Today after the Fed announce the 0.25 point cuts, a number that market has been waiting for, all the indexs shoot higher and higher. The Earning of Mastercard(MA)
lifts the whole financial sector that promote market from tanking after the news releases.
In our view, market rally will come at any time.
The rate cut fever has gripped even the best financial commentators
Gross called for a staggering 1.25% rate cut in his monthly musings yesterday, taking a big honking gulp of Kool-Aid while writing.
“Mortgage write-offs, credit card losses and increasing defaults on small business loans,” explains Gross, “will squeeze bank balance sheets and income statements for the next several years. That pressure in turn will result in more conservative lending practices, which will induce not a contraction in credit growth, but a noticeable slowdown.
“An increasingly recessionary-looking U.S. economy will likely require 1% real short rates and 3.5% fed funds in order to stabilize a potential growth contraction in lending not witnessed since the early 1970s or, to be honest, Roosevelt’s Depressionary 1930s. We can only hope that Bernanke, Paulson and their cohorts recognize the danger.”
Where’s Greenspan when you need ’im, eh? Oh yeah, he wouldn’t be much help in this situation, would he? On his book tour recently, Greenspan told USA Today he doesn’t think Bernanke has the luxury of cutting rates during every global crisis he will face… because if he does, the dollar will burn.
Wednesday, October 31, 2007
Sunday, October 28, 2007
Big surprise… The dollar furthered its record lows overnight.
The euro traded to a new high within the $1.43 handle, now just a few pips from $1.44. The British pound dug deeper into $2.05, and the yen stayed the same, at 114.
The dollar index came to rest at 77.2, just shy of the all-time low set on Monday.
Gold soared to new 28-year highs overnight. The metal’s steady rise this week left it at $775 this morning, its latest high.
Crude oil went through the roof late yesterday and overnight. The world’s energy closed at a record high of 90.46 in the States, and overnight futures climbed as high as $92.22.
The dollar index came to rest at 77.2, just shy of the all-time low set on Monday.
Gold soared to new 28-year highs overnight. The metal’s steady rise this week left it at $775 this morning, its latest high.
Crude oil went through the roof late yesterday and overnight. The world’s energy closed at a record high of 90.46 in the States, and overnight futures climbed as high as $92.22.
Thursday, October 25, 2007
Overnight, the dollar lost ground against most of its major adversaries.
The euro sprung back to $1.43 this morning. The pound regained $2.05. The yen held still at 114. And the Canadian loonie gripped $1.03 tight like a 4-year-old caught nicking a Fruit Roll-Up before breakfast.
the idea behind the weaker dollar is that you wanna invest your money into company that have other currency exposure, Like AAPL, POT, MSFT...
If the Fed cuts rate, we will see hair trimmed of dollar again. Gold will break up into $800. Remember when we started to mention gold play, it was 710. Now close at 766. Buy Gold stock (AZK,GG) or gold ETF (GLD).
the idea behind the weaker dollar is that you wanna invest your money into company that have other currency exposure, Like AAPL, POT, MSFT...
If the Fed cuts rate, we will see hair trimmed of dollar again. Gold will break up into $800. Remember when we started to mention gold play, it was 710. Now close at 766. Buy Gold stock (AZK,GG) or gold ETF (GLD).
Tuesday, October 23, 2007
Of the world’s biggest companies, eight of the top 20 are Chinese, the most of any country
Pls keep focusing on Chinese ADR in USA.
The U.S. stock market bubble was about to mutate into a housing and consumption bubble in the U.S. and that China was likely to be the next destination for the world’s capital. The chart below shows in bas-relief how evident this migration has been:
Since 1999, the U.S. has lost 50% of its spaces on the top 20 list and about a third of its global market cap.
Compared to their total absence on the same list in 1989 and 1999, China’s growth appears all the more incredible. Companies like PetroChina(PTR), China Mobile and Bank of China are well within striking range of the top three positions. Also, don't forget China life insurance(LFC).
Sunday, October 21, 2007
Saturday, October 20, 2007
The Ghosts of October 19
I read a good article, share with folks here.
===================
The Ghosts of October 19
By Mark Skousen
Certain dates stand out in my life. One is October 19, 1987, the day the Dow Jones Industrial Average suddenly collapsed by 22%. That day is also significant because it happened to be my 40th birthday. Ever since then, I've been known as the "crash baby."
Most of my broker friends and investors were in a somber mood that Monday evening, stunned by the 509 point drop in the Dow. I was ebullient because by some fortune I sent out a "flash alert" on September 8, 1987, six weeks before the crash, telling my subscribers: "The coming credit squeeze could devastate the stock and bond markets; get out now! I advise you to sell all stocks and long-term growth mutual funds."
That evening, my wife had arranged a surprise birthday party. I had a lot of fun, but the party ended early as friends rushed home to check the financial news overseas.
Was the crash a portend of something more ominous, another Great Depression perhaps? After all, a similar stock market crash occurred in October, 1929, followed by the worst economic collapse in world history.
One of my technical trader friends was deeply worried. His trading system was based on moving averages of stock indexes like the Dow. At the New Orleans investment conference a month later, he showed a chart of the Dow with a "triangle" formation. He pointed to the triangle. "If the Dow breaks below the triangle formation," he warned, "the Dow could fall another 1,000 points or worse!"
I thought it was all a joke, but he was dead serious. He staked his reputation on his prediction. A few days later, the Dow started falling again, ominously below the point of the triangle. Yet, miraculously, the Dow never crashed. In fact, it rallied to new highs. My friend soon ended his newsletter, shamed perhaps by his failure to predict the next Great Depression.
As a macro-economist, I look at the economic fundamentals before making a prediction. And, in the case of the October, 1987, crash, the economic fundamentals looked to me to be largely sound. Business across the nation was doing well, both before and after the crash. The economy was growing, inflation was under control, and interest rates were relatively stable. So while I anticipated short-term trouble, I thought the long-term outlook looked good, and it wasn't long before I started recommending stocks again.
So why did the Dow Jones Industrial Average collapse by 22% on October 19, 1987?
Historians point to several factors, such as comments by the Treasury Secretary about a weak dollar and trade deficit, but I believe the crash can be blamed in large measure on an impulsive "Mr. Market" and the technical traders who encouraged mindless trading based on a line on a chart rather than business fundamentals. Too many investors were listening to my friend with the charts.
In the summer of 1987, telephone-switching between no-load mutual funds was all the rage, based solely on a technical charting system of a 39-week moving average. Mutual fund investing was extremely popular, to the point where you
couldn't go through a meal at home in the evening without a broker calling and telling you about the latest mutual fund. Few investors knew or cared about the companies the fund managers were buying. Just follow the line on a chart showing the mutual funds were moving higher. The brokerage business had become so successful that a book was released that year written by a Merrill Lynch broker entitled No Experience Necessary: Make $100,000 a Year as a Stockbroker (Simon & Schuster, 1987). How? By buying and selling mutual funds.
As a result, the market got way ahead of itself, with everyone following the same charts. Then when the price of the mutual funds went below their 39-week moving averaging, on the Friday before the Monday crash, everyone sold at once. The October 1987 crash was purely a technician's folly, and with the business fundamentals sound, the market quickly recovered within a few weeks.
As we celebrate the 20th anniversary of the 1987 crash, the media has recently asked me repeatedly this question: What factors could cause the stock market to collapse again? Or are we immune to another financial disaster?
Here is my answer: There are several potential financial crises out there that could cause the market to suddenly turn south. At the beginning of this year, I attended the American Economic Association meetings in Chicago, where I was fortunate to attend a luncheon with Fed chairman Ben Bernanke. He wouldn't take questions about current Fed policy, including interest rates, but he spoke volumes when he gave his formal talk to us at the luncheon. Ostensibly, the topic was "Central Banking and Bank Supervision in the United States," but reading between the lines, it was clear to see that Bernanke was worried about a financial storm ahead.
In his speech, he used the terms "crisis," "risk," "panic," "threats," "stress," and similar words at least 36 times.
Bernanke said that the Fed has set up a "crisis center" to handle potential global financial problems - to anticipate them, and to deal with them if they occur. What are the possibilities?
* A dollar collapse, like the one Paul Volcker suggested would happen in the next few years. (We're certainly moving in this direction.)
* A non-dollar currency crisis in Asia, Europe or Latin America (shades of the 1997 Asian currency crisis).
* A housing crash and foreclosure crisis (we suffered one this summer).
* A major terrorist attack on a financial center, such as New York, London or Tokyo.
* A sharp unexpected rise in inflation.
Bernanke revealed the various policy measures the Fed might take in response to a crisis: buying government bonds, providing overdrafts and other short-term credits to banks, facilitating currency swaps (to boost the dollar), and "securities lending," that is, lending money to institutions to buy stocks.
In sum, the answer is always the same: inject liquidity into the system to keep the stock market from collapsing. So far it's worked like a charm. Alan Greenspan applied this bailout policy several times during his 19-year tenure -- during the 1987 crash, and 1997 Asian currency crisis, the Y2K computer threat, and the 2001 terrorist attacks. (His new book "The Age of Turbulence" addresses all these events in detail.)
Bernanke had his first test this past summer with the mortgage credit crunch. The world's markets were on the verge of collapse on August 18 when the Fed intervened...by injecting liquidity.
But what if the same old medicine stops working, and the Fed injects liquidity, but the dollar and the stock markets keep on falling? There's only one protection: buy gold! And buy the products gold will buy. And that raises the specter of hoarding and the collapse of the world monetary system. And that leads to social unrest and...the institution of new emergency powers by the Federal government.
===================
The Ghosts of October 19
By Mark Skousen
Certain dates stand out in my life. One is October 19, 1987, the day the Dow Jones Industrial Average suddenly collapsed by 22%. That day is also significant because it happened to be my 40th birthday. Ever since then, I've been known as the "crash baby."
Most of my broker friends and investors were in a somber mood that Monday evening, stunned by the 509 point drop in the Dow. I was ebullient because by some fortune I sent out a "flash alert" on September 8, 1987, six weeks before the crash, telling my subscribers: "The coming credit squeeze could devastate the stock and bond markets; get out now! I advise you to sell all stocks and long-term growth mutual funds."
That evening, my wife had arranged a surprise birthday party. I had a lot of fun, but the party ended early as friends rushed home to check the financial news overseas.
Was the crash a portend of something more ominous, another Great Depression perhaps? After all, a similar stock market crash occurred in October, 1929, followed by the worst economic collapse in world history.
One of my technical trader friends was deeply worried. His trading system was based on moving averages of stock indexes like the Dow. At the New Orleans investment conference a month later, he showed a chart of the Dow with a "triangle" formation. He pointed to the triangle. "If the Dow breaks below the triangle formation," he warned, "the Dow could fall another 1,000 points or worse!"
I thought it was all a joke, but he was dead serious. He staked his reputation on his prediction. A few days later, the Dow started falling again, ominously below the point of the triangle. Yet, miraculously, the Dow never crashed. In fact, it rallied to new highs. My friend soon ended his newsletter, shamed perhaps by his failure to predict the next Great Depression.
As a macro-economist, I look at the economic fundamentals before making a prediction. And, in the case of the October, 1987, crash, the economic fundamentals looked to me to be largely sound. Business across the nation was doing well, both before and after the crash. The economy was growing, inflation was under control, and interest rates were relatively stable. So while I anticipated short-term trouble, I thought the long-term outlook looked good, and it wasn't long before I started recommending stocks again.
So why did the Dow Jones Industrial Average collapse by 22% on October 19, 1987?
Historians point to several factors, such as comments by the Treasury Secretary about a weak dollar and trade deficit, but I believe the crash can be blamed in large measure on an impulsive "Mr. Market" and the technical traders who encouraged mindless trading based on a line on a chart rather than business fundamentals. Too many investors were listening to my friend with the charts.
In the summer of 1987, telephone-switching between no-load mutual funds was all the rage, based solely on a technical charting system of a 39-week moving average. Mutual fund investing was extremely popular, to the point where you
couldn't go through a meal at home in the evening without a broker calling and telling you about the latest mutual fund. Few investors knew or cared about the companies the fund managers were buying. Just follow the line on a chart showing the mutual funds were moving higher. The brokerage business had become so successful that a book was released that year written by a Merrill Lynch broker entitled No Experience Necessary: Make $100,000 a Year as a Stockbroker (Simon & Schuster, 1987). How? By buying and selling mutual funds.
As a result, the market got way ahead of itself, with everyone following the same charts. Then when the price of the mutual funds went below their 39-week moving averaging, on the Friday before the Monday crash, everyone sold at once. The October 1987 crash was purely a technician's folly, and with the business fundamentals sound, the market quickly recovered within a few weeks.
As we celebrate the 20th anniversary of the 1987 crash, the media has recently asked me repeatedly this question: What factors could cause the stock market to collapse again? Or are we immune to another financial disaster?
Here is my answer: There are several potential financial crises out there that could cause the market to suddenly turn south. At the beginning of this year, I attended the American Economic Association meetings in Chicago, where I was fortunate to attend a luncheon with Fed chairman Ben Bernanke. He wouldn't take questions about current Fed policy, including interest rates, but he spoke volumes when he gave his formal talk to us at the luncheon. Ostensibly, the topic was "Central Banking and Bank Supervision in the United States," but reading between the lines, it was clear to see that Bernanke was worried about a financial storm ahead.
In his speech, he used the terms "crisis," "risk," "panic," "threats," "stress," and similar words at least 36 times.
Bernanke said that the Fed has set up a "crisis center" to handle potential global financial problems - to anticipate them, and to deal with them if they occur. What are the possibilities?
* A dollar collapse, like the one Paul Volcker suggested would happen in the next few years. (We're certainly moving in this direction.)
* A non-dollar currency crisis in Asia, Europe or Latin America (shades of the 1997 Asian currency crisis).
* A housing crash and foreclosure crisis (we suffered one this summer).
* A major terrorist attack on a financial center, such as New York, London or Tokyo.
* A sharp unexpected rise in inflation.
Bernanke revealed the various policy measures the Fed might take in response to a crisis: buying government bonds, providing overdrafts and other short-term credits to banks, facilitating currency swaps (to boost the dollar), and "securities lending," that is, lending money to institutions to buy stocks.
In sum, the answer is always the same: inject liquidity into the system to keep the stock market from collapsing. So far it's worked like a charm. Alan Greenspan applied this bailout policy several times during his 19-year tenure -- during the 1987 crash, and 1997 Asian currency crisis, the Y2K computer threat, and the 2001 terrorist attacks. (His new book "The Age of Turbulence" addresses all these events in detail.)
Bernanke had his first test this past summer with the mortgage credit crunch. The world's markets were on the verge of collapse on August 18 when the Fed intervened...by injecting liquidity.
But what if the same old medicine stops working, and the Fed injects liquidity, but the dollar and the stock markets keep on falling? There's only one protection: buy gold! And buy the products gold will buy. And that raises the specter of hoarding and the collapse of the world monetary system. And that leads to social unrest and...the institution of new emergency powers by the Federal government.
Friday, October 19, 2007
Thursday, October 18, 2007
If you have ever remember the "neuclear bomb" we mentioned?
We first talked about this in our older gold investment idea post
China sold 9 billion bond reduction at a 5-year high
Times amiable (backchina.com) The Treasury Department yesterday released data indicating that China, Japan August reduction of the speed of both the United States government bonds hit a new high at least five years, of which China's bond holders scale of the month decreased by 2.2% about 9 billion US dollars to 400 billion US dollars, set since April 2002 has been the fastest speed. The market, the impact of Subordinated Debt crisis, the dollar assets are being since the Russian debt crisis of 1998 the largest wave of selling.
According to the Ministry of Finance revealed that the United States, in August, in July revised data emerged 19.5 billion US dollars inflow of funds after the United States sold a net asset markets (including bonds, notes and stock) reached 69.3 billion US dollars. August capital outflows exceeded March 1990 21.2 billion US dollars the highest on record.
Japan's reduction of China's more than significant, August bond holders size decreased 4% to 586 billion US dollars, reducing the speed record since March 2000 high; China Taiwan is a decrease of 8.9% to 52 billion US dollars, setting 10 since 2000 , a new high since.
China sold 9 billion bond reduction at a 5-year high
Times amiable (backchina.com) The Treasury Department yesterday released data indicating that China, Japan August reduction of the speed of both the United States government bonds hit a new high at least five years, of which China's bond holders scale of the month decreased by 2.2% about 9 billion US dollars to 400 billion US dollars, set since April 2002 has been the fastest speed. The market, the impact of Subordinated Debt crisis, the dollar assets are being since the Russian debt crisis of 1998 the largest wave of selling.
According to the Ministry of Finance revealed that the United States, in August, in July revised data emerged 19.5 billion US dollars inflow of funds after the United States sold a net asset markets (including bonds, notes and stock) reached 69.3 billion US dollars. August capital outflows exceeded March 1990 21.2 billion US dollars the highest on record.
Japan's reduction of China's more than significant, August bond holders size decreased 4% to 586 billion US dollars, reducing the speed record since March 2000 high; China Taiwan is a decrease of 8.9% to 52 billion US dollars, setting 10 since 2000 , a new high since.
Tuesday, October 16, 2007
Countrywide CEO Angelo Mozilo is bracing his portfolio for further CFC bloodshed.
Here’s the rundown of his trading activity last week:
That’s about $16 million in stock value for Mozilo. If his portfolio allocation is any indication of CFC’s future performance, look out below. We wouldn’t be surprised to see another round of layoffs this week.
On the other hand, if you’re holding puts,congratulation!
Thursday, October 11, 2007
Gold rebounces while market tanks today
Gold continued its rebound overnight, trading in London all the way up to $748 for immediate delivery -- a brand-spanking-new 27-year high. Only one other time in history has gold been this expensive. Also, as we noted last week, never has gold been able to sustain this high of a range for this long…
A good sign?
But the mkt sells off at the late trading today because a major Wall Street bank lowered its sales expectations for Chinese Internet company Baidu.com. Recently this company, together with other technical stocks, shows a strong yet extended rally with about 70% gain in past month. The pull back caused the sell off in the tech sector which also lead to big market pullback. However, tech sector just rebounce from their low on August, we view opportunity for the correction in this sector.
A good sign?
But the mkt sells off at the late trading today because a major Wall Street bank lowered its sales expectations for Chinese Internet company Baidu.com. Recently this company, together with other technical stocks, shows a strong yet extended rally with about 70% gain in past month. The pull back caused the sell off in the tech sector which also lead to big market pullback. However, tech sector just rebounce from their low on August, we view opportunity for the correction in this sector.
Tuesday, October 9, 2007
Money source for our retirement account
“China's got a massive plan to build many more nuclear power plants -- $50 billion and 32 plants by 2020,” notes Mayer. “The ‘whisper’ number of 300 more by the middle of the century is even more mind-blowing.”
Despite China’s rapidly growing appetite for oil (now second only to the U.S., as we reported yesterday ), the red nation is far behind on a nuclear scale. Only 2.3% of the country’s electricity is derived from nuclear power. Compared with 20% here in the U.S. or an incredible 80% in France…China’s got a long way to go.
“Given what China's demand for other commodities has done for the prices of those commodities, we should take note of its new surge into nuclear power. It would seem to bode well for the price of uranium and the profits of those who sell it.
“Even if uranium prices doubled over the next few years, nuclear energy would remain an extremely competitive energy source. Eventually, of course, new uranium mines will come online. And eventually, of course, the price of uranium might retreat. But so what; the price might soar in the meantime, especially because demand seems certain to increase sharply.”
go check the Uranium stock on the google finance if you are searching sth for your IRA account.
Despite China’s rapidly growing appetite for oil (now second only to the U.S., as we reported yesterday ), the red nation is far behind on a nuclear scale. Only 2.3% of the country’s electricity is derived from nuclear power. Compared with 20% here in the U.S. or an incredible 80% in France…China’s got a long way to go.
“Given what China's demand for other commodities has done for the prices of those commodities, we should take note of its new surge into nuclear power. It would seem to bode well for the price of uranium and the profits of those who sell it.
“Even if uranium prices doubled over the next few years, nuclear energy would remain an extremely competitive energy source. Eventually, of course, new uranium mines will come online. And eventually, of course, the price of uranium might retreat. But so what; the price might soar in the meantime, especially because demand seems certain to increase sharply.”
go check the Uranium stock on the google finance if you are searching sth for your IRA account.
Friday, October 5, 2007
Energy Crisis again?
I read a news today about the energy that would want people to pay attention to the potential energy sector play again!
===================
The latest figures released by the International Energy Agency,” comments Kevin Capp “show the global production of liquids dropped by 854,000 barrels per day from August 2006-August 2007.
“In addition, we're pumping out 1.53 million barrels per day less than the all-time high of 86.13 million extracted in July 2006. Translation: The sun may have already set on our ability to meet world demand.
“This is not good.
“Running that close to the bone means any systemic shock — a hurricane that damages drilling platforms in the Gulf, a terrorist attack on oil pipelines in Nigeria, an unexpected cold snap in the Northeast — could cause prices to skyrocket, impacting everything from costs at the pump to costs at the grocery store. What's worse, the less oil we have, the less it takes to zap the price upward.”
===================
The latest figures released by the International Energy Agency,” comments Kevin Capp “show the global production of liquids dropped by 854,000 barrels per day from August 2006-August 2007.
“In addition, we're pumping out 1.53 million barrels per day less than the all-time high of 86.13 million extracted in July 2006. Translation: The sun may have already set on our ability to meet world demand.
“This is not good.
“Running that close to the bone means any systemic shock — a hurricane that damages drilling platforms in the Gulf, a terrorist attack on oil pipelines in Nigeria, an unexpected cold snap in the Northeast — could cause prices to skyrocket, impacting everything from costs at the pump to costs at the grocery store. What's worse, the less oil we have, the less it takes to zap the price upward.”
Wednesday, October 3, 2007
The rumor on the street for gambling again
Let's see what it is, however we should remain cautious.
“Investors shrugged off a profit warning from Citigroup and instead focused on the possibility of more Fed rate cuts,” reads the first sentence of CNN’s report. Oh boy… that’s bad. The rates are being cut for a reason. And it’s not because Bernanke wants your 401(k) to return 20% this year.
we remind you: The Fed’s last rate-cutting spree began with a surprise cut on Jan. 3, 2001. The next day, stocks surged, just as they did last month. By the end of January, the buzz wore off and the Fed cut by 50 bps again… and stocks surged yet again. Less than two months later, the Dow lost 10%.
“Investors shrugged off a profit warning from Citigroup and instead focused on the possibility of more Fed rate cuts,” reads the first sentence of CNN’s report. Oh boy… that’s bad. The rates are being cut for a reason. And it’s not because Bernanke wants your 401(k) to return 20% this year.
we remind you: The Fed’s last rate-cutting spree began with a surprise cut on Jan. 3, 2001. The next day, stocks surged, just as they did last month. By the end of January, the buzz wore off and the Fed cut by 50 bps again… and stocks surged yet again. Less than two months later, the Dow lost 10%.
Monday, October 1, 2007
As we pointed out, 14300 is coming!!!
that is just a pause for the mkt, we will enjoy the rally first!~:)
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