We're On Our Way Up...

[LaoPo]

If you think Soros is wrong, what about Morgan Stanley/Oliver Wyman's statements in a report, called:

"Banks Face Biggest Crisis in 30 Years, Report Shows"

"http://www.bloomberg.com/apps/news?pid=20601087&sid=ag6x7hY0GLFo&refer=worldwide

Are they wrong; there is no financial crisis ?

That would be the best news I've heard in months and I hope that your quote: "...I believe for the stock markets the worst is over, and gains potential is higher than loss potential." will be proved correct.

Laopo

The emphasis of their report is on banks and the banking industry, with a particular focus on US banks and European banks. This sector will continue having a tough ride economically.

As for the stock markets, they are much wider in scope in terms of industries and geographical locations. Thailand, Korea, Singapore for example look good value to me. Latin America and Africa have some interesting opportunities.

I agree with your view but you wrote:

"Soros:

World financial markets haven't been in such bad shape since the 1930s, billionaire hedge-fund investor George Soros said in an interview last week in which he predicted more losses.

My comment: Think he has got it wrong this time."

..talking financial markets and banking crisis ("predicted more losses") is the same in my view, no ?

But, never mind, I think we are awaiting huge losses in the normal -western- economy when the 2008 balance sheets are coming out, in 2009.

The after waves of the banking/financial crisis will be felt for a long time to come.

LaoPo

[stumonster]

Domestic demand is still continuing to grow in the first couple of months of 2008,

Risks to inflation increased from the previous meeting. Headline inflation accelerated in the first quarter due to the prices of oil and commodities in world markets, as well as greater pass-through of costs to domestic prices.

I haven't heard about any increases in wages - so how does this compute ? savings , credit card or bullsh1t

[AFKAFSinLOS]

Domestic demand is still continuing to grow in the first couple of months of 2008,

Risks to inflation increased from the previous meeting. Headline inflation accelerated in the first quarter due to the prices of oil and commodities in world markets, as well as greater pass-through of costs to domestic prices.

I haven't heard about any increases in wages - so how does this compute ? savings , credit card or bullsh1t

All sorts of pent up demand in Thailand since late 2006, after investment/projects suffered during the coup. Installation of new government, which has also made it clear it will provide fiscal measures to boost domestic demand. eg increasing the nil band rate, increased tax relief on LTFs, tax cuts for listed companies and SMEs. Then there's populist policies for rural voters - more soft loans for villages depending on size. Plenty of Thai companies have also made annual wage increases as usual. Banks in Thailand are expecting a good year in contrast to their US brethren.

Edited April 9, 2008 by AFKAFSinLOS

[LaoPo]

Domestic demand is still continuing to grow in the first couple of months of 2008,

Risks to inflation increased from the previous meeting. Headline inflation accelerated in the first quarter due to the prices of oil and commodities in world markets, as well as greater pass-through of costs to domestic prices.

I haven't heard about any increases in wages - so how does this compute ? savings , credit card or bullsh1t

All sorts of pent up demand in Thailand since late 2006, after investment/projects suffered during the coup. Installation of new government, which has also made it clear it will provide fiscal measures to boost domestic demand. eg increasing the nil band rate, increased tax relief on LTFs, tax cuts for listed companies and SMEs. Then there's populist policies for rural voters - more soft loans for villages depending on size. Plenty of Thai companies have also made annual wage increases as usual. Banks in Thailand are expecting a good year in contrast to their US brethren.

..do you speak the same way as you write ?

LaoPo

[AFKAFSinLOS]

..do you speak the same way as you write ?

LaoPo

No. I use my mouth for speaking. Now let's watch the comments on other people using other parts of their anatomy.

Edited April 10, 2008 by AFKAFSinLOS

[stumonster]

Domestic demand is still continuing to grow in the first couple of months of 2008,

Risks to inflation increased from the previous meeting. Headline inflation accelerated in the first quarter due to the prices of oil and commodities in world markets, as well as greater pass-through of costs to domestic prices.

I haven't heard about any increases in wages - so how does this compute ? savings , credit card or bullsh1t

All sorts of pent up demand in Thailand since late 2006, after investment/projects suffered during the coup. Installation of new government, which has also made it clear it will provide fiscal measures to boost domestic demand. eg increasing the nil band rate, increased tax relief on LTFs, tax cuts for listed companies and SMEs. Then there's populist policies for rural voters - more soft loans for villages depending on size. Plenty of Thai companies have also made annual wage increases as usual. Banks in Thailand are expecting a good year in contrast to their US brethren.

tax relief will not affect the majority of the population and there is only so long food prices can be held down and enforced by government decree.

the pork barrelling in the villages has not yet been enacted , only words - extra income from higher rice/foodstuff prices will not be much while the middlemen attempt to honour their current contracts and until the government gets scared about the effect of rising prices again.

A large number of jobs have dissappeared from the manufacturing section as many factories have closed in the las 9 months.

Tourism from the traditional tourist will suffer as the Thai baht has strengthened and price and interest rate hikes at home remove the possibility of overseas holidays to many.

I don't forsee "pent up demand" , but pent up reality

I would rather be realistic and be called a "doom and gloom merchant" than spread false hope by being optimistic.

correct decisions can only be made from a start in reality.

[AFKAFSinLOS]

All sorts of pent up demand in Thailand since late 2006, after investment/projects suffered during the coup. Installation of new government, which has also made it clear it will provide fiscal measures to boost domestic demand. eg increasing the nil band rate, increased tax relief on LTFs, tax cuts for listed companies and SMEs. Then there's populist policies for rural voters - more soft loans for villages depending on size. Plenty of Thai companies have also made annual wage increases as usual. Banks in Thailand are expecting a good year in contrast to their US brethren.

tax relief will not affect the majority of the population and there is only so long food prices can be held down and enforced by government decree.

the pork barrelling in the villages has not yet been enacted , only words - extra income from higher rice/foodstuff prices will not be much while the middlemen attempt to honour their current contracts and until the government gets scared about the effect of rising prices again.

A large number of jobs have dissappeared from the manufacturing section as many factories have closed in the las 9 months.

Tourism from the traditional tourist will suffer as the Thai baht has strengthened and price and interest rate hikes at home remove the possibility of overseas holidays to many.

I don't forsee "pent up demand" , but pent up reality

I would rather be realistic and be called a "doom and gloom merchant" than spread false hope by being optimistic.

correct decisions can only be made from a start in reality.

Bear in mind the article was BoT's viewpoint. Perhaps you should drop them a line

For Thailand also bear in mind that when it comes to money you don't always need to talk about the majority of the population. More often than not it is talking about the minority with the wealth. Tax benefits will hit the select few, and middle class. All in all less than 20% of the population, but that's all that's needed. Even the odd token popular policy will find the money back in the hands of the minority, like Thaksin's ex-schemes where village loans end up with mobile phones.

Government spending was dramatically low on infrastructure last year. That's one way PPP will change policies this year.

Google Thai bank for forecasts and expected growth this year for a smal story there. Look at the SET's P/E ratios generally compared to the region - one of the cheapest. It has had 18months of missing out on other's rises due to the coup. Those P/Es are also historic after a "relatively bad year". So demand for both Thai stocks and economic demand is holding up.

At the moment, I've about 1/3 of my equity portfolio in Thailand related funds (both on and offshore) that consistently outperform Thai indices. Combined with 1/6 in resources/commodities, this 50% has been a nice shield from markets this year. We'll hit SET 900 before long, and 1,000 within the year.

[AFKAFSinLOS]

Article on Greater China as an investment at the moment:

Where next for China? 14 April, 2008

If any confirmation were needed that China is a country with superb investment potential, but also a high risk one with the capacity to move sharply down as well as up in value, then the last year has provided it. During 2007 the top performing China funds rose by more than 50%, but so far in 2008 they have fallen back sharply. What are the reasons for the recent fall, and what are the prospects for China from here?</H1>To help answer these questions we sought the views of three respected fund managers investing in China: Philip Ehrmann (Jupiter China), Henrietta Luk (Melchior Asian Opportunities) and Martin Lau (First State Greater China Growth). These individuals are experienced investors in the Greater China region – which encompasses China, Hong Kong and Taiwan – and have experienced conditions like this before.

The region's markets have seen stellar growth over recent years, so a period of profit-taking is not surprising. However, it does not alter the long term reasons for investing in Greater China – the emergence of China as an economic superpower – and all three managers expressed confidence in the region's prospects.

They agreed that the principle reasons for the falls have been concerns over global economic growth and rising inflation. The old adage that 'when American sneezes, the world catches a cold' might hold true during this credit crunch, but there is reason for optimism. "The Chinese economy is less affected by slowing US demand than ten years ago" said Philip Ehrmann, adding that, "its financial system is little exposed to the ongoing credit crisis."

The short term struggles of the Jupiter China Fund highlight how medium-sized and smaller companies have suffered during the market falls. Philip Ehrmann believes that once investors focus on the fundamental strength of businesses rather than the uncertain global picture then these stocks could rebound strongly. He believes the forthcoming earnings reporting season could be a catalyst for this turnaround.

Sharply rising inflation has been causing concern for investors however, as Henrietta Luk points out, price inflation of core goods and services remains relatively modest. It is a surge in meat and vegetable prices – exacerbated by unusually severe winter storms in China – that has caused the inflation spike. "Inflation numbers should fade in the second half of the year," said Ms Luk.

Examples of where Henrietta Luk sees value in the Chinese market are the construction and retail industries. Cement producers are significant beneficiaries of the massive urban expansion happening in China – a process that is central to the development of the Chinese economy and is unlikely to be scaled back even during a tougher period for the global economy. Meanwhile consumers in China, especially in the growing middle classes, have a growing appetite for branded goods. Ms Luk believes that this, coupled with the imminent Beijing Olympics, will create a positive environment for Chinese sportswear retailers and she has been investing in this area.

In contrast to the aggressive investment style of Henrietta Luk, Martin Lau at First State continues to employ a relatively cautious approach to investing in this high risk and volatile region. This has paid off in recent months. He expects China – like all world markets – to remain volatile in the short term until there is clarity about the full impact of the credit crunch on the global economy.

Despite this, he continues to find attractively priced companies, particularly in Taiwan where recent election results signalled a move towards warmer relations with the government in Beijing. In Hong Kong it is the property sector that he favours as falling interest rates create a positive environment for property prices. In mainland China itself he is using the current market weakness to add to his holdings in high quality companies at lower levels.

In conclusion, these three managers remain positive about the long term prospects for the Greater China region. They are active in the current markets and working to position their portfolios in undervalued stocks and sectors they believe will bounce back strongly when markets recover. The falls in recent months underline the risks involved in this (and any) emerging market. In our opinion those investors prepared to weather the volatility will be well rewarded over the long term.

For investors keen to benefit from the long term growth potential in China, but who are concerned about short term volatility, regular savings are worth considering. When prices rise any existing investments will benefit, but if markets fall your regular monthly contributions will purchase more units in your chosen fund. Over time this has the effect of averaging out your entry price into markets and takes away the need to agonise about when is the perfect time to buy. As long as your eventual selling price is higher than your average buying price you will have made a profit.

Edited April 16, 2008 by AFKAFSinLOS

[AFKAFSinLOS]

Brazil looks interesting:

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

Brazil's Retail Sales Rise at Fastest Pace Since 2004 (Update2)

By Andre Soliani and Adriana Brasileiro

April 15 (Bloomberg) -- Brazil's retail sales in February rose at the fastest pace since June 2004, boosting expectations that the central bank will raise interest rates tomorrow.

Retail, supermarket and grocery store sales, as measured by units sold, jumped 12.2 percent in February from the year-ago month, the national statistic agency said. The increase was more than the 11.7 percent median forecast in a Bloomberg survey of 30 economists.

etc

Also:

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

Meirelles May Raise Brazil Rate as Economy, Prices Accelerate , By Andre Soliani

etc

Edited April 16, 2008 by AFKAFSinLOS

[AFKAFSinLOS]

And a Happy Thai New Year to everyone. For the techies/chartists out there:

Nice to see that our SET in Thailand closed at 833.38 today. That was above the 829-833 resistance level. The breakout above the downtrend line at 829, means that technically we are now in bullish mode for intermediate/medium term trend, as well as simply short term trend. 833 is above all key moving averages in last 6 months or so.

So for the techies and chartists out there more reason to show Thailand is on its way up...

[AFKAFSinLOS]

Thailand is looking good. 2 articles from today's Bangkok Post below. Tisco shows a nice little rise waiting to happen in SET. Personally I think they are overly cautious and the rise will be stronger: 1,000+ at some time this year.

Not long now before I wake up and read: "SET reaches 10 year high" as it breaks thru the previous 924.7 set at end 1 Nov07.

Go Thailand go...

http://www.bangkokpost.com/Business/18Apr2008_biz38.php

CAPITAL MARKETS

Tisco: Index may top 900

CHADAMAS CHINMANEEVONG

The Stock Exchange of Thailand could reach 900 points in the second half of the year as foreign investors increase their positions after mostly delaying investment in the first quarter, according to Tisco Securities.

Viwat Techapoonpol, head of strategy for Tisco, said hedge funds were expected to increase their short-term buying in the second quarter. Markets worldwide dropped in the first quarter due to the ongoing US sub-prime crisis, tight liquidity in the credit markets as fears grow of a US economic recession.

The SET index closed yesterday at 845.43, up 12.05, in trade worth 28.14 billion baht as part of a regional rally driven by better-than-expected first quarter results reported by US banks.

''For the short-term, we are confident that we will see the index at 860 points by next week,'' Mr Viwat said.

... etc

http://www.bangkokpost.com/Business/18Apr2008_biz33.php

BANKING

Local banks mostly safe from sub-prime troubles

PARISTA YUTHAMANOP The global credit crisis will only marginally affect local banks, which should perform better this year thanks to promising lending growth and lower provisioning demands, according to James McCormack, senior director and head of Asia sovereign ratings for Fitch Ratings. Bank credit is expected to grow 8% this year in line with a recovery in domestic demand. The capital base for Thai banks has also strengthened through a series of recapitalisations in 2007.

....

etc

[AFKAFSinLOS]

SET just scraped thru to end above 850 resistance level. A lot of positive indicators now.

US and Europe opened weaker today though, which will put pressure on the direction tomorrow, so may need to be a little patient.

If it can make above the next resistance at 860 soon it shouldn't be long before those 10 year highs are broken.

[VegasVic]

well , I am still a doom and gloom merchant - I think the world markets are just getting started on their downward journey

these little upswings are only because of money injections into the system by governments trying to avert reality and investors holding out hope that all the profits they have been achieving for the last 20 years are not about to dissolve.

rising prices for base materials will not sustain anything if the end demand is not there.

things will continue to unravel

The United States has lost 232,000 jobs this year.

Over ten million households already owe more on their homes than they are worth. This number is growing and will continue to grow as house prices fall further.

http://www.atimes.com/atimes/Global_Economy/JD09Dj03.html

Stuey, Did you see the good news today, the dollar hit an all time low vs. the Euro and a recent survey showed that U.S. tourisim to Europe could be down nearly 40% this summer Also BMW announced that there will be more layoffs at their German facilities as they will be building more vehicles in their South Carolina plants, more jobs for the U.S.! There is more, Airbus (that wonderful government subsidized aircraft manufacturer) said it will be raising their prices by $2million Euros on their single aisle planes and $3 million on the dual aisle planes! At the same time there is a strong push from the U.S. Congress for the defense department to reconsider Boeing in that recent $40 billion contract awarded to Aibus. It looks as though Airbus industries could be having some substantial layoffs of their own in the near future . As I have always said the weak dollar is the gift that just keeps on giving (as long as you live in the U.S. and don't travel abroad)! Oh by the way those "little upswings" in the market are due to smart money coming off the sidelines and buying at the low ebb of the market, and even with the recent "smart money" coming in to the market, there still remains an enormous cashe of cash on the sidelines just waiting to enter the fray. Remember the market is a forward looking (6-9 months out) indicator, don't be late for the party the DOW will be making its move over 13,000 very soon

[VegasVic]

Brazil looks interesting:

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

Brazil's Retail Sales Rise at Fastest Pace Since 2004 (Update2)

By Andre Soliani and Adriana Brasileiro

April 15 (Bloomberg) -- Brazil's retail sales in February rose at the fastest pace since June 2004, boosting expectations that the central bank will raise interest rates tomorrow.

Retail, supermarket and grocery store sales, as measured by units sold, jumped 12.2 percent in February from the year-ago month, the national statistic agency said. The increase was more than the 11.7 percent median forecast in a Bloomberg survey of 30 economists.

etc

Also:

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

Meirelles May Raise Brazil Rate as Economy, Prices Accelerate , By Andre Soliani

etc

Brazil is the only BRIC country that I have any confidence in going forward from here. It is truely amazing what can happen to a countries economy after 10's of billions of dollars of debt is forgiven, just imagine what the U.S. could be capeable of if it had a few hundred million dollars of its debt forgiven

[VegasVic]

well , I am still a doom and gloom merchant - I think the world markets are just getting started on their downward journey

these little upswings are only because of money injections into the system by governments trying to avert reality and investors holding out hope that all the profits they have been achieving for the last 20 years are not about to dissolve.

rising prices for base materials will not sustain anything if the end demand is not there.

things will continue to unravel

The United States has lost 232,000 jobs this year.

Over ten million households already owe more on their homes than they are worth. This number is growing and will continue to grow as house prices fall further.

http://www.atimes.com/atimes/Global_Economy/JD09Dj03.html

Stuey, Did you see the good news today, the dollar hit an all time low vs. the Euro and a recent survey showed that U.S. tourisim to Europe could be down nearly 40% this summer Also BMW announced that there will be more layoffs at their German facilities as they will be building more vehicles in their South Carolina plants, more jobs for the U.S.! There is more, Airbus (that wonderful government subsidized aircraft manufacturer) said it will be raising their prices by $2million Euros on their single aisle planes and $3 million on the dual aisle planes! At the same time there is a strong push from the U.S. Congress for the defense department to reconsider Boeing in that recent $40 billion contract awarded to Aibus. It looks as though Airbus industries could be having some substantial layoffs of their own in the near future . As I have always said the weak dollar is the gift that just keeps on giving (as long as you live in the U.S. and don't travel abroad)! Oh by the way those "little upswings" in the market are due to smart money coming off the sidelines and buying at the low ebb of the market, and even with the recent "smart money" coming in to the market, there still remains an enormous cashe of cash on the sidelines just waiting to enter the fray. Remember the market is a forward looking (6-9 months out) indicator, don't be late for the party the DOW will be making its move over 13,000 very soon

WOW, just a week later and here we are with the DOW closing over the 13,000 threshold it looks like a great month ahead, come on board and join the party I still think that gold will see a $100 loss in a 24 hour period sometime this month, stay tuned in for golds demise and the dollars return:D

[stumonster]

and the dollars return:D

it was a lowering of the rate and inflation is still on the increase.

though I hope you are right , getting paid in USD suxxors at the moment - though I don't know anyone who keeps them.

[AFKAFSinLOS]

WOW, just a week later and here we are with the DOW closing over the 13,000 threshold it looks like a great month ahead, come on board and join the party I still think that gold will see a $100 loss in a 24 hour period sometime this month, stay tuned in for golds demise and the dollars return:D

Yes been a strong couple of weeks for global equity markets, and I have an even more positive feel than before.

I have only a small part of my equities in US stocks, and it is one of my least favourite markets short term and long term. I still remain Thailand, emerging markets, resources/infrastructure focused, but the US markets have shown themselves to be resilient this year, all things considered.

I have to admit to being a little (pleasantly) surprised by this US resilience, considering how bad the news thrown at it has supposed to have been. I've always believed part of that is due to exaggeration by the media, but there is obviously a little more to it than that. Considering the credit crunch, housing market issues and so on, have had much more impact on the US as a country, the US stock markets have performed relatively well this year compared to other global markets.

While I believe in years to come there will be much more reward outside the US, you have to admit a certain admiration for all that has allegedly been thrown at US markets, and the pretty benign impact the news has had on US stock markets .

More convinced than ever we're on our way up in terms of global equity markets...

Not convinced about the dollar though...Seems like it may get some temporary reprieve. Particularly against the overvalued Euro. But longer term I still think USD will continue to lose importance and hence value.

[VegasVic]

WOW, just a week later and here we are with the DOW closing over the 13,000 threshold it looks like a great month ahead, come on board and join the party I still think that gold will see a $100 loss in a 24 hour period sometime this month, stay tuned in for golds demise and the dollars return:D

Yes been a strong couple of weeks for global equity markets, and I have an even more positive feel than before.

I have only a small part of my equities in US stocks, and it is one of my least favourite markets short term and long term. I still remain Thailand, emerging markets, resources/infrastructure focused, but the US markets have shown themselves to be resilient this year, all things considered.

I have to admit to being a little (pleasantly) surprised by this US resilience, considering how bad the news thrown at it has supposed to have been. I've always believed part of that is due to exaggeration by the media, but there is obviously a little more to it than that. Considering the credit crunch, housing market issues and so on, have had much more impact on the US as a country, the US stock markets have performed relatively well this year compared to other global markets.

While I believe in years to come there will be much more reward outside the US, you have to admit a certain admiration for all that has allegedly been thrown at US markets, and the pretty benign impact the news has had on US stock markets .

More convinced than ever we're on our way up in terms of global equity markets...

Not convinced about the dollar though...Seems like it may get some temporary reprieve. Particularly against the overvalued Euro. But longer term I still think USD will continue to lose importance and hence value.

Hello AF, I'll trust Goldman Sachs on the dollar:euro call for the remaninder of this year, they see the euro at $1.35/$ by years end and they are usually uncanny on their forcasts for curencies. GS was calling for the euro to pass $1.45/$ by year end 2007 and surpass $1.50 early in the new year, this was back last summer of 2007 when the euro was around $1.35/$, I thought that they had lost their touch, but their predictions turned out to be spot on. The strenthening dollar will help many EU countries economies that have been taking the brunt of the inflated euro and will also bring down the price of oil and temper some of the wild speculation in the oil markets. G.B. on the other hand is a whole different story, I have seen predictions for the pound as low as $1.65/$ by years end. When the dust settles later this year we will likely see that the U.S. economy never dipped into recession at all, but rather that the U.S. economy had an anemic growth in the first two quarters of the year, G.B. is facing a much more significant real estate crisis and overall economic uncertainty. The easiest money I will collect this year is the short I put on gold in the upper $900's, gold will see the sub $700 price before years end and could easily break below $500/ounce next year. Good luck on all your investments, we will have to revisit this thread around Christmass time and see if Goldman still has the golden touch

[AFKAFSinLOS]

Hello AF, I'll trust Goldman Sachs on the dollar:euro call for the remaninder of this year, they see the euro at $1.35/$ by years end and they are usually uncanny on their forcasts for curencies. GS was calling for the euro to pass $1.45/$ by year end 2007 and surpass $1.50 early in the new year, this was back last summer of 2007 when the euro was around $1.35/$, I thought that they had lost their touch, but their predictions turned out to be spot on. The strenthening dollar will help many EU countries economies that have been taking the brunt of the inflated euro and will also bring down the price of oil and temper some of the wild speculation in the oil markets. G.B. on the other hand is a whole different story, I have seen predictions for the pound as low as $1.65/$ by years end. When the dust settles later this year we will likely see that the U.S. economy never dipped into recession at all, but rather that the U.S. economy had an anemic growth in the first two quarters of the year, G.B. is facing a much more significant real estate crisis and overall economic uncertainty. The easiest money I will collect this year is the short I put on gold in the upper $900's, gold will see the sub $700 price before years end and could easily break below $500/ounce next year. Good luck on all your investments, we will have to revisit this thread around Christmass time and see if Goldman still has the golden touch

Vic your posts are always interesting but just one quick question: can you hit the "enter" or "return" key on your keyboard every few sentences and make a paragraph or two. Probably your trademark, but would make it easier to read

Pretty much agree with your/GS currency movement directions, though to not necessarily the degree/levels amounts they mention. To be honest though, I've not much interest in either USD or EUR these days, so don't mind too much either way.

My own view: I wouldn't be surprised to see EUR/USD around and even below 1.40; and GBP/USD around and even below 1.80. I would be surprised to see them heading in the opposite directions. Only a matter of time before these levels are reached: months/year or so.

I've also put more than usual in gold/ commodities over the last 12months, but again think the major gains are passed. As soon as normal service is confirmed as resumed, I'll be shifting the "extra" back into equities, tho' again I've been happy to ride the storm with mainly equities anyway. Usually I feel happy to add a few more commodities just before problems are on the horizon, but I never feel comfortable as a long term bet. Long term has always been equities in my view.

Also find this discussion on a world recession bizarre. Firstly, it's not global by any means. Secondly we've not even seen one quarter contraction yet; let alone two. Slow down/ anaemic growth as you say. But not recession and not global recession / meltdown.

Edited May 5, 2008 by AFKAFSinLOS

[AFKAFSinLOS]

Over the last year or so that the prospects of global meltdown and global recession have been exaggerated. I've thought this all along since people cried wolf in May 2007 onwards. My own view was the worst started in stock markets in Nov, and was over mid-late Jan; confirmed again in March - albeit benign amyway as per opening post on this thread. The following article in the UK times sums all this up reasonaby well, and puts the "doom and gloom" "end of the world" "chicken little" merchants in perspective.

Even slippery Soros admits he may have been "wrong". Though I'm not so sure that isn't a case of trying to influence markets in favour of his positions. Like many he reveals his true position after the event. Terms of right and wrong are just to help sway markets in his favour. The real right and wrong is what's in his pocket. Not what he talks about...:

http://www.timesonline.co.uk/tol/comment/c...icle3872659.ece

Credit crunch fails to produce the feared economic catastrophe

Anatole Kaletsky, 5 May, 2008

So the sky did not fall in. While the Chicken Littles of the world economy, led by Gordon Brown, George Soros and Warren Buffett, may still repeat mechanically the IMF's surprising judgment that the world - especially America - faces its worst financial crisis since the 1930s, their hearts are no longer in it. Mr Brown, after last week's election woe, can no longer blame the world economy for his political failure. Mr Buffett, having speculated against the dollar for years and declared that credit derivatives are financial weapons of mass destruction, has finally begun to find attractive opportunities to invest his money and told his shareholders last week that the worst of the credit crisis was probably over. Mr Soros, in his forthcoming book, The New Paradigm for Financial Markets, states unequivocally: "We are in the midst of a financial crisis the likes of which has not been seen since the Great Depression." But after making $3 billion for Quantum Endowment Fund by anticipating last year's bear markets, he is now hedging his bets, as is only to be expected from the world's most successful hedge fund manager. "I may well be proven wrong," he told The New York Times last week, adding that he might yet again turn out to be "the boy who cried wolf".

The main explanation for all this revisionism is simply the change in facts. The near-unanimity of a few weeks ago that the US was sinking into a deep, prolonged recession has been dispelled by recent data on jobs, GDP, business confidence, industrial orders and consumer spending – all telling a consistent story that although the US economy weakened abruptly last autumn, it is not nearly as weak as at the start of previous recessions, and that there have been no signs of further deterioration since February in the key economic variables apart from house prices....

(contd. at link above) ....

More evidence that globally we're on our way up....

Edited May 5, 2008 by AFKAFSinLOS

[Ubon9]

Whath goes up,can only come down.

Bear Sterns had leveraged its approximately $80 billion to over $13 trillion. That $13 trillion has not gone away, it is simply added to the already huge number for JP Morgan. I think Morgan is now sitting on something like $90 trillion. This is a disaster waiting to happen. JP Morgan is the largest Fed share holder at over 30%, This can't be swept under the rug for much longer.

Possibly. Another way of looking at it is, that both Bear and JPM were counterparties (with each other)to a significant amount of derivatives. By melding the two companies all that risk is erased. How much that might be, I have no idea.

The reason the $29 billion was loaned to JP instead of directly to Bear in my view was to hide something. The Fed didn't want to save Bear, it wanted to save the economy meltdown that would have occured if Bear had been allowed to go bankrupt. I can't imagine what their actual collateral would have been against that $13 trillion. IMHO, less than 10% could have been immediately liquidated and what a mess that would have made. The Fed had little choice but the Bear Sterns failure has not gone away by any stretch

[AFKAFSinLOS]

Another good article from the UK Times about the Great Global Meltdown that wasn't. An American view this time. Some amusing touches too...

http://business.timesonline.co.uk/tol/busi...icle3876863.ece

From The TimesMay 6, 2008

Steinbeck's grapes lack wrath this time around

Gerard Baker: American View

Whatever happened to the Great Depression? Not the real one from 70 years ago, the lost decade of unimagined misery and Steinbeckian angst, the worst period in the history of modern capitalism. I mean the replay we were promised this year. The one we were told was the inevitable counterpart to the greatest financial crisis since a couple of medieval Italians first sat down on a Florentine bench and invented the word "bank".

I don't know about you but I feel a bit cheated. There we all were, led to believe by so many commentators that the sub-prime crisis was going to force the United States into a new era of dust bowls and breadlines, a slump that would call into question the very functioning of the capitalist system in the world's largest economy. Carried away on the surging wave of their own economically dubious verbosity, the pundits even speculated that this unavoidable calamity might presage some 1930s-style global political cataclysm to match.

Well, it's early days, to be fair, but so far the Great Depression 2008 is shaping up to be a Great Disappointment. Not so much The Grapes of Wrath as Raisins of Mild Inconvenience. Last week the Commerce Department reported that the US economy – battered by the credit crunch, pummelled by a housing market collapse and generally devastated by the wild stampede of animal spirits – actually grew in the first three months of the year.

The rate of expansion – 0.6 per cent – was weak for sure, and it followed a previous quarter of identically weak growth at the end of 2007, but as Depressions go it was singularly unGreat. In the 1930s, you'll recall, GDP fell by more than 25 per cent. Even the periodic mild recessions we've had in the past 20 years at least resulted in some declines in economic activity.

Lest you object – perhaps fairly – that the GDP data are way too backward-looking to be of any use, last week we also got the news that the labour market, the canary in the coalmine of economic data, is actually improving. The US economy lost 20,000 jobs in April, while the unemployment rate ticked down a little to 5 per cent. You don't have to compare this performance to the Great Depression to think it looks, as downturns go, really quite uplifting. It is, in fact, the gentlest start to a period of labour market weakness since the 1960s.

For comparison, in the first four months of the 2001 recession (which was, by the way, the mildest one in postwar history) employment fell at an average monthly rate of 105,000. In the first four months of this current downturn, the average monthly job losses have been 62,000.

You won't need me to remind you that in the other Great Depression unemployment rose to an estimated 30 per cent. Worse still for today's Steinbeck wannabes, as my colleague Anatole Kaletsky noted yesterday, it is starting to look as though world financial markets might be past the worst of the crisis that started all this.

Financial conditions are cautiously returning to something approaching normal. Barometers of distress have shown a distinct turn for the better. Take, for example, the so-called TED spread, a pretty good proxy for the state of financial anxiety. It represents the difference between three-month Libor interest rates and the yield on three-month US Treasury bills. In other words, it measures how risky banks think lending to each other for relatively short periods is compared with the riskless alternative of lending to the Government.

Last Friday the spread fell to its lowest level since the end of February, shortly before the collapse of Bear Stearns. Now, at about 125 basis points, it is still elevated relative to periods of clear normality: the historic norm is between 25 and 50 points. But it's way down from where it was in March, December and August, when it exceeded 200 points.

So should we be putting out the bunting, declaring victory over the Depression, offering prayers of thanks that we have avoided another Munich or Dunkirk? Not quite. The depression scenario was always overdone, of course, but it is still not clear that the US will actually escape as lightly as this. The principal challenge remains the health of the American consumer.

House prices are still falling and there is plenty of evidence that many Americans, suddenly scared about the value of their house as a nest egg, are retrenching. Even with the Government's tax rebate cheques dropping on to doormats, caution seems to be the watchword. That also raises the troubling possibility that a period now of shrinking demand could feed back into renewed weakness in the financial system, just as it is starting to heal.

Still, the picture is starting to look quite encouraging. Even if the US has a recession this year, the chances that it will turn into a full-blown slump are not high. Another disappointment for the hyperactive scribbling masses. But rather welcome news for everybody else.

Edited May 6, 2008 by AFKAFSinLOS

[AFKAFSinLOS]

Thailand is looking good. 2 articles from today's Bangkok Post below. Tisco shows a nice little rise waiting to happen in SET. Personally I think they are overly cautious and the rise will be stronger: 1,000+ at some time this year.

Not long now before I wake up and read: "SET reaches 10 year high" as it breaks thru the previous 924.7 set at end 1 Nov07.

Go Thailand go...

SET just scraped thru to end above 850 resistance level. A lot of positive indicators now.

....

If it can make above the next resistance at 860 soon it shouldn't be long before those 10 year highs are broken.

Well the SET has now broken thru the resistance levels around 856-860. It closed at 870.33 up a strong 14.72 points or 1.72%. Expect those 10 year highs to be hit soon!

That could be a nice little gain of over 6% to come (for starters) and prompt those who are still sitting on the sidelines into a little more action.

The part of the world called "not Thailand" isn't doing too badly either, and have been enjoying the Latin American ride this year too...

Edited May 16, 2008 by AFKAFSinLOS

[churchill]

US Stock markets may keep on rising but if the US Dollar is declining the value of your investment is in effect is going down . I think the US Dollar will keep on going down due to high inflation , oil , food and commodity prices rising and the endless printing of dollars . If you invest in other markets and therefore sell dollars you may see a gain . I am still bullish on gold and especially mining stocks , which have not risen with the gold price and so are now very undervalued ..

Edited May 16, 2008 by churchill

[VegasVic]

US Stock markets may keep on rising but if the US Dollar is declining the value of your investment is in effect is going down . I think the US Dollar will keep on going down due to high inflation , oil , food and commodity prices rising and the endless printing of dollars . If you invest in other markets and therefore sell dollars you may see a gain . I am still bullish on gold and especially mining stocks , which have not risen with the gold price and so are now very undervalued ..

Very interesting Churchill, but I am afraid you have it wrong on both accounts old chap:) Lets look at the facts for just a minute, and since your TV name is one of the great Englishmen of all time we will use the GBP. The pound saw record levels vs. the dollar towards the end of last year at around $2.08, and it currently is at $1.95. Now when one looks at the facts of the situation, if someone was a shrewd investor they would have sold off all their pounds and converted them to U.S. Dollars about 6 months ago and then bought a nice basket of U.S. equities, then they would not only have made a nice coin in the U.S. stock market but as the Dollar has strengthened they would have a double rate of return Don't worry old bean the Dollar is still poised for a long ride up so its not too late to ditch those pounds, convert to dollars and take a position in U.S. equities. Oh by the way that gold bet is a very bad idea, the speculative gold bubble has burst and gold will continue south for many years to come. Keep a stiff upper lip and ditch your gold and pounds and come over to the rising star "the U.S. dollar", you can thank me later gov!

[churchill]

US Stock markets may keep on rising but if the US Dollar is declining the value of your investment is in effect is going down . I think the US Dollar will keep on going down due to high inflation , oil , food and commodity prices rising and the endless printing of dollars . If you invest in other markets and therefore sell dollars you may see a gain . I am still bullish on gold and especially mining stocks , which have not risen with the gold price and so are now very undervalued ..

Very interesting Churchill, but I am afraid you have it wrong on both accounts old chap:) Lets look at the facts for just a minute, and since your TV name is one of the great Englishmen of all time we will use the GBP. The pound saw record levels vs. the dollar towards the end of last year at around $2.08, and it currently is at $1.95. Now when one looks at the facts of the situation, if someone was a shrewd investor they would have sold off all their pounds and converted them to U.S. Dollars about 6 months ago and then bought a nice basket of U.S. equities, then they would not only have made a nice coin in the U.S. stock market but as the Dollar has strengthened they would have a double rate of return Don't worry old bean the Dollar is still poised for a long ride up so its not too late to ditch those pounds, convert to dollars and take a position in U.S. equities. Oh by the way that gold bet is a very bad idea, the speculative gold bubble has burst and gold will continue south for many years to come. Keep a stiff upper lip and ditch your gold and pounds and come over to the rising star "the U.S. dollar", you can thank me later gov!

Well you seem very confident in your prediction . It is easy to look back and find a period that suits you opinion - If you look back at gold over the last 6 months it has done quite well and even better over the last year . You are probably right about the pound going down in the future as I believe the dollar will . I am living and earning in Thailand and expect Asian currencies along with the Chinese Yuan to generally appreciate against the dollar in the next year or so . So I take you up on your challenge - I will leave my investments mainly in gold mining and you can leave yours in the US Dollar and stock market and we will see who has done better by December .

[pattayadave]

US Stock markets may keep on rising but if the US Dollar is declining the value of your investment is in effect is going down . I think the US Dollar will keep on going down due to high inflation , oil , food and commodity prices rising and the endless printing of dollars . If you invest in other markets and therefore sell dollars you may see a gain . I am still bullish on gold and especially mining stocks , which have not risen with the gold price and so are now very undervalued ..

Very interesting Churchill, but I am afraid you have it wrong on both accounts old chap:) Lets look at the facts for just a minute, and since your TV name is one of the great Englishmen of all time we will use the GBP. The pound saw record levels vs. the dollar towards the end of last year at around $2.08, and it currently is at $1.95. Now when one looks at the facts of the situation, if someone was a shrewd investor they would have sold off all their pounds and converted them to U.S. Dollars about 6 months ago and then bought a nice basket of U.S. equities, then they would not only have made a nice coin in the U.S. stock market but as the Dollar has strengthened they would have a double rate of return Don't worry old bean the Dollar is still poised for a long ride up so its not too late to ditch those pounds, convert to dollars and take a position in U.S. equities. Oh by the way that gold bet is a very bad idea, the speculative gold bubble has burst and gold will continue south for many years to come. Keep a stiff upper lip and ditch your gold and pounds and come over to the rising star "the U.S. dollar", you can thank me later gov!

Well you seem very confident in your prediction . It is easy to look back and find a period that suits you opinion - If you look back at gold over the last 6 months it has done quite well and even better over the last year . You are probably right about the pound going down in the future as I believe the dollar will . I am living and earning in Thailand and expect Asian currencies along with the Chinese Yuan to generally appreciate against the dollar in the next year or so . So I take you up on your challenge - I will leave my investments mainly in gold mining and you can leave yours in the US Dollar and stock market and we will see who has done better by December .

$

fuel is pushing the price of gold production up per ounce

thats my bet anyway for what its worth

and i'm on a gold mine at the moment

[AFKAFSinLOS]

The shoots pushing their way thru in 2008 are looking promising... If they had mentioned Thailand as well, the headline in the article below would very nicely sum up where I am positioned and it looks good...

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

Emerging Market Stocks Erase 2008 Loss on Commodities (Update1)

By Lynn Thomasson and Michael Patterson

May 19 (Bloomberg) -- Stocks in developing countries advanced for a sixth day, erasing the MSCI Emerging Markets Index's 2008 loss, as record-breaking rallies in oil, coal and soybeans boosted equities from Rio de Janeiro to Moscow.

.....

[disgruntled]

I've still got a chill but then I guess I am a normal person. If things are going up the average person is always late to join the rally. But I bet things are going to worsen again. Over this two-year period a lot of money is going to be lost and made by the big guys who seem split on the economic situation out there. The big names are not in unity about this at all.

[samran]

The shoots pushing their way thru in 2008 are looking promising... If they had mentioned Thailand as well, the headline in the article below would very nicely sum up where I am positioned and it looks good...

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

Emerging Market Stocks Erase 2008 Loss on Commodities (Update1)

By Lynn Thomasson and Michael Patterson

May 19 (Bloomberg) -- Stocks in developing countries advanced for a sixth day, erasing the MSCI Emerging Markets Index's 2008 loss, as record-breaking rallies in oil, coal and soybeans boosted equities from Rio de Janeiro to Moscow.

.....

if you have been in energy in thailand (not power generation though) you would have almost doubled your money over the space of the past year. Shares like Banpu and PTT going really well, even though the subprime (indeed, Banpu did a IPO for one of its subsdiaries in Indonesdia in December). Dunno about new spouts though, these guys are 'old news!' LOL.

Would have liked to be in on some Australian junior miners last year....but oh well.

SET linked funds have done well over the past year too. My good corporate governance fund has gone up 20%PA over the past 2 years (average - meaning well in the first year, OK ish in year 2). My ING BRIC fund has gone up 14% in about 4 months.

Have had some dogs too. Bamrungrad has taken a hit, and AOT is a bit sluggish.

Erawan is touted for good things too.

But I'll stick with energy.