MARKET OUTLOOK - Global & Local

[frmthefuture]

QUOTE (Mark M @ Tuesday 07/10/08 08:42pm)

well don't fight the VIX, that is telling us that now is the time to start buying, i thought it would have taken a little longer for the VIX to spike up to those overbought levels, there for making stocks like NAB go down further, but that never enventuated, now it is buying time because of the sudden volitlity spike, the selling may have exhausted it self in the ST at least, sorry i can not predict the exact day that the spike occured, from a TA level alone i think NAB is going back to $31 resistance!

[frmthefuture]

QUOTE (flower @ Tuesday 07/10/08 08:27pm)

i look forward to the next 1% cut http://www.sharescene.com/html/emoticons/smile.gif

[db76]

In reply to: Mark M on Tuesday 07/10/08 07:35pm

when they do a 1% cut you know that the market illness is confirmed but the bottom is still a fair way off

 

all it will do is slow the descent to allow the smarter passengers to bail out

 

full employment will reverse quickly with the resources engine slowing up and people selling services to each other will discover a ripple effect backwards from the well paid miners , brokers, and financial geniuses who just got retrenched

 

the $22bn surplus will be sucked up into his grandiose social, climate and infrastructure engineering schemes

 

he is going to fix the climate just over Australia - he can mandate that we all paint our roofs white

 

but as you say we are probably in better position to weather the storm than Iceland is

 

 

 

 

 

 

 

[Mark M]

In reply to: db76 on Tuesday 07/10/08 11:37pm

DB76,

 

Your response was fairly negative to the 1% rate cut.

 

The RBA has been trying to break the back of the property market boom over several years now and prevent the type of speculative bubble and collapse we have seen in USA. They successfully broke the NSW property boom in early 2004, only to have the problem role on to other states QLD, SA and WA over the subsequent years. Only in the last 8 months have they stopped the insanity of the WA real estate market (my sister bought a house in Broome for around $245,000 4 years ago and the house next door to her sold for approx $840,000 7 months ago. Her house in Perth went up around 2-1/2 times in the same period. Dan has also relayed similar stories about propert prices in the Margaret River / Bunbury area).

 

The Australian economy had fairly solid GDP growth for the years 1992 - 2000, when the mining sector was at a cyclical low with commodity prices and we sailed through the Asian crisis in the mid 1990's (all the press and pundits were predicting a doomsday scenario for Australia).

 

It is all about finding a balance, if the mining sector is going into decline then the housing and construction market needs to be stimulated (which now is at a cyclical low point) to carry the economy.

 

Yes it may involve some government infrastructure projects. There is nothing wrong with spending a fiscal surplus when the economy needs a primer.

 

There is no point in hoarding a budget surplus forever whilst watching the economy get driven into the ground.

 

I do not believe the Asian economies are going to stop dead in their tracks in the short term leaving little or no demand for commodities such as minerals, energy and food. It certainly will not be the same excessive levels we have seen in recent years, but the will be a strong underlying demand.

 

In addition, it would appear that all the central banks are now embarking (or about to embark) on an easier monetary policy stance. This in turn will stimulate the world economies over the coming years.

 

I do not think it is all bad and as they say "when everyone starts predicting the end of the world is upon us, it is a signal to start buying as the worst is behind us" (from a confidence perspective).

 

Just my thoughts.

[auroraoz]

a glut of luxury boats! thats the word on RN breakfast and wanna ferrari or a maserati? A beema? they are flooding the dealers and auction houses at the moment, all the crashing nouveaus are sinking and bailing?

looks like theyll be cheaper tomorrow at this rate--

will the lenders recoup? looks like even the darlings of the banks will feel some pains

[triage]

In reply to: Mark M on Wednesday 08/10/08 06:49am

Mark

 

Appreciate your considered and temperate comments. Thanks http://www.sharescene.com/html/emoticons/smile.gif

[nohoper]

In reply to: disco stu on Tuesday 07/10/08 06:59pm

DS,

 

Thanks for the reply. Much appreciated.

 

Cheers.

[nohoper]

Oops! The DJIA dropped more than 5% last night, and the VIX is saying...? http://www.sharescene.com/html/emoticons/smile.gif

 

My observations:

 

1) VIX of the US market, what's that got to do with ASX?

2) the ASX intraday recover is mainly due to the surprise 1% rate cut

3) the recent short bans might have influenced the VIX value (just a thought, could be wrong)

[nohoper]

S&P 500 closes at 5-year low...

 

Bookvar believes the move by the Fed and other central banks will give the equities market a decent bounce through the end of the year, as the market gives the Fed actions the benefit of the doubt. As he put it, "It's going to be raining money for the next couple of months."

 

But Bookvar says he is a long-term bear for what he calls the obvious reasons: "The systemic financial collapse risk is almost over, but phase two of the unwind is a nasty economic and earnings recession."

 

** good and bad news, good or bad news, just pick one.

[nohoper]

Bernanke hints at possible interest rate cut...

 

*** if I were him I would act soon, it's no point holding back at this stage. The ECB more than likely will be doing just that. It won't help still hanging on to the old doctrine of inflation fighting at this stage if the threat of a prolonged recession is on the card.