Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Cogito Ergo Sum who wrote (75302)	6/16/2011 5:50:01 PM
From: 2MAR$	Read Replies (1) \| Respond to of 217671

Hey , we still have the debt ceiling to be raised and give helicopter Ben some more room to wiggle , oh but those severe slashing cuts that will be demanded , bills being presented to curtail the bank speculatory commoditities trades , just where are they going to make their money now ? Ipo's of social networking sites ? If people could all just go get jobs working with Facebook or the lucky few that get paid for "Tweets on Twitter" like what was his name again ...oh yes it was Charlie Sheen "The Torpedo of Death Take No Prisoners Tour Boy " (Bet you a couple of bucks Charlie would like to have that $2mil an episode paycheck back now , but sorry Charlie .) Aside from biz news on other front Secretary of State getting grilled on cutting Military expense yesterday with General Petraeus pressured to cut troop numbers in Afghanistan/Iraq and with all those returning vets fighting for freedom & stable world ...look what they get to come home to. And finding jobs for them , how precarious can this get ? Looking to see a test of 1170/90 on the SPX before this all ends , seemed a very weak defense of the 200ma today ...look out below if this waterfall efect takes hold and a repeat of 2008.

To: Cogito Ergo Sum who wrote (75302)	6/16/2011 7:44:49 PM
From: TobagoJack	Read Replies (1) \| Respond to of 217671

just in in-tray, per greed and fear · After being down for six weeks in succession, the technical issue is what sort of rally Wall Street can muster, if any. The question is whether there can be a decent pick up in breadth and volumes on any bounce. Otherwise the omens will be ominous. · The most plausible catalyst for a market “pop” will be an agreement on another bailout package for Greece. GREED & fear’s guess is still that at the last minute Germany will concede to a “voluntary” rollover of private sector holdings of Greek bonds as demanded by the ECB. · For now GREED & fear is sticking with the view that June will be the peak in China’s headline CPI inflation, as is the A-share market which has been trading sideways to down prior to any clear signal of an end to tightening. · The continuing deceleration in loan growth and money supply growth suggests to GREED & fear that tightening is nearing an end, though the authorities will want to see confirmation of the peaking in headline inflation. China may also have seen its last interest rate hike in this tightening cycle. · GREED & fear will continue to maintain the overweight in China in the Asia Pacific ex-Japan relative-return portfolio. The China tightening risk is hedged by the continuing big underweight in Australia since the Australian dollar is likely to be the key victim of any sudden swing in investor sentiment on China, in terms of going from worrying about “too hot” to worrying about “too cold”. · The monumental overvaluation of the Australian dollar continuous to be supported by the currency’s yield differential which makes the currency expensive to short unless a macro speculator gets the timing exactly right. Still the yield premium is gradually receding out of the currency. · There are growing signs of a slowdown in the domestic Aussie economy aside from the still booming mining sector. This slowdown is not surprising given the huge gearing of the Australian household sector and the reality that Australian borrowers do not enjoy negative rates. · The Reserve Bank of Australia will not raise interest rates if it sees more evidence of house prices falling. Indeed it might even cut rates. The anticipated weakness of the Aussie dollar, which is going to happen sooner or later, is also a reason why investors should not forget about the merits of the Australian gold mining sector. · The critical point for investors is that the China bust story is unlikely to be realised so long as the command economy remains in control. GREED & fear’s view is that China stocks will respond positively to the policy inflection point; though there is an issue of whether any policy easing will also occur in the residential property market. The likelihood is that current controls remain in place pending the social housing build out even if the PRC becomes more relaxed about inflation. · The past week has seen a further ratcheting up in the tightening measures on residential property in Hong Kong. The latest measures in Hong Kong look to GREED & fear ever more PRC-like in terms of ever more blatant social engineering. It would not surprise GREED & fear if the Hong Kong government comes up soon with a new initiative in subsidised housing aping China’s social housing programme. · GREED & fear would still expect Hong Kong residential property values to remain remarkably resilient in a world where the Fed is not raising rates. But the reality of draconian government intervention will continue to drive speculative activity to the office property market where values continue to rise. · In GREED & fear’s view the timing of the next experiment in alternative monetary policy by the Fed will be determined by market action. The more the S&P500 declines, the more Treasury bond yields decline and the more the US dollar rallies the quicker will come QE3. · GREED & fear will for now continue to give the recent deflationary market action the benefit of the doubt which is why risk assets should be sold into any bounce. The one area where GREED & fear would now be accumulating into weakness is domestic China stocks precisely because there is an identifiable catalyst in terms of a pending end to tightening. · A BIS research paper published last month intellectually demolishes the Ben Bernanke argument that the Western credit crisis was caused by an Asian “savings glut”. The report argues that the key issue is not “excess saving” but rather excess “financing” or the “excess elasticity” of current monetary and financial regimes. · The lack of discipline, or “anchors”, in the global monetary system has long been an obsession of GREED & fear’s. This is why all sell offs in gold are a buying opportunity. All the signs for now are that Billyboy Ben will be allowed to continue with his mad experiment in monetary quackery. · The “big banana” in a “euro-quake” is Spain because of the sheer size of its economy which would make bailouts under the existing formula untenable. With Spanish house transactions plunging in April, GREED & fear reiterates the recommendation to macro investors to maintain the “Spanish flu” trade on rising Spanish CDS. Please consider the environment before printing this email. The content of this communication is subject to CLSA Legal and Regulatory Notices These can be viewed at clsa.com or sent to you upon request.