Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24
US House Prices Trend Forecast 2024 to 2026 - 11th Oct 24
US Housing Market Analysis - Immigration Drives House Prices Higher - 30th Sep 24
Stock Market October Correction - 30th Sep 24
The Folly of Tariffs and Trade Wars - 30th Sep 24
Gold: 5 principles to help you stay ahead of price turns - 30th Sep 24
The Everything Rally will Spark multi year Bull Market - 30th Sep 24
US FIXED MORTGAGES LIMITING SUPPLY - 23rd Sep 24
US Housing Market Free Equity - 23rd Sep 24
US Rate Cut FOMO In Stock Market Correction Window - 22nd Sep 24
US State Demographics - 22nd Sep 24
Gold and Silver Shine as the Fed Cuts Rates: What’s Next? - 22nd Sep 24
Stock Market Sentiment Speaks:Nothing Can Topple This Market - 22nd Sep 24
US Population Growth Rate - 17th Sep 24
Are Stocks Overheating? - 17th Sep 24
Sentiment Speaks: Silver Is At A Major Turning Point - 17th Sep 24
If The Stock Market Turn Quickly, How Bad Can Things Get? - 17th Sep 24
IMMIGRATION DRIVES HOUSE PRICES HIGHER - 12th Sep 24
Global Debt Bubble - 12th Sep 24
Gold’s Outlook CPI Data - 12th Sep 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Return of the Boring “Normal” Stock Market

Stock-Markets / Global Stock Markets Dec 11, 2008 - 07:52 AM GMT

By: PaddyPowerTrader

Stock-Markets Best Financial Markets Analysis ArticleAfter a year plus when we have become comfortable with wild intra swings, it seemed odd to have a day when nothing happened twice . Equities, lead by energy and commodity stocks, finished modestly higher in thin end of year trading.


Today's Market Moving Stories

    Santa Is Out Of Money
  • The US House of Representatives passed the long awaited $14bn Auto bailout. It now goes to the Senate for approval but this could prove quite a hurdle as Republicans may opt to filibuster. This will keep markets on edge. It is noticeable that Helicopter Ben Bernanke was none too keen on the deal and got his revenge yesterday when the Federal Reserve turned down GMAC's (the giant financial services arm of General Motors) application to become a bank. They didn't have sufficient capital to access TARP by stealth.
  • News that a whole host of US cities are on the cusp of running out of working capital . Bernanke has suddenly realized that the Fed is mortal and has told them to look elsewhere for a bailout . Indeed the situation has gone downhill so fast for previously prosperous and financially conservative cities that Goldman Sachs are recommending taking out insurance (credit default swaps) against them going belly up. You make think this is purely a theoretical possibility but those of you around long enough will recall the New York City quasi-default in the late 1970's.
  • In the great UK tradition of talking yourself down, the Times today mulls the vista of the British peso at parity with the Euro (maybe they can belatedly join the club).
  • The hard land in China is becoming more evident by the day as alarmingly for policy makers in Beijing global trade is shrinking fast . Despite what they may say in public the only real way out of this bind is to let their currency slide. But this will cause tensions with the new US administration. The contagion effect of the worldwide train wreck is evident all over the export dependant Asia economies. Korea lowered rates by a full 1% overnight and Taiwan is expected to slash rates further later today. And watch out for a sneaky Russian devaluation of the Ruble as oil in the $40's means the economy is bust.
  • The race to zero rates continues apace today as a meeting of the Swiss National Bank cut rates by ½% leaving them now at 0.5%. The central problem for the Swiss is that they are outside the Euro area and if one combines the liabilities of the countries two largest banks (UBS and Credit Suisse); this dwarfs the GDP of the Switzerland. So in theory there is actually NO way that they could BAILOUT the banks if called upon in a meltdown situation. Ireland faces a similar problem though they have more or less unlimited lines to the ECB for their banks. One has already seen what happened to Iceland.
  • So are recent moves in equities just a suckers rally? Well according to the CLSA, Tobins Q Ratio is signalling a ‘horrific' market bottom soon!
  • Note that rating agency Standard and Poor's yesterday issued a piece in which they noted the ratio of “hard to value impossible to sell assets” that banks hold has risen to 15.5%. These level 3 assets now total $610bn which points to more Meredith Whitney style write downs to come.

Largest Private Equity Deal Collapses
In a sign of the times, the largest private equity deal in history has flopped. The buyout of Canadian telecoms company BCE for $41bn by a group comprised of Ontario Teachers' Pension Plan, Providence Equity Partners, Madison Dearborn and Merrill Lynch PE has collapsed. That followed a report from KPMG that if the transaction was completed, it would instantly create an insolvent firm. The purchasers said as a result of the report, the contract had not been fulfilled and hence they were not liable for the $1.2bn break-up fee. BCE does not agree.

Who Was Top Of The Pops In 2008?
Top 10 Economic Predictions and Forecasters for 2008

To this list I'd probably add Willem H. Buiter and the BoE's uber dove David Blanchflower , who has called for rate cuts every month since Oct 2007.

And Finally… A Reminder Of What A REAL Crisis Looks Like Zimbabwe and Hyperinflation

Disclosures = None

By The Mole
PaddyPowerTrader.com

The Mole is a man in the know. I don’t trade for a living, but instead work for a well-known Irish institution, heading a desk that regularly trades over €100 million a day. I aim to provide top quality, up-to-date and relevant market news and data, so that traders can make more informed decisions”.

© 2008 Copyright PaddyPowerTrader - All Rights Reserved
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 losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

PaddyPowerTrader Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in