The U.S. economy lost 760,000 jobs this year. Call it recession or not, makes no difference.
Sunday, 5 October 2008
Saturday, 4 October 2008
Current Financial Crisis
Thoughts from the Frontline
Here is a great analysis of the current financial crisis in the US and elsewhere.
Here is a great analysis of the current financial crisis in the US and elsewhere.
Positive Views Start to Emerge
Business Spectator - Toyota expects auto market to recover
I feel the worst is behind us. It was probably last week when the fall-out ended with a bang.
Now some optimistic views start to show in the news. There are positive forecasts for auto industry, that suffered a lot in the past couple of months, in the above article.
There are also some views that mortgage owners in the US are going to be better of as a result of the bailout package. The US housing was one of the underlying causes for the current slump and there are views that the situation in that sector has to improve to form a basis for the recovery of the rest of the economy.
Expect the next couple of months to represent a "cleanup". Whoever survives in the market will have a strong base and will be a solid target for investment.
I feel the worst is behind us. It was probably last week when the fall-out ended with a bang.
Now some optimistic views start to show in the news. There are positive forecasts for auto industry, that suffered a lot in the past couple of months, in the above article.
There are also some views that mortgage owners in the US are going to be better of as a result of the bailout package. The US housing was one of the underlying causes for the current slump and there are views that the situation in that sector has to improve to form a basis for the recovery of the rest of the economy.
Expect the next couple of months to represent a "cleanup". Whoever survives in the market will have a strong base and will be a solid target for investment.
Global Credit Crunch
Business Spectator - Prepare for a global credit crunch
In the aftermath of the bailout vote it is time to look ahead. What lies in front of us in the coming months? Global credit crunch and its effects.
In the aftermath of the bailout vote it is time to look ahead. What lies in front of us in the coming months? Global credit crunch and its effects.
Friday, 3 October 2008
The End of an Era
Dr. Doom - Profile - Nouriel Roubini - Predicting Crisis in the United States Economy - NYTimes.com
This might be the beginning of the end of the American empire
Is this anabrupt coming to an end of an era of US dominance? It was bound to happen sooner or later but I never thought it would happen with a bang. :)
Thursday, 2 October 2008
Is this the double bottom?
This is how ASX 200 looks today
Is this the double bottom?
According to one explanation double bottoms look like the above. They are complete "when prices rise above the high end of the point that formed the second low".
The key point in the current situation is that there is only a week between the two bottoms, which makes it an unreliable chart pattern.
Is this the double bottom?
According to one explanation double bottoms look like the above. They are complete "when prices rise above the high end of the point that formed the second low".
The key point in the current situation is that there is only a week between the two bottoms, which makes it an unreliable chart pattern.
Senate Passed the Bill
U.S. Senate just passed the $700 billion bill. All eyes are now on House, which will probably vote on Friday.
Australian index oscillates around 4800 since opening. Will probably remain so until the end of the week.
Poll on CNN Money shows 62% of voters not supporting the bill while 38% supports it. If this is how House will vote on Friday, the near future is not very bright for investors.
Australian index oscillates around 4800 since opening. Will probably remain so until the end of the week.
Poll on CNN Money shows 62% of voters not supporting the bill while 38% supports it. If this is how House will vote on Friday, the near future is not very bright for investors.
Wednesday, 1 October 2008
Cash Reign is Over?
Expert Articles
An article at InvestSmart web site debates that the period of cash rule is over. The rates have peaked recently and have already started on the downward path. There are still good rates with term deposits. BankWest still has an offer of 8.1%, which will probably match the share market rates in the coming period. Well, this is true if we take that a hard period is in front of us. Some believe the profitability will be very thin in the coming two years. In that regard, the current cash rates are worth locking in at the current levels. More and more people believe that central banks will need to ease the rates to allow the economy to recover.
Well, it's a transitional period. Now the bet is how long will the recovery take. Lock in the (currently high) cash rates or put the funds into share market and equities and hope for a quick recovery.
There are no silver bullets. The recommendations are simple - diversify; invest as much as you are comfortable with; invest into assets you are comfortable with. Don't over extend in any case. Everything else is gambling. To do that, one can simply go into a casino and try a few bets. Fortunes can be made overnight that way. :P And lost, too.
Nonetheless, the cycle is nearing its end. Finally.
An article at InvestSmart web site debates that the period of cash rule is over. The rates have peaked recently and have already started on the downward path. There are still good rates with term deposits. BankWest still has an offer of 8.1%, which will probably match the share market rates in the coming period. Well, this is true if we take that a hard period is in front of us. Some believe the profitability will be very thin in the coming two years. In that regard, the current cash rates are worth locking in at the current levels. More and more people believe that central banks will need to ease the rates to allow the economy to recover.
Well, it's a transitional period. Now the bet is how long will the recovery take. Lock in the (currently high) cash rates or put the funds into share market and equities and hope for a quick recovery.
There are no silver bullets. The recommendations are simple - diversify; invest as much as you are comfortable with; invest into assets you are comfortable with. Don't over extend in any case. Everything else is gambling. To do that, one can simply go into a casino and try a few bets. Fortunes can be made overnight that way. :P And lost, too.
Nonetheless, the cycle is nearing its end. Finally.
Stockmarket Closes at 4814
Today the indexes continued upward movement. Australian All Ordinaries closed at 4814.5 while the ASX S&P 200 closed at 4794.6.
This is close to the previous trading range. Tonight the US Senate will make a decision on the bailout plan and the Congress could go back to it, as well. That move could push markets a bit upwards into the trading range. Such a development would form a nice bottom that started mid-July.
This is close to the previous trading range. Tonight the US Senate will make a decision on the bailout plan and the Congress could go back to it, as well. That move could push markets a bit upwards into the trading range. Such a development would form a nice bottom that started mid-July.
Bottom Reached?
Business Spectator - Hazards beyond the rally
The US share market rose steadily all night as more and more buyers felt that yesterday we had touched the bottom. And for the time being that’s true and it could well be that September 29 (September 30 in Australia) was the 'day of no hope' that we have been looking for and that the market will now form a new base. There is a good chance of that, but no certainty.
writes Robert Gottliebsen.
While the drop yesterday was hard, the markets retraced back fairly quickly. The index behavior is quite different to the previous periods. As the graphs show, the percentage of fall gets smaller and smaller. While there are shocks that are high, the reversals are fairly quick. Selling obviously indicates a lot of fear and there's a smell of blood in the air.
Earlier I've called the bottom at 4700 and that really may be the case. While the index went as low as 4400, that was outside the trading hours in Australia.
There is a growing consensus that we are (almost) there. The new bottom should form as it is fairly reasonable to expect the bailout vote to succeed. The US would suffer the most if it doesn't so I don't expect anyone to take a responsibility for such a stupid decision.
So, the bottom will obviously form around 4700 and start its way up slowly from there. The Moving Average on the past 210 days is getting a bit closer but we have about another month to go until it reaches the current index level. That's when the index could shoot up if the economic conditions improve. The US elections should be over and some certainty should come on that side. The statistics say that the first year after elections is a good one. So, an upside movement could happen in a couple of months. The problems will remain in the financial sector as their time has passed for now. Just like with IT bubble, the credit bubble has burst. Also, thankfully, the housing one. I'd expect the house prices to stabilize. Actually, I'd hope for it as the housing is expensive pretty much everywhere. I can't even think about owning my own home.
So, I hope to see the index level to form a bottom and jump around the 4700 level for some time. Maybe even go back into 4800-5000 range. At least the slide down should end and our savings should stop effectively disappearing. :)
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