World markets fall as US fails to reach debt agreement

[barjon]

Well FTSE has shrugged it off and is holding strong against the weakness in US futures.

I guess there'll be a pop in US markets once the recalcitrant Republicans have extracted their various pounds of flesh from Obama but, unless positioned beforehand, it'll be like trying to jump aboard Lewis Hamilton's McClaren as it hits full speed.

jon

 

[Pazienza]

Well FTSE has shrugged it off and is holding strong against the weakness in US futures.

I guess there'll be a pop in US markets once the recalcitrant Republicans have extracted their various pounds of flesh from Obama but, unless positioned beforehand, it'll be like trying to jump aboard Lewis Hamilton's McClaren as it hits full speed.

jon

A lot of fuss about nothing in my opinion Jon. Markets will simply keep going up, the reason being that they should keep going up. Interruptions to this trend are just a buying opportunity.

The only way out of this debt crisis is inflation. That is it. So nobody should be surprised at how the market is reacting, or wondering why it keeps going up despite (insert blah blah blah).

 

[TheBramble]

The only way out of this debt crisis is inflation.

Oh, I can think of a couple of alternatives....

One is painful and relatively short-lived. The other is painful, lasts a lot longer, takes more cash, reduces real asset values, irreversibly inhibits potential growth and causes more long-term damage of the slightly more irrevocable kind.

However the same political myopia that actively enabled this crisis to form in the first place, will, with the same rampant irresponsibility that will prevent the smart option being given the serious consideration it deserves, consider that which buys more time, and allows memories to fade (time is a major premium in politics) and appears to offer the 'least worst case' while being truly, positively destructive in the extreme.



I think I know which it's going to be.

 

[bbmac]

I wonder to what extent the Republican party has been hijacked by the' Tea Party ' ie the speaker just does not have the votes if he fails to come back with a deal that does not involve tax rises of any kind, ie is their strategy to allow a technical default by missing the supposed August 2nd deadline gambling on the electorate blaming Obama and thus getting a bounce ahead of the presidential election ? It is clearly all political/ideological.

Whatever any of us think about last week's Euro zone deal at least a deal was done, that involved the agreement of 14 sovereign countries not just 2 parties of the same country ?

As for likely market reaction if a deal is done (or indeed not done and Aug 2nd deadline missed causing a technical; default).... Difficult to say and the knee-jerk may not be the direction once the detail is known ? Any $ rally may well be shortlived ?

Time will tell.

G/L

 

[TheBramble]

Whatever any of us think about last week's Euro zone deal at least a deal was done, that involved the agreement of 14 sovereign countries not just 2 parties of the same country ?

Erm, just two countries actually methinks.

 

[Pazienza]

I'm not saying inflation is the answer, just that it will be the one governments will go for. The alternatives? They will simply not consider them.

With that in mind I think we can fairly comfortably say what the direction of the market will be for the foreseeable future.

All this is just gassing though. The important thing is I took a long on TF at the open. Ha!

 

[bbmac]

well yeh..and only one of them really matter ? Lol

Erm, just two countries actually methinks.

 

[barjon]

I wonder to what extent the Republican party has been hijacked by the' Tea Party ' ie the speaker just does not have the votes if he fails to come back with a deal that does not involve tax rises of any kind, ie is their strategy to allow a technical default by missing the supposed August 2nd deadline gambling on the electorate blaming Obama and thus getting a bounce ahead of the presidential election ? It is clearly all political/ideological.

Whatever any of us think about last week's Euro zone deal at least a deal was done, that involved the agreement of 14 sovereign countries not just 2 parties of the same country ?

As for likely market reaction if a deal is done (or indeed not done and Aug 2nd deadline missed causing a technical; default).... Difficult to say and the knee-jerk may not be the direction once the detail is known ? Any $ rally may well be shortlived ?

Time will tell.

G/L

I guess it's somewhat narrow politics with some Republicans taking the golden opportunity to squeeze concessions/benefits (bribes) for their States out of Obama. It was ever thus

jon

 

[0007]

Perhaps this throws some light on the problem?

http://factcheck.org/2011/07/fiscal-factcheck/

 

[Splitlink]

UK went down a bit ,but it was lower yesterday and has recouped now into, more or less, level pegging with the opening. I can't do much this afternoon but I'd play it as always, by ear. Fiddle while Rome burns.

 

[Shaun12uk]

Think we may see another dip to shake out the stops before a big rally on the back of some debt deal news.

 

[fleetwood]

A lot of fuss about nothing in my opinion Jon. Markets will simply keep going up, the reason being that they should keep going up. Interruptions to this trend are just a buying opportunity.

The only way out of this debt crisis is inflation. That is it. So nobody should be surprised at how the market is reacting, or wondering why it keeps going up despite (insert blah blah blah).

Dont know what your on about market hasnt really gone up this year seems to me the bull run is over.
Ftse slighlty down for the year
dow slightly up
dax slightly up too
Its not like were in some big bull run right now is it.

 

[Pazienza]

Dont know what your on about market hasnt really gone up this year seems to me the bull run is over.
Ftse slighlty down for the year
dow slightly up
dax slightly up too
Its not like were in some big bull run right now is it.

The bull market started in 2009. They have been known to take pauses on their way to the top .

This might be the turning point of course, but I rather doubt it. The reason being that it makes perfect sense to buy stocks.

 

[barjon]

Whatever the longer term holds (and I think I agree with paz that if the underlying agenda is to inflate the debt away - it's a bit of a surprise that the busy $ printing presses haven't already hit the inflation buttons - then up will go the DOW) I was more concerned with a potentially sharp "relief" rally when the the eleventh hour agreement to raise the debt threshold is reached. If and when it comes it'll probably be fast and furious so if your not positioned beforehand there's a good chance of missing the boat.

'Course you may think in conceivable that agreement is not reached and US will default _ I can't see it.

jon

 

[Pazienza]

Whatever the longer term holds (and I think I agree with paz that if the underlying agenda is to inflate the debt away - it's a bit of a surprise that the busy $ printing presses haven't already hit the inflation buttons - then up will go the DOW) I was more concerned with a potentially sharp "relief" rally when the the eleventh hour agreement to raise the debt threshold is reached. If and when it comes it'll probably be fast and furious so if your not positioned beforehand there's a good chance of missing the boat.

'Course you may think in conceivable that agreement is not reached and US will default _ I can't see it.

jon

In a nutshell.

It certainly feels that way (your short-term opinion) - just skittering sideways, waiting for the starting gun.

 

[Black Swan]

Whatever the longer term holds (and I think I agree with paz that if the underlying agenda is to inflate the debt away - it's a bit of a surprise that the busy $ printing presses haven't already hit the inflation buttons - then up will go the DOW) I was more concerned with a potentially sharp "relief" rally when the the eleventh hour agreement to raise the debt threshold is reached. If and when it comes it'll probably be fast and furious so if your not positioned beforehand there's a good chance of missing the boat.

'Course you may think in conceivable that agreement is not reached and US will default _ I can't see it.

jon

Of course an agreement will be reached, it's all about pr now, who gets the blame in the media..

As for inflating the debt away IMHO that ain't gonna work unless folks' real incomes are inflated too and the elite decision makers don't want that to happen/won't let that happen.. Also with oil at circa one hundred for Sweet crude and 115 for Brent the second leg down in depression 2.0 is a nailed on certainty, so yep hold the shares, they're simply worthless ious with no tangible benefit given their detachment from reality..

 

[Pazienza]

Of course an agreement will be reached, it's all about pr now, who gets the blame in the media..

As for inflating the debt away IMHO that ain't gonna work unless folks' real incomes are inflated too and the elite decision makers don't want that to happen/won't let that happen.. Also with oil at circa one hundred for Sweet crude and 115 for Brent the second leg down in depression 2.0 is a nailed on certainty, so yep hold the shares, they're simply worthless ious with no tangible benefit given their detachment from reality..

Where is money going to go in the near term?

Property?

Bonds?

Cash?

 

[fleetwood]

The bull market started in 2009. They have been known to take pauses on their way to the top .

This might be the turning point of course, but I rather doubt it. The reason being that it makes perfect sense to buy stocks.

Yes yes could just be a pause but its a pretty long pause. Markets to me really do look quite negative and could turn. Still im just a simple noob lol

 

[Pazienza]

Yes yes could just be a pause but its a pretty long pause. Markets to me really do look quite negative and could turn. Still im just a simple noob lol

Well, it's all just different opinions. No market otherwise.