World economy talk

[Ry_Tower]

I was referred by uls. He asked me to keep this thread going so here goes...

The U.S. dollar rallied last week on comments from Federal Reserve chair Janet Yellen that the central bank is in the process of normalizing monetary policy. If U.S. economic growth is sustained, quantitative easing will end this year and interest rates will start to rise in 2015. Many view U.S. economic growth to be the strongest among developed countries and the Federal Reserve will be the first central bank among the big-three central banks to withdraw monetary stimulus. I believe the U.S. dollar will strengthen more in the coming months.

Welcome to tsikot and this thread.

Suwerte pa rin ni uls.

[baludoy]

informative posting debut for lady bathory. i hope to see more of the same

teka, di kaya si uls din si lady bathory? i keeed! i keeed! :laughbounce:

[chua_riwap]

informative posting debut for lady bathory. i hope to see more of the same

teka, di kaya si uls din si lady bathory? i keeed! i keeed! :laughbounce:

may bagong handle.
ok lang. sana hwag na i-ban ulit.......

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[Lady Bathory]

why am i not posting uls asked. ok ok... what asset class performed best in Q1 2014? agricultural commodities.



there. happy now?

[falken]

why am i not posting uls asked. ok ok... what asset class performed best in Q1 2014? agricultural commodities.



there. happy now?

Thanks!

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[Lady Bathory]

Why i think the U.S. dollar will strengthen further: being the supplier of the world's reserve currency, the U.S. must constantly run a trade deficit with the rest of the world in order to supply dollars for global trade and finance. The trade deficit has been moderating and the pullback of stimulus by the Federal Reserve will shrink the supply of dollars to the rest of the world. Dollar scarcity = stronger dollar.

[safeorigin]

Hmmm... some say US will undergo deflation because of a growing older population.

[brainmafia_310]

Is it true that the brics is cutting their reliance to dollar and of their dollar reserve? Let us see how the brics particularly china will dispose their dollar reserved to earn bigtime with their reserves.

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[Lady Bathory]

Due to the concern over depreciation of the U.S. dollar China has been diversifying away from the dollar by holding a larger share of non-dollar currencies and assets. But the diversification is limited by the current global financial and trade system. The dollar still dominates international transactions, asset holdings and official reserves. As long as U.S. dollar remains the dominant reserve currency China cannot hold less than 50% of its reserves in dollars.

[brainmafia_310]

^^^thanks.

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[Monseratto]

Dow fell 266 points last night.

2014 crash will be worse than 1987's: Marc Faber

2014 crash will be worse than 1987's: Marc Faber
Alex Rosenberg | *CNBCAlex
5 Hours Ago

Marc Faber says the stock market is setting up for a decline more painful than the sudden crash of 1987.

"I think it's very likely that we're seeing, in the next 12 months, an '87-type of crash," Faber said with a devious chuckle on Thursday's episode of "Futures Now." "And I suspect it will be even worse."

Faber, the editor and publisher of the Gloom, Boom & Doom Report, has recently called for growth stocks to decline. And he says the pain in the Internet and biotech sectors is just getting started.

"I think there are some groups of stocks that are highly vulnerable because they're in cuckoo land in terms of valuations," Faber said. "They have no earnings. They're valued at price-to-sales. And this is not a good metric in the long run."

To be sure, there are prominent investors that disagree with Faber, among them legendary stockpicker Bill Miller, who said this week that conditions for a bad market simply don't exist.

But it's not just momentum stocks that Faber is wary of. He says that investors are coming to a stark realization.

"I believe that the market is slowly waking up to the fact that the Federal Reserve is a clueless organization," Faber said. "They have no idea what they're doing. And so the confidence level of investors is diminishing, in my view."

As investors adjust to this fact, and valuations shrink, he predicts a massive decline in the market.

"This year, for sure—maybe from a higher diving board—the S&P will drop 20 percent," Faber said, adding: "I think, rather, 30 percent. Who knows. But all I'm saying is that it's not a very good time, right now, to buy stocks."

Previously, in August 2013, Faber predicted that a 1987-style crash was coming. The S&P 500 is about 9 percent higher since he made that call.

—By CNBC's Alex Rosenberg

[uls]

Why i think the U.S. dollar will strengthen further: being the supplier of the world's reserve currency, the U.S. must constantly run a trade deficit with the rest of the world in order to supply dollars for global trade and finance. The trade deficit has been moderating and the pullback of stimulus by the Federal Reserve will shrink the supply of dollars to the rest of the world. Dollar scarcity = stronger dollar.

hey Bathory you forgot about yield

the dollar cannot rally when the US 10Y yield keeps falling




there's no incentive to hold the dollar when real rates (nominal minus inflation) are near zero

[chua_riwap]

welcome back uls.....

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[brainmafia_310]

WB sir ULS!!! Eto na maganda dalawa na ang analyst dito.

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[Monseratto]

Effect of stimulus wind down...bond buying up, stock sell off.

http://finance.yahoo.com/news/japan-...hTvHgAMvWTmYlQ

The U.S. bond market rallied this week on renewed safe-haven bids as well as relief buying in reaction to the release of minutes from the Federal Reserve's March 18-19 policy meeting.

The intense appetite for bonds spread into this week's auction of $64 billion worth of longer-term debt, which raised $13.5 billion in new cash for the federal government.

An MSCI benchmark of global equities fell to a two-week low, spurred by a broad risk-averse tenor among investors that led to selloffs in higher-yielding currencies and emerging market assets.

"Today's decline is what we've been seeing all week. The weakness in the biotech and momentum names is getting investors worried about where the market is headed in the near-term, eventually triggering a selloff in everything," said Robert Pavlik, chief market strategist at Banyan Partners in New York.

"Our long-term outlook on the market hasn't changed because if you understand why the market is selling off, you know it's not rational, that it doesn't make sense," he added.

MSCI's all-country world equity index fell to lows last seen in late March and was last trading down 1.0 percent.

The dollar index, which measures the greenback against six major currencies, rose 0.13 percent, and the dollar edged higher against the yen, also up 0.13 percent. The euro fell slightly after being ahead a tad against the dollar most of the session.

"Bad news for the world is good news for the dollar," said Steven Englander, managing director and global head of G10 FX strategy at CitiFX in New York. "Once fears about the equity market intensified, they picked up a more conventional type of mode to buy the dollar."

[uls]

from the article above:

The dollar index, which measures the greenback against six major currencies, rose 0.13 percent, and the dollar edged higher against the yen, also up 0.13 percent. The euro fell slightly after being ahead a tad against the dollar most of the session.

"Bad news for the world is good news for the dollar," said Steven Englander, managing director and global head of G10 FX strategy at CitiFX in New York. "Once fears about the equity market intensified, they picked up a more conventional type of mode to buy the dollar."

the dollar has been falling all week

QE taper is supposed to be dollar positive. investors built up large long positions in the dollar but the dollar went in the opposite direction

investors suffered losses as the dollar fell against all major currencies

declining US yields makes the dollar less attractive to hold

[falken]

Welcome back uls.

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[uls]

thanks dudes

[Lady Bathory]

Uls, i believe yields will rise as tapering continues. The bond buying program will come to an end in October at the current pace of tapering. I think the 10-year note will be yielding 3% by then.

[Gumusut_Amige]

from the article above:



the dollar has been falling all week

QE taper is supposed to be dollar positive. investors built up large long positions in the dollar but the dollar went in the opposite direction

investors suffered losses as the dollar fell against all major currencies

declining US yields makes the dollar less attractive to hold

welcome back bro uls... are you implying to dump the green buck for now? Or gonna hold it until when?



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