I think what we must never forget is why the Banks are in this mess in the first place. Why should tax payers money be spent providing them with feathered cushions to ease the fall.

I am trying to imagine how it would work if a Bank did go under. Mortgages and secured loans would be hard for anyone to call in as that would be a breach of an agreement, which a third party not party to the agreement would be trying to impose?

My worry would be for unsecured loans and overdraft facilities which many small businesses rely on. If the Gov wants to step in there is the place to intervene.

How's de millionaires. Any new ones? Haven't really been following the markets as I'm still toying with a trading methodology and decided last Saturday to go back to basics and do some serious number crunching - 10 to 12 hours a day non-stop. I'm starting, finally, to get back that old feeling that I've got a feeling for the mourkets by focusing on the numbers and any anomolies I can find. Still psychology can't be ignored but it's much harder to quant. I suspect, however, that it's much more profitable to understand the broader market sentiment that creates the anomolies and profit opportunities.

Did someone mention wheat last week and its upward trajectory? Well, it tanked 86.2 cents a bushel since last week. As with so many things, there is rampant over production this year and the wee flood in the midwestern US states had no real impact on production. This is the time of the year when soft commodity prices are more likely to show their true underlying value as the harvests are coming to an end. (But keep in mind winter wheat etc.) Likewise, the hype about sugar being converted into fuel products is overplayed. There is much more supply than demand for these products, pure and simple.

The volatility index (VIX, on CBOE) for the US equity markets has been a bit, well, volatile. The index is up wow (week on week) by 2.47. The dow and the sp500 are both down wow despite the mighty increase in US GDP of 3.3% growth for the second quarter. Even Bloomberg TV brought out an English analyst who said he suspecst the numbers and awaits further revisions. He mentioned something about national inventories which those who care about such things might want to research. The Nikkei, long the sick child of world indicies, picked up 406.86 wow.

Finally the Euribor has softened ever so little by .001 wow. However both the Euri and UK swap rate charts show that the yield curve is inverted and becoming more inverted by the week. Short term (1 year) rates acutally increased last week while 30 year swaps decreased. This means that the sound borrowers are finding it easier to access long term loans while the short term loans are seen as more risky for those companies seeking to shore up continuing business activities. I also read that the ECB is none too happy with Irish lending institutions hitting the lending facility opened up by the ECB. While the Spanish are still the biggest borrowers, the Irish institution now come in a close second. Imo, the ECB is getting tired of bailing out the Irish banks and their exposure to big developers. I suppose the sentiment is why should the ECB take on Irish risk from Irish banks who are doing their damnest to prop up developers and by extension property prices. gl all

I used to be a millenarian but it wore off. Rocky are you saying it's possible to analyse the market and world economy in it's entirety and come up with an image of what might go up and down? That's exciting if you are going to undertake that undertaking yourself. Though such analysis of such an enormous system could end up taking you to an undertaker if you weren't careful

But this is what people and some businesses do - analyze the entire system in this way. Like I say, it's very exciting but don't do it alone - please share it with your online buddies - us.

How are you judging the sentiment now? Is Europe in a form of recession or heading that way so in that kind of market you need to be able to judge what the sentiment is.... is it a time for hibernation maybe?

rockyracoon wrote:

How's de millionaires. Any new ones? Haven't really been following the markets as I'm still toying with a trading methodology and decided last Saturday to go back to basics and do some serious number crunching - 10 to 12 hours a day non-stop. I'm starting, finally, to get back that old feeling that I've got a feeling for the mourkets by focusing on the numbers and any anomolies I can find. Still psychology can't be ignored but it's much harder to quant. I suspect, however, that it's much more profitable to understand the broader market sentiment that creates the anomolies and profit opportunities.

Did someone mention wheat last week and its upward trajectory? Well, it tanked 86.2 cents a bushel since last week. As with so many things, there is rampant over production this year and the wee flood in the midwestern US states had no real impact on production. This is the time of the year when soft commodity prices are more likely to show their true underlying value as the harvests are coming to an end. (But keep in mind winter wheat etc.) Likewise, the hype about sugar being converted into fuel products is overplayed. There is much more supply than demand for these products, pure and simple.

The volatility index (VIX, on CBOE) for the US equity markets has been a bit, well, volatile. The index is up wow (week on week) by 2.47. The dow and the sp500 are both down wow despite the mighty increase in US GDP of 3.3% growth for the second quarter. Even Bloomberg TV brought out an English analyst who said he suspecst the numbers and awaits further revisions. He mentioned something about national inventories which those who care about such things might want to research. The Nikkei, long the sick child of world indicies, picked up 406.86 wow.

Finally the Euribor has softened ever so little by .001 wow. However both the Euri and UK swap rate charts show that the yield curve is inverted and becoming more inverted by the week. Short term (1 year) rates acutally increased last week while 30 year swaps decreased. This means that the sound borrowers are finding it easier to access long term loans while the short term loans are seen as more risky for those companies seeking to shore up continuing business activities. I also read that the ECB is none too happy with Irish lending institutions hitting the lending facility opened up by the ECB. While the Spanish are still the biggest borrowers, the Irish institution now come in a close second. Imo, the ECB is getting tired of bailing out the Irish banks and their exposure to big developers. I suppose the sentiment is why should the ECB take on Irish risk from Irish banks who are doing their damnest to prop up developers and by extension property prices. gl all

I've heard talk of the ECB being able to refuse permission for Irish banks being bailed out in the event of a collapse. Do you know is that in the Banks's power?

Auditor #9 wrote:

I used to be a millenarian but it wore off. Rocky are you saying it's possible to analyse the market and world economy in it's entirety and come up with an image of what might go up and down? That's exciting if you are going to undertake that undertaking yourself. Though such analysis of such an enormous system could end up taking you to an undertaker if you weren't careful

But this is what people and some businesses do - analyze the entire system in this way. Like I say, it's very exciting but don't do it alone - please share it with your online buddies - us.

How are you judging the sentiment now? Is Europe in a form of recession or heading that way so in that kind of market you need to be able to judge what the sentiment is.... is it a time for hibernation maybe?

I'm working on market data (US, UK, Germany, Japan and EU) and also working on fundamental economic data for these regions. My aim isn't to come up with a comprehensive and up-to-the-minute updating system. The data is too vast and time consuming to collate. Rather I'm testing to see what data sets are significant and if they have correlation to various markets using regression analysis and other statistical techniques. However, I have to find the sources of data and test them for authenticity and validity. I also have to keep in mind that markets and economies changes over time and that what might be significant 25 years ago isn't today. I'm aiming for Christmas to come up with any significant indicators (if any exist) and then mould them into some sort of trading methodology. Always have to keep in mind also that there are far bigger companies doing the same research and at a much quicker rate. As the value of information has a decay factor going to zero the longer it is in the public domain, the greater the necessity for me to understand a few parameters well and maybe only deal in one or two markets. It seems most successful traders follow this methodology - become the master of one market and you may see opportunities from time to time in others.

As for sentiment data, there is loads. What's more, I have greater faith in these numbers than I do inflation data and GDP data sets. The "sentiment" indexes, for both consumers and producers, are usually carried out using the most reliable statistical methods available and are done by independent companies who do not answer to governments. They are also a leading indicators. For what its worth, German producer and company executive sentiment have been falling for serveral months now. This information may be too old to use now but who knows?

Check out Eurostats website for the EU data. Vast amount of information and probably a bit more realiable than US govt data - but always use with a good pinch of salt! ZEW for European Economic Research have a good website for German investor confidence. There is also the IFO website for German data. The University of Michigan do a good consumer sentiment survey but read the text as this often proves more insightful than the index numbers. In the US the Confrence Board do a a "leading indicators" report which should give you more insight to the US economy than the shite GDP figures published (www.confrence-board.org/).

Another more subtle sentiment indicator is reading various authors or sites where they make predictions about the future market direxctions. Completely ignore their advice and just focus on how well they perform and keep score of their prediction success/failure ratio! Then use this as an indicator after you factor in why they make predictions (stock broker, doom monger, peddling newsletter advice to all and sundry on a one off "sucker" basis).

For example, the brokerage firm might recommend a "buy" for a stock only for the stock price to fall significantly. Does the brokerage firm trade the stock? In which case, it might be a very good stock but their traders know its now a good time to sell their existing inventories to the "new" buyers and drive down the price. Now the traders buy back the stock at much lower prices and await for the rest of the market to realise it really is a good stock. The even "newer" buyers come in buying and start to drive the price up to new levels at which time the brokerage firm's traders then unload for a profit. The original "new" buyers have taken a loss at the bottom by selling to the brokers who made the recommendation! This is why value investing is so much better than day trading. If you make a determination that you see an undervalued company who earnings will increase, whose management is top class and they occupy a unique niche or are the number one in their market sector, you are better off buying for the long term. Trader's shenanigan become irrelevant.


Become a student of yield curves. Money makes the world go round! I'm organising my 3x5 index cards onto computer once I determined how useful the data is and will be able to more comprehensively give a list of data sources. gl

cactus flower wrote:

I've heard talk of the ECB being able to refuse permission for Irish banks being bailed out in the event of a collapse. Do you know is that in the Banks's power?

I have no idea about the legal framework. The ECB website will give you the information but it will be extensive and time consuming to peruse. Afaik, the lending facility is only a temporary set up for help short term liquidty in the European market in reaction to the global credit crunch. It is not meant to fund any European bank's activities over the long term. The Irish banks are taking the mickey as they try their damnest to prop up the property developers and the ECB is running out of patience.

As far as a banking collapse in any European country, I still think it's up to the individual country's central bank to mop us the mess. The only time I could see the ECB becoming involved is if a bank's failure might have continent wide implications on corporate and consumer confidence. The collapse of an Irish bank, which is very unlikely anyhow, would not constitute a continent wide catastrophe. It wouldn't even constitute a national crisis unless all depositors started stashing their cash under their mattresses.

Right now Irish banks cannot access short and medium terms credit sources from other banks and they cannot fund their requirements from depositor accounts alone. This is the same situation for many European banks. The banks don't trust each other in order to lend money to each other and the amount of new deposits isn't enough to fund ongoing lending operations. Meanwhile, the banks are not getting the money in owed from big developers and all that lovely lolly (some £2 billion sent away from Irish banks to be invested in foreign property markets) isn't doing them a damn bit of good now. Feck 'em.

rockyracoon

Best of luck with the numbers. I have long been of the opinion that the markets are chaos and that an understanding of human physiology is as important as numbers.

I can't see sentiment improving this side of Bush leaving office. Greatest single liability on two legs.

Well I hear that property prices in Abhkahavia have gone up 30% in the last week.

Squire wrote:

rockyracoon

Best of luck with the numbers. I have long been of the opinion that the markets are chaos and that an understanding of human physiology is as important as numbers.

I can't see sentiment improving this side of Bush leaving office. Greatest single liability on two legs.

Chaotic like the weather? I've not been keeping my graphs of the ISEQ and Wind Power concurrent in case there is any correlation. There must be some pattern though. Isn't there a film about it called PI ??

Auditor #9 wrote:

Squire wrote:

rockyracoon

Best of luck with the numbers. I have long been of the opinion that the markets are chaos and that an understanding of human physiology is as important as numbers.

I can't see sentiment improving this side of Bush leaving office. Greatest single liability on two legs.

Chaotic like the weather? I've not been keeping my graphs of the ISEQ and Wind Power concurrent in case there is any correlation. There must be some pattern though. Isn't there a film about it called PI ??

Myself and God have had a word about this.

Are we about to enter a world of big mergers and takeovers?
Kommerzbank is taking over Dresdner and there is talk of a South Korean bank taking over Lehmans.

cactus flower wrote:

Are we about to enter a world of big mergers and takeovers?
Kommerzbank is taking over Dresdner and there is talk of a South Korean bank taking over Lehmans.

The disappearance of Dresdner from the financial world is sad. I had an account with Dresdner in the 90s and they were a good bank to work with. The merger is causing a lot of commotion in Germany, especially focussing on the expected 9,000 redundancies which will follow.

Slim Buddha wrote:

cactus flower wrote:

Are we about to enter a world of big mergers and takeovers?
Kommerzbank is taking over Dresdner and there is talk of a South Korean bank taking over Lehmans.

The disappearance of Dresdner from the financial world is sad. I had an account with Dresdner in the 90s and they were a good bank to work with. The merger is causing a lot of commotion in Germany, especially focussing on the expected 9,000 redundancies which will follow.

I lived a year in Berlin and would have a feeling for the size of it. Would it be the (much bigger) equivalent of AIB taking over BoI in Ireland ?

Are the days of real money you can touch over, and with that a lot of jobs in banks? If people got a lust for real coins and banknotes again it would be tricky. What is driving the takeoner - is the Dresdner in trouble, or it it just the normal tendency towards monoploy in action ?

cactus flower wrote:

Slim Buddha wrote:

cactus flower wrote:

Are we about to enter a world of big mergers and takeovers?
Kommerzbank is taking over Dresdner and there is talk of a South Korean bank taking over Lehmans.

The disappearance of Dresdner from the financial world is sad. I had an account with Dresdner in the 90s and they were a good bank to work with. The merger is causing a lot of commotion in Germany, especially focussing on the expected 9,000 redundancies which will follow.

I lived a year in Berlin and would have a feeling for the size of it. Would it be the (much bigger) equivalent of AIB taking over BoI in Ireland ?

Are the days of real money you can touch over, and with that a lot of jobs in banks? If people got a lust for real coins and banknotes again it would be tricky. What is driving the takeoner - is the Dresdner in trouble, or it it just the normal tendency towards monoploy in action ?

Haven't had time to go into the detail of the background yet but it seems Dresdner goofed big-time with US sub-prime rubbish. I would say it would be similar situation to the one you describe in your Irish comparison.

The oil price is tumbling and the ISEQ is soaring. It looks like my view that oil was a speculative bubble and had to unwind is being vindicated by the near 25% fall in oil from its peak. The oil market is officially bearish.

The drop in oil is doing wonders for my fantasy spread trading on world spreads. From my initial imaginary investment of 10,000 just over a month ago I am now worth 24,230. If only I had invested real money!!!

My best profits so far:

4546 on the price of Brent Crude
4735 on the ISEQ 20 EFT
2182 on RBS
2265 on Ryanair

johnfás wrote:

The drop in oil is doing wonders for my fantasy spread trading on world spreads. From my initial imaginary investment of 10,000 just over a month ago I am now worth 24,230. If only I had invested real money!!!

My best profits so far:

4546 on the price of Brent Crude
4735 on the ISEQ 20 EFT
2182 on RBS
2265 on Ryanair

fecking hell

Hope you're not the gambling type ..

Ard-Taoiseach wrote:

The oil price is tumbling and the ISEQ is soaring. It looks like my view that oil was a speculative bubble and had to unwind is being vindicated by the near 25% fall in oil from its peak. The oil market is officially bearish.

Yes, and this is in spite of Gustav, Hanna et al. What has sparked off the drop Ard-Taoiseach?

The ISEQ index of Irish shares climbed 2.84%, or 127.17 points, in trading today, to close at 4,604.37.

Shares in CRH, Kerry Group and Grafton were among today's most-traded.

(Breaking News)

cactus flower wrote:

Ard-Taoiseach wrote:

The oil price is tumbling and the ISEQ is soaring. It looks like my view that oil was a speculative bubble and had to unwind is being vindicated by the near 25% fall in oil from its peak. The oil market is officially bearish.

Yes, and this is in spite of Gustav, Hanna et al. What has sparked off the drop Ard-Taoiseach?

Well, Gustav did! Traders believed that Gustav would leave heavy damage on the US' medium-term capability to extract and refine oil a la Katrina. They believed that that would halt, at least for a while, the downward spiral in oil prices. Now that Gustav is a plain old tropical storm and the US' refineries are barely affected, production should start up pretty soon and that has put an awful lot of supply back into the market.

I'm interested to see exactly how far the oil price might fall. It could go all the way down to 80 with the UK, Japan, France, Spain, Germany and Italy recessionary and Chindia easing off a bit.

Ard-Taoiseach wrote:

cactus flower wrote:

Ard-Taoiseach wrote:

The oil price is tumbling and the ISEQ is soaring. It looks like my view that oil was a speculative bubble and had to unwind is being vindicated by the near 25% fall in oil from its peak. The oil market is officially bearish.

Yes, and this is in spite of Gustav, Hanna et al. What has sparked off the drop Ard-Taoiseach?

Well, Gustav did! Traders believed that Gustav would leave heavy damage on the US' medium-term capability to extract and refine oil a la Katrina. They believed that that would halt, at least for a while, the downward spiral in oil prices. Now that Gustav is a plain old tropical storm and the US' refineries are barely affected, production should start up pretty soon and that has put an awful lot of supply back into the market.

I'm interested to see exactly how far the oil price might fall. It could go all the way down to 80 with the UK, Japan, France, Spain, Germany and Italy recessionary and Chindia easing off a bit.

Is it not anything to do with Bush deciding to dip into the Strategic Oil Reserve? And is that not something that will stop as soon as the election is over ?

cactus flower wrote:

Ard-Taoiseach wrote:

cactus flower wrote:

Ard-Taoiseach wrote:

The oil price is tumbling and the ISEQ is soaring. It looks like my view that oil was a speculative bubble and had to unwind is being vindicated by the near 25% fall in oil from its peak. The oil market is officially bearish.

Yes, and this is in spite of Gustav, Hanna et al. What has sparked off the drop Ard-Taoiseach?

Well, Gustav did! Traders believed that Gustav would leave heavy damage on the US' medium-term capability to extract and refine oil a la Katrina. They believed that that would halt, at least for a while, the downward spiral in oil prices. Now that Gustav is a plain old tropical storm and the US' refineries are barely affected, production should start up pretty soon and that has put an awful lot of supply back into the market.

I'm interested to see exactly how far the oil price might fall. It could go all the way down to 80 with the UK, Japan, France, Spain, Germany and Italy recessionary and Chindia easing off a bit.

Is it not anything to do with Bush deciding to dip into the Strategic Oil Reserve? And is that not something that will stop as soon as the election is over ?

Not really, there's a recession on in the €urozone, Canada, Britain and Japan which means that demand growth is dramatically tailing off in developing world nations. This has nobbled the market and led it into bearish territory where it may yet reach the 80 dollars I indicated months ago.

There's been a global crash in stock prices as well since the shocker of the US unemployment figures. The official number is 6.1%, but with the funny business of the way they count this figure, it could be as high as 10%.

I think it would also be natural that prices would be affected by the "threat" of massive investment in renewables. My understanding is that the 80 dollar mark is the point at which wind becomes seriously competitive. In the long term one would expect the oil price to drift close to the cost of renewable equivalent.

Oil has other uses which in the long run could be more valuable than energy. For renewables to set the energy price would require an enormous expansion in capacity. This will be less likely if oil and gas prices fall.


The US unemployment figures are deeply disturbing. I reckon we will not get a true measure of the problem this side of the election. It will be a cold Thanks Giving Day for many American families.

Squire wrote:

Oil has other uses which in the long run could be more valuable than energy. For renewables to set the energy price would require an enormous expansion in capacity. This will be less likely if oil and gas prices fall.


The US unemployment figures are deeply disturbing. I reckon we will not get a true measure of the problem this side of the election. It will be a cold Thanks Giving Day for many American families.

I doubt even the employed are getting cost of living increases. As for renewable investment, I suspect we'll see movement. Because it isn't just the price. We've all had our cages rattled by the price instability. 80 bucks a barrel may make wind barely competitive today, but the equation changes if we think it could be $147 again in a months time. Psychological barriers have been breached. The other thing is, as the price comes down, more people will use. Driving the price back up again.

and on another note, I doubt the boys and girls in Cheltenham or Langley will want Putin and his pipeline controls to have most of Western Europe on a tight leash. Which is right where he has us right now. Nor will they want to see increasing amounts of Western disposable income in the pockets of the Taliban funding Wahhabi sheikhs. The Iraq war is unlikely to bring them the limitless fossil fuels they dreamed of. Time for Project Energy Innovation. Note that the squillionares in Silicone Valley Venture Capital are now beginning to invest..... I still think we are in for a bad 10 years, but I'm more optimistic than I was. The energy equivalents of Steve Jobs and Bill Gates are on their way up....