By: ang101000
23/10/2009
9:06 pm Yahoo! Profile:
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Menta,
you can't just disappear! I am lay_buying that pink tutu in your size. Now, would you rob me of the pleasure of seeing you doing pirouettes on the bridge all dressed up ala Margot Fonteyn? I am planning to cross the bridge (around the same time in December) on my favorite 520 bus and of course pole_dancing in a tight leotard (:.
I have to think of a real challenge (and fancy dress, including an appropriate fascinator) for Lasty. We can always count on him to add a smart ass comment to any discussion, ala Dame Edna. Perhaps, we could take him to a good/friendly pub on Oxford street?! I know a few fabulous places, darling.
Oh, I think Billy is in Sydney, is he?. I am working on an idea from him too. We can't leave him to his 'boring' conservative banking life when there are so many opportunities open to him to be a fool for one day...
Seriously Menta,
Quitting is not an option! If I can't read your bear report, I will go broke trading on this market! Now, you wouldn't want me to end up my life selling the 'Big Issue' on George Street, would you? All because you stopped warning about the imminent market collapse. I appeal to your conscience to stay and share (opinion).
In case, I don't make any sense (don't wonder). I had a busy day and a few drinks after..Perhaps, computer and alcohol are not the best mix (:. I can always regret this in the morning.
Ang |
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By: almurrie1@y7mail.com
23/10/2009
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Ah Menta
Did you mean graciously depart? I for one would like you to hang around to prevent us from over-exuberance, even if your dire predictions prove to be unfounded.
Al |
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By: mentawaisurf
23/10/2009
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Ralph, the challenge I initiated (to highlight the need for caution moving forward) was for the ASX200 to break below key market support of the March low (3120) by years end. If not, I will gratiously depart this blog never to return. As I said, it may be tight. If my target is not reached in time at least it should be apparent by then that this forecast is on track.
Pattern, price, time, momentum, trendlines and sentiment indicators are all pointing to the end of this major-degree bear market rally.
Market forecasting is based on probability. The probability for a major market reversal and potential freefall is growing stronger by the day. Stock markets are now like a rubber band stretching to their limit. Beware of the snap-back. |
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By: enoughwealth
23/10/2009
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"Regardless of the exact timing and pricing of the resumption of the underlying bear market trend"??
In other words, even if you're proved wrong, you're pretty sure that they'll be another bear market at some time in the future? ;)
Exactly how long does the ASX200 have to stay ABOVE 3120 for you to concede that there is no longer an "underlying bear market trend"?
IMHO there was a classic "panic" in the market between Sep'08 and Mar '09, due to Lehman going broke and lots of wild speculation about another Great Depression. Mar '09 was a once in a lifetime buying opportunity (pity I had to be a seller due to some margin calls), and a large part of the strong gains since March are simply reversion to the normal pattern of a recession when the panic is stripped away. I don't think the market is cheap at the moment (I'm not buying, just holding), but I don't expect to see more than a normal 10-15% correction any time soon. That's assuming we're now in an "underlying bull market trend" ;) |
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By: mentawaisurf
23/10/2009
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More than one-third of Australia's share market wealth wiped out in just 9 weeks, when the consensus of experts is for the ASX200 to reach 5000 by years end. Surely that's impossible?
It's going to be tight Ralph. Corrective market peaks built upon such extreme optimistic sentiment is a topping process that can take some time before rolling over. But then the downside momentum can quickly lead to increased selling presure, and in such situations as now, strike fear into panic selling. Regardless of the exact timing and pricing of the resumption of the underlying bear market trend, it's sure to be an interesting few months ahead. |
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By: s_step000
23/10/2009
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"Garnaut is just pointing out the bleeding obvious; governments should not intervene and offer blanket guarantees (backed by tax payers) to private institutions and create an expectation that they will always save failing companies"
In addition, by creating an expectation that government will always save banks,
1) the banks will take on more risk (why worry someone will bail me out
2) the investors will think twice and ask for more discount before investing in the country (what happen with my money when I buy government bonds and government goes bust saving companies)
I still think rescuing Citi etc or even LTCM are stupid ideas. Should let market correct itself and reward those that really see it coming.
But one of the main issue here, if US do it and AUS does not do it. No capital will flow to AUS due to possible risk and all capital will flow to US. |
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By: enoughwealth
23/10/2009
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Only 45 more trading days until mentawaisurf leaves this blog forever! ;)
ASX200 latest: 4860
de-Menta threshold: 3120 |
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By: ang101000
23/10/2009
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Sorry Lasty,
I am at work, will answer tonight, have to go(or may get fired, which would not be a big loss to the company).
Ang |
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By: ang101000
23/10/2009
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Thanks Menta for the info, I can take it from here.
Also, you may want to read the content of the link I have provided for Billy in relation to Goldman. The arguments in that are a bit technical for compressing into a few lines for this site.
Safe surfing,
Ang |
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By: lasty49
23/10/2009
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ang,
Why shouldnt govt's intervene?
Why then have a regulator?
Garnaut appears to have very little about market psychology.
If there is a run on a bank then expect a domino effect.
This measure by the govt prevented that stampede.
Yes I dont believe in govt parachute protection with taxpayers money bailing out failing companies but this was extraordinary event.
The RBA supplied liquidity to the local market which in effect is part of the international money markets. |
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By: mentawaisurf
23/10/2009
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| Ang, that link works for me. Try to refresh the site or just search You Tube for Robert Prechter at New Orleans Investment Conference - 2007 (it is over 5 parts). It provides an insight into his unqiue analysis and shows he was spot on in his forecast. Naturally, if you want to read the latest from Bob and the team at EW you'll have to subscribe. I can highly recommend them. It will be the best investment you'll ever make. |
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By: ang101000
23/10/2009
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Lasty,
Garnaut is just pointing out the bleeding obvious; governments should not intervene and offer blanket guarantees (backed by tax payers) to private institutions and create an expectation that they will always save failing companies.
The RBA could not help with the liquidity problems on the international money markets. |
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By: lasty49
23/10/2009
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Ang,
Garnaut surely isnt taking credit for this?
The RBA had this in place a long time ago. |
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By: ang101000
23/10/2009
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Menta,
Sorry I cant access your link from yesterday
http://www.youtube.com/watch?v=xP9EDxwPTdA&NR=1
Please give some details to enable me for a different search.
Thank you,
Ang |
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By: mentawaisurf
23/10/2009
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Are we getting ready for subprime 2.0?
With the US housing market now experiencing its worst collapse in history as the aftermath of that bubble, and with no "bottom" in sight, the US government is once again trying to take the easy way out - this time by trying to re-inflate the same bubble which has just burst.
This time, the Fed's benchmark interest rate is at 0%. This time, it's the US government itself which has lowered the bar with its lending standards. This time, there is even more mortgage-fraud (up 23% from last year) - and there is still no oversight. Now it is the Federal Housing Administration (FHA), a government agency, which is handing out subprime loans like a financial "Pez-dispenser".
http://www.dnaindia.com/money/report_are-we-gettin g-ready-for-subprime-2-0_1293608
And this return to reckless lending is happening around the world, including China (record lending over the last 8 months) and even Australia with 'free money' for first-home buyers without a deposit. GFC II is at hand.
Banks offer investors money to buy "anything"
Published: 21st October 2009
Banks, under pressure from the UK government for not lending enough are offering "low risk" investors money to buy "anything" according to a fascinating report by London's Evening Standard.
One high profile individual said he takes regular calls from his bank informing him it is desperate to lend him money. When he asked what for, the bank said "anything". Property, bonds, shares, it did not matter.
In many cases, investors find the offer too tempting to refuse. They reason that if the bank loan costs them 1.5%, they ought to be able to do better than that in the stock market or property. So they can invest the money and turn a profit.
http://www.globaledge.co.uk/news/banks-offer-inves tors-money-to-buy-anyt-36009
90% mortgages return to Spain and UK
Published: 30th September
http://www.globaledge.co.uk/news/90-mortgages-retu rn-to-spain-and-uk-35185 |
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By: ang101000
23/10/2009
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Lasty,
I heard Prof Garnaut speaking a few times, he does not struck me as a nutter. In regards to GFC, he was talking about the banks and referring to the fact that at one point (in 2008) when overseas credit markets were frozen, all our banks had problems rolling over their due credits.
All our banks use funds from international money markets and the government had to step in with the guarantee to enable the banks to source funds. They, the banks, would have become technically insolvent without the government's intervention.
That intervention, or guarantee can become a 'moral hazard' ie every time there is a liquidity problem with one or more of the banks, there will be an expectation that the government will intervene to save the financial institution(s). The precedent has created a 'risk' which was not there before the GFC, a precedent of using tax payers money to save private financial institutions.
Billy,
I am not one for conspiracy theories for sure. But I am one for fairness. I am sorry to do this again but due to time constrains, here is a link to an article that (yet again) in my view reflects the sad reality;
Rent-seekers' Nirvana
by Martin Hutchinson October 19, 2009
http://prudentbear.com/index.php/thebearslairview? art_id=10298
Billy, I don't expect you to read this at work (too long) but let me know what you think when you feel like it. |
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By: billy.holliday@rocketmail.com
22/10/2009
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| lasty, I agree. listen to what he actually said, but take no notice anyway.. |
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By: lasty49
22/10/2009
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Billy,
I dont really take much notice of these book selling muppets.
Just another headline grab. |
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By: billy.holliday@rocketmail.com
22/10/2009
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Menta
I agree that levels are again up, but the quality of loans is also up enormously. There is just no way that NINJA's get loans today....that end of teh fraudulant sub prime market is gone. There is nothing wrong with prime loans and, once again, affordability is the issue. Things are not the same as they used to be, they are much much better.
foreclosures are up....for sure, but its a lagging indicator like unemployment which will also be bad in the US for a while to come.
The risks are definitely on the upside now...I am seriously worried about CPI inflation in teh next 24 months.... |
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By: billy.holliday@rocketmail.com
22/10/2009
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Hi Lasty & GoF
What the prof said was:
"The Government faced a challenge in ensuring "we don't slip easily into the same or worse vulnerabilities than those that caused the great crash of 2008."
.....delivere while promoting his new book in canberra. he ceratinly did not say that we wer facing that possibility right now. |
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By: lasty49
22/10/2009
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I forgot to add that Garnaut is a climate change supporter.
Of course the only way Garnaut gets his wishes of a depression is if this govt brings in a climate tax.
Then I will be waxing down my surfboard and riding those waves with Menta.
Dont worry Menta I wont drop in on you, uninvited.
I guess its one way of reversing the illegal immigrants.
T |
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By: lasty49
22/10/2009
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Looks another nutty professor has joined the Keen camp.
Professor Garnaut warns of a crash bigger than the GFC 2008. |
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By: lasty49
22/10/2009
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Meanwhile over in China things are going gangbusters as growth nears 9 pct.
How can this be when the US is dire straights?
The changing of the pecking order is slowly unfolding... Bye Bye Miss American Pie as we slowly embrace the dragon.
Concerns of higher interest rates over there have dampen the sharemarkets in Asia.Could this be a trigger for a temporary top?
Perhaps Menta might get his sell off afterall but how far remains to be seen? |
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By: mentawaisurf
22/10/2009
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Billy, if you read the related stories to the slides you'll see that the reckless lending, now 60% backed by the taxpayer funded FHA, is not only back to subprime levels but it is now even occuring in what is classified as 'prime' lending markets. This is simply a desparate attempt to keep the housing bubble from collapsing by gambling on a future recovery in the economy and in the housing market. With the next wave of ARMs and Alt-A mortgage resets, which don't peak until 2011, just about to hit - I don't like their chances.
Especially in an environment when the foreclosure rate is still rising;
Foreclosures: 'Worst three months of all time'
http://money.cnn.com/2009/10/15/real_estate/forecl osure_crisis_deepens/inde x.htm
And when commercial real estate is the next shoe to fall;
Commercial-Mortgage Defaults Jump Sevenfold
http://www.bloomberg.com/apps/news?pid=20601009&si d=aQtmIku3P_PA&ref=patric k.net
As I've consistently said, subprime was just a warning of a much more intense, broad-based and prolonged housing collapse and debt deleveraging yet to come, in the US and around the world. And there is no way that Australia's historic housing bubble will survive this much bigger shock-wave. |
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By: billy.holliday@rocketmail.com
22/10/2009
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Ang
Thanks I already read these articles. They suggest a conspriacy theory regarding Goldman which does stretch credibilty: yes, they were involved in all these things, as were all the wall St firms, and yes, they managed to get close to Bush and Treasury, but they werent any worse than any other, just slightly better at getting results. All banks are pushing to find ways of generating more/new revenues and while they were all doing that, they werent deliberatily trying to blow up the world, they were just trying to make more money which they did legally. The problem was that it was all unregulated at the bank level, and fradulent at the origination level.
menta,
I had a look a the slides. They were quite good, but the difference in home loan lending now is that the underwriting is verified (ie they know the real risk) and most is prime, not sub-prime. The criteria is much stricter on sub prime and originators are having to keep real skin in the game so they dont write stupid business. The ratings agencies are also now super conservative so the bond ratings are higher quality.
In summary, credit is flowing back in to teh housing sector which was very important, but the quality of loans, and portfolios of loans, is much much higher.
Billy |
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