Global Correction

[bingobongo]

the stupid deserve to be separated from their dough........

An Utterly Predictable Bust

The Shanghai composite index has plunged 45% from its high, reached last October. The first quarter of this year, which ended with a huge sell-off, was the worst ever for the market.

http://www.forexhound.com/article.cfm?articleID=92232

[LaoPo]

And, in the meantime Alan Greenspan is coming out of the dark Gloom & Doom Forest with a light bulb:

Greenspan Says U.S. Home Prices May Stabilize in 2008 (Update2)

April 8 (Bloomberg) -- Former Federal Reserve Chairman Alan Greenspan said the drop in U.S. home prices will probably end ``well before'' early next year as the number of houses on the market diminishes, aiding an economic rebound.

``It will not be until early 2009 that we will get close to having eliminated most of this'' home inventory, Greenspan told a conference in Tokyo today sponsored by Deutsche Bank AG and co-hosted by Bloomberg LP. ``But it is very likely that home prices will stabilize well before that.''

Greenspan added that the extent of damage stemming from the collapse of the subprime-mortgage market won't be known for months. He described the credit crisis as the worst in 50 years, echoing the assessment of International Monetary Fund economists.

``You won't see asset markets recover until housing prices stabilize,'' said Glenn Maguire, chief Asia-Pacific economist for Societe Generale SA in Hong Kong. ``If Greenspan is correct, you'll see weakness in the economy through 2008.''

The yield on the 10-year Treasury note fell 1 basis point to 3.53 percent as of 4 p.m. in Tokyo, according to bond broker Cantor Fitzgerald LP.

Greenspan's successor, Ben S. Bernanke, and other Fed officials have highlighted declining home prices as a major economic risk that may further hurt household wealth and consumer spending.

`Slow, Hesitant Recovery'

``Once the markets start to stabilize, especially if the real economies don't go into a severe recession,'' then ``we can expect a recovery to begin to take place,'' Greenspan, 82, said via satellite from Washington. ``It will be slow, it will be hesitant.''

The health of the U.S. housing market is tied to broader financial markets that rely on bundling mortgages to sell as securities, Greenspan said. The median price of an existing single-family home dropped 8.7 percent in February from a year earlier, the most in four decades of record keeping, according to the Chicago-based National Association of Realtors.

``Have we reached a point where prices are stable? We cannot know that for a couple of months,'' Greenspan said. ``It looks as though we're going to get a very large rate of liquidation, but not until the second half of this year.''

Greenspan said inflation will be contained during the current slowdown before picking up as the world economy recovers.

``It's difficult to imagine any major breakout of inflation as economic slack continues to increase,'' he said. ``What we will see is gradually rising inflationary pressures that will probably be subdued during the current period of slack, but that will surely reemerge when economies pick up.''

Increasing Criticism

Greenspan spoke via satellite from Bloomberg Television's studio in Washington, answering questions from Peter Hooper, chief economist at the securities unit of Deutsche Bank, which hired Greenspan as a consultant in August.

Greenspan, who retired in 2006 after 18 years as the U.S. central-bank chief, has come under increasing criticism for his policies as last year's subprime-loan meltdown spread into a broader financial crisis. One recent book, ``Greenspan's Bubbles'' by money manager William Fleckenstein, argues the former Fed chief helped inflate stock and home prices.

In response to the bursting of the Internet and technology bubble and the Sept. 11 terrorist attacks, Greenspan lowered the Fed's key rate in 2001 from 6.5 percent to 1.75 percent, then reduced it further in 2003 to 1 percent, a 45-year low.

Left to Bernanke

He left the rate there for a year before starting to raise borrowing costs in quarter-point increments, leaving it Bernanke to decide when to stop. Some Fed critics, such as Bear Stearns Cos. economist John Ryding, say rates were too low for too long, encouraging the easy credit that helped inflate a housing bubble and has now returned to burn investors.

Greenspan, who published his memoir ``The Age of Turbulence'' in September, has taken to defending his legacy in newspaper articles.

Yesterday, in a Financial Times piece headlined ``The Fed is blameless on the property bubble,'' Greenspan wrote that the evidence is ``very fragile'' that Fed interest-rate policy added to the U.S. bubble and that ``it is not credible that regulators would have been able to prevent the subprime debacle.''

``I was praised for things I didn't do,'' Greenspan said in a Wall Street Journal interview published today. ``I am now being blamed for things that I didn't do.''

Greenspan said today that ``the current credit crisis is the most wrenching in the last half century and possibly more.''

Bernanke, 54, told Congress last week that the U.S. economy may contract in the first half of 2008 and for the first time acknowledged the chance of a recession.

Later today, the Fed releases minutes of its March 18 interest-rate decision and any other conference calls in February and the first half of March. The Federal Open Market Committee that day lowered its benchmark rate by 0.75 percentage point to 2.25 percent, capping 3 points of cuts since September.

http://www.bloomberg.com/apps/news?pid=206...&refer=news

LaoPo

[LaoPo]

But, Greenspan also said:

Greenspan, on CNBC: U.S. in recession

Tue Apr 8, 2008 6:28pm EDT

WASHINGTON (Reuters) - Former Federal Reserve Chairman Alan Greenspan said on Tuesday the U.S. economy was in recession, and said it would be appropriate to tap public funds to resolve the mortgage-related crisis that has helped pull the economy under.

In an interview with CNBC television in which he defended his chairmanship of the U.S. central bank against charges that his policy missteps had laid the groundwork for the current crisis, Greenspan said Fed decisions on his watch were rationally constructed based on evidence at the time.

"I have no regrets on any of the Federal Reserve policies that we initiated back then because I think they were very professionally done," Greenspan said.

It is unfair to hold his Fed to task for the housing bubble or the current crisis in credit markets, because global market forces were at work to keep long-term interest rates low, not just Fed policies that brought short-term U.S. interest rates down to multi-decade lows, he said.

"Clearly, certain of our anticipations of what would happen as a consequence of those policies were off but there's no way of avoiding that," he said.

Greenspan went farther than the Fed has by saying outright that the economy is in a recession, although he said it is too soon to say how deep or prolonged the downturn will be.

"Consumers are beginning to shrink in, the automobile markets are beginning to contract, production is beginning to ease, and we are in the throes of recession," he said.

Continues here:

http://www.reuters.com/article/businessNew...0080408?sp=true

LaoPo

[LaoPo]

Meanwhile in the UK:

U.K. House Prices Fall the Most Since 1992, HBOS Says

By Svenja O'Donnell and Brian Swint

April 8 (Bloomberg) -- U.K. house prices dropped by the most since 1992 in March as the seizure in credit markets worldwide forced banks to pull mortgage offers, a report by HBOS Plc showed.

The average cost of a home in Britain fell 2.5 percent to 191,556 pounds ($379,000) from February, HBOS, the U.K.'s biggest mortgage lender, said in a statement today. The 1 percent drop in the first three months of this year from the fourth quarter was the biggest since 1995.

The pound fell after the report on speculation that the Bank of England will reduce the benchmark lending rate on April 10 for the third time since December to prevent an economic slump. Abbey, the U.K. unit of Spain's Banco Santander SA, today became the last major British lender to stop offering home loans that require no down payment as rising funding costs hamper banks' ability to lend.

``We're in for a long period of house prices falling or not growing at all,'' said George Buckley, chief U.K. economist at Deutsche Bank AG in London. ``It's another reason for the Bank of England to cut interest rates this week.''

Economists predicted a 0.3 percent monthly decline in house prices, the median of 12 estimates in a Bloomberg survey show. The pound fell as much as 0.6 percent against the dollar after today's report and traded at $1.9718 as of 11:58 a.m. in London.

End of the Boom

The U.K. has the second-highest proportion of homeownership among the Group of Seven industrialized nations, after Italy. A decade-long housing boom fuelled 62 consecutive quarters of economic growth and helped seal three election victories for the ruling Labour Party led by Tony Blair, and his successor as Prime Minister, Gordon Brown.

Continues here:

http://www.bloomberg.com/apps/news?pid=206...p;refer=economy

LaoPo

[disgruntled]

Why is it that people still look to Greenspan when Bernanke is in? Does this mean Bernanke hasn't made the grade?

[sonicdragon]

Why is it that people still look to Greenspan when Bernanke is in? Does this mean Bernanke hasn't made the grade?

I would pay less attention to Greenspan and Bernanke and more attention to people such as Martin Feldstein of Harvard, chairman of the NBER (the organisation which formally declares when the US is in recession)

http://news.yahoo.com/s/nm/20080407/bs_nm/...my_feldstein_dc

He believes that the US has been sliding into recession since Dec/Jan. He also believes that Q1 GDP numbers may show positive growth, but such numbers would be misleading. Readers should note that the "common" definition of a recession as being 2 quarters of negative GDP growth is not the official definition. The NBER is focussed on many other factors, in particular employment.

[LaoPo]

Thatcher's Chancellor Expects Long, Shallow Recession

By Mark Deen and Paul George

April 9 (Bloomberg) -- Nigel Lawson, the longest-serving finance minister in Margaret Thatcher's government, said Britain and the U.S. are headed for recession as a credit boom similar to one that he managed in the 1980s unwinds.

``We are probably facing a recession of some sort in the western world,'' Lawson, who served as chancellor of the exchequer from 1983 to 1989, said in a Bloomberg Television interview in London today. ``Not a severe recession, but in the U.S. and U.K. one that might be quite prolonged.''

Prime Minister Gordon Brown's Labour government is battling to prevent an economic slump as a surge in borrowing costs makes it harder for companies and consumers to get loans. U.K. house prices dropped the most since 1992 last month, and confidence among shoppers fell to a four-year low.

During his term in office, Lawson helped engineer a boom by slashing taxes and then slammed on the brakes by raising interest rates to combat inflation toward the end of his term.

Britain's economy may be headed for the slowest expansion since 1992, the year after the last recession ended. After more than a decade of growth that prompted a tripling of house prices and brought unemployment to a post-war low, economists predict growth of 1.6 percent this year, half the pace of 2007, according to a survey conducted by the Treasury.

Continues here:

http://www.bloomberg.com/apps/news?pid=206...X0&refer=uk

LaoPo

[bingobongo]

well, the mighty dragon is starting to choke on its own smoke and fire......first the shang hai stock index takes a 45% haircut in 6 months, and now real estate will soon feel the pain, and once the olympics are over, it will get oh so much worse..........point being is that global malaise is coming and will acclerate, taking all bourses with it.....

BFA: China real estate sector likely at crossroads

China's four largest listed land developers, including Vanke, China Merchants Property Development, Gemdale and Poly, all reported a five-year low in cash flow from operating costs per share in their 2007 financial reports.

http://news.xinhuanet.com/english/2008-04/...ent_7967634.htm

[VegasVic]

well, the mighty dragon is starting to choke on its own smoke and fire......first the shang hai stock index takes a 45% haircut in 6 months, and now real estate will soon feel the pain, and once the olympics are over, it will get oh so much worse..........point being is that global malaise is coming and will acclerate, taking all bourses with it.....

BFA: China real estate sector likely at crossroads

China's four largest listed land developers, including Vanke, China Merchants Property Development, Gemdale and Poly, all reported a five-year low in cash flow from operating costs per share in their 2007 financial reports.

http://news.xinhuanet.com/english/2008-04/...ent_7967634.htm

I have a nice tract of land on the northern edge of the Gobi desert that I was going to put up for sale, but it sounds like now might not be the best time Given the fact that nearly every country that the Olympic torch has passed through has seen very large and sometimes very violent protests, my guess would be that the Olympics will be a bust and the Chinese economy will follow!

[j_cheung]

well, the mighty dragon is starting to choke on its own smoke and fire......first the shang hai stock index takes a 45% haircut in 6 months, and now real estate will soon feel the pain, and once the olympics are over, it will get oh so much worse..........point being is that global malaise is coming and will acclerate, taking all bourses with it.....

BFA: China real estate sector likely at crossroads

China's four largest listed land developers, including Vanke, China Merchants Property Development, Gemdale and Poly, all reported a five-year low in cash flow from operating costs per share in their 2007 financial reports.

http://news.xinhuanet.com/english/2008-04/...ent_7967634.htm

I have a nice tract of land on the northern edge of the Gobi desert that I was going to put up for sale, but it sounds like now might not be the best time Given the fact that nearly every country that the Olympic torch has passed through has seen very large and sometimes very violent protests, my guess would be that the Olympics will be a bust and the Chinese economy will follow!

That's only in the US of A and EUROPEAN countries. The relay went without a hitch in Buenos Aires.

Aside from that distortion, I'll agree that the Motherland will have to go to the recessionary "woodshed" in the next few years (possibly after '09) in bleed some of its overexpansion excesses. However, IMHO, an economic bust doesn't always mean a public revolt let alone a political revolution. If that so, China would have long collapsed back in the late 70s or after '89.

[VegasVic]

well, the mighty dragon is starting to choke on its own smoke and fire......first the shang hai stock index takes a 45% haircut in 6 months, and now real estate will soon feel the pain, and once the olympics are over, it will get oh so much worse..........point being is that global malaise is coming and will acclerate, taking all bourses with it.....

BFA: China real estate sector likely at crossroads

China's four largest listed land developers, including Vanke, China Merchants Property Development, Gemdale and Poly, all reported a five-year low in cash flow from operating costs per share in their 2007 financial reports.

http://news.xinhuanet.com/english/2008-04/...ent_7967634.htm

I have a nice tract of land on the northern edge of the Gobi desert that I was going to put up for sale, but it sounds like now might not be the best time Given the fact that nearly every country that the Olympic torch has passed through has seen very large and sometimes very violent protests, my guess would be that the Olympics will be a bust and the Chinese economy will follow!

That's only in the US of A and EUROPEAN countries. The relay went without a hitch in Buenos Aires.

Aside from that distortion, I'll agree that the Motherland will have to go to the recessionary "woodshed" in the next few years (possibly after '09) in bleed some of its overexpansion excesses. However, IMHO, an economic bust doesn't always mean a public revolt let alone a political revolution. If that so, China would have long collapsed back in the late 70s or after '89.

JC, I also heard that the torch relay went off without a hitch in Montevideo, kudos to those south americans I do think that china will emerge stronger and smarter than ever after the eventual crash, but the pain and political unrest will last a few years until that occurs. The old line commies will need to dissappear and western educated chinese will replace them and allow for a more complete rollout of true free market capitalisim and markets, and who knows democracy might even rear its head Argentina is an amazing country, I hope you enjoy your time there!

[bingobongo]

you didn't think this thread was dead did you, just dormant

anyway, IF the AAA tranche is indeed rolling over (upper left box), then the global stock market rally is about to end and down we go as the subprime problems are returning........get ready.........remember that the bond market is smarter than the stock market

Top left Chart (AAA) shows an outstanding rally (and hence the global stock market rally since March). Now it is rolling over.

The BBB (bottom right) led the crises of last July, January and March.

The pressure worsens when the AA (top right) breaks down.

Edited May 13, 2008 by bingobongo

[bingobongo]

you didnt think it was over silly rabbits did you?

vietnam, china, and LOS.........who was the genius that said this would not spread to the land of fairies and pixie dust of LOS?

so what happens when they credit tighten in LOS?

Shanghai stock market drops 7.7%

Analysts said the primary catalyst was another round of credit-tightening measure by China's central bank.By Don Lee, Los Angeles Times

http://www.latimes.com/business/la-fi-asia...0,2533856.story

[Naam]

you didnt think it was over silly rabbits did you?

we know that we are rabbits and we know that we are silly. there's no need for a poor @sshole like you to tell us!

[bingobongo]

you didnt think it was over silly rabbits did you?

we know that we are rabbits and we know that we are silly. there's no need for a poor @sshole like you to tell us!

come on Naam, do not hate me because I warned you for the past 6 months and was right, hate yourself because you did not listen and were wrong

do not hate the player (bingobongo) hate the game (gloabl markets going in the tank)

Edited June 10, 2008 by bingobongo

[Naam]

i don't hate poor frustrated boys Bingo. i pity them

[OlRedEyes]

Ja well no fine.

Edited June 10, 2008 by OlRedEyes

[bingobongo]

i don't hate poor frustrated boys Bingo. i pity them

thanks Naam, but I am far from poor, by the way, how is the midlife crisis coming along?

anyway, prepare accordingly

US RATE FUTURES-75 bps Fed hike seen by year-end

http://www.reuters.com/article/marketsNews...033850620080610

[Naam]

i don't hate poor frustrated boys Bingo. i pity them

thanks Naam, but I am far from poor, by the way, how is the midlife crisis coming along?

a midlife crisis (if any) is long forgotten when you push 65 and as far as interest rates are concerned i hope not only Bernanke but Trichet and all others [you name them] will hike as much as they can. those who keep a high cash quota, never attend the stock market casinos and reinvest the lion share of their proceeds in bonds just love high interest rates

[highdiver]

i don't hate poor frustrated boys Bingo. i pity them

thanks Naam, but I am far from poor, by the way, how is the midlife crisis coming along?

a midlife crisis (if any) is long forgotten when you push 65 and as far as interest rates are concerned i hope not only Bernanke but Trichet and all others [you name them] will hike as much as they can. those who keep a high cash quota, never attend the stock market casinos and reinvest the lion share of their proceeds in bonds just love high interest rates

they also love a good Cuban and an excellent port

[pkrv]

i don't hate poor frustrated boys Bingo. i pity them

thanks Naam, but I am far from poor, by the way, how is the midlife crisis coming along?

a midlife crisis (if any) is long forgotten when you push 65 and as far as interest rates are concerned i hope not only Bernanke but Trichet and all others [you name them] will hike as much as they can. those who keep a high cash quota, never attend the stock market casinos and reinvest the lion share of their proceeds in bonds just love high interest rates

That reminds me of a childhood song! Bingo Bonkers, I'm truly, truly bonkers. Or am I getting the words mixed up?

[bingobongo]

nice to see the amateurs have there say.....how is the portfolio there Naam?

who was it on this thread that said LOS would not be affected? genius, i tell you pure genius

i guess a fall from 880 to 790 (a 10% haircut) in one month is not bad if you want to lose your nest egg.........its not too late to learn Naam

[midas]

I am only an amateur chartist but isnt that a " head and shoulders "

formation on the right of the chart as it was in January?

And look what happend after it reached a peak last time ?

[Naam]

nice to see the amateurs have there say.....how is the portfolio there Naam?

my portfolio (YTD) is up 4.952% in USD terms and down 1.976% in EUR terms. but as long as the wives of certain amateurs are able to draw and spend a monthly pocket money of >1,500 dollars those amateurs have a good night's sleep

those amateurs also care a sh∞t what will happen to the Dong, the condo prices in BKK, the global correction, the skies falling, the DOW, the Nasdaq, the S&P 500, the fares of baht buses, the mortgages from Kasikorn Bank, the "racist" fees for entering museums and parks in Thailand. instead of worrying too much they lean back, sip Port or Sherry and puff (not always but once in a while) a good Habana.

of course, some times those amateurs get agitated about sh∞t, e.g. when their beloved little dog did not sh*t for 1½ days and refuses to eat a delicious piece of Gouda, Brie or german sausage. they get raving mad when their wives forgot to replenish the stock of certain blue or yellow pills and when the cook tries for the umpteenth time to prepare tasty thai food and fails.

next question

[Naam]

its not too late to learn Naam

it's never too late to learn, but one can't learn from your incoherent as well as irrelevant bla-bla Bingo. for poor boys it's a must to invest and gamble in stock markets or short them, those who have reached a certain level have lots of cash in various currencies at overnight rates and clip the coupons of their bonds (denominated in various currencies). and as far as the SET is concerned... i wouldn't touch it with the longest barge pole available on this planet

come to think of it, after many years of being abstinent from stock markets i am considering again to buy some (YUCK ) shares. what's on my mind is a diversified variety of banks/financial institutions. but it looks as if the time hasn't come yet because every other day bad news are published. what do you think about that? i don't want to get in big... perhaps a million dollars (at the most a million EURos)... or so. do you how many zeroes a million has? most probably the answer is no

[Naam]

hey Bingo,

a few months ago one of your "skies falling" predictions was "when 10Y-UST reach 4.20%".... well we are at 4.167% presently, i looked up to the sky but couldn't see anything falling.

[ray23]

Maybe discounting the effects of any major economy could be a mistake. The reality is everyhting is interconnected. I hate to see Asia have to deal wiht this but in fact those of us form US have been dealing with for a long time. I hoped for soft landing for the U.S. and I hope the same for my home Thailand.

"The currency slide

By dpa correspondents

When inflation goes up, currencies tend to come down, economists say. That rule of thumb has proved true in Southeast Asia this month which has seen inflation across the region pushed to the highest levels in a decade by rising fuel and food prices.

In May, year-on-year inflation peaked at 7.6 per cent in Thailand, 9.6 per cent in the Philippines, 10.4 per cent in Indonesia and a whopping 25.2 per cent in Vietnam, leading to depreciations against the not-so-mighty dollar of the Thai baht, the Philippine peso, the Indonesian rupiah and, most recently, the Vietnamese dong.

Vietnam's State Bank on Wednesday lowered the official exchange rate of the Vietnamese dong almost 2 per cent, while raising the prime interest rate from 12 to 14 per cent to stem inflation.

Further depreciations are anticipated in Vietnam and throughout Southeast Asia in coming months.

"The big issue in my mind is, are they going to be able to get away with just gradually devaluing the currency, or should they just go 'whack' and do 20 per cent at one time?" said Peter Ryder, CEO of asset and real estate group Indochina Capital, referring to Vietnam's central bank.

Vietnam, a darling of foreign investors over the past two years, has suddenly run in to a host of macroeconomic problems, including rising inflation, a widening trade deficit and slowing growth.

While it may be have taken a lead, Vietnam is hardly alone in its fading fundamentals in the region, and the trend spells the end to almost two years of Asian currencies appreciating against the greenback.

"That's changed, and it's changed rather quickly," said James McCormack, head of Asia-Pacific Sovereign Ratings at Fitch Ratings in Hong Kong.

"All we need to do is look at how the trade flows and investment flows are going, and for Asia they are going to get worse," he said. "Based on these two trends we would expect Asian currencies to continue to weaken, or at least not return to their previous strengths."

After two years of steadily appreciating Asian currencies against the dollar, ramped up by foreign money pouring in to the region because of its impressive growth, strong exports and stable macroeconomics, a shift towards depreciating currencies is a sign of the changing times.

"The Philippine peso is a good example of how things have changed in 2008," said an economic assessment report of the DBS Bank of Singapore. "This year, growth is expected to slow while inflation has surged."

"Although (the) US dollar and peso (exchange rate) has stopped rising of late, we are mindful that it could still head higher," the report said. "History has shown that the US dollar and peso can return up to 44 per cent of its past three years' move."

The depreciation of Southeast Asia currencies has little to do with a strengthening dollar, but much more to do with the region's ongoing dependence on the US economy, analysts said.

"We're starting to see now virtually every Asian country's export growth to the US is in decline, and in some countries may even be negative year-on-year," McCormack said.

"There is no way that Asia can avoid a slowdown, because we're really looking at a synchronized global slowdown," he said. "Decoupling from the US economy was the buzzword a while ago, but nobody seems to use that term anymore because everyone realizes its not going to happen." (dpa)"

[bingobongo]

say bye bye to the SET and the rest of the asian bourses, once the olympics are over it will accelerate, by the way, how are all the strikes and protests coming along in LOS?

so Naam, what is sinking faster, your portfolio balance or viagra supply?

one more time for the amateurs in denial, if the BOT does not raise interest rates inflation will continue to decimate the country (as others) and the baht will continue to sink, futher worsening the inflation situation, if they raise rates then the house of debt comes tumbling down and the overbuilt/overleveraged businesses will go under............are you ready

Avoid Asian Emerging Markets on Inflation, HSBC Says

Goldman, Sachs & Co. on June 2 cut its rating on Malaysia, Thailand, Indonesia and the Philippines, citing the outlook for earnings as economic growth slows and consumer prices soar.

http://www.bloomberg.com/apps/news?pid=206...&refer=asia

Edited June 12, 2008 by bingobongo

[pkrv]

Well Naam Bonkers can respond unfortunatly when he chooses to do so!

Naam I have this reoccuring nightmare the song just goes , "I'm truly, truly bonkers. Or am I getting the words mixed up", please help!

[bingobongo]

Well Naam Bonkers can respond unfortunatly when he chooses to do so!

Naam I have this reoccuring nightmare the song just goes , "I'm truly, truly bonkers. Or am I getting the words mixed up", please help!

keep trying pkrv, the next support on the SET is not until 725 - 730 range, another 10% haircut is coming, but what do i care