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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: carranza2 who wrote (37273)	7/17/2008 3:22:19 AM
From: Haim R. Branisteanu	Read Replies (1) \| Respond to of 219655

Well not completely agree with you - sorry - but markets fluctuate <GGG> we mat get below 11,000 again but it will take several years until we will see 14,000 again - my bet at least 2 years Please keep in mind that there is a massive transfer of wealth from the US and EU to resource rich countries - and what they will do with all this money? BWDIK

To: carranza2 who wrote (37273)	7/17/2008 8:29:19 AM
From: TobagoJack	Read Replies (3) \| Respond to of 219655

just in in-tray · The US authorities have acted, as expected, to try to counter the growing panic concerning those elephantine monstrosities Fannie Mae and Freddie Mac. Thus, Treasury Secretary Hank Paulson announced some "incremental nationalisation" measures on Sunday, such as increasing the GSEs' line of credit from the Treasury and providing temporary authority for the Treasury to purchase equities in Fannie and Freddie. · GREED & fear's view is that the mortgage agencies are still likely to end up being formally nationalised with the shareholders wiped out and the Fannie and Freddie debt formally moved on the federal government's balance sheet. The problem for now is that the Bush administration is still trying to avoid this ultimate more desirable outcome. · World stocks are dramatically oversold by most technical measures and a dramatic short-covering rally can occur at any time. Still these are not normal times and, unless oil breaks down convincingly, a further scary capitulation can also occur at any time. Such a capitulation would take Asia down to the 400-430 level on the MSCI AC Asia ex-Japan index where GREED & fear sees real long term support. · There is clearly no hard evidence yet that oil has broken down technically; most particularly with the renewed bout of US dollar weakness. Still demand destruction is occurring at an accelerating pace in the West. · The failure of IndyMac has caused the consensus to recognise that the credit crisis has now moved from Wall Street to plain vanilla commercial banks. The issue now is how many more institutions fail or do private sector buyers emerge for some of the famous US financial services franchises now widely rumoured to be on the verge of collapse. Clearly, the latter outcome would provide some short-term relief for sentiment. · GREED & fear remains convinced that the world's most vulnerable economy remains Britain. The British financial firms which have so far run into trouble have seen their problems triggered by funding issues. But the key point for Britain is that the inevitable rise in bank and "building society" NPLs has barely begun. · As for monetary policy, a capitulation by the Bank of England has to come sooner or later, though it would be much easier for "King of England" to save face if oil now helped him out by correcting sharply. GREED & fear remains convinced that sterling is a massive short, which makes Asian equities now extremely interesting from the standpoint of sterling-based investors. · As the global economy slows, there is growing evidence of the expected slowdown in exports from Asia. China is the most interesting economy in this respect, which raises the issue of whether China's trade surplus is on the point of peaking. Such a trend would suggest a slowdown in renminbi appreciation pressure. This would likely mean a reduction in the "hot money" inflows into China playing renminbi appreciation. · GREED & fear would view any such decline in hot-money inflows as a blessing in disguise for the China domestic stocks since it would reduce the pressure on the PBOC. GREED & fear would also expect the mainland authorities sooner rather than later to start relaxing currently restrictive policy towards the residential property sector. · An initial weighting in China's ICBC will be introduced in the Asia ex-Japan absolute-return portfolio. This will be paid for by removing the investment in CNOOC. GREED & fear continues to recommend that ownership of this Asia ex-Japan portfolio should be hedged by being short Western financial stocks. · The world is only about one-third the way through the write-off story. GREED & fear remains convinced that the end game in Western financials will be wholesale government recapitalisation and/or opportunistic buying of distressed Western financial services franchises by opportunistic non-Western buyers. · The Japanese mega banks buying controlling stakes in all-but-bust Western financial franchises would represent the ultimate round trip for financial markets. The Japanese banks' current innate caution means they are in no hurry to buy new businesses. This lack of aggression means they may actually end up getting a bargain.