Asiachart.com is one website I regularly visit for its Charts and Technical Analysis and comments.
Here's what is posted at Asiachart.com on 31 Mar 2008:
Cheers!
Dennis Ng
31st March 2008: Last week there were noises in the media suggesting that markets in the US have bottomed. There is a chance that this is the case both in the US and throughout Asia and perhaps the rest of the world. But the greater probability is that we are still in the grip of a major bear trend.
Let us review Asian and Global markets and see where the balance lies.
Starting in the US, there is mixed evidence. The major indices are all still in bearish trends that began last October. The NYSE Composite is the most unambiguously bearish index. The Dow, on the other hand, is forming a triangle, which is ambiguous, and the Nasdaq is well supported. No real joy then from the indexes.
Far more suggestive of a bottom are the many turns on long term supports to be found in at least four US sector charts. Staples, Consumer Discretionary, Technology and Materials are all well supported, giving the impression that the long term trend has not changed from bullish but that the recent bear is just a medium term phenomenon with no implications for the major term.
In the rest of the so called developed world, the situation is much the same as in the US indexes - ambiguous. Big double tops threaten. Some good long term supports are still holding. The German MSCI index is sitting on very strong double support. It could well be finding a bottom. UK clearly looks as though it has further to fall. Japan could be bottoming, but we still have an outstanding bearish target. Ambiguity thus prevails in those markets, but the bearish trend starting last October is the dominant trend.
Asia provides a mixed bag. Hongkong is still in a bear trend. But the index and many stocks are well supported on long term supports. The market could be finding a bottom now.
India and Indonesia are well supported in bullish channels. These two markets have not entered bear trends yet at all.
Japan is still subject to a strong bearish trend. Singapore, Korea, Malaysia and Philippines are all subject to tops which really haven't moved anywhere yet. They are like storm clouds brewing over head. They could blow away and amount to nothing, or they could strike with a vengeance. Much will depend on the regional and global trend. If we see world markets bottoming, there is a fair chance that the tops in these markets will subside without causing much damage.
Taiwan is the bullish star of the week. The market broke out of a small reversal pattern with excellent volume inspiring hope for a sustained rally. Thailand is also making bullish noises. But volumes are yet too low in that market to inspire confidence in the near term.
In summary, the global trend is still bearish. There is possible light at the end of the tunnel. But much of that could be wishful thinking. Major bear markets are difficult to apprehend, especially after a long bull market. The bullish habit of thinking is that, after a few weeks, or a few months at most, the inexorable march upwards will resume. The opposite is the case. Bear markets usually continue until hope and despair prevail.
One must remain detached and patient. The analysis that I do on these pages is particularly useful in the case of major bear markets. Being in cash, or partially in cash through much of a bear market can be a real boost to your bottom line and long term annualized return when the bear eventually reverses. The key is to be patient, wait for all the signals to line up and then pounce. Plenty of time for that.
gb
Have Global Stock Markets Bottomed?
Moderators: alvin, learner, Dennis Ng
Have Global Stock Markets Bottomed?
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.
George Soros sees additional market decline...
Soros Sees Additional Market Declines After Temporary Reprieve
2008-04-03 00:01 (New York)
By Katherine Burton
April 3 (Bloomberg) -- Billionaire George Soros called the
current financial crisis the worst since the Great Depression
and said markets will fall more this year after a brief rebound.
``We had a good bottom,'' Soros said yesterday in an
interview in New York, referring to the rally in stocks and the
dollar after JPMorgan Chase & Co. agreed to buy Bear Stearns
Cos. on March 17. ``This will probably not prove to be the final
bottom,'' he said, adding the rebound may last six weeks to
three months as the U.S. moves closer to a recession.
Last summer, worried about market disruptions that started
with rising subprime-mortgage defaults, Soros, 77, returned to a
more active role in managing the $17 billion Quantum Endowment
Fund, whose profits pay for his philanthropic projects. Quantum
returned an average of 30 percent a year before Soros started
using outside managers in 2000 for much of his money.
He also decided to write a book, his 10th, ``The New
Paradigm for Financial Markets'' (Public Affairs, 2008).
Released today online, the book explains the causes of the
current meltdown, a crisis he says has been in the making since
1980, and the trades he put in place this year to protect his
wealth, much of it in Quantum.
Soros has bet on declines in the dollar, 10-year Treasuries
and U.S. and European stocks. He expected foreign currencies to
rise, as well as Chinese and Indian equities. The latter bet
helped Quantum return 32 percent in 2007. Quantum's returns this
year have ranged from up 3 percent to down 3 percent.
`Heightened Uncertainty'
The euro has climbed 7.5 percent against the dollar this
year and the Japanese yen has gained 9.1 percent. These and
other currencies may continue to strengthen, he said.
``There is an increasing unwillingness to hold dollars,
though there's a lack of suitable alternatives,'' he said.
``It's a period of heightened uncertainty.''
Federal Reserve officials dropped their benchmark interest
rate 2 percentage points this year to 2.25 percent, and Soros
doesn't see that they can lower the rate much further, given the
weak dollar.
``We are close to the limit,'' he said.
As for his wagers on developing markets, Soros hasn't
abandoned his holdings in India, even with the 22 percent drop
in the benchmark Indian index this year.
``The fundamentals remain good,'' he said. He is less
certain about what will happen to Chinese H shares, which trade
in Hong Kong.
Credit-Default Swaps
Credit default swaps -- a way to bet on the
creditworthiness of a company -- may be the next crisis area
because the market is unregulated, and it's impossible to know
whether counterparties can meet their obligations in the event
of a bond default. The market has a notional value of about $45
trillion -- or about half the total wealth of U.S. households.
Soros recommends the creation of an exchange with a sound
capital structure and strict margin requirements, where current
and future contracts could be traded.
The cause of the current troubles dates back to 1980, when
U.S. President Ronald Reagan and U.K. Prime Minister Margaret
Thatcher came to power, Soros said. It was during this time that
borrowing ballooned and regulation of banks and financial
markets became less stringent. These leaders, Soros said,
believed that markets are self-correcting, meaning that if
prices get out of whack, they will eventually revert to
historical norms. Instead, this laissez-faire attitude created
the current housing bubble, which in turn led to the seizing up
of credit markets and the demise of Bear Stearns, Soros said.
To avoid a super-bubble in the future, Soros said banks
must control their own borrowing. They must also curtail lending
to clients such as hedge funds by demanding greater collateral
and margin requirements on loans.
Asked if such moves would make it impossible to achieve
returns like those of his pre-2000 days, Soros laughed.
``Since I'm designing these regulations, they would not
hurt me,'' he said. ``We made direction bets but we haven't used
leverage'' like the $25-to-$1 borrowing that brought down John
Meriwether's Long-Term Capital Management LLC in 1998.
--Editors: Larry Edelman, Sau Chan
2008-04-03 00:01 (New York)
By Katherine Burton
April 3 (Bloomberg) -- Billionaire George Soros called the
current financial crisis the worst since the Great Depression
and said markets will fall more this year after a brief rebound.
``We had a good bottom,'' Soros said yesterday in an
interview in New York, referring to the rally in stocks and the
dollar after JPMorgan Chase & Co. agreed to buy Bear Stearns
Cos. on March 17. ``This will probably not prove to be the final
bottom,'' he said, adding the rebound may last six weeks to
three months as the U.S. moves closer to a recession.
Last summer, worried about market disruptions that started
with rising subprime-mortgage defaults, Soros, 77, returned to a
more active role in managing the $17 billion Quantum Endowment
Fund, whose profits pay for his philanthropic projects. Quantum
returned an average of 30 percent a year before Soros started
using outside managers in 2000 for much of his money.
He also decided to write a book, his 10th, ``The New
Paradigm for Financial Markets'' (Public Affairs, 2008).
Released today online, the book explains the causes of the
current meltdown, a crisis he says has been in the making since
1980, and the trades he put in place this year to protect his
wealth, much of it in Quantum.
Soros has bet on declines in the dollar, 10-year Treasuries
and U.S. and European stocks. He expected foreign currencies to
rise, as well as Chinese and Indian equities. The latter bet
helped Quantum return 32 percent in 2007. Quantum's returns this
year have ranged from up 3 percent to down 3 percent.
`Heightened Uncertainty'
The euro has climbed 7.5 percent against the dollar this
year and the Japanese yen has gained 9.1 percent. These and
other currencies may continue to strengthen, he said.
``There is an increasing unwillingness to hold dollars,
though there's a lack of suitable alternatives,'' he said.
``It's a period of heightened uncertainty.''
Federal Reserve officials dropped their benchmark interest
rate 2 percentage points this year to 2.25 percent, and Soros
doesn't see that they can lower the rate much further, given the
weak dollar.
``We are close to the limit,'' he said.
As for his wagers on developing markets, Soros hasn't
abandoned his holdings in India, even with the 22 percent drop
in the benchmark Indian index this year.
``The fundamentals remain good,'' he said. He is less
certain about what will happen to Chinese H shares, which trade
in Hong Kong.
Credit-Default Swaps
Credit default swaps -- a way to bet on the
creditworthiness of a company -- may be the next crisis area
because the market is unregulated, and it's impossible to know
whether counterparties can meet their obligations in the event
of a bond default. The market has a notional value of about $45
trillion -- or about half the total wealth of U.S. households.
Soros recommends the creation of an exchange with a sound
capital structure and strict margin requirements, where current
and future contracts could be traded.
The cause of the current troubles dates back to 1980, when
U.S. President Ronald Reagan and U.K. Prime Minister Margaret
Thatcher came to power, Soros said. It was during this time that
borrowing ballooned and regulation of banks and financial
markets became less stringent. These leaders, Soros said,
believed that markets are self-correcting, meaning that if
prices get out of whack, they will eventually revert to
historical norms. Instead, this laissez-faire attitude created
the current housing bubble, which in turn led to the seizing up
of credit markets and the demise of Bear Stearns, Soros said.
To avoid a super-bubble in the future, Soros said banks
must control their own borrowing. They must also curtail lending
to clients such as hedge funds by demanding greater collateral
and margin requirements on loans.
Asked if such moves would make it impossible to achieve
returns like those of his pre-2000 days, Soros laughed.
``Since I'm designing these regulations, they would not
hurt me,'' he said. ``We made direction bets but we haven't used
leverage'' like the $25-to-$1 borrowing that brought down John
Meriwether's Long-Term Capital Management LLC in 1998.
--Editors: Larry Edelman, Sau Chan
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.
George Soros said Global Credit Crisis will get worse...
April 10 (Bloomberg) -- Billionaire George Soros said the global credit crisis will get worse before it gets better.
Soros, who said lack of oversight is partly responsible for problems in the financial markets, criticized regulators and the U.S. administration for not ``responding fully enough.'' He was speaking on a teleconference call with reporters today.
The world's biggest banks have recorded $232 billion in asset writedowns and credit losses since the beginning of 2007, including reserves set aside for bad loans. The Federal Reserve has engaged in the most aggressive rate cuts in the past 40 years in an attempt to forestall losses in the credit and equity markets.
``Authorities have not accepted the responsibilities to try to control asset bubbles from going too far,'' Soros said. Recently established markets, including for credit-default swaps, are ``totally unregulated, that's the cause of the troubles.''
Credit-default swaps, contracts designed to protect investors against default and used to speculate on credit quality, grew 49 percent to cover a notional $43 trillion of debt in the six months ended June 30, according to the Bank for International Settlements.
The market for derivatives grew at the fastest pace in at least nine years to $516 trillion in the first half of 2007, the BIS said in a report. Money at risk through credit-default swaps increased 145 percent from last year to $721 billion, according to the BIS, which was formed in 1930 to monitor financial markets and regulate banks.
``I think it's a pretty accurate estimate of the loan losses,'' Soros said. ``But we have not yet seen the full effect of possible recession.''
Mistrust in Markets
Uncertainty about the ability of investors and traders to meet contract obligations is creating ``mistrust'' in the markets that ``will not be fully cleared up until you have a regulated delivery mechanism and oversight over this market,'' he said.
Morgan Stanley Chief Executive Officer John Mack said on April 8 that the credit crisis will last a couple of quarters longer and that the markets are facing the most difficult conditions he's seen in 40 years.
Soros said the crisis will last longer than authorities predict.
``They claim that there will be a pickup in the second half of the year,'' he said. ``I cannot believe that. I don't see any reason to believe it because it will take much longer for the full effect of the decline in the housing market to be felt.''
Total losses for banks, hedge funds, pension funds, insurance companies, and sovereign wealth funds may swell to $945 billion, the International Monetary Fund said in a report on April 8.
``This is a man-made crisis and it's made by this false belief that markets correct their own excesses,'' Soros said. ``That's the job of the regulators. And the regulators failed to perform their job.''
Separately, Soros said China was not immune to worldwide market conditions. China's inflation has peaked and may be abating, he said.
Soros, who said lack of oversight is partly responsible for problems in the financial markets, criticized regulators and the U.S. administration for not ``responding fully enough.'' He was speaking on a teleconference call with reporters today.
The world's biggest banks have recorded $232 billion in asset writedowns and credit losses since the beginning of 2007, including reserves set aside for bad loans. The Federal Reserve has engaged in the most aggressive rate cuts in the past 40 years in an attempt to forestall losses in the credit and equity markets.
``Authorities have not accepted the responsibilities to try to control asset bubbles from going too far,'' Soros said. Recently established markets, including for credit-default swaps, are ``totally unregulated, that's the cause of the troubles.''
Credit-default swaps, contracts designed to protect investors against default and used to speculate on credit quality, grew 49 percent to cover a notional $43 trillion of debt in the six months ended June 30, according to the Bank for International Settlements.
The market for derivatives grew at the fastest pace in at least nine years to $516 trillion in the first half of 2007, the BIS said in a report. Money at risk through credit-default swaps increased 145 percent from last year to $721 billion, according to the BIS, which was formed in 1930 to monitor financial markets and regulate banks.
``I think it's a pretty accurate estimate of the loan losses,'' Soros said. ``But we have not yet seen the full effect of possible recession.''
Mistrust in Markets
Uncertainty about the ability of investors and traders to meet contract obligations is creating ``mistrust'' in the markets that ``will not be fully cleared up until you have a regulated delivery mechanism and oversight over this market,'' he said.
Morgan Stanley Chief Executive Officer John Mack said on April 8 that the credit crisis will last a couple of quarters longer and that the markets are facing the most difficult conditions he's seen in 40 years.
Soros said the crisis will last longer than authorities predict.
``They claim that there will be a pickup in the second half of the year,'' he said. ``I cannot believe that. I don't see any reason to believe it because it will take much longer for the full effect of the decline in the housing market to be felt.''
Total losses for banks, hedge funds, pension funds, insurance companies, and sovereign wealth funds may swell to $945 billion, the International Monetary Fund said in a report on April 8.
``This is a man-made crisis and it's made by this false belief that markets correct their own excesses,'' Soros said. ``That's the job of the regulators. And the regulators failed to perform their job.''
Separately, Soros said China was not immune to worldwide market conditions. China's inflation has peaked and may be abating, he said.
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.
more bad news are expected to be announced by banks and financial firms all around the world. And I'm probably the first person to say that there'll be a Global Financial Crisis as early as July 2007.
Time will tell if I'm correct.
Dennis Ng, http://www.HousingLoanSG.com
WASHINGTON - The Group of Seven major industrialized nations on Friday said the banks should adopt recommendations to "fully and promptly" reveal their risk exposure due to the current financial market turmoil within 100 days.
In a statement, the G7 said that after approving a Financial Stability Forum (FSF) report on ways to prevent a repetition of the financial crisis, it had identified several recommendations for implementation within the next 100 days.
Ranked first, the G7 said, "firms should fully and promptly disclose their risk exposures, write-downs, and fair value estimates for complex and illiquid instruments.
"We strongly encourage financial institutions to make robust risk disclosures in their upcoming mid-year reporting consistent with leading disclosure practices as set out in the FSF's report," G7 finance ministers and central bank governors said after a meeting here.
Among the other measures for early implementation, the G7 said the International Accounting Standards Board (IASB) and standard-setters should "initiate urgent action to improve the accounting and disclosure standards for off-balance sheet entities."
It should also enhance its guidance on fair value accounting, particularly on valuing financial instruments in periods of stress.
Off-balance sheet entities have been blamed for concealing the true extent of the banks' exposure to the US sub-prime home loan crisis and the risks involved in assets that could not be fairly valued in times of distress.
"Firms should strengthen their risk-management practices, supported by supervisors' oversight, including rigorous stress testing. Firms also should strengthen their capital positions as needed," the G7 said.
"We strongly endorsed the (FSF) report and commit to implement its recommendations ... We reaffirm our shared interest in a strong and stable international financial system," it said.
In its report, the FSF said watchdogs around the world should improve their "responsiveness to risks," and "robust arrangements" should be put in place to deal with stress in the global financial system.
"To restore confidence in the soundness of markets and institutions, it is essential that steps are taken now to enhance the resilience of the global system," the FSF urged.
The G7 said the world economy "continues to face a difficult period...(and) near-term economic prospects have weakened.
"The turmoil in global financial markets remains challenging and more protracted than we had anticipated," it said.
The G7 finance chiefs noted that since their last meeting in February, there have been "sharp fluctuations" in major currencies and members "continue to monitor exchange markets closely and cooperate as appropriate."
Major central banks have coordinated multi-billion dollar cash injections into stressed financial markets in recent months and the dollar has plunged to record lows.
"We reaffirmed our strong commitment to continue working closely together to restore sustained growth, maintain price stability, and ensure the smooth and orderly functioning of our financial systems." - AFP/ir
Time will tell if I'm correct.
Dennis Ng, http://www.HousingLoanSG.com
WASHINGTON - The Group of Seven major industrialized nations on Friday said the banks should adopt recommendations to "fully and promptly" reveal their risk exposure due to the current financial market turmoil within 100 days.
In a statement, the G7 said that after approving a Financial Stability Forum (FSF) report on ways to prevent a repetition of the financial crisis, it had identified several recommendations for implementation within the next 100 days.
Ranked first, the G7 said, "firms should fully and promptly disclose their risk exposures, write-downs, and fair value estimates for complex and illiquid instruments.
"We strongly encourage financial institutions to make robust risk disclosures in their upcoming mid-year reporting consistent with leading disclosure practices as set out in the FSF's report," G7 finance ministers and central bank governors said after a meeting here.
Among the other measures for early implementation, the G7 said the International Accounting Standards Board (IASB) and standard-setters should "initiate urgent action to improve the accounting and disclosure standards for off-balance sheet entities."
It should also enhance its guidance on fair value accounting, particularly on valuing financial instruments in periods of stress.
Off-balance sheet entities have been blamed for concealing the true extent of the banks' exposure to the US sub-prime home loan crisis and the risks involved in assets that could not be fairly valued in times of distress.
"Firms should strengthen their risk-management practices, supported by supervisors' oversight, including rigorous stress testing. Firms also should strengthen their capital positions as needed," the G7 said.
"We strongly endorsed the (FSF) report and commit to implement its recommendations ... We reaffirm our shared interest in a strong and stable international financial system," it said.
In its report, the FSF said watchdogs around the world should improve their "responsiveness to risks," and "robust arrangements" should be put in place to deal with stress in the global financial system.
"To restore confidence in the soundness of markets and institutions, it is essential that steps are taken now to enhance the resilience of the global system," the FSF urged.
The G7 said the world economy "continues to face a difficult period...(and) near-term economic prospects have weakened.
"The turmoil in global financial markets remains challenging and more protracted than we had anticipated," it said.
The G7 finance chiefs noted that since their last meeting in February, there have been "sharp fluctuations" in major currencies and members "continue to monitor exchange markets closely and cooperate as appropriate."
Major central banks have coordinated multi-billion dollar cash injections into stressed financial markets in recent months and the dollar has plunged to record lows.
"We reaffirmed our strong commitment to continue working closely together to restore sustained growth, maintain price stability, and ensure the smooth and orderly functioning of our financial systems." - AFP/ir
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.
remember I ever commented that Temasek was "too early" to buy into Merill Lynch? And of course the many times I asked people to raise Cash before end of year 2007?
the latest news confirmed so:
Cheers!
Dennis Ng
Temasek likely to shed more assets, conserve cash
Temasek, sitting on paper losses of US$1.2 billion on its investments in Merrill Lynch and Barclays, is expected to shed more assets and conserve cash to offset its exposure to the West's ailing financial sector.
the latest news confirmed so:
Cheers!
Dennis Ng
Temasek likely to shed more assets, conserve cash
Temasek, sitting on paper losses of US$1.2 billion on its investments in Merrill Lynch and Barclays, is expected to shed more assets and conserve cash to offset its exposure to the West's ailing financial sector.
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.
[quote=Musicwhiz]
I think it is highly probable that there will be more write-downs. However, with more clarity and more funds coming into the system; it will probably reduce the "shock" impact of any subsequent announcement of write-downs.
I am of the opinion that the sub-prime crisis may last 2-3 years in total for the entire system of bad credit to be "flushed out".
[/quote]
agree with your comments.
However, after the sub-prime news loses its shock impact, there might be further shocks when Real Weakness in Global Economies and Rising Inflation and Risk of Social Unrest in Poor Countries start to happen......that'll be Part 2 of the saga.
Remember that in Asian crisis which started in May 1997, stock markets only bottomed in Oct 1998. This time round, stock markets start falling in Nov 2007....the current Global Financial Crisis crisis is likely to be worser than Asian Crisis......just my personal opinion.
Time will tell if I'm correct. Actually, I don't wish to be correct, but I fear I might be correct.
I think it is highly probable that there will be more write-downs. However, with more clarity and more funds coming into the system; it will probably reduce the "shock" impact of any subsequent announcement of write-downs.
I am of the opinion that the sub-prime crisis may last 2-3 years in total for the entire system of bad credit to be "flushed out".
[/quote]
agree with your comments.
However, after the sub-prime news loses its shock impact, there might be further shocks when Real Weakness in Global Economies and Rising Inflation and Risk of Social Unrest in Poor Countries start to happen......that'll be Part 2 of the saga.
Remember that in Asian crisis which started in May 1997, stock markets only bottomed in Oct 1998. This time round, stock markets start falling in Nov 2007....the current Global Financial Crisis crisis is likely to be worser than Asian Crisis......just my personal opinion.
Time will tell if I'm correct. Actually, I don't wish to be correct, but I fear I might be correct.
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.
Economy and PE Ratio Impact on Long-term Stock Market
I Extracted part of the article I read below. Here's the url for the full article:
http://www.marketoracle.co.uk/Article4022.html
Cheers!
Dennis Ng, http://www.HousingLoanSG.com
Duke University released a survey yesterday of Chief Financial Officers of major corporations. This is a gloomy bunch. 54% think we are already in a recession. My friend Duke Professor Campbell Harvey said: "In contrast, 90 percent of the CFOs do not believe the economy will turn the corner in 2008. Indeed, many of them believe it will be late 2009 before a recovery takes hold."
Let's look at a chart courtesy of John Burns Real Estate Consulting. This shows that part of the bubble in housing was in the number of transactions that occurred during the bubble years. In 2005 alone, there were 48% more housing transactions that occurred than should have been expected based on historical average sales per household. In large part this was caused by "investors," many of dubious financial strength, buying homes and condos on readily available credit with no real lending standards and no way to pay the loans if they were not able to sell them at a higher price.
As a result, there are now 3.5 million excess homes that need to be filled by qualified homeowners. Over time, due to growth in the population, the demand will eventually catch up, but that will be a process of several years. Housing prices will have to fall by another 15-20% or so to get to a place where homes become affordable to the marginal buyer. And that assumes rates can stay low.
Let's review some basics. I made the contention in Bull's Eye Investing that we should look at bull and bear market cycles in terms of valuations rather than price. Stock markets go from high valuations to low valuations and back to high valuations over very long term cycles, averaging around 17 years. That would mean we are roughly halfway through this secular bear market which began in 2000. I also pointed out a few weeks ago that the bottom in terms of price in the last secular bear market (1966-1982) was made in 1974, but it was 8 years later than the bottom in valuations as expressed by Price to Earnings Ratio was reached. These periods of low valuation are the springboard for the next bull market rise, so there is a bull market coming. We just have to be patient.
It is entirely possible that we see the bottom of the market in terms of price this year as the market falls due to the pressures of the recession we are in, yet valuations continue to fall even as prices rise. In fact, that is typical of the secular bear cycles. This happens as earnings rise faster than stock prices.
where are today's P/E ratios? Let's go to the data provided by Standard and Poor's for the S&P 500. In January of 2007, S&P estimated that earnings for 2007 would be $89. Earnings for 2007 were actually $71.56, down about 20%. Last year about this time S&P estimated that earnings for 2008 would be $92. Today they estimate 71.20 for 2008. Lately every time new estimates come out they are down. But that is typical in a recession. Analysts are generally behind the curve.
But as the table below shows, we are now at P/E ratios that are back up over 20, and going to 22 by the middle of the summer. That would suggest that total returns are going to be under pressure for the next few years at a minimum and maybe for a decade. That does not bode well for retirees who are expecting the stock market to compound at 8-10% annually in order for them to be able to retire in the style to which the want to be accustomed. Real (inflation adjusted) returns of between 0 and 4% are more likely based on historical returns from today's valuations.
The Boomers Break the Deal
I have good news and bad news. First, the good news. Basically, my generation – the Baby Boomers- is going to break the deal my Dad's generation made with my kids. They agreed to die on time. The Boomer Generation and subsequent generations are going to live longer –potentially much longer - than the current actuarial tables suggest because of major breakthroughs in medicine and health care. It is quite conceivable that we will see another average ten years of average life for the Baby Boomer Generation. I personally fully intend to enjoy those years.
But the bad news is that many have not saved enough for an extended life span, let alone 30 years of retirement. My friend Ed Easterling at Crestmont Research did some very interesting analysis a few months ago. You have saved and invested, and now you want to retire. You decide to take out 5% of your total portfolio to live each year and increase the amount for inflation, so that you can maintain your lifestyle (a number which a surprising number of investment advisors would say is ok). Let's say you are an aggressive older couple and decide to stay in the stock market because that is where you are told that you can get the best returns over time. And you know that at least one of you have the probability of living 30 years. On average you are going to get 7-8% or more on your stock portfolio, right?
Ed calculates what you would get for 78 different 30-year periods since 1900. Let's say you start with a million dollars. On average, this has been a good bet. You could maintain your lifestyle and end up with $3.6 million. You've been pretty conservative, right?
Wrong. Because the returns you get over the next 30 years are highly dependent on the P/E ratios at the beginning of those 30 years. Let's break up those 30-year periods into four quartiles of beginning valuation. If you start in a period when P/E ratios are in the highest quartile, you find that over 50% of the time you end up penniless, on average within 22 years. Here's that data from Ed:
As we saw above, valuations are well into that top 25% quartile. Notice that even when starting with the lowest-quartile valuations that 5% of the time you ran out of money within 23 years. Want to take a lifestyle bet that you have a 1 in 20 chance of losing? It will not be fun to have to go to work as a Wal-Mart greeter at 80.
Of course, there are other implications. A generation living longer means that the seemingly pessimistic forecasts of doom and gloom for Social Security and Medicare are not pessimistic enough. Defined benefit pension plans will be in real trouble at the end of the next decade.
So, what should you do? In secular bear cycles like we are in now, you should look for absolute return style investments, like income portfolios, hedge funds and other alternative style investments, be more nimble in your stock picking rather than using index funds and expect overall lower returns. We need to be patient and wait for the lower valuations which have always eventually made themselves evident.
http://www.marketoracle.co.uk/Article4022.html
Cheers!
Dennis Ng, http://www.HousingLoanSG.com
Duke University released a survey yesterday of Chief Financial Officers of major corporations. This is a gloomy bunch. 54% think we are already in a recession. My friend Duke Professor Campbell Harvey said: "In contrast, 90 percent of the CFOs do not believe the economy will turn the corner in 2008. Indeed, many of them believe it will be late 2009 before a recovery takes hold."
Let's look at a chart courtesy of John Burns Real Estate Consulting. This shows that part of the bubble in housing was in the number of transactions that occurred during the bubble years. In 2005 alone, there were 48% more housing transactions that occurred than should have been expected based on historical average sales per household. In large part this was caused by "investors," many of dubious financial strength, buying homes and condos on readily available credit with no real lending standards and no way to pay the loans if they were not able to sell them at a higher price.
As a result, there are now 3.5 million excess homes that need to be filled by qualified homeowners. Over time, due to growth in the population, the demand will eventually catch up, but that will be a process of several years. Housing prices will have to fall by another 15-20% or so to get to a place where homes become affordable to the marginal buyer. And that assumes rates can stay low.
Let's review some basics. I made the contention in Bull's Eye Investing that we should look at bull and bear market cycles in terms of valuations rather than price. Stock markets go from high valuations to low valuations and back to high valuations over very long term cycles, averaging around 17 years. That would mean we are roughly halfway through this secular bear market which began in 2000. I also pointed out a few weeks ago that the bottom in terms of price in the last secular bear market (1966-1982) was made in 1974, but it was 8 years later than the bottom in valuations as expressed by Price to Earnings Ratio was reached. These periods of low valuation are the springboard for the next bull market rise, so there is a bull market coming. We just have to be patient.
It is entirely possible that we see the bottom of the market in terms of price this year as the market falls due to the pressures of the recession we are in, yet valuations continue to fall even as prices rise. In fact, that is typical of the secular bear cycles. This happens as earnings rise faster than stock prices.
where are today's P/E ratios? Let's go to the data provided by Standard and Poor's for the S&P 500. In January of 2007, S&P estimated that earnings for 2007 would be $89. Earnings for 2007 were actually $71.56, down about 20%. Last year about this time S&P estimated that earnings for 2008 would be $92. Today they estimate 71.20 for 2008. Lately every time new estimates come out they are down. But that is typical in a recession. Analysts are generally behind the curve.
But as the table below shows, we are now at P/E ratios that are back up over 20, and going to 22 by the middle of the summer. That would suggest that total returns are going to be under pressure for the next few years at a minimum and maybe for a decade. That does not bode well for retirees who are expecting the stock market to compound at 8-10% annually in order for them to be able to retire in the style to which the want to be accustomed. Real (inflation adjusted) returns of between 0 and 4% are more likely based on historical returns from today's valuations.
The Boomers Break the Deal
I have good news and bad news. First, the good news. Basically, my generation – the Baby Boomers- is going to break the deal my Dad's generation made with my kids. They agreed to die on time. The Boomer Generation and subsequent generations are going to live longer –potentially much longer - than the current actuarial tables suggest because of major breakthroughs in medicine and health care. It is quite conceivable that we will see another average ten years of average life for the Baby Boomer Generation. I personally fully intend to enjoy those years.
But the bad news is that many have not saved enough for an extended life span, let alone 30 years of retirement. My friend Ed Easterling at Crestmont Research did some very interesting analysis a few months ago. You have saved and invested, and now you want to retire. You decide to take out 5% of your total portfolio to live each year and increase the amount for inflation, so that you can maintain your lifestyle (a number which a surprising number of investment advisors would say is ok). Let's say you are an aggressive older couple and decide to stay in the stock market because that is where you are told that you can get the best returns over time. And you know that at least one of you have the probability of living 30 years. On average you are going to get 7-8% or more on your stock portfolio, right?
Ed calculates what you would get for 78 different 30-year periods since 1900. Let's say you start with a million dollars. On average, this has been a good bet. You could maintain your lifestyle and end up with $3.6 million. You've been pretty conservative, right?
Wrong. Because the returns you get over the next 30 years are highly dependent on the P/E ratios at the beginning of those 30 years. Let's break up those 30-year periods into four quartiles of beginning valuation. If you start in a period when P/E ratios are in the highest quartile, you find that over 50% of the time you end up penniless, on average within 22 years. Here's that data from Ed:
As we saw above, valuations are well into that top 25% quartile. Notice that even when starting with the lowest-quartile valuations that 5% of the time you ran out of money within 23 years. Want to take a lifestyle bet that you have a 1 in 20 chance of losing? It will not be fun to have to go to work as a Wal-Mart greeter at 80.
Of course, there are other implications. A generation living longer means that the seemingly pessimistic forecasts of doom and gloom for Social Security and Medicare are not pessimistic enough. Defined benefit pension plans will be in real trouble at the end of the next decade.
So, what should you do? In secular bear cycles like we are in now, you should look for absolute return style investments, like income portfolios, hedge funds and other alternative style investments, be more nimble in your stock picking rather than using index funds and expect overall lower returns. We need to be patient and wait for the lower valuations which have always eventually made themselves evident.
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.
My personal opinion is that U.S. will definitely have a Recession (or Jim Rogers said U.S. already in recession).
The ONLY questoin is How Long and How Deep is this U.S. recession? The answer will affect Global Stock/Property/Bond markets.
I don't think U.S. stock market has bottomed, the price/action/volume of the last few days do NOT look good, (just my personal opinion).
However, some stocks in Singapore seem to have bottom, as their prices do not drop even when S'pore market drops.
The ONLY questoin is How Long and How Deep is this U.S. recession? The answer will affect Global Stock/Property/Bond markets.
I don't think U.S. stock market has bottomed, the price/action/volume of the last few days do NOT look good, (just my personal opinion).
However, some stocks in Singapore seem to have bottom, as their prices do not drop even when S'pore market drops.
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.
of course U.S. economy will eventually recovers. The fact remains that anyone who bought stocks at higher prices are losing out in terms of "Opportunity Cost".
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.
well, I warned several months ago in year 2007 that stock prices are likely to come down. If people had heeded my advice, they would have avoided stock price plunge of 30% to over 70%.
In my opinion, this retreat in commodities prices of about 10% is just a correction, it gives Opportunity for those who do NOT have any $ in Gold and Silver to buy some.
My average cost of Gold is US$790, still better performing than any stocks I bought recently.
Just my personal opinion, I might be totally wrong.
In my opinion, this retreat in commodities prices of about 10% is just a correction, it gives Opportunity for those who do NOT have any $ in Gold and Silver to buy some.
My average cost of Gold is US$790, still better performing than any stocks I bought recently.
Just my personal opinion, I might be totally wrong.
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.
yes, I think this time it is different from the Crash of year 2000 and the near U.S. recession of year 2001.
During that time, stocks crashed, however, with interest rates cuts, both U.S. Property market and Bond market went up, up, all the way.
This time round, we have U.S. Property down, stocks down, and Bond market down (with all the CDOs and other bond problems).
And we didn't have inflation problem back in year 2001. This time round, we have inflation problem.
In year 2001, the worry was deflation. Now, the worry is stagflation.
I would NOT want to be in the shoes of Bernanke. People expect magic from him, to turnaround everything.
During that time, stocks crashed, however, with interest rates cuts, both U.S. Property market and Bond market went up, up, all the way.
This time round, we have U.S. Property down, stocks down, and Bond market down (with all the CDOs and other bond problems).
And we didn't have inflation problem back in year 2001. This time round, we have inflation problem.
In year 2001, the worry was deflation. Now, the worry is stagflation.
I would NOT want to be in the shoes of Bernanke. People expect magic from him, to turnaround everything.
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.
Alan Greenspan must be so glad he is no longer the Fed Chief....Bernanke tried to "imitate" Alan Greenspan by cutting interest rates to "rescue" the economy, however, he probably forget that this time round, things are different, Bernanke had to worry about Rising Inflation, a problem which Alan Greenspan didn't have back then.
Cheers!
Dennis Ng
The Fed's worst nightmare
By Paul R. La Monica, CNNMoney.com editor at large
Last Updated: March 13, 2008: 12:48 PM EDT
Ugly retail sales and a somber forecast from CFOs point to recession, but rising oil and gold prices and a weak dollar show inflation. What's Ben Bernanke to do?
NEW YORK (CNNMoney.com) -- It's days like today that will make many investors wish they stayed in bed.
And they're not the only ones. Something tells me that Ben Bernanke and the rest of the Federal Reserve's policy-making committee would like to run and hide as well.
Where to begin? Retail sales for February were shockingly weak, with sales falling 0.6% during the month compared to economists' forecasts of a 0.2% gain. Those numbers put dents in the argument that consumers would keep spending in the face of the housing downturn.
Wall Street is also digesting some sobering results from a survey of chief financial officers released by Duke University and CFO magazine late Wednesday.
TalkBack: Should the Fed keep cutting rates?
According to the survey of more than 1,000 CFOs, conducted last week, three-quarters of the respondents said the economy is either in a recession already or will hit one this year, and nearly 90% of CFOs surveyed said they didn't think the economy would rebound until late 2009.
So this means the Fed should slash interest rates at its next meeting on March 18, right? After all, according to federal funds futures, investors are pricing in a 72% chance of a three-quarters of a percentage point cut.
But not so fast.
Gold hit $1,000 an ounce for the first time ever Thursday morning. Oil is slouching towards $111 a barrel. And the dollar hit a 12-year low against the yen and a new record low against the euro. Can you say inflation?
Actually, it's worse than mere inflation. The combination of rising commodity prices and the weakening growth forecast for the economy has people worried about 1970s style stagflation. I hope Bernanke can dig up a pair of old bell bottom pants. Do the hustle!
"Clearly, the Fed needs to switch to Plan B," noted Duke professor Campbell R. Harvey in a release about the CFO survey.
But what is Plan B exactly? It's difficult to figure out just what the Fed can do other than let the credit markets and housing markets work themselves out, and hope the actions the central bank has already taken stimulate the economy at some point.
Time may be the Fed's only ally
Even though the Fed's series of rate cuts since last September - as well as the hundreds of billions in cash and Treasurys that the central bank has pledged to loan capital-constrained financial institutions - have failed to encourage more lending just yet, investors and consumers need to realize there is a lag effect of several months before Fed policy moves have an impact. History shows that Fed easing will eventually work their magic.
Hopefully, the rate cuts will encourage more banks to loosen their lending standards again, and will spur consumers and corporations to start spending more by the end of 2008 or early 2009.
Plus, even though there is a debate about whether the tax rebate checks that consumers will receive in the next few months will really help the economy that much, it's hard to see how the rebates can hurt.
But as I've said earlier this week in this column and numerous times before that, the Fed cannot drop the ball on inflation even if there are more signs of severe economic weakness. On Friday morning, we'll find out how much consumer prices rose in February.
Economists are predicting a 0.3% rise in the headline Consumer Price Index (CPI) number and a 0.2% increase in the so-called core number, which excludes volatile food and energy costs.
If the CPI figures are higher than expected, the Fed may have no choice but to disappoint Wall Street next week and only cut interest rates by a half-point, or perhaps even only by a quarter-point.
A quick fix for the economy is not what's needed. The Fed has to ensure that its actions don't lead to the type of double-dip, or W-shaped recession, that some economists and market strategists are now talking about.
Harvey indicated this could be the longest slowdown since the double-dip of 1979 to 1981. But if the Fed holds firm and doesn't stoke even greater inflation by lowering its key federal funds rate that much further, perhaps there's a chance this slowdown will turn into, at worst, just your garden-variety recession - and not an unwelcome rerun of what happened in the 1970s.
Cheers!
Dennis Ng
The Fed's worst nightmare
By Paul R. La Monica, CNNMoney.com editor at large
Last Updated: March 13, 2008: 12:48 PM EDT
Ugly retail sales and a somber forecast from CFOs point to recession, but rising oil and gold prices and a weak dollar show inflation. What's Ben Bernanke to do?
NEW YORK (CNNMoney.com) -- It's days like today that will make many investors wish they stayed in bed.
And they're not the only ones. Something tells me that Ben Bernanke and the rest of the Federal Reserve's policy-making committee would like to run and hide as well.
Where to begin? Retail sales for February were shockingly weak, with sales falling 0.6% during the month compared to economists' forecasts of a 0.2% gain. Those numbers put dents in the argument that consumers would keep spending in the face of the housing downturn.
Wall Street is also digesting some sobering results from a survey of chief financial officers released by Duke University and CFO magazine late Wednesday.
TalkBack: Should the Fed keep cutting rates?
According to the survey of more than 1,000 CFOs, conducted last week, three-quarters of the respondents said the economy is either in a recession already or will hit one this year, and nearly 90% of CFOs surveyed said they didn't think the economy would rebound until late 2009.
So this means the Fed should slash interest rates at its next meeting on March 18, right? After all, according to federal funds futures, investors are pricing in a 72% chance of a three-quarters of a percentage point cut.
But not so fast.
Gold hit $1,000 an ounce for the first time ever Thursday morning. Oil is slouching towards $111 a barrel. And the dollar hit a 12-year low against the yen and a new record low against the euro. Can you say inflation?
Actually, it's worse than mere inflation. The combination of rising commodity prices and the weakening growth forecast for the economy has people worried about 1970s style stagflation. I hope Bernanke can dig up a pair of old bell bottom pants. Do the hustle!
"Clearly, the Fed needs to switch to Plan B," noted Duke professor Campbell R. Harvey in a release about the CFO survey.
But what is Plan B exactly? It's difficult to figure out just what the Fed can do other than let the credit markets and housing markets work themselves out, and hope the actions the central bank has already taken stimulate the economy at some point.
Time may be the Fed's only ally
Even though the Fed's series of rate cuts since last September - as well as the hundreds of billions in cash and Treasurys that the central bank has pledged to loan capital-constrained financial institutions - have failed to encourage more lending just yet, investors and consumers need to realize there is a lag effect of several months before Fed policy moves have an impact. History shows that Fed easing will eventually work their magic.
Hopefully, the rate cuts will encourage more banks to loosen their lending standards again, and will spur consumers and corporations to start spending more by the end of 2008 or early 2009.
Plus, even though there is a debate about whether the tax rebate checks that consumers will receive in the next few months will really help the economy that much, it's hard to see how the rebates can hurt.
But as I've said earlier this week in this column and numerous times before that, the Fed cannot drop the ball on inflation even if there are more signs of severe economic weakness. On Friday morning, we'll find out how much consumer prices rose in February.
Economists are predicting a 0.3% rise in the headline Consumer Price Index (CPI) number and a 0.2% increase in the so-called core number, which excludes volatile food and energy costs.
If the CPI figures are higher than expected, the Fed may have no choice but to disappoint Wall Street next week and only cut interest rates by a half-point, or perhaps even only by a quarter-point.
A quick fix for the economy is not what's needed. The Fed has to ensure that its actions don't lead to the type of double-dip, or W-shaped recession, that some economists and market strategists are now talking about.
Harvey indicated this could be the longest slowdown since the double-dip of 1979 to 1981. But if the Fed holds firm and doesn't stoke even greater inflation by lowering its key federal funds rate that much further, perhaps there's a chance this slowdown will turn into, at worst, just your garden-variety recession - and not an unwelcome rerun of what happened in the 1970s.
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.
Warren Buffett's view on Current Global Credit Crisis
Excerpt from Interview with Warren Buffet (Fortune Magazine)...
How does the current turmoil stack up against past crises?
Well, that's hard to say. Every one has so many variables in it. But there's no question that this time there's extreme leveraging and in some cases the extreme prices of residential housing or buyouts. You've got $20 trillion of residential real estate and you've got $11 trillion of mortgages, and a lot of that does not have a problem, but a lot of it does. In 2006 you had $330 billion of cash taken out in mortgage refinancings in the United States. That's a hell of a lot - I mean, we talk about having $150 billion of stimulus now, but that was $330 billion of stimulus. And that's just from prime mortgages. That's not from subprime mortgages. So leveraging up was one hell of a stimulus for the economy.
If that was one hell of a stimulus, do you think the $150 billion government stimulus plan will make an impact?
Well, it's $150 billion more than we'd have otherwise. But it's not like we haven't had stimulus. And then the simultaneous, more or less, LBO boom, which was called private equity this time. The abuses keep coming back - and the terms got terrible and all that. You've got a banking system that's hung up with lots of that. You've got a mortgage industry that's deleveraging, and it's going to be painful.
The scenario you're describing suggests we're a long way from turning a corner.
I think so. I mean, it seems everybody says it'll be short and shallow, but it looks like it's just the opposite. You know, deleveraging by its nature takes a lot of time, a lot of pain. And the consequences kind of roll through in different ways. Now, I don't invest a dime based on macro forecasts, so I don't think people should sell stocks because of that. I also don't think they should buy stocks because of that.
Conclusion:
The gurus like George Soros, Jim Rogers shared the same views as Warren Buffet.
However the major investment banks are saying the opposite with regards to the seriousness of the sub-prime problems. I chose to believe the formers.
How does the current turmoil stack up against past crises?
Well, that's hard to say. Every one has so many variables in it. But there's no question that this time there's extreme leveraging and in some cases the extreme prices of residential housing or buyouts. You've got $20 trillion of residential real estate and you've got $11 trillion of mortgages, and a lot of that does not have a problem, but a lot of it does. In 2006 you had $330 billion of cash taken out in mortgage refinancings in the United States. That's a hell of a lot - I mean, we talk about having $150 billion of stimulus now, but that was $330 billion of stimulus. And that's just from prime mortgages. That's not from subprime mortgages. So leveraging up was one hell of a stimulus for the economy.
If that was one hell of a stimulus, do you think the $150 billion government stimulus plan will make an impact?
Well, it's $150 billion more than we'd have otherwise. But it's not like we haven't had stimulus. And then the simultaneous, more or less, LBO boom, which was called private equity this time. The abuses keep coming back - and the terms got terrible and all that. You've got a banking system that's hung up with lots of that. You've got a mortgage industry that's deleveraging, and it's going to be painful.
The scenario you're describing suggests we're a long way from turning a corner.
I think so. I mean, it seems everybody says it'll be short and shallow, but it looks like it's just the opposite. You know, deleveraging by its nature takes a lot of time, a lot of pain. And the consequences kind of roll through in different ways. Now, I don't invest a dime based on macro forecasts, so I don't think people should sell stocks because of that. I also don't think they should buy stocks because of that.
Conclusion:
The gurus like George Soros, Jim Rogers shared the same views as Warren Buffet.
However the major investment banks are saying the opposite with regards to the seriousness of the sub-prime problems. I chose to believe the formers.
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.
With inflation going higher, social unrest might outbreak in developing countries around the world, Indonesia, Thailand, Philippines are some of the neighbouring countries facing high risk of social unrest.
Time will tell if I'm right.
Time will tell if I'm right.
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.
Have Global Stock Markets Bottomed?
Dow just hit above 13,000. STI hit above 3,200....looks like the Good Times are back.
Do you notice some dark clouds over the horizon, or are you happily ignoring them?
1. there might still be more write-offs by banks around the world for the sub-prime mess.
2. that inflation is rearing its ugly head.....one billion of people around the world are now below the poverty line becos of recent rise in food and energy prices....and the problem is look like prices might even go up further...and more people will go below poverty line...
3. in the months ahead with inflation rising, there'll be more and more strikes and social unrest around the world, especially in developing countries.....
4. it looks like the damage of sub-prime Crisis is just starting to filter down to the economy.....in the months ahead, especially in U.S., more jobs will be cut, more homes will be foreclosed, more credit cards defaults will be expected, and more disappointment in corporate profits might be reported.....
5. Global property markets are starting to crack.....if and when Global Property Prices start crashing.....that'll be another Crisis sweeping around the globe....countries including U.S., UK, Australia, New Zealand, China, Hong Kong, India, Dubai, Europe all have property prices at bubblish levels....when Global property market crashes, it will be another damage to Global Wealth and Global Economies.....
6. With falling profits and rising costs, more and more companies might default on their debts, there might be a Crash in Global Corporate Bonds Market as well....
For me, I will wait a while before going out and celebrate that Good Times are back.....I think things (Global Economies) are likely to be worse first before things are going to be better.
What we had might just be a Bear Trap Rally.
You might be surprised that I wish that I'm wrong. Becos if I'm right, it will not be a pretty sight, many more fortunes will be wiped out and lost in the current complacency....
Do you notice some dark clouds over the horizon, or are you happily ignoring them?
1. there might still be more write-offs by banks around the world for the sub-prime mess.
2. that inflation is rearing its ugly head.....one billion of people around the world are now below the poverty line becos of recent rise in food and energy prices....and the problem is look like prices might even go up further...and more people will go below poverty line...
3. in the months ahead with inflation rising, there'll be more and more strikes and social unrest around the world, especially in developing countries.....
4. it looks like the damage of sub-prime Crisis is just starting to filter down to the economy.....in the months ahead, especially in U.S., more jobs will be cut, more homes will be foreclosed, more credit cards defaults will be expected, and more disappointment in corporate profits might be reported.....
5. Global property markets are starting to crack.....if and when Global Property Prices start crashing.....that'll be another Crisis sweeping around the globe....countries including U.S., UK, Australia, New Zealand, China, Hong Kong, India, Dubai, Europe all have property prices at bubblish levels....when Global property market crashes, it will be another damage to Global Wealth and Global Economies.....
6. With falling profits and rising costs, more and more companies might default on their debts, there might be a Crash in Global Corporate Bonds Market as well....
For me, I will wait a while before going out and celebrate that Good Times are back.....I think things (Global Economies) are likely to be worse first before things are going to be better.
What we had might just be a Bear Trap Rally.
You might be surprised that I wish that I'm wrong. Becos if I'm right, it will not be a pretty sight, many more fortunes will be wiped out and lost in the current complacency....
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.