Financial News

[cabiness42]

How old are you?

 

Seems like a gamble if you still have years and years left before retirement. Timing the market has never worked, even for the pros.

 

I've done pretty well with it in the past. I always err on the side of caution, because even if I miss an upswing in the markets, I'm earning 3% a year, which is a lot better than losing 5-10% in a week.

[southsider2k5]

Not sure how much sense that makes. You know what they say about people who try to pick bottoms.

 

My favorite trading saying

[Chisoxfn]

Not sure how much sense that makes. You know what they say about people who try to pick bottoms.

That their finger smell?

 

Seriously, I don't know the answer..but am I right? I actually presume this is a decent enough to buy. But better yet, just stick with consistent allocations (DCA) and you should do fine (as long as you are looking long term). I don't invest for the short-term or with short-term funds so I can't comment on that. Anything I have in the market, the plan would be, that I have no short-term needs for such funds.

[southsider2k5]

That their finger smell?

 

Seriously, I don't know the answer..but am I right? I actually presume this is a decent enough to buy. But better yet, just stick with consistent allocations (DCA) and you should do fine (as long as you are looking long term). I don't invest for the short-term or with short-term funds so I can't comment on that. Anything I have in the market, the plan would be, that I have no short-term needs for such funds.

 

Unless you believe China is about to collapse, it is a buying opportunity.

[Balta1701]

That their finger smell?

 

Seriously, I don't know the answer..but am I right? I actually presume this is a decent enough to buy. But better yet, just stick with consistent allocations (DCA) and you should do fine (as long as you are looking long term). I don't invest for the short-term or with short-term funds so I can't comment on that. Anything I have in the market, the plan would be, that I have no short-term needs for such funds.

The U.S. corporate market still seems strong, Europe is at least currently stable until the next Greek crisis arrives in a year or so (or in a few months depending on what the IMF does), China's fluctuations will hit the U.S. manufacturing sector even more but that's already been devastated so the exposure to the U.S. of that is limited.

 

The U.S. market should weather this as a temporary blip/correction unless someone does something stupid...i.e. the Fed could raise rates in the near future as they've been threatening to do and turn this into a major rout...or we could run into a 2002-style explosion of all sorts of financial fraud schemes that were surviving as long as markets kept moving upwards & couldn't survive the down blip.

[Jenksismyhero]

I've done pretty well with it in the past. I always err on the side of caution, because even if I miss an upswing in the markets, I'm earning 3% a year, which is a lot better than losing 5-10% in a week.

 

Yeah but you could potentially be losing out on bigger gains when the market rallies.

 

I invest the same amount of money every month and ride the waves up and down. This month I may add more to try to catch the bottom, but I never take out. 2008 was a great example of why that's a bad strategy.

[southsider2k5]

The U.S. corporate market still seems strong, Europe is at least currently stable until the next Greek crisis arrives in a year or so (or in a few months depending on what the IMF does), China's fluctuations will hit the U.S. manufacturing sector even more but that's already been devastated so the exposure to the U.S. of that is limited.

 

The U.S. market should weather this as a temporary blip/correction unless someone does something stupid...i.e. the Fed could raise rates in the near future as they've been threatening to do and turn this into a major rout...or we could run into a 2002-style explosion of all sorts of financial fraud schemes that were surviving as long as markets kept moving upwards & couldn't survive the down blip.

 

Our economy affects China on a macro level WAY more than China hits ours. With the barriers to entry, things don't really flow that way.

[Balta1701]

Our economy affects China on a macro level WAY more than China hits ours. With the barriers to entry, things don't really flow that way.

The way I'd say it is their undervalued currency is a major long-term negative on the U.S. Job market, so they have a huge long-term impact, but short-term shocks in China aren't likely to flow the other way. Close enough.

[southsider2k5]

The way I'd say it is their undervalued currency is a major long-term negative on the U.S. Job market, so they have a huge long-term impact, but short-term shocks in China aren't likely to flow the other way. Close enough.

 

And right now their central bank is spending a ton of dollar reserves trying to keep that float from eroding, taking away some of their other economic stimulus options.

[bmags]

Was reading something interesting on how china's huge investment into real estate to the point of overextension means they don't have an easy area to target to reinflate economy.

[Chisoxfn]

The U.S. corporate market still seems strong, Europe is at least currently stable until the next Greek crisis arrives in a year or so (or in a few months depending on what the IMF does), China's fluctuations will hit the U.S. manufacturing sector even more but that's already been devastated so the exposure to the U.S. of that is limited.

 

The U.S. market should weather this as a temporary blip/correction unless someone does something stupid...i.e. the Fed could raise rates in the near future as they've been threatening to do and turn this into a major rout...or we could run into a 2002-style explosion of all sorts of financial fraud schemes that were surviving as long as markets kept moving upwards & couldn't survive the down blip.

Raising the rates would push the primary blue chips back as they are already struggling to hit expectations with the strong dollar...let alone pushing it stronger.

[Chisoxfn]

And China could very well be crashing. You just never know when that bubble is going to burst. They've done so much to stop it so we will see. More so though, it appears a lot of what they are doing recently is to do everything they can to keep the Yuan in China vs. those funds getting spent overseas on real estate, etc. They want that money re-invested in their economy vs. others.

[Balta1701]

And China could very well be crashing. You just never know when that bubble is going to burst. They've done so much to stop it so we will see. More so though, it appears a lot of what they are doing recently is to do everything they can to keep the Yuan in China vs. those funds getting spent overseas on real estate, etc. They want that money re-invested in their economy vs. others.

Since they're such an exporter and not an importer it's hard to see that even if their bubble does burst, it will move that far out of China. Their bubble bursting could just push prices down even more on Chinese made goods, leading to higher U.S. corporate profits. The U.S. demand for those goods isn't going to go away.

 

Some of the numbers I saw a few weeks ago argued that ~98% of Chinese stocks were owned by Chinese nationals and corporations and that the government has allowed very little foreign investment in those markets. Even major implosions in their stock markets and real estate markets could very well stay confined mostly to China.

[bmags]

How come all of the strongdollar heads aren't out there telling us how great this is?

[Jenksismyhero]

Was reading something interesting on how china's huge investment into real estate to the point of overextension means they don't have an easy area to target to reinflate economy.

 

They were/are pushing their citizens to buy up real estate in empty cities built for millions as great investments. It's crazy.

[Jenksismyhero]

Dow with quite the resurgence. Down 1k just after open, now only down 150

[bmags]

They were/are pushing their citizens to buy up real estate in empty cities built for millions as great investments. It's crazy.

 

Does the outside real estate investment in US from China actually help US in any way? It seems to be a hinderance considering rent/house prices in th emajor cities.

[southsider2k5]

Was reading something interesting on how china's huge investment into real estate to the point of overextension means they don't have an easy area to target to reinflate economy.

 

They have huge levels of municipal level debt, as I understand it.

[Chisoxfn]

Since they're such an exporter and not an importer it's hard to see that even if their bubble does burst, it will move that far out of China. Their bubble bursting could just push prices down even more on Chinese made goods, leading to higher U.S. corporate profits. The U.S. demand for those goods isn't going to go away.

 

Some of the numbers I saw a few weeks ago argued that ~98% of Chinese stocks were owned by Chinese nationals and corporations and that the government has allowed very little foreign investment in those markets. Even major implosions in their stock markets and real estate markets could very well stay confined mostly to China.

I am talking about the mega dollars within China that is invested abroad. For example, SoCal Real Estate and other hot real estate markets. Other sectors as well. That is money that China is trying to keep invested in China vs. moving abroad and part of what they have been doing over the past year has been to limit funds leaving the country. The loss in the market and weakening of their currency will impact those people who are trying to buy here (or already have stuff here and now are far less wealthy as they were previously due to their domestic losses...which could spur them to have to sell properties here).

[southsider2k5]

Down 588 on the day, after being off as much as 1000 points early, and has high as down only just under 100 points. The last hour of trading had a trading range of 400ish Dow points.

[caulfield12]

One thing to remember is that at least 80% of the stocks at Shanghai had trading suspended at their daily 10% loss limits, so the theory remains Shanghai could fall from 3200 another 500-700 points.

 

The focus here has been the slowdown/impact in commodities-driven countries such as Australia, Russia, Brazil, etc., that export to China.

 

Lots of talk from Japanese about currency wars if the rmb continues its descent. Vietnam has already started the process in order to remain competitive.

 

Rumor out of Beijing is that real gdp growth is closer to 2-3% and that many "mom and pop" investors are growing increasingly frustrated with the government essentially promising their stock and real estate purchases would continue to rise. Despite all the market interventions, the key 3500 point barrier was easily breached yesterday with no response other than saying that provincial pension funds can eventually throw 600 billion more (30% of net assets, over two trillion) into the lottery of that aforementioned market as their own managers were only earning 2%, similar to the same arguments we hear in the US about privatizing the SS trust fund.

 

Nosediving oil prices are not really helping matters.

 

If you're looking for micro signals, Jack Ma of Alibaba fame just spent $186 million on a Hong Kong property (one house) and something like $123 million on another in the Catskills.

Edited August 24, 2015 by caulfield12

[caulfield12]

So to summarize, companies with a lot of exposure to China like Deere, Apple, European luxury goods exporters, anything to do with construction/real estate, raw materials/metals, better to steer away from...but if the US economy is actually growing at 3.5-4% then the bottom of the collapse/overreaction in the US has to be near.

 

You started to see it with the pushback from bottom feeders today.

 

Of course, panic and anxiety is never logical, whether its Dutch tulips, 1929, 1987, 1998, 2001-02, 2007-2009, etc.

 

As FDR famously said, "the only thing we have to fear is fear itself."

[Chisoxfn]

So to summarize, companies with a lot of exposure to China like Deere, Apple, European luxury goods exporters, anything to do with construction/real estate, raw materials/metals, better to steer away from...but if the US economy is actually growing at 3.5-4% then the bottom of the collapse/overreaction in the US has to be near.

 

You started to see it with the pushback from bottom feeders today.

 

Of course, panic and anxiety is never logical, whether its Dutch tulips, 1929, 1987, 1998, 2001-02, 2007-2009, etc.

 

As FDR famously said, "the only thing we have to fear is fear itself."

Who is saying the US economy is growing 3.5 - 4% per year. I've never seen any sort of growth figures that high. That would be insanely strong growth for a country our size. Maybe you and I are thinking of different metrics from a growth perspective?

[Balta1701]

Who is saying the US economy is growing 3.5 - 4% per year. I've never seen any sort of growth figures that high. That would be insanely strong growth for a country our size. Maybe you and I are thinking of different metrics from a growth perspective?

All of the Republican candidates insist they'll make that growth rate happen if you vote for them

[Chisoxfn]

All of the Republican candidates insist they'll make that growth rate happen if you vote for them

I'd be delusional if I thought Bush's so called 4.5% growth rate was at all possible. It isn't. It is a bunch of non-sense, which is exactly what every president gets elected on. Every president claims if you listen to my plan we'll get some insane historical treatment of some sort. Save jobs...make you richer, blah blah blah.