FetteredChinos
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and birthday greetings from me too J.
keep clear of those deserted islands, and remember to catch the last ferry home..
keep clear of those deserted islands, and remember to catch the last ferry home..
FetteredChinos
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roguetrader
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Zero tollerance, that's the way.FetteredChinos said:
Big boys rules for big boys games.
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Who Says No One Rings a Bell?
The implications for America are enormous. Far from being the panacea that American politicians proclaim, China's decision to alter its peg could be the pin that finally pricks America's bubble economy. For America, the direct result of this action will be the following:
Higher consumer prices.
Higher interest rates.
Reduced profits for American companies, particularly those dependent on domestic consumption and consumer debt.
Lower stock prices, as earnings decline and multiples contract.
The busting of the housing bubble, as tighter credit standards and higher interest rates squeeze current home prices.
Rising unemployment, as higher interest rates and vanishing home equity slow consumer spending and reduce jobs dependant on that spending.
A severe recession as a result of all of the above.
Rising federal budget deficits, as recession reduces tax revenue, while higher interest rates and escalating outlays increase expenditures.
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It will be interesting to watch the spinmeisters hedonically adjust the CPI to avoid the effect of 2% price inflation in costs from China.
The implications for America are enormous. Far from being the panacea that American politicians proclaim, China's decision to alter its peg could be the pin that finally pricks America's bubble economy. For America, the direct result of this action will be the following:
Higher consumer prices.
Higher interest rates.
Reduced profits for American companies, particularly those dependent on domestic consumption and consumer debt.
Lower stock prices, as earnings decline and multiples contract.
The busting of the housing bubble, as tighter credit standards and higher interest rates squeeze current home prices.
Rising unemployment, as higher interest rates and vanishing home equity slow consumer spending and reduce jobs dependant on that spending.
A severe recession as a result of all of the above.
Rising federal budget deficits, as recession reduces tax revenue, while higher interest rates and escalating outlays increase expenditures.
-------------------------------------------------------------------------------------------------------------------
It will be interesting to watch the spinmeisters hedonically adjust the CPI to avoid the effect of 2% price inflation in costs from China.
Racer
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Some comments on Bloomberg last night made me think the US has not realised what this could actually mean for them. They might get more than they bargained for because they have, in my opinion, being acting as the 'big boys' and telling China what to do.Minder said:
roguetrader
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I think the likely impact of Chinese revaluation has been well known for some time, I know I read an article about it a few months back on MarketWatch, which listed all the isues that have been mentioned and possibly a few more. Given that one can speculate on two things, either the US economic wizards have assessed and decided rightly or wrongly that the positives outweigh the negatives or as one pundit suggested, having decided that it would be bad for the US set about bullying China in the hope that they would refues to be pushed. If that was the case then in the words of the tv commercial and song...........
"There may be trouble ahead."
"There may be trouble ahead."
frugi
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A few breadth charts...
My instinct is that either the top is in already (though this view feels a tad comfortable to be fully short now) or we will get a savage blow-off next week into month end (which will be psychologically much harder to short but mark the actual top). The put/call ratio extremes seem to lag price, so a couple of hundred more points upside would not be a surprise.
My instinct is that either the top is in already (though this view feels a tad comfortable to be fully short now) or we will get a savage blow-off next week into month end (which will be psychologically much harder to short but mark the actual top). The put/call ratio extremes seem to lag price, so a couple of hundred more points upside would not be a surprise.
Attachments
Racer
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CAT at record high levels and looking at chart, wonder if it is in island reversal pattern? CAT has a great weighting on the Dow (has been split recently), see below for recent comments from results yesterday. Interest rates are going to continue going up (FOMC minutes) and this revaluation by China will affect interest rates for US mortgages. Already in recent figures there was some slowdown in housing as far as I remember.
North America machinery sales grew $647 million, or 24%. "Low interest rates and rising home prices supported housing construction, and nonresidential construction benefited from record corporate profits and favorable credit conditions," Caterpillar said.
Its higher forecast for 2005 is based on low inflation, low interest rates and demand for metals and energy. "While economic growth is slowing overall from a very robust 2004, 2005 will be another year of solid economic activity," the company said.
North America machinery sales grew $647 million, or 24%. "Low interest rates and rising home prices supported housing construction, and nonresidential construction benefited from record corporate profits and favorable credit conditions," Caterpillar said.
Its higher forecast for 2005 is based on low inflation, low interest rates and demand for metals and energy. "While economic growth is slowing overall from a very robust 2004, 2005 will be another year of solid economic activity," the company said.
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roguetrader
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Total market volume lagging yesterdays pace on both markets in fairly choppy going this morning. Market internals somewhat mixed. With yesterdays selling and in light of the recent gains plus the continuing situation in London I would have expected profit taking into the weekend. I know if I were a swing trader I would not want to go home long into the weekend. But so far the bulls are a bit frisky.
SPX the index showing the relative strength so far.
SPX the index showing the relative strength so far.
Maybe - ranging 10600 -620 for the last 2.5 hours. A sell off after lunch is still possible as oil creeps back up over $58. However the SPX remains fairly robust today and that would probably need to show some evidence of decline first.Minder said:
roguetrader
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Ther ya go Racer, a little bounce pour MadameRacer said:
