And what of this? – a “chart has just got to anger the living patoots out of the left.”
That ought to start some discussion. If you need more help with your pessimism, there’s lots of commentary at Maxed Out Mama.
And what of this? – a “chart has just got to anger the living patoots out of the left.”
That ought to start some discussion. If you need more help with your pessimism, there’s lots of commentary at Maxed Out Mama.
I know it is just a snapshot but;
The media is in a feeding frenzie, trying to stampede us all into a crash because of the US housing credit crunch and yet the US index above is the only one in the green !!
IMO this whole so-called mortgage mess was caused by Alan Greenspan trying to save Bill Clinton’s stock market bubble —- doing it with rediculously low interest rates.
But the media would just love a crash when GW is at the helm so they will push it.
And what of this? Well it brings a warm and fuzzy feeling to my my otherwise cold and uncaring heart!
Yawn.
The goldmans and citigroups will buy out the foolish companies at pennies on the dollar and the market will have its much needed correction.
There will be less small and mid-sized firms out there making stupid decisions and the investors in these foolish companies will lose their money. The cost of greed.
All of this is good.
Markets correct periodically. If they don’t you got big trouble and then it would be time to look for the exit.
The S&P the measure of the 500 largest companies in the US is at a Price/Earnings ratio of about 15 cheaper than its been in years. The Euro is hovering around its highs. The US market is cheap folks. That means money flowing to the US to buy cheap assets.
Although sub prime mortages failures hurt its not the end of the world. There is a kabillion other components to any economy.
Dam missed my trade typing this.
Anyway the media will tend to talk to money managers who have an agenda and those guys have such big amounts of money to move around that they have been known to talk doom and gloom while their trading floor can’t buy stuff fast enough in a sell off. Smart money pushing amateurs over the cliff as it where to catch what they panic and dump at the bottom.
High risk morgage lenders are paying the price….it’s impacting. That and the fact the Fed has been engaged in a slow quiet contraction of the money supply…things will slow for a while.
After 18 interest rate increases the fed hasn’t increased rates since January and since thats how they remove money from the system I’m not sure what your talking about WLM Redux.
The effect on the economy of rate hikes have a lag of about 12-18 months. The last rate hike’s effect would be expected to be felt between Jan and Jun of 08.
If you could tweek monetary policy in real-time, the central banks would have a much easier time getting it right…
That would be the case Warwick if you where taking rates from say 5% to say 7% but the rate rate hikes prior to January where to remove stimulus from the system not slow the economy sort of like coasting instead of peddling like mad.
What is also missing is the fact the rest of the central banks in the world are stimulating or had been till recently. They have been running about 75 basis points below fed funds. You see it in the value of their currencies. So instead of stimulus from the fed what you will see to take its place is money being repatriated to the US that will continue to fuel the growth not artificially or unsustainably as it where when governments stimulate. All that demand that has been coming out of the US to fuel the rest of the world will now move to the US. Buy American its cheap. Ebb and flow. Economies are no longer isolated to the degree they once where. Actions have consequences around the globe.
Latest snapshot has only Switzerland’s market index up, and everyone else’s — including the US — down. Yawn…
If the flow of money was into the US from elsewhere, the US currency would have appreciated not depreciated.
The carry trade between the countries with cheap real rates (Japan) and economies with above average returns (like Canada) is what has fueled the market. A credit crunch will slow or reverse this. This doesn’t mean a move to US equities, it means a move out of equities and a reduction in leverage.
Hedge funds and private equity have used the cheap rates of places like Japan to borrow money and have used the funds to buy commodity stocks in places like Canada.
The last few small corrections have been unwinding positions. Especially when Japan threatened to increase rates.
A credit squeeze arising from sub-prime loans effects global credit. A lot of morgage lenders raise funds on the Eurodollar market as well as the ABS and MBS markets.
Changes in one day’s trading don’t usually prove much of anything. I don’t see the point in posting this snapshot. Without context (for which click on one of the indices and look at longer term changes) it is more misleading than informative.
It’s BUYING time fellas!
One can only hope that we get a massive correction in the real estate market in Canada as well. One, it will really put many of those latte trawna types in a bind when they can’t sell their trendy s@#$holes for the amount of the mortgage they are sitting on. Two, I am ready to buy, buy, buy. Let the recession begin folks, and watch the market shake out all the idiots. I mean, really, do these big city types not even study medium term market trends before they put down $700,000 on a 2000 sq ft dump?
kingstontard if we stopped our excessive immigration the 2,000 ft home in toronto would be worth the same as if it was in winnipeg or moncton.
You keep adding 200,000 people to the demand side the price goes up.
John’s right. This morning, the S&P/TSX is up 0.7%, while the S&P 500 is down 0.02%, and that could very well reverse in 20 minutes. While I don’t disagree with the conclusions drawn, the chart posted has minimal relevance.