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3/09/2009

Waiting for Pipe Piper to blow his tune

The Shanghai and Tokyo stock markets have started to stabilise and turned around. Australia has extended its curb on shortselling till the end of May. Proactive govts who are concerned with how their stock exchanges are performing and how to shore up the falling values of the stocks are actively doing their parts. We used to have commentaries to talk up a falling market when the situation justified it. We used to distinguish our markets from the rest as our market was sound. And our market is sound. At least many of the companies are still reeling in millions and billions in profits. Some have cash hoards in the billions waiting to prey on distressed companies. Compare them to the companies in the US when many are insolvents, then we ask the question, why are the values of our stocks being battered down? Taken that some of their revenues will be affected. But they are still healthy companies, especially our banks and blue chips. When will the Pipe Piper stand out to blow his tune? It seems that everyone is just waiting. No one dares to utter his bit if the Pipe Piper does not act. It is like a headless corpse waiting for something to happen. And in the meantime the stockmarket continues to be slammed irresponsibly and billions being lost. There must be a return to value for the sound and profitable blue chips. It would also shore up the values of Temasek and GIC when the values of their stock holdings improve. Their books will definitely look better too. Where is the Pipe Piper?

10 comments:

Anonymous said...

Well, the Japanese Government did say that they are considering buying up shares to prop up the Nikkei. Have they done that and how much of the stability is attributed to the intervention, nobody knows.

Lost Citizen

Matilah_Singapura said...

The market will fall again. This is just a rally. The next fall(s) will be spectacular and IMO new record lows will be tested.

The bond market is very quiet. Wait for the action there, it will be bloody, brutal and aggressive.

Nearly every govt on earth has a "stimulus and recovery package", leading to budget deficits and soon will have to tap the bond market to finance their grandiloquent social programs (which are all doomed to fail, I'm happy to add, since it is impossible for governments to create "value")

Also as companies earnings dry up, many will be terminating their leases in the commercial real estate sector, and commercial real estate is even more highly leveraged than the mortgages (or 2nd mortgages) of the domestic housing sector.

redbean said...

the chart for nikkei is levelling and the fall arrested. the chart for sti is still going down.

ideally market forces should do the work. but when market forces are controlled and used by some players who are able to do so, then it is not a perfect market and unfair to the weak players.

then there is the issue of market confidence, integrity and viability.

Matilah_Singapura said...

"Market frces" are nothing more than the voluntary actions of buyers and sellers.

When the govt inflates the money supply, some of the "new money" will end up bidding up sock prices.

There are numerous historical examples for this: Zimbabwe — record levels in stock market before and during hyper inflation, and Argentina in the 90's when they inflated to "save" themselves from going bankrupt. (The country is still fucked economically. Stimulus doesn't work)

The reason stimulus packages don't work is because they do not create more wealth. In essence, pump-priming simply re-distributes resources.

Wait for it. After the next rally, there's going to be another spectacular crash. I'm looking forward to it!

Anonymous said...

Me too. STI 1200 pts and Dow 5000 pts possible.

Matilah_Singapura said...

Dickie Branson, Sir to all y'all says...

Nail. Head. Hit.

Anonymous said...

the problem with US is their toxic housing asset. Soon, US need to offer green cards to all tom, dick and harry in foriegn lands who could cough up the cash to get those houses. Than the trouble can be settled. Singapore may need to grant dual citizenship if this happened. If not the US's vacuum machine may such many CPF money away.

Matilah_Singapura said...

The wonderful thing about the so-called American "free enterprise" system is that is runs on ever growing debt. This debt is primarily financed by the hard working Asians who exports their produced trinkets to satisfy the enormous appetite of the American consumer.

With the earnings of banana US dollars earned in the trade, Asians — primarily their govt and their banks use the toilet paper USDs to buy US treasuries and other securities and assets.

If Asians stopped producing, and saving the money they earned from their labour and effort, the US would have no one to borrow from. China and Japan hold are the bigest holders of US debt.

Keep working you buggers! Uncle Sam and Uncle Oh-Bummer need your money to go to war, buy votes and reward Wall Street!

> Singapore may need to grant dual citizenship if this happened. <

It's been happening 'de facto' for decades. They can't make it 'official' because that means changing the constitution. Many thousands of S'poreans have more than one passport. This is no longer as 'hush-hush' as it was in the past.

Matilah_Singapura said...

BTW, if you don't already know JIM ROGERS who co-founded the Quantum Fund with Soros, also well known analyst, investment banker and financier moved to Singapore in 2007.

You can google him and find out more. He has a blog at blogspot.

Singapore has definitely gained on this one.

Anonymous said...

The blog is not actually Jim Rogers'. Still a nice summary of his views + links to his appearances.