| Latest Forum Topics / Others |
 Post Reply
|
|
DOW
|
|||||||||||||||||||||||||
|
tanglinboy
Elite |
06-Sep-2007 07:32
Yells: "hello!" |
||||||||||||||||||||||||
|
x 0
x 0 Alert Admin |
Danger: Steep drop aheadEven if the credit crunch passes without a major catastrophe, the prices of stocks, bonds and real estate have a long way to fall. (Fortune Magazine) -- Credit crises have always been painful and unpredictable. The current one is particularly hair-raising because it's occurring amid the first truly global bubble in asset pricing. It is also accompanied by a plethora of new and ingenious financial instruments. These are designed overtly to spread risk around and to sell fee-bearing products that are in great demand. Inadvertently (to be generous), they have been constructed to hide risk and confuse buyers. How this credit crisis works out and what price we end up paying has to be largely unknowable, depending as it does on hundreds of interlocking and often novel factors and how they in turn affect animal spirits. In the end it is, of course, the management of animal spirits that makes and breaks credit crises. ut even if this crisis is contained, we are facing some near certainties that should be understood. First, house prices may move on euphoria in the short term, but long term they depend on family income - the ability to pay mortgages and rent. At levels well above the normal four times family income, the market gradually loses first-time buyers until prices break and fall back to affordable levels. House prices are in genuine bubble territory in the U.S., Britain and many other markets. In Britain and in some critical large cities in the U.S., for example, the multiple of family income has risen to over six times from below four times, and in London last year the percentage of first-time buyers was the lowest since records began. From these high levels, prices are guaranteed to fall. In doing so, they will reduce consumer borrowing and spending power. They will also increase mortgage defaults, most of which lie ahead, and lower financial profits and confidence. Second, profit margins are at record levels around the world. They have lifted stock prices directly alongside the rising earnings. They have served to raise P/E multiples as well, for surprisingly, investors on average reward higher margins with higher P/Es. This is fine for an individual stock, but for the entire market, multiplying boom-time profits by high P/Es is horrific double counting and sends markets far too high in good times (and far too low in bad times). Higher margins also indirectly raise prices by providing more cash flow for buybacks and takeovers. So high profit margins offer multiple supports for the market, but they will certainly decline. They are the most dependably mean-reverting series in finance: If high margins do not attract greater competition, then a wheel has fallen off the capitalist machine. For U.S. and developed foreign markets, fair value (defined as normal P/E times normal profit margins) is about one-third below today's level, and for emerging markets it is about 25 percent lower. Third, and most important, risk will be repriced. Last year a broad base of risk measures - including volatility (VIX), junk and emerging debt spreads, CD rates, high-quality vs. low-quality stock values - reflected the lowest risk premiums in history. On some data, indeed, investors actually appeared to be paying for the privilege of taking risk. For fixed income, some spreads widened slowly at first this year and then unexpectedly widened rapidly in recent weeks. For equities, though, the process has hardly started. Junkier stocks continued to outperform into June, even as the subprime woes spread. At the end of the cycle, high-quality blue chips will once again sell at normal premiums or better. Investment bubbles and high animal spirits do not materialize out of thin air. They need extremely favorable economic fundamentals together with free and easy, cheap credit, and they need it for at least two or three years. Importantly, they also need serial pleasant surprises in such critical variables as global GNP growth. All of this has been provided. These conditions always produce excess and are always extrapolated. Unfortunately, like almost all other investment factors, they eventually move back to normal. As wonderfully favorable factors cool off, asset prices will be under broad pressure, and risky assets will be under extreme pressure. If the credit crisis gets out of control, this will happen quickly and painfully. The important point to make here is that even if all works out well on the credit front, it will still happen slowly. Jeremy Grantham is chairman of investment firm GMO, where he oversees quantitative products and investment strategies.  |
||||||||||||||||||||||||
| Useful To Me Not Useful To Me | |||||||||||||||||||||||||
|
synnexo
Veteran |
06-Sep-2007 01:31
|
||||||||||||||||||||||||
|
x 0
x 0 Alert Admin |
Aren't these figures coming out from the US garden are expected? Unemployment rates up, mortgage default rates up, home sales down, more banks involve in subprime, etc. Big companies affected by subprime are cutting heads, obviously more will file for unemployment. Why are investors still worried? These Americans are up to something very naughty. |
||||||||||||||||||||||||
| Useful To Me Not Useful To Me | |||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||
|
synnexo
Veteran |
06-Sep-2007 01:05
|
||||||||||||||||||||||||
|
x 0
x 0 Alert Admin |
The going gets rough on Wall StreetStocks pull back as investors eye weak ADP employment report, drop in pending home sales, more bank woes.But will the tough gets going??
|
||||||||||||||||||||||||
| Useful To Me Not Useful To Me | |||||||||||||||||||||||||
|
idesa168
Elite |
06-Sep-2007 00:00
|
||||||||||||||||||||||||
|
x 0
x 0 Alert Admin |
It's about time the DOW falls after hanging there for so long. I am expecting this to happen soon and it's here tonight. Don't fret about the fall, as I see it heathy fall, a fall for a reason. If DOW keeps crawling up till 18 Sept, do u think the FED will cut interest rate? I think DOW will find all sort of excuses to fall all the way to 18 Sept. So guys, hold your guns, prepare for the rough ride ahead STI's fall tomorrow might not be significant, as it seemed to have decoupled from DOW these few sessions, but please dun take my words too seriously. Those who wish to bottom fish tomorrow, may not be wise to do so, as I see there will be a few more fall from DOW. Then again, will STI take cue from DOW's fall, it's your take, your risk. But if the FED decided to cut before 18th Sept, then I will loose in this phycology game. I am still at the side line...hahaha! |
||||||||||||||||||||||||
| Useful To Me Not Useful To Me | |||||||||||||||||||||||||
|
Green8
Senior |
05-Sep-2007 23:37
|
||||||||||||||||||||||||
|
x 0
x 0 Alert Admin |
Expected. No clear answer from FED Chairman, neither this nor that......No great solution plan ? how to invest when full of ?????? | ||||||||||||||||||||||||
| Useful To Me Not Useful To Me | |||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||
|
jng1103
Senior |
05-Sep-2007 23:34
|
||||||||||||||||||||||||
|
x 0
x 0 Alert Admin |
A bit sianz here... after seeing STI rally this morning and now DOW going south... sianz leh... Ah Ben, pls do something... quick quick... | ||||||||||||||||||||||||
| Useful To Me Not Useful To Me | |||||||||||||||||||||||||
|
timewatch
Senior |
05-Sep-2007 23:33
|
||||||||||||||||||||||||
|
x 0
x 0 Alert Admin |
dow down, tomorrow sgx underground, oh oh |
||||||||||||||||||||||||
| Useful To Me Not Useful To Me | |||||||||||||||||||||||||
|
paperless
Senior |
05-Sep-2007 23:29
|
||||||||||||||||||||||||
|
x 0
x 0 Alert Admin |
DOWI : -174 | ||||||||||||||||||||||||
| Useful To Me Not Useful To Me | |||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||
|
Pension
Elite |
05-Sep-2007 22:23
|
||||||||||||||||||||||||
|
x 0
x 0 Alert Admin |
Attention Mr Bush and Mr Bernake, both of you have to work overtime to understand the mood of the investors. |
||||||||||||||||||||||||
| Useful To Me Not Useful To Me | |||||||||||||||||||||||||
|
Pension
Elite |
05-Sep-2007 22:00
|
||||||||||||||||||||||||
|
x 0
x 0 Alert Admin |
all in red , dow -96.98 | ||||||||||||||||||||||||
| Useful To Me Not Useful To Me | |||||||||||||||||||||||||
|
lookcc
Master |
05-Sep-2007 21:50
|
||||||||||||||||||||||||
|
x 0
x 0 Alert Admin |
down until interest rate cut n then up only one day n then down again?? run?? | ||||||||||||||||||||||||
| Useful To Me Not Useful To Me | |||||||||||||||||||||||||
|
tanglinboy
Elite |
05-Sep-2007 21:47
Yells: "hello!" |
||||||||||||||||||||||||
|
x 0
x 0 Alert Admin |
Dow now down 92 points. Crazy market. One day optimistic, another day pessimistic. Wall St. pulls back at openStocks sound retreat as investors show caution ahead of economic reports.NEW YORK (CNNMoney.com) -- U.S. stocks pulled away from recent gains at Wednesday's open, with investors cautious ahead of economic reports that include the August employment figures at week's end. The Dow Jones industrial average lost 0.6 percent. The Nasdaq composite index slipped 0.5 percent. The Standard & Poor's 500 index was down 0.5 percent. |
||||||||||||||||||||||||
| Useful To Me Not Useful To Me | |||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||
|
cheongwee
Elite |
05-Sep-2007 18:58
|
||||||||||||||||||||||||
|
x 0
x 0 Alert Admin |
For your reading pleasure... http://www.spiritoftruth.org/eclipses.htm |
||||||||||||||||||||||||
| Useful To Me Not Useful To Me | |||||||||||||||||||||||||
|
dlimck
Member |
05-Sep-2007 13:05
|
||||||||||||||||||||||||
|
x 0
x 0 Alert Admin |
Dow futures is -ve37 now, doesn't looks good. |
||||||||||||||||||||||||
| Useful To Me Not Useful To Me | |||||||||||||||||||||||||
|
singaporegal
Supreme |
05-Sep-2007 09:36
Yells: "Female TA nut" |
||||||||||||||||||||||||
|
x 0
x 0 Alert Admin |
STI's gains seem broad based today. I would really like to see the large volumes returning to the market. | ||||||||||||||||||||||||
| Useful To Me Not Useful To Me | |||||||||||||||||||||||||
|
Pinnacle
Master |
05-Sep-2007 08:30
|
||||||||||||||||||||||||
|
x 0
x 0 Alert Admin |
U.S. stocks jumped on an optimistic outlook for technology shares and gains in oil prices that lifted energy shares. The Nasdaq composite index rallied for a fourth straight session and the S&P 500 broke above its 50-day moving average for the first time since July 24, with each index notching gains of more than 1%. The Dow Jones industrial average rose 91.12 points, or 0.68%, to end at 13,448.86. The Standard & Poor's 500 Index was up 15.43 points, or 1.05%, at 1,489.42. The Nasdaq Composite Index was up 33.88 points, or 1.30%, at 2,630.24. The Nasdaq has risen 5.2% in the last four sessions - its best four-day run since October 2003. |
||||||||||||||||||||||||
| Useful To Me Not Useful To Me | |||||||||||||||||||||||||
|
tiandi
Senior |
04-Sep-2007 23:14
|
||||||||||||||||||||||||
|
x 0
x 0 Alert Admin |
read a nice DJI chart on this link: http://stockcharts.com/c-sc/sc?s=$INDU&p=D&yr=0&mn=5&dy=0&i=p30970609868&a=115626680&r=167 |
||||||||||||||||||||||||
| Useful To Me Not Useful To Me | |||||||||||||||||||||||||
|
Pinnacle
Master |
04-Sep-2007 23:14
|
||||||||||||||||||||||||
|
x 0
x 0 Alert Admin |
Data looks good!!! GM has to up also to be really positive.
|
||||||||||||||||||||||||
| Useful To Me Not Useful To Me | |||||||||||||||||||||||||
|
Pinnacle
Master |
04-Sep-2007 23:11
|
||||||||||||||||||||||||
|
x 0
x 0 Alert Admin |
At least now picking up momemtum.. If this goes on, STI will also cheong tomorrow!!!
|
||||||||||||||||||||||||
| Useful To Me Not Useful To Me | |||||||||||||||||||||||||
|
paperless
Senior |
04-Sep-2007 22:42
|
||||||||||||||||||||||||
|
x 0
x 0 Alert Admin |
Tday last report, Motor Vehicle Sales to be released on 4am sg time. Good luck. |
||||||||||||||||||||||||
| Useful To Me Not Useful To Me | |||||||||||||||||||||||||
+0.32%