Black Monday

[Aaron]

So, could we have an apology from all the stupid lemmings who have recently predicted another Great Crash.....

Sorry I've been wrong for the last couple of years, really sorry. No I mean it, sorry I have missed all those good returns by making the wrong call. My view is that valuations might come down if earnings slow down and businesses, govts and people start having trouble repaying their loans. I try not to get excited by every little up and down in the market.
But if commodities are a leading economic indicator maybe things will slow down but valuations might be underpinned by historically low interest rates and loose money, so who knows. I don't like to see people lose money but I would like the opportunity to by good companies at much lower prices. Property as well for that matter.

[twotic]

So, could we have an apology from all the stupid lemmings who have recently predicted another Great Crash.....

Out of interest, (1) who predicted a great crash? and (2) how have you established one is not coming and hence you deserve an apology?

[NZSilver]

Much to early to get back it yet on this small rally, markets still well down on highs - there is a long time between now and half year results from most listed companies - so I'm sure there will be ample opportunity to buy the majority of them at lower prices. Only positive I see for markets is low interest rates, so stocks with yields greater than 4-5% are attractive. Market rally will also increase likely hood FED will increase U.S. Interest rates - which will likely reduce capital flows into markets. I still think a high percentage of your portfolio in cash is a good play at this point.

[gv1]

So, could we have an apology from all the stupid lemmings who have recently predicted another Great Crash.....

Wait until next week then maybe u can ask for that.. after 13/9.

[xafalcon]

To a large degree China is driving sentiment on global markets. Looking back at past events to infer what may happen this time has one major flaw - the Chinese market is not truly free. If the Chinese government decides something needs to change, they will make it happen. Hence I do not believe any past market behaviour will be a useful guide as the how this will play out. I also do not believe the Chinese government will allow their growth target to be missed by a large margin, too much national/international pride would be lost. So I think it is highly likely they will continue to modify government policy to approximately meet their growth target, and the world will slowly realise that this was a period of over-reaction / misreading the situation.

I deal with Chinese authorities in my day job, and after a while you just stop asking why their authorities make arbitrary and unilateral decisions. It is just the Chinese way. Their people are used to it, I am getting used to it, the world will reach this conclusion in time.

[Nasi Goreng]

It's all ANZ's fault. They announce a capital raise and world markets tank. At the end of their capital raise, the stock rallies, Glencore capitulates, German stock market back in favour and world markets rally. Co-incidence... Hmm

[Daytr]

Yep totally agree Xafalcon & China is driving sentiment in the wider market.
However I think that is masking valuation issues and profit erosion due to a high dollar & low oil of US muti-nationals in particular.
Goldmans made a call around 6 months ago on US markets & when the lead merchant bank in the world talks down equities I listen.
As I said previously I am far less bearish Chinese markets than US markets, in fact I have been quite friendly to Chinese & Indian markets since this massive correction.

[couta1]

It's all ANZ's fault. They announce a capital raise and world markets tank. At the end of their capital raise, the stock rallies, Glencore capitulates, German stock market back in favour and world markets rally. Co-incidence... Hmm

That's a lot of credit to give to a bank that's rated 42nd in the world.

[macduffy]

Odd, isn't it. The Western world has demanded for years that China float the yuan. So they finally take the first steps by widening the relationship to the dollar - not technically a devaluation - the yuan takes the expected move down, the rest of the world takes it badly!

[xafalcon]

That is true. However, its the Chinese policy decisions that are reverberating through the global economy and impacting everyone else. Such as devaluing the yuan, selling their foreign reserves, and the capital flight into foreign assets. Everything has an impact, and its usually the far out ripple effects that do the most damage because they are unforeseen and unprepared for.

Devaluing the renminbi by 2% when it is tied to the rapidly appreciating US$ is a non-event. Nobody seems to have had any concerns about the renminbi artificially appreciating over the past 18 months through the US$ tie. And it's gone up by much more than 2% against most other currencies. Yes, they should have a floating currency, but they don't. So stepwise changes are the next best option

Capital flight into foreign assets is viewed by others as risk spreading investment diversification. Appears like a sound economic decision with an appreciating currency

Any large economy's monetary policy changes impact other markets. Just look at the ridiculous situation where the world seems to be hanging on the FED potentially raising interest rates by 0.25%, a quarter of 1%. Just completely stupid. It won't make or break the economics of investing in equities v's bonds

The world seems paranoid, just like Y2K, global warming, peak oil etc. The common element in all this is the media, who seem to thrive on bad news.......