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The White Elephant Forum, WEF
nohoper
post Posted: Oct 4 2012, 09:28 AM
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Attached File  audusd_12oct4_1.jpg ( 81.01K ) Number of downloads: 12

**AUDUSD -- if you equate the audusd pair as a good risk-on risk-off indicator, then take this as a caution coz the recent rate cut has made the AUD less appealing to the free+cheap money mobs, which naturally would translate to lesser liquidity and lesser risk takers, which again translate into lesser equity investors since equity is defined as a "risky" investment, etc... dig?

Ok, watch where audusd is travelling, and if it doesn't rebound from here quickly, chances are you are looking at more bunge jumps, possibly to 98, which again would translate to more risk-off moves, away from equity that is.

Attached File  audusd_12oct4.jpg ( 65.26K ) Number of downloads: 10

** line chart version showing a clearer break down in the 4-mth trend, just so you can see what I meant.



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nohoper
post Posted: Oct 3 2012, 03:09 PM
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In Reply To: nohoper's post @ Sep 13 2012, 04:54 PM

** Yo! 'tis all about FMG and io, again... I know, the price is holding at the moment, but do you know what kind of future lies ahead for you fmg believers? Huh? According to S&P, fmg is the world's most vulnerable io miner, go read about it and then cross your fingers, ok?

And don't get fooled by the current stock price because the real test is in the next reporting season when+where fmg will be forced to answer the many not too nice questions like "how're you doing lately?"... and doing well will depend a lot on the io price staying above 110? Or 130? or whatever, just fill in your own number. Whatever it is, and no matter how much fmg is selling -- it won't be enough! That is, it won't be enough for it to report that kind of profit number the investors were so used to in the past.

And that's what the believers will be subjected to. Translated, it would/could mean severe market reaction if/when the result is less than satisfactory... yes, it would mean sh** as usual. smile.gif

** next, here's this news on Norway's io dream... thought you might want to know because it makes one wonder how could they compete with Australia with them being this far away from China, yet, the truth is they (the Norwegians and the Brazilians) are here competing nice and easy against the Aussies! What's happening here?

Well, if there's a market+moral truth in all these... is this -- if China doesn't buy from them, they wouldn't stand a chance. It's a free market out there after all? Right? Probably yes and no, I reckon. Being the world's largest io producer country and being located this near to China, it's a shame that this country let+allow all these lesser producers+competitors stealing market share away from it.

Australia could probably supply all China's need of io but for some reason Australia is not! Do you know why?

Can you see where my finger is pointing to or not?



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nohoper
post Posted: Oct 3 2012, 11:25 AM
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** Everyone loves a rally I know... but at some point they should keep this in mind -- all rallies would die eventually. This time, let me jump the gun and raise this how long is the string question -- when will this rally die?

Do you know why I ask? Coz I hate rally! wink.gif No no nonononono.... wrong, it's not about my hate and love, but rather it's about my gut feeling (feeling bloated right now!). It gets worse as the rally drags into October and into the end of the year coz these are dangerous times. You got the "Black October" precedence to remember, and you got the Presidential election to watch out for. And then, you have QE's firing from all sides injecting an artificialness into the rally. On top of all these, you are reading about China's economy slowing down which is affecting Australia's commodity exports. And the baddest sh** of all, the EU is walking headlong into a winter of discontent, with recession tearing their societies apart, and then the baddest of the baddest sh** is the potential sovereign default of one of the PIIGS bringing forth the collapse of EUR (I know this is a little dramatic, but the fear is quite real to some, ok?)...

But none so worst than the US fiscal cliff, which has a fairly high % to happen, well after the new president is elected! If Obama gets elected, the fiscal grid lock will continue, which means sh**! If Romney gets elected, Don Bernanke will get his arse kicked and quite likely his QE would terminate prematurely.

So you see, how can you, a sensible rational logical all reasoning expert market observer and all that, could possibly rest easy and are holding on, hoping for more rally and greater profit?

See I am all heart here? It's all about caring and loving here since Xmas is getting near, and all the fund managers are taking their family for a long break soon and naturally it would be window dressing time, if not now then soon, etc... and blah blah blah. It's all about you, my dear visitor, you dig or not? I am so worried about your profit, or your loss of potential profit here that I am writing all these. All for you! And just for you! Woo hoo! Sob sob sob...

Anyway, time for some serious stuff, like more bad news to kill the jolly mood. From DBS as usual...
QUOTE
US: Everything about the September ISM (51.5) looked good. Well, better.
Production was up by more than two points, tho still below 50. Orders jumped 5
points to 52.3. And employment jumped 3 points; almost back to 55. A solid
report after three sub-50 headlines. Add to this two solid months of auto sales and
risks of further deceleration in GDP growth in the third quarter are falling fast.
It's still no great shakes, mind you. Our pencils point to 1.7% (QoQ, saar) growth in
3Q – right where things stood in 2Q before growth was officially knocked down to
1.3%. It's been the sub-two blues for most of the past year and a half and there's
nothing stirring in the pot that suggests a party is about to start.

On the contrary, the fiscal cliff is getting so close one can almost peer over the side
of it now. Four-point-five percentage points of GDP worth of expiring tax cuts,
automatic expenditure cuts and employment taxes. It's a long way down and no
one's even started erecting a retaining wall. Not that anyone expected a safety crew
to show up with November elections looming and a new congress that won't show
up until January.

But the point is, even if household deleveraging has made a lot of progress over
the past four years – which would allow for considerably faster consumption / GDP
growth going forward – public sector deleveraging hasn't even begun. The deficit
is still over 8% of GDP and the debt is getting bigger, not smaller. Imagine the Feds
taking those facts, cap-in-hand, to Draghi and the ECB to ask for a loan – 'twould
be an interesting world indeed with 10Y Treasury yields at 6%. It won't happen but
another S&P downgrade certainly may. And even if congress somehow manages to
become more conciliatory / pragmatic, the debate this year is still going to be over
how best to tighten policy – not how to put a fire under the economy.

Since the economy hit bottom way back in June 2009, growth has averaged a
disappointing 2.1% (annualized) per quarter. The next three years may not look
much different.




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nohoper
post Posted: Oct 2 2012, 11:11 AM
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In Reply To: nohoper's post @ Sep 30 2012, 10:27 AM

Attached File  dxy_12oct2.jpg ( 76.83K ) Number of downloads: 9

DXY - the market is looking quite pathetic probably waiting for the RBA rate decision. The market opinion on rate cut generally is divided into two camps, ie, pro vs con, and here are two typical pieces: Why the RBA must not cut rates... vs Great urgency in an RBA snip... , give them a glance over to at least make yourself a little less ignorant of the fuss, and yes, try not to end up like moi - a simpleton! Btw if you are wondering, I think Adam's piece is more convincing as Australia's economic condition is that much better comparing with other OECD countries, which makes the rate cut less urgent. Why fire all guns when you don't need to? Use them only when necessary and when they give you the maximum impact.

In any case, who can tell what the RBA will do next?

Back to DXY, yes, the follow up, can see what I said the other day on its possible turning points? Well, it did turn at 80.14 instead of 80.17, close enough and you should take that as a caution but it would be prudent not to jump to any definitive conclusion as it probably needs more time for the punters to firm up their opinion on their next move. If you are anxious, the best thing to do is to offload some... it's good for your trading soul. Trust me! devilsmiley.gif



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nohoper
post Posted: Oct 1 2012, 11:22 AM
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The European conundrum...
QUOTE
...This is how I would summarise the German position: First, we do not really want a banking union all, but if we have to have it, we would like to limit the remit of the pan-European supervisor to a few large cross-border banks.

Second, ideally the supervisor should not be the ECB; if it has to be the ECB, there must be safeguards, stronger than those proposed, to ensure that monetary policy remains independent from the banking supervisor.

Third, there shall be no joint deposit insurance.

Fourth, the banking union shall not deal with any legacy risk, only problems that arise in the future. The Spanish bank programme remains a Spanish bank program.

Fifth, the ESM should not be able to undertake direct bank recapitalisations until the banking union is fully implemented. This will take many years.

Whether or not you call this a banking union, or a breach of the June 29 agreement, is irrelevant. The point is that you cannot force through a banking union against the explicit will of the German government, the German parliament, the German public at large and the Bundesbank. I suspect the EU will ultimately agree on a fudge. But it would be irrelevant for the resolution of this crisis.

Jens Weidmann, president of the Bundesbank, last week said a banking union was a disguised transfer mechanism. On this point, he is right. A banking union would recapitalise Spanish banks at the expense of northern European taxpayers...

** if your participation in the market has been counting on: a) the US QE3, and b) the EU's OMT (or Oh My Turd) and the bank debt+recapitalisation resolution... you cannot get a better answer than the above and therefore you gotta reappraise your plan or get your moment of Waterloo.

The bottom line is simply this -- you cannot expect someone else to pay for all your debt just so you can have another go at it without paying an equivalent price (in kind at least). There is no free lunch in this world, more so, there must not be any free lunch in a capitalist system or the whole system would cease to function. There wouldn't be a jungle if the jungle rules are not adhered. The PIIGS must not think or believe they can get away from paying their due and their banks must not be allowed to walk away from their erroneous deals scot free.

No matter how noble, how serious, how important, how critical the media pundits write about resolving the PIIGS problem through a common union, fiscal or otherwise, the capitalist and free market truth remains this -- you stuff up, so you fix it. Counting on others to fix your problem? For you because you believe you are indispensable? Yeah, may be, at a small price probably. But hoping others to help you out with them facing the risk of bankrupting themselves?

You'd got to be joking, mate!

In any case, Germany and other relatively debt free European countries are not fools, or their respective leaders would get their due punishment from their people. After all, they practise some kind of democracy don't they?



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nohoper
post Posted: Sep 30 2012, 10:27 AM
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** BS-free+free service as usual. There's no form to fill, no question to answer and no money to pay and no outrageous opinion on why China's economy must doom even though this country's fortune is deeply entwined with it... yes, this is not a newsletter, obviously. smile.gif

Attached File  gold_12sep30.jpg ( 90.56K ) Number of downloads: 10

Gold -- as a punter or trader, you should be very sceptical and cautious on price movement that is too good to be true, even though your eyes are seeing it... like they say behind every cloud there's a silver lining, and behind every silver lining, there's a dark cloud not far behind, so, yeah, the trading moral here is believe what you see and believe what you can see not far further ahead and be prepared to take your money and run.

Currently the decision you need to make is quite simple: 1) will ellipse B learns from ellipse A and then acts like A; 2) bet against a "broadening top", that is, watch everyone that is making a nice and decent profit and watch who is gonna lose his nerves and pulls the trigger first. Still remember the Mexican standoff in "the Good, the Bad and the Ugly" where Clint Eastwood spent most of his time talking to an empty chair and then killed the baddestass of them all? Yeah, you got it!

Attached File  dxy_12sep30.jpg ( 68.13K ) Number of downloads: 9

DXY -- this time the gold movement has much to do with Bernanke's QE and EU's QE and China's reactive QE... basically they all have an erosive and corrosive effect on the value of fiat currency which makes stuffs such as hardware+hardassets appealing as a hedge+insurance option. But since commodity has been through many cycles of upswing and is reaching its peak with China reaching a stage of regurgitating what it had swallowed, betting against a higher level of commodity cycle without a credible demand source frankly is quite "unwise", and this has made gold look appealing, esp after its recent 6mths+ decline, making it relatively "cheap" to the "free money" mobs whose godfather is either Don Bernanke or Don Draghi...

... this makes gold relatively sensitive to DXY movement and so you gotta watch DXY, and right now it is making itself "an obvious ass" by inching upward without a care and forming a bearish flag. This could go on for a while or it could just reverse itself and plunge back to the valley... and here's where you need to keep an eye -- the recent historical peaks usually give you an indication because this is what punters+traders do -- they like to go back to old haunt or waterhole to find their next prey+goodies. If DXY is gonna turn, chances are quite high it will do so at that two levels, so keep an eye.

And yes, good luck to those who bought NCM at 22.00 with a 30% profit... surely there must be a limit to greed? devilsmiley.gif



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nohoper
post Posted: Sep 27 2012, 11:56 AM
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Michael Pettis again -- on China's exports retreat...
QUOTE
The sources of China's export competitiveness

The currency regime is certainly one of them, and the mechanism is fairly easy to understand. An undervalued currency spurs export competitiveness by subsidising the local cost component for manufacturers. These implicit subsidies are effectively paid for by Chinese households in the form of artificially high prices for imported goods. Since all households, except perhaps subsistence farmers, are effectively net importers, an undervalued currency is a kind of consumption tax that effectively reduces the real value of their income.


The second mechanism, the difference between wage and productivity growth, does the same thing, but with a different set of winners and losers. Chinese workers' wages have grown more slowly than productivity for all but the last two years of the past three decades, which means that until two years ago workers have received a steadily declining share of what they produce. Manufacturers benefit from this process because their wage payments are effectively subsidised, and of course the more labour-intensive production is, the greater the subsidy they implicitly receive.


The third mechanism, the most important, is artificially low interest rates, which in China have been set extremely low. These reduce household income by reducing the return households receive on bank deposits, and in China, because of legal constraints on investment alternatives, the bulk of savings is in the form of bank deposits. Artificially lowered interest rates, however, increase manufacturing competitiveness by lowering the cost of capital. Of course the more capital-intensive a manufacturer is the more it benefits.
..

** Swan called them teapartiers cranks and crazies... does he include Pettis as well? Coz he is just as twisted as them teapartiers.

Of the above 3 so called mechanisms, #1 is arguable because not too long ago China raised its exchange rate by close to 30% and yet not much changes had happened and the trade gap between two countries had in fact got worse. There were many arguments, but roughly it can be explained this way -- the Americans need the Chinese stuffs, while those American stuffs the Chinese want are not for sale, stuffs like high tech goods and weaponry, etc...

#2 is all about the Chinese internal system and frankly if Pettis think it is a good mechanism for the economy, he should argue to get the Americans changing their system to that of the Chinese' and become an autocratic communist regime and stop giving the people their "freedom" and choices, including wealth distribution. At this point, there really isn't much to crow about the American system btw -- just note the rich in the USA are getting richer and how the people's money is used to pay for all the bank debts.

#3 note his logic and bs plus his blindness -- artificially low interest rates -- hell o? Can anyone tell me what is the interest rate in the USA currently? Huh?

Negative rate if you take inflation into account! And there's no telling what's the real inflation rate is coz "they" keep changing their "methodology", a bit like cranks and crazies!

And yet negative rate is no help to the American exports! So just what is Pettis actually talking about here? Is he blind or what? The American exports don't seem to be rising, if at all, it is quite negligible or they would be crowing about it all over the Net!

So just how credible is his argument that China's competitiveness is mainly due to their artificially low interest rate?

If he is not stupid and blind, there's nothing more artificial than Bernanke's QE regime! But look how conveniently he avoid talking about it in all, if not most of this blogs. Sheesh!



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nohoper
post Posted: Sep 15 2012, 11:01 AM
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Better China links...

** I know there isn't much "feel good" factor about China to many, but spare a thought about Australia's need for increase national income, esp if+when the commodity super cycle turns down and there's a need to look at other export sectors to support this growing need; and let's not forget that this country is still growing and there is always this added pressure of increasing mouths to feed...

Thus far, if you care, I believe you would have noticed Australia is facing a pretty serious "Dutch Disease" with other export sectors outside the mining sector facing various degree of decline, opportunities to an extent are passing by this country and export income streams are getting narrower. The need for Australia to expand into new areas and new region is getting more acute by the day. With Asia just by the next door and with their growing need for services, this is one area I believe Australia+Australians have a natural advantage over the other more advanced economies from the West, because it's only human nature they want to do business with us... for many reasons, but primarily it's mainly driven by self interest -- everyone wants a stable prosperous neighbour -- a stable neighbour means a more peaceful coexistence. Better still, if the neighbours share a common interest, a shared prosperity, where there are ties that bind, where they can count on each other in times of trouble...

The Asians are less concerned, less worried and less troubled if Europe is in upheaval because it is that far away. It's a similar mentality if the Americas are in trouble... coz it's out of sight, hence it's out of mind. Quite a natural human reaction. But I doubt if they are this indifference if Australia, or NZ and the S.Pacific are in turmoil.

... but why is Australia not exploiting this natural advantage?

The day this country finds the way to release itself from this mental hurdle is the day Australia's prosperity will rise to a whole new level -- 'tis my belief. But I won't be holding my breath...!

The following are a series of cut and paste from a very long report. I am posting them here because of the many "stupid" views on China and its impending economic bust. While those who propagate them are raking in $ from the clueless, the Asians are holding quite a different view, please help yourself, esp pay attention to the part on the rising Service PMI coz this is where it translates into opportunity to Australia, and for many Australians who have the training, skill and talent to convert that into real prosperity for themselves, and to this country.

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nohoper
post Posted: Sep 15 2012, 09:37 AM
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In Reply To: mullokintyre's post @ Sep 14 2012, 07:37 PM

M,

I wouldn't call that little blunders as far as Australia's spending on "useless" military weaponry+equipment is concerned comparing with the so called NBN cost blowout. Turnbull's argument against the current NBN plan has been mainly built on cost issue which in my view reflects a lot of ostrich mentality with picky eyes and selective vision. If he wants to be respected as a leader and if he wants his "new (but actually old)" NBN alternative to be taken seriously, he should address and raise all the cost issues fairly and squarely.

In fact the more I read about his plan, the more I found it's a badass piece of plan. He should feel ashamed of his politicking on such important national issue.

Cheers.

ps: I believe bad+fake parts are not just limited to the US navy, there were earlier reports on aircraft (both military+commercial) components being supplied by the various contractors as well. Just fancy how it will turn out the day the US goes to war with Russia or China, can't wait! devilsmiley.gif



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mullokintyre
post Posted: Sep 14 2012, 07:37 PM
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In Reply To: nohoper's post @ Sep 11 2012, 10:54 AM

Howdy Nohoper,
read RG's article on the blunders in Defence. Great Read.
But its not just the Australian Defence that has its little blunders.

QUOTE
Last year, the U.S. Navy bought 59,000 microchips for use in everything from missiles to transponders and all of them turned out to be counterfeits from China. Wired reports the chips weren't only low-quality fakes, they had been made with a "back-door" and could have been remotely shut down at any time.


Read more: http://www.businessinsider.com/navy-chines...6#ixzz26R3KuNme


backdoor to chips


Mick



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