Thursday, Aug 13, 2009
Don't look down!
Telegraph: Fresh alert on global stock market
The post from Pretcher was largely ignored the other day, which kind of astonished me. I guess there were too many articles about the minutiae of the day to day of our housing market! Anyway another call although maybe the timing is too soon, as many are thinking that restocking after the cost cutting and firesales will show temporary improvements until we discover there are no buyers.
Some think this year will mirror last year and thus far it has, even down to the spike in oil. Watch out below
Posted by bellwether @ 08:26 AM (1005 views) Add Comment
13 Comments
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1. drewster said...
Mish is bullish on the dollar again, and so is MoneyWeek. Certainly an influential bunch with a decent track record!
2. drewster said...
oh and MarketOracle.co.uk are bearish on the dollar, and they are the best contrarian indicator in the world :-P
3. bellwether said...
Agreed Drewster. Pretcher made an absolute call on the dollar and I suspect that as compred to Sterling $1.70 will be peak.
The usd will be the place to be when this thing busts again. Broad money supply M4 is still shrinking despite intervention and people will be scrambling for dollars to pay down debt. Couldn't believe that Bernanke recently spoke as if he had tamed the situation saying he didn't want to be remembered as presided over the second great depression.
For anyone with savings in sterling there might not be a better time to switch or hedge. Crispin Odey thinks UK will hyperinflate.
4. str 2007 said...
Bellwether
An interesting read, thanks for that one.
I hope they can hold of the crash for a few weeks until I'm ready !
5. str 2007 said...
I've had a look bellwether but can't find Crispin Odey discussing hyperinflation in the UK - did you have a link ?
I must admit I haven't really followed exchange rates, is it the pound slumping again or the dollar growing stronger against all currencies you are anticipating.
It amazes me people would flock to a currency that has a full speed ahead printing press behind it - but as they'd say up North - there's nowt as queer as folk.
6. little professor said...
Crispin didn't forecast hyperinflation, he called for greater inflation to erode the world's debts but said that this would not lead to hyperinflation, and that to try to battle inflation was to "fight the last war." :
"The world’s total outstanding debts have to be reduced. Our populations and companies need the means and the time to pay them off. These means are profits and pay rises. The other thing we need is inflation.
Inflation will allow debt to reduce day by day. It is healthier that people receive an annual pay rise than take out an extra annual loan - as they have been doing since 2000. This package will allow markets to breathe again.Inflation is coming in any case as a by-product of today’s world-wide policy intervention. If it comes by force through currency and debt dislocation, then it may come as hyper-inflation at terrible social cost. But it is not useful to see hyper-inflation and deflation as opposite ends of the spectrum. They sit too close to each other on the circle.
Our aim must be to achieve an inflationary world until the debt comes down, choosing the right target for the times. The responsible choice is to opt for managed change, to deal with the pain inflation will inflict, at its acutest in the first years, and to fix an exit strategy. We should choose to take this path, set a softer inflation target rate and use forms of quantitative easing, with fiscal action to encourage wage rises. To fight inflation is to fight the last war. In a modern monetary economy the mortal enemy is deflation, and the absence of growth, profits, and wage increases."
7. str 2007 said...
Thanks for that LP
As a side issue, I've just come off the phone to an old colleague working for a division of one of the major builders merchants.
They were quiet earlier in the year but have been booming since June.
The 'upper echelons' however are predicting things to fall off a cliff again in the Autumn. IE a W shaped recession not a V shaped one.
So perhaps they are either HPCers or perhaps alot of the talk here is indeed in the right direction.
8. techieman said...
The assumption is made that fiscal and monetary expansion policies will out and will either be just right or too hot, and that when they are too hot - thats ok we can just pour cold water (reverse easing / expansion) on 'em. But the fact is that macro economics cant be put inside a box in that way because if that were the case we would never have overshoots or undershoots of anything, because we would just adjust policy. Isnt the erosion of debt by inflation just one of those bullets that the government have loaded into their guns? Are they finding out. like the persian guy in crash (the movie) that they are blanks?
Yes they think it has worked and yes for a while, superficially at least it has. But then even a blank will hurt! (the scene in crash is not lifelike you can still hurt someone with a blank).
Relative to the greenback - yep if we dont breach 1.70 (and change) from the low of the 1.64 back up to the upside (which now i dont think we will) then a major down move looks on the cards. So how to trade it? 1.67-1.68 to see the move back up fizzle out and then sell on stop below the 1.64. Might need a couple of goes but where is the place to get out? According to Mr P we will go back down to the 1.30s at least - isnt that worth a couple of cents stops?.....
9. mountain goat said...
TM - "According to Mr P we will go back down to the 1.30s at least - isnt that worth a couple of cents stops?"
Not the only Mr P who thinks "As debt is destroyed the dollar will strengthen."
PS. got stopped out of S&P short but ready to try again later ;-)
10. bellwether said...
Little Professor not the first time you have ticked me off. I would not cite someone as saying something unless they have said it. I actually posted the article a week or so back. This is not the original but the basics of what was said.
http://climateerinvest.blogspot.com/2009/08/crispin-odeys-apocalyptic-worldview.html
11. mountain goat said...
Maybe I am nostalgic for S2R1 but I found this on Barry Ritzhold Big Picture blog site. It shows economic confidence chart (by CitiFX Technicals) versus the stock market. I will try post image here but often other sites block these so have a look yourself on the link above. It shows economic confidence waning even though the stock market keeps going up. In fact it peaked around April which is uncannily close to Martin Armstrong's prediction. Considering that Armstrong came up with this plot 1997 I find that amazing.
Anyway my point is the public don't seem to be buying into the green shoots idea despite the market recovery.
Martin Armstrong Prediction
12. fahrenheit451 said...
@3 bellwether - Large amount of inflation may arrive soon, but it may help to devalue debt, all this 2% inflation etc, just means that the value of commercial equipment takes longer to be paid off. It's a bad situation for small businesses and the high street.
13. britishblue said...
Excellent post LP