Wake Up Time
Gents,
A quick synopsis of the financial markets, combined with an overview of the trade conditions (particularly here in China) suggest that the world as we know it is about to take a serious turn for the worse. Yesterday, Fedex announced that there has been a sharp drop-off in Asia originating tech shipments. Additionally, there is the mother of all credit crunches developing in China (those of you who are sitting on a profit in property....now might be the time to get out!). Europe: About to implode. The Greece situation is going to lead to a collapse in the Euro, and outright recession/depression. The large banks are technically insolvent with no mechanism to recapitalise them. The counterparty risk is unquantifiable, but certainly of a staggering scale. USA: Screwed....politically and financially. There is no hope of avoiding a recession. This will trigger even higher levels of unemployment which will lead to yet another leg down in housing. The model is broken there with the bank stocks reaching record lows again and main economic companies (like Fedex etc) flashing warnings of a sudden and large world slowdown. Asia: Living of an export bubble supported by easy Chinese money. The brakes are on and companies are closing suddenly and in large numbers. Suppliers and banks are not being repaid with unemployment starting to spike, leading to massive outbreaks in civil unrest. The follow on in HK will be dramatic and will result in 1997 like falls in economic activity and falls in housing prices. Overview: No place to hide. CX will have to hunker down for the next several years. Any planned expansion will probably be put on hold. The next battle over pay and conditions will be fought from a much reduced position of strength on our part. Watch the weekly telex for indications of all the above stated ideas. ...hopefully i'm wrong...but 20 years of market study convince me that the sky really is about to fall. Good luck. |
Air Profit . . .
...hopefully i'm wrong...but 20 years of market study convince me that the sky really is about to fall. Once you are able to digest this global calamity, then you may acquire some balance in your doomsday prognosis. In comparison, the WWII financial meltdown makes today's global recession appear rather tame. Note how quickly Europe and Japan had rebuilt their infrastructures and economies after near total destruction. Do you think that people will suddenly stop eating imported Australian beef? Will people stop buying made-in China toys for their kids? Will women stop buying imported roses from Kenya? Will YOU stop living...? :ooh: |
Before, during and after WW2 the world had an ever increasing supply of cheap, easilly transportable liquid energy - OIL.
Still alot left, but at over $100 / barrel, it's expensive, and the demand for it is insatiable, especially India / China. We are at peak oil (or even past it) - oil supply is downhill from here. No cheap energy, little or no economic growth. Energy is THE problem - or the lack of CHEAP liquid energy, to be honest. I agree the system may fail catastrophically soon. Globalisation is failing fast. "Interesting" times ahead, world-wide. Lid |
Flying lid.
China doesn't run on oil alone, Coal is a major factor and they will never run out of cheap coal, mainly because we (Australia) have so much of it. Japan and Germany are before India, although I think India will catch up and over take those two. . |
When the recession will come, the oil price will probably drop well below the 100$ mark.
But then, I think we'd rather have a 3% growth and a barrel costing 120$, than a recession |
Happy to post my synopsis and stand by it. Time will tell.
ps. Furball. I implied I have 20 years of experience studying and playing the markets, not that I am only considering the last '20 years of market action'.... |
......as an example
A Bunch Of Chinese Manufacturing Bosses Just Defaulted And Fled Their Failing Businesses Linette Lopez | Sep. 23, 2011, 12:41 PM China's papers are calling it their "own subprime crises." According to Shanghai Daily, 7 large business owners, mostly manufacturers, fled the city of Wenzhou on September 12th. They left thousands of employees jobless and hundreds of millions in unpaid debt. This is one of the consequences of China's "black bank," the massive undergound banking system that has been growing at a dizzying pace since the government started tightening credit to curb inflation. Banks favor state-owned businesses when it comes to lending, so when private business owners need to take out a loan, they turn to the alternative, to the underground. Going to the undergound has two consequences: For those who take out loans, it means having to pay much higher interest rates than they would if they borrowed legitimately. For the lender, it means that if a loan goes unpaid, there isn't much that can be done about it. In other words, if business is bad for a business owner with an underground loan, they can just walk away. So they do. One of the runaway employers is Hu Fulin, the owner of Zhejiang Center Group (ZCG). ZCG owns the most popular sun-glass company in China (they make 20 million pairs a year) and employed 3,000 people. He also invested in real estate and the renewable energy industry. Hu is penniless now, but he owes his employees their August and September salaries (about $1.5 million), and he hasn't paid his suppliers either. The city government has set up a task force to figure out how to track all of Hu's loans and repay his debts. It's rare that the authorities are able to catch bankrupt business owners before they leave town, but sometimes it happens. Zheng Zhuju, the 49 year old owner of a home appliance store, tried to skip Wenzhou leaving $43.8 million in unpaid, underground debt. She was arrested beforehand, though, and has been incarcerated since September 13th. Please follow Business Insider on Twitter and Facebook. Follow Linette Lopez on Twitter. Ask Linette A Question > Read more: A Bunch Of Chinese Manufacturing Bosses Just Defaulted And Fled Their Failing Businesses |
...and another
ROB ARNOTT: We're In The Worst Depression Since The Great Depression Gus Lubin | Sep. 23, 2011, 7:10 AM | 7,531 | 29 A A A Rob Arnott says we're in the worst depression since the Great Depression and the Fed may be making things worse. Arnott, who oversees $80 billion at Research Affiliates, tells King World News: When real interest rates are 2%-4% and inflation rates are 2%-4% you get a really nice peak where the average P/E ratio is north of 25 times earnings. The interesting thing is both of these numbers are within the control of the Fed, the Fed can control the rate of inflation and tacitly can therefore control the real rate of interest. Where are we now? We have negative real interest rates. Okay, that’s pretty alarming. We also have inflation rates (if) correctly accounted, it’s probably in the 5%-7% range. If inflation kicks up another 1% or 2%...This creates some fairly serious downside risk for equities if the Fed continues on it’s current path. Unfortunately I think they will, unfortunately enabling bad behavior is what they do to try to avoid an economic downturn. Well, the downturn is already here. Absent deficit spending, we’re already mired in the worst depression since the Great Depression. Read the full interview at KWN > Please follow Money Game on Twitter and Facebook. Follow Gus Lubin on Twitter. Ask Gus A Question > Read more: ROB ARNOTT: We're In The Worst Depression Since The Great Depression |
If you are that good at 'playing the market' Profit, what are you doing posting on an anonymous pilots' bulletin board; or are you posting from your yacht in Monaco and doing it for 'charity'?
(I ask a similar question to all 'financial advisors') :hmm: |
"The one who believes in infinite growth in a finite world is either a madman or an economist" |
Capt Dart
I am not sure that AP is posting financial advice, as much as his view. We all have views on what is going to happen in the next 20 years, whether or not we actually realise it. We use those views to do things like choose our fidelity allocations. Some (perhaps most) believe that tomorrow will be the same as today, ad infinitum. Others believe that there will be increased growth, yet others think there will be some significant issues, economically speaking. If you have a good strong look at say the last 300 years, you will see that economies and currencies ebb and flow, with significant booms and upsets every so often. Most of these upsets occur after a prolonged period of currency manipulation by governments; conversly, periods of stability follow times when currencies have been strong and stable (read not "fiat"). In the past it was considered good housekeeping to prepare for disasters, whether they are floods or famine. I think AP is merely giving you his view that the time for some preparation has arrived again. That's his view. You need to make your own. |
Governments will simply give in to quantitative easing, printing more money into the system, pushing up hard asset prices like employment area real estate. Timing the plays may be a good idea, but it's the steady hand that wins the game, keep your debt minimal, dollar cost average, enjoy that you have net worth and a job. Get on with things and enjoy your remaining years on this planet... it goes fast.
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Jed: :ok: Captain Dart: :yuk:
ps. Dart, good job 'all' your passengers don't ask you about how competent you are to fly airplanes.... pps. I never said I was 'good' at playing the markets.... (do try and read a bit more carefully next time...?). |
Hey Dart. You seem pretty good at missing the point. Jed was correct, Profit was simply offering an opinion, not giving ANY advice (other than HK property...which anybody with a pulse can see is probably due for a drop). I think the articles posted by Profit seem to provide pretty good evidence to support his opinion. How about you, things looking pretty good through your rose coloured glasses??
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Well, most of us already heard about AP's delusional "worldview" regarding his magic invisible friends with superpowers, our 6000-year-old Earth, dead people disappearing to live again in his magic invisible post-life place, etc.
Delusional people tend to interpret things to suit their delusion, just as with shamans, tarot cards, horoscopes, bibles, etc. Markets go up, and markets go down. Economies boom, and economies bust. Players at Macau make money, then lose more. To those who don't get that, or need to rely on a fortune teller with AP's "worldview" to get it, well, good luck! In the meantime, there is plenty of money to be made when markets go down, too. Doing it that way just depends on your "worldview!" Have a nice day! |
...read it and weep...
Europe’s problem is that no one knows who’s in charge It’s no good calling for leadership if none of the EU leaders has the authority to act. http://i.telegraph.co.uk/multimedia/...0_1805228j.jpg By Charles Moore 8:02PM BST 23 Sep 2011 When the euro began, it proved difficult to agree on the design of the banknotes. In the end, its founders settled on pictures of bridges. British pound notes signify the national bank’s quantity of money (originally a weight of sterling silver) under the authority of the sovereign (the Queen). Euro notes are much vaguer. They express an aspiration. Those bridges represent man’s attempt to link what is naturally separate. Now the bridges are cracking, and it turns out that it isn’t really anyone’s job to pin them together. Something called the troika – the European Commission, the European Central Bank and the International Monetary Fund – is handling the crisis, but the very fact that these three entities have to be triple-yoked indicates the problem. The only power that actually might be able to do something is Germany, and it seems paralysed. Since this is a financial crisis, most of what you read about it is expressed in financial terms. Will the ECB buy up more bonds from distressed member states? Will the European Financial Stability Facility increase? Will the eurozone create a fiscal union? All perfectly reasonable questions in themselves, but they fail to ask the prior question, which is political, not economic: “Who’s in charge?” The posh word for this question is “sovereignty”, and we Eurosceptics have been attacked more violently for worrying about it than for any of our other sins. In a fierce and timely pamphlet, Guilty Men, published yesterday by the Centre for Policy Studies, Peter Oborne and Frances Weaver expose all the people who excoriated us doubters and insisted that the euro would work. They quote Chris Patten, former Tory chairman, Governor of Hong Kong, European Commissioner, and now the new chairman of the BBC. In a lecture at the time of the euro’s beginning, Lord Patten said that sovereignty, “in the sense of unfettered freedom of action, is a nonsense”. “A man naked, hungry and alone in the middle of the Sahara desert,” he went on, “is free in the sense that no one can tell him what to do. He is sovereign, then. But he is also doomed.” Having defined sovereignty in this way, Patten was then easily able to prove that it was a useless concept – better for Britain to allow such empty freedom to be circumscribed in order to “achieve some other benefit”. But this is not what sovereignty means. It means those institutions and people who, in any political community, have ultimate authority – who is Caesar, as Jesus put it when asked about paying the tribute money. That authority relates, of course, to power, but it is not only a matter of power, but also of legitimacy. It requires consent, which, in modern times, usually means democratic consent. In Britain, sovereignty is supposed to reside in what constitutional historians call “the Crown in Parliament”. Those of us who stuck by this concept were called little Englanders, xenophobes, bigots. But all we were really doing was insisting on those basic answers which you need before you embark on an awfully big adventure. Our questions were mocked and the answers never came. In 1998, when the euro was brewing, I was invited to give a speech about it to the Institute of Directors. I looked up the European Commission’s Q & A booklet on the subject. To the question, “Will full economic and monetary union spell the end of my country’s right to determine its own economic policy?”, it replied, “Yes and no”. “Surely the right answer, from the pro-EMU point of view,” I said in my speech, “has to be an unequivocal 'yes’. Otherwise there will be different Caesars for different things with their powers undefined or, worse, different Caesars for the same things. In the long run, that is not possible.” Because of that original “yes and no”, half of the eurozone economy is now on the brink of collapse. So this week, when everyone, including our Prime Minister and the head of the IMF, calls for political leadership, it cannot be provided. This is not because the leaders are not much cop (though they aren’t), but because they lack the necessary authority. The eurozone is suffering from a sovereign debt crisis, because no one is sure who is sovereign. Within an area united under the same currency some government debt – in the most extreme form, that of Greece – is toxic. Other government debt – above all, that of Germany – is fine. Greece finds herself neither sovereign, nor free, nor, to use the Patten phrase, achieving “some other benefit”. She is up the creek without a paddle, and so, quite possibly, are Portugal, Spain, Ireland, Italy, and more. The Euro-visionaries such as Jacques Delors did not mind avoiding the question of sovereignty. Indeed, they almost rejoiced in it. They had wanted political union and failed to get it. So they hoped that, by pushing through economic and monetary union, they would make political union inevitable. If only they could get enough people into the room, they reasoned, they would find that they would not want to leave. What they refused to contemplate was what is now happening. In 1997, William Hague predicted that being in the euro would be like “being trapped in a burning building with no exits”. He was attacked for his “half-way-out extremism” (Hugo Young), but today the acrid smoke from that fire is billowing across the markets. You can hear the screams of those trapped inside. The crisis today is indeed worse than what followed the collapse of Lehman Brothers in 2008. People make bright suggestions for how the problems of the eurozone could be sorted out. These all depend on the idea that reform can be agreed and enforced. Given that treaty change can take years, and markets can collapse in hours, this seems improbable. But there is a much deeper problem than one of time. In a really beautiful cutting from 1997, Oborne and Weaver find Lionel Barber, now the editor of the Financial Times, quoting with approval some words of Dominique Strauss-Kahn, then the French finance minister. Strauss-Kahn was attacking Britain for staying out of the euro. “Monetary union,” he said, “is like a marriage… People who are married do not want other people in the bedroom”: poor old Britain would find herself locked out. Subsequent events suggest that Mr Strauss-Kahn’s own bedrooms are rather less exclusive than he implied, but the assumption behind what he said was that the diplomatic marriage of France and Germany would ensure all was well. This turns out to be quite untrue. Diplomacy cannot create a nation, or even a looser political community, such as a United States of Europe. For that, you need the agreement of citizens. Such agreement has never seemed more remote in the history of the European Union than it does today. It is not beyond Germany’s financial power to rescue the ailing eurozone countries. But the increase in political power for Germany which such a rescue implies is surely way beyond what most of the people of Europe would accept. The Germans do not want it either: in agreeing to create the ECB, they willed the means, but not the end. Now that the end is nigh, they are terrified. What Europe faces, then, is a disaster that was predictable – and predicted – and is now unavoidable. In the process, millions will lose their jobs, an entire generation will miss the opportunities which their parents enjoyed, and blood will probably be shed. The rulers of Europe have never been so wrong since the late 1930s. |
We are long the Macau casinos. It's our long corruption, short property play. |
Skillet. Is 'everything' in your world reflected in your obviously troubled soul and conscience? Are you able to comment on ANYTHING without showing your rather narrow-minded obsession with discrediting your maker...?
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I agree with AP
Although markets may find an interim ( 2-3month low) soon that is but the first leg down of markets that will plummet more disastrously than they did in 2008.
Final bottom in about 4-5 years. Dow below 1000, S&P500 to around 150 |
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