Hi,
I am quite nervous about financial situation turmoil happening for the last few days.
1) Euro Currency de-value heavily for 4 years low against US Dollar.
2) Germany restrict naked short selling for some major securities which cause all the world stock market to fall.
3) There is a Sudden drop of 1000 points of DOW which until now SEC in USA cannot explain why
4) Greece debt problem, and possible Portugal, Spain and Italy
5) Gold price at record high.
6) All the major company in USA reported high earning at the same time which I am not sure if that is really good news or substainable.
7) USA reform it's financial market.
All the above is it a sign of bad time coming ? Should we be very careful and not ignore them ?
James
Is the world heading to another Recession ?
Moderators: alvin, learner, Dennis Ng
Re: Is the world heading to another Recession ?
yes, if things worsen, there might be a possibility of a double dip Recession followed by "stagflation" (stagnant economy plus High Inflation).jamestai wrote:Hi,
I am quite nervous about financial situation turmoil happening for the last few days.
1) Euro Currency de-value heavily for 4 years low against US Dollar.
2) Germany restrict naked short selling for some major securities which cause all the world stock market to fall.
3) There is a Sudden drop of 1000 points of DOW which until now SEC in USA cannot explain why
4) Greece debt problem, and possible Portugal, Spain and Italy
5) Gold price at record high.
6) All the major company in USA reported high earning at the same time which I am not sure if that is really good news or substainable.
7) USA reform it's financial market.
All the above is it a sign of bad time coming ? Should we be very careful and not ignore them ?
James
We cannot predict or control what might happen, but we can Prepare and Position ourselves financially for different scenarios.
In a stagflation, stock prices are likely to fall, while Real Assets would typically do well. This is why I have money in Gold/Silver, Property, French Fine Wine and Land, which are all Real Assets. Real Assets constitutes about 36% of my total investment portfolio.
I have about 35% in Stocks and also about 10% in Opportunity Fund, to standby for any Good Opportunity that might arise in a Crisis.
Now, probably people can see the Rationale that I keep stressing the Importance of putting our money (eggs) into different Baskets (Assets) and not just into stocks.
Cheers!
Dennis Ng - When You Master Your Finances, You Master Your Destiny
Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.
Dennis Ng - When You Master Your Finances, You Master Your Destiny
Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.
20 May 2010
SINGAPORE (AP) -- Asian stock markets were lower Thursday, as financial upheaval in Europe continued to reverberate around the globe, with continued fears the continent will be unable to quickly resolve its debt crisis.
Japan's benchmark Nikkei 225 stock average was off 1.5 percent at 10032.26 after the government said the economy in the first quarter grew 4.9 percent, less than analysts expected. Australia's main index fell 1.4 percent to 4325.00 while shares in Shanghai, Hong Kong and Indonesia also fell.
Singapore's benchmark index fell 0.5 percent despite strong first quarter economic growth. The government said Thursday that Singapore's gross domestic product jumped 16 percent from a year earlier.
Analysts say an economic slowdown in Europe shouldn't affect Asia much since most of the region's exports go to the U.S. or other Asian countries. Just 3 percent of China's exports end up in Italy, Spain, Portugal and Greece -- Europe most troubled economies, according to Morgan Stanley
"The negative impact on the real economy due to China's trade exposure to Euroland will likely be quite manageable," Morgan Stanley said in a report. "The weakness in the Euroland economy helps avoid a worst case scenario in China: Overheating."Nevertheless, investor fears that contagion from the Europe crisis could spread continue to weigh on stock markets.
"The impact on market confidence and the subsequent reactions on various asset classes matters more than the real economy in the short term," Singapore's DBS bank said in a report.
South Korea's Kospi index fell 1.3 percent to 1608.21 after the government announced that an investigation showed overwhelmingly that North Korea fired a torpedo that sank the Cheonan and killed 46 sailors. North Korea has denied involvement in the sinking and vowed Thursday to wage "all-out war" if punished for the sinking of the ship.
Thailand's stock market was closed Thursday after a confrontation between the army and anti-government protesters sparked rioting and arson in Bangkok. The exchange was one of the building's torched by rioters but damage was largely limited to its ground floor.
The Dow Jones industrial average dropped 135.28 points, or 1.3 percent, at 10,375.67, and the broader Standard & Poor's 500 index fell 1.3 percent to 1,106.21.
Major European markets were also down sharply Wednesday, falling nearly 3 percent.
The latest downturn was triggered by Germany's unexpected announcement Tuesday that it had banned naked short selling, where traders bet against investments they don't hold. The sudden move was seen as another example of the disarray in Europe's financial system.
European leaders agreed last week to a nearly $1 trillion bailout program to help countries with debt problems, like Greece. Traders are also concerned that the strict financial measures tied to the bailout could curtail a rebound in stock prices.
In currencies, dollar fell to 91.46 yen from 91.78 yen earlier in New York while the euro fell against the dollar to $1.2358 from $1.2426.
Benchmark crude for June delivery was up 30 cents to $70.17 a barrel in electronic trading on the New York Mercantile Exchange. The contract added 46 cents to settle at $69.87 on Wednesday after dropping earlier in the session to $67.90, the lowest since September.
SINGAPORE (AP) -- Asian stock markets were lower Thursday, as financial upheaval in Europe continued to reverberate around the globe, with continued fears the continent will be unable to quickly resolve its debt crisis.
Japan's benchmark Nikkei 225 stock average was off 1.5 percent at 10032.26 after the government said the economy in the first quarter grew 4.9 percent, less than analysts expected. Australia's main index fell 1.4 percent to 4325.00 while shares in Shanghai, Hong Kong and Indonesia also fell.
Singapore's benchmark index fell 0.5 percent despite strong first quarter economic growth. The government said Thursday that Singapore's gross domestic product jumped 16 percent from a year earlier.
Analysts say an economic slowdown in Europe shouldn't affect Asia much since most of the region's exports go to the U.S. or other Asian countries. Just 3 percent of China's exports end up in Italy, Spain, Portugal and Greece -- Europe most troubled economies, according to Morgan Stanley
"The negative impact on the real economy due to China's trade exposure to Euroland will likely be quite manageable," Morgan Stanley said in a report. "The weakness in the Euroland economy helps avoid a worst case scenario in China: Overheating."Nevertheless, investor fears that contagion from the Europe crisis could spread continue to weigh on stock markets.
"The impact on market confidence and the subsequent reactions on various asset classes matters more than the real economy in the short term," Singapore's DBS bank said in a report.
South Korea's Kospi index fell 1.3 percent to 1608.21 after the government announced that an investigation showed overwhelmingly that North Korea fired a torpedo that sank the Cheonan and killed 46 sailors. North Korea has denied involvement in the sinking and vowed Thursday to wage "all-out war" if punished for the sinking of the ship.
Thailand's stock market was closed Thursday after a confrontation between the army and anti-government protesters sparked rioting and arson in Bangkok. The exchange was one of the building's torched by rioters but damage was largely limited to its ground floor.
The Dow Jones industrial average dropped 135.28 points, or 1.3 percent, at 10,375.67, and the broader Standard & Poor's 500 index fell 1.3 percent to 1,106.21.
Major European markets were also down sharply Wednesday, falling nearly 3 percent.
The latest downturn was triggered by Germany's unexpected announcement Tuesday that it had banned naked short selling, where traders bet against investments they don't hold. The sudden move was seen as another example of the disarray in Europe's financial system.
European leaders agreed last week to a nearly $1 trillion bailout program to help countries with debt problems, like Greece. Traders are also concerned that the strict financial measures tied to the bailout could curtail a rebound in stock prices.
In currencies, dollar fell to 91.46 yen from 91.78 yen earlier in New York while the euro fell against the dollar to $1.2358 from $1.2426.
Benchmark crude for June delivery was up 30 cents to $70.17 a barrel in electronic trading on the New York Mercantile Exchange. The contract added 46 cents to settle at $69.87 on Wednesday after dropping earlier in the session to $67.90, the lowest since September.
Cheers!
Dennis Ng - When You Master Your Finances, You Master Your Destiny
Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.
Dennis Ng - When You Master Your Finances, You Master Your Destiny
Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.
Hi,
Another fresh bad news reported from CNN
http://money.cnn.com/2010/05/20/markets ... 2010052018
James
Another fresh bad news reported from CNN
http://money.cnn.com/2010/05/20/markets ... 2010052018
James
Hi Dennis,
I am reading this article in the link below from cnn about the yield of long term bond in USA is dropping and to some this is not a good thing. After reading, I still don't really understand why the drop in bond yield in not good thing for the economy recovery or what is it effect on economy. Just wonder would you be able to explain to us.
http://money.cnn.com/2010/05/21/news/ec ... /index.htm
James
I am reading this article in the link below from cnn about the yield of long term bond in USA is dropping and to some this is not a good thing. After reading, I still don't really understand why the drop in bond yield in not good thing for the economy recovery or what is it effect on economy. Just wonder would you be able to explain to us.
http://money.cnn.com/2010/05/21/news/ec ... /index.htm
James
Hi James,jamestai wrote:Hi Dennis,
I am reading this article in the link below from cnn about the yield of long term bond in USA is dropping and to some this is not a good thing. After reading, I still don't really understand why the drop in bond yield in not good thing for the economy recovery or what is it effect on economy. Just wonder would you be able to explain to us.
http://money.cnn.com/2010/05/21/news/ec ... /index.htm
James
take note that Bonds are "fixed income" securities, ie. the interest paid is fixed. Thus, if demand for Long Term Bonds increase, the yield falls, becos the price of Bonds shoots up.
This is negative becos as the article mentioned, yield on Long Term Bonds is now only about 3.2%, not high at all.
The fact that people are buying bonds when the yield is Low shows that they are "negative on the economy", that they possibly think the economy is likely to go through a Recession or even a Depression (negative Growth) that making 3.2% is considered a good deal. It shows that the market is fearful and trying to seek "shelter" in safe havens such as U.S. government Bonds, and selling Risky assets, such as Stocks.
This is why this is negative. Hope this clarifies.
Cheers!
Dennis Ng - When You Master Your Finances, You Master Your Destiny
Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.
Dennis Ng - When You Master Your Finances, You Master Your Destiny
Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.
Hi Dennis,
Thank you so much for your explanation. It is very clear and I can understand what the article is saying.
And update on from cnnmoney.
http://money.cnn.com/2010/05/21/news/ec ... /index.htm
http://money.cnn.com/2010/05/21/markets ... /index.htm
Bonds ring economic alarm bells
Stocks rose Friday at the end of a choppy session, which was a positive, but the selling is probably not over yet, said Peter Tuz, president at Chase Investment Counsel.
"We've been given negative news about Europe and mixed signals about the U.S. economy and its been putting the market on edge," Tuz said.
"The market ended higher Friday and that could continue into early next week," he said, "but until we get clarity on the economy or signs that the first-quarter earnings growth is going to continue, this volatility is going to continue."
James
Thank you so much for your explanation. It is very clear and I can understand what the article is saying.
And update on from cnnmoney.
http://money.cnn.com/2010/05/21/news/ec ... /index.htm
http://money.cnn.com/2010/05/21/markets ... /index.htm
Bonds ring economic alarm bells
Stocks rose Friday at the end of a choppy session, which was a positive, but the selling is probably not over yet, said Peter Tuz, president at Chase Investment Counsel.
"We've been given negative news about Europe and mixed signals about the U.S. economy and its been putting the market on edge," Tuz said.
"The market ended higher Friday and that could continue into early next week," he said, "but until we get clarity on the economy or signs that the first-quarter earnings growth is going to continue, this volatility is going to continue."
James