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Thread: Dow

  1. #11
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    re Dow fall: on the upside, gold bounces nicely ; )

  2. #12
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    So it appears the Fed has run out of room to move. No more interest rate cuts = bad news for equities over the next two months?
    Disclaimer: Do not take my posts seriously. They are only opinions.

    AMR has sold all shares and is pursuing property.

  3. #13
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    Quote Originally Posted by AMR View Post
    So it appears the Fed has run out of room to move. No more interest rate cuts = bad news for equities over the next two months?
    The only move it can make is to raise rates - bad news for equities through this year and next at the very least.

  4. #14
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    Quote Originally Posted by malcolm View Post
    YEP; --USA HAS BEEN GETTING ROTTEN ALL YEAR and i watch CNBC EARLY mornning interviews day in day out and what has been standing out louder and louder as year gone on is--- ONE OF CONFUSION--- FROM PEOPLE WHO SHOULD BE CALM AND UNDER CONTROL i think that thier major investment banks are all in the SH-T AND WILL ALL START TO HAVE DIARHEA-SOON MONDAY COULD BE BLACK MONDAY AGAIN------MHOP-----no financial expert but have shallow pockets
    Yes I watch Closing Bell and Fast Money in the mornings on CNBC
    Malcolm usually Fast Money is entertaining and funny with the traders joking away and taking the mickey out of their counterparts when they have a bad day...but this morning they didn't crack one joke..they were all rather subdued.
    First time I've noticed this. I think this is a very bad bad sign.

  5. #15
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    Independance day was a breaker this/last week. Watching with interest, next. Maybe a few good buys will flow through into the NZ and AUS markets - bit of spare cash is handy to have ATM.

  6. #16
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    OMG what a day. The carnage was amazing - look at the LEH volume 260% of normal daily volume. At this rate the LEH mid-year bonus will see staff own all of LEH. **** next staff salary will be simply be in stock bought daily from salary budget.

    As for FNM and FRE they are dust - FRE down 22% today alone. THEY ARE BOTH INSOLVENT/BANKRUPT AS THEIR LIABILITIES EXCEED ASSETS(CAPITAL).

    If the US government steps in to guarantee them the US WILL BE DOWNGRADED. T-BONDS will be dumped in mass. US i-rates will head up.
    The trend is your friend.

  7. #17
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    If this isn't the prelude to worse to come nothing is.

    http://www.telegraph.co.uk/money/mai...cnspain111.xml

    Spain pulls bond sale amid economic crisis

    By Ambrose Evans-Pritchard
    Last Updated: 10:21pm BST 10/07/2008

    Spain has suspended an auction of sovereign bonds as investors take fright over the country's property crash and accelerating slide into economic crisis.

    Spain has suspended an auction of sovreign bonds as investors take fright over the country's property crash and accelerating slide into economic crisis
    Spanish government officials have been shocked by the intensity of the downturn

    The treasury pulled an expected sale of 15-year bonds after probing the market informally, saying it would wait until credit conditions began to calm down. "We are not facing financing problems. We placed a successful three-year note on Wednesday," said a spokesman.

    Government officials have been shocked by the intensity of the downturn now engulfing the country. Car sales fell 31pc in June, industrial production has fallen 5.5pc over the past year and the collapsing property sector is shedding almost 100,000 jobs a month.

    Miguel Sebastian, the industry minister, said the economy had ground to a halt in the second quarter and was now in "virtual recession"
    The trend is your friend.

  8. #18
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    More doom and gloom...

    http://www.telegraph.co.uk/money/mai...cnmoney111.xml

    The money tap turns off, leaving the world in short supply

    Last Updated: 12:33am BST 11/07/2008

    The lifeblood of countries' economies is draining away - with grim consequences for us all, writes Ambrose Evans-Pritchard

    The money supply data from the US, Britain, and now Europe, has begun to flash warning signals of a potential crunch. Monetarists are increasingly worried that the entire economic system of the North Atlantic could tip into debt deflation over the next two years if the authorities misjudge the risk.

    The key measures of US cash, checking accounts, and time deposits - M1 and M2 - have been contracting in real terms for several months. A dramatic slowdown in Britain's broader M4 aggregates is setting off alarm bells here.

    Money data - a leading indicator - is telling a very different story from the daily headlines on inflation, now 4.1pc in the US, 3.7pc in Europe, and 3.3pc in Britain.
    # Read more by Ambrose Evans Pritchard
    # More on economics

    Paul Kasriel, chief economist at Northern Trust, says lending by US commercial banks contracted at an annual rate of 9.14pc in the 13 weeks to June 18, the most violent reversal since the data series began in 1973. M2 money fell at a rate of 0.37pc.
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    "The money supply is crumbling in the US. There was a very sharp lending contraction in the second quarter lending. If the Federal Reserve is forced to raise rates now to defend the dollar, it would be checkmate for the US economy," he said.

    Leigh Skene from Lombard Street Research said the lending conditions in the US were now the worst since the Great Depression. "Credit liquidation has begun," he said.

    The Fed's awful predicament does indeed have echoes of the early 1930s when the bank felt constrained to tighten into the Slump in order to halt bullion loss under the Gold Standard. Investors - notably foreigners - dictated a perverse policy. Over 4,000 US banks collapsed. This time a de facto "Oil Standard" is boxing in Ben Bernanke. Benign neglect of the dollar has started to backfire. It is pushing up crude, with multiple leverage.

    The monetary picture is highly complex. The different measures - M1, M2, M3, M4 - have all given false signals in the past. Each tells a different tale, and monetarists fight like alley cats among themselves.

    The Federal Reserve stopped paying much attention to the data a long time ago. It has abolished M3 altogether. The US economic consensus is New-Keynesian (dynamic stochastic general equilibrium model). Delving into the money entrails is derided as little better than soothsaying.

    That attitude, retort monetarists, is the root cause of the credit bubble. The money supply almost always gives advance warning of big economic shifts. Those who track the data are now calling on central banks to move with extreme caution. If the rate-setters overreact to an inflation spike caused by oil and food - or confuse today's climate with the early 1970s - they may set off an ugly chain of events.

    "The data is pretty worrying," said Paul Ashworth, US economist at Capital Economics. "US lending is shrinking dramatically in real terms, and we know from the Fed's survey that banks want to tighten further. People are clamouring for higher rates but we think deflation is now the biggest threat. The idea that the Fed should tighten with unemployment soaring is preposterous," he said. The jobless rate jumped from 5pc to 5.5pc in May.

    In Britain, the Shadow Monetary Policy Committee - hosted by the Institute for Economic Affairs, and a refuge for UK monetarists - issued its own alert this week. The focus is on "adjusted M4", which covers loans to "private non-financial corporations" and may offer the best insight into the health of British business.

    The growth rate has dropped from 16.1pc a year ago to minus 0.5pc in April. It is the suddenness of the decline that matters most. The data reeks of recession. Professor Patrick Minford from Cardiff Business School called for an immediate rate cut, arguing that the credit crunch is a more powerful and long-lasting force than the oil inflation.

    Professor Tim Congdon from the London School of Economics said the UK was lurching from boom to bust. "Real money growth is virtually nil. The British economy is taking a thrashing and it is going to get worse. Corporate money balances have contracted 3pc over the last three months, which is double digits on an annualised basis. This is a serious squeeze for companies," he said.

    Mr Congdon warned three years ago that surging M4 would lead to a "dangerous" bubble, which is what occurred. He now fears the MPC will react too late as the process goes into reverse.

    Roger Bootle from Capital Economics said Britain could be facing a "real economic crisis and a financial collapse. The MPC does not have the luxury of waiting until all is absolutely crystal clear. By that time the bird will have flown."

    The eurozone is at a later stage of the credit cycle. Even so, house prices are collapsing in Spain, and falling in Germany and France. German industrial orders have dropped for the last six months in a row. A joint IFO-INSEE survey said eurozone growth had stalled to zero in the second quarter.

    "Consumer lending has fallen off a cliff. It is contracting in real terms," said Hans Redeker, currency chief at BNP Paribas. Core inflation has fallen from 1.9pc to 1.7pc over the last year.

    Unlike the Fed, the European Central Bank keeps a close eye on money data (though not on real M1, now shrinking). It looks at the broader M3 figures. There is a raging debate in Europe over the signals now being sent by this indicator.

    The M3 growth is still 10.5pc, down from 11.5pc in January. However, the data has been badly distorted by the closure of the capital markets. Firms have been forced to draw down existing credit lines from banks, which shows up as M3 growth. (It is the same story with America's M3 since the collapse of the Commercial Paper market).

    "The credit lines are expiring. Companies cannot roll over loans. We are going to see the entire private credit multiplier go into a slowdown," said Mr Redeker.

    Jean-Claude Trichet, the ECB's president, said last week that the M3 data "overstates the underlying pace of monetary expansion". The ECB nevertheless pressed ahead with a rate rise to 4.25pc, setting off a storm of protest. This may go down as one of the most unwise monetary decisions of modern times.

    The strain on eurozone banks is growing by the day. They bid a record $85bn (£43bn) at the ECB's last auction for dollars. Only $25bn was available. The spreads on Euribor interbank lending are still at extreme stress levels.

    Few disputes that "global inflation" is taking off. Over 50 countries now face double-digit price rises. Ukraine (29pc), Vietnam (27pc), and the Gulf states are out of control, with Russia (15pc), and India (11pc) close behind. China (7.1pc) is on the cusp. Interest rates are still below inflation across much of the emerging world. This is the driving force behind spiralling commodity prices.

    The oil spike is already squeezing real wages in the Atlantic region. The debate is whether the Fed, Bank of England, and ECB should squeeze them further, trying to off-set energy rises with a deflationary bust in the rest of the economy. If and when oil peaks in this cycle, they may find inflation crashing faster than they dare to imagine.

    The 9th Circle in Dante's Inferno - starring Judas and Brutus - is a frozen lake. Cold can be more frightful than heat. "Blue pinch'd and shrined in ice the spirits stood," (Canto XXXIII). Such awaits the victims of debt deflation.
    The trend is your friend.

  9. #19
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    FTSE and CAC taken a hit today (more than 2% down). Oil up and then DOW tomorrow...
    Last edited by Jess9; 11-07-2008 at 12:00 PM. Reason: sp

  10. #20
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    yip - would make 4 an interesting market open on Monday, here.

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