I think public companies take their market cap seriously, as it effects their debt/equity ratio and the ability to roll finance.
The recession's over
- Thread starter investor888
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I think public companies take their market cap seriously, as it effects their debt/equity ratio and the ability to roll finance.
Hi Boz,
Money is the only thing that is really limitless as its price is not tied to anything. In historic terms the amount of money was tied to the amount of gold held in the banks vaults. Gold = Money, Money = Gold. That all changed when DeGaul asked the Americans for there payments to be made in gold instead of $US. Overnight tricky Dicky got the world to agree to abandon the gold standard, so the US could pay the French with money.
All governments have shown a propensity to spend newly created money in modern times. What has happened in the last year show how easy it is for money to be created when Governments want/need to do it. It's value is not tied to anything material, though many people think it should be.
In the US with the new $2T, where can it go other than being spent, eventually??
bye
Money is the only thing that is really limitless as its price is not tied to anything. In historic terms the amount of money was tied to the amount of gold held in the banks vaults. Gold = Money, Money = Gold. That all changed when DeGaul asked the Americans for there payments to be made in gold instead of $US. Overnight tricky Dicky got the world to agree to abandon the gold standard, so the US could pay the French with money.
All governments have shown a propensity to spend newly created money in modern times. What has happened in the last year show how easy it is for money to be created when Governments want/need to do it. It's value is not tied to anything material, though many people think it should be.
In the US with the new $2T, where can it go other than being spent, eventually??
bye
Hi WW,
No more real than the value/price paid by those on the margin.
However property is different to shares. There is a constant underlying demand, everyone needs to live somewhere, plus property (the land component) is limited in amount and not easily destroyed.
Stocks/companies on the other hand have a life, very few exist today that were around 100 years ago, plus new ones get created all the time, pretty much out of thin air. Many companies in the recent past have totally disappeared.
The closest complete answer I can give is that the value of property is more real than that of equities, but there is no actual money in either as the money comes from the supply/demand at the margin should you choose to go there.
Then of course, there is the creation of money by banks lending new money against the perceived 'value' of both.
What people believe does not change the facts.
bye
No more real than the value/price paid by those on the margin.
However property is different to shares. There is a constant underlying demand, everyone needs to live somewhere, plus property (the land component) is limited in amount and not easily destroyed.
Stocks/companies on the other hand have a life, very few exist today that were around 100 years ago, plus new ones get created all the time, pretty much out of thin air. Many companies in the recent past have totally disappeared.
The closest complete answer I can give is that the value of property is more real than that of equities, but there is no actual money in either as the money comes from the supply/demand at the margin should you choose to go there.
Then of course, there is the creation of money by banks lending new money against the perceived 'value' of both.
What people believe does not change the facts.
bye
Sorry Steve, I've got nothing for sale 
But you can read all bout it here....
http://www.somersoft.com/forums/
bye
But you can read all bout it here....
http://www.somersoft.com/forums/
bye
Hopefully, someone will come along soon enough, and explain clearly who is profiting from loose credit, and how it all works....and the people will demand new regulations change the facts......
Hi WW,
The borrowers clearly benefit to the detriment of the savers of money.
Banks are borrowers, not savers, then lenders.
To stop this ongoing ponzi scheme, would need nothing short of a revolution, world wide. Individual countries that have had revolutions and changed the rules all eventually seem to return to this ongoing ponzi scheme, because of pressure from the rest of the world.
As I mentioned earlier, it is the prudent savers of cash who get creamed in this system. Firstly they get taxed on their interest, then the stack loses purchasing power in relation to goods, services and assets.
In Jan Somers book "Story to Story" there is an example of a couple who retired young and sold off all their IPs to live off the interest. It was something like 10 houses free of debt. By selling (no CGT), they had what was considered a fortune, yet by paying tax on their interest earnings, and through the effect of inflation, by the '90's they qualified for (and needed) the pension to survive.
Just keeping the asset (income producing) would have been far better than keeping money.
bye
The borrowers clearly benefit to the detriment of the savers of money.
Banks are borrowers, not savers, then lenders.
To stop this ongoing ponzi scheme, would need nothing short of a revolution, world wide. Individual countries that have had revolutions and changed the rules all eventually seem to return to this ongoing ponzi scheme, because of pressure from the rest of the world.
As I mentioned earlier, it is the prudent savers of cash who get creamed in this system. Firstly they get taxed on their interest, then the stack loses purchasing power in relation to goods, services and assets.
In Jan Somers book "Story to Story" there is an example of a couple who retired young and sold off all their IPs to live off the interest. It was something like 10 houses free of debt. By selling (no CGT), they had what was considered a fortune, yet by paying tax on their interest earnings, and through the effect of inflation, by the '90's they qualified for (and needed) the pension to survive.
Just keeping the asset (income producing) would have been far better than keeping money.
bye
I can accept borrowing from future productivity, if those borrowings are used to increase income/production and thereby cover interest repayments. But if the borrowings are just used to create asset bubbles (in shares or houses) and buying lots of imported stuff, then it isn't going to end pretty.
don't quite agree with that, most people here have wages and pensions and other forms of money income, when money gets too much and you see bread or petrol prices or basic stuff going up everyday (because some idiot at government or central banks decide there is not enough money around) you'll get a lot of protests and end up with a change of government in search of more stability and protection of wealth/incomes, remember that 99% of people lose with high inflation.
in US the new 2 t$ can burn as quickly as they come up from thin air. when you get a society with 300% of gdp in debt like US eventually every extra cent would need to go and repay debt and all those extra cents going to repay debt are a little drop in gdp (as every cent going to repay debt is less consumption and less gdp growth) that push up the 300% debt against gdp even further.
These are very dangerous times....
here's an idea.
loose credit?
thirteen wise men own thirteen banks.
thirteen wise men have their minions working for thirteen federal systems.
thirteen wise men steered clear of CDOs. they bought what people were selling at undervalued rates so these loonies could buy CDOs.
thirteen wise men travel to thirteen corners of the globe. each man identifies what makes each corner tick. each man sets about a raft of loose credit lending to artificially pump up values to make the underlying value of a CDO on home soil look fool proof.
thirteen wise men NOW buy CDOs.
thirteen wise men pump more one and zeros through the system to increase the rate of return for CDOs. as a side effect, regular real estate balloons. boom appears to be driven from nowhere.
ballooning equity makes money out of thin air. the flow on effect into the joe schmoe economy is a side benefit - confidence is a big market swinger.
stock market rallies. small profit taking but underlying money supply is too great. rally after rally after rally.
CDOs now worth thousands of percent more than when purchased by thirteen wise men.
thirteen wise men offload CDOs. some poor suckers buy them all.
thirteen wise men cash in what they bought originally from the suckers selling to buy CDOs originally. rallies everywhere means huge capital gains.
thirteen wise men now cashed up.
thirteen men now tell their thirteen banks to restrict lending criteria.
credit slows. profit taking starts.
thirteen wise men restrict credit further. now they "refuse" to lend to each other.
credit stops. panic starts.
thirteen wise men's minions let competition fail though lack of federal support.
share markets plummet. equity deflates likes a loose ballon.
credit remains tight. VIX thru roof. businesses start to get into trouble.
unemployment rises. gloom sets in.
non recourse starts posting.
thirteen wise men get thier minions in the federal banks to buy all the junk they don't want by passing bills the people have no clue about.
thirteen wise men offload all debt.
thirteen wise men tell their thirteen banks to restrict credit a little more.
values in free fall.
Feb 09 - thirteen wise men buy real estate at well undervalued rates.
Feb 09 - thirteen wise men buy equities at well undervalued rates.
Feb 09 - thirteen wise men sell currency at overvalued prices.
March 09 - thirteen wise men tell thirteen banks to ease credit slightly.
March 09 - floor forming.
Aug 09 - end of 50% rally.
Sept 09 - profit taking as per usual.
aussie banks see panic about rising rates.
raise fixed rates to pull people into thinking rates are going to skyrocket.
people pay a premium for SANF
now banks can pass on full rate cuts to those on variable if/when it happens again in the next 2-3 years as a marketing ploy.
ta daa!
raise fixed rates to pull people into thinking rates are going to skyrocket.
people pay a premium for SANF
now banks can pass on full rate cuts to those on variable if/when it happens again in the next 2-3 years as a marketing ploy.
ta daa!
BC, I am in no doubt the rally since March is new money/leverage from quant easing, money that was supposed to make its way into general circulation.
Instead, the money stopped with the banks, who are using them to bid up equity markets. Once they get the market high enough, they'll pull profits. Big W on its way imho....but might take up to 18mths.
Same in China....loose credit encourages misallocation of capital....and it is happening their big time...
This rally should be called the quant rally......
Instead, the money stopped with the banks, who are using them to bid up equity markets. Once they get the market high enough, they'll pull profits. Big W on its way imho....but might take up to 18mths.
Same in China....loose credit encourages misallocation of capital....and it is happening their big time...
This rally should be called the quant rally......
absolutely - overbought already but still steaming - call a 4600 sell off.
i'll be selling out completely at 4620.
i'll be selling out completely at 4620.
those 13 mens are criminal and if they are succesful in manipulate markets with own profit they'll need to go to jail (but none knows the market that well and is able to succesfully manipulate it for long time)
China and Bombay led the pullback.......makes sense to reduce exposure to the most volatile first.....
bsesn India
hsi hong kong
axjo australia
000001.ss china
bvsp brazil
gspc usa
bsesn India
hsi hong kong
axjo australia
000001.ss china
bvsp brazil
gspc usa
No one here has yet mentioned something that does help prop our share market.IMHO. Every quarter 9% of that quarters wages is dumped into the share market, bonds, cash and property trusts.
Don't you think that might have some effect on how the market goes?
I wouldn't have a clue what gross wages in this country are for a quarter but I assume they are not negligible amounts.
Don't you think that might have some effect on how the market goes?
I wouldn't have a clue what gross wages in this country are for a quarter but I assume they are not negligible amounts.
Good point Joan. I did however read somewhere something to the effect that a significant number of instos (possibly including industry super funds) are not even half invested back in the share market.
Maybe they too are taking a "wait and see" approach. Not sure if they are that clever or their mandate allows to take such a conservative view. Maybe they just keep invested at the expense of their super funds members.
Still, I reckon there is more money from those sources yet to find a home in the stock market.
Maybe they too are taking a "wait and see" approach. Not sure if they are that clever or their mandate allows to take such a conservative view. Maybe they just keep invested at the expense of their super funds members.
Still, I reckon there is more money from those sources yet to find a home in the stock market.
I think Super money would be distributed broadly between international and national equities, property, and fixed interest.
As for performance, if you browse through most funds' last 1 and 3 year performance, you'll see they don't prioritize the first law of investment
"preserve capital"
