Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Coronavirus: UK Parents Demand ALL Schools OPEN September, 7 Million Children Abandoned by Teachers - 9th Aug 20
Computer GPU Fans Not Spinning Quick FIX - Sticky Fans Solution - 9th Aug 20
Find the Best Speech Converter for You - 9th Aug 20
Silver Bull Market Update - 7th Aug 20
This Inflation-Adjusted Silver Chart Tells An Interesting Story - 7th Aug 20
The Great American Housing Boom Has Begun - 7th Aug 20
NATURAL GAS BEGINS UPSIDE BREAKOUT MOVE - 7th Aug 20
Know About Lotteries With The Best Odds Of Winning - 7th Aug 20
Could Gold Price Reach $7,000 by 2030? - 6th Aug 20
Bananas for All! Keep Dancing… FOMC - 6th Aug 20
How to Do Bets During This Time - 6th Aug 20
How to develop your stock trading strategy - 6th Aug 20
Stock Investors What to do if Trump Bans TikTok - 5th Aug 20
Gold Trifecta of Key Signals for Gold Mining Stocks - 5th Aug 20
ARE YOU LOVING YOUR SERVITUDE? - 5th Aug 20
Stock Market Uptrend Continues? - 4th Aug 20
The Dimensions of Covid-19: The Hong Kong Flu Redux - 4th Aug 20
High Yield Junk Bonds Are Hot Again -- Despite Warning Signs - 4th Aug 20
Gold Stocks Autumn Rally - 4th Aug 20
“Government Sachs” Is Worried About the Federal Reserve Note - 4th Aug 20
Gold Miners Still Pushing That Cart of Rocks Up Hill - 4th Aug 20
UK Government to Cancel Christmas - Crazy Covid Eid 2020! - 4th Aug 20
Covid-19 Exposes NHS Institutional Racism Against Black and Asian Staff and Patients - 4th Aug 20
How Sony Is Fueling the Computer Vision Boom - 3rd Aug 20
Computer Gaming System Rig Top Tips For 6 Years Future Proofing Build Spec - 3rd Aug 20
Cornwwall Bude Caravan Park Holidays 2020 - Look Inside Holiday Resort Caravan - 3rd Aug 20
UK Caravan Park Holidays 2020 Review - Hoseasons Cayton Bay North East England - 3rd Aug 20
Best Travel Bags for 2020 Summer Holidays , Back Sling packs, water proof, money belt and tactical - 3rd Aug 20
Precious Metals Warn Of Increased Volatility Ahead - 2nd Aug 20
The Key USDX Sign for Gold and Silver - 2nd Aug 20
Corona Crisis Will Have Lasting Impact on Gold Market - 2nd Aug 20
Gold & Silver: Two Pictures - 1st Aug 20
The Bullish Case for Stocks Isn't Over Yet - 1st Aug 20
Is Gold Price Action Warning Of Imminent Monetary Collapse - Part 2? - 1st Aug 20
Will America Accept the World's Worst Pandemic Response Government - 1st Aug 20
Stock Market Technical Patterns, Future Expectations and More – Part II - 1st Aug 20
Trump White House Accelerating Toward a US Dollar Crisis - 31st Jul 20
Why US Commercial Real Estate is Set to Get Slammed - 31st Jul 20
Gold Price Blows Through Upside Resistance - The Chase Is On - 31st Jul 20
Is Crude Oil Price Setting Up for a Waterfall Decline? - 31st Jul 20
Stock Market Technical Patterns, Future Expectations and More - 30th Jul 20
Why Big Money Is Already Pouring Into Edge Computing Tech Stocks - 30th Jul 20
Economic and Geopolitical Worries Fuel Gold’s Rally - 30th Jul 20
How to Finance an Investment Property - 30th Jul 20
I Hate Banks - Including Goldman Sachs - 29th Jul 20
NASDAQ Stock Market Double Top & Price Channels Suggest Pending Price Correction - 29th Jul 20
Silver Price Surge Leaves Naysayers in the Dust - 29th Jul 20
UK Supermarket Covid-19 Shop - Few Masks, Lack of Social Distancing (Tesco) - 29th Jul 20
Budgie Clipped Wings, How Long Before it Can Fly Again? - 29th Jul 20
How To Take Advantage Of Tesla's 400% Stock Surge - 29th Jul 20
Gold Makes Record High and Targets $6,000 in New Bull Cycle - 28th Jul 20
Gold Strong Signal For A Secular Bull Market - 28th Jul 20
Anatomy of a Gold and Silver Precious Metals Bull Market - 28th Jul 20
Shopify Is Seizing an $80 Billion Pot of Gold - 28th Jul 20
Stock Market Minor Correction Underway - 28th Jul 20
Why College Is Never Coming Back - 27th Jul 20
Stocks Disconnect from Economy, Gold Responds - 27th Jul 20
Silver Begins Big Upside Rally Attempt - 27th Jul 20
The Gold and Silver Markets Have Changed… What About You? - 27th Jul 20
Google, Apple And Amazon Are Leading A $30 Trillion Assault On Wall Street - 27th Jul 20
This Stock Market Indicator Reaches "Lowest Level in Nearly 20 Years" - 26th Jul 20
New Wave of Economic Stimulus Lifts Gold Price - 26th Jul 20
Stock Market Slow Grind Higher Above the Early June Stock Highs - 26th Jul 20
How High Will Silver Go? - 25th Jul 20
If You Own Gold, Look Out Below - 25th Jul 20
Crude Oil and Energy Sets Up Near Major Resistance – Breakdown Pending - 25th Jul 20
FREE Access to Premium Market Forecasts by Elliott Wave International - 25th Jul 20
The Promise of Silver as August Approaches: Accumulation and Conversation - 25th Jul 20
The Silver Bull Gateway is at Hand - 24th Jul 20
The Prospects of S&P 500 Above the Early June Highs - 24th Jul 20
How Silver Could Surpass Its All-Time High - 24th Jul 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Stock Market Wednesday Worries, Greece Closed and Japan On the Edge of Collapse

Stock-Markets / Stock Markets 2010 May 05, 2010 - 09:48 AM GMT

By: PhilStockWorld

Stock-Markets

Best Financial Markets Analysis ArticleLord Blankfein, the peasants are revolting!  Lloyd: "I know, they stink on ice."

Greek air-traffic controllers and teachers walked off their jobs and shopkeepers shuttered their stores to challenge Prime Minister George Papandreou’s latest decision to cut wages and pensions and raise taxes in return for a 110 billion-euro ($143 billion) rescue package.  Protesters trying to gain access to the parliament building clashed with helmeted and padded riot police and threw sticks and stones and chanted slogans when they were repulsed. Police, who said 18,000 people are participating in the marches, shot tear gas at other protesters who lobbed rocks and set trashcans on fire at the central bank building near the parliament.


Today’s general strike, the third this year, follows Papandreou’s announcement of a second set of wage cuts for public workers, a three-year freeze on pensions and a second increase this year in sales taxes and the price of fuel, alcohol and tobacco in return for a bailout from the European Union and the International Monetary Fund. Union groups have called the austerity measures “savage.” Demonstrators daubed “IMF OUT” in red paint on pillars around the centrally located Finance Ministry. Most stores in the main shopping street of Ermou were open for business, with some lowering shutters over display windows to protect against any violence.

  1. Air traffic controllers shut down Greek airspace
  2. Government workers shut schools and hospitals
  3. Gas stations closed to protest the fuel-tax
  4. Dock workers grounded the ferried
  5. Power company employees are striking
  6. Journalists are on strike so there is no local news covering any of it!

It’s one thing to have these egg-headed discussions about austerity and cutbacks and for the EU and the IMF to get together and tell the Greek people it’s time to pay their debts but it’s quite another thing to actually get it past the people who’s lives these measures will affect.  Imagine if the IMF told Americans that we needed to cut government spending by $1.5Tn (the equivalent) and that wages would be frozen and retirement will be raised from 65 to 70 effective immediately so hopefully you die at work and save us the Social Security payments….  We have Tea Party protests now! 

Fifty-one percent of Greeks say they won’t accept new austerity measures and would join protests against them, according to a poll of 1,000 people by ALCO for Proto Thema newspaper from Apr 27-29. That compares with 33 percent who would accept them.  Support for the government fell to 29.7 percent from 32.1 percent last month, according to the survey. “These measures are unjust and should be paid for by those politicians over the past 30 years who have led us here,” said Barbara Tzerbou, 37, a lawyer who traveled to central Athens with her brother to participate in her first-ever protest. Papandreou “had choices; we didn’t need to get as far as the IMF,” she said.

Make no mistake, Japan is next.  Their consumers have tightened their belts for 20 years to pay back for the collapse in the 80’s but that belt is out of notches and Japan can no longer borrow money internally as their people are tapped out.  S&P indicated that a fiscal plan scheduled for next month by Prime Minister Yukio Hatoyama’s government may be key to whether it will cut the nation’s sovereign credit rating.

At stake for Japan is keeping the AA grade after S&P lowered its outlook for the rating in January, and shoring up confidence that it will avoid contagion from a Greek crisis threatening to engulf other sovereign borrowers. Finance Minister Naoto Kan said this week that Greece has shown the need for Japan to take a “very firm” stance toward reducing debt, which is approaching twice the size of Japan’s economy.  “There is a growing sense of urgency, even though it’s stated very quietly, that the situation isn’t sustainable,” said Hess, who was in the capital of Uzbekistan to attend an annual meeting of the Asian Development Bank.

Japan’s government has an election in July but needs a budget next month that reduces the deficit from 9.4% of GDP to 3% of GDP but the whole thing is a joke as Japan is still borrowing money by selling 10-year notes at 1.29% because the Japanese people are offered 0% by their own banks and tend to be long-term savers.  Also, 20 years of DEflation has given the people a false sense of security so 1.29% seems pretty good when things get cheaper every year.  The rest of Asia is fighting INflation and if prices go up OR if rates go up OR if Japan is forced to sell 10-year notes "outside the family" - that 9.4% deficit could jump to a 20% deficit overnight if Japan is forced to pay the same 3.72% the US does.  Of course, if Japan has to compete on the open market for loans - EVERYONE’s rates will be going up!

So party on Garth - the dollar is fetching 94.7 Yen this morning, that’s up 10% since Thanksgiving while oil priced in Yen is now hurting the Japanese consumers as much as it hurts us (they had escaped some of the pain with a very strong Yen to Dollar in the last spike).  Oil priced in Euros is even worse, now passing 2008 highs as the Euro falls below critical at $1.30 (now $1.289).  At the end of 2008, oil was priced at $100 American and that is the pain currently being felt in Europe as their currency declines while oil continues to be manipulated higher by investment banks who are stealing more money every single day than all of Goldman’s sub-prime deals put together.  Now that bubble may be popping too as, once again, they have bankrupted the people who have to, ultimately, buy the oil.

Putting the global cherry on top of our EDZ and EUO hedges is State Street Global, who put an "underweight" position on the largest emerging markets including China and Brazil on concern shares are expensive relative to smaller developing nations as economic growth slows. “We’ve been a little cautious on the larger countries in emerging markets, China amongst them, that seem to have reasonably rich valuations,” Richard Lacaille, London-based global chief investment officer at State Street Global Advisors, which oversees $1.9 trillion, said in a Bloomberg Television interview in Hong Kong

The MSCI China Index trades at 14 times estimated profits and Brazil’s Bovespa gauge fetches 13 times, compared with the multiple of 12 for the MSCI Emerging Markets Index. Chinese manufacturing grew at a slower pace in April according to a survey of more than 400 companies released today.  BlackRock Inc. is among money managers reducing their holdings on Chinese stocks on expectations that economic growth has peaked. The BlackRock Emerging Markets Fund has widened its “underweight” position for China versus the MSCI Emerging Markets Index to about 7.5 percent from 4.6 percent at the end of March, the fund’s London-based co-manager Dan Tubbs said.

The Hang Seng dropped another 435 points (2.1%) this morning, down to 20,327 but the Shanghai bounced 0.8% but is still off 13% for the year so far and the rise in the Shanghai smacks of manipulation.  Taiwan fell 3% and India dropped another 0.5% so it was JUST the Shanghai that went up IN THE WHOLE WORLD.  Japan and Korea are still closed for holidays and, at the moment, they have a LOT of catching up to do when they come back. 

"It’s a bit of a bloodbath today," said IG Markets institutional dealer Chris Weston in Sydney. "We are seeing aggressive short-selling of materials and other high beta names because there’s still no clarity on the resources tax and the European debt crisis and Chinese manufacturing looks to be slowing down. It’s a perfect storm, but we’ve got great value in certain stocks, which could trigger broker upgrades."

I love that attitude, which is the norm among investors:  "Hey, things are catastrophically bad but maybe GS will put a stock on their Conviction Buy list and everything will be all better…"  Europe actually opened up this morning and gave a brief pop to our futures but now they are back to roughly 1.5% drops with the DAX failing 6,000 for the first time since March and that would be about 1,157 on the S&P, right where I said we’d be at the conclusion of our 5% Rule Review!  I also said "not holding that is going to be nasty" so look sharp today as we expect at least a 1% bounce off that line.  Anything less will be LAME!  

Of course we are in disaster hedge heaven because THIS IS A DISASTER!  We’ll be looking at layers to go lower and also as a way to lighten up because, the same way we took 300% profits off the table on the way up, we need to do the same on the way down. 

By Phil

www.philstockworld.com

Philip R. Davis is a founder of Phil's Stock World (www.philstockworld.com), a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders. Mr. Davis is a serial entrepreneur, having founded software company Accu-Title, a real estate title insurance software solution, and is also the President of the Delphi Consulting Corp., an M&A consulting firm that helps large and small companies obtain funding and close deals. He was also the founder of Accu-Search, a property data corporation that was sold to DataTrace in 2004 and Personality Plus, a precursor to eHarmony.com. Phil was a former editor of a UMass/Amherst humor magazine and it shows in his writing -- which is filled with colorful commentary along with very specific ideas on stock option purchases (Phil rarely holds actual stocks). Visit: Phil's Stock World (www.philstockworld.com)

© 2010 Copyright  PhilStockWorld - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules