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Giotto
10-10-06, 01:30
Thread Starter

Giotto
10-10-06, 01:48
To all who are interested in the stock market:

There is a technical analysis published in Bangkok Post, always on mondays. I am reading it since years, and their predictions, warnings and stop-loss marks are very precise, compared to other newspapers or broker writings.

The current analysis is careful and predicts a possible downturn of the market when the SET 676 - 680 support will not hold. An outbreak to the upside is possible when the SET can break the resistance around 700 - 703.

My personal opinion is that the market will tend to rise, because all the bad news is priced in already, the sentiment should turn positive soon. Furthermore the market usually rallies in the last quarter of a year.


Giotto

Member #3173
10-10-06, 02:58
Is B Post also useful for beginners who rely on fundamentals such as dividend
yields ,NTA, price to book?
What would be a useful start for a beginner .....banks, hotels or hospitals?

Giotto
10-10-06, 03:05
Is B Post also useful for beginners who rely on fundamentals such as dividend
yields ,NTA, price to book?
What would be a useful start for a beginner .....banks, hotels or hospitals?Member #3173,

You mean what stocks would be appropriate for first time Thailand investors?


Giotto

Member #3173
10-10-06, 04:01
Yes.Is it ok to go for dividend stocks and are dividends taxed to foreigners if
you are actually in Thailand and buy in Thailand? Or do you go for growth or
a mixture of both?

Giotto
10-10-06, 16:20
Yes.Is it ok to go for dividend stocks and are dividends taxed to foreigners if
you are actually in Thailand and buy in Thailand? Or do you go for growth or
a mixture of both?Member #3173,

I definitely buy stocks in Thailand, and I stay here. My portfolio contains a mix of all, dividend stocks, shares of turn-around companies, warrents etc. etc. . Shame over me, I have no idea about the taxation of dividends in the moment, my accounting company is preparing all tax declarations every year.

But I sent a mail to my broker and will get that info soon.


Giotto

Killroy
10-10-06, 20:49
Stocks can be a bit tricky now when Taksin is gone...before it was easy,I just checked what company the guys in the TRT was owner of ,r there family was owner of and bought stocks in them..never lost...now I don't have a clue,sold most of it earlier this year tho...but will for sure invest again soon..

JuiceSpike
10-10-06, 20:54
Finally you got something interesting to read about...:D

Here is some good reading.

http://www.bloomberg.com/apps/news?pid=20601080&sid=afZbkryxvDuE&refer=asia

Daddy07
10-11-06, 01:21
I'm going to stick to the American stock markets and hopefully be able to follow them while I'm in LOS. Don't have a clue about what stocks to pick in Thailand. (Have any massage parlors gone public? I'd like to buy the Eden Club ADR) I'm a short term trader and watch the markets here every day in real time. Hope to see some of you guys next week.

Take care and remember to cover your shorts.

Daddy

Giotto
10-11-06, 05:15
Yes.Is it ok to go for dividend stocks and are dividends taxed to foreigners if
you are actually in Thailand and buy in Thailand? Or do you go for growth or
a mixture of both?Member #3173,

Dividends are subject to a 10 % "Dividends Earning Tax" if you are NOT subject to income tax (--> work permit) in Thailand. Otherwise the dividend is taxed together with all your income.

Basically same system as in other countries, the 10 % is deducted anyway from the paid dividends.


Giotto

Giotto
10-11-06, 17:15
Stocks can be a bit tricky now when Taksin is gone...before it was easy,I just checked what company the guys in the TRT was owner of ,r there family was owner of and bought stocks in them..never lost...now I don't have a clue,sold most of it earlier this year tho...but will for sure invest again soon..Killroy,

That worked in the first years of the Thaksin administration, but then - SHIN :) ?

Anyway - where are you going to invest now?


Giotto

Killroy
10-11-06, 20:59
Killroy,

That worked in the first years of the Thaksin administration, but then - SHIN :) ?

Anyway - where are you going to invest now?


Giotto

Giotto,
Not sure yet,I haven't had a chance to check up the market carefully for 6 months,been outside the country and worked to much and need the money for other investments..... will let you know if I have some good info from Mrs, who work for one of the local stock firms..

Giotto
10-12-06, 04:21
Market is up, trying to break the resistance at 700 - 703, lead by the banks.

Turnover is OK, looks good.


Giotto

Giotto
10-13-06, 05:12
The SET broke through the 703 level yesterday, on high turnover. The market was driven by banks and some property stocks.

It will most likely now move up to around 722 - 725 before facing major resistance again - and then it gets interesting. If that resistance falls the market is free for a major upwards movement towards the end of this year.


Giotto

Giotto
10-14-06, 06:05
The SET broke easily through the resistance at 700 - 703 and stabilized above that mark. Usually this movements are initiated by bank stocks followed by the financials.

In this case we saw some property stock rallying...that was a surprise.

I talked to some property dealers during the past few weeks, and they all expect the property prices to fall next year. Some of them expect a crash-like scenario as we experienced in 1998 following the Asian financial crisis.

If we understand the stock market as an early indicator of future developments of the economy it looks as if property prices will continue to rise, and no serious crash will hit that market. Obviously the lower sales numbers of the past few weeks have had a positive impact on the market - it is not overbought, and there are still enough buyers waiting for good opportunities.

Will be interesting to watch if this trend will continue.


Giotto

Killroy
10-14-06, 16:07
Killroy,

That worked in the first years of the Thaksin administration, but then - SHIN :) ?

Anyway - where are you going to invest now?


Giotto

Talked with Mrs,she said Bank and Energy should be good to invest in,like PTT public and soo on.
It's going to be interesting to see if the market can stay above 700 on monday or if it will go below 700,it's will be an interesting week ahead
Closed just over 712 on Friday not bad at all

Giotto
10-15-06, 05:25
Talked with Mrs,she said Bank and Energy should be good to invest in,like PTT public and soo on.Killroy,

As regards of the actual political situation - TMB :D ???


Giotto

Giotto
10-18-06, 04:17
The SET in the resistance zone between 710 - 720 . That will last a while...

The global trend is approaching a strong resitance, too. It will not be too easy to break through 722. If it happens the market will jump up very fast.


Giotto

Giotto
10-20-06, 05:16
The SET tries to crack the resistance at 723. Around 724 in the moment.

Most likely it will not break today, it needs some time. If it breaks it is time to buy Thai stocks, the upwards movement will be stong.

IMHO.


Giotto

Giotto
10-23-06, 04:36
The stock market is closed today.

Will be an interesting session tomorrow, after Fridays attempt to break through the 722 barrier.


Giotto

Giotto
10-24-06, 11:24
Index at 728, over average turnover, strong performance again from banks and property stocks.

I am quite sure that we will test the 722 again before we start a major upwards movement.


Giotto

Giotto
10-26-06, 12:02
The SET was up to 733 in the top, closing today at 728. I expect we will test 722 tomorrow afternoon. Again the upwards movement was driven by banks and property stocks (LH).

The THB is on a 5 year top against the USD at 37.08 (yesterday). Obviously money is flowing into Thailand.

I expect that the major movement will start after the 722 resistance / support is tested. It will be a strong upwards movement.


Giotto

PosterLion
10-26-06, 17:57
Hey G,

Long time no talk. As you know, I've been busy working on my matrimonial endeavors. Now it's official. I'm married! It's been an entire week and I'm not divorced yet. Amazing!

Now . . .

For those of you that are interested in following Sir G's advice to invest in Thailand, here's a closed ended mutual fund that should do the trick: Morgan Stanley Thai Fund (TTF). It's traded on the NYSE just like a stock.

The 10 largest holdings are as follows:

As of 8/31/2006
Holding--------------------------------% of Total Portfolio
PTT Pcl---------------------------------14
Advanced Info Service Pcl--------------8.6
Siam Cement Pcl------------------------7.3
Bangkok Bank Pcl-----------------------7.1
Siam Commercial Bank Pcl-------------5.8
PTT Exploration & Production P---------5.3
Kasikornbank Pcl------------------------4.1
Bank of Ayudhya Pcl--------------------3.8
Electricity Generating Pcl---------------2.6
Banpu Pcl-------------------------------2.5

Also, I've included a three year chart as a GIF file at the end of this post.

So . . .

What do you think of this fund Sir G?

poster . . .

Giotto
10-26-06, 19:38
Hey G,

Long time no talk. As you know, I've been busy working on my matrimonial endeavors. Now it's official. I'm married! It's been an entire week and I'm not divorced yet. Amazing!

Now . . .

For those of you that are interested in following Sir G's advice to invest in Thailand, here's a closed ended mutual fund that should do the trick: Morgan Stanley Thai Fund (TTF). It's traded on the NYSE just like a stock.
...
Posterlion,

Congratulations! That's good news.

The Fund:

Despite the fact that the chart of the fund looks good and that I generally expect an upward movement of the market I don't really like this fund. Via the strong holding of PTT and AIS this fund is in danger of being affected by external risks: Oil price (PTT) and political questions regarding the Thaksin / Temasek deal (AIS).

But in general I expect this fund to outperform the market if the oil price doesn't fall further, and this is unlikely in my POV. But it is possible.


Giotto

Nuff Said
10-26-06, 21:51
The SET was up to 733 in the top, closing today at 728. I expect we will test 722 tomorrow afternoon. Again the upwards movement was driven by banks and property stocks (LH).

The THB is on a 5 year top against the USD at 37.08 (yesterday). Obviously money is flowing into Thailand.

I expect that the major movement will start after the 722 resistance / support is tested. It will be a strong upwards movement.

GiottoG,

During my visit I did have one of your girls show me around BKK and she took me on the boat tour and I noticed a lot of big buildings that where either for sale or rent, couldnt make out if they where old hotels or office buildings, whats your opinion of those office buildings and land by the river (especially with floods) are they cheap? expensive? - I would think they'd be nice for a casino hotel but I'm sure someone thought of that before so I take it gambling is not allowed in Thailand

Giotto
10-27-06, 09:03
G,

During my visit I did have one of your girls show me around BKK and she took me on the boat tour and I noticed a lot of big buildings that where either for sale or rent, couldnt make out if they where old hotels or office buildings, whats your opinion of those office buildings and land by the river (especially with floods) are they cheap? expensive? - I would think they'd be nice for a casino hotel but I'm sure someone thought of that before so I take it gambling is not allowed in ThailandNuff Said,

Gambling is not allowed in Thailand (yet). But there are discussions about building casinos - but I doubt that any foreigner will get a license to do so, that business will be in Thai hands, first. Later, may be, some American companies will also get those licenses, too...

Casinos would be very big business for Thailand - better keep your fingers out of it!

Rule No. 1 in Thailand: Never put your fingers into the rice bowl of a Thai!


Giotto

Giotto
10-27-06, 09:12
The Bank of Thailand was talking about that the rise of the baht is too fast...

When will this central bankers learn their business? All attempts to change the direction of markets verbally have failed up to now.

A central banker should never evaluate the movement of the currency of his country. He should analyze the reasons for the movement.

Unprofessional, this people.


Giotto

Giotto
10-27-06, 11:01
As expected: We tested a low of 724 in the index today.

I think we will go lower in the next week, before the prices will rise sharply. The market is a bit overbought in the moment.


Giotto

Nuff Said
10-27-06, 14:21
Nuff Said,

Gambling is not allowed in Thailand (yet). But there are discussions about building casinos - but I doubt that any foreigner will get a license to do so, that business will be in Thai hands, first. Later, may be, some American companies will also get those licenses, too.

Casinos would be very big business for Thailand - better keep your fingers out of it!

Rule No. 1 in Thailand: Never put your fingers into the rice bowl of a Thai!

GiottoNo foreingers allowed : ) I get it - all that money involved I know everyone (Thailands version of the mafia) will have there hands in the rice some how or another : )

PosterLion
10-27-06, 16:08
Posterlion,

Congratulations! That's good news.

The Fund:

Despite the fact that the chart of the fund looks good and that I generally expect an upward movement of the market I don't really like this fund. Via the strong holding of PTT and AIS this fund is in danger of being affected by external risks: Oil price (PTT) and political questions regarding the Thaksin / Temasek deal (AIS).

But in general I expect this fund to outperform the market if the oil price doesn't fall further, and this is unlikely in my POV. But it is possible.


Giotto

That's a fair analysis. It's hard to find a fund without significant exposure to PTT. However, I found a fund with a lesser amount of "AIS" risk.

Check this link for more information: http://www.etfconnect.com/select/fundpages/global.asp?MFID=3880

It's put out by Daiwa Securities. This fund also sells at less of a premium to net asset value then the TTf fund

poster . . .

P.S. here is a link for the same information about the TTF fund: http://www.etfconnect.com/select/fundpages/global.asp?MFID=3855

Giotto
10-30-06, 07:28
SET is moving lower as expected, trading around the 722 mark this morning. Low at 721 up to now.


Giotto

PosterLion
10-31-06, 11:54
Here's a website I found with excellent charts and commentary dedicated to the SET. This site should be in your bookmarks if you are serious about investing in the Thai Stock Market.

http://www.asiachart.com/thai.html

poster . . .

Giotto
11-01-06, 05:56
Here's a website I found with excellent charts and commentary dedicated to the SET. This site should be in your bookmarks if you are serious about investing in the Thai Stock Market.

http://www.asiachart.com/thai.html

poster . . .Posterlion,

I read this website since years, and I recommend to be very careful with this site.

The charts are excellent, but the commentary is not. 2 years ago this site was permanently wrong with its recommendations, because it only interpeted charts and did not add any fundamental information to their analysis.

Eversince this site gives two options and leaves it to the reader how to interprete it. I doubt that most of the average investors are able to make decisions based only on charts.

If somebody needs a high quality chart- and market analysis including cautious recommendations please read the economy part of the Bangkok Post on mondays.


Giotto

Giotto
11-01-06, 10:58
It's a bit surprising, but the correction seams to be a very short one.

The market tested 720 and below yesterday, but had nothing faster to do than moving up to 730 again. It looks strong - if we breach 730 - 733 we will see one of the Thai break-outs, and there will be no time any more to buy.

Would like to know where this investors get their optimism from...


Giotto

Tiny 12
11-01-06, 17:45
In certain instances, where the company has BOI income, part or all of the dividend in Thailand is tax free. If you are a citizen of a country like the US that taxes its citizens on their worldwide income, you'll also owe taxes on the dividend in your home country, although you can generally use part or all of the tax paid in Thailand as a tax credit on your tax return for your home country.



Member #3173,

Dividends are subject to a 10 % "Dividends Earning Tax" if you are NOT subject to income tax (--> work permit) in Thailand. Otherwise the dividend is taxed together with all your income.

Basically same system as in other countries, the 10 % is deducted anyway from the paid dividends.


Giotto

Giotto
11-06-06, 17:38
The index tries to break the resistance between 730 and 735. Due to the global stock market situation and the elections in USA I don't believe that it will be successful this week.

If the resistance breaks ... :):):) .


Giotto

Giotto
11-08-06, 15:25
Stable, intra-day consolidation at high turnover. Banks again strong, the property index is fighting with the 126 resistance.

It looks good.


Giotto

Giotto
11-30-06, 04:35
The index still in the embattled resistance area. No sub-index has broken the resistance significantly up to now.

The US$ weakens against the THB - yesterday the THB hit an 8 year high against the US $.

I still see a lot of capital inflow into Thailand, but Thai institutionals selling and raising their cash positions.


Giotto

Giotto
12-06-06, 05:10
The index tries to break out of the resistance zone 730 - 743 .

There are major indizes which could generate a buying signal then.

Watch it closely.


Giotto

Giotto
12-19-06, 09:12
Crash at the Thai stock market. In the moment the SET is at 598.32 (-132.23) = - 18.10 % . The reason is the fight of the BOT against the strong THB:

http://www.bangkokpost.com/Business/19Dec2006_biz01.php

This is what we call "professionalism" in Thailand. Those idiots from the Central Bank have obviously no idea what they did with this decision. I don't want to comment on that - it is simply too stupid. This brainless decision makers, how dangerous that is for Thailand. Being scared of 15 % rise of the currency against an anyway weak USD. I feel pity for them.

Record turnover, everybody sells and sells. Panic.

Time to buy.


Giotto

Giotto
12-19-06, 09:44
Interesting.

There are some future derivates traded at the stock market which only loose 70 - 80 points in the moment. There is a huge gap between the cash market and the futures which will be closed soon.

Either the market will recover strongly, of the futures will drop.

The index fell below 587 and recovered within minutes to 619. Now the next selling wave is coming in, foreigners. Europe is up.

I expect the market to rise sharply and recover in the last 30 minutes of trading.

Let's wait and see - time to make money.


Giotto

Giotto
12-19-06, 10:54
I was wrong. The market started to recover, when the third major selling wave hit it. It was panic pure...

SET Close: 622.14, slightly recovered from the lows, but not enough to gain back investor confidence. Tomorrow will be interesting, if we cannot recover tomorrow - Good Night, Thailand.

Stock.......Prior.....Open......High.......Low.....Close
--------------------------------------------------
BBL...........123......107.......110.........97.......103
KBANK.........70.5.....60.........63.5......49.75....57.5
PTT...........224......206.......212.......178.......186
LH...............7.25......7.25......7.25......5.1........6.2

Talked to my broker, he was completely groggy. It was a slaughterhouse today, he said. If the measures to weaken the THB are not taken back and the BOT board resigns (and probably the finance minister) the market will most likely not recover. The selling did not end, it continued all session long.

This is much worse news than the coup of september. If the investors loose confidence in the market place Thailand - then that was it for this country!

Remember 1997/1998????


Giotto

Giotto
12-19-06, 15:24
"Please call an ambulance, there is a bloodbath," a dealer at a domestic brokerage said.

The president of the Rice Exporters Association, Chukiat Opaswong, called central bank couragous for imposing the measure.

Bangkokpost

Yep. Let us eat rice for the next hundreds of years.



Giotto

Daddy07
12-19-06, 16:06
"Please call an ambulance, there is a bloodbath," a dealer at a domestic brokerage said.

Yep.

GiottoSorry, Giotto. It's all over the news in the USA today. Hope your losses were small. The USA markets are still recovering from the 2000 crash. I noticed that the Thai Baht was down just fractionally this morning. Do you think it will continue to slide against the USD? I don't like to see anyone lose money in the markets, but I sure would like to see the USD get back to the neighborhood of 40/$.

Daddy

Opebo
12-19-06, 18:37
Shouldn't we mongers be rooting for a collapse of the Thai economy and of the baht against the dollar?

Cyberspace
12-19-06, 20:01
Shouldn't we mongers be rooting for a collapse of the Thai economy and of the baht against the dollar?

Actually devaluation of the baht would encourage more tourism (and of course more mongers) to bring dollars into Thailand thereby greatly strengthening the Thai economy. The exchange rate today still leaves the baht stronger against the dollar than it was only two weeks ago. As far as currency goes, there has hardly been a significant change, speak nothing of a crisis. The Thai stock market is clearly overreacting, as all markets tend to do from time to time.

Maybe Giotto's worried because he's made bad investments in the stock market. Maybe he just wishes American mongers would go away, continued stengthening of the baht would achieve that.

Giotto
12-19-06, 21:14
Actually revaluation of the baht would encourage more tourism (and of course more mongers) to bring dollars into Thailand thereby greatly strengthening the Thai economy. The exchange rate today still leaves the baht stronger against the dollar than it was only two weeks ago.Cyberspace,

don't worry about me, I just lost a bit during this crash - 1 Mio. THB.

Actually - nobody outside Thailand gives a shit on what the currency exchange rate is, and I also don't think that your few dollars stengthens the Thai economy. You make me laugh. You don't spent BILLIONS of baht for a vacation...

OK, May be you do.

Do you have any idea why the stock market today fell 122 points? I am listening!!!


Giotto

Giotto
12-19-06, 21:16
Shouldn't we mongers be rooting for a collapse of the Thai economy and of the baht against the dollar?Opebo,

No, not a collapse, and I still love you!! Sure! :D!!!


Giotto

Giotto
12-19-06, 21:26
Sorry, Giotto. It's all over the news in the USA today. Hope your losses were small. The USA markets are still recovering from the 2000 crash. I noticed that the Thai Baht was down just fractionally this morning. Do you think it will continue to slide against the USD? I don't like to see anyone lose money in the markets, but I sure would like to see the USD get back to the neighborhood of 40/$.
...Daddy07,

It is the market who makes the exchange rate. Nobody should interfere. And - yes, we will see 40 THB against the THB and USD again if this idiots of the BoT proceed, but if not we will not see such an exchange rate again in the next couple of years.

Hey, guys, most of you are Americans. Can we let the market do all those adjustments, or does the free market stop at the borders of the US??? Yikes.
Get some brain, guys.


Giotto

Cyberspace
12-19-06, 22:43
Cyberspace,

don't worry about me, I just lost a bit during this crash - 1 Mio. THB.
...



1 million baht before this so-called currency crisis would a little less than $30,000. And since little real change has acually occurred to the exchange rate, one million baht is still roughly a little less than $30,000. That's a fair chunk of change and it's a shame you don't want me to worry about you since I'd have been happy to offer you sympathy.



... Actually - nobody outside Thailand gives a shit on what the currency exchange rate is, and I also don't think that your few dollars stengthens the Thai economy. You make me laugh. You don't spent BILLIONS of baht for a vacation...

OK, May be you do.
...


Actually I think mongers and tourists do give a shit about the currency exchange rate, and quite a big shit at that. It directly affects how much they can buy from hotels to food to the services that mongers enjoy most. But you were right the first time, I personally don't spend BILLIONS of baht on vacations. However I never suggested my activites alone supports the Thai tourist industry.



... Do you have any idea why the stock market today fell 122 points? I am listening!!!


Giotto

Loss of 122 points on the Dow wouldn't amount to more than a flea bite on an elephant's ass, but maybe the better way to characterize Thai crash would be as a loss of about 15% of their value. Losses of this magnitude have also occured twice in the supposedly stable American markets in the last twenty years. In the 1980's investors erroneously assumed markets would rise ad infinitum fueled by mergers and aquisitions funded by junk bonds. In 2001 investors erroneously assumed markets would rise ad infinitum fueled by internet industries. I don't follow the Thai market closely, but if Thai investors have erroneously assmed that the baht would continue to appreciate ad infinitum then maybe it was only a matter of time before their bubble was burst.

Sorry for your loss Giotto, but I myself am looking forward to more affordable vacations in Thailand ... if in fact the baht does devaluate significantly. I'm still waiting patiently.

Daddy07
12-19-06, 23:28
Cyberspace,

Do you have any idea why the stock market today fell 122 points? I am listening!!!

GiottoThe Thai market crashed because the country's new military leaders decided to clamp down with new regulations on foreign investors, which in turn spooked all those foreign investors, who then began to stampede to the exits like herds of lemmings. That's what governments do best -- fuck up the free markets.

Daddy

Daddy07
12-19-06, 23:34
Daddy07,

It is the market who makes the exchange rate. Nobody should interfere. And - yes, we will see 40 THB against the THB and USD again if this idiots of the BoT proceed, but if not we will not see such an exchange rate again in the next couple of years.

Hey, guys, most of you are Americans. Can we let the market do all those adjustments, or does the free market stop at the borders of the US??? Yikes.
Get some brain, guys.

GiottoI don't quite get your point here. Are you blaming the crash on us Yanks simply because we would like to see a stronger dollar against the THB? No way. Like I said before, Giotto, it's the government of Thailand that did it -- not US investors.

Daddy

Opebo
12-20-06, 02:40
Hey, guys, most of you are Americans. Can we let the market do all those adjustments, or does the free market stop at the borders of the US??? Yikes.

Those of us who hail from the center of the Empire are well aware that there is no such thing as a 'free market'; capitalism is a heirarchy designed to benefit the politically powerful via implementation of State force. One need not be taken in by the right-wing line that it is some how necessary, 'natural', or efficient.

Regarding the point of whether a Thai economic collapse is desirable for the monger, one of the most essential factors in good mongering is poverty. This exists in copious amounts in the US as well as Thailand, but presumably an economic collapse would lead to more poverty, and thus more girls working.

What do you think?

(My apologies for intruding upon your forum, Giotto - and I'm sure you will feel no compunction about deleting this if it offends or annoys.)

Cyberspace
12-20-06, 04:27
... one of the most essential factors in good mongering is poverty. ... an economic collapse would lead to more poverty, and thus more girls working.

...

If that were REALLY true then you should include Lebanon and Palestine on your travel itinerary LOL. Prostitutes are not all impoverished and not all impoverished women go into prostitution. Middle class and well-to-do Japanese teenagers will frequently bed to be able to buy more jewelry or the latest fashion. Similarly American girls will often trade their services for bucks if they're sure of their anonymity. In other words the real key factor in promoting an environment for mongers are female greed and safety.

I will still contend that a prosperous Thai society will NOT destroy prostitution as long as the ladies have sex drive and greed. A small taste of prosperity may be an incentive. I will also contend that devaluation of the baht will only bring more monger dollars into the Thai economy, strenghten the Thai export market, and improve the Thai standard of living. Or maybe all Thais except those foolish few that speculated over their heads in the stock market ... Sorry again for your loss Giotto.

Giotto
12-20-06, 06:22
...Regarding the point of whether a Thai economic collapse is desirable for the monger, one of the most essential factors in good mongering is poverty. This exists in copious amounts in the US as well as Thailand, but presumably an economic collapse would lead to more poverty, and thus more girls working.

What do you think?

(My apologies for intruding upon your forum, Giotto - and I'm sure you will feel no compunction about deleting this if it offends or annoys.)Opebo,

I think that's correct. But luckily there will be no collapse, though I see an impact in the investors confidence for Thailand, which will lead to less growth in the next years.

And no, there is no reason to delete your report, but if you want me to delete just let me know :) !


Giotto

Giotto
12-20-06, 06:43
After the new regulations were modified the market is recovering.

Set Index: 688.17 (+ 66.03), after the morning session.

Still 200 + billion THB market capitalization wiped out since yesterday.



Giotto

Opebo
12-20-06, 07:00
Similarly American girls will often trade their services for bucks if they're sure of their anonymity. In other words the real key factor in promoting an environment for mongers are female greed and safety.


Cybers, I have had a wide experience of American prostitutes, and of course they are virtually all from poor families. Class is, as we all know, almost perfectly hereditary, particularly in the USA.

I would not consider it 'greed' precisely that motivates a young and attractive poor to sell sexual services rather than work at WalMart or McDonalds, but I suppose the spectrum from desperate need to frivolous greed does include a large gray area.

Rikusa
12-25-06, 07:31
After the new regulations were modified the market is recovering.

Set Index: 688.17 (+ 66.03), after the morning session.

Still 200 + billion THB market capitalization wiped out since yesterday.

GiottoThe mistake made by heads of BANKING was no mistake, They knew and took full advantage of this like all other people of importance in Thailand do! Time will show that many people were ready and poised for this event. But do we really think that they will prosecute themselves! No Way! The new elite just took advantage of the situation and lined there pockets with both foriegn and domestic investors losses. Investing in Thailand is a very dangerous proposition.

Giotto
12-26-06, 13:14
The mistake made by heads of BANKING was no mistake, They knew and took full advantage of this like all other people of importance in Thailand do! Time will show that many people were ready and poised for this event. ...Rikusa,

no, I don't think so. If investors had known about this before the selling in the stock market had started earlier.

The BoT acted when the THB reached 35.01 against the USD, they feared a break through the 35 barrier would have started another sell-off for the USD. The BoT was also aware of the fact, that this intervention would only buy time for Thailand to adjust to the actual changes on the currency market, in the long term the trend will persist.

They registered incoming funds of USD 300 Mio per week since October 2006. This amount jumped to > USD 900 (!!!) in the first week of December. They had analyzed the growth rate of Thailand and compared it to the other Asian nations, most of them with higher growth rates but not the same appreciation of their currency this year.

So the BoT understood this increase of funds inflow into Thailand basically as currency speculation and tried to fight against it with the imposed measures. Currency speculation is always a game from the [bad] non-Thai investors, and nobody cares about them. The most important thing is that Thai investors make money - but Thai investors have THB already... - But obviously many Thai investors lost a lot, too - in the stock market. The BoT had completely underestimated the investors reaction on that measure.

Some of the consequences for the financial market are already visible - capital increase measures are postponed, because there will be no foreign money, property funds have problems with the refinancing...it starts already! It will get worse.

There was never a successful attempt of any central bank of the world to deal with the currency market that I know of. In this case the damage is huge, because the investors confidence into the Thai market place was hit! Many fond managers and investors will rethink whether they want to invest money in a country which imposes those drastic measures surprisingly and does not care about the possible reactions on the market(s).

On the long term there is no growing wealth in a country without a stabile or slowly rising currency. The money inflow into Thailand was good for investments, good for the country. The rising THB was also good for the high oil invoice Thailand has to pay.

All that reminds me on 1997, when Thailand tried to use their currency reserves to intervene in the market and buy THB, which was that time falling. They lost all their currency reserves within 6 hours.

Afterwards they found the man who was guilty: George Soros and his Currency Hedge Fund. That time he speculated against the THB, and everybody knew that. He had 3 billion USD in the market...remember - in the first week of December we saw nearly 1 billion USD flowing into Thailand.

That people really wanted to tell us that it is possible to speculate against the THB with 3 billion USD ...

I laughed that time, and now, nearly 10 years later most investors laugh again. And they will say Good Bye to Thailand now. They learned nothing, and there are markets which investors can trust. No investment in Thailand any more.


Giotto

Yi Ren
12-28-06, 20:10
Given all this, and one who has obviously been exposed to investment both in SE Asia and Europe, what do I do now that I'm being moved to the UK?

Cheers,
-Y



Rikusa,

no, I don't think so. If investors had known about this before the selling in the stock market had started earlier.
<...>
That people really wanted to tell us that it is possible to speculate against the THB with 3 billion USD ...

I laughed that time, and now, nearly 10 years later most investors laugh again. And they will say Good Bye to Thailand now. They learned nothing, and there are markets which investors can trust. No investment in Thailand any more.


Giotto

Giotto
12-29-06, 12:18
Given all this, and one who has obviously been exposed to investment both in SE Asia and Europe, what do I do now that I'm being moved to the UK?Yi Ren,

Cry :) ???


Giotto

Yi Ren
12-29-06, 13:49
Yi Ren,

Cry :) ???

Giotto
I'll have to request extra towels from Housekeeping! :)

-Y

Giotto
01-04-07, 17:14
Did I mention that the stock market was down 20 points yesterday and 8 today? No?

OK, nobody is surprised. Index around 650 now.

Keep your fingers away from Thai stocks.


Giotto

Horatio
01-04-07, 17:35
Did I mention that the stock market was down 20 points yesterday and 8 today? No?

OK, nobody is surprised. Index around 650 now.

Keep your fingers away from Thai stocks.


Giotto



"Buy on the cannons, sell on the trumpets.” -Old French Proverb.

Bombs and canonfire have to sound pretty much alike.

Giotto
01-04-07, 17:51
"Buy on the cannons, sell on the trumpets.” -Old French Proverb.

Bombs and canonfire have to sound pretty much alike.Horatio,

yes, I know that, I was expecting this respond.

First the gap must be closed down to 622 (from last week). And then I still remember a BoT decision from 2 weeks ago ... and that is the reason to NOT invest in Thai stocks.

You don't know what this brainless people will do next.


Giotto

Horatio
01-04-07, 18:13
What do you think about investing in SEA in general? Emerginging markets have been up for several years now. I started investing in mutual funds in emerging mkts bonds and emerging mkt stocks, and one fund in Japan. I will be dollar cost averaging in to these funds. My time horizon is several years. I think emerging mkts might stall for awhile, then continue their rise so I will be building a position.

The Yen has lost against the $ and the Euro over the last year. I dont think that the $ will do well in the future. Americans dont save and the deficit is huge. I think that it is a good time to specualate in Japanes Yen, but I dont know how to do that as a small investor. Everbank is one option, but only for larger investors. I wish I could buy a group of diverse short term bonds which pay in Yen. What do you think?

Horatio

edited to add a few things

Dizz Hizz
01-05-07, 01:56
What do you think about investing in SEA in general? Emerginging markets have been up for several years now. I started investing in mutual funds in emerging mkts bonds and emerging mkt stocks, and one fund in Japan. I will be dollar cost averaging in to these funds. My time horizon is several years. I think emerging mkts might stall for awhile, so I will be building a position.

The Yen has lost against the $ and the Euro over the last year. I dont think that the $ will do well in the future. Americans dont save and the deficit is huge. I think that it is a good time to specualate in Japanes Yen, but I dont know how to do that as a small investor. I wish I could buy a group of diverse short term bonds which pay in Yen. What do you think?

Horatio

Just taking a quick stab, but I also think that investing into SEA could be a good idea, especially in emerging markets such as Vietnam and Indonesia, given the outflow of foreign capital contributing to a weak US Dollar and a decreasing scaledown of IPOs in the Chinese market. Foreign capital should take flight into developing markets for maturation and thus could be a more profitable investment route.

Giotto
01-05-07, 04:17
What do you think about investing in SEA in general?
...
Horatio,

I still see SEA as a strong growing area of the world, but the world stock index of Asia Pacific compared to the world index itself is topping and at a resistance already since 2 month, and we should see a correction before to invest. Read the technical analysis of Bangkok Post on Mondays.

Japan is in my POV not really an Emerging Market, though I expect Japanese stocks to do well this year. But to invest in an Emerging Market fund in Japan (Yen fund) makes sense, because you should benefit from rising stock prices and Yen appreciation in the future.

I never checked that out, but I can ask my broker which kind of this funds he knows and how to buy them.


Giotto

Giotto
01-05-07, 04:53
We opened again sharply lower, the SET reached 629 as the lowest point. Now the question is whether we interprete the gap as being closed or not.

The market is oversold, a correction is clearly indicated. I would like to see another selling wave further downwards - then I think the worst is over.


Giotto

Horatio
01-05-07, 15:03
Horatio,

Japan is in my POV not really an Emerging Market, though I expect Japanese stocks to do well this year. But to invest in an Emerging Market fund in Japan (Yen fund) makes sense, because you should benefit from rising stock prices and Yen appreciation in the future.

I never checked that out, but I can ask my broker which kind of this funds he knows and how to buy them.


Giotto


I didnt mean Japan as an emerging market, it was another idea I had for investing. I am not really a technical investor, I try to buy on good fundamentals. The P/E on the emerging mkt funds I am investing in is in the teens. I am only putting a little money in each month so it will help me if the price goes down so long as it goes up in the end.

Thanks for any advice you can give me.

Warmest regards
Horatio

Giotto
01-10-07, 11:21
After the new foreign business laws we again saw a sell-off on the Thai stock market yesterday. Today we then rebounded up to 622 in the index.

The situation is interesting now - all bad news should be visible in the actual stock market prices already. For those people who are willing to take risks it could now be the right moment to buy. Another short time buying signal would occur if the index moves above 638 / 639.

All that is only a short- to medium time speculation, I still believe that many foreign investers will use any higher stock prices to sell and move out of Thailand. The maximum rebound potential in the index in the moment should be around 680.


Giotto

SE Asia Joe
01-17-07, 05:55
Giotto:
Not sure if this would be appropriate here or not - but I know that you've been very accomodating AND is very up-to-date with all that is happening in Thailand. Do you know about developments in the laws regarding property ownership in Thailand? I've posted the following enquiry in the Thai Boards:
>> What is happening with property developments in Thailand - specifically in regards to laws specifying majority ownership of developments by Thai nationals. As far as I know, in the past, these laws were only techinally abided to - by the use of reduced voting rights by the Thai national shareholders, by signing blank transfer forms or subjugating shareholding etc. Now I hear that the Thai Government is cracking down and examining the actual wherewithal of these Thai National Nominees, cracking down on reduced voting rights etc - to the point that it is impossible for a Foreign national to have SECURE title to any properties bought in Thainland. WHAT IS THE REAL LOW DOWN ON ALL THIS?? Am asking this here as I know that in the past, this forum and its notable participants, had offered unique insight views and even breaking news. Thanks guys - am plenty worried as I own property there (or think I do!!) - and I would think that many others here also.

Giotto
01-18-07, 06:18
Giotto:
Not sure if this would be appropriate here or not - but I know that you've been very accomodating AND is very up-to-date with all that is happening in Thailand. Do you know about developments in the laws regarding property ownership in Thailand? I've posted the following enquiry in the Thai Boards:
>> What is happening with property developments in Thailand - specifically in regards to laws specifying majority ownership of developments by Thai nationals. As far as I know, in the past, these laws were only techinally abided to - by the use of reduced voting rights by the Thai national shareholders, by signing blank transfer forms or subjugating shareholding etc. Now I hear that the Thai Government is cracking down and examining the actual wherewithal of these Thai National Nominees, cracking down on reduced voting rights etc - to the point that it is impossible for a Foreign national to have SECURE title to any properties bought in Thainland. WHAT IS THE REAL LOW DOWN ON ALL THIS?? Am asking this here as I know that in the past, this forum and its notable participants, had offered unique insight views and even breaking news. Thanks guys - am plenty worried as I own property there (or think I do!!) - and I would think that many others here also.SE Asia Joe,

I do not expect any major changes of the Thai laws reg. the ownership of properties, except the modification of the foreign shareholding in companies.

If you own a condo the foreign owernership within a building is restricted to 50 % of the units in the moment. There are discussions to increase that to 70 %. But - nothing changed there up to now.

If you own land you need one or two companies and at least 7 shareholders. In the future it will be checked that the shareholders REALLY put money into the company, and are not only functioning as proxies. Furthermore there was in the past the option to assign a higher number of votes for one single shareholder (the foreigner). That is not possible any more.

Old company structures are either grandfathered, or have to change the company contracts within one year, depending on their business activities. No details specified up to now.


Giotto

Horatio
02-28-07, 02:44
so what is the thinking after everything falling? Is it a good time to buy. I heard a guy on tv say stay away from china, but maybe buy the thai market.

Giotto
02-28-07, 04:52
so what is the thinking after everything falling? Is it a good time to buy. I heard a guy on tv say stay away from china, but maybe buy the thai market.Horatio,

The Shanghai market saw the biggest losing day in 10 years - yesterday. It's time to be careful with China in the moment.

As for Thailand - my opinion is that it is still too early to buy now. I expect the market to fall back to at least SET 650. For 2007 there are better investment options than Thailand, 2008 could be better then.


Giotto

Giotto
03-05-07, 07:38
Guys,

careful with stocks in the moment - it does not look so good.

Thailand will most likely not being hit too much this time, but the major markets have started a major downwards movement (in my POV). All charts look dangerous, and the news support the expectation, that there might be a recession in USA and China on the horizon. And then - good night, my friends.

Tokyo lost again 600 points this morning - hopefully some of your out there are invested short.


Giotto

Freeman 418
03-06-07, 12:26
Any discussions about why the Baht is so strong at the moment and keeps decreasing in relation to USD, AUD etc. ??

Does this have to do with huge amounts of capital being suddenly pulled out of China equities and markets and pumped anywhere else such as Thailand?? Surely this has got to hurt Thai exports..

I was shocked on Monday when I saw it hit around 25.5 Bt per 1 AUD.. a few years back I was getting 33+ per 1 AUD.. now that's around the price for 1 USD!!

I've already booked my ticket to LOS.. but man, I'm hoping it's not too tight lol.

Giotto
03-08-07, 16:15
Any discussions about why the Baht is so strong at the moment and keeps decreasing in relation to USD, AUD etc. ??

Does this have to do with huge amounts of capital being suddenly pulled out of China equities and markets and pumped anywhere else such as Thailand?? Surely this has got to hurt Thai exports..

I was shocked on Monday when I saw it hit around 25.5 Bt per 1 AUD.. a few years back I was getting 33+ per 1 AUD.. now that's around the price for 1 USD!!

I've already booked my ticket to LOS.. but man, I'm hoping it's not too tight lol.Freeman 418,

do not exchange in the offshore market - exchange HERE IN THAILAND!

Don't know the rate from today, but on Monday it was still > 35.5 against the USD . The BOT tries to keep the THB exchange rate for the USD above 35.0 .

Background in the moment is NOT the strength of the THB, but the weakness of the USD and other $-currencies.


Giotto

Brain666
03-08-07, 17:26
Any discussions about why the Baht is so strong at the moment and keeps decreasing in relation to USD, AUD etc. ??

Does this have to do with huge amounts of capital being suddenly pulled out of China equities and markets and pumped anywhere else such as Thailand?? Surely this has got to hurt Thai exports..

I was shocked on Monday when I saw it hit around 25.5 Bt per 1 AUD.. a few years back I was getting 33+ per 1 AUD.. now that's around the price for 1 USD!!

I've already booked my ticket to LOS.. but man, I'm hoping it's not too tight lol.
The issue are the weak dollar countries, especially the US$ and not the strength of the Baht. Against e.g. the euro there is only a slight increase over more then 6 months, also against the won. So for me mongering is rather stable!

But the however weack dollor would not be enough to ever think mongering in the US (strange idea anyhow).

regards

Brain666

Giotto
03-15-07, 07:13
The Thai Baht at the onshore market below 35 to the USD, offshore 32.49 as a low. Speculations that the BOT might lift the 30 % reserve rule on capital import.

Clearly visible again, that interventions of a Central Bank in the markets usually do not work - if, then only a very short time. The further outlook for this year sees the USD rebounding to 36.5 until the middle of this year, before the next downturn will start.

Stock Markets: The next selling wave has started, this time in New York. The better than expected GM results turned the marked around then last night, but - for how long...

I hope some of you out there are still short. In my POV the worst still to come.


Giotto

Mark Pinksy
06-07-07, 20:29
Can anyone give me pointers on how to go about investing in Thai stocks e.g. opening a brokerage account, etc.

Thanks in advance.

Freeman 418
06-08-07, 16:27
Nice correction coming up in the world markets soon.
The DAX which was ready to hit 8000 is about to go back down below 7500.
Let's see what next week has in store with the US markets.
ASX had a lot of cheap good stocks on sale today.. if only my $$$ wasnt still tied up in resource stocks, which I need to wait on, until the next "up" day.

Any bargains on the SET?

Giotto
06-08-07, 20:37
Nice correction coming up in the world markets soon.
The DAX which was ready to hit 8000 is about to go back down below 7500.
Let's see what next week has in store with the US markets.
ASX had a lot of cheap good stocks on sale today.. if only my $$$ wasnt still tied up in resource stocks, which I need to wait on, until the next "up" day.

Any bargains on the SET?Freeman 418,

The SET should see a correction, too. But - I was wrong with everything what I expected in the last half year. I will shut up...


Giotto

Freeman 418
06-09-07, 06:10
Hehe, yeah i remembered those predictions on getting out at that time.. well maybe you weren't wrong, there was just some more juice left in the market still.

You were right about the volatility of the Chinese markets.. up and down 8% in Shanghai is no longer scaring other world markets now, like it did the first time it happened end last year.

Let's wait next week to see if the US markets recover from this week's correction, or completely halt the bull market.



Freeman 418,

The SET should see a correction, too. But - I was wrong with everything what I expected in the last half year. I will shut up...


Giotto

Mike Frankfurt
06-29-07, 13:59
Set 50 in major bullmarketcicle since 3 month

The set 50 was going sideways for nearly 4 years, there was a breakout of the chanell two month ago. Set 50 hit new highs last week.

Charts submit a pricetarget of 800 or equal to 1000-1200 in set within 18 month

Fundamentaly there is a dramatic change in policies in Thailand.

The major point, the new goverment, crack down on corruption, and this consequently, not only against taxsin

First time ever!

Earnings would stay flat for the next 3 quarters, with improving reslutts in 2008, even if worldmarkets would slow down.

But investors take caution!

The market have a lot of shit shares, stay on fundamentals and dividends, and watch price to sales, and.

Don't trust Thai companys, their are a lot of bandits out, and there is no subsainibility in Thai companys.

Giotto
06-30-07, 08:20
...
Charts submit a pricetarget of 800 or equal to 1000-1200 in set within 18 month

Fundamentaly there is a dramatic change in policies in Thailand.

The major point, the new goverment, crack down on corruption, and this consequently, not only against taxsin

First time ever!
...
Mike Frankfurt,

hmmm...

I agree that techically the SET looks good in the moment, and it will look even better if it breaks the 785/790 resistance.

But - that there is a dramatic change in politics in Thailand - this is quite new for me. And that this government cracks down on corruption, that is very new for me. There is a witch hunt ongoing against Thaksin and his family, but that is [nearly] all what I can see. This government is not too active...

The fundamentals behind this hausse at the stock market are slim, basically the very low P/E ratio of Thai listed companies compared to the other asian markets. And there is the idea that the upcoming elections in december will have a positive impact on the economy.

Growth rates in March and April were above expectations, another good news for the markets.

If we think about the elections we should not forget, that the power afterwards will be most likely returned to that party which ruled Thailand for decades before the Thasin government. The old power clique returnes to power. More than 100 high ranking politians from the TRT party were banned from politics for 5 years, there will not be a real opposition in the new parliament. Whether we will have a stabile and active government after the election under this circumstances - I have my doubts.

Investment into stocks in Thailand is more risky than ever. But - as everybody knows - an environment like this creates sometimes huge upside potential for stocks.


Giotto

Giotto
07-04-07, 06:07
...and it happened. SET: 817 in the moment.


Giotto

Giotto
07-10-07, 05:18
SET: 848 (!)
THB: 33.7 here in Thailand.

Massive capital inflow into the markets.


Giotto

Mature Man
07-10-07, 12:20
Money alone does not make a market. While it may do so temporarily there is no assured continuity. Markets today are no longer isolated. Marktes are going up without reacting to basic and fundamental happenings, failures of subprime loans in the US which can throw entire financial markets astray, oil prices back in the 70's and the very fluid situation in the middle east which can explode any day now. With the US printing press being run 24 hours a day by the Fed the money supply in every country has increased tremendously. In turn, the governments of these countries are holding the valueless greenbacks in their reserves
A lot of money laundering is also taking place and funds from the US are flowing into the Far East (non muslim countries) and to Dubai in the middle east.
IMHO you should get out of the market




SET: 848 (!)
THB: 33.7 here in Thailand.

Massive capital inflow into the markets.


Giotto

Giotto
07-10-07, 13:43
...
IMHO you should get out of the marketMature Man,

Thanks, as long as we hear many voices like this (and my voice earlier this year)... the hausse will go on. When everybody then only talks about rising stock prices, and the maids are buying stocks - then it is time to sell.


Giotto

Mature Man
07-11-07, 04:41
One must always remember that for every profit there is a loss ( either notional or actual). No one can be right all the time. If you are more often right than wrong you will be still be ahead.
But the problem is greed takes over. Those who make money in stocks not only plough back all their profits, they put more money into it, either their own or by borrowing.They know nothing about the company they invest in, its products, its balance sheet etc.When the markets collapse their entire money goes. And there many who invest in mutual funds and think they will not be affected. They fail to realise that these funds hold different stocks and that their fund managers use their money to take risks to earn more money for themselves. When funds collapse, the fund managers throw up their hands. Their only loss is the bonus that they would get on better returns. They still take their fat salaries and go home.
In a market like this ,only the profits should ride, if it rides at all.The capitalshould be back in the bank accounts ( I would choose the banks - most banks are actually bankrupt if you take the effect of the derivatives they hold)
Yes, most of us remember Baruch's mentioning that he decided to call it a day when his shoeshine boy asked him what was good to buy. The Wall street sell off started immediately thereafter.
Poor maids, they will end up selling their stock ( their bodies) more over the years.


Mature Man,

Thanks, as long as we hear many voices like this (and my voice earlier this year)... the hausse will go on. When everybody then only talks about rising stock prices, and the maids are buying stocks - then it is time to sell.


Giotto

Giotto
07-11-07, 05:24
...
In a market like this ,only the profits should ride, if it rides at all.The capitalshould be back in the bank accounts ( I would choose the banks - most banks are actually bankrupt if you take the effect of the derivatives they hold)
...Mature Man,

Basically correct. But in a market like this there are no reasonable decisions.

With a P/E ratio far below all other Asian countries the Thai market had just started to rally. Based on the political situation the expectation for the market was not too positive for this year, so there are still not many people invested. So much money waiting to be put into the market.

If you then think about China, and the development of the markets there during the past few years, then you know what Asian investors have experienced during the past few years. This 20 % rise of the Thai stock market since the beginning of the year is for them - just the beginning! They don't even think about profit taking right now. There is a huge amount of chinese money flowing into the Thai stock market in the moment.

Anyway - highly speculative, Maids, invest your money in stockings, and not in stocks :) !!!


Giotto

Mature Man
07-11-07, 05:55
I dont dispute the low PE ratios. But when all other markets come down this will also come down. IMHO there is an impending reaction across all financial exchanges.
Returns are always better when the movement is without any initial capital loss and are higher when purchased at lower prices.
Yes money right now may appear to be floating around looking for investments. But when a collapse or huge drop comes every one of these investors get hit right across the board. These Chinese investors will also have money in their own markets and in others. When they loose money there, the tendency is to sell off investments in other stock markets to make good their losses and to prevent further losses. Right now the information from China is that both their main exchanges in Shanghai & Shenzen are full of investors similar to maids who look to making more money in a day or two to what they earn in a month.
And most important is that Chinese are compulsive gamblers( runs in their genes) and with PE ratios being close to 40 we are somewhere close to a financial catastrophe.
LOL- I agree investments in stockings are way better for maids.



Mature Man,

Basically correct. But in a market like this there are no reasonable decisions.

With a P/E ratio far below all other Asian countries the Thai market had just started to rally. Based on the political situation the expectation for the market was not too positive for this year, so there are still not many people invested. So much money waiting to be put into the market.

If you then think about China, and the development of the markets there during the past few years, then you know what Asian investors have experienced during the past few years. This 20 % rise of the Thai stock market since the beginning of the year is for them - just the beginning! They don't even think about profit taking right now. There is a huge amount of chinese money flowing into the Thai stock market in the moment.

Anyway - highly speculative, Maids, invest your money in stockings, and not in stocks :) !!!


Giotto

Giotto
07-11-07, 06:43
I dont dispute the low PE ratios. But when all other markets come down this will also come down. IMHO there is an impending reaction across all financial exchanges.
...Mature Man,

I basically agree on the risks, but the money is always going somewhere...

And yes, there was/is a maids rally in China, for sure, but you never know how far upwards it takes the market.

I don't see a major the downside risk for the Thai market, 10-15 % max. . If I watch the market today - there is some profit taking, and whenever a stock which was rallying during the days before drops down a few points huge buying is coming in.

Typical bull market, overbought already, but nobody cares. It is as if you cannot buy stocks any more - tommorow, sold out!


Giotto

Mature Man
07-11-07, 11:33
IMHO when the suckers come in (lol- not necessarily only the maids who give blow jobs or the gays either) we have come to the virtual end of the bull market. It's just a matter of time- any time.
Yes, markets which have not gone up much face a lower downside risk no doubt.
And when there is more money chasing less shares no doubt you are in for an increase in prices- fundamental law of supply and demand.
But if the present money supply runs out the present holders will have no one to sell it to. I know what a bear market is. My experience is close to 40 years in the stock markets and a lot of it as an integral part of it , even as it started as a teenager.
Anyway , goodluck to you. My sole intention is to make people understand that nothing is permanent. That no one can chose the timing. That you can ONLY SELL AS THE MARKET MOVES UP. You can hardly sell on the way down and you get left with a big pile till the next bull rally- who knows when!


Mature Man,

I basically agree on the risks, but the money is always going somewhere...

And yes, there was/is a maids rally in China, for sure, but you never know how far upwards it takes the market.

I don't see a major the downside risk for the Thai market, 10-15 % max. . If I watch the market today - there is some profit taking, and whenever a stock which was rallying during the days before drops down a few points huge buying is coming in.

Typical bull market, overbought already, but nobody cares. It is as if you cannot buy stocks any more - tommorow, sold out!


Giotto

Giotto
07-11-07, 15:20
...
My sole intention is to make people understand that nothing is permanent. That no one can chose the timing. That you can ONLY SELL AS THE MARKET MOVES UP. You can hardly sell on the way down and you get left with a big pile till the next bull rally- who knows when!Mature Man,

Your intention is very much appreciated, AND EVERYBODY SHOULD LISTEN TO THAT. Stock markets are rallying for a time, but when they start to fall they fall much faster. Most of the time it is then too late to sell.


Giotto

Giotto
07-13-07, 06:50
SET: 861
THB: 33.2 here in Thailand.

I talked to my stock broker.

The appreciation of the THB leads to massive $ inflow into the country, now again, since the THB broke through the 34.7 barrier. The Bank of Thailand tries to ease the pressure on the THB, to support the exporting companies. Thai investments in foreign countries (= outflow of THB) shall be easier now, nearly all capital outflow control mechanisms are suspended in the moment (introduced during the Asian crisis 1997/1998, to protect the THB).

Though overbought the market seams to be technically ok. He mentioned PTT as an example, during the rise of their price from below 200 to now 306 there were permanent profit taking sessions. The calculation about the average investment price for a one of the free floating shares (the major part is in the hands of long term investors) is around THB 280.00 . That means, that the stock is relatively clean and not in a huge danger to be hit by massive profit taking sells orders.

Everybody starts to talk about a SET Indes around 1000/1100 at the end of this year.

Hmmm...that sounds damned positive.

And what I learned in the 25 years of investing money into markets: If the sentiment gets too positive it is time to sell. Everybody is invested already. the number of new investers is declining.

May be time to sell now?


Giotto

Mature Man
07-14-07, 06:12
Market is moving the way I thought. The Dow will cross 14,000 and go up to even 14,200. One can only sell by pushing up the market and getting suckers in.
Anytime between now and the US Congress recess starting Aug 6th would be the time to sell.
Be happy with your profits and let the man who buys from you risk his money to make profits. Even if he does make a profit, I would think he is entitled to it as he has taken the burden of your shoulder.






SET: 861
THB: 33.2 here in Thailand.

I talked to my stock broker.

The appreciation of the THB leads to massive $ inflow into the country, now again, since the THB broke through the 34.7 barrier. The Bank of Thailand tries to ease the pressure on the THB, to support the exporting companies. Thai investments in foreign countries (= outflow of THB) shall be easier now, nearly all capital outflow control mechanisms are suspended in the moment (introduced during the Asian crisis 1997/1998, to protect the THB).

Though overbought the market seams to be technically ok. He mentioned PTT as an example, during the rise of their price from below 200 to now 306 there were permanent profit taking sessions. The calculation about the average investment price for a one of the free floating shares (the major part is in the hands of long term investors) is around THB 280.00 . That means, that the stock is relatively clean and not in a huge danger to be hit by massive profit taking sells orders.

Everybody starts to talk about a SET Indes around 1000/1100 at the end of this year.

Hmmm...that sounds damned positive.

And what I learned in the 25 years of investing money into markets: If the sentiment gets too positive it is time to sell. Everybody is invested already. the number of new investers is declining.

May be time to sell now?


Giotto

Rubberyman
07-16-07, 12:40
Something that may be of interest:

http://faculty.haas.berkeley.edu/odean/

What I can glean from his papers is that 'overconfidence is the arch-enemy of sensible investing. And when markets are bouncing around record highs it is easy to confuse great results with investing brilliance'.

The author is Professor of Banking and Finance at the Haas School of Finance at the University of California and claims to be a leading researcher in the field of behavioural finance. (I guess Uni Cal outranks me at least).

Overconfidence, Odean argues, is a useful trait when facing many of life’s challenges but not when it comes to things like investing or driving a car.

His original research PhD theory was that overconfident investors would trade more often and earn less.

Relevant to the discussion on this board is this quote by him:

“What happens to the market if the market is full of overconfident investors? (Like in Thailand, the US and Australia as far as I can see). Overconfident investors trade more because they think that they’re right. They think that their idea is a sure thing, and they are willing to bet on it. As a result, they tend to earn less. They under-diversify because when they think they are right, there does not seem to be a need to hedge,”

He and another academic Brad Barber put his theory to the test by studying two sets of data from an online share broker with more than 60,000 investor accounts in all.

They calculated the return for each portfolio after commissions and transaction costs and found that active traders underperformed buy and hold investors by about 6 per cent a year. They later subdivided the data and found that men traded more than women and suffered in the performance stakes because of it - and the worst were single men who traded 67% more than their single female counterparts.

My take-away from this is to hedge by diversifying with good value portfolios producing dividend returns. If you do that, you can still try to read the market and try to sell before a crash, but if you miss out, at least the value will ensure that there is dividend income even if you have to wait till the next rally to sell up. Better than ending up with a pile of Enron stock to wallpaper your bedroom imo.

OTOH is he a zillionaire who knows what he is doing practically, or just an academic??

Mature Man
07-24-07, 06:57
Yes it's common knowledge that the brokers on Wall Street like to make any as many turns as possible on trades. They make money on each trade. The capital gets whittled away in the process.
A speculator who makes money rarely gets to keep it. Greed ensures that all money is in the market leveraging optimistic gains.
Anyway, here i am, putting myself on the line.
Within the next 40 days we are going to see a lot of changes in the financial markets ( yes downward to be precise) . I have based my opinion- not a prediction- on various inputs.
I am not talking of the Thai Stockmarket. It's the worldwide markets which of course will influence the Thai Market.
Good luck to all out there who continue to be invested in stocks.





Something that may be of interest:

http://faculty.haas.berkeley.edu/odean/

What I can glean from his papers is that 'overconfidence is the arch-enemy of sensible investing. And when markets are bouncing around record highs it is easy to confuse great results with investing brilliance'.

The author is Professor of Banking and Finance at the Haas School of Finance at the University of California and claims to be a leading researcher in the field of behavioural finance. (I guess Uni Cal outranks me at least).

Overconfidence, Odean argues, is a useful trait when facing many of life’s challenges but not when it comes to things like investing or driving a car.

His original research PhD theory was that overconfident investors would trade more often and earn less.

Relevant to the discussion on this board is this quote by him:

“What happens to the market if the market is full of overconfident investors? (Like in Thailand, the US and Australia as far as I can see). Overconfident investors trade more because they think that they’re right. They think that their idea is a sure thing, and they are willing to bet on it. As a result, they tend to earn less. They under-diversify because when they think they are right, there does not seem to be a need to hedge,”

He and another academic Brad Barber put his theory to the test by studying two sets of data from an online share broker with more than 60,000 investor accounts in all.

They calculated the return for each portfolio after commissions and transaction costs and found that active traders underperformed buy and hold investors by about 6 per cent a year. They later subdivided the data and found that men traded more than women and suffered in the performance stakes because of it - and the worst were single men who traded 67% more than their single female counterparts.

My take-away from this is to hedge by diversifying with good value portfolios producing dividend returns. If you do that, you can still try to read the market and try to sell before a crash, but if you miss out, at least the value will ensure that there is dividend income even if you have to wait till the next rally to sell up. Better than ending up with a pile of Enron stock to wallpaper your bedroom imo.

OTOH is he a zillionaire who knows what he is doing practically, or just an academic??

Giotto
07-24-07, 10:08
...
Within the next 40 days we are going to see a lot of changes in the financial markets ( yes downward to be precise) . I have based my opinion- not a prediction- on various inputs.
I am not talking of the Thai Stockmarket. It's the worldwide markets which of course will influence the Thai Market.
...Mature Man,

Good that still some pessimists are out there :) . You can be right - Subprime problem in the states, overheated market / growth in China, the low interest yen policy of the BOY.

I read the same prediction in a Germany newspaper yesterday, from a guy who had precisely predicted the Asian crisis ten years ago.

May be the upturn of the market has just begun :) ?!?


Giotto

Mature Man
07-24-07, 13:25
Lol- Good to know that there are still optimists around. How else does one find buyers. Boy you deserve every buck you make, if you make it
I guess if it doesnt happen within 40 days from now- I will buy you drinks at your bar ( or would you prefer it outside) on my next visit.
And if I am right I will buy you anyway, am sure you will need it being the optimist you are
Meant in good humor.Comes along with my 2 bit
Cheers in anticipation


Mature Man,
Good that still some pessimists are out there :) . You can be right - Subprime problem in the states, overheated market / growth in China, the low interest yen policy of the BOY.

I read the same prediction in a Germany newspaper yesterday, from a guy who had precisely predicted the Asian crisis ten years ago.

May be the upturn of the market has just begun :) ?!?


Giotto

Giotto
07-24-07, 14:49
Lol- Good to know that there are still optimists around.
...Mature Man,

Don't worry, I am not an optimist either. I sold my stocks already a few months ago, after the Shanghai market dropped nearly 9 % one day. But - I was wrong with my market expectations :) ...

What I watch in the moment is that the bad news are basically inpriced already, in NYSE the subprime problem, some disappointing earning reports etc. etc. , and the market is close to record levels. It does not look as if major problems would occur soon. There is still so much money out there looking for interesting investments ...

Thailand is a special case, with its low P/E ratio. Here the rally has just started, and if you know how rallies are working here, it is somehow unusual and breathtaking.

The market was clearly overbought 2 weeks ago, consilidated for a week - it is even technically quite clean now. And then - today the SET + 19 to around 880 .

Let's wait whats happening next. A drink is anyway always appreciated :) !


Giotto

Giotto
07-25-07, 01:08
...
Within the next 40 days we are going to see a lot of changes in the financial markets ( yes downward to be precise) .
...
Mature Man,

Wall Street took a beat - has it started :) ???


Giotto

Mature Man
07-25-07, 05:54
LOL
Just a tip of the iceberg IMHO.
There are people who may still keep it up with the money surplus available and with the grandoise idea that the markets will still go up ( my 40 days stand ). Dont forget the Fed has been printing dollar notes 24/7. Based on these notes every Govt across the world holds these notes as reserve and print against it thinking they have value. When you print notes like there is no tomorrow, it takes a while before Govts across the world finally come to their senses and stop it. For they do know that when they preside over a financial collapse their days are over. they will try to mitigate- too little and too late.In the US, it is part of the strategy to do so. You can fool people of the world some of the time but you cannot fool them all the time.
Most important never forget there is no such thing as an orderly and controlled drop in the financial markets. It's every man for himself

Also let me also say I get no pleasure when people loose money. The markets today are one big casino. Online trading has resulted in trading by so many people who dont know anything about what they are doing. It's no longer investment and returns. It absolute gambling fueled by the flow of valueless currency notes.



Mature Man,

Wall Street took a beat - has it started :) ???


Giotto

Giotto
07-26-07, 11:42
...
Dont forget the Fed has been printing dollar notes 24/7. Based on these notes every Govt across the world holds these notes as reserve and print against it thinking they have value. When you print notes like there is no tomorrow, it takes a while before Govts across the world finally come to their senses and stop it.
...
Mature Man,

Wall Street rebounded :) ... damned!

I tried to check that, I found the money policy of the FED quite restrictive in the last years, even they know (for sure better than we do) that printing money is counterproductive, creates inflation and - (M2 - M1) is revers correlating to the growth rate.

And I also thought that the difference between the monitary system in Europe and USA is that in Europe the Central Banks definitely control the quantity of money to be printed, but in USA the government does...

But may be I am completely wrong with all this.


Giotto

Mature Man
07-26-07, 21:06
Dear Dr. G,

You are a nice guy.

Upto the year 2000 from the founding of America in 1776 the M1 was around $350 billion. Yes Coins and currency at their peak in the year 2000 was approx $350 billion.
Would you know how much has been printed since then ?

Look what I am aware of goes way beyond.I am not there to convince anyone or to prove myself.
All i can say his take heed.
One has to respect money, what it is and what it can do.
Let time decide our fate.





Mature Man,

Wall Street rebounded :) ... damned!

I tried to check that, I found the money policy of the FED quite restrictive in the last years, even they know (for sure better than we do) that printing money is counterproductive, creates inflation and - (M2 - M1) is revers correlating to the growth rate.

And I also thought that the difference between the monitary system in Europe and USA is that in Europe the Central Banks definitely control the quantity of money to be printed, but in USA the government does...

But may be I am completely wrong with all this.


Giotto

Giotto
07-27-07, 01:55
Dear Dr. G,

You are a nice guy.

Upto the year 2000 from the founding of America in 1776 the M1 was around $350 billion. Yes Coins and currency at their peak in the year 2000 was approx $350 billion.
Would you know how much has been printed since then ?

Look what I am aware of goes way beyond.I am not there to convince anyone or to prove myself.
All i can say his take heed.
One has to respect money, what it is and what it can do.
Let time decide our fate.Mature Man,

I have no idea. Who knows whether I am a nice guy :) ?

And - let them print whatever they want, I don't expect the Americans to listen to anybody or even to scientific results. But I know - the Wall Street was down today in the worst moment over 400 points. And the market volatility is the higherst in 13 months.

BTW: I am also not here to prove myself. I think this discussion is interesting. And a part of it could be whether the FED really prints money. If yes, and lots of it [is M0 really interesting???] ... they could have a reason for that, because I assume that the FED board is not much more stupid than we are. And even if they do - who knows the real available money of USA since the FED doesn't publish M3 any more :) ?

And - what I don't know is - does the FED print or the government?

Anyway - tomorrow will be an interesting day for the stock markets in Asia.


Giotto

Mature Man
07-27-07, 06:09
Only the Fed has the power to print. The Fed is a private bank. In 1913 when Congress slept ( a long story- the American people are still sleeping like Rip Van Winkle) control over the money ( and thereby the country) was handed over to a cabal of bankers ( dont want to be accused of racism).
When the US govt wants money printed- they request the Fed. The Fed prints the notes and tell the Govt- "Here's a billion dollars. The interest on this money printed will at current rates be 5%. Thank you very much"

I do know you have no ulteriors motives too.

Your forum is there to help exchange knowledge and provide a yeoman service.

The Fed is not stupid. Whatever is happening ,is happening, because the powers that be want it to happen in this way. This is only a part of their big picture in which we vassals do not count.




Mature Man,

I have no idea. Who knows whether I am a nice guy :) ?

And - let them print whatever they want, I don't expect the Americans to listen to anybody or even to scientific results. But I know - the Wall Street was down today in the worst moment over 400 points. And the market volatility is the higherst in 13 months.

BTW: I am also not here to prove myself. I think this discussion is interesting. And a part of it could be whether the FED really prints money. If yes, and lots of it [is M0 really interesting???] ... they could have a reason for that, because I assume that the FED board is not much more stupid than we are. And even if they do - who knows the real available money of USA since the FED doesn't publish M3 any more :) ?

And - what I don't know is - does the FED print or the government?

Anyway - tomorrow will be an interesting day for the stock markets in Asia.


Giotto

Tiny 12
07-27-07, 06:29
Maybe time to buy the exporters, if you think the BOT will succeed in easing upward pressure on the THB. Some of the agricultural exporters, for example, haven't moved up with the rest of the market. Believe it or not, you could have bought some of these companies before the crash back in, say, 1996 and first half 1997 and done very well. When the Baht was devalued their earnings exploded, at least those companies without a lot of foreign debt.


SET: 861
THB: 33.2 here in Thailand.

I talked to my stock broker.

The appreciation of the THB leads to massive $ inflow into the country, now again, since the THB broke through the 34.7 barrier. The Bank of Thailand tries to ease the pressure on the THB, to support the exporting companies.
May be time to sell now?


Giotto

Giotto
07-27-07, 10:07
Only the Fed has the power to print. The Fed is a private bank. In 1913 when Congress slept ( a long story- the American people are still sleeping like Rip Van Winkle) control over the money ( and thereby the country) was handed over to a cabal of bankers ( dont want to be accused of racism).
When the US govt wants money printed- they request the Fed. The Fed prints the notes and tell the Govt- "Here's a billion dollars. The interest on this money printed will at current rates be 5%. Thank you very much"
...
Mature Man,

Now - that is interesting.

Does that mean that the goverment can request the FED to print money, and the FED has to do?

And - does that mean that the goverment BORROWS notes and coins from the Fed and pays interest on it?


Giotto

Giotto
07-27-07, 10:44
Maybe time to buy the exporters, if you think the BOT will succeed in easing upward pressure on the THB. Some of the agricultural exporters, for example, haven't moved up with the rest of the market. Believe it or not, you could have bought some of these companies before the crash back in, say, 1996 and first half 1997 and done very well. When the Baht was devalued their earnings exploded, at least those companies without a lot of foreign debt.Tiny 12,

The statement from the BOT is that the THB should be stabile or a bit weaker a bit in the second half of this year. The growth rate (4.3 % in the last quarter) should fall below 4 % in the third quarter.

A weaker THB is generally NOT good for Thai stocks because it devaluates foreign invested money. There is a strong correlation between the SET index and the THB.


Giotto

Mature Man
07-27-07, 16:37
Yes, exactly as i said earlier and as mentioned by you below.

Why should the Fed refuse anyway? It's only cost is that of printing the notes.( Paper,ink and printing press needed)
It's money for jam.
Would'nt you like to own ( or be a major shareholder in ) the Fed?




Mature Man,

Now - that is interesting.

Does that mean that the goverment can request the FED to print money, and the FED has to do?

And - does that mean that the goverment BORROWS notes and coins from the Fed and pays interest on it?


Giotto

Tiny 12
07-27-07, 21:24
A weaker THB is generally NOT good for Thai stocks because it devaluates foreign invested money. There is a strong correlation between the SET index and the THB.
Giotto

Giotto, I said exporters, not "generally". You could look at charts for TUF and DELTA for examples of what happened to the share prices after the Baht was devalued in 1997. TUF went from 3 to 15. DELTA went from 5 to 40. Companies in agriculture are on average a better bet after a devaluation than electronics, because their costs are mostly in Baht. The electronics exporters will see increased revenues (in Baht) after a currency weakens, but their costs tend to go up too because they import more of their raw materials and components.

Tiger 888
07-28-07, 05:51
Giotto, I said exporters, not "generally". You could look at charts for TUF and DELTA for examples of what happened to the share prices after the Baht was devalued in 1997. TUF went from 3 to 15. DELTA went from 5 to 40. Companies in agriculture are on average a better bet after a devaluation than electronics, because their costs are mostly in Baht. The electronics exporters will see increased revenues (in Baht) after a currency weakens, but their costs tend to go up too because they import more of their raw materials and components.But those fluctuations are not good for anyone except the speculators. When the Baht dropped to almost 60 against the US$, everything was cheap for a while, nobody increased prices. After the prices were adjusted, the baht rebounced and suddenly Thailand was double expensive. How can you explain that to a client in the West. They would rather order from China.

Giotto
07-28-07, 13:14
Giotto, I said exporters, not "generally". ...
Tiny 12,

I understood your message, don't worry. I personally think that the THB will not weaken so much that it makes sense to but exporters. It can make sense to buy electronics like DELTA, HANA, CCET due to better earning expectations.


Giotto

Giotto
07-28-07, 13:22
Interesting development at the US markets during the past few days. Two straight losing sessions, and no real rebound. More selling pressure at the end of last nights session.

Technically the markets look vulnarable now. The S&P 500 index broke throught the 5 year trend support line... and that is not good.

Furthermore disturbing is the market sentiment ... even on a much lower level not many buyers, the investors are obviously nervous (which is basically good). Now this is exactly the scenario where a thunderstorm can develop. No buyers, huge selling volume of all those who still sit on huge unrealized profits, and panic...

Positives: The USD was not weakening. And the trading volume was not too high.

Monday will be an interesting day for the stock market in the US (and for all the world, too) - if the stocks will not rebound sharply we might have seen the start of a medium to long term bear market.


Giotto

Mature Man
07-28-07, 20:14
Dear Dr G,

There's one thing you must remember. People have their money invested in different ways and when they take a loss in one they tend to sell another to either neutralise it or to get enough liquidity to handle the crisis- meaning that you will have losses in other segments.
And in case you are unaware the outstanding derivatives segments as per the Bank of International Settlements is close to $400 trillion. Unofficial estimates place it close to $1000 trillion. You wont find these derivatives listed on banks balance sheets.
What you will shortly see is an avereseness to buying fresh debt and funding fresh debt. This should be the precursor to further problems.



Interesting development at the US markets during the past few days. Two straight losing sessions, and no real rebound. More selling pressure at the end of last nights session.

Technically the markets look vulnarable now. The S&P 500 index broke throught the 5 year trend support line... and that is not good.

Furthermore disturbing is the market sentiment ... even on a much lower level not many buyers, the investors are obviously nervous (which is basically good). Now this is exactly the scenario where a thunderstorm can develop. No buyers, huge selling volume of all those who still sit on huge unrealized profits, and panic...

Positives: The USD was not weakening. And the trading volume was not too high.

Monday will be an interesting day for the stock market in the US (and for all the world, too) - if the stocks will not rebound sharply we might have seen the start of a medium to long term bear market.


Giotto

Nuff Said
07-28-07, 23:12
Yes Monday and Tuesday will be VERY interesting, a lot of my mutual Fund$ too big hits this week.


Interesting development at the US markets during the past few days. Two straight losing sessions, and no real rebound. More selling pressure at the end of last nights session.

Technically the markets look vulnarable now. The S&P 500 index broke throught the 5 year trend support line... and that is not good.

Furthermore disturbing is the market sentiment ... even on a much lower level not many buyers, the investors are obviously nervous (which is basically good). Now this is exactly the scenario where a thunderstorm can develop. No buyers, huge selling volume of all those who still sit on huge unrealized profits, and panic...

Positives: The USD was not weakening. And the trading volume was not too high.

Monday will be an interesting day for the stock market in the US (and for all the world, too) - if the stocks will not rebound sharply we might have seen the start of a medium to long term bear market.

Giotto

Giotto
07-29-07, 01:09
And in case you are unaware the outstanding derivatives segments as per the Bank of International Settlements is close to $400 trillion. Unofficial estimates place it close to $1000 trillion. You wont find these derivatives listed on banks balance sheets.
...Mature Man,

OK, it gets scary now. But I think you should explain why we wont find these derivatives on banks balance sheets, before we seriously go on in this disussion.


Giotto

The Wanderer
07-29-07, 14:33
Been following the recent absorbing and disturbing chain of mails between Mature Man and Giotto. Found the article below which may interest, seems global banks may be facing something of a liquidity crisis.

http://www.bbc.co.uk/blogs/thereporters/robertpeston/2007/07/the_l_word.html

Giotto
07-29-07, 19:13
Been following the recent absorbing and disturbing chain of mails between Mature Man and Giotto. Found the article below which may interest, seems global banks may be facing something of a liquidity crisis.
The Wanderer,

Interesting, thank you. I read a lot about this possibly upcoming liquidity crisis during the past few days.

In USA there is obviously not only this sub-prime crisis, there are also problems in other financing areas, more and more payments are overdue up to 60 days (an indicator used by the FED).

Looks as if a storm appears at the horizon.


Giotto

Giotto
08-03-07, 15:59
OK, what now, the earthquake over, or the worst still to come?

Opinions, please.


Giotto

Giotto
08-04-07, 14:32
...
What you will shortly see is an avereseness to buying fresh debt and funding fresh debt. This should be the precursor to further problems.
...Dear Mr. Mature Man,

Good. As you predicted we are seeing an averseness in buying and funding debts.

I watched the panic selling in the last minutes of the Wall Street session yesterday, after Bear Stearns was downgraded, and then later the comments of its financial director reg. the situation of the fixed-incom market. The S&P 500 broke through the 200 day moving average line, significantly, 95 % of the S%P stocks fell yesterday. Volatility indicators are topping.

Technically the market looks extremely weak now. Fundamentally the financials look weak too, but the rest of the market still looks ok. Earning reports for the last quarter were above expectations.

Now I would like to hear your opinion. What is next?


Giotto

The Wanderer
08-04-07, 17:01
Dear Mr. Mature Man,

Good. As you predicted we are seeing an averseness in buying and funding debts.

I watched the panic selling in the last minutes of the Wall Street session yesterday, after Bear Stearns was downgraded, and then later the comments of its financial director reg. the situation of the fixed-incom market. The S&P 500 broke through the 200 day moving average line, significantly, 95 % of the S%P stocks fell yesterday. Volatility indicators are topping.

Technically the market looks extremely weak now. Fundamentally the financials look weak too, but the rest of the market still looks ok. Earning reports for the last quarter were above expectations.

Now I would like to hear your opinion. What is next?


Giotto


I'm also interested in Mature Man's opinion.

I think share prices still have a long way to go.....down. We are seeing one ofthe biggest bubbles ever in credit, liquidity is a huge issue for US and global banks. My view is: the only thing thig that is propping up wall street is the weakness of the Dollar.

Mature Man
08-06-07, 00:13
Hi Dr.G and the Wanderer,

So many things will happen. It's difficult to say in which order things occur.
There is no person who can forecast the order of things to come.
Todays financial markets have no parallel. Those worthless greenbacks are floating all over the world with people and governments still attributing value to them. People have bought American dollar debt too at higly overrated values. When they will come to their senses, one cant say.
The markets will be volatile. Fresh funds may come in but will take a beating as those who are in will get a chance to get out.
We are just on the fringes of the first phase of the collapse. A long long way to go.

A few of my rantings for the average person for what they are worth.
1) When fresh debt is not being bought it means money becomes tight. When money becomes tight each one in turn tries to encash their investments, stocks. bonds, real estate etc. Banks and financial institutions will start calling in on their debts at the first sign of default- each trying to beat the other lender.
2) When money becomes tight those who are leveraged will have to close their positions or else the banks and lenders will do it for them anyway.
3) With the dollar depreciation most companies in Asia will find their bottom lines turning red from black and facing payments on their loans.This will necessarily impact employment and salaries in those places and will tell on their economies.
4) Trillions of dollars will vanish into thin air and business and bank failures will result.
5) American debt is now spread all over this world. Foreign treasuries holding dollars have been loosing and will continue to loose. The stupidity of holding dollar reserves trying to show their strengths will end up in some governments changing. Funny thing is that the US foreign exchange reserves is shown as less than $70 billion each month when the trade deficits are slightly less. The fact is when the money ( inflow does not come in- required amount $3 billion each day- to take care of the deficit) they just print it out. It's a monopoly game in which the monopoly owner alone has the right to print.
6) Countries and companies who have earned money and loose their savings and their markets , will rethink on the globalisation. When one really stops and thinks - It has been the globalisation of the US dollar and US debt. The world has extended a line of credit to the US which in turn uses it against them on a so called war against terror and to fund their own citizens. There are no funds for the US Govt to tap from its own citizens for the American savings rate is nil compared to the 20 to 40% savings rate in Japan,India, China etc.
Globalisation will be reworked between different countries and in different ways. Barters systems, a mix of currencies depending on their imports etc will be the order of the day.
7) Those countries having their own huge markets like China, India, Brazil etc will be better off than the smaller ones
8) The Euro may break up as it will be virtually impossible for all the countries in the EU to maintain the fiscal requirements as per the euro norms given their enormous disparities and that each country will have to protect its own citizens.

If war does break out in the Middle East , anytime in the next few months, the changes will be impossible to predict. A financial disaster is absolutely sure but the environmental damages caused will be something unimaginable.My humble opinion is that it will . The stakes have now become too high for the US administration .


Sorry , if i am sounding like a Cassandra. The fact is in todays world we have no real statesman. Every country's leader and political system is run by businessmen ( theirs and outside ) and money is the only thing on their mind. Their brains are limited and so are their goals. Like wild dogs in a pack they act together and when one falls they devour the fallen one and move on.





Dear Mr. Mature Man,

Good. As you predicted we are seeing an averseness in buying and funding debts.

I watched the panic selling in the last minutes of the Wall Street session yesterday, after Bear Stearns was downgraded, and then later the comments of its financial director reg. the situation of the fixed-incom market. The S&P 500 broke through the 200 day moving average line, significantly, 95 % of the S%P stocks fell yesterday. Volatility indicators are topping.

Technically the market looks extremely weak now. Fundamentally the financials look weak too, but the rest of the market still looks ok. Earning reports for the last quarter were above expectations.

Now I would like to hear your opinion. What is next?


Giotto

Giotto
08-07-07, 07:20
...
1) When fresh debt is not being bought it means money becomes tight. When money becomes tight each one in turn tries to encash their investments, stocks. bonds, real estate etc. Banks and financial institutions will start calling in on their debts at the first sign of default- each trying to beat the other lender.
2) When money becomes tight those who are leveraged will have to close their positions or else the banks and lenders will do it for them anyway.
3) With the dollar depreciation most companies in Asia will find their bottom lines turning red from black and facing payments on their loans.This will necessarily impact employment and salaries in those places and will tell on their economies.
4) Trillions of dollars will vanish into thin air and business and bank failures will result.
...
If war does break out in the Middle East , anytime in the next few months, the changes will be impossible to predict. A financial disaster is absolutely sure but the environmental damages caused will be something unimaginable.My humble opinion is that it will . The stakes have now become too high for the US administration .
...
Mature Man,

Thanks for your report, interesting.

I can follow your thoughts to a certain extend, but not all the way down into the End-Of-The-World scenario. I think that we will see some further market turbulances to inprise the actual subprime/credit problems in the US. The markets will be volatile, and we might see lower levels at NYSE than we have seen up to now.

The impact of the subprime problem for Asia is limited, though I see a huge problem in the Japanese low yield policy and all the carry trade transactions and obligations. This could cause problems for the Asian markets.

War in the middle easy - I find that highly unlikely. Whenever I talk to US army personal they talk about the US Army being spread about so many places right now, that there is only very limited option to accumulate the troups for any new "battlefields"...

Let's wait, and hope that you are wrong :) .


Giotto

Mature Man
08-07-07, 13:13
The sub prime loans are only a part of it. The funds raised to arrange for mergers, buyouts etc have huge debt components . The collateral has been over valued several times over to justify these loans. These loans are spread too all over the East. And these loans are subject to currency risks.
I have not spoken of the End-of-the-World scenario. I have only said that we could be in for terrible times ahead if the war in the middle East occurs.

The carry trade will boomerang as the dollar collapses.If the Fed reduces the interest rate today the markets will move up temporarily but the dollar will move down. If the reverse, the markets markets will crash and the dollar may have a very temporary reprieve. If no change, the dollar will anyway carry its downward march.

And as for the US army personnel knowledge, it's something i would say thats akin to the Enron personnel before Enron crashed. They dont have a clue.
Most of these guys wouldnt know how many bases they have in the first place. FYI, the US has more than 6000 miltary bases in the world and they have bases in 132 countries. At the last count their were 192 countires in the UN to my knowledge. I dont think these guys can count beyond their fingers anyway. If they even stop to ask the Veterans about the after (joining), fore they join up, there wouldnt be many troops left. If they check about the DU and what it has done to the troops they would stay at home.

And besides the war in the middle east, if it comes , will not need troops. It will be a nuke attack and thats why i said the devastation is incalculable.





Mature Man,

Thanks for your report, interesting.

I can follow your thoughts to a certain extend, but not all the way down into the End-Of-The-World scenario. I think that we will see some further market turbulances to inprise the actual subprime/credit problems in the US. The markets will be volatile, and we might see lower levels at NYSE than we have seen up to now.

The impact of the subprime problem for Asia is limited, though I see a huge problem in the Japanese low yield policy and all the carry trade transactions and obligations. This could cause problems for the Asian markets.

War in the middle easy - I find that highly unlikely. Whenever I talk to US army personal they talk about the US Army being spread about so many places right now, that there is only very limited option to accumulate the troups for any new "battlefields"...

Let's wait, and hope that you are wrong :) .


Giotto

Giotto
08-07-07, 18:40
The sub prime loans are only a part of it. The funds raised to arrange for mergers, buyouts etc have huge debt components . The collateral has been over valued several times over to justify these loans. These loans are spread too all over the East. And these loans are subject to currency risks.
I have not spoken of the End-of-the-World scenario. I have only said that we could be in for terrible times ahead if the war in the middle East occurs.

The carry trade will boomerang as the dollar collapses.If the Fed reduces the interest rate today the markets will move up temporarily but the dollar will move down. If the reverse, the markets markets will crash and the dollar may have a very temporary reprieve. If no change, the dollar will anyway carry its downward march.

And as for the US army personnel knowledge, it's something i would say thats akin to the Enron personnel before Enron crashed. They dont have a clue.
Most of these guys wouldnt know how many bases they have in the first place. FYI, the US has more than 6000 miltary bases in the world and they have bases in 132 countries. At the last count their were 192 countires in the UN to my knowledge. I dont think these guys can count beyond their fingers anyway. If they even stop to ask the Veterans about the after (joining), fore they join up, there wouldnt be many troops left. If they check about the DU and what it has done to the troops they would stay at home.

And besides the war in the middle east, if it comes , will not need troops. It will be a nuke attack and thats why i said the devastation is incalculable.Mature Man,

Let me try to point out on what of your scenarios I can agree.

I first agree that the sub-prime problem is only part of the credit problem, and I think a smaller part of it. That will not hurt the markets much more than it already has.

I also agree that the carry trade will cause major problems for the dollar when the funds have to be returned to Japan.

Then I think that the most stupid thing the FED could do today would be to reduce the interest rates. Then everybody would think that the problem is much bigger than it is inprised up to now, and another sell-off of stocks would start. They will leave the rates unchanged. Cover and duck.

Whether the US army has enough personal for another war - I don't know. But I have met some very clever guys from the US army.

And if there will be a nuclear attack / war in the middle east we don't have to think about sub-prime problems or interests rates any more. The markets will then crash anyway.


Giotto

The Wanderer
08-10-07, 09:53
Right now Central banks in a number of countries across the world are intervening to support their domestic banking. Yesterday the European Central Bank injected US$130billion to prevent a collapse, today in Asia Australia has put in $4bn, Japan $8bn and in the US the Fed is believed to be doing something similar. I hope these actions work but don’t expect big publicity. In Hong Kong the market fell alarmingly, thankfully Tropical Cyclone PABUK closed trading early.

TGIF as this may bring a halt to a sequence of falls, however, this may be a temporary respite - a shortage of cash and confidence could still cause a global recession.

Giotto
08-10-07, 10:54
Right now Central banks in a number of countries across the world are intervening to support their domestic banking.
...The Wanderer,

Yep, and you saw at Wall Street yesterday, what followed after the activities from the ECB. It's always like this, though it was for sure necessary to do - liquidity for the dried European money market.

How to understand this market reactions, is it a healthy adjustment to all the problem news of the credit market, or the beginning of a panic? Asia rebounded in late trading today.

Interesting to watch what is going on.


Giotto

The Wanderer
08-11-07, 09:26
The Wanderer,

How to understand this market reactions, is it a healthy adjustment to all the problem news of the credit market, or the beginning of a panic?

Giotto

Completely agree, and I wish I knew! Been tracking some UK bank stock - down between 14 - 17% in the last three weeks. Doing the same with some HK stocks, though the falls there are not as significant, possibly as they are being protected by a weak Currency.

The question I am trying to understand is: at what point in the cycle are we? Have share prices reached a point where the entry price makes the risk worthwhile. This now seems to have become a political problem; you are right next week will be very interesting.

Brain666
08-11-07, 11:00
Neither I can claim to know.

However the US house market situation reminds me drastically to the Japanese overheated house market 10-12 years ago.

Therefore I don't see that we have yet reached the bottom of the ice mountain.
As some Wall Street guy said, surprised about the more then expected liquidity injection of the ECB: What do they know what we don't know?

Anyhow I will not invest right now. Lucky wise (thanks my working nose this time :D probably tuned by well smelling Thai pussies - Miss J?), I made some of my paper wins of the last 3 years stock rise to real money about 3 months ago and spent a little from that in return non recurring with Thai girls ;).

Will follow the scenery however.
Thanks Miss J :) sharpening the nose.

Regards

Brain666

Mature Man
08-13-07, 04:08
An extract that provides an explanation for the coming further drop ( next phase)
Most people are not aware that one has to give a notice period for withdrawal from a hedge fund unlike a mutual fund.
One more thing , you will find hedge funds exiting the US market for they have to pay off debt before the dollar depreciates further- the yen carry trade is there in the background.
The Central government banks have given a chance for those who are in to exit by ( approx $62 billion by the Fed and 65 billion euros by the ECB). As said in an earlier this is a golden opportunity being given and even possibly with the message to those in the know to bail out now.
In my opinion expect at least a 15% drop in dollar value over the next few months. The Chinese do not have to revalue the Yuan. The dollar will do it for them.


August 15 is an important day for many hedge funds across the world.

This is how it works - If you want to withdraw money from hedge funds, a 45 day notice period is required in which the application can be submitted. So, for the July quarter, July 1 to August 15 is the application period to withdraw serious money from a hedge fund. Also, post August 15 will probably see people queuing up for redemptions in hedge funds. This may lead to a ``cascading liquidity withdrawal`` syndrome across emerging markets. That has not happened yet, but if it does, the stock prices can be under selling pressure across markets where funds have been invested. There could be a lot of jitters in the overall hedge fund universe, leading to contraction and pulling out of liquidity.





Completely agree, and I wish I knew! Been tracking some UK bank stock - down between 14 - 17% in the last three weeks. Doing the same with some HK stocks, though the falls there are not as significant, possibly as they are being protected by a weak Currency.

The question I am trying to understand is: at what point in the cycle are we? Have share prices reached a point where the entry price makes the risk worthwhile. This now seems to have become a political problem; you are right next week will be very interesting.

Giotto
08-13-07, 06:06
An extract that provides an explanation for the coming further drop ( next phase)
Most people are not aware that one has to give a notice period for withdrawal from a hedge fund unlike a mutual fund.
One more thing , you will find hedge funds exiting the US market for they have to pay off debt before the dollar depreciates further- the yen carry trade is there in the background.
...
Mature Man,

I see that risk, but especially if we talk about hedge funds it can work the other way around, too.

Hedge funds are known to hedge their investments. Many of them are selling the markets short, being long in either assets or derivatives (historically because of the ongoing hausse of the past few years). Even if money is withdrawn from those funds the question is which positions a fund will liquidate to provide the cash for the refunds. If they liquidate the short positions because of the profits in there it might turn the market around (short squeeze).

I see the problem coming from the ordinary investment and mutual funds. It started already on friday, of course from Germany (those investors always show a high risk averseness), when the Deutsche Bank reported that some of their investment funds had lost up to 30 % of their value without being involved in subprime loans of the credit market in general. People having invested their savings in funds getting all the news about the troubled markets in the moment, and decide that they pull their money out as long as they are still in the profit zone... And that will force the fund managers to sell stocks in a larger scale.

Everything is possible at the moment, I really don't want to predict how all this will end.


Giotto

Giotto
08-13-07, 06:28
Some more troubled funds:

http://www.bloomberg.com/apps/news?pid=20601087&sid=aZ1P4QKP8Mbg&refer=home


Giotto

Mature Man
08-13-07, 11:06
Scams galore are taking place. I came to understand that when the owner takes a mortgage on the house in the US, he signs 3 sets of documents, one for himself, one for the mortgager and one for the insurer. Apparently using these 2 sets further discounting takes place.In effect one property is hypothecated twice to gain financial leverage.
Not to mention that after discounting the fresh funds have been re employed to repeat. The exposure therefore is very very considerable.

By the way hedge funds dont limit themselves to investing only with the funds available with them. They leverage these funds to borrow and invest more. And they speculate on margins too. So the exposure is not possible to quantify.

The investment grade corporate bond market has ground to a virtual halt making it difficult for companies to access capital and hard for investors to find a place to put their money to work. For July, corporate bond issuance was down 77% from June.” (“Corporate Bond Market has come to a Standstill”, Wall Street Journal) .

In my opinion there is every chance of a major blow out over the next 2 weeks which could be set off by another major terrorist incident and or war.The 2 in conjunction could cause a real financial disaster. All central Governments in each country can wash off their hands on a financial disaster attibuting the collapse to that incident.

I know, you will tell me my thinking is weird. It will be because you are not aware of the nexus running this world and their objectives.

A "free market" is for the public's consumption. It ain't free at all. And it will be a free for all in the days to come with each wanting out.




Mature Man,

I see that risk, but especially if we talk about hedge funds it can work the other way around, too.

Hedge funds are known to hedge their investments. Many of them are selling the markets short, being long in either assets or derivatives (historically because of the ongoing hausse of the past few years). Even if money is withdrawn from those funds the question is which positions a fund will liquidate to provide the cash for the refunds. If they liquidate the short positions because of the profits in there it might turn the market around (short squeeze).

I see the problem coming from the ordinary investment and mutual funds. It started already on friday, of course from Germany (those investors always show a high risk averseness), when the Deutsche Bank reported that some of their investment funds had lost up to 30 % of their value without being involved in subprime loans of the credit market in general. People having invested their savings in funds getting all the news about the troubled markets in the moment, and decide that they pull their money out as long as they are still in the profit zone... And that will force the fund managers to sell stocks in a larger scale.

Everything is possible at the moment, I really don't want to predict how all this will end.


Giotto

Giotto
08-13-07, 13:03
...
In my opinion there is every chance of a major blow out over the next 2 weeks which could be set off by another major terrorist incident and or war.The 2 in conjunction could cause a real financial disaster. All central Governments in each country can wash off their hands on a financial disaster attibuting the collapse to that incident.

I know, you will tell me my thinking is weird. It will be because you are not aware of the nexus running this world and their objectives.
...
Mature Man,

Come on, man, do we really need the help of a terrorist attack or a war to crash the markets? Is it not possible to do that with the actual credit crunch?

A terrorist attack, a war - that's too easy, yes, that could give our markets the rest. But the interesting question is: Can the markets deal with the actual liquidity problems, or can that cause a major destaster?



Giotto

Mature Man
08-13-07, 13:42
Just think- If there is only a financial collapse, then Govts become accountable. When it comes with an incident , they have an excuse- to continue to govern you. In times of such distress no one questions the Govt as it would be deemed to be unpatriotic.

As to whether markets can deal with liquidity problems!
Sometimes things play out by themselves depending on the flow of events.
I wouldnt know and i wouldnt care to hazard a guess.





Mature Man,

Come on, man, do we really need the help of a terrorist attack or a war to crash the markets? Is it not possible to do that with the actual credit crunch?

A terrorist attack, a war - that's too easy, yes, that could give our markets the rest. But the interesting question is: Can the markets deal with the actual liquidity problems, or can that cause a major destaster?



Giotto

Giotto
08-14-07, 05:09
Just think- If there is only a financial collapse, then Govts become accountable. When it comes with an incident , they have an excuse- to continue to govern you. In times of such distress no one questions the Govt as it would be deemed to be unpatriotic.

As to whether markets can deal with liquidity problems!
Sometimes things play out by themselves depending on the flow of events.
I wouldnt know and i wouldnt care to hazard a guess.Mature Man,

I understand what you want to tell us.

When I watched the Wall Street yesterday night I could feel the upcoming panic. Whenever the market started to recover the next wave of selling started.

I don't think we need any help from outside, it will get worse this week.


Giotto

Mature Man
08-14-07, 05:48
Yes, G, in times like these. like I mentioned earlier, every time the markets go up it gives some a time to exit and after a while even the strongest of players run out of sources for funds. The ones who have exited sit on the sidelines keeping what they still have and the market volumes drop considerably.
The present scenario is that it is still a long way to go before panic really sets in.The influx of over $350 billion has delayed it.
This money has been lent to banks to fend of financial problems- it is not a freebie. It has to be returned. Wonder how much these lenders will loose eventually- anyway- its tax payers money after all- it doesnt belong to the individuals who make the decision.
And these funds have been lent to stem the financial problems arising out of the sub prime crisis. Not to those who have leveraged their positions on futures ,options and investments in the falling stock market, which may have been closed out for lack of additional capital already.



Mature Man,

I understand what you want to tell us.

When I watched the Wall Street yesterday night I could feel the upcoming panic. Whenever the market started to recover the next wave of selling started.

I don't think we need any help from outside, it will get worse this week.


Giotto

Giotto
08-14-07, 08:29
Yes, G, in times like these. like I mentioned earlier, every time the markets go up it gives some a time to exit and after a while even the strongest of players run out of sources for funds. The ones who have exited sit on the sidelines keeping what they still have and the market volumes drop considerably.
...Mature Man,

what surprises me most is that we heard over the last few years so much about all the liquidity out there still waiting to be invested ... where is all that money gone now when we need it?


Giotto

Mature Man
08-15-07, 01:36
G,
I answered this question yesterday and the reply is missing. Read it in normal mode after the reply too. Am a little worried. Can you please check up?




Mature Man,

what surprises me most is that we heard over the last few years so much about all the liquidity out there still waiting to be invested ... where is all that money gone now when we need it?


Giotto

Giotto
08-15-07, 04:39
G,
I answered this question yesterday and the reply is missing. Read it in normal mode after the reply too. Am a little worried. Can you please check up?Mature Man,

I read that, too, yesterday. But there is not even a deleted report in this thread where your report was yesterday.

BTW: Your second report about eating ducks in the Giotto's Lodge thread is gone, too.

Funny. What happens here?



Giotto

Giotto
08-16-07, 05:05
Things become serious now.

The SET lost 150 points now from its top at 890 to 740 in this moment.

This can be the final sell-out of a correction, and things return to normal afterwards. If not - then Good Night, investors.


Giotto

ArchieLeach
08-16-07, 06:33
Mature Man,

I read that, too, yesterday. But there is not even a deleted report in this thread where your report was yesterday.

BTW: Your second report about eating ducks in the Giotto's Lodge thread is gone, too.

Funny. What happens here?

It's the network of us who are running the world. We do that occasionally to exert our power. Consider it a warning, Mature Man. Please don't make me send the helicopters. ;)

Mature Man
08-16-07, 06:56
Archie,
Helicopters are on their way out. Vaccum cleaners that suck cash are on their way in.
I hope you take the warning



It's the network of us who are running the world. We do that occasionally to exert our power. Consider it a warning, Mature Man. Please don't make me send the helicopters. ;)

Giotto
08-17-07, 11:52
Yesterday - 350 points down in Dow Jones during the session, but at closing time nearly unchanged.

Today Hongkong lost 6 %, panic selling, but closed only 1 % down.

Was that it?

The Thai stock market even closed a few points higher.


Giotto

The Wanderer
08-17-07, 17:01
Yesterday - 350 points down in Dow Jones during the session, but at closing time nearly unchanged.

Today Hongkong lost 6 %, panic selling, but closed only 1 % down.

Was that it?

The Thai stock market even closed a few points higher.


Giotto

The liquidation into cash has moved from the credit market into equities and forex - hence volatility. These are the only encashable assets for redemption by stretched funds etc. as Mature Man warned. I have personally gone back into the HK market in a small way, as I feel some of the Blue chips there are now a good bet. However, I am being very selective on sector, Mainland or US stock seem too a big risk right now.

Incidentally there is a feeling that Mattel product recalls are not simply about quality but opportunities to push back inventory to suppliers. If so on the back of the Wal-Mart announcement, it puts big question marks on the US economy.

ArchieLeach
08-23-07, 01:51
MM,

I don't trust any of the markets much. When crashes come, the only way to survive is to be debt free. Those who are leveraged lose. Those who are debt free survive. And those with piles of cash step in and make even more.

My life's work is to be debt free and not part of "the system" (to the extent possible).

Maybe I hear the rumble of helicopters too. :)

Archie

Giotto
10-02-07, 09:35
Dow Jones closes on record level, just 6 weeks after the credit crunch crises, even though the banks are announcing lower/very low 3rd quarter profits.

The SET is still a bit lame, compared to other Asian stock markets, trading at 854 at this moment.

What is next?


Giotto

Member #3173
10-02-07, 14:54
I have an account with Abn Amro in Haadyai.Do they have a branch in Phuket to buy if I go there?Thanks

Giotto
10-02-07, 16:19
I have an account with Abn Amro in Haadyai.Do they have a branch in Phuket to buy if I go there?ThanksMember #3173,

No idea. Quite sure they have.

Current account? If for the stock market - why you not apply for internet trading?


Giotto

Giotto
11-02-07, 06:40
The SET tried to break through the 910/915 index resistance during the past 10 days, and failed. The upward movement is bascially carried only by the energy sector - most of the other indices don't really support the rising trend.

Wall Street is still fighting with the subprime crisis and expectations of lower growth / may be a recession? The USD in free fall...

Time to invest carefully. Though the Thai market is still cheap, and looks technically good if the resistance at 910/915 can be broken it is a High Risk / High Return market at this moment.


Giotto

NSA Cruzer
11-17-07, 06:18
Hello Gitto and other forum members,

Stumbled across this thread and was interested in reading about your posts on current economic developments. Are you only interested in the Thai economy? Or the more general Asian economy? What info are you looking for so I can share my knowledge?

Thanks,

NSA

Giotto
11-19-07, 05:37
...
Stumbled across this thread and was interested in reading about your posts on current economic developments. Are you only interested in the Thai economy? Or the more general Asian economy? What info are you looking for so I can share my knowledge?
...Nsa Cruzer,

Everybody who lives in Thailand and runs a business is interested in the Thai economy, and of course the Asian economy in general, too.

Now - this is the ISG, and we will not go too much into details. But your opinion about the development of the Thai economy and the stock market is appreciated.


Giotto

Giotto
12-25-07, 06:52
Strong gains at the Thai Stock Market today. Index + 2.33 % after the morning session.

The investors are obviously not too scared of the return of polical unrest in Thailand. That Thaksins politics (and the one we can expect from PPP) was preferred is anyway clear.

Let's wait and see how this will continue.


Giotto

Revcolinn
12-25-07, 09:27
I become more and more impressed with you Dr. G.

Obviously a hotelier of note and world wide noteriety, a wine expert, a well seasoned critique of MP's. Not that you have any personal experience of this and now a financial advisor.

There is a job going at Merill Lynch in Johanessburg. If you have one forward your CV to me and I will claim the head hunting fee if you get the job.

Most impressed. Perhaps you don't have good interpersonal skills. We can't have it all. So do you need a good psychiatrist to help you with the management of the sports bar?

Have a wonderful xmas and a prosperous new year (the astrologer says it will be great for you financially).

See you soon

The rev

Giotto
12-26-07, 05:24
I become more and more impressed with you Dr. G.

Obviously a hotelier of note and world wide noteriety, a wine expert, a well seasoned critique of MP's. Not that you have any personal experience of this and now a financial advisor.

There is a job going at Merill Lynch in Johanessburg. If you have one forward your CV to me and I will claim the head hunting fee if you get the job.
...
Revcolinn,

LOL. ML - no, thanks. This part of my life is definitely finished. I just watch the markets for fun, and my own business.

Wine expert - I don't know either. But, that reminds me that I still have some bottles of Chateau Chalon at home in Germany - most likely now nearly Sherry already :) .

I have such a hard life here, sitting next to the swimming pool (which is now brilliant clear), watching the stock market, drinking a coffee - but then the decisions every day to which massage parlour I should go - it is a hard life!


Giotto

Giotto
01-22-08, 07:44
Looks like we have a lot of trouble at the international stock markets. Yesterday Europe - a crash like scenario, the prices did not even recover after nearly 7 % losses at the end of the session.

Thailand lost nearly 100 points within 3 days. Index 732.44 at the moment.

That does not look good. Wallstreet was closed yesterday, but the future is already down more than 500 points. Still falling.


Giotto

Tiger 888
01-22-08, 12:24
Looks like we have a lot of trouble at the international stock markets. Yesterday Europe - a crash like scenario, the prices did not even recover after nearly 7 % losses at the end of the session.

Thailand lost nearly 100 points within 3 days. Index 732.44 at the moment.

That does not look good. Wallstreet was closed yesterday, but the future is already down more than 500 points. Still falling.


GiottoLooks like a good chance for all those who have been waiting for it.

Giotto
01-22-08, 16:08
Looks like a good chance for all those who have been waiting for it.Tiger 888,

Golden Stock Market Rule: Never catch a falling knife!


Giotto

PS: FED --> Emergency rate cut 0.75 points. Things get crazy.

Revcolinn
01-22-08, 16:25
South african market down 5% in one day.

Just took 3 bar fines off my visit.

What to do oh wise one DR. G.

Take Care see you soon

The Rev

Giotto
01-23-08, 07:21
...
What to do oh wise one DR. G.
...
Revcolinn,

As always - I have no idea. What I feel is that it still makes sense to sell - it can go much deeper down.

Basically the markets are cheap, P/E ratio around 14 (worldwide average). This should limit possible losses. But - what happens if the earnings reports come out negative, and the USA / the world is really entering into a period of low growth or even into a recession? Then the P/E ratio can jump up because of lower earnings, which then causes the next selling wave on the markets.

Furthermore nobody really knows how deep the subprime problem in the USA really goes - especially with all the derivative products based on the housing market segment.

I expect that the markets will rebound in the next days, and the higher prices will then be used from the professionals to start selling again. Still a long way to go.

Again the rule: Never catch a falling knife.


Giotto

Tiger 888
01-23-08, 07:23
Tiger 888,

Golden Stock Market Rule: Never catch a falling knife!


Giotto

PS: FED --> Emergency rate cut 0.75 points. Things get crazy.
I am doing carry trades at present with short USD and JPY Long pound. The knife was falling and the catch not bad. Especially the rate cut helped.

Tiger 888
01-23-08, 07:25
Revcolinn,

As always - I have no idea. What I feel is that it still makes sense to sell - it can go much deeper down.

Basically the markets are cheap, P/E ratio around 14 (worldwide average). This should limit possible losses. But - what happens if the earnings reports come out negative, and the USA / the world is really entering into a period of low growth or even into a recession? Then the P/E ratio can jump up because of lower earnings, which then causes the next selling wave on the markets.

Furthermore nobody really knows how deep the subprime problem in the USA really goes - especially with all the derivative products based on the housing market segment.

I expect that the markets will rebound in the next days, and the higher prices will then be used from the professionals to start selling again. Still a long way to go.

Again the rule: Never catch a falling knife.


GiottoThey say it's too late to sell and too early to buy.

Giotto
01-23-08, 07:52
I am doing carry trades at present with short USD and JPY Long pound. The knife was falling and the catch not bad. Especially the rate cut helped.Tiger 888,

I don't get that - carry trades borrowing USD and putting it into JPY? The difference of interest is still negative then, where is money to be earned? The appreciation of the Yen?


Giotto

Tiger 888
01-23-08, 12:46
Tiger 888,

I don't get that - carry trades borrowing USD and putting it into JPY? The difference of interest is still negative then, where is money to be earned? The appreciation of the Yen?


GiottoBorrowing Yen and USD and putting it into pounds of course.
Therefore short Yen, short USD, long GBP. I have to reread my post to see if I wrote something wrong. I could get pounds at 1.94 USD yesterday. Now we are at 1.953 (even 1.96 for a short time this morning)

Giotto
02-27-08, 08:34
The index is fighting to break the 840 resistance of the SET.

The next days will be interesting.


Giotto

SE Asia Joe
02-27-08, 08:46
Borrowing Yen and USD and putting it into pounds of course.
Therefore short Yen, short USD, long GBP. I have to reread my post to see if I wrote something wrong. I could get pounds at 1.94 USD yesterday. Now we are at 1.953 (even 1.96 for a short time this morning)
As an ex-broker, I know that this "Carry Trade" is profitable for..... ME first and foremost .... as I get to get the commission (Spread) on all these trades!

As such, anytime one of my clients wants to do one of these trades,(usually at the suggestion of his other banker or broker - where he would actually borrow one currency, convert it into another and then depositing the converted currency for interest) I'd just convince him to instead do a straight FORWARD interbank currency trade or even take out a straight IMM commodity contract. This would accomplish the exact same result except that the guy would only pay one spread or one commission.

The key difference is to NEVER actually physically borrow the funds, actually convert it and then actually depositing the converted funds - and this is precisely what a lot of "Bankers" would suggest AND do for their clients.
NOt only does the guy make all sorts of commissions, it is next to impossible for the client to quickly and judiciously "cut Loss" if and when required.
Be careful out there!!
SE Asia Joe

Giotto
02-29-08, 19:25
http://www.bangkokpost.com/breaking_news/breakingnews.php?id=126234


Giotto

Giotto
03-10-08, 05:35
...
And in case you are unaware the outstanding derivatives segments as per the Bank of International Settlements is close to $400 trillion. Unofficial estimates place it close to $1000 trillion. You wont find these derivatives listed on banks balance sheets.
What you will shortly see is an avereseness to buying fresh debt and funding fresh debt. This should be the precursor to further problems.
We have really trouble on the financial markets. This morning I suddenly thought of the sequence of reports from last summer, and this member, who predicted precisely what was going to happen.

Up to now he was right, even with his timing.


Giotto

Giotto
04-13-08, 06:58
Interesting piece, Bangkok Post today.

http://www.bangkokpost.com/Perspective/13Apr2008_pers15.php

Credit Default Swaps:

http://en.wikipedia.org/wiki/Credit_default_swap

We are talking about pocket money:

...
The Bank for International Settlements reported the notional amount on outstanding OTC credit default swaps to be $42.6 trillion[[1]] in June 2007, up from $28.9 trillion in December 2006 ($13.9 trillion in December 2005).

In the US, the Office of the Comptroller of the Currency reported the notional amount on outstanding credit derivatives from 882 reporting banks to be $5.472 trillion at the end of March, 2006.
...

And here the main topic of the article (it is fiction!!!):

...
The president of the bank revealed to his board that he had just discovered that leading market trends - which had risen much faster than expected - were legally forcing the bank to acknowledge that losses on CDS or options contracts did not represent the anticipated 0.1 percent of the theoretical value of the contracts. They did not even represent 1 percent as the executive director of the IMF had said the previous day, but more than 2 percent. For the bank, it meant $3 trillion, an amount two times greater than the value of the bank's assets.
...

Now we remember last Friday, when we got the superb GE first quarter earnings report. That will for sure not have a positive impact on credit ratings ...


Giotto

Mature Man
05-09-08, 04:50
hi g,

just popped in to make a contribution. if someone tells you the dollar will recover or the credit crisis is over ask them to tell you how to make gold from lead.
it appears that the charts cannot be copied on to this report. for seeing them please go to : http://www.marketoracle.co.uk/article4624.html

cheers
mm

the bernanke monetary policy conundrum heading for a crash
economics / economic depression
may 07, 2008 - 05:40 pm

by: mick_phoenix

with the us federal reserve cutting its fed fund rate to 2%, presumably to aid the cost of borrowing and allow an expansion of lending that will lift the us economy from the doldrums you would expect to see an expansion of bank business. not so according to the latest fed's senior loan officer opinion survey which shows that banks are now actively avoiding the expansion of credit and it can be shown are deliberately causing a credit contraction.

this has profound meaning for the us and the wider global economy.

let's look at the evidence. the following 3 charts show the bernanke conundrum as it applies to business. yes, business - its not just consumers getting squeezed:


this is for all business sizes in the april survey, conditions have been tightened, rates have been further increased above the cost that banks incur to borrow and here is the crunch, demand is increasing from business.

how important is this?

very, i mean crash imminent (q2/3) very important. it is clear to see that borrowing conditions for business have not improved even with the fed liquidity/solvency actions and the cutting of rates. around 60% of domestic banks are making it difficult or impossible (likely the latter for all but the highest quality of business) to borrow. in fact conditions for business requiring credit have deteriorated substantially even in the face of a higher demand since the last survey.

why am i worried about a crash?

simply this, notice the increase in demand for loans (third chart above) is a good leading indicator of the direction of the economy and the markets. this is probably a function of using credit to expand business / productivity in anticipation of an acceleration of growth overall.

having said that and looking at the chart above you are probably wondering why i am not saying the good times are just around the next quarter or 2. it would seem foolish to say its different this time.

yes, you guessed it:



this is the same information up to q1 2003, just before the last bull market took off. notice the striking difference? rising demand for loans occurred in a benign environment of looser lending standards and cheap credit as priced by the banks over their borrowing costs (low risk). q2 '03 is even more benign.

the problem for bernanke is made no easier by the same predicament facing consumers:



so as consumer demand picks up do the banks take the business?

no, they do not. loans and credit cards have tightening standards and there is no willingness to allow consumer instalment loans. the bottom of the consumer barrel has been scraped and there is no wish to return for the crumbs.

when compared to the last downturn and recession ('00-'03) you can see how much more difficult it is for consumers to borrow now, compared to then. no consumer and no business borrowing. what's a fed chairman to do eh?

am i saying its different this time?

oh yes, without a doubt. look again at the charts above, focussing on the last quarter of '99. look how lending standards and costs rise as we tipped over into the weakening economy and eventual recession to come, yet lending demand from business contracted. this is the "natural" state of affairs, even back in '90/91 when demand for loans and the price above the banks borrowing costs rose, standards were dropping rapidly, business could borrow, it just cost more.

this is clearly not happening now. we have an environment were business needs to borrow but banks are unwilling or unable to lend.

bernanke's conundrum is simple to see, after all the easing of rates and invention of facilities to enable credit markets to continue and even with the de facto underwriting of the whole fiat monetary system, banks will not lend.

how big a problem is this?

unless business can borrow (either to offset costs, rollover previous borrowing or get ready for expansion) then 1929-33 looms large.

this though is not the final state we have achieved. by now all market participants know that the fed will go to extraordinary lengths to keep the current system operating. the conundrum for bernanke is what can he do to make banks loosen standards and lower costs?

you see, for ben bernanke the current situation isn't "news"

bernanke has already studied the conundrum. i quote from "non-monetary effects of the financial crisis in the propagation of the great depression" as used in "new keynsian economics"(mankiw and romer ch 29):

"an interesting aspect of the general financial crises - most clearly, of the bank failures-was their coincidence in timing with adverse developments in the macroeconomy"

the present paper builds on the friedman-schwartz work by considering a third way in which the financial crises (in which we include debtor bankrupties as well as failures of banks and other lenders) may have affected output".".....because markets for financial claims are incomplete, intermediation between...borrowers and....lenders required nontrivial market making and information gathering".

bernanke then goes on to state that as the real costs of intermediation rose some borrowers found credit to be expensive and difficult to obtain. he then states:

"the effect of this credit squeeze on aggregate demand helped convert the severe.....downturn of 1929-1930 into a protracted depression"

bernanke goes on to identify various problems from the '20s that made the 29-30 downturn, which included the expansion of debt and in 1930 the move by banks out of the loan markets into more liquid instruments. indeed the 1932 national industrial conference board survey of credit conditions reported that the shrinkage of commercial loans in 1931 and the first half of 1932 represented pressure from the banks on customers for repayment and refusal by banks to grant new loans. the worry is that the fed chairman saw no cure better than the one used in the '30s new deal and the large scale intervention of the federal govt:

"home mortgage market...function....was largely due to the direct involvement of the ferderal government....establishing ...fslic...federally chartered savings and loans....government "readjusted" existing debts....and substituted for recalcitrant private institutions in the provision of direct credit. in 1934.....home owners' loan corporation made 71 percent of all mortgage loans extended"

it looks to me that bernanke has already instituted the measures he believes will help avoid a repeat of '29-'33 by delivering the medicine now rather than later. as we have seen earlier in this article, the medicine does not seem to be affecting the patient. credit availability continues to contract due to the policies of banks. ben bernanke now finds himself in a situation where he has delivered all he can to no avail. does he sit back and wait for a change in credit conditions to become apparent or is there more that he can do?

whatever he does, unless lending conditions change markedly and rapidly in this quarter , it will be ineffective. bernanke will no longer have to refer to history to see a deflationary depression, he will be living it.

by mick phoenix
www.caletters.com

Giotto
09-16-08, 03:31
Mature Man,

You predicted the upcoming trouble at the stock markets more than a year ago.

We had enough trouble now - can you please predict the end of it :) ???


Giotto

Mature Man
09-18-08, 06:02
Mature Man,

You predicted the upcoming trouble at the stock markets more than a year ago.

We had enough trouble now - can you please predict the end of it :) ???


Giotto

Thanks for remembering me.

Wish it were so easy to say when or wish all this away.

We are just starting the journey. A long way to go. Like i said no bank trusts another bank and credit/lending will be a very difficult proposition for a long time to come. Most banks are anyway bankrupt. The time bombs are the derivatives.

What is happening is that now institutions like Bearn Stearns, Merril Lynch are being /taken over/merged with banks. The Fed cannot take them over directly. They have to be first ingested by the bank. And then when these banks have a problem the Fed will come their rescue.
In the case of AIG, the world's biggest insurer the Fed had no choice. Pension fund money and AIG's commitment in over 100 countries sealed the fate. Just as Fannie Mae and Freddie Mac whose bonds are held by foreign Govts.
What will happen as a result is since the Fed becomes an endless last resort the value of the dollar should go down and inflation in the US will go up and up.

The funny thing is that those countries which think they have escaped through these actions , if they continue to hold the dollar, will find in the future that the value of their dollar reserves has depreciated equally if not more.

The dollar became stronger recently ostensibly because it was felt that the Euro zone was more suspect to bigger problems (than the US). I don't agree with this theory. To me the Euro zone has sufficient and more savings to weather a depression/recession. The US has no savings and only a negative savings rate. The US is the world's biggest beggar, sorry to state.
Countries with a high savings rate are China, Japan and India.

The US GDP depends on whether their begging bowl is full/half full etc. Spending contributes over 70% of their GDP. If the money does not come in they will have to print their way out. The Weimar experience is well known.

The entire US Empire, it's over 6000 military bases of which over approx 700 are in 134 countries, is funded by savings of other countries by threats, inducements, so called freedom , trade offers etc. History says an army marches on it's belly.
When the money and food run out the empire dies as all empires have.

The dollar became stronger recently IMHO because when the US Treasury bonds are dumped payment has to be made in dollars. So other currencies are sold to buy the dollar to pay off for the bonds. The short term movements can be confusing but the long term future is very clear. The dollar will have to loose value.

Added to this is the very real scenario of the Iran attack. Like Sey Hersh mentioned, Dubya is unlikely to leave this decision to the next Prez.

I am sorry if my comments are not encouraging. The scenario is frightening. There are too many unseens. The US Govt , the banks, the establishment and the media are keeping everything under wraps. Govts in other countries are also keeping the details out for fear of a backlash.

Just be prepared for things to be bad for the next few years and to take things as they come.

Hard cash, cutting down expenditure, paying off loans, etc are necessary to weather the crisis. Holding Gold and or Silver would definitely be helpfull

El Greco
09-18-08, 11:34
Thanks for remembering me.

Wish it were so easy to say when or wish all this away.

We are just starting the journey. A long way to go. Like i said no bank trusts another bank and credit/lending will be a very difficult proposition for a long time to come. Most banks are anyway bankrupt. The time bombs are the derivatives.

What is happening is that now institutions like Bearn Stearns, Merril Lynch are being /taken over/merged with banks. The Fed cannot take them over directly. They have to be first ingested by the bank. And then when these banks have a problem the Fed will come their rescue.
In the case of AIG, the world's biggest insurer the Fed had no choice. Pension fund money and AIG's commitment in over 100 countries sealed the fate. Just as Fannie Mae and Freddie Mac whose bonds are held by foreign Govts.
What will happen as a result is since the Fed becomes an endless last resort the value of the dollar should go down and inflation in the US will go up and up.

The funny thing is that those countries which think they have escaped through these actions , if they continue to hold the dollar, will find in the future that the value of their dollar reserves has depreciated equally if not more.

The dollar became stronger recently ostensibly because it was felt that the Euro zone was more suspect to bigger problems (than the US). I don't agree with this theory. To me the Euro zone has sufficient and more savings to weather a depression/recession. The US has no savings and only a negative savings rate. The US is the world's biggest beggar, sorry to state.
Countries with a high savings rate are China, Japan and India.

The US GDP depends on whether their begging bowl is full/half full etc. Spending contributes over 70% of their GDP. If the money does not come in they will have to print their way out. The Weimar experience is well known.

The entire US Empire, it's over 6000 military bases of which over approx 700 are in 134 countries, is funded by savings of other countries by threats, inducements, so called freedom , trade offers etc. History says an army marches on it's belly.
When the money and food run out the empire dies as all empires have.

The dollar became stronger recently IMHO because when the US Treasury bonds are dumped payment has to be made in dollars. So other currencies are sold to buy the dollar to pay off for the bonds. The short term movements can be confusing but the long term future is very clear. The dollar will have to loose value.

Added to this is the very real scenario of the Iran attack. Like Sey Hersh mentioned, Dubya is unlikely to leave this decision to the next Prez.

I am sorry if my comments are not encouraging. The scenario is frightening. There are too many unseens. The US Govt , the banks, the establishment and the media are keeping everything under wraps. Govts in other countries are also keeping the details out for fear of a backlash.

Just be prepared for things to be bad for the next few years and to take things as they come.

Hard cash, cutting down expenditure, paying off loans, etc are necessary to weather the crisis. Holding Gold and or Silver would definitely be helpfull

Thank you Mature Man very good report. I share same thoughts.

We are only in the begining.

Capitalism at its worst (or should I say best) when USA government has to "nationalise" banks. People paying again, in other words, what yappies are losing.

Giotto
09-19-08, 06:44
Thanks for remembering me.

Wish it were so easy to say when or wish all this away.
...
Mature Man,

Thanks for your report. I agree with most of it...though I don't like it.

Hopefully we can relax now for a few days - we had the classic signals of the end of a bear market, extreme pessimisn, panic selling, caputulation effect, crazy put-call ratios, and the VIX going through the roof - and then yesterday the relief rally, which spreads over Asia right now...and all that because some people from the US Senat inspired by Bernanke and Paulson are now willing to actively tackle the problems of the financials.

I read some joking comments in Asian newspapers in the last few weeks, in which the actual financial crisis was compared the the Asian Financial crisis from 1997/1998. Though this crisis is by far more complex there are some similarities, and the actual plan published yesterday looks pretty close to the way Thailand dealt with the problem 10 years ago. Taken the bad loans and overvalued properties/equities/derivatives/other risk papers out of the banks, to clean up their balance sheets, bundling them in special funds / companies financed with government money and risk capital (that time many banks issued warrents for that, and most of those warrents finally diminished without ever creating any return). So - after more than a year into the crisis the USA, world power No. 1, copies an Asian recepe to fix that problem :) ...

As for the USD - I completely agree with your POV. I have no idea why the Dollar advanced against the other currencies - the argumentation with weaker oil/commodity prices and possible weaker outlook for the European economy does not make any sense to me. The weak USD helped the export in USA a lot, and if this support now breaks away the upcoming recession will even be worse. The FED and other central banks pump billions of USDs into the market, this must create inflation. On the other hand the inter-banking lending is dried up, therefore some dollars are not circulation as fast any more, which can create a deflationary tendency. But - with all the debts and the billions of USD pumped into the market to keep the capital and financial markets going there must be a devaluating impact on the USD on the long term.

First signals are there, and I am very surprised that we don't hear more about it - the credit default swaps on US treasury bonds double within the past 3 days. That means that investors consider the risk of a possible failure of the US government to fulfill their treasury bond obligations to be twice as high as before. Very disturbing signal.


Giotto

Mature Man
09-20-08, 02:22
Mature Man,

Thanks for your report. I agree with most of it...though I don't like it.

Hopefully we can relax now for a few days - we had the classic signals of the end of a bear market, extreme pessimisn, panic selling, caputulation effect, crazy put-call ratios, and the VIX going through the roof - and then yesterday the relief rally, which spreads over Asia right now...and all that because some people from the US Senat inspired by Bernanke and Paulson are now willing to actively tackle the problems of the financials.

I read some joking comments in Asian newspapers in the last few weeks, in which the actual financial crisis was compared the the Asian Financial crisis from 1997/1998. Though this crisis is by far more complex there are some similarities, and the actual plan published yesterday looks pretty close to the way Thailand dealt with the problem 10 years ago. Taken the bad loans and overvalued properties/equities/derivatives/other risk papers out of the banks, to clean up their balance sheets, bundling them in special funds / companies financed with government money and risk capital (that time many banks issued warrents for that, and most of those warrents finally diminished without ever creating any return). So - after more than a year into the crisis the USA, world power No. 1, copies an Asian recepe to fix that problem :) ...

As for the USD - I completely agree with your POV. I have no idea why the Dollar advanced against the other currencies - the argumentation with weaker oil/commodity prices and possible weaker outlook for the European economy does not make any sense to me. The weak USD helped the export in USA a lot, and if this support now breaks away the upcoming recession will even be worse. The FED and other central banks pump billions of USDs into the market, this must create inflation. On the other hand the inter-banking lending is dried up, therefore some dollars are not circulation as fast any more, which can create a deflationary tendency. But - with all the debts and the billions of USD pumped into the market to keep the capital and financial markets going there must be a devaluating impact on the USD on the long term.

First signals are there, and I am very surprised that we don't hear more about it - the credit default swaps on US treasury bonds double within the past 3 days. That means that investors consider the risk of a possible failure of the US government to fulfill their treasury bond obligations to be twice as high as before. Very disturbing signal.


Giotto

Hi G,

An extract from a very recent interview.

These sucker rally's like the one on Thursday followed by yesterday, will tend to take away the remaining bucks that the average man has if he enters the markets afresh.
IMHO one needs to use this as an opportunity to sell out for one can only sell when there are buyers. Very few people today know what a real bear market is.
No volumes and no buying interest. It was Ok for Goldman, Morgan Stanley etc to sell short when they made billions. Now, when on the receiving end they scream " Momma" and "Papa" and the Fed runs in to the rescue using the taxpayers money to bail out their childen and change the rules. The absence of any short covering will ensure volumes drop considerably.

Best Regards
Ajit



http://www.usnews.com/blogs/the-home-front/2008/9/19/ron-paul-this-bailout-wont-be-the-last.html

Ron Paul: This Bailout Won't Be the Last
September 19, 2008 05:35 PM ET | Luke Mullins | Permanent Link

I recently chatted with Rep. Ron Paul (R-Texas) about the gigantic financial bailout that the government is preparing to undertake.

Some excerpts from the interview:

What's your take on this huge financial bailout?
"It's more of the same. More debt and more inflation and more pressure on the dollar. Ultimately, although the markets are responding very favorably at the moment, I think it is going to be devastating to the dollar and to our financial situation in this country."

But don't we need to get these toxic assets off banks' balance sheets?
"Sure, they need to be removed. Somebody needs to suffer the consequences [but] not the taxpayer. Everybody knows that they have to be removed. They are priced too high. The assets don't have real value—some have zero and some have 10 cents on the dollar.

The people who had been making profits for all these years and dealing in all of this debt creation and derivatives—that now is becoming unwound—are claiming that it would be so painful if somebody went bankrupt and therefore we have to put so much burden on the taxpayer and on the dollar because the alternative is worse. But quite frankly, if they destroy the dollar and the dollar system, then they have a much bigger problem that they are going to have to deal with and it would be the collapse of the whole international monetary system—which is conceivable."

So instead of having taxpayers buy the bad debt, the market should take care of it by itself?
"Sure, prices need to go down. Bad debt needs to be eliminated. The taxpayer ought to be protected. Taxes ought to be lowered...We are following the same routine that we did in the Depression, and that is artificially try to keep prices up. People were starving in the Depression and the only thing they did was try to keep wages artificially high and keep food prices high. We are doing the same thing now—we are trying to keep housing prices high. Low prices for houses mean poor people could buy a house. This is the most important part of a free market economy and that is free market pricing. Without free market pricing, the market can't work. And this is in a way a major effort to price fix."

So you think the government should not have bailed out an y companies during this crisis?
"That would have been the best thing. It would have been painful, but housing prices would have come down sharper and faster, and it would have been over by now. But this whole idea of price fixing—that's what they are doing—has been trying to keep housing prices up and trying to stimulate home building. Well, if you have 100 percent more homes than the market really wants, you can't keep prices up and you can't stimulate home building. If the prices go down, then people will go out and buy homes again. So they should allow the liquidation of debt.

Before the Depression, [the government] generally allowed these kinds of problems to unwind. They were very severe. They would last six months or a year—a lot of liquidation of debt would be wiped off the books. And then it would go back to work again. What we've been doing now—especially since 1971—is preventing the real liquidation of the malinvestment and the excess of debt . . . If this process continues, we're going to own General Motors and Ford, then we will have to own the airlines. We are socializing our country without even a vote by the Congress. It's a horrible situation."

Will this bailout stabilize the crisis?
"I personally don't think so. It might be temporary, but no, there is much more involved. I mean, we are talking about trying to unwind trillions of dollars of derivatives . . . You have to get rid of all that stuff."

Will this bailout be the last?
"No, no. This won't be the last one. There will be something else later on. But that doesn't mean you might not have a few months of a reprieve. But it will continue."

Will we have to bail out the auto makers?
"Oh I think so. We are not going to let them fail. Our policy is such that everybody gets bailed out. It's like a drug addict, they've got to take their fix. It's too tough getting off these drugs. And the drug here is easy credit.

Giotto
09-20-08, 06:05
hi g,

an extract from a very recent interview.
...
mature man,

i agree with your thoughts regarding the bear market - not many players have ever experienced a real one, and nobody knows at the moment whether the thursday/friday relief rally is just a short lasting bear market rally - and then the downtrend continues. possible.

i ask myself at the moment what impact all this really has for the usd. i think the recent upwards movement of the usd had to do with the risk aversion of banks to lend money and a very strong reduction of the money circulation speed in the us (don't know whether this english is correct). the fed and other central banks were pumping billions into the market, but despite all that the usd did not weaken further against major currencies.

now we will see another 800 - 1000 billion government debts been added to the market, that should weaken the usd. but - this debts is used to buy "toxic" assets (i like this term), mainly overvalued properties, illiquid derivaties and diverse bundled collaterals. those assets will be kept in the newly founded government agency / fund / company (whatever it might be), until the market conditions get better and they can be sold on the market.

assumed this works:

one main question will be the evaluation of those assets when sold to this new agency. it cannot be the original value - that means that the sellers (banks, insurances, other financial institutes) will have to book further writedowns when selling those assets. the profits of financial institutes will be hurt for several years.

writedowns will also occur in the government agency - most likely later than sooner. the will be a stock of assets which are worthless and cannot be sold at all. on the other hand there will also be properties which can one day be sold with profit, if the property market recovers.

if you now compare that the central banks have already added hundreds of billions of liquidity to the markets in the months before (usd 280 billion only last week) - it had up to now no destabilizing effect on the usd, the usd was even rising in the last few months. why? the only explanation i have is that the circulation speed of the usd is falling sharply.

bundling collaterals and selling them / leveraging properties and other assets has increased the circulation speed dramatically before the financial crisis. many financial institutes were overleveraged and are right now in the process to unwind this. to provide liquidity to speed up this unwinding process gives those institutes the option to stretch this unwinding over a reasonable time period and also stretch the necessary write-downs, that they can financed with the profits of their traditional businesses. to support this unwinding process should further reduce the money circulation speed but keep liquidity in the market to provide credits for private households and businesses - back to the roots of the banking business.

adding then the perspective of an us economy that will not move into a deep recession/depression, tackles its financial problems agressively and offers attractive options for investments could then add a positive sentiment towards the usd.

the question is: will the model succeed?


giotto

SE Asia Joe
09-20-08, 06:25
The following is a Copy and paste from Wikipedia.
The numbers are eye-openers, especially when you consider the amounts per capita.
SEAJ

////
United States public debt
From Wikipedia, the free encyclopedia

The United States total public debt, commonly called the national debt, or U.S. government debt, is the amount of money owed by the United States federal government to creditors (bankers) who hold U.S. debt instruments. Debt held by the public is all federal debt held by states, corporations, individuals, and foreign governments, but does not include intragovernmental debt obligations or debt held for Social Security. Types of securities held by the public include, but are not limited to, Treasury Bills, Notes, Bonds, TIPS, United States Savings Bonds, and State and Local Government Series securities.[1]

As of September 2008, the total U.S. federal debt was approximately $9.7 trillion[2], about $31,700 per capita (that is, per U.S. resident). Of this amount, debt held by the public was roughly $5.3 trillion.[3] If, in addition, unfunded Medicaid, Social Security, Medicare, etc. promises are added, this figure rises to a total of $59.1 trillion.[4] In 2007, the public debt was 36.9 percent of GDP [5], with a total debt of 65.5 percent of GDP.[6] The CIA ranked the total percentage as 26th in the world.[7]

It is important to differentiate between public debt and external debt. The former is the amount owed by the government to its creditors, whether they are nationals or foreigners. The latter is the debt of all sectors of the economy (public and private), owed to foreigners. In the U.S., foreign ownership of the public debt is a significant part of the nation's external debt (see also below). The Bureau of the Public Debt, a division of the United States Department of the Treasury, calculates the amount of money owed by the national government on a daily basis.[8][9][10][11]

The total debt has increased over $500 billion each year since FY 2003, considering both budgeted and non-budgeted spending.[12] The annual US budget deficit declined from $318 billion in 2005 to $162 billion in 2007, but is estimated to increase to $410 billion in 2008.[13] Annual deficits add to the debt. The Congressional Budget Office projects an annual budget surplus by 2012. However, this estimate is based on current law, which assumes sizable tax reductions will expire in 2010.[14] When the U.S. Government has a surplus, it may pay down its outstanding debt by paying back the principal of the outstanding bonds redeemed for payment while not issuing new bonds. The U.S. Government could also purchase its own outstanding securities on the open market if it was searching for a way to use a surplus to reduce outstanding debt that was not due for redemption in a given year.[15][16]

The Government Accountability Office (GAO), Office of Management and Budget (OMB) and the U.S. Treasury Department have warned that debt levels will increase dramatically relative to historical levels, due primarily to mandatory expenditures for programs such as Medicare, Medicaid, Social Security and interest. Mandatory expenditures are projected to exceed federal tax revenues sometime between 2030 and 2040 if reforms are not undertaken. Further, benefits under entitlement programs will exceed government income by over $40 trillion over the next 75 years.[17]The severity of the measures necessary to address this challenge increases the longer such changes are delayed. These organizations have stated that the government's current fiscal path is "unsustainable."[18]

Member #3173
09-20-08, 07:15
Guys, are there any stock picks in the Thai market up to Oct 31 to buy with
a view to dividends? I am from Malaysia so I guess I will have to buy from the Foreign board? My account is with a local broker in Haadyai.
I am in Thailand for 3 months in a year only, so I cannot monitor those stocks
that, well, need monitoring in terms of timing to sell.I buy to keep two to 3
years.Thanks

Fon Tok
09-21-08, 03:18
Here's an interesting website from 2004 that basically outlined some of what has happened to gold prices in the past couple of years:

http://www.lewrockwell.com/north/north326.html

Horatio
10-13-08, 01:26
If I was in Thailand could I take $5000 and invest it in Thailand without going through any United States broker? I am a U.S. citizen. If so would it be a problem to only deal with people who speak Engilsh? That's the only language I know. Also would I need to be aware of any potential problems?

I am not trying to hide money from the U.S. or anything just wanting to get a little more diversified world wide.

Thanks for any help or advice.

Horatio

Giotto
10-13-08, 06:48
If I was in Thailand could I take $5000 and invest it in Thailand without going through any United States broker? I am a U.S. citizen. If so would it be a problem to only deal with people who speak Engilsh? That's the only language I know. Also would I need to be aware of any potential problems?

I am not trying to hide money from the U.S. or anything just wanting to get a little more diversified world wide.

Thanks for any help or advice.

HoratioHoratio,

Yes, you can. You only have to get a confirmation from a bank that the money was transferred legally into the country, don't bring it in cash, they want to be sure about the origin of the money.


Giotto

Giotto
11-20-08, 18:48
Dear God of the World's Markets,

Please, what we need now is:

- a weakening USD for at least some weeks,

- an oil price slightly rising, and not going below 50 USD.

Could you please do that for us?

Thanks in advance.


Giotto

Fon Tok
02-28-09, 20:36
An interesting explanation of what is currently happening in the world (mainly American) financial markets:

http://baselinescenario.com/financial-crisis-for-beginners/

PosterLion
03-05-09, 23:09
citi of the 2nd great depression . . .

PosterLion
03-05-09, 23:13
I've been looking at the S&P 500 today and have noticed some very bizarre things:

The first requirement for a company to enter the ranks of the S&P 500 is a market capitalization of at least $3 billion.

1) The index currently has 140 companies with a market capitalization of less than $3 billion.
2) The bottom nine companies (acas, odp, ddr, jny, mtw, etfc, hban, gnw, and yhc) have a combined market capitalization of $2.999 billion.
3) Autozone (at $8.8 billion) is 8.8 times larger than General Motors at $1.1 billion. It's a joke! Black and Decker is larger than GM today.
4) Western Union at $7.966 billion is bigger than Citibank at $6.188 billion.
5) 53 companies in the S&P are selling for less than $5 per share: (AIG $.36, Etrade $.66, ACAS $.72, Office Depot $.88, Citigroup $.99)

6) The top ten companies in order: Exxon, Wal-Mart, Microsoft, Procter&Gamble, Johnson&Johnson, AT&T, IBM, Chevron, Google, and Coca-Cola. This one scares the shit out of me because it shows just what America has become:

- Our biggest company produces a commodity that we don't possess.
- Our second biggest company sells goods that we don't manufacture.
- Microsoft makes software and that is cool, but the world could function on Linux quite nicely, making Microsoft a not-so-important product.
- P&G and J&J make things to clean your mouth and wipe your ass with
- AT&T supplies the connections for us to talk to each other while we are cleaning our mouths and wiping our asses.
- IBM should survive with its army of Linux professionals.
- Chevron is a ditto with Exxon
- GOOGLE! I can't believe a search engine can make it into the top 10 of the S&P 500. Maybe we can GOOGLE our way out of this mess
- while we are all sitting on our unemployed asses drinking Coca-Cola!

Giotto
03-06-09, 02:51
...
- while we are all sitting on our unemployed asses drinking Coca-Cola!PosterLion,

LOL!

Yes, it looks frightening. Its panic right now - that's not too bad at all. Still the question remaining whether this is a (simple LOL) recession, a depression or a systemic problem of our economy based on a growth philosophy.

Who knows?

Anyway - time for a Citi ... aeehhh, a Cafe Latte.


Giotto

PosterLion
03-06-09, 03:47
she has f-u-c-ked 200 men in ten
states
5 have commited suicide
3 have gone entirely mad.
every time she moves to a new city
10 men follow her.
now she sits on my couch
in a short blue dress
and she seems
quite healthy and chipper
even looks innocent.
"I lose interest in a man,"
she says,
"as soon as he begins to care for me."
I refill her drink
as she pulls her dress up,
shows me her black panties.
"don't these look sexy?" she asks.
I tell her that they do look sexy.
she gets up, walks across the room
through my bedroom and into the bathroom.
soon I hear the toilet flush.
her name is Nana and she has been living on
earth for the past
5,000 years.

PosterLion
03-06-09, 03:58
which I did not write.

inspired the above poem,

which I did . . .

in fact

write! :)

PosterLion
03-06-09, 03:59
She has slept with twenty men
in ten days
and
of those twenty
one in ten
will send her money
via Western Union

now she sits on my bed
smoking a cigarette
talking to some poor bastard on her hand phone
while I pour two glasses of Sang Som
over ice

she begins to speak in a loud voice
“Why are you calling me? I told you I’m at my friends house. Don’t you trust me?”
I walk over to the bed and offer her one of the
drinks

she gives me the phone and motions for me to listen
so I listen
a guy is crying and saying
“I’m sorry baby. I’m sorry.”

I hand her the phone and she puts it to her ear
smiling
she lifts her glass and I lift mine
it’s a funny way to have a first drink

she asks him if he wants to talk with her friend and pauses
knowing he’ll say
no
it’s okay

I marvel at the bluff she’s running
as I contemplate the destructive force of the atomic bomb
versus
how many will die or have died
over her

she hangs up the phone and smiles at me
“Are you ready?”
I nod my head and she gets up to take a shower

I hear the water running as I think about the bombs that fell
on Hiroshima and Nagasaki

soon she will walk out of the bathroom
like insanity in a bath towel
the worm will slip the hole and we’ll both take a piece
from each other

she will leave with the morning light and I will smell what’s left
of her
on my pillow

her name was Nana and she’s been alive
on this earth
for ten thousand years.

Giotto
03-06-09, 04:38
PosterLion,

You are a crazy man :).

Am an only crying if I think about the stock market...


Giotto

Lustforthrust
04-06-09, 21:44
some poster had described in detail the manner in which foreigners could invest in the thai stock-market with all the details of the pricing mechanism of the foreign-owned stocks and how it relates to the thai-owned stocks of teh same company. that post seems to have vanished.

from what i recall the dividends were in the high teens and the recent rally has peeked my interest in these. ayone have information on this?

Giotto
04-13-09, 03:53
some poster had described in detail the manner in which foreigners could invest in the thai stock-market with all the details of the pricing mechanism of the foreign-owned stocks and how it relates to the thai-owned stocks of teh same company. that post seems to have vanished.

from what i recall the dividends were in the high teens and the recent rally has peeked my interest in these. ayone have information on this?lustforthrust,

right, the poster has deleted his report - i don't know why. it was a good report.

i would strongly recommend not to invest in thai stocks at the moment. the political situation must be sorted out first.


giotto

PosterLion
06-05-09, 19:50
Hey G,

Here's the general make-up of my current portfolio. My biggest position is the short on the 30 year bond. It made the month of May feel like i never wanted it to go away.

What are your longs and shorts these days?

I am really thinking I need to make a trip to LOS soon. What is the current status of life there?

Thanks in advance and take care of yourself!

poster . . .

- Short the 30 year US Treasury Bond (established position mid-April)

- Long the Dollar (established position this week)

- Long Natural Gas (established position this week)

- Long Heating Oil, Crude Oil, Gold, Aluminum, Corn, and Wheat (established position Nov. 2008)

- Long Singapore, Taiwan, Hong Kong, Australia, and most of the remaining emerging Markets (established position Nov. 2008)

P.S. apologies in advance to those that disagree with the term "emerging markets" as a description of their respective country. It's just what we call them here in Oklahoma as a matter of convention. I reckon us Okies will be calling ourselves "a resident of an emerging market", in good time. :)

Giotto
06-08-09, 04:19
Hey G,

Here's the general make-up of my current portfolio. My biggest position is the short on the 30 year bond. It made the month of May feel like i never wanted it to go away.

What are your longs and shorts these days?

I am really thinking I need to make a trip to LOS soon. What is the current status of life there?

Thanks in advance and take care of yourself!

poster . . .

- Short the 30 year US Treasury Bond (established position mid-April)

- Long the Dollar (established position this week)

- Long Natural Gas (established position this week)

- Long Heating Oil, Crude Oil, Gold, Aluminum, Corn, and Wheat (established position Nov. 2008)

- Long Singapore, Taiwan, Hong Kong, Australia, and most of the remaining emerging Markets (established position Nov. 2008)

P.S. apologies in advance to those that disagree with the term "emerging markets" as a description of their respective country. It's just what we call them here in Oklahoma as a matter of convention. I reckon us Okies will be calling ourselves "a resident of an emerging market", in good time. :)Hi, Poster,

Nice portfolio. Especially the short position on the US T-Bonds. I looked for an option to do the same, but I did not find any appropriate papers for private investors to short the T-Bonds. Let me know how you managed to do that.

I basically agree with all investments except the US $ long position. And I would add some South American emerging markets to my portfolio.

US $ - difficult at the moment. On the medium to longer term I would expect the US $ to fall and fall and fall ... short term it was oversold and had to technically react on the strong GBP and Euro rally.

If the US $ rallies this will have a negative impact on the stock markets again. And it will only happen if Oil starts to pull back. That will only happen if the expectations becomes stronger that we are NOT through the recession, and that we might get a W shaped recesion/recovery. If that happens you might want to be in the US $, but not in commodities and stocks.

I personally don't believe in the V shaped recession/recovery we are right now pricing in at all markets.

C U .


Giotto

PosterLion
06-09-09, 14:54
Hi, Poster,

Nice portfolio. Especially the short position on the US T-Bonds. I looked for an option to do the same, but I did not find any appropriate papers for private investors to short the T-Bonds. Let me know how you managed to do that.

I basically agree with all investments except the US $ long position. And I would add some South American emerging markets to my portfolio.

US $ - difficult at the moment. On the medium to longer term I would expect the US $ to fall and fall and fall ... short term it was oversold and had to technically react on the strong GBP and Euro rally.

If the US $ rallies this will have a negative impact on the stock markets again. And it will only happen if Oil starts to pull back. That will only happen if the expectations becomes stronger that we are NOT through the recession, and that we might get a W shaped recesion/recovery. If that happens you might want to be in the US $, but not in commodities and stocks.

I personally don't believe in the V shaped recession/recovery we are right now pricing in at all markets.

C U .


Giotto

The easiest way for me to short the 30 year bond is with the UltraShort 20+ Year Treasury ProShares (TBT). Marc Faber has money in it so it must be good right? :)

It is an ETF that seeks daily investment results, before fees and expenses, which correspond to twice the inverse of the daily performance of the Lehman Brothers 20+ Year U.S. Treasury index. The fund normally invests at least 80% of assets to investments that, in combination, have economic characteristics that are inverse to those of the index. It also typically invests in taking positions in financial instruments, including derivatives that should have similar daily return characteristics as twice the inverse of the index. The fund is nondiversified.

Actually, I am doing all my investments with ETFs these days because they are the easiest way to move in and out of just about any market you can imagine. If I want to invest in South America as you mentioned, there are several ETFs I can use to do that with:

iShares S&P Latin America 40 Index (ILF)
iShares MSCI Chile Investable Mkt Idx (ECH)
iShares MSCI Mexico Investable Mkt Idx (EWW)
iShares MSCI Brazil Index (EWZ).

There are even leveraged long and short funds for these indexes. It's crazy! And that scares me a bit because it seems to me we are about to create an ETF bubble. :)

As far as the dollar goes, I agree with you on the long term, but the Elliot waves say it is time to buy the dollar.

Cheers Mate!

I hope I have the chance to meet up with you soon.

poster

P.S. I see you must be following Bejing. I hear they have been shopping in South America too. :)

PosterLion
06-09-09, 19:06
Dear God of the World's Markets,

Please, what we need now is:

- a weakening USD for at least some weeks,

- an oil price slightly rising, and not going below 50 USD.

Could you please do that for us?

Thanks in advance.


Giotto

You know G . . .

I wonder if you were invested in what you thought the world needed when you made this wish. I hope you were. It was quite a prescient call if you ask me!

poster

Giotto
06-10-09, 17:03
...
As far as the dollar goes, I agree with you on the long term, but the Elliot waves say it is time to buy the dollar.
...
PosterLion,

Elliot or not... get out of the USD!


Giotto

Mature Man
01-02-10, 08:35
Hi G,

WISHING ALL OF YOU THE VERY BEST FOR 2010

Sorry, my sincere apologies for not having written earlier as promised. Have been unable to get down to writing in due to various reasons.

Nothing has really changed on the financial horizon. In fact, it has only become worse with assets being valued at cost and far below their actual worth in bank's balance sheets in connivance with the US authorities since April 25th 2009.

The US Treasury is run by Goldman Sachs and the US Fed by J P Morgan.

There is no real recovery. And what ever QE has been done so far cannot continue at the same pace. Taxes have to go up even as revenue streams are dropping.

Credit is still extremely tight .Corporate lending ( by banks) is at a very low , compared to normal times. Large Commercial Real Estate failures in the US is around the corner. Failure of more big Retail chains is just weeks/months away

I am giving below Denninger's predcitions for 2010. He is one of the few I really respect. People in some parts of the world feel they have been/will be immune to the financial crisis. What they do not realise is the implication of the financial connections/network around the globe. China and India who have never seen a financial crisis or a recession will get to know the implications.Other countries in Asia have undergone such events.

Only one thing that I can add is that I expect major upheavals/events in Jan.
Maybe even a new war front opened up in the middle east - middle Jan.

Mature Man

2010 Predictions from one of the few who call a spade a spade and one who knows his onions.

http://market-ticker.denninger.net/

So with all this said, here's what I believe we're looking at for 2010... ready or not, here it comes!

*
No, this is not a new Bull Market; the market will be lower on December 31st than it is on January 4th, quite possibly by a a hell of a lot. We may not break the March 2009 lows - but I also don't believe for a second we're going back to 1576 on the SPX. Not without the leverage - and we can't get the leverage. I believe we will end the year down from where we begin on January 1st. McHugh calls it "Wave 3 Down"; I call it "aw crap." Either way "irrational exuberance" is back for now but cash flow always wins in the end. I'll be a "generational buyer" of stocks when dividend yields are over 5% and P/Es are in single digits. We didn't get there last year and yet those are the historical metrics that mark true Bear Market bottoms. With that said, I would not be surprised if we hit 1220 on the SPX some time earlier in the year - but it is by no means a lock, contrary to what virtually everyone in the "pundit community" expects (most of which are looking for 1350 or more!)

*
The Long end of the Bond Curve is going to move higher on yields. We have completed a long-term (multi-year) inverted Head and Shoulders pattern. The probability of the targets set by that pattern being achieved is extremely high. The target? 6.9% on the 30 year "long bond" - a rate that puts 30 year mortgage money at least to 7%. This prediction assumes that we do not get a panic-style sell-off in the Stock Market - if we do get one (and I think it's 50/50 on that) then I withdraw this prediction.

*
House prices will fall another ~20% - whether as a consequence of the rate back-up or utter destruction in the markets generally. Sorry folks, the housing mess is not over. The math on this is simple; a $200,000 principal loan at 4.75% for 30 years produces a P&I of $1039.18. That same payment with a rate of 7% produces a principal financed of $157,107.95. If, for whatever reason (engineered or not) the stock market collapses then you get your housing price crash anyway.

*
Banks will "give up" on holding their real estate as rates start to backup and will dump their foreclosure inventories. Why? Because the regulators may let them to play games with alleged "values" when people can get mortgages at 4%, but at 7% there's just no way the numbers work and the fraud becomes too difficult to countenance. There are rumors of major banks dumping hundreds of thousands of homes on the market next year - this is likely the backstory on "why."

*
Credit will not ease for "ordinary people." All the exhortations about "lending more" have been going on now for more than two years yet have gone nowhere. The jawboning will continue but the results will not come, simply because there is no more good collateral left against which to lend. This will in turn lead to.

*
A massive second wave of small business bankruptcies will sweep the nation. We've seen the first part of it. The second will be worse - far worse. With long rates backing up and the 30% credit card sweeping the land those who have relied on credit to operate in the small and mid-sized business world will get relentlessly squeezed. Many will fall.

*
Unemployment will appear to be stabilizing - for a while - but that will prove illusory. We finish 2010 over 10% - no material improvement. If things get real bad we might see 12-14%. Yes, U-3. I won't stick my neck out that far as a prediction but I believe ending the year at or above 10% is a lock.

*
The "revolting" call for last year was early - but not wrong. There will be at least one major coup or other violent overthrow of a government in 2010 tied to economic instability - either directly or via a war it spawns.

*
The states will go to the government well for handouts, they will probably get them, but it won't matter. They'll get some assistance at least, but in the grand scheme of things it doesn't make any difference in a world where long rates are rising precipitously. California and Arizona are in the biggest trouble, with Michigan, New Jersey and New York right behind. The public employee unions will have a kitten but again, it won't matter - that which isn't there isn't there, whether you want it to be or not.

*
A "double dip" will be recognized by the end of the year. Between taxes and rising rates - or an intentionally-detonated stock market to stop the long end of the bond curve going bananas - you can bet on it.

*
China will lose control of their property and plant bubble - with horrible consequences. They're good at the game, but that which can't go on forever won't. I bet it blows up before the end of the year. If so, Australia's property market better watch out - they're levitating on the strength of China's commodity demand and pricing there is California-style.

*
The Canadian Real Estate Market will show signs of cracking - especially in places like Vancouver. They may have another year before it all goes to hell, but the time approaches. Beware.

*
The Fed's games will "leak" and credibility will be shaken severely. There's too much pressure. Something will give, somewhere. Washington DC is too hostile a place for the "hold hands and head for the cliff together" game to work with an election coming up......

*
The Democrats lose big in the House. Time is probably too short for a viable third party to emerge for the midterm elections, and I don't expect the Democrats to lose House control. However, I do expect them to lose their filibuster-proof majority in the Senate, and to lose enough seats in The House to trash their "steamroller" approach to legislation. This might be bullish for the markets late in the year and into 2011 - maybe (divided government is generally good for the markets.)

*
Congress continues to try to spend its way out of the recession - and runs head on into rising rates. Watch the TBAC reports. Those will be your "tell" along with the TIC data.

*
One or more of the PIIGS (Portugal, Ireland, Italy, Greece, Spain) either defaults technically or is forced into austerity by the ECB. Further, Eastern Europe becomes dangerous destabilized. There is a real possibility of outright hostilities in that part of the world next year. Let's hope not. The ECB has a nasty problem on their hands; I have said for quite some time that the Euro is likely to trade at PAR down the road. This year is probably not the year for it, but the cracks in the dam that ultimately could destroy the European Union should become very apparent in 2010.

*
Contrary to virtually EVERY "investment pundit" on the street today return OF capital will once again assert itself as the primary consideration. Sentiment indicators as of 12/31, along with 52-week highs, all are at levels that have been associated with tops on a historical basis. Treasury has to issue $2.5 trillion this year, while we all cheered when they issued $1.5 trillion last year - and got away with it. China has housing trading at 80x average incomes, Australia and parts of Canada have housing markets at 10x or more average incomes and the banksters and "investors" alike appear to have learned nothing, with "reaching for yield" coming back in force. Ponzi ponzi ponzi! Add to this geopolitical event risk and things get interesting. That which can't continue forever won't - we merely argue over timing, not outcome. I'll lay the marker on one or more of these timers reaching zero in 2010.

Giotto
01-05-10, 08:21
Hi G,

WISHING ALL OF YOU THE VERY BEST FOR 2010

Sorry, my sincere apologies for not having written earlier as promised. Have been unable to get down to writing in due to various reasons.
...
Mature Man,

All the best for 2010 to you, to. And many thanks for your report below.

I agree on many points mentioned in the post. But I see the danger coming from the other side of the world: China.

The US seems to me quite well balanced right now. I expect a surprisingly high growth number for Q4 based on stimulus, cheap money and inventory rebuilding. I also expect some earnings surprises - the season starts next week with the Alcoa results. This should drive the US markets higher for some time.

The treasury and the FED are acting clever right now. There are indications (=words) that stimulus money might be removed, whenever reasonable good economic numbers are published – but in reality that will not be done. They know that the recovery is still weak, and the market still needs the liquidity to move forward. A higher stock market is wanted and needed right now. Indications of possible rate hikes are meant to created an expectation of higher rates to stabilize the USD – but I don’t expect that to really happen. And I also doubt that the demand for treasury bonds will fade away, and significantly higher yields have to be offered – there is so much liquidity out there looking for any kind of return that supply and demand can be balanced. And – if the yields should move up we still have the FED, and they will use the FED to buy more bonds and expand the FEDs balance sheet to keep the yields as low as possible.

The danger is coming from China.

The trade surplus is shrinking. Growth above 7.5 % is needed to only keep the actual workforce employed. This growth generation is done by creating a massive property bubble and adding more [unused] capacity in manufacturing. China is not buying US T-Bonds any more since October 2009, the USDs are not flowing back to the US. Sooner or later China will be forced to even sell parts of their foreign currency reserves to keep the growth going.

We all hear the complains of the central bankers and treasury secretaries about the RMB pegged to the USD. In the past and may be right now the RMB might be artificially undervalued, but in the moment when the bubbles start to burst the pegging is a major problem for China. Even if they have 3 trillion foreign currency reserves (starting to shrink right now) they will need endless amounts of money to defend their currency then. And if their attempt to do so should fail we will see something comparable to what we saw in Thailand in 1997... but in a much larger scale. Good night, China. Hell will break lose then ...

BRIC ... the investment chance of 2009 and 2010? I would be very careful with that. India looks best, because their economic growth is mostly base on domestic demand. Russia – I would not invest a single USD there, a crisis starting in China will immediately jump over. Russia’s economy is solely based on oil and gas exports. Brasil already had a good run – the stock market is valued quiet highly and the currency also rose around 30 % against the USD last year. And capital can move extremely fast in a crisis situation.

Compared to that the situation in the US looks quite stabile to me. That leverage / debts is not rising any more is not that bad. And I am quite sure that this is controlled responsible people in the treasury department and FED – whenever the shrinkage should cause the growth to fade away a new stimulus package will be set up, and the balance sheet of the FED will increase a few hundred billions. Who cares?

Inflation because of printing / generating too much fresh money? Not at all, the deflationary tendencies of the low economic growth rates are much too strong. And the danger coming from China will create demand for the USD as safe haven, so the forces for a weakening USD (money printing) are absorbed by contrary forces that should stabilize the USD. It will move between 1.35 – 1.55 against the Euro.

We will get used to higher P/E ratios in the developed markets. Interest rates will stay low, company earnings should not rise too much, and there is a lot of demand for any return generating stocks or bonds.

Commodity prices? Yep, as long as the world looks ok the prices will move up. When the China bubble burst the commodity prices will experience major losses, too. No safe haven.

As for today – things look great. I think I start to clean up my portfolio and sell ... I don’t know whether the China bubble will burst next week or next month, but I expect that to happen within 2010. And when it bursts ... then it will be too late to sell.

Now – there is one major argument against the described scenario. Some famous economists are writing about this scenario, and many people talk about the Chinese property bubble. Usually bubbles do not burst when people talk about markets being in a bubble situation ... that might drive the prices further up because scared investors (like me) have sold already, and shares/property is moving from weak hands into strong hands. So – all might be good this year, possibly. But – I would not bet on that.

As for your predictions for 2010:

*
No, this is not a new Bull Market; the market will be lower on December 31st than it is on January 4th, quite possibly by a a hell of a lot. We may not break the March 2009 lows...

### I agree.

*
The Long end of the Bond Curve is going to move higher on yields. We have completed a long-term (multi-year) inverted Head and Shoulders pattern. The probability of the targets set by that pattern being achieved is extremely high. The target? 6.9% on the 30 year "long bond" - a rate that puts 30 year mortgage money at least to 7%. This prediction assumes that we do not get a panic-style sell-off in the Stock Market - if we do get one (and I think it's 50/50 on that) then I withdraw this prediction.

### I disagree. The yields will move higher but not much.

*
House prices will fall another ~20% - whether as a consequence of the rate back-up or utter destruction in the markets generally. Sorry folks, the housing mess is not over. ...

### I agree. But those further falling house prices will not cause much damage, it is largely expected by the markets.

*
Banks will "give up" on holding their real estate as rates start to backup and will dump their foreclosure inventories. ...

### I disagree. Banks will be forced by government agencies NOT to crash the housing markets. There are some clever guys working at the treasury.

*
Credit will not ease for "ordinary people." All the exhortations about "lending more" have been going on now for more than two years yet have gone nowhere. The jawboning will continue but the results will not come, simply because there is no more good collateral left against which to lend. This will in turn lead to.

### Hmmm, not sure. I agree that there is collateral problem, but there is also the necessity to start credit going again. You will see government programs which provide the necessary collaterals to banks to get credit going.

*
A massive second wave of small business bankruptcies will sweep the nation. We've seen the first part of it. The second will be worse - far worse. With long rates backing up and the 30% credit card sweeping the land those who have relied on credit to operate in the small and mid-sized business world will get relentlessly squeezed. Many will fall.

### I agree.

*
Unemployment will appear to be stabilizing - for a while - but that will prove illusory. We finish 2010 over 10% - no material improvement. If things get real bad we might see 12-14%. Yes, U-3. I won't stick my neck out that far as a prediction but I believe ending the year at or above 10% is a lock.

### I agree.

*
The "revolting" call for last year was early - but not wrong. There will be at least one major coup or other violent overthrow of a government in 2010 tied to economic instability - either directly or via a war it spawns.

### That’s speculation. Possible. If the bubble in China burst we will see unrest there, for sure. And somewhere in Africa will be a coup – for sure :) .

*
The states will go to the government well for handouts...

### I agree.

*
A "double dip" will be recognized by the end of the year. Between taxes and rising rates - or an intentionally-detonated stock market to stop the long end of the bond curve going bananas - you can bet on it.

### I agree. But we will not see strongly rising rates, as explained above.

*
China will lose control of their property and plant bubble - with horrible consequences. They're good at the game, but that which can't go on forever won't. I bet it blows up before the end of the year. If so, Australia's property market better watch out - they're levitating on the strength of China's commodity demand and pricing there is California-style.

### Here we go – I strongly agree.

*
The Canadian Real Estate Market will show signs of cracking - especially in places like Vancouver. They may have another year before it all goes to hell, but the time approaches. Beware.

### Possible, I don’t know that market.

*
The Fed's games will "leak" and credibility will be shaken severely. There's too much pressure. Something will give, somewhere. Washington DC is too hostile a place for the "hold hands and head for the cliff together" game to work with an election coming up......

### I disagree. The games will go on and work well.

*
The Democrats lose big in the House. ...

### I agree.

*
Congress continues to try to spend its way out of the recession - and runs head on into rising rates. Watch the TBAC reports. Those will be your "tell" along with the TIC data.

### I agree with the spending, not with the rising rates.

*
One or more of the PIIGS (Portugal, Ireland, Italy, Greece, Spain) either defaults technically or is forced into austerity by the ECB. Further, Eastern Europe becomes dangerous destabilized. ...

### I agree. And – we should not forget England ... 1/3 of the government debts is owned already by the Bank of England.

*
Contrary to virtually EVERY "investment pundit" on the street today return OF capital will once again assert itself as the primary consideration. Sentiment indicators as of 12/31, along with 52-week highs, all are at levels that have been associated with tops on a historical basis. Treasury has to issue $2.5 trillion this year, while we all cheered when they issued $1.5 trillion last year - and got away with it. China has housing trading at 80x average incomes, Australia and parts of Canada have housing markets at 10x or more average incomes and the banksters and "investors" alike appear to have learned nothing, with "reaching for yield" coming back in force. Ponzi ponzi ponzi! Add to this geopolitical event risk and things get interesting. That which can't continue forever won't - we merely argue over timing, not outcome. I'll lay the marker on one or more of these timers reaching zero in 2010.

### I agree, that the collapse is only a question of time – it will happen.

Mature Man
01-15-10, 09:54
[quote=giotto]mature man,

all the best for 2010 to you, to. and many thanks for your report below.

i agree on many points mentioned in the post. but i see the danger coming from the other side of the world: china.

the us seems to me quite well balanced right now. i expect a surprisingly high growth number for q4 based on stimulus, cheap money and inventory rebuilding. i also expect some earnings surprises - the season starts next week with the alcoa results. this should drive the us markets higher for some time.


hi g

thanks for your response. yes, china will have surprises as loan and interest defaults loom high.

however,i do not agree with your prognosis for the us.
here is a very nice article which i am mostly in agreement with

m m

america slides deeper into depression as wall street revels
december was the worst month for us unemployment since the great recession began.

by ambrose evans-pritchard

the labour force contracted by 661,000. this did not show up in the headline jobless rate because so many americans dropped out of the system. the broad u6 category of unemployment rose to 17.3pc. that is the one that matters.

wall street rallied. bulls hope that weak jobs data will postpone monetary tightening: a silver lining in every catastrophe, or perhaps a further exhibit of market infantilism.

the home foreclosure guillotine usually drops a year or so after people lose their job, and exhaust their savings. the local sheriff will escort them out of the door, often with some sympathy –– just like the police in 1932, mostly irish catholics who tithed 1pc of their pay for soup kitchens.

realtytrac says defaults and repossessions have been running at over 300,000 a month since february. one million american families lost their homes in the fourth quarter. moody's economy.com expects another 2.4m homes to go this year. taken together, this looks awfully like steinbeck's grapes of wrath.

judges are finding ways to block evictions. one magistrate in minnesota halted a case calling the creditor "harsh, repugnant, shocking and repulsive". we are not far from a de facto moratorium in some areas.

this is how it ended between 1932 and 1934, when half the us states declared moratoria or "farm holidays". such flexibility innoculated america's democracy against the appeal of red unions and coughlin fascists. the home siezures are occurring despite frantic efforts by the obama administration to delay the process.

this policy is entirely justified given the scale of the social crisis. but it also masks the continued rot in the housing market, allows lenders to hide losses, and stores up an ever larger overhang of unsold properties. it takes heroic naivety to think the us housing market has turned the corner (apologies to goldman sachs, as always). the fuse has yet to detonate on the next mortgage bomb, $134bn (£83bn) of "option arm" contracts due to reset violently upwards this year and next.

us house prices have eked out five months of gains on the case-shiller index, but momentum stalled in october in half the cities even before the latest surge of 40 basis points in mortgage rates. karl case (of the index) says prices may sink another 15pc. "if the 2008 and 2009 loans go bad, then we're back where we were before – in a nightmare."

david rosenberg from gluskin sheff said it is remarkable how little traction has been achieved by zero rates and the greatest fiscal blitz of all time. the us economy grew at a 2.2pc rate in the third quarter (entirely due to obama stimulus). this compares to an average of 7.3pc in the first quarter of every recovery since the second world war.

fed hawks are playing with fire by talking up about exit strategies, not for the first time. this is what they did in june 2008. we know what happened three months later. for the record, manufacturing capacity use at 67.2pc, and "auto-buying intentions" are the lowest ever.

the fed's own monetary multiplier crashed to an all-time low of 0.809 in mid-december. commercial paper has shrunk by $280bn ($175bn) in since october. bank credit has been racing down a hair-raising black run since june. it has dropped from $10.844 trillion to $9.013 trillion since november 25. the mzm money supply is contracting at a 3pc annual rate. broad m3 money is contracting at over 5pc.

professor tim congdon from international monetary research said the fed is baking deflation into the pie later this year, and perhaps a double-dip recession. europe is even worse.

this has not stopped an army of commentators is trying to bounce the fed into early rate rises. they accuse ben bernanke of repeating the error of 2004 when the fed waited too long. sometimes you just want to scream. in 2004 there was no housing collapse, unemployment was 5.5pc, banks were in rude good health, and the fed multiplier was 1.73.

how anybody can see imminent inflation in the dying embers of core pce, just 0.1pc in november, is beyond me.

mr rosenberg is asked by clients why wall street does not seem to agree with his grim analysis.

his answer is that this is the same mr market that bought stocks in october 1987 when they were 25pc overvalued on shiller "10-year normalized earnings basis" – exactly as they are today – and bought them at even more overvalued prices in 2007, long after the property crash had begun, bear stearns funds had imploded, and credit had its august heart attack. the stock market has become a lagging indicator. tear up the textbooks.

Zig33
01-25-10, 23:55
The economic forecasts by Giotto and Mature Man are most interesting. My opinions follow: The US stock market is at risk starting soon and going through the spring and again in the fall around the elections. We agree that medium to long term there has to be a (global financial) collapse. Possibly China's bubble burst will be the start. There is just too much increasing US debt. Global trade has been great for global growth but will be interrupted by the pending financial crisis. Hopefully, the world will get through it and come out the other end without too much destruction. It will take years to fully unfold and resolve. Investors should be diversified (currencies and asset types), own some gold, and consider holding some short positions.

Mature Man
02-06-10, 05:58
The economic forecasts by Giotto and Mature Man are most interesting. My opinions follow: The US stock market is at risk starting soon and going through the spring and again in the fall around the elections. We agree that medium to long term there has to be a (global financial) collapse. Possibly China's bubble burst will be the start. There is just too much increasing US debt. Global trade has been great for global growth but will be interrupted by the pending financial crisis. Hopefully, the world will get through it and come out the other end without too much destruction. It will take years to fully unfold and resolve. Investors should be diversified (currencies and asset types), own some gold, and consider holding some short positions.


Hi G & Z

Here's something in China building up which all 3 of us are in agreement. :)

MM


Friday, February 05, 2010

Nonperforming Loans in China Rise to "Trillions of Renminbi"

Inquiring minds are questioning the solvency of the Chinese banking system. Please consider China Defaulting Loans Soar, Insolvency Lawyer Says.

Non-performing loans in China have risen into the “trillions of renminbi” because of poor lending practices, an insolvency lawyer said.

“We work really closely with SASAC, the state-owned enterprise regulator in China, and there are literally trillions and trillions of renminbi of, frankly, defaulting loans already in China that no one is doing anything about,” Neil McDonald, a Hong Kong-based business restructuring and insolvency partner with Lovells LLP, said at an Asia-Pacific Loan Market Association conference yesterday. “At some point there’s going to be a reckoning for that.”

China’s government is tightening controls, including banks’ reserve ratios, to prevent record lending from fueling inflation. The Shanghai office of the China Banking Regulatory Commission warned yesterday that a 10 percent fall in property values would treble the number of delinquent loans in the city. Liu Mingkang, chairman of the CBRC, said Jan. 4 that loans were channeled into stock and property speculation last year, which China has been taking measures to stop. CBRC’s press officer is not immediately available for comment today.

Chinese banks issued a record 9.6 trillion yuan ($1.4 trillion) of new loans last year as part of a 4 trillion yuan stimulus package aimed at bolstering growth through the global financial crisis.

Should property prices fall 10 percent in Shanghai, China’s second-most-expensive property market, the ratio of delinquent mortgages would almost triple for the city’s banks to 1.18 percent, according to the Shanghai branch of the CBRC yesterday, citing a stress test based on Sept. 30 figures. A 30 percent decline would cause the ratio to jump almost fivefold, the agency said.

Fitch Ratings said Dec. 17 that Chinese banks’ capital strength is probably more “strained” than it appears as lenders use more off-balance sheet transactions to make room for loans.

I am amazed at the number of people sucked into the "China Story", about how undervalued the RMB is, and what amazing growth China has. The real story is China is a command economy, printing trillions of RMB, funding numerous apartment complexes, malls, and even entire cities where no one lives.

In centrally planned economies, when the government says lend, banks lend. Supposedly this is "growth". It isn't. One must not mistake Ponzi financing for growth.

The US, led by Hillary Clinton and president Obama, is putting enormous pressure on China to float the RMB, in expectation that it would rise and US exports would soar. I believe that if China floated the RMB on the Forex markets, it might crash.

Mike "Mish" Shedlock
http://globaleconomicanalysis.********.com

Giotto
02-06-10, 11:52
Hi G & Z
...
Mike "Mish" Shedlock
http://globaleconomicanalysis.********.comMature Man,

here the complete link:

http://globaleconomicanalysis.********.com/2010/02/nonperforming-loans-in-china-rise-to.html


Giotto

Giotto
02-06-10, 11:56
Hi G & Z
...
Mike "Mish" Shedlock
http://globaleconomicanalysis.********.comMature Man,

here the complete link:

globaleconomicanalysis.b*l*o*g*s*p*o*t*.com/2010/02/nonperforming-loans-in-china-rise-to.html

Tale out the *s .

Giotto
www.livingstones.co.th

Giotto
02-07-10, 06:04
Mature Man, Zig33,

There are some serious developments ongoing right now, and every investor should watch those things closely.

- Technically the oil price broke through the 200 day moving average and is close to breaking through throught the 50 day moving average.

- The Credit Default Swaps are jumping up, as for 04.02.2010:

--- iTraxx SovX Western Europe Index of credit- default swaps on the debt of 15 governments rose 12.5 basis points to 106.5
--- swaps on Portugal soared 31 basis points to 227
--- contracts on Greece jumped 32.5 basis points to 430
--- contracts on Spain increased 13 to 165.
--- swaps on the Markit CDX North America Investment-Grade Index Series 13, which is linked to 125 companies, jumped 4 basis points to 96.25, the biggest rise in two weeks.

- Technically all major indices broke out (to the downside) of a rising wedges since March 2009. According to Edwards and Magee this indicates the continuation of the primay bear trend, target the previous lows (from March 2009 !!!).

- Record redemptions from emerging market funds in January 2010.

- Yields of the US treasuries fell, but they are still quite high in the perspective of the current economic situation (4.49 % for the 30 Years T-Bond).

- The MSCI world index (stocks) dropped 10 % from the highs of the beginning of January 2010 (http://www.bloomberg.com/apps/quote?ticker=MXWO%3AIND), that means we are technically at least in a correction.

- Psychologically a crash does not happen when everybody expects it. The past few days it could be seen how much fear is in the market after the experience of the 2008/2009 crash - look at the VIX spiking nearly 50 % in 2 days. This is basically good for the markets, weak and fearful investors have already sold.

OK, market technique is a nice additional information toolbox for investment decision making processes - but without fundamental reasons I am not willing to buy such a horror scenario.

Fundamentally:

- China is tightening its credit, higher reserves requests for commercial banks, restrictions for second and third mortgages etc. etc. . That's basically good to avoid a property bubble - at least it reduces the risks.

- The Chinese stock market is not even close to it's all time highs, so the bubble risk is limited right now. Even a shart drop in share prices would not have the dimention of a crash.

- The RMB - a lot of pressure on China to let the RMB float, but as mentioned before and also mentioned in the report below I see the risk of a crash if this happens. If the exports do not rise and the manufacturing overcapacity leads to further price pressure a deadly spiral could evolve. And - though the RMB is pegged to the USD it will be a problem for the Chinese Government to defend their currenct, even with huge foreign reserves.

- The problem of the Euopean goverment budget deficits is right now inpriced - that's basically good, too.

- Emerging markets are not the top favorites of the investors any more. Money will flow back to the US, Japan and Europe (Europe a little bit later, the investors have to digest Greece, Spain, Portugal ...).

- Massive downwards pressure on the Euro - good for European exporters, bad for US multinationals.

- As I wrote before - the US seams to be quite stabile. We get mixed information, the labour market report from last Friday was quite ok, some glimmer of hope in it, some data quite flat. The growth rates of the 4th quarter 2009 high (5.7 % as expected), but background is basically rebuilding inventory, the first quarter 2010 will be worse. We will have to see whether a growth rate above 3 % is sustainable.

- What was mentioned here many times - the US money printing - skyrocketing government debts. I think this number is misused in many discussions and wrongly interpreted. The overall debts of the US is FALLING (!). The first time since the statistics exists this is happening. Falling credit is ONE reason that lead to the deep recession, because demand is missing. But in general it is POSITIVE that the US debts is falling. What happens is a shift of debts from the private sector to the government. The private sector is massively deleveraging in the US.

- If the goverment can keep up this trend, slightly falling total debts but a slightly rising GDP - then something very important was archived, and on the medium to longer term the US market will benefit from that. This is NOT A CRASH scenario for US stocks! We also should not forget that nearly 2 trillion USD were written off by banks during the financial crisis. If the government recreates this 2 trillion somehow (issuing T-Bonds and selling them the the FED :) = money printing) this is basically not [yet] inflationary - it just fills up what was written off before (!).

- btw., a good read is Richard Duncan's "Corruption of Capitalism". Richard Duncan predicted the financial crisis in his book "The Dollar Crisis". In a nutshell he comes to the result that stimulus packages and higher government debts are in this economic situation not the problem - it's about how the money is spent. It should be spent for future oriented investments, alternative engergy, cancer research etc. etc. , to develop now business areas for the US for future economic activities.

I could go on ...

Conclusion:

The US still seams to be stable to me, with a balance of good and bad news. That will keep liquidity in the market ( no early removal of stimulus ), and that should stabilize the American stock markets.

The emerging markets will see a correction, at least 10 - 20 %.

Europe's markets will inprise the debts situations right now, they will be under pressure for some time.

Gold - I never understood the gold hausse, but if I look at the worlds currencies - I don't see an alternative. The USD is strong at the moment, but for how long? The Euro is not an alternative because of the debts problems of many countries. Ireland, Italy, Belgium are not even in the focus right now - but that will happen soon. The British Pound? No, thank you. The Yen - hmm ... not sure, mixed picture, but I don't like the deflationary scenario there. The RMB ? That's a poker game. All this should create a basic upwards trend for Gold - though I find it hard to believe! What the hell can somebody do with gold in a worst case scenario? Eat the bullion?

Commodities/oil - I leave that out for the moment. Write about that later.

Strategy: I still prefer US stocks right now, especially in an environment of a rising USD. It's a liquidity driven market 2009/2010, there are no real alternatives to stocks. Emerging Markets - not at the moment. Gold - yes, 10 % of the portfolio, at least. And a share of Japanese quality stocks.

If

- the oil price falls sharply,
- or the CDSs rise sharply,
- or the US 30 year T-Bond yield rises sharply (above 4,8 or even 5 %),
- or the gold price jumps up in a stable USD environment

THEN I WILL SELL ALL STOCKS WORLDWIDE. But even holding cash will then not help much!


Giotto

Disclaimer: The content on this site is provided as general information only and should not be taken as investment advice... :D

Fon Tok
02-07-10, 07:45
FYI...for interested ISG members.

Fiscal Scare Tactics
By PAUL KRUGMAN, New York Yimes Op-Ed Columnist. February 5, 2010
http://www.nytimes.com/2010/02/05/opinion/05krugman.html?th&emc=th

"These days it’s hard to pick up a newspaper or turn on a news program without encountering stern warnings about the federal budget deficit. The deficit threatens economic recovery, we’re told; it puts American economic stability at risk; it will undermine our influence in the world. These claims generally aren’t stated as opinions, as views held by some analysts but disputed by others. Instead, they’re reported as if they were facts, plain and simple.

Yet they aren’t facts. Many economists take a much calmer view of budget deficits than anything you’ll see on TV. Nor do investors seem unduly concerned: U.S. government bonds continue to find ready buyers, even at historically low interest rates. The long-run budget outlook is problematic, but short-term deficits aren’t — and even the long-term outlook is much less frightening than the public is being led to believe.

So why the sudden ubiquity of deficit scare stories? It isn’t being driven by any actual news. It has been obvious for at least a year that the U.S. government would face an extended period of large deficits, and projections of those deficits haven’t changed much since last summer. Yet the drumbeat of dire fiscal warnings has grown vastly louder.

To me — and I’m not alone in this — the sudden outbreak of deficit hysteria brings back memories of the groupthink that took hold during the run-up to the Iraq war. Now, as then, dubious allegations, not backed by hard evidence, are being reported as if they have been established beyond a shadow of a doubt. Now, as then, much of the political and media establishments have bought into the notion that we must take drastic action quickly, even though there hasn’t been any new information to justify this sudden urgency. Now, as then, those who challenge the prevailing narrative, no matter how strong their case and no matter how solid their background, are being marginalized.

And fear-mongering on the deficit may end up doing as much harm as the fear-mongering on weapons of mass destruction.

Let’s talk for a moment about budget reality. Contrary to what you often hear, the large deficit the federal government is running right now isn’t the result of runaway spending growth. Instead, well more than half of the deficit was caused by the ongoing economic crisis, which has led to a plunge in tax receipts, required federal bailouts of financial institutions, and been met — appropriately — with temporary measures to stimulate growth and support employment.

The point is that running big deficits in the face of the worst economic slump since the 1930s is actually the right thing to do. If anything, deficits should be bigger than they are because the government should be doing more than it is to create jobs.

True, there is a longer-term budget problem. Even a full economic recovery wouldn’t balance the budget, and it probably wouldn’t even reduce the deficit to a permanently sustainable level. So once the economic crisis is past, the U.S. government will have to increase its revenue and control its costs. And in the long run there’s no way to make the budget math work unless something is done about health care costs.

But there’s no reason to panic about budget prospects for the next few years, or even for the next decade. Consider, for example, what the latest budget proposal from the Obama administration says about interest payments on federal debt; according to the projections, a decade from now they’ll have risen to 3.5 percent of G.D.P. How scary is that? It’s about the same as interest costs under the first President Bush.

Why, then, all the hysteria? The answer is politics.

The main difference between last summer, when we were mostly (and appropriately) taking deficits in stride, and the current sense of panic is that deficit fear-mongering has become a key part of Republican political strategy, doing double duty: it damages President Obama’s image even as it cripples his policy agenda. And if the hypocrisy is breathtaking — politicians who voted for budget-busting tax cuts posing as apostles of fiscal rectitude, politicians demonizing attempts to rein in Medicare costs one day (death panels!), then denouncing excessive government spending the next — well, what else is new?

The trouble, however, is that it’s apparently hard for many people to tell the difference between cynical posturing and serious economic argument. And that is having tragic consequences.

For the fact is that thanks to deficit hysteria, Washington now has its priorities all wrong: all the talk is about how to shave a few billion dollars off government spending, while there’s hardly any willingness to tackle mass unemployment. Policy is headed in the wrong direction — and millions of Americans will pay the price."

Mature Man
02-07-10, 08:42
Hi G,

May i state that nothing has changed as far as the solvency of the banks goes. The changed FASB accounting rules ( Apr 25th 2009) that allowed banks to mark their assets/derivatives at cost intead of market value remains in place.
What has happened is that all the muck has been swept under the carpet.
Hey everyone - everything is okay. Here is the stimulus- Hey we have recovered and everything is hunkydory. Wow, we have averted the the collapse ( poo cant be seen)
The muck- bad debt- should have been removed from the scene.
Now it festers, decays and the entire financial room has started to stink.
Right now there are 2 meetings going on. 1) The G7 heads in the Artic and 2) The Heads of Central Banks in Australia.
We are on the cusps of major announcement and possible changes.
By the way the US needs to raise close to $3.5 trillion this year to cover the deficits and replace the short terms notes falling due.
It's good that all of us have an opinion, as the market moves on different opinions.
In my book however, I dont invest in crooked markets as the crooks are the ones behind the moves.

Cheers
MM



Mature Man, Zig33,

There are some serious developments ongoing right now, and every investor should watch those things closely.

- Technically the oil price broke through the 200 day moving average and is close to breaking through throught the 50 day moving average.

- The Credit Default Swaps are jumping up, as for 04.02.2010:

--- iTraxx SovX Western Europe Index of credit- default swaps on the debt of 15 governments rose 12.5 basis points to 106.5
--- swaps on Portugal soared 31 basis points to 227
--- contracts on Greece jumped 32.5 basis points to 430
--- contracts on Spain increased 13 to 165.
--- swaps on the Markit CDX North America Investment-Grade Index Series 13, which is linked to 125 companies, jumped 4 basis points to 96.25, the biggest rise in two weeks.

- Technically all major indices broke out (to the downside) of a rising wedges since March 2009. According to Edwards and Magee this indicates the continuation of the primay bear trend, target the previous lows (from March 2009 !!!).

- Record redemptions from emerging market funds in January 2010.

- Yields of the US treasuries fell, but they are still quite high in the perspective of the current economic situation (4.49 % for the 30 Years T-Bond).

THEN I WILL SELL ALL STOCKS WORLDWIDE. But even holding cash will then not help much!


Giotto

Disclaimer: The content on this site is provided as general information only and should not be taken as investment advice... :D

Giotto
02-07-10, 09:07
Hi G,
...
Cheers
Mature Man,

you were always quite pessimistic ... :) .


...
May i state that nothing has changed as far as the solvency of the banks goes. The changed FASB accounting rules ( Apr 25th 2009) that allowed banks to mark their assets/derivatives at cost intead of market value remains in place.
...
I disagree. The solvency of the banks is much better than end of 2008. But I agree, that the problem is NOT COMPLETELY FIXED yet, and that we have to return to accouting rules forcing the banks to to mark their assets/derivatives at market value.


...
What has happened is that all the muck has been swept under the carpet.
Hey everyone - everything is okay. Here is the stimulus- Hey we have recovered and everything is hunkydory. Wow, we have averted the the collapse ( poo cant be seen)

The muck- bad debt- should have been removed from the scene.
Now it festers, decays and the entire financial room has started to stink.
...
Agreed, some of the muck has been swept under the carpet. But nearly 2 trillion were written off, and more than 1 trillion bought by the FED. Something has happened (!), and Rome was not build in one day, too :) .


...
...
Right now there are 2 meetings going on. 1) The G7 heads in the Artic and 2) The Heads of Central Banks in Australia.
We are on the cusps of major announcement and possible changes.
...
Let's hope for the best, but I don't expect too much from those meetings.


...
...
By the way the US needs to raise close to $3.5 trillion this year to cover the deficits and replace the short terms notes falling due.
...
OK, where is the problem? Still the total US debts is falling (!!!). There is so much liquidity out there! And - if no buyers can be found any more (what I don't expect), the FED will bid for the debts (also to keep the yields down), the balance sheet will grow another few hundred billions - not nice, but it will NOT cause a major problem!

Inflation? In this economic environment with so many deflationary forces? I don't see it.


...
...
In my book however, I dont invest in crooked markets as the crooks are the ones behind the moves.
...
Then - what are you doing with your money? In your crash/inflation scenario cash will be devaluated, too.

Properties? Gold? Oil?



Giotto

Mature Man
02-07-10, 09:11
Hi Fon Tok

I dont agree with Paul Krugman. Of course I am no Nobel candidate at all in the first place

Deficits do matter. And not cleaning up the massive frauds that have taken place does matter. The coop remains in charge of the same foxes( or should i say- criminals!) who are responsible for the mess in the first place.
You dont get the hens- the foxes will till such time as they remain.
If the system had been cleansed and then the stimulus money introduced I would have given some chance to a real recovery taking place.
The chances now in the existing system -IMHO- Zilch



MM


FYI...for interested ISG members.

Fiscal Scare Tactics
By PAUL KRUGMAN, New York Yimes Op-Ed Columnist. February 5, 2010
http://www.nytimes.com/2010/02/05/opinion/05krugman.html?th&emc=th

"These days it’s hard to pick up a newspaper or turn on a news program without encountering stern warnings about the federal budget deficit. The deficit threatens economic recovery, we’re told; it puts American economic stability at risk; it will undermine our influence in the world. These claims generally aren’t stated as opinions, as views held by some analysts but disputed by others. Instead, they’re reported as if they were facts, plain and simple.

. Policy is headed in the wrong direction — and millions of Americans will pay the price."

Mature Man
02-07-10, 09:37
Answers inside G.

:) In life , we live and learn. History will repeat if not taken cognizance off!

Mature Man,

you were always quite pessimistic ... :) .

Not so. Only the last 5 years when i could see where we were leading upto.


I disagree. The solvency of the banks is much better than end of 2008. But I agree, that the problem is NOT COMPLETELY FIXED yet, and that we have to return to accouting rules forcing the banks to to mark their assets/derivatives at market value.

No it is worse now than ever before

Agreed, some of the muck has been swept under the carpet. But nearly 2 trillion were written off, and more than 1 trillion bought by the FED. Something has happened (!), and Rome was not build in one day, too :)

Rome was burnt down and rebuilt. You cannot have a stink under your foundation


Let's hope for the best, but I don't expect too much from those meetings.

OK, where is the problem? Still the total US debts is falling (!!!). There is so much liquidity out there! And - if no buyers can be found any more (what I don't expect), the FED will bid for the debts (also to keep the yields down), the balance sheet will grow another few hundred billions - not nice, but it will NOT cause a major problem!

US Debts falling !!!!! Kindly let me know how? Only consumer debt is falling to my knowledge. The Government debts are piling up.

Inflation? In this economic environment with so many deflationary forces? I don't see it.

Then - what are you doing with your money? In your crash/inflation scenario cash will be devaluated, too.

Properties? Gold? Oil?

Gold - Checked for tungsten content

M M

Giotto
02-07-10, 10:18
...
US Debts falling !!!!! Kindly let me know how? Only consumer debt is falling to my knowledge. The Government debts are piling up.
Hi,

there are different statistics, but one I found in the article that you recommended to read (Denninger) :):) ...

http://market-ticker.denninger.net/archives/2009/12.html

I try to attach the statistic as a picture.


...
Gold - Checked for tungsten content
...
Gold - clear. But what does "checked for tungsten content" mean?

Gold - I will get worried if the gold price rises in a stable USD environment. That does not happen at the moment. The USD was strengthening last week, and the gold price fell. All right, that's how it should be. No panic movements into gold.

I agree to hold gold as a part of the portfolio.


Giotto

Mature Man
02-07-10, 14:56
Hi G

Could'nt find out in that article where debt has reduced.

On Gold checking for for tungsten . The cat came out of the bag last Oct. GATA has been talking about how little actual gold remains in all the Central Bank vaults for some years now.
Here is an interesting article for you.

http://www.kitco.com/ind/willie/feb052010.html

The US$ is being manipulated. How on earth can the dollar show strength based on the Euro's problem! Both are in trouble. Does not mean that one is better than the other. Just means you need an alternative place to park your funds. - which is gold. In any new financial system it is inevitable for Gold to find a place in the basket.

M M


Hi,

there are different statistics, but one I found in the article that you recommended to read (Denninger) :):) ...

http://market-ticker.denninger.net/archives/2009/12.html

I try to attach the statistic as a picture.

Gold - clear. But what does "checked for tungsten content" mean?

Gold - I will get worried if the gold price rises in a stable USD environment. That does not happen at the moment. The USD was strengthening last week, and the gold price fell. All right, that's how it should be. No panic movements into gold.

I agree to hold gold as a part of the portfolio.


Giotto

Giotto
02-07-10, 17:17
...
Could'nt find out in that article where debt has reduced.
...
Mature Man,

here the link again:

http://market-ticker.denninger.net/xxx/2009/12.html

Please replace xxx with "archives".


...
On Gold checking for for tungsten .
...
I don't get it. How to understand tungsten (Wolfram) in this context?


...
The US$ is being manipulated. How on earth can the dollar show strength based on the Euro's problem! Both are in trouble. Does not mean that one is better than the other. Just means you need an alternative place to park your funds. - which is gold. In any new financial system it is inevitable for Gold to find a place in the basket.
...
Nahhh,

I don't buy that the US $ can be manipulated. 3+ trillion turnover each single day ...

Gold - yep, I hear this many times, some central banks have bought in the fourth quarter last year, and some will most likely buy again when the gold price falls to 1000 US $ again. Nevertheless - it does not make sense to me. The gold system is a system of the past, and I don't think it will be reinstated in any financial system of the future.

If somebody explains to me why something is so special with gold compared to other precious metals ... may be I change my mind. Again - I would hold some gold, but I would not solely put my money into gold assuming that it is the only acceptable investment opportunity right now.

I also don't like this crazy predictions of gold prices above US $ 1500/2000 . If predictions like this pop up the hausse is most likely over. We saw that when the Oil price was predicted to reach US $ 250 - 300 in 2007, when it was trading above US $ 140. And then - it started to fall.


Giotto

Mature Man
02-08-10, 05:20
Hi G

The chart is not okay- Hints at leveling off. US Debt has only gone higher. The US Treausry debt has moved up and the ceiling is to move up. Medicare and Social Security adds another $50-60 trillion to it. Then the individual States.

Tungsten has the density/SG as Gold. If tungsten is gold plated, then the product will have the same volume as gold. The Chinese just got some of these gold plated tugsten bars last Oct- ostensibly from London. The media has become very quiet on this by choice.

No fiat currency like the dollar etc has ever lasted more than 200-250 years throughout history. While oil was/ is being manipulated upwards- Gold has been manipulated downwards. Because the powers that be, the politicians do not want to loose the power of the printing press.

When you understand what the trillions of dollars of CDS has done/can do to the financial system you will understand how the dollar can be manipulated.
The world leaders are a bunch of fools or are in cahoots with the cabal who run the Fed ( a private bank) when they follow the US dollar as a reserve currency. We live in a society where most leaders live for themselves.

M M


Mature Man,

here the link again:

http://market-ticker.denninger.net/xxx/2009/12.html

Please replace xxx with "archives".

I don't get it. How to understand tungsten (Wolfram) in this context?

Nahhh,

I don't buy that the US $ can be manipulated. 3+ trillion turnover each single day ...

Gold - yep, I hear this many times, some central banks have bought in the fourth quarter last year, and some will most likely buy again when the gold price falls to 1000 US $ again. Nevertheless - it does not make sense to me. The gold system is a system of the past, and I don't think it will be reinstated in any financial system of the future.

If somebody explains to me why something is so special with gold compared to other precious metals ... may be I change my mind. Again - I would hold some gold, but I would not solely put my money into gold assuming that it is the only acceptable investment opportunity right now.

I also don't like this crazy predictions of gold prices above US $ 1500/2000 . If predictions like this pop up the hausse is most likely over. We saw that when the Oil price was predicted to reach US $ 250 - 300 in 2007, when it was trading above US $ 140. And then - it started to fall.


Giotto

Giotto
02-08-10, 05:44
...

The chart is not okay- Hints at leveling off. US Debt has only gone higher. The US Treausry debt has moved up and the ceiling is to move up. Medicare and Social Security adds another $50-60 trillion to it. Then the individual States.

Tungsten has the density/SG as Gold. If tungsten is gold plated, then the product will have the same volume as gold. The Chinese just got some of these gold plated tugsten bars last Oct- ostensibly from London. The media has become very quiet on this by choice.
...
Mature Man,

Whether the chart is ok or not ... it anyway makes sense to me that we get into such a deep recession if the private sector does not overspend any more and pays back the debts. For that the goverment has to do the opposite to soften the impact of this behaviour change. All this sounds quite logical to me.

As for gold - do you want to indicate that there are faked bullions out there, and that in case that this is true and the papers start writing about it the physical gold price will go through the roof while the paper gold price will drop?


Giotto

Mature Man
02-08-10, 06:00
You still believe in Govts? Those leaders who will not put the perpetrators of the todays financial woes behind bars! Those who change the accounting rules so that the frauds continue!! Those who are selling you a mirage!!!

The individual is tapped out for money. The behavioral change is that the individual now needs to look after himself- not his Govt.

Yes- shortly physical gold will command a much higher price to the paper ETF's etc.

M M



Mature Man,

Whether the chart is ok or not ... it anyway makes sense to me that we get into such a deep recession if the private sector does not overspend any more and pays back the debts. For that the goverment has to do the opposite to soften the impact of this behaviour change. All this sounds quite logical to me.

As for gold - do you want to indicate that there are faked bullions out there, and that in case that this is true and the papers start writing about it the physical gold price will go through the roof while the paper gold price will drop?


Giotto

Giotto
02-09-10, 19:54
you still believe in govts? those leaders who will not put the perpetrators of the todays financial woes behind bars! those who change the accounting rules so that the frauds continue!! those who are selling you a mirage!!!
...
mature man,

i don't really want to discuss this issue. i know that the abilities of many politicians are limited, but i also know that many of them try their best.

nevertheless - i don't think that fingerpointing at the banks helps, neither does it point into the right direction. the banks of course are partially responsible for the financial crisis with their overly supported sales activities of cheap credits - but in reality the crisis was you who caused the crisis, not only for the americans, but also for all the world!"

but - how to get reelected then :) ?


giotto

Mature Man
02-10-10, 06:49
hi g

:)
have learnt to live with alternate views. now lets just sit back and watch the ride next 30 days . and even if i am proved right , i dont get any pleasure in seeing people's money and savings getting wiped out .

m m


mature man,

i don't really want to discuss this issue. i know that the abilities of many politicians are limited, but i also know that many of them try their best.

nevertheless - i don't think that fingerpointing at the banks helps, neither does it point into the right direction. the banks of course are partially responsible for the financial crisis with their overly supported sales activities of cheap credits - but in reality the crisis was you who caused the crisis, not only for the americans, but also for all the world!"

but - how to get reelected then :) ?


giotto

Giotto
03-28-10, 20:55
Hi G

:)
Have learnt to live with alternate views. Now lets just sit back and watch the ride next 30 days . And even if i am proved right , I dont get any pleasure in seeing people's money and savings getting wiped out .

M MMature Man,

I watched the ride for more than 30 days :) ... and I made money! The USD - looks good for me :):)!

The world is still ok - but during the last 2 days we had the RED ALERTS I was waiting for (rising yields of the T-Bonds), and next Friday we will get most likely a positive Labour Market Report ...

Now - I am worried!!!

I think everybody should really reconsider stock market investments in the next few months ... wait and see what happens.

This is - as usual - my POV.


Giotto

Excess
03-28-10, 22:01
FWIW - There is an old US Stock Market saying that is not always right but right enough times. This year I am going to take the advice and seriously reduce my own portfolios covering several markets as it suggests:

"Sell in May and Go away" - going away refers to the summer months and reconsider again in the autumn.

E.


Mature Man,

I watched the ride for more than 30 days :) ... and I made money! The USD - looks good for me :):)!

The world is still ok - but during the last 2 days we had the RED ALERTS I was waiting for (rising yields of the T-Bonds), and next Friday we will get most likely a positive Labour Market Report ...

Now - I am worried!!!

I think everybody should really reconsider stock market investments in the next few months ... wait and see what happens.

This is - as usual - my POV.


Giotto

Fon Tok
04-12-10, 08:36
The Bangkok Post reports: SET index down 3.64%, Monday 12 April

The Stock Exchange of Thailand (SET) composite index on Monday lost 28.76 points or 3.64 per cent to close at 760.90 points. The market value was 35.21 billion baht, with 3.61 billion shares traded.

The SET100 index ended the session at 1,156.06 points, down 48.36 points or 4.02 per cent, with a total trade value of 32.46 billion baht.

The SET50 index fell 23.08 points or 4.12 per cent to stay at 536.62 points, with a total transaction value of 28.86 billion baht.

The Market for Alternative Investment (mai) index went down 4.23 points or 2.02 per cent to close at 204.78 points, with a total turnover of 125.78 million baht.

Top five most active values were as follows;
PTT closed at 256.00 baht, down by 13.00 or 4.83 per cent.
KTB closed at 13.10 baht, down by 0.80 or 5.76 per cent.
BBL closed at 116.00 baht, down by 6.50 or 5.31 per cent.
KBANK closed at 92.00 baht, down by 5.25 or 5.40 per cent.
PTTEP closed at 146.00 baht, down by 2.50 or 1.68 per cent.

Bronx Prowler
04-17-10, 01:37
As the Thai stock market is going down, the rate of USD to Thai baht is getting worse. Why is this? Wouldn't it be the other way around?

BP

Giotto
04-21-10, 19:41
As the Thai stock market is going down, the rate of USD to Thai baht is getting worse. Why is this? Wouldn't it be the other way around?

BPBronx Prowler,

Thailand has still a high trade surplus - that keeps the THB strong. It might change though, within the next few months.


Giotto

Mature Man
04-29-10, 10:39
Hi G

Sorry for not responding earlier. Been terribly busy with my many issues.

As I have always said earlier the problem today is the fact that it is not a liquidity problem alone. It is an insolvency problem. The liquidity problem arises out of the fact no bank trusts another one and as they themselves need the money to keep afloat.
All this QE has gone to saving the banks and Financial institutions. Now it is pay back time and the tax payer will again be made to pay- this time to the Govts - effectively paying for the bailouts.The banks should have been allowed to fail and the system cleaned. Instead the crap was covered by carpets and now the pile has grown so big that the smell and stink cannot be controlled anymore.
The insolvency problem continues, the frauds by Goldman Sachs. JPM etc continue . AIG the dead man kept alive continues to pay out the guarantees on the derivative swap bets.
Now finally Greek bonds have been rated junk, to be followed by Portugal & Spain.
Actually the British pound and the US $ are in even worse shape but the media is not showing them in the limelight.

We are in for tremendous changes . Timing is one thing I have never been able to predict. But most events - yes- i have been successful.
There is a good chance the Euro may be left as only Germany's currency-in effect back the to the DM.

In my opinion choosing between the US$ and the Euro is like choosing between HIV Positive and Herpes.

Stick to a major portion of your assets in Gold & Silver. When the new global reserve currency shows up , these assets should save your day.

Stock markets can never move up when Bonds collapse and currencies are unpredictable.

My only word of advise- is to have cash and some assets in precious metals for the next 6 months by which time most events will unfold.






Mature Man,

I watched the ride for more than 30 days :) ... and I made money! The USD - looks good for me :):)!

The world is still ok - but during the last 2 days we had the RED ALERTS I was waiting for (rising yields of the T-Bonds), and next Friday we will get most likely a positive Labour Market Report ...

Now - I am worried!!!

I think everybody should really reconsider stock market investments in the next few months ... wait and see what happens.

This is - as usual - my POV.


Giotto

Giotto
05-06-10, 19:24
Hi G

Sorry for not responding earlier. Been terribly busy with my many issues.
...
Mature Man,

No problem at all - still early enough.

Well done!


Giotto

Mature Man
05-08-10, 05:16
Thanks G

The situation appears to be getting out of hand. Trust governments to blunder. Because all they are interested is in seeing their own continuance. Raising funds when revenues are dropping and interest rates are low is a no go. And now when every country is in debt and has problems there can be no white knights to the rescue. Most people have forgotten that Iceland, Dubai etc are all still unsolved. All that talk of greenshoots and recovery are seen for what they are - blatant lies.

Govts. have now gotten themselves into a situation- Damned if you do and damned if you dont. People all over are loosing faith in them

Today's dollar value and purchase power will look like a joke in the future.
I am still holding on to my view that there will be an attck on Iran.
With all economic problems surfacing a diversion is badly needed.


M M



Mature Man,

No problem at all - still early enough.

Well done!


Giotto

Mature Man
06-26-10, 06:29
It appears that the government's ( all governments) hold on the rope is slipping and they are worried. Maybe a few feet left before it slips off fully.The weekend's G20 meet is basically to advise them to open their printing presses.
This is no soloution and is intended to only delay things till war breaks out when the human populace will be told patriotism is the order of the day and to forget the/their economic crisis. That LIfe and existence by itself was far more important than money.

As each day passes we are getting closer to bigger and bigger problems. We are in a debt trap spiral that we cannot get out off. A whirlpool which has no bottom.

My advice continues to be- hold gold and silver and enough cash to sustain yourself. Get out of stocks totally .as also Treasuries, bonds etc. Governments who have been issuing short term notes will simply put off redemption, effectively default. Easiest things to do. For citizens holding these- it will be patriotism. For foreigners - tough luck- they took the chance.




Thanks G

The situation appears to be getting out of hand. Trust governments to blunder. Because all they are interested is in seeing their own continuance. Raising funds when revenues are dropping and interest rates are low is a no go. And now when every country is in debt and has problems there can be no white knights to the rescue. Most people have forgotten that Iceland, Dubai etc are all still unsolved. All that talk of greenshoots and recovery are seen for what they are - blatant lies.

Govts. have now gotten themselves into a situation- Damned if you do and damned if you dont. People all over are loosing faith in them

Today's dollar value and purchase power will look like a joke in the future.
I am still holding on to my view that there will be an attck on Iran.
With all economic problems surfacing a diversion is badly needed.


M M

Giotto
07-01-10, 06:06
It appears that the government's ( all governments) hold on the rope is slipping and they are worried. Maybe a few feet left before it slips off fully.The weekend's G20 meet is basically to advise them to open their printing presses.
...
Get out of stocks totally .as also Treasuries, bonds etc. Governments who have been issuing short term notes will simply put off redemption, effectively default. Easiest things to do. For citizens holding these- it will be patriotism. For foreigners - tough luck- they took the chance.Mature Man,

Wow, perfect timing ... congratulations!


Giotto

Cyberspace
07-11-10, 02:23
...


I am still holding on to my view that there will be an attck on Iran.
With all economic problems surfacing a diversion is badly needed.


M M

Really? Thailand is planning a war with Iran for the sake of a diversion? And to think I heard it here first in the Thai Stock Market forum of InternationalSexGuide. Who knew?

Red Square
11-28-10, 12:24
Giotto,

Remember we talked a bit about what would happen if countries switched from the USD to something else.

Well, it's happening (but I'm sure you've already heard).

Yikes!

Giotto
11-29-10, 20:10
Giotto,

Remember we talked a bit about what would happen if countries switched from the USD to something else.

Well, it's happening (but I'm sure you've already heard).

Yikes!Red Square,

don't really get you. If countries would switch from the USD to something else the USD were weak - but in the last few days the opposite was the case.

No question, many countries WANT to diversify their currency reserves ...


Giotto
http://www.livingstones.co.th

Stevebny
03-08-11, 05:08
As each day passes we are getting closer to bigger and bigger problems. We are in a debt trap spiral that we cannot get out off. A whirlpool which has no bottom.As debt increases more and more people fall into it until you are left with the few Elite holding the power and the slaves / serfs / middle lower classes feeding into it. Isn't this how revolutions get started?

Giotto
06-27-11, 08:11
If somebody owns Thai stocks right now: There are elections next weekend.

The impact will be significant. I expect a landslide victory for the PT (Thaksins Party) , who has won the last 3 elections, too. But this time the victory will be more important than ever before, for several reasons:

- the DP had about 3 years to convince the people that the old establishment and their policies are good for Thailand. And they obviously failed to do so.

- the economy is in relative good shape (though the money is ending up in the pockets of the rich, growth is socially unbalanced) , but still the people will not support the actual government.

- the coup of 2006 is not forgotten.

- the demonstrations of last year causing the death of 92 people are not forgotten.

The stock market usually anticipates certain developments, and though it fell during the past weeks it is still quite high. There is still the hope that PT will not get a majority, and that the conservative coalition around the DP could prevail. THIS IS NOT GOING TO HAPPEN!

After staging a coup against a democratic elected government (it does not really matter whether Thaksin was corrupt or not, good or bad) , the questionable implementation of the actual coalition (buying politicians out of PPP, convincing parties to join the coalition with heaps of money and pressure from powerful people in the background) the old elite is running out of options to keep the power. Whatever they decide to do, the red movement comes back and back, and it even gets stronger. Significant will be that the PT most likely will win the majority of seats in Bangkok. And that will be an eye opener for many who still hope that it could somehow go on with the Thai political system as it worked in the past. THIS IS NOT GOING TO HAPPEN!

Thailand is besides China and Singapore one of the strongest exporters of Asia. That has worked well in the past, and after feeling only a minor impact of the financial crisis of 2008/2009 (the Thai banks had not participated in most of the speculations that lead to the crisis, because they were still recovering from the Asia Financial Crises 1997/1998) the recovering exports generated 7. 8 % growth last year. But investors are not blind. They know about the political rift in the country and the political instability resulting from that. Major investments have NOT been done in the past few years, and it must be expected, that new investments in the region will not necessarily been done in Thailand but in China.

If the elite realizes that the attempts of the past to keep in power against the clear results of elections failed the last remaining strategy of those people might be the massively move money / capital out of the country. Run the economy down, to make clear, that the PT cannot fulfill their promises (because the money is simply not available) , and that things get WORSE with a PT government. I believe that this strategy will be implemented for the next few years.

Back to the stock market: Everybody invested in Thailand should seriously think whether he really wants to own Thai stocks after next weekend! Besides all the risks of the world markets (let's just mention Greece) there is a lot additional risk for the Thai market. I don't think that international fund managers will show major interest in the Thai market until the political crisis is solved. And this can last some more years.

Giotto.

http://www.livingstones.co.th

Member #4698
07-05-11, 05:14
Back to the stock market: Everybody invested in Thailand should seriously think whether he really wants to own Thai stocks after next weekend! Besides all the risks of the world markets (let's just mention Greece) there is a lot additional risk for the Thai market. I don't think that international fund managers will show major interest in the Thai market until the political crisis is solved. And this can last some more years.

http://www.livingstones.co.thGiotto,

To follow up on your insightful pre election report, I thought forum members might be interested in this post election analysis by the Asia Today WSJ. The thing is nobody knows what will happen in Thailand post election and this uncertainty will weigh heavy on foreign investment. http://online.wsj.com/video/asia-today-what-next-for-thailand/86A31DB9-F53D-4499-81D0-5B072A5EF003.html?mod=WSJ_hpp_mpvidcar_2

On a shallow note; am I the only guy here who thinks Pou is kind of hot?

Giotto
07-05-11, 06:13
.

To follow up on your insightful pre election report, I thought forum members might be interested in this post election analysis by the Asia Today WSJ. The thing is nobody knows what will happen in Thailand post election and this uncertainty will weigh heavy on foreign investment.

http://online.wsj.com/video/asia-today-what-next-for-thailand/86A31DB9-F53D-4499-81D0-5B072A5EF003.html?mod=WSJ_hpp_mpvidcar_2

On a shallow note; am I the only guy here who thinks Pou is kind of hot?Natty Bumpo,

Thanks for the link. Up to now the stock market appreciated the election results a lot, it's strongly up yesterday and today.

Pou is hot, no question at all. Fantastic move from Thaksin to bring her into the game.


Giotto
http://www.livingstones.co.th

Tiny 12
04-03-12, 06:00
If somebody owns Thai stocks right now: There are elections next weekend.

The impact will be significant. I expect a landslide victory for the PT (Thaksins Party) , who has won the last 3 elections, too.

http://www.livingstones.co.thIf someone had the foresight on the date of Giotto's post above (6/27/2011) to buy stocks that had been decimated by Thaksin's troubles he'd be up big time:

INTUCH (new symbol for Shin Corp.) : +88%

ADVANC: +80%

THCOM: +85%

SET Index: +19%

Giotto
04-05-12, 19:53
If someone had the foresight on the date of Giotto's post above (6/27/2011) to buy stocks that had been decimated by Thaksin's troubles he'd be up big time:

INTUCH (new symbol for Shin Corp.) : +88%

ADVANC: +80%

THCOM: +85%

SET Index: +19%Tiny 12,

LOL. The Thaksin stocks.

But you did not want to look at the Thai stock prices in October 2011! The SET dropped from around 1100 in July to 900 in October.


Giotto