... to 2180pts at 1530hrs and this is the Oct 08 level. Are we back to the "golden period"?
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STI up 100 pts...
- Thread starter Black Swan
- Start date
I do agree with you. Now is the fear of missing out of the action. I append the synopsis from ML conference today by Roubini.
Basic synopsis of his comments as follows.
Where are we in the crisis - a case of good news / bad news The good news:
Things have improved since Lehman thanks to- Liquidity injections Deposit guarantees Financial institution re-capitalisation
The Bad News:
Liability side of Balance Sheet has been dealt with - but asset side problems remain.
Roubini believes credit losses will be US$3.6trn (current IMF f/cast US$2.7trn) Reducing leverage ratios for banks will take another US$700bn.
Sub prime issues extending to prime, student loans, car loans, credit cards etc., etc
US Economic Outlook
He sees a U shaped recovery of 24+ mths duration (currently in the 17th month) Policy action has been aggressive ( and required in his view to avoid depression) He thinks probability of extended L shape has reduced from 30% to 15% Consensus US growth f/casts iof 2% in 4Q CY09 and 2010 are too high He expects -2% in 4q and +0.5% in 2010
Global Outlook
Hard landing is far reaching
Eastern Europe and LatAm facing major financial crises Acknowledges there has been stabilisation Emerging Market recovery is dependant on Developed Market recovery Asia has not de-coupled, but rather re-coupled because of trade and financial links Asia spending too much on growing capacity and not enough to stimulate domestic consumption eg. China
Why is he so Bearish?
Many countries are over-leveraged.
US consumption has further to fall. Now 70% of GDP back from a high of 72% against a historical average of 65% Financial institutions decimated and semi-bankrupt Still to be hit by the Private Equity mis-priced LBO overhang Huge leverage being transferred to sovereign balance sheets increasing very real risk of default for even developed countries US Corporates in trouble given high yield debt issuance.
How to fix the Banks?
Creeping nationalisation is not helping. Paradoxically, outright nationalisation would be more mkt friendly.
Current measures (creeping nationalisation) creating zombie banks - will extend the crisis Need to swap debt for equity - a la Chapter 11
Thinks we see "Stagdeflation"
Deflation pressure to last another 2-3 years Given gap between supply and demand pricing power not returning Slack in labour markets Slack in commodity markets - sees downside risk to prices in 2010 Politically easier decision to print more money than to raise taxes / cut spending
The Rally?
Thinks it is a Bear Market Rally
Market looks forward but is not always right Market has predicted 16 of the last 9 recessions and 6 of the last 0 recoveries!
Macro news will surprise on the downside, largely driven by falling consumer demand from job losses. Corporate earnings to miss expectations in coming quarters. This qtr was OK reflecting cost controls (job cuts) - positive impact is short term.
And some quick comments on:
US$
Remains strong. Things are bad in the US but they are as bad if not worse elsewhere US Treasuries the only true AAA rates asset
Near term model portfolio?
Underweight equities, commodities, real estate Long Governement bonds with low sovereign risk
Gold?
The fear trade is dead. Bearish
Oil?
Actually thinks it looks OK medium term. Demand to rise, supply to be caught short (again) by under-investment. Production largely in areas of low political stability
The Final Word?
Audience (600 odd) straw polled at the conclusion of the presentation if Roubini should be know as Dr. Doom or Dr. Reality.
The vast majority voted for the latter.
Basic synopsis of his comments as follows.
Where are we in the crisis - a case of good news / bad news The good news:
Things have improved since Lehman thanks to- Liquidity injections Deposit guarantees Financial institution re-capitalisation
The Bad News:
Liability side of Balance Sheet has been dealt with - but asset side problems remain.
Roubini believes credit losses will be US$3.6trn (current IMF f/cast US$2.7trn) Reducing leverage ratios for banks will take another US$700bn.
Sub prime issues extending to prime, student loans, car loans, credit cards etc., etc
US Economic Outlook
He sees a U shaped recovery of 24+ mths duration (currently in the 17th month) Policy action has been aggressive ( and required in his view to avoid depression) He thinks probability of extended L shape has reduced from 30% to 15% Consensus US growth f/casts iof 2% in 4Q CY09 and 2010 are too high He expects -2% in 4q and +0.5% in 2010
Global Outlook
Hard landing is far reaching
Eastern Europe and LatAm facing major financial crises Acknowledges there has been stabilisation Emerging Market recovery is dependant on Developed Market recovery Asia has not de-coupled, but rather re-coupled because of trade and financial links Asia spending too much on growing capacity and not enough to stimulate domestic consumption eg. China
Why is he so Bearish?
Many countries are over-leveraged.
US consumption has further to fall. Now 70% of GDP back from a high of 72% against a historical average of 65% Financial institutions decimated and semi-bankrupt Still to be hit by the Private Equity mis-priced LBO overhang Huge leverage being transferred to sovereign balance sheets increasing very real risk of default for even developed countries US Corporates in trouble given high yield debt issuance.
How to fix the Banks?
Creeping nationalisation is not helping. Paradoxically, outright nationalisation would be more mkt friendly.
Current measures (creeping nationalisation) creating zombie banks - will extend the crisis Need to swap debt for equity - a la Chapter 11
Thinks we see "Stagdeflation"
Deflation pressure to last another 2-3 years Given gap between supply and demand pricing power not returning Slack in labour markets Slack in commodity markets - sees downside risk to prices in 2010 Politically easier decision to print more money than to raise taxes / cut spending
The Rally?
Thinks it is a Bear Market Rally
Market looks forward but is not always right Market has predicted 16 of the last 9 recessions and 6 of the last 0 recoveries!
Macro news will surprise on the downside, largely driven by falling consumer demand from job losses. Corporate earnings to miss expectations in coming quarters. This qtr was OK reflecting cost controls (job cuts) - positive impact is short term.
And some quick comments on:
US$
Remains strong. Things are bad in the US but they are as bad if not worse elsewhere US Treasuries the only true AAA rates asset
Near term model portfolio?
Underweight equities, commodities, real estate Long Governement bonds with low sovereign risk
Gold?
The fear trade is dead. Bearish
Oil?
Actually thinks it looks OK medium term. Demand to rise, supply to be caught short (again) by under-investment. Production largely in areas of low political stability
The Final Word?
Audience (600 odd) straw polled at the conclusion of the presentation if Roubini should be know as Dr. Doom or Dr. Reality.
The vast majority voted for the latter.
Nassim Nicholas Taleb will be the guest speaker tomorrow. Looking forward to it!
"Hooray... now i can invest again with no regrets"
Wau lau! Angie! You are a super joker sia!?!
Wahahahahahahahahaha!
False rallying, even Shaun and Michelle choose this downturn to get married ! Discount discount !
Michelle Chia gets jilted by The Frenchman marries Shaun Chen.
http://shaunchensfanclub.blogspot.com/2007/08/shaun-chen-michelle-chia.html
http://shaunchensfanclub.blogspot.com/2007/08/shaun-chen-michelle-chia.html
Shaun Chen thinks he had a good deal !
Michelle Chia gets jilted by The Frenchman marries Shaun Chen.
http://shaunchensfanclub.blogspot.com/2007/08/shaun-chen-michelle-chia.html
http://shaunchensfanclub.blogspot.com/2007/08/shaun-chen-michelle-chia.html
Shaun Chen thinks he had a good deal !
Keep on checking this thread to find out about maintaining the Golden Period.
http://www.sammyboy.com/showthread.php?t=23304
"hooray... Now i can invest again with no regrets"
jah rastafar rules!
Yes, made some money but nothing to shout about. I am not a financial adviser.
May 7 (Bloomberg) -- The current global crisis is “vastly worse” than the 1930s because financial systems and economies worldwide have become more interdependent, “Black Swan” author Nassim Nicholas Taleb said.
“This is the most difficult period of humanity that we’re going through today because governments have no control,” Taleb, 49, told a conference in Singapore today. “Navigating the world is much harder than in the 1930s.”
The International Monetary Fund last month slashed its world economic growth forecasts and said the global recession will be deeper than previously predicted as financial markets take longer to stabilize. Nouriel Roubini, 51, the New York University professor who predicted the crisis, told Bloomberg News yesterday that analysts expecting the U.S. economy to rebound in the third and fourth quarter were “too optimistic.”
“Certainly the rate of economic contraction is slowing down from the freefall of the last two quarters,” Roubini said. “We are going to have negative growth to the end of the year and next year the recovery is going to be weak.”
Federal Reserve Chairman Ben S. Bernanke told lawmakers May 5 that the central bank expects U.S. economic activity “to bottom out, then to turn up later this year.” Another shock to the financial system would undercut that forecast, he added.
‘Big Deflation’
The global economy is facing “big deflation,” though the risks of inflation are also increasing as governments print more money, Taleb told the conference organized by Bank of America- Merrill Lynch. Gold and copper may “rally massively” as a result, he added.
Taleb, a professor of risk engineering at New York University and adviser to Santa Monica, California-based Universa Investments LP, said the current global slump is the worst since the Great Depression that followed Wall Street’s 1929 crash.
The Great Depression saw an increase in global trade barriers and was only overcome after President Franklin D. Roosevelt’s New Deal policies helped revive the U.S. economy.
The world’s largest economy may need additional fiscal stimulus to emerge from its current recession, Kenneth Rogoff, former chief economist at the International Monetary Fund, told Bloomberg News yesterday.
“We’re going to get to the point where recovery is just not soaring and they’re going to do the same again,” he said. “We’re going to have a very slow recovery from here.”
Fiscal Stimulus
The U.S. economy plunged at a 6.1 percent annual pace in the first quarter, making this the worst recession in at least half a century. President Barack Obama signed a $787 billion stimulus plan into law in February that included increases in spending on infrastructure projects and a reduction in taxes.
Gold, copper and other assets “that China will like” are the best investment bets as currencies including the dollar and euro face pressures, Taleb said. The IMF expects the global economy to shrink 1.3 percent this year.
Gold, which jumped to a record $1,032.70 an ounce March 17, 2008, is up 3.6 percent this year. Copper for three-month delivery on the London Metal Exchange has surged 55 percent this year on speculation demand will rebound as the global economy recovers from its worst recession since World War II.
Commodity prices are also gaining amid signs that China’s 4 trillion yuan ($585 billion) stimulus package is beginning to work in Asia’s second-largest economy. Quarter-on-quarter growth improved significantly in the first three months of 2009, the Chinese central bank said yesterday, without giving figures.
Credit Derivatives
China will avoid a recession this year, though it will not be able to pull Asia out of its economic slump as the region still depends on U.S. demand, New York University’s Roubini said.
Equity investments are preferable to debt, a contributor to the current financial crisis, Taleb said. Deflation in an equity bubble will have smaller repercussions for the global financial system, he added.
“Debt pressurizes the system and it has to be replaced with equity,” he said. “Bonds appear stable but have a lot of hidden risks. Equity is volatile, but what you see is what you get.”
Currency and credit derivatives will cause additional losses for companies that hold more than $500 trillion of the securities worldwide, Templeton Asset Management Ltd.’s Mark Mobius told the same Singapore conference today.
“There are going to be more and more losses on the part of companies that have credit derivatives, those who have currency derivatives,” Mobius, who helps oversee $20 billion in emerging-market assets at Templeton, said at the conference. “This is something we’re going to have to watch very, very carefully.”
Taleb is best known for his book “The Black Swan: The Impact of the Highly Improbable.” The book, named after rare and unforeseen events known as “black swans,” was published in 2007, just before the collapse of the subprime market roiled global financial institutions.
To contact the reporters on this story: Chen Shiyin in Singapore at [email protected]; Liza Lin in Singapore at [email protected].
Last Updated: May 7, 2009 05:35 EDT
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