By: rodneysaviour2
18/08/2009
2:22 pm Yahoo! Profile:
rodneysaviour2 Did this message offend you?
Sign in to report abuse |
Reply to this message |
I have a suggestion -
Lets just ignore them. |
|
By: rodneysaviour2
18/08/2009
2:22 pm Yahoo! Profile:
rodneysaviour2 Did this message offend you?
Sign in to report abuse |
Reply to this message |
I have asuggestion -
Lets just ignore them. |
|
By: the_pr.of_china_is_evil
15/08/2009
12:37 am |
Message deleted. Reason: Breach of terms of service |
|
By: peteradish
9/08/2009
11:50 pm |
Message deleted. Reason: Breach of terms of service |
|
By: mentawaisurf
7/08/2009
12:56 pm Yahoo! Profile:
mentawaisurf Did this message offend you?
Sign in to report abuse |
Reply to this message |
China replaced its dependence on the faltering US consumer with its own debt binge. The speculative asset bubble that developed is now also faltering.
China's state-owned banks were 'encouraged' to lend hand-over-fist by their CCP bosses which resulted in a rampant lending campaign since late 2008 and has merely created unsustainable stock market and real estate bubbles (China's stock market is up over a staggering 100% since its lows just 9 months ago!) But now the Chinese government has ordered a cessation of this irresponsible lending which may soon lead to a collapse in these precarious asset bubbles;
http://www.ft.com/cms/s/0/5ec09bb2-7aa1-11de-8c34- 00144feabdc0.html?nclick_check=1
And for anyone who hasn't had the chance to walk the streets of China's largest city recently, take a walk with Hugh Hendry to see what is really happening there today;
http://www.youtube.com/watch?v=ektMQGbW3wk |
|
By: mentawaisurf
5/08/2009
10:54 am Yahoo! Profile:
mentawaisurf Did this message offend you?
Sign in to report abuse |
Reply to this message |
| As I mentioned, subprime was merely the initial sympton of the much bigger disease in global financial markets. And it matters little how much money/credit central banks create if people are unwilling to take on more debt (just like pushing on a piece of string - no effect at all). That is the key issue that governments and central banks have no control over and will see their 'great plans' fail as the next round of the bear market unfolds. |
|
By: jadeshangrila
5/08/2009
8:10 am Yahoo! Profile:
jadeshangrila Did this message offend you?
Sign in to report abuse |
Reply to this message |
| Menta, commercial loans are a lot easier to be refinanced now even MOF got some of it's expiring loans sucessfuly refinanced. The government name and shame banks that are not adequately capitalise to refinance these loans you mention. They may be forced to take up TARP funds and are encouraged to lend and be more lenient to defaulters. Also Freddie and Fannie mac has been pumped up with hundreds of billions of dollars to take up any new loans and refinancing. Such things have already been worked and analysed by stock analysts. Even more risky companies like Ford have recently been able to sell their bonds. goes to show the credit market has finally unfreeze. What about pending home sales up last night by 3%. Next consumer spending will be up than personal income will be up and than GDP will be up and unemployment will be down and trade will be up everything will normalize to pre credit freeze economy. New stimulus such like cash for clunkers and more free money in the mail will just kick things along. Remember money is just a illusional value that the government creates and controls, it is not backed by anything and its value is only limited to what you can buy with it. Surely with such Fiat money inflation is the only outcome as more and more of this paper is printed or added to bank's computers as digits. More of course is added when there is a economic crisis. At the end of the day a lack of money or credit will never be an excuse for prolong recession, when such things can be easily added to the system. |
|
By: jaymarcel
5/08/2009
7:46 am Yahoo! Profile:
jaymarcel Did this message offend you?
Sign in to report abuse |
Reply to this message |
Sorry to be rude menta but rubbish, the subprime was the sole cause of the credit crisis, there is nothing wrong with debt as long as it is affordable. Which is where subprime mortgages come in as they were just not affordable to the people allowed to take them on.
Australia & China would now be in a much different position if not for the subprime issue in the USA. |
|
By: mentawaisurf
4/08/2009
8:37 pm Yahoo! Profile:
mentawaisurf Did this message offend you?
Sign in to report abuse |
Reply to this message |
But Jade, subprime was not the cause of the credit crisis. It was merely a sympton of the disease; an unsustainably inflated debt bubble due to a prolonged era of unprecedented credit expansion fueled by an investment mania of irrational exuberance.
We have only experienced the first early stages of the credit implosion, asset deleveraging and global deflation that still has several years to play out yet. This will become evident when the next debt bubble explodes, whether its the $2 trillion of commercial property loans that need refinancing over the next 18 months or the wave of Alt-A and ARMs mortgages that are due to reset from late 2009 and not peaking until 2011 (coupled with rapidly rising unemployment) or the pile of festering toxic 'assets' that have yet to be marked-to-market and written down or the elephant in the room (the highly over-leveraged and unstable shadow banking system which has grown to be an uncontrolable behemoth of over 15 times global output) - the arcane and unregulated world of derivatives. Whatever reason is blamed for the resumption of the financial crisis matters little because all bad debt has to be either defaulted on or paid off before a sustainable recovery can follow. The great debt unwinding and asset deflation has barely begun. |
|
By: jadeshangrila
4/08/2009
6:52 pm Yahoo! Profile:
jadeshangrila Did this message offend you?
Sign in to report abuse |
Reply to this message |
| Menta, credit seizure resulting from the subprime crisis was what resulted in deflation in asset prices in the first place. It created exceptionally high interest and very limited credit and resulting in deflation. However this has since been rectified with trillions of new money and many tens of trillions of new credit. Now that credit is cheaper than ever the natural thing is a return of inflation as people start to consume and invest. You can expect wealth assets to inflate and consumption to increase as long as credit is cheap and available. |
|
By: mentawaisurf
4/08/2009
6:43 pm Yahoo! Profile:
mentawaisurf Did this message offend you?
Sign in to report abuse |
Reply to this message |
| Jade, it's true our RBA are flagging rising interest rates and inflationary pressures moving forward. In fact, almost all mainstream economists are again echoing this same theme based on their Keynesian assumptions and talk of so-called 'green shoots'. But these are the same people who were raising interest rates and fearing inflation just prior to the first phase of the credit deflation. I guess for many only time will prove that they were mistaken - yet again. |
|
By: jadeshangrila
4/08/2009
5:56 pm Yahoo! Profile:
jadeshangrila Did this message offend you?
Sign in to report abuse |
Reply to this message |
| Menta, deflation is over in Australia as property prices rise and commodity prices rise. Even the central bank is afraid of inflation of house prices and the necessity to increase interest rates. There is always demand for things and assets if credit is cheap. Even in America there is signs of house prices bottoming and on the rise. It is just that such things like houses are a necessity of life. |
|
By: mentawaisurf
4/08/2009
5:45 pm Yahoo! Profile:
mentawaisurf Did this message offend you?
Sign in to report abuse |
Reply to this message |
And let's not forget, demand for debt (ie. risk appetite) is the other key issue. No matter how much money central banks print or credit they create out of 'thin air' nothing will stop the credit and asset deflation if people are selling to pay down debt while also remaining reluctant to borrow. The central bankers are merely pushing on a piece of string - which as we know has no effect.
Sustained price declines are concerning policy makers because deflationary expectations lead consumers to defer borrowing and purchases, resulting in further downward price pressure. This is the classic deflationary spiral which, as yet, we have only experienced the early stages. |
|
By: jadeshangrila
4/08/2009
5:37 pm Yahoo! Profile:
jadeshangrila Did this message offend you?
Sign in to report abuse |
Reply to this message |
| Menta, have you thought of credit expansion rather than contraction. That is what happens when asset prices like houses and stocks start to rise. Also what about the trillions injected into the economy they will be multiplied by ten with fractional reserve banking. That is why libor rate has declined the banking system is flush with cash. The risk of rapid credit expansion of course is hyperinflation, an example is China. Debt deflation if not valid because of government intervention in this scenario. |
|
By: mentawaisurf
4/08/2009
12:40 pm Yahoo! Profile:
mentawaisurf Did this message offend you?
Sign in to report abuse |
Reply to this message |
Jade, that is what the Keynesian economists who co-ordinate global monetary and fiscal policy believe. However, our central bankers, and those who follow their misguided assumptions, are confusing the fiat money system with the credit money system (which has ballooned to be historically disproportionate).
Governments are rabidly fighting deflation but deflation will win, at least initially. The reason - because there is a massive amount more debt dollars than cash dollars with over $50 trillion in total market credit. With this enormous mountain of debt imploding it is swamping all efforts to inflate. Of course, the US Federal Reserve and central banks around the world will keep trying but even another several trillion dollars simply won't get near stemming a contracting pool of over $50 trillion. A reduction in the aggregate value of dollar denominated debt is deflation, which is now occurring.
Eventually the value of credit will contract to a point where it can be sustained by new production. At that point we may experience hyper-inflation, the US dollar may indeed collapse and gold may soar under the weight of government bailouts and central banks money creation machinations. But deflation must run its course first. |
|
By: male_leo2003
4/08/2009
12:17 am Yahoo! Profile:
male_leo2003 Did this message offend you?
Sign in to report abuse |
Reply to this message |
| If the political leaders of both NLP and the ALP actuly had the Balls over the yrs,Australia would of been a real heavy superpower by now..u would think that the ALP would of learnt by now that very close ties to china is bad ok.but like i always say " u just cant polish a turd" .its ok to trade with china.but the gov must have the balls to ' cut the strings' when china steps out of line.chinas resent lack of respect should not be forgotten.. |
|
By: jadeshangrila
3/08/2009
8:35 pm Yahoo! Profile:
jadeshangrila Did this message offend you?
Sign in to report abuse |
Reply to this message |
| Oh forgot to say professor Roubini, the chap that predicted the global economic crisis, has said at the miner and diggers meeting, that minerals and other resource prices are set to increase in 2010 as economic activity resumes. Well that is enough to reassure me that resource shares are worth investing in for sometime to come. |
|
By: jadeshangrila
3/08/2009
8:18 pm Yahoo! Profile:
jadeshangrila Did this message offend you?
Sign in to report abuse |
Reply to this message |
| Menta, the world has learned since the last great depression and that when there is a credit contraction and resulting deflation, the answer is to print more money and to reduce interest rates. A endless supply of money can be provided if required to keep credit going that is why we have grown from a gold standard to Fiat currency. As with paper money printing can be done till deflation becomes inflation and no gold is required to be found to back the currency. The Fed can buy treasuries and print if required without selling bonds to anyone else if required. Both the Americans and British along with the Chinese have been keeping their printers hard at work. Look at libor rates it has declined to half a percent. The world economy has enough resources to keep going and growing and there is still plenty of room for economic growth as half the world is still living under 3rd world standards. I suspect the limiting factor to global economic growth is energy supply, global warming and good land . Such things we cannot print. As for inflation the problem is that is you hold cash when there is inflation your money actually buy less things and to be on the gravy boat you have to invest or buy assets that will inflate when there is inflation. Those that are not on the gravy boat will become poorer relative to the one on it. It is just the way the economic world works to encourage investment and industry and job creation. This is how the modern society works - where money is the instrument of productivity. Well I believe this is the beginning of a new bull run. How far it will run remains to be seen. My hope if that there will not be hyperinflation for the sake of the world's poor. Buy if resource is scarce this could be the end result. |
|
By: mentawaisurf
3/08/2009
11:53 am Yahoo! Profile:
mentawaisurf Did this message offend you?
Sign in to report abuse |
Reply to this message |
Jade, that is what our central bankers, governments, many mainstream economists and our media are telling us - but most of them do not understand, or are unwilling to confront, the underlying problem. Asset inflation was driven by an era of unprecedented credit expansion, especially over the last few decades. We have recently entered an era of unprecedented credit contraction. The deleveraging and asset deflation has only begun and efforts to re-inflate, even huge globally co-ordinated responses, will only delay the inevitable while making the ultimate crash even worse.
Regarding China, the so-called saviour of the global economy, Alan Kohler in the Business Spectator recently wrote that China's state-owned banks, under government orders, have been lending money "hand over fist". The result is a re-inflated housing bubble and a stock market that has soared over 100% since its low just nine months ago. Kohler stated that China "must surely be heading for a destabilising crash."
Massive bank lending and government spending is unsustainable. The truth is emerging that the US cannot afford another stimulus package and the UK, Europe and Ja pan remain in deep recession. China's exports are down 22% this year. While much has been said about its push to replace exports with domestic demand, China's consumption is still only worth a tiny fraction of its export markets to the US, Europe and Ja pan.
The next major phase of the credit implosion and resultant deflation is looming and despite what we read to the contrary, there is now nothing that the 'talking heads' can do to prevent it. |
|
By: peteradish
1/08/2009
7:06 pm |
Message deleted. Reason: Breach of terms of service |
|
By: jadeshangrila
1/08/2009
4:51 pm Yahoo! Profile:
jadeshangrila Did this message offend you?
Sign in to report abuse |
Reply to this message |
| Menta in comparison with the CSI the ASX and the Dow is only on the initial stage of a bull run. Bull and bear runs always run longer than one would expect. I suspect this bull run will run at least 12 months, before a serious correction. The Chinese economy is doing very well and people are spending freely and inflation in wealth assets are pronounce whether art or real estate or shares. Still their foreign reserve is growing steadily. If we take a "Chinese" run economy like Singapore, Hong Kong or Taiwan we can expect the Chinese economy to be growing for the next 20 odd years. As inflation runs in the Chinese economy we would expect mining and industrial companies in Western countries to do better and their goods will sell well and at higher prices. As I mention since January global coordinated printing of money ( increase money supply) will surely lead to credit easing and inflation much like Zimbabwe only that this is done at a more controlled level. There is a risk of hyperinflation the longer this crisis goes on but my suspicion is that a balance will be reach somewhere where employment and consumer spending reoccurs at a normalize rate after wealth assets have inflated to a level where wealth is restored to the majority of Americans and debt to asset levels fall to levels that are comfortable . The only way to achieve this is to have low interest rates and increase supply of money. The fed is selling treasuries at a record rate and printing at a record rate to achieve this aim. |
|
By: mentawaisurf
1/08/2009
2:39 pm Yahoo! Profile:
mentawaisurf Did this message offend you?
Sign in to report abuse |
Reply to this message |
China's stronger GDP figures merely indicate a speculative bubble has kicked off in Chinese assets thanks to expanded bank lending and the huge government stimulus. What's more, it will takes years for an economy as large as China's to shift from an export driven model to a domestic consumption model.
The real risk is that once the Chinese stimulus dries up, so too will demand for Australian resources. Also, China will see a major correction in the stock market (up almost a staggering 90% this year) and in real estate. The unprecedented liquidity boom in China will have to give way to an asset bust. For Australia it means the recovery from the March lows is imperiled by the reality that recent Chinese resource demand has been largely artificial.
China's New 'Great Wall' Built on Easy Money, Speculation and Toxic Debt;
http://finance.yahoo.com/tech-ticker/article/29100 0/China%27s-New-%27Great-Wall%27-Built-on-Easy-Mon ey-Speculation-and-Toxic-Debt?tickers=FXI,FXP,RTP, PGJ,XPP,TAO,EEM&sec=topStories&pos=9&asset=&ccode= |
|
By: jadeshangrila
31/07/2009
9:12 pm Yahoo! Profile:
jadeshangrila Did this message offend you?
Sign in to report abuse |
Reply to this message |
| Market heads north full steam ahead as foretold months ago. Top stock analysts are worth their weight in gold and are paid accordingly. Thats one thing that can't be taught and either born with it or not. They get forecast a crash just before anyone else knows and in right near the bottom when least suspected and pessimism abound- stocks bought for pennies from foolish bears selling like the end of the world is next. Professionals such as these are neither blindly pessimistic or optimistic, do not rely on prophets or news or gossips. Just pure intelligence and brilliance thats what make them mighty rich. |
|
By: straightarrow34
31/07/2009
8:35 pm Yahoo! Profile:
straightarrow34 Did this message offend you?
Sign in to report abuse |
Reply to this message |
| ... and two thirds of their factories have closed down!!! |
|
By: mentawaisurf
31/07/2009
8:29 pm Yahoo! Profile:
mentawaisurf Did this message offend you?
Sign in to report abuse |
Reply to this message |
| Bloomberg reported on 10 July that the Baltic Dry index fell by more than 1%, its largest decline this year due to a sharp drop in Chinese demand for ships to import iron ore and coal. It seems that China has been buying huge amounts of iron ore and coal, and now all their storage facilities are full, AND there are 60 ships waiting to be unloaded in Shanghai harbor with no place to put the stuff! |
|
