Could Asia go into a depression? (update 2)

Could Asia go into a depression? (update 2)

• South Korea exports drop (May 2009) year on year -22.4%

• South Korea imports drop (" ") y/y -42.2%

• Singapore GDP fell to -3.9%. (- 6% an -9% is on the horizon).

• Japan's Tertiary index (domestic/consumer services) has collapsed -4.0%. (A slump of very restrained domestic spending at 12 year low. Market should be shitting it's self once Government starts tax hikes, that could be in 2009)

• Japan's crude steel index drops -43.6% y/y largest drop since records began (1949) for crude steel.
  

Oil on a 25mth cyclical bull run?

As discussed in 2009 oil price - note January lows 2007/2009. Start of a 'oil' bull market?, the oil price has moved up from $56 and broken through resistance line at $60. We could be at the start of a cyclical bull run that occurred in January 1st 2007. The current new market highs after the lows of 33.22 on January 1st 2009 have mirrored a similar patten within a two year period of January 1st 2007 and January 1st 2009.

Of course there has been murmurs within the market of a global recovery, we all know deep down that a recovery isn't going top happen anytime soon and the current stock market rallies have been on the back of political 'support' which is slowly dissipating out of the market. Support by means of trying to instill confidence which in turn created a type of illusion in the market, causing the market players to overly anticipate an economic recovery.

The question is can oil hold it's own and break out further into high 60's? Which can be answered as a distinct possibility. China has been hording oil as it is a net importer and Japan has been doing the same. Although the US Oil reserves are declining. Not to mention that output on oil could be slowing and demand increasing. Even mild demand could move the oil price higher. Another factor of course is US dollar weakness and geopolitical issues which always effects the oil price. But we are looking at this as a cyclical patten, from a technical chart perspective it is clearly there.

(Please click on graph for larger image.) Note the oil price could peak at $70.00 within the next few weeks or early June 2009

*morbius glass does not give investment advice. Trade at your own risk

Morbius Glass store - Blu Ray Players

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Could Asia go into a depression? (update 1)

Could Asia go into a depression? (update 1)

This will be a new blog post (continuously) until Asia 'officially' recovers. The title of the post will be Could Asia go into a depression?. In light of the rather tiring dialogue about an Asian recovery pulling the world out of recession. This is simply not happening, there is a prolonged slump in Asia that could become a domestic problem especially for their banks, in which they were able to dodge the subprime (US) bullet. However like Spain's well capitalised banks, the domestic 'bullet' will not be dodged.

Institutional investors are mindlessly locked in on an upswing of political 'goodnews' rhetoric (yes politicians have successful rallied markets, - hence the recent rallies. Note recently UK's Chancellor Alistair Darling saying that UK will return to growth in 2009

These posts are for the everyday trader, to judge for themselves when a buying time will be right for Asia. So it's bad news until good news arrives.

• Japans GDP drops -4.0% worst drop in economic contraction recorded in history
  

Some bar opening in NYC... and Daria Werbowy

To me opening high end bars (a sports bar in NYC) in a recession is kinda pointless, still whatever people are into. Me personally, would like to see a coffee shop (not run of the mill), yeah it sells booze too, but it's dark, intimate and hidden away.

Anyway here is a pic of Daria Werbowy (yes I would like to invite her to a dark, intimate coffee shop...for a coffee and cake of course):


















Original article came from mens.style, click here

How are the markets trading? Liquidity inflows? Green Shoots? Or market hysteria?

There are some subtle arguments forming about the recent stock rallies. The consensus view is that there is improvement in the economy (better 'bad' news), not from overall improvement in asset markets per se. In the sense, that a report may come out that housing stats have slightly improved, or company profit has come in better than expected (from a low base). The stock market then reacts to news, it's the search for good news after such a pronounced slump in equity markets for the last 8mths. The other argument from a smaller camp is that liquidity pumped in from central banks, namely the Federal Reserve is supportive of asset prices, thus underpinning price fluctuations within the stock market. Money returns to the market and stocks are bought.

The better 'bad' news argument overshadows the liquidity argument by the fact that the rallies are turning into a buying hysteria - on the small amount of good news. The psychology of the current market doesn't seem to represent a rational perspective. It could be argued that the recent market rallies (US) started after The US President Barack Obama announced that stocks were cheap on March the 5th 2009, please refer to graph:




The continued rally from March 9th 2009 was from the speculative internal memorandum by Citigroup chairman Vikram Pandit, stating that Citigroup will return to profit, mirroring profits from 2007. please refer to graph (note rally point from March 9th 2009 - running deal time daily):


Even though economic fundamentals remain poor, good 'bad' news have rallied the markets to the highs that we currently have, although it pains me to say this, it is President Obama and Treasury Secretary Tim Geithner (re: bank bailouts/toxic assets - despite the banks remaining unprofitable in 2009. Watch for write downs relating to commercial real esate) that are currently underpinning the stock market. Yes politicians and Government officials have successfully rallied stock markets.

A better example and a more recent one of political stock market related hysteria is the Indian market, rallied occurred after India's National Congress Party were voted in as a majority (Tuesday, 19 May 2009), the market rallied to 651.50 (17.74%) in one day!
please refer to graph (running real time daily):



The liquidity argument holds some truth (supporting stock prices) on the pretext of the Fed and Treasury flooding the market with liquidity, but it is a volatile perspective; especially on the back of a global tax shortfall as discussed in "Green shoots". The Global economic recovery, or plastic weeds in quicksand? Be concerned regarding a Global tax shortfall.

If the Obama administration decides to increase taxes for Corporate profits, this will eventually squeeze out liquidity from the markets. This could happen sooner than later as they (US government) will desperately try and fill the deficit hole.

The point is, the market is buying on speculation even if it is from liquidity perspective which I am beginning to doubt. But the speculation is on a political/market influence that is trying to create a artificial environment of market confidence. Reflecting back to the Indian (nifty exchange) stock market surge which is nothing less than bizarre and an alarming aspect of irrational aspects of the market. We are now well overdue for a substantial correction in the market, the longer the market overreacts (on the upside) to 'not so bad' political/economic news, the harsher the correction will be.

The 'Duke' arrival soundtrack ' Escape From New York'

First please check out the The morbius glass schlock, horror, 80’s, grindhouse, sex and violence movie marathon – Escape From New York (1981) Director: John Carpenter. , don't worry the movie mathron is still going.

Anyway, not only is Escape From New York a damn slick 80's cult flick , the soundtrack is just so good.

Especially the Dukes entrance track: