iCharts Discussions

[ajayhkaul]

psalm did not object to the discussion throughout .... it was relevant ie how we can interpret the european index level data posted by him in view of the volatility?....psalm stated that it was up to the readers to use the info posted by him... that's where it took off albeit tangentially later on.

We would have appreciated your take on the shortcomings/limitations of TA for the benefit of readers.....but it was not to be I guess....

[rk_a2003]

"#50 During the Obama administration, the U.S. government has accumulated more debt than it did from the time that George Washington took office to the time that Bill Clinton took office".



Consider the fact that a quarter of the Global GDP share belongs to America. Now look at the above fact you will be able to feel the weight of the problems faced by the World Economy. Consider some more facts……. American debt is 3.5 times of the GDP. About 60% the global currency reserves has been invested in the US dollar and only 24% in euro.

In case dollar lose its credibility and some of the nations with draw its reserves from Dollar denominations what will happen?!. That’s the main reason for America going all out to highlight EU problems and attacking on euro from all fronts. So as it cannot emerge as an alternative to US $.

[vinay28]

All over the world, people are allowing the economic meltdown to get the better of them, causing stress, which in turn appears in our knee-jerk responses in all aspects of life. Not good for the society, not good at all.

[ajayhkaul]

Here is another view of the current state of affairs for your consideration:


Most investors are scared of a market crash right now.

Fear is the dominant theme. And fear of a genuine market collapse is greater than it has been in a long time.

According to Google Trends, a service that allows you to search activity for certain themes, the number of searches for “Crash 2012” has increased 20 times over in the past year.

As 2011 winds down and the Euro crisis cranks up, "crash"-related searches are accelerating.

But one indicator shows a much different picture forming...

This indicator — which has successfully predicted four out of the last four major stock market upturns — is now signaling 2012 could be a surprisingly strong year.

And not just during the ongoing Euro crisis, but because of it.

History Repeats Itself

There have been a number of market wrenching events over the last 15 years. All of them have been different, but the results were always the same: Every major crisis over the last 15 years has followed a strikingly similar (and profitable) pattern.

The Asian currency crisis in 1997 started off just like everything else. The markets were humming along... Then there’s the whiff of a large problem, which got progressively worse as investors figured out what was really going on. Investors sold in a panic as the problems appeared “systemic.” Then the central banks stepped in, papered over it...

All the extra cash floating around found a home somewhere and a new bubble or bull market is born.

The Russian debt crisis of 1998 followed a similar route. It was unexpected, posed systemic risks, and caused a lot of fear and aggressive selling.

The end result was the same: The coordinated central bank actions to prevent a global economic catastrophe simply papered over the problem.

These two events and the central banks’ aggressive responses laid the foundation for the dot-com bubble that followed. And when that bubble burst, it was no different.

The downturn stemming from the dot-com bust sunk the markets. Central banks stepped in, slashed interest rates, and papered over any problems. The housing bubble and Dow 14,000 were the inevitable results.

The Euro crisis is shaping up to have similar ending.

And it means 2012 could be surprising strong. In fact, one indicator says the worst is likely behind us...

VIX Marks the Bottom

The CBOE Volatility Index, aka “the VIX” or the “Fear Index,” is one of the most useful market indicators ever devised.

Since it directly measures the market demand for “insurance” against a market crash, it directly tracks the levels of fear in a market.

The image below tracks the VIX over the last 15 years.


It shows how it has marked the bottom of each major crisis and when a major turnaround for stocks began:

As you can see, each spike in fear levels came precisely at times when stocks would take off.

The late 90s spike in fear and “emergency” responses from central banks immediately preceded the dot-com bubble.

The 2002 bottom and central banks’ responses came right before a steady five-year run for stocks.

And the 2008 bottom was followed by a market bull run for stocks — once again, fueled largely by the actions of the world’s central banks.

The Euro crisis may be different than all of those crises, but the end results won’t be.


Same Story, Same Ending

To date the Euro crisis has been met with steadily increasing doses of money printing.

Eventually, these small steps will prove insufficient. In time, the “real solution” to the Euro crisis — the massive devaluation of the euro and the outright printing of a few trillion euros — will be politically expedient and enacted.

We’re not advocating for this. It doesn’t solve any problems.

It’s just how the world has been working. And things won't change until it quits working.

Right now, it’s a safe bet what was used and has worked before (in this case, printing money) will be used again and end in the same results.

The only difference this time is the response will be greater — and the impact on the financial markets should be equally massive.(Andrew Mickey)

[vinay28]

Looks like your cup and handle may work! About a month ago, somebody (was it ST?) had posted the "psychological" index. I am not sure about the exact title though. I would love to see the latest chart.

[ajayhkaul]

As mentioned earlier it all depends if and when the QE ie money printing starts ! The market needs the third dose of steroids!

[ajayhkaul]

As blogged earlier , skeletons seem to be falling out of the chinese cupboard ! Another reason why worldwide money printing presses must be oiled and in started in full swing !!!

Consider the following picture: Recent growth has relied on a huge construction boom fueled by surging real estate prices, and exhibiting all the classic signs of a bubble. There was rapid growth in credit - with much of that growth taking place not through traditional banking but rather through unregulated "shadow banking" neither subject to government supervision nor backed by government guarantees. Now the bubble is bursting - and there are real reasons to fear financial and economic crisis.

Am I describing Japan at the end of the 1980s? Or am I describing America in 2007? I could be. But right now I'm talking about China, which is emerging as another danger spot in a world economy that really, really doesn't need this right now.

I've been reluctant to weigh in on the Chinese situation, in part because it's so hard to know what's really happening. All economic statistics are best seen as a peculiarly boring form of science fiction, but China's numbers are more fictional than most. I'd turn to real China experts for guidance, but no two experts seem to be telling the same story.....

Read more here ......

http://economictimes.indiatimes.com/news/international-business/china-emerging-as-another-danger-spot-in-the-world-economy-paul-krugman/articleshow/11165937.cms

[psalm]

This is an article by Gordon G. Chang from the Forbe's Website

http://www.forbes.com/sites/gordonchang/2011/12/18/the-no-1-problem-of-the-chinese-economy/

[rk_a2003]

Ajay

Your write up “Markets in 2012 -- another view” is hitting the bull’s eye. You decoded convincingly how the crisis after crisis emerge in this Economy and subsequently how they were managed.

Technological breakthroughs and inventions too aid in this effort. Transferring the part of the crisis on to the emerging countries is also another trick of the developed world which was often adapted.

The million dollar question is every time are they able to manage?! Will there not be a point where things will change radically and this system collapse and altogether a new system which is qualitatively different and progressive will emerge from it.

We don’t know yet. At least there are no such signs as of now.

So, there are two other possibilities as per your projection they may manage as usual and pump up the Economy/ Market or the whole system is dragged in to chaos .The possibility for the latter is remote. Though can not be ruled out.

So can we conclude that the time is nearing for Bottom Fishing….To pick your stocks which are fundamentally strong and which remain so for a reasonable time?!.

Is anyone there who can offer the advice?!.

[ajayhkaul]

RK ..... Being inside the box ie looking mostly at equities for investments , we are like the proverbial frogs in the pond ie our 'ocean'.

But consider this :

Money is being yanked out of the stock markets
Over 90% of mutual funds are bleeding
Brokers are going broke !

So where is the money going : Alternatives ?

'....a slim group of investors look at stocks as one small portion of the investing equation -- not the equation.

Tired of the high-risk, low-return model prevalent in the stock market these days, informed investors are fleeing the equities game. So far this year... billions have been yanked from the hands of the boys on Wall / dalal Street.

Where's it going?

The money is showing up all over the place. But mostly it is going to assets that have shown stability over the past 36 months.

One place... is fine art. The popular Mei Moses Fine Art Index surged by over 16% last year and is up another 11.8% through November. Even better, thanks to the explosion of Asian wealth, traditional Chinese art surged by 24% during the year's first nine months.

These last two years aren't anomalies. That's the best part. Over the past decade, the Mei Moses Index, with a compound annual growth rate of 4.86%, has beat the pants off the S&P 500 and its anemic 1.35% growth.

Of course... it's not just art.

Vintage car auctioneer Gooding & Co. tells us its average selling price is up 7% over the last year.

It's stamps, too. Most folks don't know it, but two-thirds of all stamp collectors live in Asia (it's big business). So when we see strong emerging market growth... we see an explosion in stamp prices.

A recent auction in Singapore broke all sorts of records as $12.6 million traded hands. One stamp that was worth $133,000 last year... sold for $221,000 this year. That's 66% in a year.

This massive growth in alternative assets is changing the way we invest. Like I said, no longer are stocks our first choice. They're one of many choices, even for the smallest of investors.

It's a trend that has scrambled those in the brokerage business. They've got to change their business model... and fast. Remember, their commission check shrinks with every rupee you pull out of one of their wealth-eroding funds.

I say it's their turn to go broke. Ditch your mutual funds and the thieves who run them. We've got alternatives....'

Below 4600 nifty spot was always a dicey area... bears rule there so ...

Bottom is not in as yet in my opinion . There will be many bull traps set while some try to get out of their positions... The FIIs are wanting nothing to do with our market... Also , as I wrote earlier in my blog the accounts have to be closed and heavy bonuses to be collected... wait for the dust to settle .

If money is not pumped/printed , the leaders/insiders risk being lynched by mobs. Will they risk it ? Also elections in US in 2012 , called the presidential year is historically a very bullish time

War is costly ...hardly advised at this time .

What would you do as the ruler of the Junta aka politician /insider ? You know the wealth of the masses has eroded significantly over the years and getting worse . Will the junta keep watching helplessly ? Civil wars ? Middle east erupted when food inflation stung the masses and many dictators were thrown out (Egypt , Yemen , Tunisia etc) Other richer rulers in the middle east doled out heavy funds and employment in the government. Except that these were not democracies , the rulers want to stay and not be lynched by the mob. What happens in a democratic setup?


Meanwhile .... we were taught about the feudal system in history books in school .So this makes interesting reading:-

The genius of modern democracy is that it makes the citizen a party to his own enslavement. Rather than give up 10% of his output to his feudal lord and master, he gives up 30% to 50% to his democratically-elected bosses. They tell him what to do. And he believes he is giving the orders!

And then, he believes he has discovered the best form of government in the world. It is so good he can't wait to force others to be democrats too.

[rk_a2003]

"Being inside the box ie looking mostly at equities for investments , we are like the proverbial frogs in the pond ie our 'ocean'."

“Tired of the high-risk, low-return model prevalent in the stock market these days, informed investors are fleeing the equities game.”

“The genius of modern democracy is that it makes the citizen a party to his own enslavement. Rather than give up 10% of his output to his feudal lord and master, he gives up 30% to 50% to his democratically-elected bosses. They tell him what to do. And he believes he is giving the orders!”

Ha...Haa...Haaa

[vinay28]

zer good!

[ajayhkaul]

Dank..

[ajayhkaul]

Recall that Chavez of Venezuela asked for his gold back some months ago.

Now he is also associating with Iran and Obama said he is concerned about actions the Venezuelan government has taken that have “restricted the universal rights of the Venezuelan people, threatened basic democratic values and failed to contribute to the security in the region,” ( Just as Gaddafi , Saddam)

In retaliation Chavez says Mr O is a 'clown' !

http://www.theblaze.com/stories/hugo-chavez-obama-is-a-clown-and-an-embarrassment/

No prizes for guessing who is next on the chopping block !

[psalm]

But Ajay, chavez has been and will be there in U.S.'s hitlist. However, CIA or Pentagon has never been able to do anything. Chavez, Castro etc are the ones U.S. has never been able to touch. It will remain the same, as long as the people of their countries don't want a change in regime.