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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: gumnam who wrote (37682)	9/1/2003 11:12:05 PM
From: rolatzi	Read Replies (1) \| Respond to of 74559

If there is a big drop in the US stock market it is better to be in metals and energy directly and not through shares of miners and producers. I am a bit wary of gold miners because the share price has gotten ahead of the price of gold. Each time the stock market has had a big drop from 1987 onward, gold miners have declined more or less proportionately to the stock averages. On the other hand, September is the best month for increases in the price of gold and many say that gold mining stocks lead the price of gold. I don't trade commodities (and I assume many here don't as well) so I am thinking of one of the FCX pfd shares which are proxies for the price of gold and should not have the volatility of gold miners. I don't know if there is a comparable for oil and natural gas but I suspect that oil and gas prices will hold up much better in a market correction than the producing, exploration and service companies. Ro

To: gumnam who wrote (37682)	9/2/2003 1:37:11 AM
From: TobagoJack	Respond to of 74559

Hi gumnam, <<I am hoping that we do not see the end of the financial system type catastrophe in the next few months>> Give up hope, instead, get energized to embrace the ambiguity and relish the uncertainty, for it is nearly time to make some more moolah. <<1) If the stocks in US crumble, how hard do you think the Chinese, Indian and other Asian stocks get hit?>> When the stocks in the US crumble, all financial markets will get hit, horribly, and get mangled, beyond recognition, which then spells opportunity, with a capital O, triple underlined, in bold shadow font, coloured crimson. <<2) What do you think of being involved directly in commodities rather than through stocks?>> I do not know that game and have not tried to find a easy way to play. Any illumination would be welcomed. <<3) Bond markets US-Japan etc? What is going on there and will it end ?>> I am guessing, of course, but I think it all ends when the Japanese starts to panic about becoming poor, which would be after the US J6P balance sheet gets tapped out like a mature gas field, and then, suddenly, the flying street sign takes off the head, ending the romp in the summer rain. Call me a pessimist :0) Chugs, Jay

To: gumnam who wrote (37682)	9/4/2003 11:08:38 PM
From: TobagoJack	Read Replies (2) \| Respond to of 74559

Hello Gumnam, I am most happy that you gave me the impetus, a kick in the behind, to get out of AUD, and I am also happy that I loaded up more on CAD. This morning, as I did my MS Money update and checked the exchange rate moves overnight, I felt the difference in ommph of the changed portfolio composition, as if putting premium gas in a sports car that was on regular. Here is the apparent reason as told by MS: morganstanley.com "Currencies: AUD -- Downward Pressure Down Under Karin Kimbrough (New York) AUD/JPY to decline Over the last year AUD/JPY has appreciated by some 17%. The rise from 65 to 75 has largely been the work of a rising AUD/USD. USD/JPY by contrast remained fairly steady. Currently, however, AUD/JPY seems resolutely headed down from its peak near 81 in early July. This move has again been largely driven by a retreat in AUD/USD. Despite the 117 anchor in USD/JPY and the reluctance of the Japanese authorities to let the JPY appreciate on any axes, we see potential for further JPY strength against the crosses. Directly, this should push EUR/JPY lower (for details see EUR/JPY Rebalancing is the Key Theme, Stephen Jen, August 26, 2003). Indirectly, this also should push AUD/JPY lower. Uridashi issuance is waning One reason why the AUD strengthened over the last year -- in addition to the mighty USD correction -- has been increasing offshore issuance of AUD bonds. The lion's share of offshore issuance is in Uridashis, in this case Japanese-issued AUD bonds targeting the Japanese retail investor. The data show that Uridashi issuance began to accelerate in Q1 2002 and, thus far in 2003, issuance is greater than in all 12 months of 2002. But the quarterly profile also shows that Uridashi issuance has slowed dramatically since March. The attraction of Uridashis has been fuelled by two factors: (1) higher relative yield and (2) expectations that the AUD will appreciate. Given that both factors are now less compelling, it is no surprise that Uridashis look less attractive. We expect the RBA to keep rates on hold at 4.75% on September 3, and with rest of the world largely close to done with cutting rates, the relative yield is more likely to narrow than to widen. At the same time, the AUD has now probably seen its highs in the near term and consensus does not look for more appreciation. Our technical analyst, Andrew Baptiste, expect more downside and sees initial long-term support at 0.6250. Fundamentally, the growth gap is narrowing A second factor contributing to downside in the AUD/JPY is more fundamental. The accumulation of positive data from Japan is a key surprise not necessarily priced in by the market. Our economists have just revised up their annual GDP forecasts for Japan to 2.0%Y in 2003, and this implies the growth differential between Australia and Japan is now at its narrowest in many years. Tight rein on USD/JPY shifts adjustment to JPY-crosses A third drag on AUD/JPY is in fact the Japanese authorities are keeping such a tight rein on USD/JPY. Ironically, the more the MoF intervenes to defend USD/JPY, the more JPY strength will be diverted to forcing down EUR/JPY. By extension, this should also weigh on AUD/JPY. Equally Stephen Jen has pointed out that MoF intervention can push EUR/USD lower. This can induce general AUD/USD weakness because while the often reported 'fact' that the AUD and EUR are 80% correlated is false, it is true that the two currencies are about 30% correlated. In sum generalized AUD weakness and diverted JPY strength should keep AUD/JPY under downward pressure. " Chugs, Jay P.S. On Canada morganstanley.com