here come the drums of a global slowdown..

[Aaron Sice]

?

5. How's about the situation for the RBA Board's decision made in December 2007?

not sure what you mean?

they said they weren;t going to raise rates for Dec and that "it didn;t look likely" that rates would rise for a "while". the XJO is not under the 200dMA so i see no reason to raise rates for this month according to my theory.

however, the drums are beating again, and have been for a few days.

a look at that graph will tell you why.

i'll happily bet you a beer that they go up again if the XJO stays below the 200dMA until early Jan when the RBA meets.

 

[feihong]

Kenneth,

Sometimes not everything can be explained in logical sense (like in this case RBA vs SPI 200 DMA). That's why charting/technical analysis could be more important than fundamental analysis, as the latter is usually fully understood in hindsight.

 

[Kennethkohsg]

Dear Feihong,

1. I think I know what you mean.

2. I will normally consider using the Technical Analysis, using the Price-Volume Charts/Moving Average/Trend Analysis, as a guide for a more precise entry/exit point as far as stock investing is concerned.

3. Most often, I will always consider the basic fundamental trends to understand the investing operating environment and its long term market direction/trend through fundamental and research/news analysis.

Cheers,
Kenneth KOH

 

[Kennethkohsg]

Dear BlueCard,

1. According to the latest RBA Board Meeting Minutes, the RBA has made an exception by not increasing the interest rate in December 2007 despite the high inflation figures reported. This is in view of the unfolding of the ill-effects of the Credit Crunch on the Australian Economy.

2. How well and accurate, will your "Wealth Confiscation Effect" Theory applies in this case?


Cheers,
Kenneth KOH

 

[Kennethkohsg]

i'll happily bet you a beer that they go up again if the XJO stays below the 200dMA until early Jan when the RBA meets.

*********************
Dear Bluecard,

1. At this point in time, many of us in this forum as well as the other banks economists would expect the RBA to increase the interest rate in Feb 2008 by another 0.25% in view of the existing inflationary figures seen, all thing being equal.

2. However, I would be happy to know if this is indeed the case based on your own technical analysis and "Wealth Confiscation Effects" Theory and perspective.


Cheers,
Kenneth KOH

 

[adam31]

Hi all
I don't have much clue about all this money talk. Inflation is caused when there is an increase in money supply? Why do we keep printing money and raising rates, it makes no sense to me. They say inflation is rising but does inflation increase if money supply doesn't. I think Hyper-inflation is being well hidden in this country.
How does slipping an extra $500 billion to some banks resolve anything. WHy are governments so scared of reccession do they really think that if there is an upside to a market they can print their way out of a downside???
Learn me oh learned ones.

Cheers

 

[trendsta]

Hi Kenneth,

2. The article was in Mondays AFR. I think it was page 3(?). Sorry, I cant remember exactly…

3. I don’t have the exact figures, but maybe ABS or RBA site can help you there..

4. In terms of debt levels, the reference was to debt/GDP or debt/per capita, not total debt (in which case US wins by a trillions).

5. Many housing assumptions are based on current (previous?) trends contuing, e.g. population growth, low rates, massive bonuses and salaries in certain sectors etc…

 

[trendsta]

For all the people still calling this sub-prime issue - this is not a sub-prime issue. In summary its about DEBT and RISK. Massive, many trillions of dollars worth of debt at every level have been built up over last 5 years while interest rates were low, and RISK was perceived to be low..

The debt bombs are going off, starting with riskiest debt, sub-prime then moving to ARM, then to corporations, then to …

Oh my, Japan has just changed its economic growth DOWN from 2.5% to 1.1% .. hmm, US, Euro, Japan all forecasting lower growth by the day.. it shouldn’t really matter they only account for 60-70% of australian trade.. all that seems to matter is the 20% odd trade with China..

 

[Kennethkohsg]

Oh my, Japan has just changed its economic growth DOWN from 2.5% to 1.1% .. hmm, US, Euro, Japan all forecasting lower growth by the day.. it shouldn’t really matter they only account for 60-70% of australian trade.. all that seems to matter is the 20% odd trade with China..

********************************
Say who??? ...RBA? Kevin + his new ALP Federal Government?

More exciting times ahead of us in the 2008-2009 period indeed!

First the collapse of the 2 hedge funds operated by Macquarie Bank, then RAMs, now Centro... who's next and likely to fall victim in Australia to these global crises....


Kenneth KOH

 

[trendsta]

********************************
Say who??? ...RBA? Kevin + his new ALP Federal Government?

More exciting times ahead of us in the 2008-2009 period indeed!

First the collapse of the 2 hedge funds operated by Macquarie Bank, then RAMs, now Centro... who's next and likely to fall victim in Australia to these global crises....


Kenneth KOH

http://www.bloomberg.com/apps/news?pid=20601087&sid=aDhCxYLyUO00&refer=home

I quoted incorrectly... the slowdown is from 2.1% to 1.3% for year ending mar 08 .. still shows that things are slowing down. The other forecast was from Macquarie.

Poor Kevin.. I really feel for him.. Poor guy has inherited a massive debt bomb himself. If things go wrong people will unfairly blame him..

 

[Kennethkohsg]

Poor Kevin.. I really feel for ...e neccessary, please. Cheers, Kenneth KOH

 

[Aaron Sice]

see replies in blue

Dear BlueCard,

1. According to the latest RBA Board Meeting Minutes, the RBA has made an exception by not increasing the interest rate in December 2007 despite the high inflation figures reported. This is in view of the unfolding of the ill-effects of the Credit Crunch on the Australian Economy.

see the chart. i can't predict when they will or won't raise them if the value is above the 200dMA. your guess is as good as mine. early dec, the values were above the 200dMA.

2. How well and accurate, will your "Wealth Confiscation Effect" Theory applies in this case?

dude you're hooked on this "theory". it's no thesis, it's my personal opinion. i believe the RBA take my money and everyone elses when the value of XJO dips below the 200dMA when the RBA meet early every month to get the XJO above it's 200dMA. i have evidence, and it's downloadable for all to see.

it's simple.
1) watch the chart at the start of each month
2) if it's under the 200dMA, then expect a rate rise.
3) if it's not, and they rase rates anyway, then there are other factors to take into account that i have no idea about and have never professed to know anything about.
4) watch the chart after rates are raised. we're headed for the same boom pattern as Aug this year.

1. At this point in time, many of us in this forum as well as the other banks economists would expect the RBA to increase the interest rate in Feb 2008 by another 0.25% in view of the existing inflationary figures seen, all thing being equal.

if the value of XJO is under the 200dMA early jan then i would expect them to raise rates in Jan - if the value of XJO is under the 200dMA early feb then i would expect them to raise rates in feb.


Cheers,
Kenneth KOH

 

[Aaron Sice]

i'm spent - do i really have to keep repeating myself?

 

[trendsta]

oh no.. where have all the bonuses gone ..

mac bank share price down, all its listed investments price down, no performance fees, mergers and acq dried up, not an ipo in sight, no assets to acquire on highly debt funded financial structure .. looks like millionaires factory has stopped producing.. oh wat a start to the financial year..

how are these guys goin to fund that new wing, or upgrade to a 7 bedroom palace? No big bonus, how will they afford a massive loan in that yuppy suburb.. never imagined the good times coming to an end so quickly .. oh my, what if things dont get better, forget about the bonus, what if the highly paid lemmings dont have a job by next year ..

whats that saying for every manufacturing job created there are 4 other jobs created.. and for every service job there are 7 or 8 other jobs created .. could the opposite be also true??

 

[Kennethkohsg]

Dear Trendsta,

The show has just begun... and yet you are getting so excited already... stay cool and watch further...more exciting shows coming soon as we next enter into the New Year in 2008


Cheers,
Kenneth KOH

 

[trendsta]

Hi Kenneth,

yup 08 is the one to watch..

i only wish china werent having olympics, and US the elections..
just makes things awkward and delays it all ...

 

[trendsta]

Here is another casualty, now in the bond market:

The credit crisis spread to the nation's (US) largest bond insurer Thursday, sending shares of MBIA Inc. plunging and calling into question the safety of tens of billions of dollars of company and local government debt held by investors… a disclosure by MBIA that of the $30 billion in mortgage debt guarantees it issued, some $8 billion were for the the riskiest types.

The big question in my mind now is this: It has been reported the global economy is worth 30 trillion USD, and global property is worth about 65 trillion. All the shares and bonds are worth another 65 trillion. However, a conservatie measure of the derivatives based on these assets is 300 trillion a few years ago. A higher estimate is 700 trillion this year.. The first point is the amount of leverage here is just crazy. Now these derivatives are based on asset prices. Many I presume are taking a ‘long’ position because asset prices have been rising.. Second point is what happens when the asset prices don’t rise as they have been for last 5 years? Is this what the fed really fears, that behind a 100 billion of bad sub-prime debt is a wall of $1 trillion leveraged instruments waiting to explod?? Why else would Europe inject a massive 500 Billion in give-away price loans??

This all sounds absurd to me. Money has been printed at silly rate and lent at even sillier levels. Asset prices have been propped up because of this debt.. Now the only way to hold these prices up is by keeping the printing press going and debt rolling over to higher and higher levels…

 

[BayView]

For all the people still calling this sub-prime issue - this is not a sub-prime issue. In summary its about DEBT and RISK. Massive, many trillions of dollars worth of debt at every level have been built up over last 5 years while interest rates were low, and RISK was perceived to be low..

The debt bombs are going off, starting with riskiest debt, sub-prime then moving to ARM, then to corporations, then to …

Oh my, Japan has just changed its economic growth DOWN from 2.5% to 1.1% .. hmm, US, Euro, Japan all forecasting lower growth by the day.. it shouldn’t really matter they only account for 60-70% of australian trade.. all that seems to matter is the 20% odd trade with China..

All this reminds me of the lead up to the 1929 crash; massive borrowings and leverage in the wake of the never-ending boom, people were ecstatically confident and positive; then "boom".

Not that I'm a "doom and gloomer"; quite the opposite, and I don't care as we have a safe LVR and good cashflow, but the signs are a worry for those who are highly leveraged in shares and property.

 

[trendsta]

Yes, my thoughts exactly LA. There is a time to be aggressive and gear excessively, and there is a time to be conservative … I agree, now is a time to be conservative.

 

[alexlee]

Yes, my thoughts exactly LA. There is a time to be aggressive and gear excessively, and there is a time to be conservative … I agree, now is a time to be conservative.

Me, I'm going to buy. Conservatively, of course. Being conservative doesn't mean you have to sit on your hands and do nothing, and it certainly don't mean sell.
Alex