*** FUTURE POSTS WILL ALSO APPEAR AT 'NOW AND NEXT' : https://rolfnorfolk.substack.com
Wednesday, December 19, 2007
Stockmarket crash on the way?
All investors take heed, you are staring at a market that is NOT responding well to “Good News.” Markets that cannot rally on Good News tend to accelerate downward on any type of bad news, and that is the kind of market which appears to be taking shape.
Here we go
Now Governor Schwarzenegger is looking for a 10% cut in expenditures across the board, as the San Diego Union-Tribune reports.
Tuesday, December 18, 2007
What goes around, comes around
Interestingly for me, he relates this action in part to the UK's having taken on so much of US Treasury debt, a matter on which I commented repeatedly some time ago.
Monday, December 17, 2007
Snippets, straws in the wind
Nadeem Walayat predicts another brightening of the FTSE's candle flame, before it flutters again;
Jas Jain says "total household debt growth below $300B annual rate will lead to outright deflation within months" and this is why the Fed has to keep trying to stimulate lending, with ever-diminishing responses;
Ghassan Abdallah counsels against trying to short the market, what with many forces attempting to support it - best to sit out the dance;
AFP interprets the slide in world stocks as a disappointed response to the Fed's limited interest rate cut, and a sign of fear of inflation - something Alex Wallenwein predicted recently;
Finally, Captain Hook plays with ideas that have occupied me for some time (rubric mine):
... If what we are witnessing is at a minimum a Grand Super-Cycle Degree event, then a total collapse of stock, bond, and currency markets world-wide could be in store as the globe reverts back to more regionalized economies, and localized currencies...
... the swings in the markets are enough to curl one's spine these days, so speculator exhaustion could play a role in curbing interest in speculation. This is a natural considering the aging western populations at this point and will play a big role in curbing the demand for financial assets moving forward as retirees attempt to spend their savings.
Sunday, December 16, 2007
What is long-term investment?
Well, I'm not a respected Fleet Street money journalist, merely a no-account bearish personal financial adviser, but I'd suggest that in the exciting investment world of today, maybe a five-year period is not a good basis for comparing long-term results, or conditioning expectations for the future.
I had a client ask my opinion about investments a couple of years ago, because his bank had been showing him their fund's marvellous growth over a three-year period. I took time to explain to my client that over the five years to date (then), the graph (as for the FTSE 100) described a kind of bowl shape, and the period chosen by his bank just happened to draw a line from the bottom of the bowl to the lip.
I then showed him the five-year line in all its loveliness:
I think it's fair to say that these are not ordinary times. There has been a steady build-up of electrical charge, so to speak, over something like a decade (some would say, much longer), and there may well be some powerful bolts unleashed as a result. Where will the lightning will strike next: a steeple, an oak tree, a cap badge - who can tell?
Massive debt; changes in the balance of international trade; demographic weakening of future public finances; sneaky currency devaluation; wild financial speculation; wars and the rumours of wars; imprecisely known ecological limits to growth; declining energy resources; the desperation of the world's poor to join our fantastic lifestyle; our fear that we may lose the comfortable living we used to imagine was our birthright; the corruption, abuse and neglect of the young; the selfishness of their parents and the middle-aged; the increasing burden and growing neglect and abuse of the old.
In all this turmoil, making five-year investment performance comparisons has an air of unreality, like planning tomorrow's menu on a mortally-wounded ocean liner.Friday, December 14, 2007
Lead, kindly light
Perhaps, after the next election, a new US President, with the strength of a fresh mandate, will be also able to act so decisively.
Thursday, December 13, 2007
Denninger: depression, but when?
The other is to keep the door closed until the smell is too bad, and then we have far worse problems - but it could take years. End result: deflationary depression.