The Great International Depression of 2008 & Beyond /

tags: GD2 Credit Crunch Financial Crisis California ious UK rescue package bailouts UK Reform Plan Germany agrees on 50bn stimulus package UK officially in recession - 23rd Jan. 09 Davos 2009 California to cut 10% of Civil Service $16 trillion bad debt Telegraph cover-up Eastern Europe to Default ? / Strains on the Eurozone

Banks collapsing, halves of millions of people unemployed, national debts rocketting, unbalanced budgets, stimulus packages, inflation, deflation, biflation - if it is generally related to this topic stick it in here. We had a good Iseq thread going but the iseq turned into a school shop (Anglo was around 34 cents today). We have the Irish Economy and Budget thread and that can serve alongside the specific Iceland one as all these economies undergo severe pressures from all angles over the next while. Feel free to open other threads on specific stuff but it might disappear in here after a while that the wind goes out of it.

For example, over the past week some $30 Billion in Treasury Bills were sold at 0% and god knows what it means but it looks newsworthy.

Quote :

Dec. 9 (Bloomberg) -- The Treasury sold $30 billion of four-week bills at zero percent for the first time since it began selling the securities in 2001 amid persistent demand for the safety of U.S. debt during the worst financial crisis since the Great Depression.

The bills were sold at a high discount rate of zero percent, the Treasury Department said today in Washington. The government received bids for the bills totaling more than four times the amount sold.
..
..
Yields on government securities have plummeted this year to record lows as investors have gravitated toward their safety as stocks and emerging-market assets plunged. Rates on three-month bills, viewed as a haven in times of turmoil, traded at a negative rate of 0.01 percent today. The Treasury sold $27 billion in three-month bills yesterday at a rate of 0.005 percent, the lowest rate since it starting auctioning the securities in 1929.

Bloomberg

Looks like less people are taking a risk with putting their money into enterprises with some risk associated. Has it anything to do with Obama's plans ? Does it mean negative or 0% growth in the near term or just over the 4 weeks ahead ?

What's the difference between putting it under the mattress bar the risk of getting burgled ?

It looks bad anyway and anything that looks bad will look good on this thread. The badder the better.

O jesus where did I put my Rennies ?

Closer to home , bank stocks are in bits.

http://www.rte.ie/business/markets/iseq.html

Anglo Irish closed today at 0.33 (low 0.28 ) and BOI closed at 1.00

S&P have dropped Irish banks from it's top group.

http://www.rte.ie/business/2008/1210/banks.html

It is good that you recognise that things looking bad is good.

Remember last year when A-T was saying things were good, well we know how wrong he was and that was very bad.

I would agree that all general economic issues should be in one thread as there are only a relatively small number of posters.

Big single issues like the budget can have their own thread.

Where has Rockyracoon gone. He was great.

Lads sometimes want to go where the audience is larger when talking about economics. the iseq thread on Pie has nearly 200000 views.

I would guess about 300 unique viewers each day. Does anyone know the real figure for that thread I wonder.

It seems Cookie has too departed

Thats what happens when numerous posters gang up on one. That will never happen to me hopefully

Ha ha Dan. Sometimes on the other place's ISEQ thread it was more a case of you (on your own) ganging up on numerous posters. Ha ha.

I'd buy Anglo at 33c.

I'd buy it for 33c.

evm that's a good link on the banks - they are getting relegated. Maybe we could get a list sometime of the stocks that have shifted into their place if that's what happens - I'd guess it might be more food stocks.

youngdan
rockyracoon left because of a few flippant remarks on a thread about Bertie. I think there might have been a bit more of a political stimulus to ejectulate himself though. Rockyracoon was a deadly poster on the economics for sure. I have to trawl around in the Pin or on p.ie or beyond for some crumbs to satisfy my thirst for news of financial horror since he's gone although Squire sometimes brings good bad news around, thankfully. We have a good few posters left who are interested though. Even on p.ie there are only a handful of posters who talk about that stuff and I suppose the ISEQ thread there is a monument on the irish net.

You won't get ganged up on though yd - not as long as you take the BLUE pill anyway

coc wrote:

I'd buy it for 33c.

Plenty of takers for Anglo. I'd be worried about all this consolidation talk myself.

I suppose in theory the S&P relegation will do more damage to the shares tomorrow, as it would be harder for Irish banks to get credit at a good price now. Is that right ?

That other thread is a dog eat dog world at times. There is one fool back there who I am waiting to nail though when what I expect eventually happens but as Anorak said getting the direction of a move is difficult enough but getting the timing also is close to impossible.

Lads get upset too easily. Getting worried over Bertie is a bit much. Cael too is gone but he I assume left solely due to time constraints as is he not posting on at least 2 more sites. A number of new posters are here as you mention and things are fine

More are tempted to buy but the market is telling us that this bank is done. The shares are going to zero

coc wrote:

I'd buy it for 33c.

Why?

Can't understand Readymix at 23 cents. I know there isn't much building, but you always need concrete. It is as basic as wheat and rice. Where would most Mafia films be without the stuff? Probably something I am unaware of is responsible.



I miss Rockyracoon he was very good in a succinct, analytical and balanced way. Probably be heading out East soon myself.

Don't forget your computor

Squire wrote:

coc wrote:

I'd buy it for 33c.

Why?

I was attempting comedy.

As Dan says, the market is speaking. A company that posted profits north of 750million a few days ago is now worth less than a third of that. If it wasn't going to zero the management would be working on a buyout right now. The fact that they are not suggests (to me anyway, who admittedly knows nothing of such matters) that they think it is essentially worthless.

One of the telling indicators of the deepening nature of this worldwide retrenchment is the average of forecasts for the world's leading economies in the back pages of the Economist. In the last forecast, 7 out of 14 economies were expected to grow on average. That figure has now fallen to 2. Canada and Australia are the only two with any hope of growing now and Canada is looking perilous in that position.

Britain is expected to have a humdinger of a recession as the quarterly figures published today confirm. The -1% average forecast for GDP in 2009 has been cut further to -1.4% and is possibly going to be cut further.

Venezuela is also expected to have a deep recession in 2009 as the collapse in oil revenues bite into its economy as I discussed a while ago. Now that the prices at the pump are falling below the 1 euro level, Venezuela is to see its GDP shrink by 3%. It'll be interesting to see how they perform in 2010. I wonder will they be able to recover from that slump.

What you know is common sense coc and that is better than most.

Stock pickers/analysts are divided into 2 groups. Fundamental Analysis and technical analysis.
The fundamental guys will read up reports etc and make a decision based on that

The technical guy does not want to know anything about the company, nothing. His thinking is that all that is publically known has already been studied and acted upon. This knowledge is reflected in the price action and charts of the stock. So by studying the past chart action he predicts the future action

This sounds crazy but it actually seems to work. You will hear this talking about "resistance" etc at different prices. Because so many believe in technical analysis it is a self fulfilling prophecy.

So many analysts actually do know nothing.

Squire wrote:

Can't understand Readymix at 23 cents. I know there isn't much building, but you always need concrete. It is as basic as wheat and rice. Where would most Mafia films be without the stuff? Probably something I am unaware of is responsible.

Speaking of Venezuela, why aren't people putting their money into oil now that it's so low ? Of all the things isn't that something that's predicted to escalate in price after a bit of a 5-year slumber ? Or are peaple waiting until it goes to $20 a barrel ?

youngdan wrote:

What you know is common sense coc and that is better than most.

Stock pickers/analysts are divided into 2 groups. Fundamental Analysis and technical analysis.
The fundamental guys will read up reports etc and make a decision based on that

The technical guy does not want to know anything about the company, nothing. His thinking is that all that is publically known has already been studied and acted upon. This knowledge is reflected in the price action and charts of the stock. So by studying the past chart action he predicts the future action

This sounds crazy but it actually seems to work. You will hear this talking about "resistance" etc at different prices. Because so many believe in technical analysis it is a self fulfilling prophecy.

So many analysts actually do know nothing.

Nicole Elliott of Mizuho did that on European Closing Bell on CNBC on Tuesdays. It's fascinating to see the technical wizardry used by these people. 200-day moving averages, relative strength indices, Fibonacci curves, momentum, upward-flowing channels, downward-flowing channels, resistance and support levels. It's more art than science.

Auditor #9 wrote:

Squire wrote:

Can't understand Readymix at 23 cents. I know there isn't much building, but you always need concrete. It is as basic as wheat and rice. Where would most Mafia films be without the stuff? Probably something I am unaware of is responsible.

Speaking of Venezuela, why aren't people putting their money into oil now that it's so low ? Of all the things isn't that something that's predicted to escalate in price after a bit of a 5-year slumber ? Or are peaple waiting until it goes to $20 a barrel ?

I feel the recession is going to continue to bite that price and it could tumble all the way down to $20 per barrel. That said, it doesn't actually put any more new oil into the ground so the long term fundamentals of supply and demand should re-assert themselves in the future and lead to an overall rise in the price to somewhere near $150 again.

Worst-hit of all will be poor Iceland. Their economy is expected to contract by about 10 percent next year with the unemployment rate moving from almost zero to about 6 percent.

I wonder will they have a swift recovery in 2010 or another year of pain with further reductions in GDP. Quite possibly the latter given how profoundly over-leveraged their economy is.

Ard-Taoiseach wrote:

Worst-hit of all will be poor Iceland. Their economy is expected to contract by about 10 percent next year with the unemployment rate moving from almost zero to about 6 percent.

I wonder will they have a swift recovery in 2010 or another year of pain with further reductions in GDP. Quite possibly the latter given how profoundly over-leveraged their economy is.

It's bizarre that this boom was built on ... construction really - is that right ? Simultaneous worldwide construction boom with cheap interest provided by Chinese production, very broadly. Where can the next impetus come from though and could it be as huge ? There's hardly a chance that such wholesale leveraging can go on once markets get sorted out - or can it ?

Auditor #9 wrote:

Ard-Taoiseach wrote:

Worst-hit of all will be poor Iceland. Their economy is expected to contract by about 10 percent next year with the unemployment rate moving from almost zero to about 6 percent.

I wonder will they have a swift recovery in 2010 or another year of pain with further reductions in GDP. Quite possibly the latter given how profoundly over-leveraged their economy is.

It's bizarre that this boom was built on ... construction really - is that right ? Simultaneous worldwide construction boom with cheap interest provided by Chinese production, very broadly. Where can the next impetus come from though and could it be as huge ? There's hardly a chance that such wholesale leveraging can go on once markets get sorted out - or can it ?

Well not construction, though that was a big part of the general economic uplift of the last few years in economies such as Ireland, the UK, Spain, USA and Dubai. The boom was founded on the availability of extremely cheap liquidity which led to many businesses, governments and homeowners over-leveraging themselves to produce, consume and spend on programmes. This debt was built up and now that it is expensive to service and hard to come by, the whole rationale of the economic uplift evaporated. Now we are experiencing a retrenchment from that period of excess.

The next impetus will come from the eternal ingenuity of the human mind and what that is exactly, I do not know, but I can assure you that it will be coming. Wholesale leveraging can occur when people put short-term gain over long-term. Pursuing long-term gain is quite worthy and beneficial, but pursuing short-term gain, particularly at all cost, is quite damaging to the health and wealth of economic affairs.

Quote :

The boom was founded on the availability of extremely cheap liquidity

The cheap liquidity was there to provide a boost after the dot.com bubble burst - we were due a recession then, but it was postponed by issuing the cheap credit. The banks had to push out volumes of loan as the returns were so low. If it hadn't been construction it would have been tulips.

Just back from Waterford - for sale and to let signs outside businesses that made it all through the 80s. Not looking too different from that great survey of Enniscorthy someone put up on the site.

youngdan wrote:

The technical guy does not want to know anything about the company, nothing. His thinking is that all that is publically known has already been studied and acted upon. This knowledge is reflected in the price action and charts of the stock. So by studying the past chart action he predicts the future action

This sounds crazy but it actually seems to work. You will hear this talking about "resistance" etc at different prices. Because so many believe in technical analysis it is a self fulfilling prophecy.

I wonder how they are getting on in the current market? Can't see their models covering the current trading environment.

Audi

Oil can be a very volatile commodity as the graph below shows. I believe there are those who say that the price of oil adjusted for inflation historically averages around 21 dollars a barrel. There is no shortage of potential sources of energy, the problem is we are over reliant on several fuels and limited sources. Due to lack of investment other technologies are lagging, but I think that is changing. If we don't invest in alternative sources now any eventual economic recovery will be hit by rising fuel costs, I am in no doubt on this.

I would prefer to invest in other energy options rather than oil. It is a more positive investment but paradoxically is dependent on oil being expensive to be a viable option. Mind you the greatest beneficiaries from oil prices are governments, their tax take often exceeds the nett cost. Oil will head back up once demand picks up or if a belief takes hold that we have reached peak production. If that happens the price will go through the roof.




COC

Sorry sometimes humour can be lost on me, spent a lot of time as a child in other countries and I have never really been up to speed with the nuances of language.

Of all the things to invest in I don't see why oil isn't getting more attention from investors. Could it be except that the price isn't being affected so much ?

It's a sure thing as far as I can see - you even win if you lose because the ambient energy price will be low if you lose on oil so your costs will be reduced anyway. If you could take your stocks in the tangible barrel then you'd be gaining too in that you could be using that stock to run your machines although investors haven't the option to take the actual asset have they ?

It's inexplicable, the falling price. There must be plenty of it but as you say, maybe there's plenty of energy out there now, or at least the potential to get at it.

Squire wrote:

youngdan wrote:

The technical guy does not want to know anything about the company, nothing. His thinking is that all that is publically known has already been studied and acted upon. This knowledge is reflected in the price action and charts of the stock. So by studying the past chart action he predicts the future action

This sounds crazy but it actually seems to work. You will hear this talking about "resistance" etc at different prices. Because so many believe in technical analysis it is a self fulfilling prophecy.

I wonder how they are getting on in the current market? Can't see their models covering the current trading environment.

Here in work everyone raves about technical analysis, head and shoulders developing etc. Most believe it only works because so many analyists use it as a basis for their recommendations which is a fair enough point I guess. About the current market, I've been surprised by people optimism, even now. I reckon people actually believe a prolonged worldwide depression may be avoided. The problem I believe is that its been so good for so long people have forgotten caution and are conditioned to see upside in everything.

shutuplaura

I reckon they are a part of the problem. Lemmings with computers. After all with Lemmings it is also all about boom and bust.

http://www.5min.com/Video/Lemming-Migration-Along-the-Norwegian-Coast-1354282