When will the downward spiral in the stockmarket end?

[Sunny]

u are indeed wrong. the US inflation rate is not that high at all. oil will continue rising but we can absorb much more higher oil prices easily enough. the dow broke through 12750 today, a big resistance point. we are in for a big rally - watch this space

Shame Mickman got himself banned. Would have liked to have got his views now.

 

[jimbob1234]

if oil nose dives then its very good for equity markets . but with this downward spiral at present we need a catalyst to snap back i.e. hike rates, support dollar etc. we could be heading for a major down day today if ECB rise rates more than expected or announce that they are to continue increasing and US payroll numbers come in worse than expected. the euro will break 1.60 then and oil will go beserk

 

[MichaelDes]

if oil nose dives then it’s very good for equity markets . but with this downward spiral at present we need a catalyst to snap back i.e. hike rates, support dollar etc.

Now with the US diminishing in economic stature should oil be priced in dollars? There are fewer dollars in circulation and also less dollars in global bond markets than the Euro. Would Euro pricing make any difference? But yes - America started the problem and still holds the key to the problem, i.e. stop sending the currency down the toilet.

we could be heading for a major down day today if ECB rise rates more than expected or announce that they are to continue increasing and US payroll numbers come in worse than expected. The Euro will break 1.60 then and oil will go berserk

If oil does go berserk and your analogy IMO makes sense then not only will equity markets be toasted but any mild Euro recession will become more protracted and longer in duration. My hope is the oil will subside; there are fewer supply issues than 2004 so the economics of its price do not make any sense.

Moneyweek mentioned that if oil hit $200 mark then there will be about 10million bpd excess compared to daily output. Is there 1 million bpd in excess daily at the moment, or is demand versus supply being equally satisfied? Also anyone can buy futures contract of oil per barrel [158 litres] and speculate with as little as 77cents down. That is wrong and is causing all this smoke and mirror hype. Once the tide turns then the pariah of hedge funds will be shorting IMO like Billyo.

 

[jimbob1234]

yeah your right but it could take a while yet for fund managers to start shorting oil. when it does break it will be swift and violent and people will be broke after it. but at the moment its 145, equites are in bits. people wont return to equities until oil turns back.

oil should be priced in euro really shouldnt it, cant see this happening though ,can you?

 

[MichaelDes]

So the US banks were exposed on here back in Feburary with their pants down and no assets. The US banks were not unique, all banks were doing the same at the credit binge and lending recklessly. The ISEQ is beyond sub 2000 values. What's next? IMO the US bailout is wrong and ultimately won't repair the damage. Interest rates in the UK and US will probably will be cut next week but Libor is now totally disconnected from base rates.

Congress approved another $600bn for Iraq without a squeak and this new bailout will cost $billions. It's like trying to change the tide by peeing in the sea. The credit deleveraging catastrophe not even halfway through a US housing downturn means the efforts to contain this will be futile and printing so many dollars with no one willing for the IOU's will ultimately led to rapid inflation or hyperinflation. Any sort of knock on inflationary effect will be the real consequence that affects daily life here and everywhere.

As an example of runaway inflation - Weimar 1923 when banks notes were cheaper to burn than firewood.


[broken link removed]

Seeking Alpha, NY - 26 Sep 2008
http://seekingalpha.com/article/97527-the-700-billion-cram-down-no-doc-proposal

Doesn’t Bernanke understand the consequences if he pushes the model too hard? It would not be unintended consequences, if he does. It is a logical consequence of pushing the Keynesian model of government intervention way too far, way farther than Keynes himself ever intended.
If Ben is afraid of how demoralizing a Depression is, he should also consider how demoralizing hyperinflation was on the Weimar Republic in the 1920’s. The demoralization of 1920’s Germany is what produced a monster like Hitler. As Senator Bunning put it Wednesday, “We haven’t even passed this bill yet and already Americans are paying for it because of the fall of the dollar as a result of all the new debt we will be taking on.”

.
Where next for wealth protection. Opinions??

 

[ixus]

Hope it's ok bringing up this old thread, haven't been on this forum in a long time.

Very interesting looking back at this thread four years later.

The S&P has only just returned to January 2008 levels after collapsing more than 50%.
The ISEQ, well, it continues to languish at lows.
The euro strengthened and was then smoked with the eurozone debt crisis.

A fair few posters were banned in "the purge".

The events preceeding and leading to 2007/08 inspired me to become a trader.