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Realistbear

F T S E On Longest Winning Streak Since Last September

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http://uk.finance.yahoo.com/news/ftse-seen-opening-higher-reuters_molt-70bea0f2d2c9.html?x=0

LONDON (Reuters) - The FTSE 100 is seen opening 12-13 points higher on Thursday, with moves muted as investors await data from both sides of the Atlantic and caution prevailing as anxiety over Spain's public debt finances return to the fore.
The blue-chip index is seen opening around 0.2 percent higher, according to financial spreadbetters, after it gained 0.4 percent to close at a one-month high of 5,237.92 on Wednesday.
It has gained for six consecutive days, its longest winning run since September.

1. Sovereign debt has not gone away but the reverse as more nations wobble.

2. Overall unemployment up and closing on 2.5m with cuts yet to be implemented

3. Manufacturing slowing

4. Trade deficit growing

5. BP

6. BOE point to higher IR as QE is phased out

Irrational exuberance?

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Part is tremendous amounts of savings with nowhere to go. Few young people who make any money to lend to. Few or no businesses looking to expand production.. and the few that do can self-finance most of it without going to bonds.

So all of a sudden 3% dividends look pretty good. And an off chance they might grow over time.

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Banks with tremendous amount of QE with nowhere to go. Few young people who make any money to lend to. Few or no businesses looking to expand production.. and the few that do can self-finance most of it without going to bonds.

So all of a sudden 3% dividends look pretty good. And an off chance they might grow over time.

QE ends, stock bubble ends.

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http://uk.finance.yahoo.com/news/ftse-seen-opening-higher-reuters_molt-70bea0f2d2c9.html?x=0

LONDON (Reuters) - The FTSE 100 is seen opening 12-13 points higher on Thursday, with moves muted as investors await data from both sides of the Atlantic and caution prevailing as anxiety over Spain's public debt finances return to the fore.
The blue-chip index is seen opening around 0.2 percent higher, according to financial spreadbetters, after it gained 0.4 percent to close at a one-month high of 5,237.92 on Wednesday.
It has gained for six consecutive days, its longest winning run since September.

1. Sovereign debt has not gone away but the reverse as more nations wobble.

2. Overall unemployment up and closing on 2.5m with cuts yet to be implemented

3. Manufacturing slowing

4. Trade deficit growing

5. BP

6. BOE point to higher IR as QE is phased out

Irrational exuberance?

Most certainly. It's the 'just when they thought it was safe and under control phase. Then Bang!'

The next upheaval is brewing, but until the pot boils the heat looks calm.

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FTSE 100 5234.68-0.06%

How deeply shocking. :o

Edit:

No, back on track!

FTSE 100 5239.28+0.03%

Edit 2

Now thats more like it!

FTSE 100 5239.28+0.41%

Edited by Realistbear

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1. Sovereign debt has not gone away but the reverse as more nations wobble.

2. Overall unemployment up and closing on 2.5m with cuts yet to be implemented

3. Manufacturing slowing

4. Trade deficit growing

5. BP

6. BOE point to higher IR as QE is phased out

Irrational exuberance?

Not at all. Simply natural rhythm of stockmkt. Heading 5500/5600 by next month then all the way back to last Summer's level, at least.

Edited by Killer Bunny

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Realist Bear, as far as I can see the six reasons for pessimism you list relate mostly to the UK economy. The FTSE is heavily weighted towards international behemoths. The state of the UK economy is more or less irrelevant to their share prices.

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Not at all. Simply natural rhythm of stockmkt. Heading 5500/5600 by next month then all the way back to last Summer's level, at least.

To a degree, but there is nothing natural about this stock market any more, it is used as a monetary tool by the central banks.

stock%20market%20valuation_0.jpg

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FTSE 100 5250.84 -0.06%

The 7 day run ended today. How sad. How very sad. :(

The euphoria does seem to be waning as you glance through the most recent headlines. Sovereign debt issues still there. Austerity and job cuts still there. No change really.

Choo think--will we have some darkish grey days next week? Back to the real world?

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Part is tremendous amounts of savings with nowhere to go. Few young people who make any money to lend to. Few or no businesses looking to expand production.. and the few that do can self-finance most of it without going to bonds.

So all of a sudden 3% dividends look pretty good. And an off chance they might grow over time.

yup, search for yield.

just desperate greed.

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Its apparently an 8 month long rally. Market is pricing out risk as the debt crisis has passed with Spanish bonds picking up (lower IR).

This would normally suggest a reduction in gold speculation but the opposite is occurring. The market is behaving very erratically and seems to be on a hypnotic trance drug that says buy no matter what. That said, there has been a stream of positive "news" this week with the end of the Euro crisis, more appetite for risk and lower inflation (US prices down again).

Summary of contradictions:

http://www.bloomberg.com/apps/news?pid=20601087&sid=aWcy90kbsyok&pos=2

June 18 (Bloomberg) -- The MSCI World Index of stocks rose for the ninth day, the longest rally in 11 months, and Spanish bonds jumped on speculation efforts to contain Europe’s debt crisis will succeed. Treasuries fell, while gold climbed to a record. Oil reversed losses to rebound above $77 a barrel.

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The market is behaving very erratically and seems to be on a hypnotic trance drug that says buy no matter what.

simply put, the central banks have been successful in inducing inflationary expectations. They have poor boobes like liam hallighan and peter schiff out doing their propaganda for them now. The punters think every sovereign debt crisis is going to result in sudden mass monetisation of debt.

but don't worry my bearish beauty, it won't last very long, as the mathematics of the money supply supply and demnd make themselves felt.

what interests me most is that when the central banks inflation-expectations blimp has been shot down for good, what card they shall turn over next. I can assure you they have a few left to play.

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http://www.bloomberg.com/apps/news?pid=20601087&sid=aWcy90kbsyok&pos=2

Sentiment has changed to the positive after investors saw that the European debt crisis hasn’t spiralled out of control,” said Daphne Roth, Singapore-based head of Asian equity research at ABN Amro Private Banking.

Stocks are not necessarily a good hedge against inflation and bonds are rising (lower IR). If there was an expectation of inflation bonds would sell off (higher IR) but this has not been the case, even in Spain. Yet, at the same time, gold is rising as if risk was increasing along with bond rates.

This is a tough market to call. I do not trust the SM or the smooth talk coming from the ECB. However, the FOREX rarely gets conned and it may be the case that the Euro has frozen at 1.23 as the traders are not buying the propaganda about the risk having passed.

IMO the bond market and FOREX usually the best guides but they do seem to have diverged, at least over the past 24 hours.

What lies ahead next week?

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I will say it again, people are seeing their cash eroded and are piling into shares and, um, property.

I wish they weren't but they are.

Mortgage lending has picked up but still remains very subdued. But you are right, there seems to be a lot of money around and it is not doing any good in bank accounts.

The market is wondering if the sovereign debt "crisis" has been overblown and that we can all get back to normal with HPI, higher stocks, less risk etc etc.

The problem I have with this is that it overlooks reality and why are the metal prices rising given the lower risk appetite? This is a glaring contradiction. Bonds do not rise when risk levels drop.

If the crisis has passed then we all owe Gordon Brown a debt of gratitude.

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http://uk.finance.yahoo.com/news/euro-pound-rise-as-debt-fears-ease-afp-89d11d8a1f01.html

The British pound meanwhile rose on Friday as Britain reported better-than-expected borrowing data for May, on Friday.

There is no doubt that HPI is the main driver of the UK's future economic prospects. Higher mortgage borrowing (increased debt) is a positive for Sterling which means we are now regarded as an HPI dependent economy.

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I know many HPCers who have quietly disappeared from here in recent months and bought homes... they felt it was right for them...

If we go back to the 70s - I know no two situations are the same - but if we had a choice of buying then or waiting for a crash then buying would prove right and waiting would prove wrong... as inflation erased the debt of those who bought in the 70s...

Alas, now we are on the back of a massive bubble but maybe the 70s for us now was 5 years ago... even 3 years ago...

Hate to say it but it needs to be discussed.

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Guest Noodle

http://uk.finance.yahoo.com/news/euro-pound-rise-as-debt-fears-ease-afp-89d11d8a1f01.html

The British pound meanwhile rose on Friday as Britain reported better-than-expected borrowing data for May, on Friday.

There is no doubt that HPI is the main driver of the UK's future economic prospects. Higher mortgage borrowing (increased debt) is a positive for Sterling which means we are now regarded as an HPI dependent economy.

A dead end street, a cul-de-sac of a situation.

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I know many HPCers who have quietly disappeared from here in recent months and bought homes... they felt it was right for them...

If we go back to the 70s - I know no two situations are the same - but if we had a choice of buying then or waiting for a crash then buying would prove right and waiting would prove wrong... as inflation erased the debt of those who bought in the 70s...

Alas, now we are on the back of a massive bubble but maybe the 70s for us now was 5 years ago... even 3 years ago...

Hate to say it but it needs to be discussed.

I would agree with you if inflation was in the near or medium term future. But it seems that deflation is more likely as we are at the tail end of a collapse in banking and credit. Most governments are cutting back rather than spending their way out of trouble. This will eventually trickle down into job losses and more failed businesses as demand weakens. Lets see what happens over the next 2 quarters as employment is always a lagging indicator and austerity will have some effect on sentiment and enthusiasm to buy up property. I doubt CGT will have a huge impact on the flippers as 40% tax on easy money is still worthwhile.

In the meantime, the stockmarkets are irrational IMO. They look ahead 2 or even 3 Q's and, if anything, the near term looks much better than medium or long term. We are in a bit of a "make hay while the sun shines" with clouds on the not too distant horizon.

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It's what happens when governments print money.

As usual Mr Parry has the correct answer.

In all seriousness, the only way out of the current UK mess is inflation.  The Government can either have massive public sector strikes as it curbs pay and pensions, or it can instead boil the public sector frog slowly.

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  • 149 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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