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

To: abuelita who wrote (38022)	8/7/2008 5:22:17 PM
From: TobagoJack	Respond to of 217588

for just about everything, canada may be a better buy hong kong may have more variety in any case, just in in-tray · There has been a freeze of redemptions in recent days locking up NZ$1.34bn of investors' money in New Zealand's property funds. The panic over the open-ended property funds shows concerns hitting more mainstream respected financial service franchises, at a time when the New Zealand domestic economy looks to be entering a free fall and in particularly its highly leveraged property market. · The New Zealand situation is deteriorating at a pace that could precipitate depositor concerns about the health of the New Zealand banks. A financial crisis in New Zealand will directly ricochet into Australia since major Australian banks have 15-25% of their lending in New Zealand. Banks in both New Zealand and Australia have very high loan-deposit ratios, resulting in massive dependence on wholesale funding. There is also no formal deposit insurance scheme in both countries. · GREED & fear continues to recommend a zero weighting in Australian banks. For like New Zealand, there has been a consumer debt-driven bubble of massive excesses in Australia further fuelled by the following wind from the commodity boom. The domestic economy is now unwinding just as the oil-led commodity complex is showing growing evidence of cracking. · Macro investors should bet aggressively on falling interest rates and a weakening currency in Australia. But both trends will not be bullish for Australian banks which absolute-return investors should remain short of. As for relative-return investors in Asia Pacific the increasing likelihood of significant Australian dollar weakness over the next 12 months or more is another reason to run a massive underweight in Australia. This should be funded by an overweight in Japanese domestic stocks. · The financial excesses of the credit bubble were not just confined to America. Rather this is a global phenomenon where the greatest excesses have been where the Anglo-Saxon free market model has been most vigorously practised. The model has been fatally compromised by the only too evident view of the relevant financial service sectors that the relevant governments and central banks will always bail them out of a problem. · The break of oil below US$120/barrel surely signifies the commencement of a medium term correction in oil and the related commodity complex. GREED & fear would not be surprised to see oil now drift toward US$100 per barrel or lower during this medium term correction, a period during which commodity and other cyclical related stocks should be expected to underperform. This will occur in the context of a continuing recognition by investors that growth is continuing to slow. · The oil correction is occurring as expected in the context of a strengthening US dollar. GREED & fear expects the dollar to rally more here because US consumption is slowing sharply and the US current account deficit is about to decline even more sharply than it already has done. Such a dollar rally will gain momentum if the American currency breaks 75 on the US dollar index. · If the dollar does break out, it is only a matter of time before Billyboy resumes cutting rates again. For now investors should assume that the dollar can rally to the 1.25-1.3 level against the euro, and also rally sharply against the likes of sterling and the Australian dollar. The dollar rally will be much more muted against the yen and the Asian currencies. · The break down in the oil-led commodity complex will curb the inflation scare in both the West and Asia that has generated so much noise this year. The scare never made any sense in the West, which is facing the biggest deflationary debt liquidation since the Great Depression. GREED & fear is now lowering the federal funds rate target from 2% to 1%. · As for Asia, with the inflation scare about to disappear down the proverbial plug-hole, the asset allocation recommended for dedicated equity investors remains to get out of commodity and cyclical related stocks and into interest rate sensitive stocks which will be viewed as beneficiaries of a weaker oil price. The obvious structural underweight in Asia Pacific remains Australia. · GREED & fear is going to remove the allocations in Russia and Middle East equities in the global portfolio, with the money put back into US Treasury bonds where GREED & fear retains the long-term target of 2.5% on the 10-year Treasury bond yield. · Taiwan Fertilizer will be removed from the Asia ex-Japan thematic portfolio and replaced by doubling the position in China's ICBC. The investments in India and Indonesia in the relative-return portfolio will be raised by 1ppt each by shaving the overweight in Taiwan by 1ppt and by increasing the underweight in Korea by 1ppt. · With Thaksin's wife charged with tax evasion and establishment voices calling for a "New Politics" where only 30% of the parliament would be elected and 70% appointed, it is clear that the stalemate in Thai politics continues to fester. The longer this stalemate continues, the bigger the risk it climaxes in a violent confrontation. For now GREED & fear will retain the zero weighting in Thailand.