Best of the Week

XL's Spreadsheet Fails to Addup

Economics / Recession 2008 - 2010 Sep 12, 2008 - 08:03 AM

Best Financial Markets Analysis Article XL, Britain's third largest tour operator went bust today leaving more than 90,000 holiday makers stranded across the globe and another 200,000 with advance bookings facing a loss. The company was forced to call in the administrators this morning after last minute financial backing talks failed.

As I warned in the article of 6th Sept and newsletter Credit Crisis Phase II - The Economic Crunch, the fallout from the derivatives deleveraging due to basically banking sector greed during the credit boom years has gradually traversed itself from the devastated financial sector towards the wider economy, no sector is being left untouched with the last sector to feel the pinch being the commodities that as little as a month ago were still in full boom mode, now on break of multiple chart triggers are feeling the full force of the global Deleveraging as warned of as early as March of this year DELEVERAGING- Gold and Commodities Teetering on the Brink of a Bear Market?

The gold market trend was warned of during June 2008 in the article -Nothing Sweet About Gold , The downtrend target of $800 has now been more than exceeded with crude oil collapsing in on itself towards $700 whilst those with heavy gold and precious metals exposure erroneous cry of market manipulation. The only true market manipulation being observed is the smack in your face bailout of Freddie Mac, which was only taken as last resort to prevent a collapse of the US financial system as the $1.7 trillion foreign holders of Fannie and Freddie debt panicked by selling out of their holdings, which would ripple right across the US and world corporate bond markets.

With Crude oil trading at $146, I warned of an imminent peak and trend to a target of $110, 04 July 2008 - Crude Oil Seeking Black Swan for Spike above $150 in Overbought State , subsequent analysis of gave a crude oil target of $80 - 16 July 2008 - Crude Oil Parabolic Move Driven by Inflation Hedging that Could Unwind

Today's news of XL's collapse is just the first sign of the recession that the UK looks set to enter into this year, already the forex traders have started to dump sterling as the worlds scared money rushes into the US Dollar which is now well into its bull market. The immediate target for sterling of $1.80, in the article of 17 Aug 2008 - The US Dollar Bull Market , as long since been left in the dust with sterling presently standing at $1.75. The euro target of 1.40 has also been reached. However the dollar at 80, remains on target for USD 90 by early 2009.

By Nadeem Walayat
http://www.marketoracle.co.uk

Nadeem Walayat has over 20 years experience of trading, analysing and forecasting the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication. We present in-depth analysis from over 150 experienced analysts on a range of views of the probable direction of the financial markets. Thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

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Comments

John
15 Sep 08, 14:50

oil

Good Article. Looks like we are headed back to sanity in Real Estate, oil and the dollar. John http://www.houseforsaleweb.com/

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