World economy talk

[zonda]

Mga Sirs, ano po ba advise nyo. kasi may kailangan akong bayaran sa atin. Ito na ba ang right time habang ok pa ang palitan ng dollar-peso? Ano ba projection nyo dollar-peso exchange rate for the next 6 months?

Thanks

[uls]

War or no war, the only solution is to inflate out of this mess

inflate the money supply

HYPERINFLATE the money supply

replace the money that has been wiped out by massive deleveraging

they have to create TENS OF TRILLIONS OF DOLLARS in a short period of time

that's what they have to do to revive the economy

question is...

will they succeed?

[tidus1203]

My solution which is IMO a good compromis. Let the insolvent banks go bankrupt and let the solvent ones get the assistance from the TARP instead. Then use the some of the TARP funds as deposit insurance instead of using it to buy bad assets. Wipe out the shareholders and the bondholders of the insolvent banks because they are old enough to understand the risks they are getting into by putting money into these institutions whether as an equity investor or as a creditor...

[uls]

yep

thing is, the US govt is protecting the bondholders

the US govt is intimidated by bondholders

like PIMCO

[uls]

the US govt will only allow smaller banks to fail

not the big ones

Four U.S. Banks Seized, Bringing Total for Year to 13
http://www.bloomberg.com/apps/news?p...GeM&refer=home

Feb. 13 (Bloomberg) -- Banks in Florida, Illinois, Nebraska and Oregon were shut by state regulators, boosting the toll of failed institutions to 13, as a worsening economy and slumping housing market pushes home foreclosures to records.

Riverside Bank of the Gulf Coast in Cape Coral, Florida; Sherman County Bank in Loup City, Nebraska; Corn Belt Bank and Trust Co. of Pittsfield, Illinois; and Pinnacle Bank of Beaverton, Oregon were closed by state regulators today. The Federal Deposit Insurance Corp. was named receiver.

TIB Bank of Naples, Florida, will buy Riverside’s $424 million in deposits, except $142.6 million in brokered deposits, for a 1.3 percent premium. Heritage Bank of Wood River, Nebraska, will pay a 6 percent premium for Sherman County’s $85.1 million in deposits. Carlinville National Bank of Carlinville, Illinois, will assume Corn Belt’s $234.4 million deposits for a 1.75 percent premium. Washington Trust Bank of Spokane, Washington, assumed Pinnacle’s $64 million of deposits.

Another example of how the US govt chooses who to save and who to allow to die:

U.S. Won't Help Deal for Florida Bank
http://online.wsj.com/article/SB123449626824881135.html

The future of the largest Florida-based bank is in jeopardy because the U.S. government has declined to prop up a private bid for BankUnited Financial Corp., highlighting the strong hand being played by regulators in picking winners and losers during this banking crisis.

Investors W.L. Ross & Co. and Carlyle Group are interested in a joint purchase of the $14.3-billion Coral Gables, Fla.-based bank, according to people familiar with the matter, but they want the U.S. government to share losses on BankUnited’s $9.5 billion portfolio of troubled mortgages, a major contributor to the company’s net loss of $306 million during the first quarter of fiscal 2009 ended Dec. 31, 2008.

The two firms, which have expressed interest in buying distressed financial companies, also recently have been joined in their effort by hedge-fund manager John Paulson.

However, the government isn’t supporting an assisted transaction, these people said, because it has determined that a potential collapse of BankUnited does not constitute a risk to the larger financial system.

the rule of the jungle is:

you have to be so big, that if you fail, you drag the whole freaking world down with you

your failure poses systemic risk

that's when you are considered TBTF (too big to fail)

that's how you qualify for a bailout

[tidus1203]

What do you do if you can't sell your products and no one is buying and you are losing money as a result? Why your best customers are actually near you So go ahead beg them to buy, even though deep inside they rather not buy

Panasonic orders 10,000 employees to buy its products by July

Friday 13th February, 02:58 PM JST
OSAKA —
Panasonic Corp has directed about 10,000 managerial-level group employees to buy company products by July under the ‘‘Buy Panasonic’’ campaign to shore up shrinking sales that have eroded its profits, company officials said Friday.

Executives and senior managers are being asked to buy at least 200,000 yen worth of Panasonic goods, such as refrigerators, flat-panel TVs and Blu-ray disc players, said Akira Kadota, the spokesman. Lower level managers are asked to buy at least 100,000 yen worth of such products, he said.

The campaign is voluntary, but Panasonic is an old-style Japanese comany where loyalty to the company is deeply rooted among its ranks.

The “buy Panasonic” campaign follows a similar effort among managers at Toyota Motor Corp, who are being asked to buy a Toyota car.

Panasonic is expecting a 380 billion yen net loss for the fiscal year through March, its first annual net loss in six years, and is slashing about 15,000 jobs and shuttering 27 plants worldwide. Panasonic blamed plunging consumer demand, lower gadget prices and the soaring yen, which erodes overseas income, for the poor performance.

Toyota is sinking into its first net loss in since 1950, forecasting a 350 billion yen net loss for the fiscal year through March—a stunning reversal from the record 1.72 trillion yen profit it posted the previous year.

http://www.japantoday.com/category/b...oducts-by-july

[uls]

US dollar index



Gold price



Gold price usually moves opposite to dollar value

when dollar value falls, gold price rises

but lately, even if the dollar is holding its value, gold price is still rising

what is that telling us?

there's uncertainty about the future

there's a lot of fear out there

[tidus1203]

Bottomline for whatever reason (fear or speculative) the supply of GOLD is far and hard to get. I know that first hand. I am talking about physical gold here, madaming mga paper gold dyan (like ETF's) personally though I don't trust anything that is paper. Mahirap na... Gusto ko genuine! (ala Microsoft)

[tidus1203]

What do you do if you can't sell your products and no one is buying and you are losing money as a result? Why your best customers are actually near you So go ahead beg them to buy, even though deep inside they rather not buy


http://www.japantoday.com/category/b...oducts-by-july

Just wanted to slip this in! PANASONIC IDEAS FOR LIFE!!!!

[uls]

talk about Japan...

FAIL

Japan’s GDP Shrinks 12.7%, Most Since 1974 Oil Shock

http://www.bloomberg.com/apps/news?p...v0c&refer=home

Feb. 16 (Bloomberg) -- Japan’s economy shrank at an annual 12.7 percent pace last quarter, the most since the 1974 oil shock, amid an unprecedented collapse in exports and production.

Gross domestic product fell for a third straight quarter in the three months ended Dec. 31, the Cabinet Office said today in Tokyo. The median estimate of 26 economists surveyed by Bloomberg News was for an 11.6 percent contraction.

Exports plunged a record 13.9 percent from the third quarter as global demand for Corolla cars and Bravia televisions evaporated. Toyota Motor Corp., Sony Corp. and Hitachi Ltd. -- all of which are forecasting losses -- are firing thousands of workers, heightening the risk a slump in household spending will prolong the recession.

“The economy is in terrible shape and the scary part is that we’re likely to see a similar drop this quarter,” said Seiji Adachi, a senior economist at Deutsche Securities Inc. in Tokyo. “All we can do is wait for overseas demand to pick up.”

The Nikkei 225 Stock Average fell 0.7 percent as of 9:35 a.m. in Tokyo. The yield on 10-year government bonds rose 2 basis points to 1.28 percent.

The world’s second-largest economy shrank 3.3 percent from the third quarter, today’s report showed. That compared with the U.S.’s 1 percent contraction and the euro-zone’s 1.5 percent decline. Economists predicted a 3.1 percent drop.

Without adjusting for inflation, Japan shrank 1.7 percent from the previous quarter, less than the 2.1 percent analysts estimated. The GDP deflator, a broad measure of price changes, rose 0.9 percent, the first increase in a decade.

[tidus1203]

The only thing not failing over there is the CURRENCY the Yen. Pero para sa kanila masama din yan, pero to Yen holders and Yen savers its actually quite nice. Low inflation, high exchange rates so imports are cheap what more could you ask for if you're a Yen saver?

[uls]

yep safe haven parin ang yen

as long as there is risk aversion, the yen will remain strong

but the market is beginning to question the yen's safe haven status coz of the deteriorating Japanese economy

but the correlation of yen stength/weakness and risk aversion/appetite will still apply for quite some time

[tidus1203]

Follow the price I say. The charts is very clear the downtrend is very evident. The Western currencies will continue to fall against the Yen. Forget it if Japan is in a very bad shape follow the price since the price is the gauge of human fear and greed and fear is killing greed right now...

[tidus1203]

HONG KONG -- The Hong Kong government is considering paying companies to hire new graduates as interns to prevent the unemployment rate from shooting up, according to a media report Monday, citing a source. Financial Secretary John Tsang is likely to announce details of the subsidy in his budget next week, the Standard newspaper reported. The subsidy will only be paid to companies that hire local graduates, the report added.

http://www.foxbusiness.com/story/hon...uates-interns/

Oh san ka pa? Maybe the US should bail out companies who promise to hire people It just get weirder and weirder by the day!

[emanzano]

US dollar index



Gold price



Gold price usually moves opposite to dollar value

when dollar value falls, gold price rises

but lately, even if the dollar is holding its value, gold price is still rising

what is that telling us?

there's uncertainty about the future

there's a lot of fear out there

i think gold has a life of its own irrespective of how the dollar behaves. Remember that it was worth $400/ounce back in 2003, and has risen steadily during the bull runs and even now during the bear months.

but yes, there is definitely a lot of fear out there (i sold one of my cars last month so i'll have some cushion should we see the worst).

I was hoping that travel prices would drop because of this crisis. Instead, a packaged trip to europe is $200 more expensive now that it was in 2008, before the downturn. And the US$ has risen against the peso... it's now around P48:$1 whereas it was around P43 a year ago. Things are slow while prices continue to rise... i think we better start preparing for the great depression of this century...

And my $0.02 worth... this is more political than it is economic. I think the Yen will be worse off than the US$ by year-end. Let's check our graphs around Xmas.

[tidus1203]

That's where price discounts everything philisophy comes in. Ma political man yan or economical its all factored into the price. Mabigat ang trend ng Yen pataas I will post my technicals later to show you the points to consider with the Yen.

[uls]

emanzano:

I think the Yen will be worse off than the US$ by year-end. Let's check our graphs around Xmas.

the USD is the tallest midget

or in an ugly contest , it is the least ugly hehe

the world has no freaking choice

the US economy is f*cked up,

but so is the rest of the world

the world is looking to the US for leadership out of this mess

and the USD, no matter how ugly, will remain the safe haven currency

the other one is the JPY

[tidus1203]

But the JPY is kicking the USD even though the USD is getting higher against the other currencies. So in essence the JPY is the least evil so to speak. Forget the USD/JPY you should look at EUR/JPY and GBP/JPY those are massacred. I will show the technical analysis later for all 3 JPY pairs. The USD is also in a downtrend against the Yen.

[tidus1203]

So here is the WEEKLY chart of the USD/JPY. Its a candlestick chart where one stick equals one week of price action. Kitang kita yung bigat ng trend down. Basic technical analsysis tell us that a trend which always shows lower HIGH's and lower LOW's is a classic downtrend and downtrend's don;t reverse without a solid reverssal pattern (typical reverssal patterns are the double bottom or reverse head and shoulder) and I don't see any. The key price to break though is 95.60 (coincidentally its also the 23.6 Fibonacci retracement level)if the USD/JPY stays below that then there is no chance in hell I think for the pair to go up. But thats only the first resistance the ultimate resistance is in the 100.50 mark break that and this thing has reversed. Also look at the MACD and the Stochastics (the two charts below the price chart, they are both momentum indicators) the MACD is near its all time low meaning there is no upward momentum whatsoever. And the Stochastics is approaching the OVERBOUGHT level which means sooner rather than later we will see another leg downwards.

My investment recommendation. Buy the Japanese Yen if you have it continue to hold.

NOTE: The chart is kinda blurry because Tsikot downsizes the chart you can right click the image and choose View Image to get a better picture of the chart.

[tidus1203]

Then here is the chart for EUR/JPY. NOW this is what you call MASSACRE. Observe the slope of the fall its so much sharper than the slope in the USD/JPY. Key resistance level is 131.40 there I place the red line. Notice everytime the price attacks that level it fails and goes back down again? Three attempts so far, 2 times in August 2008 and one time in December 2008 and they all failed to get past. Like wise momentum idicators are very depressed. There is no end in sight to the downtrend.

Investment Recommendation: Short the EUR/JPY but not now. Wait for a bounce at around 122 then short it.