The Stock Markets Discussion

[Grouchio]

Greetings good ladies and businessmen! I would like to treat you all to the happy joyous debates and story times that is the stock market!

Now I know what you're thinking: "Doesn't the global economy blow etcetera etcetera.." Yes, I know how you feel right now. But do you know what? I don't mope the rest of the day about it! I instead want to enjoy it as much as possible! I want this thread to last until the end of the internet! In fact, I'm jolly enough to give you guys some jazzy, business-like music to listen to! Ain't I sweet?

http://www.youtube.com/watch?v=KKmdXd5w4jI

So instead of steamin and poutin' about how the world's goin' under and all that, sit back in your comfy armchair and relax; there's nothing you can do about it anyways.

Without further ado, Let's start the endless discussion about the stock markets! Shall we?

Disclaimer: I got permission from one of the mods to do this, so never try to pull this down. I have a Tommy gun you know!

[Grouchio]

Article of the Day!
http://online.wsj.com/article/SB1000..._largeHeadline

[Exarch]

it's only the euro that's going into the crapper, germany's economy is steaming along quite nicely thank you very much.
the US debt situation is in much the same shape as greece's but the USD is in a relatively better position than the euro

[Menelik_I]

the US debt situation is in much the same shape as greece's but the USD is in a relatively better position than the euro

I am of the Opinion that the USD is faring better because the Euro is sinking and there is no other reserve currency left to invest in.

Also Didn't the stock market got down today after the Fed announced poor forecast and QE3 ?

@Grouchio:

You bastard ... this jazz makes me feel like a Billionaires and nothing like a pencil in my mouth to simulate a Cuban Cigar

[Exarch]

I am of the Opinion that the USD is faring better because the Euro is sinking and there is no other reserve currency left to invest in.

Also Didn't the stock market got down today after the Fed announced poor forecast and QE3 ?

QE 3 will result in devaluation of the USD; the only reason ppl look to the USD as a safe haven isnt because it is truly a safe haven but rather because all other avenues are almost exhausted. the swiss have said they're not going to be playing that game no more as their swiss franc has gone up last week.

what could save the euro is ironically greater federation as that'd mean all of europe would be beholden to that debt, but that's not going to happen cuz all the euro countries are too independant minded.

so the USD is in a relatively better position than the EU, but the national debt is approaching unsustainability; whilst japan's debt is about 200% of GDP, ppl have to remember the US isn't like Japan which self funds its own debts and doesnt rely on foreign lenders

[Claudius Gothicus]

From an structural point of view the USA has a better chance of revamping their economy faster that the EU one. At least Americans have both the Fiscal and Monetary tools on their hands, EU economies simply lack one or the other.

Solutions for Europe right now are:

- Letting Greece default and also let French/German banks fall with it effectively impoverishing a large sector of their respective societies while also opening the doors for an even bigger recession.

- Impoverishing the general population of Euro countries by the emission of euro-bonds that help Greece save their asses but also letting their fiscal irresponsibility go unpunished.

- Let Greece default and simply save the banks of Germany and France. It looks like a pretty nice solution, but it could eventually generate a contagious reaction that makes many other EU countries drop the Euro and effectively end the common currency that helped Germany to steam it's production.

[Ahlerich]

Solutions for Europe right now are:

- Impoverishing the general population of Euro countries by the emission of euro-bonds that help Greece save their asses but also letting their fiscal irresponsibility go unpunished.

- Let Greece default and simply save the banks of Germany and France. It looks like a pretty nice solution, but it could eventually generate a contagious reaction that makes many other EU countries drop the Euro and effectively end the common currency that helped Germany to steam it's production.

eurobonds - the only little faith i have left in my government is that germany will veto eurobonds

let greece default and save german and french banks. german banks are not the problem. if all the french involved banks can be saved i dont know. what you completely ignored is the important part of the possible chain reaction: portugese, spanish and italian banks

[Claudius Gothicus]

eurobonds - the only little faith i have left in my government is that germany will veto eurobonds

let greece default and save german and french banks. german banks are not the problem. if all the french involved banks can be saved i dont know. what you completely ignored is the important part of the possible chain reaction: portugese, spanish and italian banks

I didn't, re-read the contagious effect part.

[Freddie]

it's only the euro that's going into the crapper, germany's economy is steaming along quite nicely thank you very much.
the US debt situation is in much the same shape as greece's but the USD is in a relatively better position than the euro

I don't know where you get your news from because whatever your reading is very misleading. The last credible reports showed the that German economic growth saw a sharp slowdown (the same as the UK in the same period). Germany is staring recession in right in the face come 2012.

the US debt situation is in much the same shape as greece's but the USD is in a relatively better position than the euro

Nonsense. Greece has a debt to GDP ratio of 140% the US is now around 70% of GDP. Greece pays a lot of its tax revenue on interest alone and they can't get long term debt because the banks don't want the exposure because of the risk of default and there credit worthiness is junk with most if not all credit agencies making it very expensive to borrow money. The only reason why the US nearly defaulted the other month was because of pure political reason not economic reasons, if the US really didn't have the cash it could just print the damn bills and devalue its currency.

The current economic position of Europe and the US is a toxic one, the only way IMO you can rebuild if by cutting public spending to reduce debt and to cut red tape of bureaucracy and encourage people to startup new businesses and let natural economic growth lead the way to recovery. My fear is with all the austerity measures in place across Europe people will loose faith and start voting for more extremists parties (socialist, communists, nationalists, fascists etc) and why not? History shows us that its times like this that these types of political organisations flourish.

As for the stock market........I sold last Tuesday just before the crash on the FTSE! More luck then judgement though. Instead of buying an ISA i'm buying company stock for the firm I work for which is more tax efficient for myself.

[Bsodmin]

USD, Euro, GBP, CHF, JPY of whatever...all sick dogs
The Canadian dollar is doing better than the USD, there is the safe haven It feels so out of the ordinary that the CAD is worth more than the USD, from the american point of view that is.

[JJDXB]

USD, Euro, GBP, CHF, JPY of whatever...all sick dogs
The Canadian dollar is doing better than the USD, there is the safe haven It feels so out of the ordinary that the CAD is worth more than the USD, from the american point of view that is.

Appreciating against the USD is generally bad thing you know . It hurts exports and if it's viewed as a safe haven is in all likelihood going to lead to faster appreciation.

The CHF appreciating against the EUR directly led to the Swiss Govermnent capping the exchange rates since the massive influx of investors driving up the relative worth of the CHF was strangling the economy.

But, if the USD does collapse, say goodbye to your CAD safe haven

Furthermore, the value of a currency in comparison to another currency isn't exactly useful as an indicator of health.

For example, the Kuwaiti Dinar is worth $3.61, but that doesn't mean the KWD is a safe haven.

[Bsodmin]

Appreciating against the USD is generally bad thing you know . It hurts exports and if it's viewed as a safe haven is in all likelihood going to lead to faster appreciation.

The CHF appreciating against the EUR directly led to the Swiss Govermnent capping the exchange rates since the massive influx of investors driving up the relative worth of the CHF was strangling the economy.

But, if the USD does collapse, say goodbye to your CAD safe haven

Furthermore, the value of a currency in comparison to another currency isn't exactly useful as an indicator of health.

For example, the Kuwaiti Dinar is worth $3.61, but that doesn't mean the KWD is a safe haven.

I just have to make sure I cash my chips in time to buy the necessities Before the proverbial poo hits the fan, I am aware that when the USD goes down the toilet it will drag down many with it to the sewers, but I do not know when...and that is the golden question-When?

My only explanation to why the CAD would appreciate to USD(or USD depreciating to CAD)is because Canada is up to far less shenanigans than the US, and I feel their currency's relative stability reflects more responsible behaviour(Canadian public debt ~500 billion while American public debt ~14 trillion). I can be wrong though, but so far I have somewhat protected myself from inflation...

[ztrain909]

USD, Euro, GBP, CHF, JPY of whatever...all sick dogs
The Canadian dollar is doing better than the USD, there is the safe haven It feels so out of the ordinary that the CAD is worth more than the USD, from the american point of view that is.

Actually from a trading standpoint if you were a "long only" kind of person, the Yen would have been your best bet over the last few years. The CAD has done well, Aussie and NZD are about the same, but the Yen has performed the best out of all(slow and steady), again, if you were a long ONLY type of investor.
http://tools.currenciesdirect.net/currency-chart/

[von Jungingen's bad decision]

the US debt situation is in much the same shape as greece's but the USD is in a relatively better position than the euro

lol no it's not.

[Grouchio]

I got a really good question. Back in the day, did the Great Depression also have this de-valuement thing? Or is this a brand new baddie commin to town?

[Admiral Piett]

I got a really good question. Back in the day, did the Great Depression also have this de-valuement thing? Or is this a brand new baddie commin to town?

The Depression spurred a deflationary spiral, not so much the inflation that we are experiencing in this current recession.

[Menelik_I]

Obliteration!
But first, the scoreboard:
Dow: -387.37
NASDAQ: -79.69
S&P 500: -36.19

Read more: http://www.businessinsider.com/closi...#ixzz1YiqfC65y

IBD is having some fun with this it seems. Looks like almost everyone is in trouble

Spoiler Alert, click show to read: 

The "day" really started yesterday around 2:20 when the FOMC released its highly anticipated "Operation Twist" announcement. Markets were already down modestly heading into that, but the selloff got serious after that, and stocks really fell out of bed. To some extent, the selling was a "sell-the-new" kind of thing, and perhaps to some extent some were disappointed that Bernanke didn't go further. Alongside the announcement, yields on long-term Treasuries plunged through the floor.
Not long after the market closed, more bad news from Washington came: The House voted down a bill to keep the government open. A government shutdown is a real possibility.
That selling carried through. Asia got smoked across the board last night. Hong Kong fell 4.8%. Korea fell another 2.9%. What's more, Chinese flash PMI came in weak, confirming slowdown fears there.
But the real pain was in Europe, where French banks continue to be at the center of the show. They got demolished on all kinds of ugly headlines, like Mohamed El-Erian talking about a huge run on them (in an FT piece) and a story about BNP Paribas going to the Mideast looking for fresh cash. This of course lead to selling in everything else, and all the major indices got destroyed. Clearly the crisis is not a "Greek" crisis anymore. The banking system has been infected. Europe, too, clocked in with a bad PMI report. The slowdown is real.
And the follow through continued in the U.S. Dow futures were already pointing to a loss of about 200 points when at 8:30 AM we got (yet) another disappointing initial claims report. Later at 10:00AM, we did actually get a surprisingly good reading from the FHFA home price index, but nobody cared.
Markets trashed everything and everyone all day. Stocks got clobbered (never mounting anything resembling a comeback), commodities got destroyed, gold got smashed, oil fell below $80, and the Swiss Franc continued to cede its supersafehaven status. Only the yen, the dollar, and US Treasuries (where yields continue to plumb fresh lows) turned in positive/respective showings. BTW: If gold investors are bummed about the 4% decline today, silver investors, who lost over 8% should be annoyed.
There wasn't much mitigating on the corporate front today. FedEx, the ultimate economic bellwether, warned about next quarter's earnings. Bank of America fell because, well, it's Bank of America. Morgan Stanley got really hit on concerns over its French bank exposure. From the tech world, reports seemed to confirm that Meg Whitman will be the next CEO of Hewlett-Packard once it gets aroun to actually firing the current CEO, Leo Apotheker.

Read more: http://www.businessinsider.com/closi...#ixzz1YiqoQ3Zv

[Dubh the dark]

Joyous, happy you say;

when I saw the markets decline today, I got a powerful sense of dread that hasn't left.

I can't listen to music when the Titanic is going down, someone shoot that band already.

[Condottiere 40K]

This is great news for people like Warren Buffet, who expected and predicted this turn of events, and kept a large chunk of cash at hand to buy up assets during fire sales; I can't remember when I read that Buffet interview, but possibly it was five years ago.

[Grouchio]

Article of the Day!
...Apparently stocks are getting gains somehow! This is great!
http://online.wsj.com/article/SB1000...d=markets_data