but, in the long term, leaving apart the last two centuries, these two countries have generally represented almost 50% of the world’s wealth. It is difficult for the Europeans to “finesse” this « hard fact ».

(7) Source: The Independent, 10/06/2009

(8) Source: Bloomberg, 10/12/2009

(9) Source: ShockedInvestor, 09/16/2009

(10) Considering the state of UK public finances, it cannot be of great help to the US. Indeed the Tory party seems ready to play the role of the IMF with its programme based on severe public spending cuts, while Gordon Brown is selling the State’s “family jewels”. Sources: BBC, 10/06/2009; BBC, 10/12/2009

(11) Most probably, these estimates are much less than reality as they are based on the federal government’s own growth forecasts. Source : US Congressional Budget Office, 08/2009

(12) Obviously, there are still a few, for instance in the Norwegian snow, among those responsible for awarding the Nobel Peace Prize.

(13) See GEAB N°37

(14) See « crisis-related country-risks » anticipations in this GEAB N°38.

(15) This is exactly the message Japanese citizens sent out when they voted for a radical change of power in Tokyo a little more than a month ago.

(16) For those with some knowledge of History, it is quite difficult to call China, India or Russia « emerging » powers.

Vendredi 16 Octobre 2009
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Old 8th Nov 2009, 12:26
  #231 (permalink)  
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Something I thought it is interesting to share.

Debt Clock Australia

How much is your share...?
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Old 8th Nov 2009, 12:41
  #232 (permalink)  
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In a statement this morning, Sun 8th Nov09, British Airways posted a loss before tax of £292m (€325m) for the six months to the end of September.

This compares with a profit of £52m (€58m) in the same period last year and includes the airline's first April-to-June loss since privatisation.

A small example of the bigger problem, clearly still a long way to go before things settle down
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Old 8th Nov 2009, 23:36
  #233 (permalink)  
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maybe british airways needs to go away?

flip sde of the coin..

Emirates reports surging first-half profit, predicts demand recovery in 1-2 years

Emirates appears to have flown untouched through the industry downturn, reporting a AED752 million ($204.7 million) profit in the fiscal semester ended Sept. 30, more than double the AED284 million earned in the year-ago period.

"Emirates remained focused on its long-term strategy despite the global economic slowdown. We have continued to invest in our eco-efficient aircraft fleet, in strengthening our global route network and also in supporting the infrastructure for our growing business," Chairman and CEO Ahmed bin Saeed Al Maktoum said. "Unlike others in the industry, Emirates did not cut back on its product, service or people. Instead, we invested in these areas and looked to our people to develop ever more innovative ways to manage costs, improve efficiencies, reallocate resources, and drive alternative strategies for the business."

EK added eight aircraft and two destinations (Durban and Luanda) during the semester and now operates 139 planes to 101 destinations. It plans to take 10 additional aircraft before the end of its fiscal year on March 31. It said it raised aircraft financing of AED3.3 billion in the first half.

Six-month revenue fell 13.5% year-over-year to AED19.8 billion, which EK said was a reflection of "lower passenger and cargo yields." Expenses sank 15.8% to AED19 billion. Traffic measured in RPKs rose 21% against a 22% increase in capacity that dropped load factor 0.8 point to 77.5%. Cargo carriage was "in line" with the year-ago period.

Al Maktoum said, "We expect it will take at least another year or two before demand for air transport and travel services starts picking up again. In the meantime, Emirates is well-placed to weather the rest of the storm."

Yesterday the airline announced a 13% increase in seat capacity to the Asia/Pacific beginning next month, comprising a fourth daily service to Bangkok, a third daily to Sydney, the 13th and 14th weekly flights to Manila and an 11th weekly service to Jakarta.

"Asian markets are rebounding with reports of resurgent traffic at key airports in the region. We are confident of seeing a recovery soon and are introducing additional capacity to serve the increasing demand," Senior VP- Commercial Operations-Far East and Australasia Richa
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Old 11th Nov 2009, 04:27
  #234 (permalink)  
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Emirates surging profit.

Mr. Hat,

Check out the middle east forums and see the pilots take on Emirates profit.
Makes for interesting reading!
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Old 13th Nov 2009, 08:16
  #235 (permalink)  
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As someone who "has no idea how markets work", I'm just wondering how that USD bull run is going? You haven't touted the USD for a few weeks now, 4PW's. We should be due another effort any minute, right?


A few expats might be considering their options more closely as the USD sinks.
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Old 18th Dec 2009, 05:20
  #236 (permalink)  
Foie gras
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Chook Tractors

Sorry to regurgitate the subject, but bad vibes suggest that the "Crisis" is not that far away, and most certainly IMMINENT.

The Mad Monk's mate Barnaby, wasn't half wrong recently, when he made public the fact that the US could quite easily default, creating global financial Armageddon. Subject went pretty quiet after everyone came down on him like a ton of bricks!
We don't want to create a panic.
This is serious ####!

Maybe we have been focusing on the US too much.
What about the EU?
Have a read of this report from a Russian political commentator:-

Eurasian Home - Opinion of Boris Kagarlitsky: Default in Europe

In these uncertain times, preparedness is an absolute.
For that reason why not order something like a chook tractor for Christmas.

McCALLUM MADE Chicken Tractors
Old 19th Dec 2009, 01:17
  #237 (permalink)  
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Only 2 weeks of 2009 left, not looking good for the " another crash by the end of the year " experts
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Old 20th Dec 2009, 10:43
  #238 (permalink)  
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Not much fun out there is there. Yet another warning of another crash, meanwhile the butterflys are getting seriously involved with the frogs, all the aircraft will have to be fitted with floats, you will need a boat to get to work, the whole bloody box and dice is about to fall on our heads, and that is just today! I don't think I will be too sad to head off to that crew bar in the sky, and watch the fun below!
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Old 21st Dec 2009, 10:58
  #239 (permalink)  
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Some good news to lift everyone's spirits;

Qantas shares jump on profit forecast

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Old 9th Jan 2010, 08:52
  #240 (permalink)  
Join Date: Oct 2005
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2010 is the year to be safely out of stocks, out of debt and into cash.

Which currency? USD, NZD or SGD, but not the Aussie.

It's kind of amusing in a way to read how a sceptic of the current thinking, be it AGM, Swine Flu or the accepted wisdom pertaining to the direction of stocks, currencies, bonds or real estate is said to be a pessimist.

Anyway, roll on.
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