Global Equities Sell-Off

#2
The whole business had gone too far too fast, in my opinion. Too many people had lost sight of the meaning of risk, especially with interest rates rising. My puts are in profit, which is a relief, as I thought I had got it wrong. It will be interesting to see if the hedge funds were, er, hedged!

Interesting head and shoulders forming on the FTSE; might change my mind about how far it has to fall....

Litotes
 
#3
Not_Whistlin_Dixie said:
Stock averages closed down all around the world today, 22 May.
Wow! I never thought the election in Montenegro would have had such an impact. Wow again!
 
#4
Litotes:

If you are short UK equities or hold put options on them, you might take some cheer over the linked report.

From a "technical analysis" standpoint, the FTSE looks vulnerable: it just punched through its 200 day moving average.

"Billions wiped out as FTSE drops to 5-month low"
By Friedel Rother 22 May 2006
http://business.scotsman.com/latest.cfm?id=761132006

A ferocious struggle between the bulls and bears lies ahead.

I predict that the bears will win:

1. The USA property boom is slowing and reversing. This will eliminate home equity lines of credit as fuel for consumer spending.

2. USA mortage defaults and delinquencies are going up.

3. Fannie Mae, one of the twin pillars of the US secondary mortgage market, appears to be in quite bad shape. It is so far delinquent in filing financial statements that the fact that trading of its shares hasn't been suspended is scandalous.

4. We seem to be teetering on the verge of a really big war in the middle east.

5. Folks are starting to wake up to the fact that there isn't much congruity between official inflation statistics and the actual rate at which their cost of living increases.

However, the bulls have powerful weapons at their disposal too. They enjoy the support of central banks and national treasuries which feel they have a vested interest in avoiding a collapse in financial asset prices.

Should be a wild ride. Whatever happens, we aren't likely to die of boredom.
 
#6
Equities sell-offs yesteday in Japan, India, S. Korea.

S. Korean Kospi index at seven month low.

Japanese Topix index saw largest slump of last 13 months.

USA Dow Jones Industrial Average fell below 11,000 yesterday.

The Bombay Stock Exchange Sensitive Index dropped 4.7% yesterday. The linked article describes that as yesterday's biggest drop on Asian bourses.

The linked article ascribes these events to interest rate jitters.

"Asian Stocks Posts Biggest Drop in 2 Years; Toyota Declines" 8 June 2006
http://quote.bloomberg.com/apps/news?pid=10000104&sid=adhfwV_6.WxE&refer=home

I've read elsewhere that today the European Central Bank announced a 25 basis point (one fourth of one percent) increase in its short term policy rate.

The S. Korean central bank today raised its policy rate.

There seems to be a consensus around the world that the US Federal Reserve System will once again raise the interbank overnight loan rate (known here as the federal funds rate) target another 25 basis points.
 
#7
this is most interesting, I know nothing of the markets, just building and selling companies privately, and the housing market, cos I invest there..., was going to plunge some money into the city, but will carry on following your posts with interest
 

Zoid

Old-Salt
#8
londonirish said:
this is most interesting, I know nothing of the markets, just building and selling companies privately, and the housing market, cos I invest there..., was going to plunge some money into the city, but will carry on following your posts with interest
likewise
 
#11
Principal bourses of the world are getting thumped again today. Red ink all around the world.

Americas: http://finance.yahoo.com/intlindices?e=americas

Asia: http://finance.yahoo.com/intlindices?e=asia

UK and Europe: http://finance.yahoo.com/intlindices?e=europe

Cairo and Tel Aviv: http://finance.yahoo.com/intlindices?e=africa

What's noteworthy is that they are all going red simultaneously.

This may have something to do with perceived tightening, or anticipated tightening, by the world's two principal liquidity factories, the Federal Reserve System and the Bank of Japan.
 
#12
I am no expert on Serious financial matters. At weekend I was reading an artical that expressed conncern that the US has stopped publishing figures for M3 money. This is the number of $ actually in circulation. With out this number Professionals cannot make a true estimate of US inflation. The artical was suggesting this was deliberate policy by Bush government.
john
 
#14
jonwilly said:
I am no expert on Serious financial matters. At weekend I was reading an artical that expressed conncern that the US has stopped publishing figures for M3 money. This is the number of $ actually in circulation. With out this number Professionals cannot make a true estimate of US inflation. The artical was suggesting this was deliberate policy by Bush government.
john
They suspended publication of the M3 figure effective March 23 of this year with a one sentence explanation that such was an "economy measure."

The explanation was preposterous and widely interpreted as an attempt to hide something.
 
#16
The meeting of the G8 in Rooshia this last week said all was going well for the global markets. Or words to that effect.
Someones telling Porkies. The price of crude alone would tell anyone that all is not well.
john
 
#17
frenchperson said:
How tragic. My heart bleeds for those involved and I sincerely hope nobody jumps off any buildings this time around
So do I , but I actually mean it. While the City is fuelled by greed, every single person in the country, including the one in five, who like you I presume, are or have been government servants, depends upon it being stable....so while you might not like them, you need them. A lot of people don't like soldiers, but they need them too
 
#18
The central banks of some of the world's biggest economies have been concurrently raising their short term policy interest rates: USA, EU, Japan, S. Korea.

"Central Bankers declare War on Global Inflation"
By Gary Dorsch
Jun 14. 2006
http://www.321gold.com/editorials/sirchartsalot/dorsch061406.html

Stock investments are measured against the yield to be had in money market instruments. If you can get a better return with a certificate of deposit than you can reasonably expect to get with shares, the share market will suffer.

Also, a large volume of financial investment is "leveraged," i.e., conducted with borrowed money. When operating with borrowed money gets too expensive, the speculators are forced to liquidate.
 
#19
londonirish said:
frenchperson said:
How tragic. My heart bleeds for those involved and I sincerely hope nobody jumps off any buildings this time around
So do I , but I actually mean it. While the City is fuelled by greed, every single person in the country, including the one in five, who like you I presume, are or have been government servants, depends upon it being stable....so while you might not like them, you need them. A lot of people don't like soldiers, but they need them too
you missed his point, being French, he has nothing but distain for "Anglo Saxon Ecomonics" and capitalism is evil and inferior to the French socialist model (which allows for protectionism, political interference, massive unemployment, inflation and political support for buying other countries assets)!
 
#20
top tip!

put your money into Middle East (that is Gulf States) concrete makers and crane companies!

Oil still over US60 a barrell
 
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