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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: russwinter who wrote (6581)	1/30/2004 9:33:42 PM
From: Box-By-The-Riviera™	Respond to of 110194

probably not. just did a little japanese style bob above water only to continue in trend

To: russwinter who wrote (6581)	1/30/2004 11:06:33 PM
From: TobagoJack	Read Replies (1) \| Respond to of 110194

Hello Russ, I have no beef with the stats as claimed by the good Mr Yam. I do have some flavorings that may highlight his dish. (a) Wages are down about 30% across the board over the past 40 months; (b) The HK property market, defined by our top-end apartments and centrally located offices/retail shops, fell around 60% in USD/HKD terms from peak price in 1997, and had stablized in 2000. Nice apartments now yield around 7.2% (top locations, best views) and can be financed at 2.5% mortgage rate. Nice, popular, centrally located B-grade office premises have fallen by around 78% from peak price. The fact that values (as opposed to commercial rent) did not fall substantially during the 3 financially deadly months of SARS last year indicate that the worst may be behind us, barring out-of-the-blue downward spike powered by some events. I have it on good authority that had the SARS episode which left hundreds of thousands of people without income lasted a few weeks longer, the bankruptcy mortuary would have been filled to bursting. During those dark days, most commercial landlords reduced the rent by up to 50% during that time, and many employees of travel related businesses reported to work but were making do without pay. On this basis, one would certainly hope that property deflation is behind us ;0) (c) The mainland boom, and the resultant tourists loaded with moolah visiting HK has helped matters on the retail side. (d) The fact that anyone can buy any asset in HK in the amount of HKD 6.5 mm (7.8:1 USD) can obtain residency is attracting much interest, not only from China mainland but even from the USA. (e) Multi-currency savings account is routine in the typical HK family's banking setup, and as many have overseas residency, especially in Canada, Australia, and New Zealand, many had considerable savings denominated in those currencies. As HK dollar had taken a beating along with the USD from the stronger currencies, the folks with the right kind of money is in fact looking at real estate bargains denominated in HKD. (f) The recent China H-share bubblet has boosted sentiments and allowed many to earn undeserved gains. So, yes, deflation could be over, or may be simply on a ledge, and as usual, has nought to do with any government initiatives or brilliance, except that they were wise enough to stay mostly out of the free market's way. HK made it this far in OK shape, considering, and I attribute it to (a) high local savings pool, (b) worldwide liquidity flood, (c) China boom, and (d) USD devaluation. Even so, the drubbing has been horrific. I am wondering how California would fare through a similar episode ;0) They who have perpetual wars to fight, Mars to go, SUVs to tank, and missile defenses to dream up. Chugs, Jay

To: russwinter who wrote (6581)	1/30/2004 11:15:56 PM
From: mishedlo	Read Replies (1) \| Respond to of 110194

There is inflation the FED can do nothing about and then there is inflation that the FED can do something about. I fail to see how raising interest rates causes rain in argentina, fixes a blast of cold air from canada or corrects a geopolitical mess in Iraq or venezuela. Undoubtedly low interest rates have caused house prices to rise, low interest rates are some part of rising oil prices (but the exact % is sure questionable, given problems in Iraq, demand in China, and problems in Venezuela). Low interest rates indeed have caused rampant speculation in the stock market. The bubble in 2000 would have died without a hike and so will this one. (I am not saying we should not have hiked then, I am merely saying it was ready to roll over then and the FED was too late then, and probably too late now). Perhaps, this rally and stimulus is unsustainable and perhaps is ready to die on its own accord now. As for shorting the Euro, well that may work big time (for a while) if Europe cuts. It sure seems odd for someone who thinks treasuries are a screaming sell and our econony is unsustainable with debt and bubbles everywhere to be long the US$. On that one, I think you may be right (for a while) but for the wrong reason. The US$ fell today and I expect the peak of this rally is close at hand unless Europe cuts. Many here are griping about the waste of money Japan is throwing at the US$ and now you are betting that it will succeed. I guess if you are right, then Japan is right too, finally. PC prices are down, appliance prices are down, furniture prices are down, if prices at walmart are up, which ones? Sears just slashed benefits across the board. Is that an inflationary or deflationary thing? 10,000 jobs lost at bank one. Is that inflationary or deflationary? 6,000 jobs lost at Kraft, inflationary or deflationary? Lost jobs = fewer people chasing goods. That is deflationary. Now, if you think an interest rate hike will stimulate jobs you are blatantly silly. It will kill the stock market, housing and cost a ton of jobs. Will it cause the price of corn to drop? Will it cause the price of roast pork to drop? Even IF it caused roast pork to drop, would it be worth it? If this market heads south here, big time and stays down, you will not see a hike to 2006, if then. Nor, will we need one for any purpose either. M