Monday, March 5, 2007

It’s not looking good folks!!!!

World markets see slide continue

Asian and European stocks have fallen rapidly already this morning

Posted by sovietuk @ 09:12 AM (526 views)
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16 thoughts on “It’s not looking good folks!!!!

  • Good in some ways – not good in others. Even gold is sliding – but I thought it would be the refuge in times like this.

    My problem is that as a STR my money is in (lots of different places including) stocks and gold. If the BoE just print money and keep interest rates low, my money is going to be worth sweet FA – anywhere in the world.

    It is making me a little nervous.

    Maybe it’s just the thrill of the rollercoaster.

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  • Very interesting development, looks like it could (possibly) be more than just a “blip” – now who was it that described it as “just a blip” last week? Ah yes, David. The Nikkei lost well over 3% over night. The Ftse 250 is off over 2% at the moment…

    Inbreda, after initial falls gold will probably rally; as for stocks, it’s anybody’s guess.

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  • The good thing is that after reading this board for a long time I decided to get into currency trading. I have a lot of short trades selling the dollar against the Thai Baht and the Japanese Yen. These have proved quite profitable. Particularly in the last few days!!

    As a result of the Yen strengthening – as I understand it – the cash and carry trade that supplies all of the ‘free’ money becomes suddenly unprofitable. This I guess forces the credit squeeze. I simply cannot see this as a blip. There will be some traderst hat will get hurt on this and the cash and carry trade will no longer be seen as a safe bet, so the damage is done.

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  • Well as Buzz Aldrin said whilst sat atop Apollo 11 and realising the spaceship was really just a large bomb, decided there was nothing he could do about relaxed sat back and enjoyed the ride.

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  • One thing is for sure, the city boys won’t be too keen on paying silly money for London property while this is going on. If the confidence disappears in the city it may filter through the rest of the country. It seems that people can live with creeping interest rates, after all we are “all” so used to being up to the hilt in debt what’s a few 100 quid a month going to do? I fear we will need interest rates somewhere in region of above 6% before they squeeze a lot of people into trouble with property. I can’t see this happening this year. 5.75% at most.

    If a lot of borrowed money is riding on the stock market and falls continue, it may be that this combined with the cheap money disappearing fast from the orient will bring some rational back to the economy as a whole. What worries me is that I’ve always been told that property and stocks move conversely to each other, but both in recent years have boomed. I would be worried that money will be taken out of stocks and ploughed into property, further boosting the bubble. The thing is the general public know that stocks and shares are a risk, but these same people truly do not believe that this can happen to the property market. I am with you inbreda it is a worry but I too I am trying to see how this news is good news for us here at HPC.co.uk. We appear to be living in a time of economic uncertainty; some of the old rules may not apply anymore.

    I guess there are a number of ways to pop a bubble, and a plummeting stock market may be it this time around?

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  • japanese uncle says:

    Could possibly be the beginning of the bloodbath. God knows. Hopefully a good wake-up call for the consumers here. It’s about time to get back to sanity.

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  • financial planner says:

    Gold will rise big time when the real stock market crash happens, later on.

    Stocks and property move in parallel but not in tandem. Stocks are down from 2000 and so will property. By next year stocks will be 30-40% down on 2000 – AFTER 8 YEARS!!!

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  • inflation is eating my savings says:

    Moods and markets. Last May you sort of felt that it was a blip- at least that was what the commentators concensus was. This time, it seems a little different, certainly in mood.
    In October 1929, the two heavy falls were preceded by a week of selling at high volumes- when the really smart money got out. We shall see.

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  • sold 2 rent 1 says:

    inbreda,

    Gold and especially silver are taking a pounding at the moment.
    I am looking at this as another buying opportunity – but will wait and see

    I still beleive that gold and silver are in a secular bull.
    In the 1970’s secular bull there was a cyclical correction that lasted a couple of years.
    Hopefully this won’t happen this time.

    My portfolio is:

    40% Euro
    20% Sterling
    20% Turkish Lira
    10% Gold and silver (units trusts and ETF)
    5% energy stocks
    5% Japanese stocks

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  • sold 2 rent 1 says:

    financial planner,

    I agree. We are 7 years into a secular bear for stocks

    History has shown that 7-8 years after a stock market peak there is a secondary crash
    It happened in 1937 (from 1929) and again in 1974 (from 1966)

    Reduce exposure to sterling
    Reduce exposure to stocks
    Get exposure to gold and silver

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  • S2R1

    I too have over 40% euro holdings, but will wait a little longer for a serious move into gold – I think it has further to fall, before going through the roof. The £ is toast (especially long-term). As for stocks, it will be interesting to see if the markets can regain their nerve – seems to be deserting them at the moment. However, one should never underestimate the gambling prowess (or stupidity) of the City.

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  • The problem with the global credit glut is that it has boosted every asset class with commodities just being the most recent. According to Jim Puplava on Financial Sense (a lot of folk around here listen to him), the flight to “safety” this last week was to bonds rather than gold, an odd choice given the low yields (now even lower.) Gold ETFs were heavily sold to cover margin calls. This week should be even more interesting than the last – the tea leaves for gold are saying long term it’s going up but short term who knows? Many of Jim’s mate’s are saying that it’ll never be this cheap again but then again they’re long term bulls.

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  • Watch what the “Apex Predator Money” does (Private Equity / Hedge Funds / Investment Banks”.

    The smarter ones are engaged in defensive plays by buying up either infrastructure assets (Docks & Harbours, Water Utilities, Railways, Airlines) or commodities (and their associated forwards/futures).

    Idiots are buying things like SubPrime Lenders, Estate Agents (Foxtons).

    The smart play IMHO is to stay away from Sterling and the USD (both terminally ill).

    Never listen to what the politicos say – these are people who will tell you that there are plenty of helicopters to get you out of the Embassy compound and thus there is no need to rush. Next thing, the last helicopter left and you are t the mercy of the invading overruning troops.

    Watch what the Apex Predators are doing. They are vying for defensive relavtive value plays. Even if the currency fails (as it will), there will still be people left who need transporting, feeding, entertainment, goods etc. So if a Dock falls to a tiny fraction of its Sterling value, it will be worth something and as long as the owner can survive, the owner will be protected.

    Great stores of value.

    It is also interesting to keep an eye on the yield curves of bonds and the cost curves of commodities like Oil & Gas. Contango rules for now, but backwardation may soon reign as action kicks off in Iran.

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  • All us daft boys sold up all our equities on December 20th. Anyone trading since then is a complete mug. The signs were all clearly there for all to see. Its no good being an expert after the event.

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  • dohousescrashinthewoods says:

    Interesting about gold ETFs, Monty, I was wondering why it went down.

    Daft Boy, can you elaborate a little? I wound up some fantasy share positions on a hunch in December and January and am now feeling slightly smug, but don’t know what prompted me to do it. What were the signs?

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  • Financial Planner……..I am in total agreement with your comment and forcast

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