One financial indicator I've been keeping my eye on - the Australian dollar. Fallen 10% from the peak.
Australia is a proxy for Chinese growth.
Australia also is very solid financially, and has room to lower its interest rates (currently north of 4%). So it could probably survive a recession - the government isn't "out of bullets" like we and EU and Japan are.
But lower interest rates will weaken the currency of Australia.
I look at the dip in AUD as a signal that worldwide recession is anticipated, including much lower growth in Asia (5% growth in China would feel like a major recession to them).
I hesitate to give investment advice but AUD and CAD are on sale right now. Just saytin'. It's my intention to purchase some (more) soon.
('Course, they could get much, much cheaper as well - AUD went down to 60c on the dollar in the crash of '08/'09...- caveat emptor and all).
AUD just traded below parity. Wow. The speed of the descent indicates to me that stocks will continue to fall.
We just got our 401K report and in the last quarter (through July 31) it lost 13K. And we are on a conservative investment program with targeted retirement in 7-8 years. I am dreading what the next report will say after what's happened so far in August.
Do you have the feeling that we are being held hostage? Anyone with any brains knows that current government policies are downright wrong, but it is very hard to do anything about it.
Lewy, please forgive my being a combative asshole at times. It stems mostly from frustration I think. Frustration that our government lacks the common sense seen here at TCKT.
I do agree though, that the bottom is yet to be seen in stocks.
S&P futures down another 25+ points to 1083. AUD seems to be holding steady just above parity.
I'm betting there will be at least one big rally day this week - hundreds of points up in the Dow.
I just don't know when, and from what level. But it would be very consistent with past history to have a big rally day. (Of course, it could be a rally from 7,000 to 8,000...)
So this is Canadian dollars per US dollar. You can see the trend - a US dollar buys fewer and fewer Canadian dollars - US dollar weakening...
...until just recently.
Couple weeks ago a a US dollar only bought you 94 Canadian cents. Now it buys you 99.74 Canadian cents (or so). Back to where it was hanging out around Feb and March.
Matt, I think the kidnapping is ending. Sadly, all the hostages are getting shot.
This particular phase of the great crash is not addressable by policy.
(If Tea Party caucus held the House and a filibuster proof majority in the Senate and Paul Ryan was Treasurer and Ron Paul led Commerce and Allan West was SecDef and Rick Perry were President and Katy Perry were SecState, I'd still expect the market to go down - austerity is what we need but austerity will be painful in the short run. IMO.)
Stocks in HK have rallied substantially off their lows after lunch. Currencies stabilizing too (which means sadly that the dollar is weakening once again - this is "normal" now).
I'm calling the panic which began around the time Obama came on TV over as of about a few hours ago.
Of course, who knows what tomorrow will bring. Tomorrow's mostly over in Asia, just getting started in Europe...
"The Fed signaled it plans to keep its benchmark short-term interest rate close to zero for at least another two years as it sharply downgraded its view of the U.S. economy."
I'm confused. Why in the midst of a "tanking" do investors flee equities for federal debt notes (that whose value has been downgraded?) and gold (whose sole value is tied to the dollar, er...Federal Reserve Note ... another "IOU")?
Gold, as a personal "investment", physical, or even funnier, certificated (just wheere is that held, exactly?), especially amuses me. My test: if on a deserted island with minimal resources, what is gold worth? Chiefs Sitting Bull, Red Cloud, Quanah Parker, Crazy Horse, Gall and most others also found white man's preoccupation with gold puzzling. For the same reasons.
I'm having a "troglodyte day," obviously ... trigger by the little chart on the WSJ cover this morning showing where the money is going.
Articles (and schmucks like Obama) that imply we're not really AA+ also befuddle. A nation whose sovereign debt amounts to north of 70% of gross productivity is AAA? Good F'ing luck with that argument on your next car loan. See how your bank treats you on future loans if you already owe them more than 70% of what you earn/produce already. Bwahahahaha.
Lewy ... please to rescue my feeble mind this day.
Yes lewy, rescue my mind too! I absolutely do not understand why the stock market rallied today. The Fed comes out and basically admits that we're in another recession, and that the cavalry is gonna hold off printing a bazillion more "rescue" greenbacks...and everyone runs out and buys stock?
Oh, Dances, this is just depressing. :-(
ReplyDeleteI just heard some political talking head call it "the tea pary downgrade". That's apparently the talking point of the week.
She got slapped down hard by a economic commentator.
Apparently the final fall was 615 points - the single biggest drop since 2008.
ReplyDeleteOn top of the 570+ from Friday, us it about time for brokers to start ledge leaping?
We are in a lull between some heavy thunderstorms here, so I will not be on for long.
I hope your power doesn't go out, DWT. We could use the rain but not the thunder and lightning.
ReplyDeleteOne financial indicator I've been keeping my eye on - the Australian dollar. Fallen 10% from the peak.
ReplyDeleteAustralia is a proxy for Chinese growth.
Australia also is very solid financially, and has room to lower its interest rates (currently north of 4%). So it could probably survive a recession - the government isn't "out of bullets" like we and EU and Japan are.
But lower interest rates will weaken the currency of Australia.
I look at the dip in AUD as a signal that worldwide recession is anticipated, including much lower growth in Asia (5% growth in China would feel like a major recession to them).
I hesitate to give investment advice but AUD and CAD are on sale right now. Just saytin'. It's my intention to purchase some (more) soon.
('Course, they could get much, much cheaper as well - AUD went down to 60c on the dollar in the crash of '08/'09...- caveat emptor and all).
AUD just traded below parity. Wow. The speed of the descent indicates to me that stocks will continue to fall.
ReplyDeleteThe Hang Seng is trading about 1,400 down at this hour. Damn.
ReplyDeleteAUD just traded below parity. Wow. The speed of the descent indicates to me that stocks will continue to fall.
ReplyDeleteWe just got our 401K report and in the last quarter (through July 31) it lost 13K. And we are on a conservative investment program with targeted retirement in 7-8 years. I am dreading what the next report will say after what's happened so far in August.
Oh no florrie! I can't believe how much hard-earned money is evaporating into thin air. It's no wonder investor confidence is so shaken. :(
ReplyDeleteLewy, why do you say that CAD is on sale? It was trading at, or slightly above, par today.
ReplyDeleteDo you have the feeling that we are being held hostage? Anyone with any brains knows that current government policies are downright wrong, but it is very hard to do anything about it.
ReplyDeleteLewy, please forgive my being a combative asshole at times. It stems mostly from frustration I think. Frustration that our government lacks the common sense seen here at TCKT.
ReplyDeleteI do agree though, that the bottom is yet to be seen in stocks.
S&P futures down another 25+ points to 1083. AUD seems to be holding steady just above parity.
ReplyDeleteI'm betting there will be at least one big rally day this week - hundreds of points up in the Dow.
I just don't know when, and from what level. But it would be very consistent with past history to have a big rally day. (Of course, it could be a rally from 7,000 to 8,000...)
I was glued to the business channel when I was inside today and several insiders also said to expect a rally and not panic, lewy.
ReplyDeleteOh, I hope so.
Fay, here's a 1 year chart of USD/CAD I just pulled up:
ReplyDeleteimgw:"http://i35.photobucket.com/albums/d170/lewy14/USD-CAD.png"
(direct link here)
So this is Canadian dollars per US dollar. You can see the trend - a US dollar buys fewer and fewer Canadian dollars - US dollar weakening...
...until just recently.
Couple weeks ago a a US dollar only bought you 94 Canadian cents. Now it buys you 99.74 Canadian cents (or so). Back to where it was hanging out around Feb and March.
(Seems like there was a kind of sale on CAD back in June as well, but just today we had some trades over parity).
ReplyDeleteMatt, I think the kidnapping is ending. Sadly, all the hostages are getting shot.
ReplyDeleteThis particular phase of the great crash is not addressable by policy.
(If Tea Party caucus held the House and a filibuster proof majority in the Senate and Paul Ryan was Treasurer and Ron Paul led Commerce and Allan West was SecDef and Rick Perry were President and Katy Perry were SecState, I'd still expect the market to go down - austerity is what we need but austerity will be painful in the short run. IMO.)
Well we like this Lewy because Matt has a US bank account and we have been hesitant to convert the funds to CAD because they were lower than par.
ReplyDeletePlus our exports suck when the CAd is higher than the USD
ReplyDelete"and Katy Perry were SecState"
ReplyDeleteLMAO lewy!
;)
ReplyDeleteI think lewy did that to make sure we weren't speed reading his comments, lol!
ReplyDelete:D
ReplyDeleteMaybe the hostages are getting shot, but they can't shoot all of us at once....
ReplyDeleteHong kong stocks down 6% at lunchtime. (Their lunchtime).
ReplyDeleteStocks in HK have rallied substantially off their lows after lunch. Currencies stabilizing too (which means sadly that the dollar is weakening once again - this is "normal" now).
ReplyDeleteI'm calling the panic which began around the time Obama came on TV over as of about a few hours ago.
Of course, who knows what tomorrow will bring. Tomorrow's mostly over in Asia, just getting started in Europe...
Whoops, scratch that, Hong Kong closed near the lows after all, and Europe is down big (3% to 5%) after opening green. CAD approaching parity again.
ReplyDeleteI'm so relieved to see the US markets clawing back some losses this morning. Keep it up!
ReplyDeleteI wonder if we'll see an announcement of QE3 today. :-/
Oh crap. Obama has canceled his electioneering and is huddled in the White House with his
ReplyDeletetroupe of clowns.
Nothing good will come of this. Lower the lifeboats!
From the WSJ: the results of the fed meeting:
ReplyDelete"The Fed signaled it plans to keep its benchmark short-term interest rate close to zero for at least another two years as it sharply downgraded its view of the U.S. economy."
Now the stock market is tanking. Again.
I'm confused. Why in the midst of a "tanking" do investors flee equities for federal debt notes (that whose value has been downgraded?) and gold (whose sole value is tied to the dollar, er...Federal Reserve Note ... another "IOU")?
ReplyDeleteGold, as a personal "investment", physical, or even funnier, certificated (just wheere is that held, exactly?), especially amuses me. My test: if on a deserted island with minimal resources, what is gold worth? Chiefs Sitting Bull, Red Cloud, Quanah Parker, Crazy Horse, Gall and most others also found white man's preoccupation with gold puzzling. For the same reasons.
I'm having a "troglodyte day," obviously ... trigger by the little chart on the WSJ cover this morning showing where the money is going.
Articles (and schmucks like Obama) that imply we're not really AA+ also befuddle. A nation whose sovereign debt amounts to north of 70% of gross productivity is AAA? Good F'ing luck with that argument on your next car loan. See how your bank treats you on future loans if you already owe them more than 70% of what you earn/produce already. Bwahahahaha.
Lewy ... please to rescue my feeble mind this day.
Yes lewy, rescue my mind too! I absolutely do not understand why the stock market rallied today. The Fed comes out and basically admits that we're in another recession, and that the cavalry is gonna hold off printing a bazillion more "rescue" greenbacks...and everyone runs out and buys stock?
ReplyDeleteI'm so confused. SRSLY.
Dry Bones has something to say about the ratings crisis - see this great cartoon:
ReplyDeleteimgw:"http://www.drybonesproject.com/blog/D11807_2.gif"
Spot on! Thanks for posting it, annie!
ReplyDelete