World economy talk

[uls]

Lagot ang mga Irish pag retire nila

Ireland govt to invest billions in its banks...

will use funds from pension fund

http://www.ft.com/cms/s/0/220cd480-c...077b07658.html

A fund set up to finance public service pensions for those retiring a decade from now is to be used to fund the Irish bank bail-out, under plans announced at the weekend.

The National Pension Reserve Fund is Ireland's own sovereign wealth fund, established when the country was running healthy budget surpluses. It had assets under management of €18.7bn (£16.8m) at August 31. Under the legislation, it was not envisaged that money would be drawn down until after 2025.

Brian Lenihan dismisses criticism, insisting there will be no downside for the taxpayer or the pension fund from a €10bn investment in the Irish banks, claiming instead that the fund will benefit from the “upswing” in the bank shares.

[tidus1203]

That's quite risky for a retirement fund. But then again, its also a sovereign wealth fund so wala ding say mga pensioners. Too bad...

[uls]

Govt intervention or non-intervention,

just look at where we are now

the global financial system is on freaking life support

the world's largest banks are being kept alive by fund injections and govt guarantees and bailouts

The banks have to be kept alive coz their collapse will bring down the entire civilized world...

Life as we know it would end...

How did we freaking get here?

The system got us here

the Anglo American designed financial system

A highly interconnected, tightly coupled system

OVERLEVERAGED

PRONE TO COLLAPSE

Now, how do we get out?

THEY are still trying to figure that out

THEY are making up the rules as they go

THEY are clueless

[tidus1203]

Wow sir uls, you are even more grim than me Di naman end of the civilization, I mean in world history it always happens someone collapses and someone takes over.

[uls]

hehe

i factored in Armageddon already

i remember September too clearly

it was the scariest month this year

[tidus1203]

I loved September that was the month the Japanese Yen broke the Y100 mark to the USD. It was so sweet...

[uls]

hahaha

trader ka talaga

that was the month nobody knew for sure which bank would fail next

interbank lending stopped

commercial paper market stopped

money market

everything stopped

rich people couldnt sleep

Lehman palang yan

[uls]

panoorin nyo ito

this is so funny

Fred Thompson on the Economy

[ame="http://www.youtube.com/watch?v=RKc4XFK0iVY"]YouTube - Fred Thompson on the Economy[/ame]

[tidus1203]

We are going to spend our way back to prosperity... Natawa ako doon. Kala ko ba prosperity comes from saving and investing and not borrowing and consuming? Para army enlisting pag gera, you are being called by Uncle Sam to spend the hell out of your pathetic life and sell your kids future and save the US economy from the enemy este the scrooges out there

ASK NOT WHAT YOUR COUNTRY CAN SPEND FOR YOU, BUT ASK WHAT YOU CAN SPEND FOR YOUR COUNTRY.

[Monseratto]

panoorin nyo ito

this is so funny

Fred Thompson on the Economy

"It's not our problem..."

[tidus1203]

Yep he's right its not our problem, because I am slowly dumping my US Dollars...

[emanzano]

panoorin nyo ito

this is so funny

Fred Thompson on the Economy

hahaha! i have to admit, that was funny. good post uls.

[uls]

hehehe

i'm glad you guys enjoyed that serious video



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China’s Zhou Sees More Rate Cuts as Investment, Economy Weaken
http://www.bloomberg.com/apps/news?p...bEw&refer=home

Dec. 16 (Bloomberg) -- China’s central bank Governor Zhou Xiaochuan said interest rates may fall again this month after exports declined, inflation slowed and a report today showed property investment cooled.

“From now until the beginning of next year is full of interest-rate-cut pressure,” Zhou said in Hong Kong, where the Financial Stability Forum is meeting. Consumer prices are “going down and sometimes even faster than we think,” he said.

Global rate cutting orgy

[tidus1203]

Let me add something new here in this thread. For the most part we always talk about the fundamentals, but now I will also add the technicals. Technical analysis is the study of price movement (anything from stocks, to currencies, to commodities, even index and futures contract can be charted) to determine the psychology of the market. It’s a great tool to make informed investment or trading decision.

For today let me add my technical analysis of the EUR/USD.

Here is the daily chart of the EUR/USD (it’s a daily chart meaning one bar equals one day). The Red Line is the 50 day moving average, the Blue Line is the 100 day moving average and the Green Line is the 200 day moving average.





We can see that for the past 3 months the EUR/USD has been falling from its all time high of 1.60. But then it found a solid base and it looks like it has bottomed. And I will boldly say that it has bottomed and has now broken the consolidation to the upside meaning bullish. But if you plan to get in, not just yet wait for a pullback. Look at the RSI and Stochastics they are very overbought already so expect a pullback but the general trend now is UP. Next resistance is 1.3750 but I think it can break that easily. Beyond that the next price resistance is 1.42 and beyond that 1.4550. 1.4550 is a strong resistance and if I was a betting man I would say it will stop there but if it does break that we could go back to those old highs near 1.60.

[uls]

rate cuts

quantitative easing

temporary dollar strength due to strong demand for USD in uncertain times

USD peaked when the market was extremely volatile a few months back

Since then, volatility has declined (check VIX)

incentive for holding on to the USD has dminished

[uls]

Fed funds rate = .25%

http://www.cnbc.com/id/28254875

what else will the Fed do?

In addition to the rate cut, the Fed said it was prepared to expand already announced large purchases of debt issued by government-sponsored mortgage agencies to support the battered US housing market.

and might do...

The Fed, however, remained cautious about another unusual measure, which Fed Chairman Ben Bernanke first floated two weeks ago. The statement said the central bank was still "considering" buying long-term Treasury securities, which is also thought to be aimed at lowering borrowing costs by going around commercial banks.

quantitative easing

By boosting the quantity of money in the financial system, the Fed has engaged in so-called "quantitative easing" to provide economic relief.

[tidus1203]

Hehehehe what the hell should we do with all these US Dollars, they only yield 0.25%... By the way the USD dropped against every currency out there more notably against the EUR. The EUR reached 1.4050 overnight, the Yen is below 89, the Swissy at 1.12 and Cable is 1.5570...

[uls]

^^^

umm... spend it as fast as possible? hehe

they are punishing the savers

there is no more incentive to hold on to USD

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global trade slowdown indicator:

Singapore reports fall in shipping traffic
http://www.ft.com/cms/s/0/2275d384-c...077b07658.html

Singapore reports fall in shipping traffic
Published: December 16 2008 06:09 | Last updated: December 16 2008 06:09

Singapore, the world’s biggest container port, suffered last month its first fall in throughput traffic since 2001 due to a slowdown in global exports that has affected the Asian shipping industry.

Container traffic shrunk by 1.5 per cent in November from a year ago to 2.29m twenty-foot equivalent units (TEUs), the standard industry measurement, Singapore’s Maritime and Port Authority said. Monthly traffic volume has been slowing since July, although total shipments have increased by 9 per cent to 27.8m TEUs through November from a year ago.

[tidus1203]

Well that is if you're a spendaholic but how about investors and people who want to make money what do they do with their US Dollar? I think the FX market has the answer and its very clear investors don't like how the government is making the money worthless virtually. I mean 0% rate, you get nothing for your US Dollar. Wow now even holding the Japanese Yen (which has been the carry trade currency of choice for a decade or more) has now a higher interest rate than the USD. Amazing!

[uls]

Go into riskier assets

Buy equities

considering the market reaction here in Asia, investors are dumping US treasuries and going into equities

the Fed rate cut forced money out of their hiding places.

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take note of this statement -- Fed will hold rates low for an extended period