sp500 FAMOUS 10 week upleg HISTORY,only for 1st time 9 weeks
CRITIERIA FOR 10WK UPLEG:START WITH A LONG CANDLE BODY,LAST WEEK ENDS WITH A LONG CANDLE BODY

1st HALF

1.mar9 2009 to may4 2009(9weeks)
up 260pts
672-929

2.JUL13 2009- SEPT14 2009(10WEEKS)
up 200points
875-1075

3.nov2,2009-jan4 2010(10weeks)
up 120pts
1029-1145

FIRST THREE 10WEEKS UPLEGS MAINTAIN BY UPWARD SUPPORT TRENDLINE CONNECTING LOWS

4. feb15 2010-apr19,2010(10weeks)
up 140points
1079-1218

SECOND HALF

5. AUG30 2010-NOV1 2010(10WEEKS)
UP 190POINTS
1040-1228

6. NOV29 2010---???
SO FAR,nov 29 2010 TO NOW,JAN 8 IS 6 WEEKS
UP 100POINTS SO FAR IN 6WEEKS
1173----??

FOUR WEEKS TO GO.....

THE RESTING PERIOD

1.MAY11 2009-JUL6 2009
MAX DOWN 60POINTS
930-869
9WEEKS
TYPE OF CONSOLIDATION:DOUBLE TOP,RETRACE TO 78.6%FIB of rise(672 to 929),down 6.5pc
bounce off 880,23.6pc of plunge

2.SEPT21 2009-OCT26 2009
MAX DOWN 54POINTS
1074-1020
6WEEKS
TYPE OF CONSOLIDATION:DOUBLE TOP AND HORIZONTAL BAND,bounce off 38.2pcof plunge FIB

3. JAN11-FEB8 2010:
MAX DOWN 90POINTS
1150-1044
5WEEKS
TYPE OF CONSOLIDATION: break uptrend diagonal support line connecting lows of starting weeks of 1st two 10 weeks,down 9pc,ALMOST MISSING "CORRECTION" technical definition of 10pc

4. END OF FIRST HALF:
max down 210points
1220-1010
19weeks
TYPE OF CONSOLIDATION:bounce off 38.2pc fib of 07-09plunge,1013

START OF 2ND HALF

5.MAX DOWN 50points
1227-1177
3weeks
TYPE OF CONSOLIDATION:park below 1228,61.8pc fib of 1576-666 plunge


OVERALL MOVEMENT OF SP500:

move beyond 23.6pc to 930(23.6)--9WEEKS
fell back retest 23.6pc
went beyond 38.2pc to 1075(38.2pc)--10WEEKS
fell back retest 38.2pc 1013
went beyond 50pc to 1145(50pc)--10WEEKS
fell below 50pc 1121 to 1044(miss technical definition of "correction")
went to test 61.8pc 1228 FAILED,NEVER GO BEYOND 1228 (61.8)--10WEEKS
PLUNGE 210pts due to EXCUSE EURO CRISIS,BOUNCE OFF 38.2pc 1013,(NARROWLY AVOID BEARMARKET DEFINITION OF 20PC)
went back to retest 61.8pc at 1228 (61.8)--10WEEKS
fell 4pc just below 61.8pc to 1177(just belown3pc rule)

THE GOLDEN QUESTION!!!

NOW!!!GOING TO 1320 OR 1381(78.6PC???)

im going to change my estimate because everytime sp500 rise 10weeks sure to go to A higher fib OR BEYOND a higher FIB(once we cross that FIB)

NOW MY ESTIMATE FOR THIS RALLY END 4 WEEKS LATER AT 78.6PC 1381-1400!!!!!

MEANING THERE WILL BE A RALLY OF extra 100-120POINTS FROM 2ND WEEK JAN TO 1ST WEEK FEB 2011

MY COMMENTS::

very well planned indeed!!!IVE SHOWN HOW TECHNICAL THE STOCKMARKET IS..EVERY UPLEG,DOWNLEG HAS SOMETHING TO DO WITH TECHNICALS,patterns.THOSE PEOPLE WHO NEVER STUDY THOROUGHLY WILL NEVER UNDERSTAND THE MAGIC OF TECHNICALS


fibonnaccis of sp500 of big plunge (1576-666) 2007
23.6pc: 880
38.2: 1013
50pc:1121
61.8pc:1228
78.6: 1381

Wealthy Singaporeans cautious about investments



Yet more than half of them still managed to grow net worth in the last six months.

The latest findings of the HSBC Affluent Asian Tracker show that affluent Singaporeans are relatively cautious about investments, when compared to their Asian counterparts.

More than half of affluent individuals surveyed in India (54%) and HK (52%) and almost a third in China (29%) and Taiwan (28%) said that they are looking to increase their investment, particularly in local securities. By comparison, only 19 percent of affluent Singaporeans plan to increase their investment in equities and bonds, according to an HSBC report.

A wave of affluent investors taking up new investment products is also expected from Greater China: 32% in HK, 21% in mainland China and 12% from Taiwan, but in Singapore, only 1 percent planned to take up new investments.

The third wave of the HSBC Affluent Asian Tracker was conducted by Nielsen for HSBC across 2,072 affluent individuals aged 18-65 in seven key markets in Asia from February to April 2010. With the last wave conducted in September to October 2009, the survey gauged the views of people in the top 10 percentile of the population by liquid assets or mortgage value.

The survey also calculated a risk index to measure mentality and behaviour towards security and growth. On a scale of 0-200, where 0 represents security and 200 for growth, markets tended to hover near the mean of 100 for Indonesia (100), India (100) and mainland China (99) showing a more balanced attitude toward risk compared to six months ago.

The more mature markets of Taiwan (89), Malaysia (89), Singapore (82) and Hong Kong (82) show a shift to a security-oriented investment strategy. Singapore registered the largest drop in risk appetite, from 95 in the last survey six months ago to 82 in this survey.

Preference for stable wealth growth
This cautious approach appears to be working for affluent Singaporeans, as the vast majority maintained or grew their net worth in the last six months (91%). While this is a consistent trend across the region, Singapore registered the highest percentage of affluent individuals who maintained and grew their assets in the region. When compared to the last survey, Singapore also has the largest increase in affluent individuals who maintained or grew their assets in the region (91% vs 73%).

Despite being relatively conservative, affluent Singaporeans are among the top three countries with the highest increase in total net worth in the region. More than half of affluent Singaporeans increased their total net worth in the last six months (52%). However, it is the affluent Mainland Chinese who are leading Asia’s wealth surge with 69 percent increasing their total net worth in the last six months; followed by Malaysia at 58 percent. The Singapore findings are fairly consistent with the last survey, when 53% of Singaporeans saw an increase in total net worth.

Consistent with the conservative investment approach of affluent Singaporeans, 47 percent – the highest in the region – said that they preferred to focus on capital protection when asked about risk appetite. Singapore also registered the largest increase (29%) in affluent individuals who tended toward capital protection in the region.

The majority of affluent individuals in the other countries have a moderate appetite for risk. Indonesia (25%) and Malaysia (23%) showed the largest increase in people with a bigger risk appetite. In Singapore, only 8 percent - the lowest in region - said they have a bigger risk appetite.

Mr Greg Zeeman, Head of Personal Financial Services at HSBC Singapore said, “The findings of the HSBC Affluent Asian Tracker show that affluent Singaporeans are growing their wealth in a safe and steady way. Staying invested and building a core suite of investment solutions for capital protection is essential to achieving stable wealth growth and this is what we advise our customers to do, particularly in times of market uncertainty.”

Relatively under-invested in equities
Aside from local currency deposits, the survey also found that local securities, unit trusts and foreign currency deposits are the more popular financial holdings among affluent Asians. In Singapore, about 40 percent of affluent individuals hold unit trusts and local securities; and 19 percent hold foreign currency deposits.

However, equity holdings are significantly higher in most of the other Asian countries particularly in local securities, which are held by 87 percent of affluent Hong Kongers; 71 percent of affluent Mainland Chinese; 70 percent of affluent Taiwanese and 60 percent of affluent Indians. More than half of affluent individuals in India (58%), Malaysia (56%), China (55%) and Taiwan (55%) also hold unit trusts.

Affluent individuals in Taiwan and Mainland Chinese are the biggest equity traders, with a 12-month average turnover in stocks of US$547,739 and US$371,885 respectively. Mainland Chinese are also Asia’s biggest unit trust investors, with the highest 12-month average unit trust turnover at US$30,141.

Mr Zeeman said, “Affluent individuals in other parts of Asia such as Mainland China and India may be more adventurous with investments because they tend to be younger accumulating wealth very quickly. Affluent individuals in Singapore tend to be more mature and focused on wealth preservation to provide for the needs of their family and retirement. However, at every life stage there are benefits to diversifying into equities to tap into the upside of the market. Affluent Singaporeans who have a relatively conservative investment appetite can do this through unit trusts, which are tailored and managed to suit their risk appetite.”

Profile of affluent Singaporeans
On the profile of affluent individuals across Asia, the survey found affluent Singaporeans to be older, with an average age of 44. Mainland China has the youngest affluent population with an average age of 36, followed by India with an average age of 38 and Indonesia with an average age of 39.

The majority of affluent Asians are married with kids, with the largest percentage in Taiwan (88%), followed by Malaysia (81%) and India (78%). 64% of affluent Singaporeans are married with kids. Hong Kong has the lowest proportion of affluent individuals who are married with kids (46%) and the highest percentage of affluent individuals with double income and no kids - 39% - which is more than double that of Singapore (18%).

Hong Kongers are also the most affluent in Asia with average liquid assets of over US$300,000 almost twice that of Singaporeans, which are second with an average of over US$180,000 in liquid assets.

The survey also found that Singapore has highest percentage of affluent individuals that use overseas banking services (21%). Hong Kong is second at 11%, followed by Taiwan and India both at 6%.

Commenting on this finding, Mr Zeeman said, “We can certainly vouch for the demand for global banking services amongst affluent Singaporeans, who are increasingly mobile and world-oriented. In 2009, HSBC Premier - our personalised banking platform that enables customers to access service and support around the world - recorded the largest increase in new customers across all our customer propositions in Singapore.”

An Analysis of Secular Bear Markets and Secular Bull Markets since 1900

From a historical perspective since 1900 there have been 3 Secular Bull Markets and 3 Secular Bear Markets as shown by the tables below of the Dow and S&P 500. As you can see during a Secular Bull Market the Average Annual Return (highlighted in red) is considerably higher than during a Secular Bear Market (highlighted in blue). Thus the long term Buy and Hold strategy that worked well in the 1980's and 1990's for investors may have not worked very well during the Secular Bear Markets of 1906-1921, 1929-1949 and 1966-1982.

Secular Bear Markets vs Secular Bull Markets and Dow Performance

Secular Bear Duration Avg Yearly Ret Secular Bull Duration Avg Yearly Ret
Markets (Years) (Dow) Markets (Years) (Dow)
1906-1921 16 1.58% 1922-1928 7 17.20%
1929-1949 21 1.69% 1950-1965 16 10.60%
1966-1982 17 1.59% 1983-1999 17 15.30%
2000-?


Secular Bear Markets vs Secular Bull Markets and S&P 500 Performance
Secular Bear Duration Avg Yearly Ret Secular Bull Duration Avg Yearly Ret
Markets (Years) (S&P 500) Markets (Years) (S&P 500)
1906-1921 NA NA 1922-1928 7 17.90%
1929-1949 21 2.34% 1950-1965 16 11.40%
1966-1982 17 3.64% 1983-1999 17 14.96%
2000-?


The big question is now are we in the beginning stages of a 4th Secular Bear Market which started in 2000. The average length of the previous 3 Secular Bear Markets was 18 years with a minimum of 16 years and a maximum of 21 years. Thus if you add 18 years to the year 2000 and take + or - 3 years on either side then the next Secular Bull Market may not begin until sometime in the 2015 to 2021 time period if we are now entering a 4th Secular Bear Market. However I would like to point out that even in a Secular Bear Market there can still be Bull Markets lasting a year or two as the longer term charts of the Dow show below.

Notice after the Secular Bull Market of 1922-1928 which was followed by a Secular Bear Market from 1929-1949 that the Dow still had impressive gains during the early to mid 1930s (points A to B) before going through another Bear Cycle prior too and during World War II (points B to C). This was then followed by another Bull Cycle from 1943-1946 (points C to D). However from the early part of 1937 (point B) until the end of 1949 (point E) the Dow virtually had a net gain of 0% as its basic overall pattern was a series of up and down movements which pretty much cancelled each other out.



Meanwhile after the Secular Bull Market from 1950-1965 the Dow once again went through another Secular Bear Market from 1966-1982. Notice after the Dow peaked in early 1966 (point F) that it had a lot of upward and downward movements from 1966 through 1982 but it basically went nowhere and actually was lower at the end of 1982 (point G) versus its peak in early 1966 (point F).



Looking at the current chart of the Dow shows that it has been exhibiting a choppy pattern similar to previous Secular Bear Market environments after experiencing a Secular Bull Market from 1983-1999. One has to wonder during the next 10 years or so whether the Dow will continue to exhibit a similar pattern that occurred from the mid 1960's through the 1970's in which it had a lot of downward and upward moves but the overall net gain was negligible.



Even if we go through another Secular Bear Market over the next several years there will still be plenty of smaller Bull Markets and if taken advantage of properly will still lead to some excellent investment opportunities in the future.

----download from www.amateur-investors.com/Secular_Bear_Markets_vs_Secular%20Bull_Markets.htm -

sp500 trend very clear:

10 wk rise pattern MUSTNT BE IGNORED

1st 10wk rise:

mar9 2009 to may4th week

sp rose 260pts

2nd 10 wk rise:

jul13 to sept 14 2009 week

sp rose 200 points

3rd 10 week rise:

nov2nd to jan4th week

sp rose 120points

feb8 2010 week to apr 12 2010 week

sp rose 160points

now 2nd half:


aug1st to nov1st week

sp rose 190points

now we r in 5th week from nov29th week

rose 80points so far, left around 50-80-120points in last 5weeks

why ave singaporeans liquid assets still lose to ave hker liquid assets by 60pc?

is it due to this?

why bruno lee says major affluent hker able to capitalise on stock market recovery?what about affluent singaporeans????

did these comments make them blur?????????????????

1.
Straits Times (8 July 2007) - Singapore in a golden period, says MM Lee

The Straits Times

July 8, 2007

TOP OF THE NEWS

Singapore in a golden period, says MM Lee

By Aaron Low

FRAMED against a Saturday night Orchard Road crowd, Minister Mentor Lee Kuan Yew last night sketched a rosy picture of a more vibrant Singapore in five years' time - if it took full advantage of the opportunities now before it.
Investors from developed countries are pouring money into the region and Singapore is enjoying good economic growth and social development.

Economic giant China is pulling in foreign investments of US$70 billion (S$106 billion) and India, US$10 billion a year. Foreign direct investments here have maintained at about S$6 billion to S$7 billion.

The stock markets of some Asean countries have risen by an average of 48 per cent. Asian current accounts are running surpluses with reserves doubling since 2003 to US$2,500 billion.

'If there are no wars or oil crises, this golden period can stretch out over many years,' he said.

The key is having a good government which will get its policies right, to encourage economic growth.

Singapore's economic growth this year will be around 5 per cent to 6 per cent - 'not bad' for a maturing economy with a per capita income of over US$25,000, he said at a Tanjong Pagar GRC event in Ngee Ann City's civic plaza.

'Once you have growth, all problems can be managed. When you have no growth and you have unemployment and no jobs, then all problems become intractable,' he said.

Mr Lee told the sizeable crowd, many of them younger Singaporeans, that they were luckier than him when he was a young man.

'You got the best schools, technical colleges. Nobody is deprived of an education in Singapore and you can go abroad if you do well with bursaries and scholarships.'

He had this message for those in their teens and early 20s: 'You're a generation that is especially blessed. You have ahead of you 10, 15, 20 years.'

Singapore was able to push ahead when China and India adopted wrong economic policies. Although they have recovered and are growing strongly, Singapore is still ahead 'and our job is to stay ahead, and I believe we can'.

Mr Lee said Singapore is in this enviable position today because it had taken 'painful and unpopular measures' after the 1997 Asian financial crisis to get the economy into shape.

The data tells the story: some 9.7 million visitors came here last year; unemployment is at a low 2.9 per cent and 49,000 jobs were created between January and March.

More important, he said, the Government has revised its vision of Singapore - to turn it into a city with a lively night life, a more liberal arts and entertainment scene, the building of the two integrated resorts and the introduction of Formula 1 racing here next year.

'I believe you're going to see a transformation in Singapore. It'll be the most vibrant lively city in this part of the world. And I believe in the next five years, we'll see it evolve.'

aaronl@sph.com.sg

then TATA COMES THE SUBPRIME START

AUGUST9 2007: SG NATIONAL DAY:

WIKIPEDIA:
August 9: French investment bank BNP Paribas suspends three investment funds that invested in subprime mortgage debt,[97] due to a "complete evaporation of liquidity" [98] in the market. The bank's announcement is the first of many credit-loss and write-down announcements by banks, mortgage lenders and other institutional investors, as subprime assets went bad, due to defaults by subprime mortgage payers.[99] This announcement compels the intervention of the European Central Bank, pumping 95 billion euros into the European banking market.[100][101]

then next:

BBC:

Singapore officially in recession

It is Singapore's first recession since 2002
Singapore's economy shrank between July and September, confirming it was the first Asian country in recession in the current financial crisis.


IN MAR 2009....

WHEN MM LEE WAS BEARISH:

Full recovery at least 2 to 3 years away
Mar 21, 2009 - The Straits Times
Clarissa Oon, Senior Political Correspondent
Share | | Comment | E-mail to friend | Bookmark & Share

SINGAPORE will take two to three years to bounce back from the recession - and this is the optimistic scenario that assumes the United States recovers next year. The pessimistic forecast? Five to six years, according to Minister Mentor Lee Kuan Yew,
who spoke last night at the launch of an alumni complex at the National University of Singapore (NUS).

MM Lee, who has been saying that Singapore's recovery hinges on that of the US, believes that the American economy is 'fundamentally sound'. Its
big companies such as General Motors and Chrysler are 'sound' despite their requests for further government aid.

He said he was reassured by US Federal Reserve chairman Ben Bernanke's remarks last month that the economy would pick up by 2010, once
the government's stimulus package frees up lending to households and businesses.

Also, the same reliance on exports that has put Singapore's economy in the doldrums means that once the world's major economies rebound, 'we are going to bounce back'.


MM Lee took issue with criticisms of Singapore's economic model, such as that from a recent Wall Street Journal editorial which said the Republic needed to refocus on the domestic consumption of goods that are now produced for export.

'Four
million people to sustain industries supplying top-end goods to the world? That's rubbish.' Singapore has no choice but to export, he stressed.

What will further stand Singapore in good stead is its free trade agreements with countries such as the
US, Japan, China, Australia and New Zealand, he added.

With such conditions in place, 'if we don't prosper, we're stupid'.

Mr Lee made these points as he shared his thoughts on what Singapore would become in 25 years time, with some 300 alumni,
students and staff of NUS.

Singapore's prosperity would depend not just on its own efforts, but the state of the world a quarter century from now, he said, offering two possible scenarios.

The optimistic one is that the US and a rising China are
on good terms and there is cooperation between Beijing and its neighbours Japan and South Korea.

In this scenario, Singapore and its Asean neighbours will have banded together and achieved the goal of a single market and production base, because
'sooner or later, all the 10 countries will realise, unless we combine our markets we will be sidelined'.

What would be cause for alarm is if there were a clash between the world's major powers such as the US, China, the European Union and Russia,
creating 'a more dangerous Cold War'.

'This does not make for a prosperous world, there will be more arguments, more suspicion' and Singapore 'will not prosper so much' as a result.

In this pessimistic scenario, the Asean Economic Community would
be 'just a name - people are dragging their feet, never fully commit' and each Asean country would be aligned more closely to the big powers than with each other.

The actual outcome, he concluded, is likely to be somewhere in between the two
scenarios he sketched.

Later, in a dialogue, he was asked what would be a viable economic model for Asia as it emerges from the current crisis.

Smaller places such as Singapore, Hong Kong and Taiwan will continue to rely on exports, he said.

As
for China and India, while they have the alternative to eventually build up their economies to where they are less dependent on exports, neither country would be able to completely do away with exports, he said.

He was also asked what would happen to
Singapore if some People's Action Party (PAP) politicians break away to form a new party and take over the Government.

'If you have capable people then I'm not worried.'

Integrity is crucial, he added, as are ability, experience and willingness to
do things for the people.

However, he did not believe the country with its small population could sustain a two-party system as the PAP already has 'to scour the whole country to find the quality we now have'.

'You need character, commitment,
drive and (the) ability to connect with people. It's a very tough job.'


I WAS VERY BULLISH.......LOOK AT THE TIMINGS!!!!

Singapore out of recession


Tue, Oct 13, 2009
my paper



THE economy of Singapore grew by an estimated 0.8 per cent in the three months to September from a year ago, reinforcing the country's recovery from recession, official figures showed yesterday.

It was the country's first year-on-year expansion in five quarters and was based on July and August data. The estimate is expected to be revised when the full September numbers are available next month.

'A clear but modest recovery is underway globally, at least for the next three or four quarters,' theMinistry of Trade and Industry (MTI) said in a statement.



The Government upgraded its full-year growth forecast to a contraction of 2-2.5 per cent - a significant improvement from the previous estimate of a 4-6 per cent contraction.

'One-off factors such as restocking activities and fiscal stimulus measures will continue to support growth in the near term,' MTI said.

However, it cautioned that economic activity will 'probably remain below pre-crisis levels' because of the drag on demand in the developed economies.

On a seasonally adjusted quarter-on-quarter annualised basis, GDP surged 14.9 per cent following a 22 per cent expansion in the second quarter to June, said MTI. It was the second successive quarter-on-quarter growth period.

'Growth was driven by the continued expansion of biomedical and electronics manufacturing output, and improvements in the trade-related and tourism sectors...on the back of a gradual stabilisation in global economic conditions,' MTI said.

Mr Song Seng Wun, regional economist with CIMB-GK Research, said Singapore was 'firmly out of recession' with GDP expanding in the third quarter.

Singapore sank into recession in the second quarter of last year, hurt by falling demand for its exports in major markets.



MY BEST REVERSE INDICATOR..I WILL TELL MY KIDS IN FUTURE...

REVERSE INDICATOR ALWAYS WORKS!!

short sugar today

NEWS
ECONOMY | Staff Reporter, Hong Kong
Published: 15 Jul 10



HSBC says Hong Kongers most affluent in Asia

The majority (78%) of affluent Hong Kongers say they managed to either keep their wealth intact (30%) or grow their net worth (48%) in early 2010 compared to six months ago, as they led the region as the wealthiest in terms of liquid assets. The HSBC Affluent Asian Tracker survey shows that affluent Asian investors, among the youngest of the world’s wealthy, are riding on the recovery in the world’s fastest-growing markets while navigating through continued uncertainty in the West, particularly in Europe.

Hong Kongers hold average liquid assets of US$301,289, nearly double Singapore’s at US$183,145 and Taiwan’s at US$155,162. Mainlanders lead Asia’s new affluent with US$126,537 worth of liquid assets while Indians’ are at US$87,769 and Indonesians’ at US$61,697. Malaysia’s affluent hold around US$56,891 worth of liquid assets, according to an HSBC report.

Bruno Lee, Regional Head of Wealth Management Asia-Pacific, said: “In the early part of the year, the majority of Hong Kong affluent were able to capitalise on the stock market’s recovery and regained confidence in other asset classes that delivered balanced growth and tapped opportunities in fast-growing economies.”

Across Asia, over half of liquid assets are in deposits, with affluent Indonesians holding up to 95 per cent in cash. Across the affluent in Greater China (Hong Kong 44%, Taiwan 42% and mainland China 41%) and India (40%), at least 40 per cent of liquid assets are invested in equities, unit trusts and other investments.

The third wave of the HSBC Affluent Asian Tracker was conducted by Nielsen for HSBC across 2,072 affluent individuals aged 18-65 in seven key markets from February to April 2010. With the last wave conducted in September to October 2009, the survey gauged the views of people in the top 10 percentile of the population by liquid assets or mortgage value. Details of the survey are attached.

Net worth growth
Sixty nine per cent (vs 70%) of mainland Chinese affluent reported a rise in net worth compared to six months ago. The proportion increases to 88 per cent (vs 85%) with the addition of the affluent set who maintained their net worth.

Across Asia, except in Indonesia (80% vs 91%) and Taiwan (67% vs 75%), more affluent individuals say they maintained or grew their net worth over the last six months: 91 per cent in Singapore (vs 73%), 91 per cent in Malaysia (vs 87%) and 89 per cent in India (vs 82%).

Young affluent Asians
Affluent Mainlanders are the youngest among the region’s affluent with an average age of 36, followed by Indians at 38 and Indonesians at 39. Hong Kong’s affluent are the oldest at 48 years on average and close to four in 10 (39%) are double income couples with no kids (DINKS). At least 10 per cent of affluent respondents in the region, except in Taiwan, are single.

Mr Lee added: “Asia’s young and upwardly mobile working population is fast accumulating wealth to become this generation’s emerging affluent. Their wealth management needs are evolving as they cross over to the next life stages. In many key markets in the region, investments, particularly in local equities, are a key driver to wealth growth. Asia’s new affluent, particularly in mainland China, are increasingly becoming savvy investors as they look to other asset classes and to overseas opportunities for diversification.”

Current investments
At least 7 in 10 affluent in Greater China invest in equities, with Hong Kong leading at 87 per cent, mainland China at 71 per cent and Taiwan at 70 per cent. One third (34%) of liquid assets held by affluent Hong Kongers are invested in equities, the highest in the region, followed by 29 per cent by affluent Mainlanders and 26 per cent by affluent Taiwanese. Yet, affluent individuals in Taiwan and the Mainland are Greater China’s biggest equity investors spending an average of US$547,739 and US$371,885, respectively buying and selling stocks over the last 12 months. Hong Kong came in third at US$220,795.

The survey also shows that affluent Mainlanders have one of the most diversified investment portfolios in the region, with a tenth of liquid assets invested in unit trusts and over half of the respondents (55%) saying they own unit trusts. Affluent Mainlanders are the region’s biggest unit trust investors, spending over US$30,141 in unit trusts in the past 12 months.

Future investments
Affluent Asians continue to look to stocks for future growth, with India leading the pack (44%), followed by Hong Kong (42%) and mainland China (18%). The affluent in Greater China, led by 20 per cent in Hong Kong, 16 per cent in mainland China and 12 per cent in Taiwan, plan to diversify into other investments, including the renminbi (RMB) in the next three months. Currently, close to a quarter (23%) of affluent individuals in Hong Kong hold RMB investments.

A wave of affluent investors taking up new products is expected from Greater China: 32 per cent in Hong Kong, 21 per cent in mainland China and 12 per cent in Taiwan. Over a tenth in Hong Kong (13%) and mainland China (14%) plan to invest in bonds for the first time. Fourteen per cent of affluent Mainlanders and 10 per cent of affluent Taiwanese plan to do overseas banking, particularly investments in securities and unit trusts.

Mr Lee said: “Our survey shows that in general, affluent Asians remain underinvested in the full range of assets with an overconcentration of investments in stocks compared to professionally managed mutual funds. This may have to do with restrictions on the type of product and market access in individual markets. However, Asia’s new affluent are showing increased maturity as investors as they have become wary about rushing into unfamiliar investments and are fast to change investment strategies to react to market changes.
“They are active self-investors who plan to explore new wealth opportunities, such as the RMB, emerging markets and other overseas investments. Increased involvement in their investments has helped mitigate the impact of the European crisis on affluent Asians’ wealth growth.”

HSBC Affluent Asian Risk Index
The survey also calculated a risk index to measure mentality and behaviour towards security and growth using a number of attributes. In a scale of 0-200 where 0 represents security and 200 for growth, markets tended to hover near the mean of 100 with Asia’s new affluent showing a balanced attitude towards risk compared to six months ago: Indonesia (100), India (100) and mainland China (99). The more mature markets of Taiwan (89), Malaysia (89), Singapore (82) and Hong Kong (82) show a shift to a security-oriented investment strategy. In Hong Kong and Singapore, the scores were driven by a cautious approach towards investing in products they are uncertain of or unfamiliar with.

Six in 10 affluent in the Mainland (66%), India (64%) and Hong Kong (62%) have a moderate appetite for risk. More affluent individuals in Singapore (47% vs 18%) and Taiwan (36% vs 18%) increased their appetite for capital protection compared to six months ago. Affluent investors from the emerging markets of Indonesia (25%) and Malaysia (23%) show a higher propensity for risk compared to the rest of the region.

23 Nov, 2010, 04.11AM IST,REUTERS
Thailand slides into 'technical' recession

BANGKOK: Thailand’s economy slipped into a technical recession in the third quarter, reinforcing signs of an Asia-wide slowdown as export growth cools, manufacturing ebbs and the impact of massive government stimulus spending fades.

South-East Asia’s second-biggest economy shrank 0.2% in the third quarter after a revised 0.6% contraction in the second, data showed on Monday, reducing chances of another interest rate rise next month. The data reinforce signs of a slowdown across much of the region, from North Asian export powerhouses China, South Korea and Taiwan to South-East Asian “tigers” Thailand, Singapore and Indonesia. Strong growth in Asia has been one of the few bright spots for the struggling global economy.

Figures last week showed Taiwan’s economic growth slowing in the third quarter, while Singapore’s trade-reliant economy shrank 18.7% and Indonesia reported this month its first slowdown in annual growth in five quarters. From a year earlier, Thailand grew 6.7% in the quarter, largely in line with economists’ forecasts and slowing from growth of 9.2% in the second quarter, the data from the state planning agency showed.

“Looking forward, we expect weaker global demand to bring Thailand’s economic growth to below trend in the fourth quarter of 2010, and in the first half of 2011,” said Usara Wilaipich, a Bangkok-based economist at Standard Chartered Bank. Malaysia’s economic growth slowed more than expected to 5.3% in the third quarter from 8.9% in the second, its central bank said on Monday, noting growth in the second half of the year and in early next year was moderating.

OCBC economist Gundy Cahyadi said growth almost stalled in the third quarter from the previous three months, though few analysts give quarter-on-quarter figures. The Asian slowdown has been exacerbated by the US dollar’s slide, which has driven up regional currencies and started to erode export revenue.

The Bank of Thailand is likely to keep its trend-setting one-day repurchase rate unchanged at 1.75% at its next policy-setting meeting on December 1, said Arkhom Termpittayapaisith, secretary-general of the National Economic and Social Development Board, Thailands state economic planning agency.

Private economists echoed that view after the data, which was marginally better than a deeper 0.4 per cent contraction expected by most economists in a Reuters survey.

``We expect less aggressive monetary policy by the Bank of Thailand and possible delays on interest rate hikes next year,’’ said Isara Ordeedolchest, an economist at KT Zeamico Securities, a stock brokerage in Bangkok.

Pimonwan Mahujchariyawong, economist at Kasikorn Research Centre, expects the economy to contract again in the fourth quarter, hurt by a nearly 12 per cent rise in the baht this year against the dollar to a 13-year high and floods that have killed more than 200 people since October.

RATES SEEN ON HOLD

Thailands debt market has largely priced in a rate pause next month, with one-year swap rates down by 22 basis points in the past two weeks. Government bond yields were barely changed after Mondays economic data.

Indonesias central bank is also seen pausing to keep its policy rate on hold at a record low 6.5 per cent well into 2011 as it tries to avoid encouraging an even bigger flow of investment capital to its markets.

Despite the slowdown, Thailands state planning agency raised its forecast for economic growth this year to 7.9 per cent from 7.0-7.5 per cent projected in August, and tipped growth of between 3.5 per cent and 4.5 per cent in 2011.

Agency chief Arkhom said the quarterly contraction was due to lower state spending and a slowdown in private investment.

``Its cyclical that Q3 is usually weaker than other quarters,’’ he told reporters, adding that the flooding across much of Thailand over October and November shaved economic growth by 0.3 percentage points.

He said the fourth-quarter performance depended on strength in exports which his agency expected to rise 25.1 per cent this year before slowing to about half that rate of growth next year.

The data puts Thailand technically in recession after two straight quarters of economic contraction.

Earlier data had indicated the economy grew 0.2 per cent in the second quarter from the first, but that was revised down to show it had contracted, due largely to political unrest over April and May in which more than 90 people were killed.

SET:nov23:1009
dec 23:1021
GOT MEANING?

SET UP FROM 734 TO 1021 IN 2010!!!!!!!!!!!!!!!


China GDP Growth Rate

The Chinese economy expanded 9.6 percent in the third quarter of 2010, as measured by the year-over-year change in Gross Domestic Product (GDP YoY). Unlike the commonly used quarterly GDP growth rate the annual GDP growth rate takes into account a full year of economic activity, thus avoiding the need to make any type of seasonal adjustment. The China Gross Domestic Product is worth 4909 billion dollars or 7.92% of the world economy, according to the World Bank. From 1989 until 2010, China's average annual GDP Growth was 9.30 percent reaching an historical high of 14.20 percent in December of 1992 and a record low of 3.80 percent in December of 1990. This page includes: China GDP Growth Rate chart, historical data and news.

Country Interest Rate Growth Rate Inflation Rate Jobless Rate Current Account Exchange Rate
China 5.56% 9.60% 5.10% 4.20% 70500 6.6640

Year Mar Jun Sep Dec
2010 11.90 10.30 9.60
2009 6.20 7.90 9.10 10.70
2008 10.60 10.10 9.00 6.80



China's GDP Slows to 9.6%
Published: 10/22/2010 8:23:09 AM By: TradingEconomic.com

China's economy grew by 9.6% in the third quarter, indicating a slight deceleration in growth this year as the government's cooling measures appeared to have had some effect.

The numbers compared to 10.3% on the second quarter and 11.9% in the first, but at the same time consumer price index (CPI)inflation hit a two year high of 3.6% in September.

While the GDP figures will please the country's fiscal policy makers who have been trying to cool the pace of growth, the stubborn inflation numbers will be more of an issue.

The government had set a ceiling for inflation levels at the start of 2010 at 3%, and had predicted that inflation would fall well below that figure during the second half of the year.

CPI inflation stood at 3.5% in August, with most of the rise blamed on volatile food prices. The inflation hike will be of concern to market watchers who will expect Chinese growth to remain strong over the coming months.

WHY SHANGHAI COMPOSITE DOWN FOR THE YEAR 2010?????????

Acquisition of POSBank
In 1998, DBS Bank merged with POSBank, giving it a dominant market share with over four million customers.

---FROM WIKIPEDIA

DE JA VU???

On February 27, 2009, Citigroup announced that the United States government would take a 36% equity stake in the company by converting $25 billion in emergency aid into common shares; the stake was reduced to 27% after Citigroup sold $21 billion of common shares and equity in the largest single share sale in US history, surpassing Bank of America's $19 billion share sale one month prior.

Citigroup is one of the Big Four banks in the United States, along with Bank of America, JP Morgan Chase and Wells Fargo.--from wikipedia

WHEN DID THE STOCKMARKET BOTTOM????IS THIS NOT A PLOY OR WHAT????

after the US GOVT BOUGHT ALL THAT THEY WANTED TO--THE STOCKMARKET "FORGOT" HOW TO DROP!!!

Goldman Sachs Says Hong Kong Set to Benefit Most from Quantitative Easing

By Nick Gentle - Nov 3, 2010 8:04 AM

Goldman Sach Group Inc. raised its 12-month target for Hong Kong’s Hang Seng Index to 29,000, saying the city has the most to gain from extra liquidity released by quantitative easing programs and China’s growth.

Hong Kong will benefit most from a structural capital relocation away from developed markets to emerging ones, Goldman analysts said in a report today. They said the MSCI Hong Kong Index offered a better proxy for Hong Kong growth than the Hang Seng Index, for which China stocks make up 56 percent of its market capitalization.

The analysts said Hong Kong property stocks such as Sun Hung Kai Properties Ltd. and Cheung Kong (Holdings) Ltd. would benefit from liquidity-driven real estate inflation.

Wednesday, December 1, 2010
People's Daily: International Investment Bank Caused Crash
By staff reporters Sun Huixia and Ma Yuan 12.01.2010 20:00

People's Daily Says Investment Bank Responsible for Plunge
In an apparent effort to influence the stock market, the People's Daily opposed big fluctuations in stock market

(Beijing) - China's official mouthpiece, the People's Daily, said December 1 that an international investment bank manipulated stock markets for its own gain and a group email that it sent to investors triggered off a plunge in share prices on November 12
In a commentary contributed by Shi Jianxun, a professor at Tongji University, an unnamed international investment bank allegedly sent emails to investors, advising them to sell their shares. The article, titled "Where is China's stock market heading in the next two decades?" said that rumors of impending stamp taxes also sent the market into a tailspin.

On November 12, the Shanghai Composite Index fell 5.16 percent, the largest single-day drop in 2010 so far. China Securities Regulatory Commission has started a probe into the alleged manipulation and has not released their findings.

The article, published on the front page of the overseas edition of the People's Daily, said that China should avoid dramatic fluctuations in the stock market and make it a major vehicle to increase the wealth of the masses. The overseas edition targets audiences outside of the mainland.

"Big fluctuations on the stock market have a remarkable impact not only on economic development, but also on the harmony and stability of the society," said the commentary.

About 150 million Chinese invest in stock markets and investors are from all walks of life, said the commentary, adding that any move in the stock market would rattle the nerves of millions of people.

The commentary was the second in two weeks for the state-run newspaper to voice its strong support for a bullish market. In the commentary published last Wednesday, the stock market was described as the best place to absorb excess liquidity.

"China's fight against inflation will not come at the expense of a stock market collapse. The market should not overreact to the measures by the government to curb inflation," said the previous commentary.

The commentary added that stock markets still lack fairness, accountability and transparency.

The Shanghai Stock Exchange and Shenzhen Stock Exchange were launched two decades ago with the official mission to facilitate state-owned companies in their corporate financing. All listings still need to be approved by securities regulator, rather than by the exchanges.





Goldman Advises Clients To Take Profits On "Long China" Trade
Submitted by Tyler Durden on 11/11/2010 12:16 -0500




After last night's completely unsurprising "beat" of Chinese annualized inflation of 4.4%, Goldman today has come out with a note which, however, is very surprising: Goldman's Robin Brooks and Dominic Wilson have decided to close out their "long China" recommendation, which was one of the firm's Top 2010 Trades presented previously on Zero Hedge. And while the profit on the trade of 11.3% is appealing, the reason for the unwind makes little sense. As everyone had been fully aware (see our note here) in advance, the inflation number would come out at 4.4% (and so it did). To use this as an argument for tightening expectations seems a little disingenuous. Which begs the question: why is Goldman truly no longer bullish on China? And does this mean that the firm no longer buys Jim O'Neill latest decoupling thesis? Lastly, as China has been a key dynamo for world growth, if there is little equity upside to be had in the one last capitalist country, what can we say about the less than capitalist America? This is further compounded by Jan Hatzius' suddenly rosy again outlook on the US economy (coupled with Goldman's ongoing demands for up to $2 trillion in QE, which with every passing day is becoming increasingly more improbable)...

From Goldman Sachs:

Following yesterday’s RRR hikes, overnight China’s CPI inflation came in at 4.4%, above consensus of 4.0%, while industrial production rose by 13.1%, slightly short of consensus expectations of 13.4%. Money growth remained robust at 19.3% yoy. These data reinforce our view that activity remains solid even as inflation is picking up, so that more tightening measures are likely on the way. Jobs data in Australia was stronger than the headline number suggests (5.4% vs consensus of 5.0%), with the rise in the unemployment rate due to a jump in labor force participation. The main even today and tomorrow will the G-20 summit of heads of state.

Yesterday we closed our long China (HSCEI) equities recommendation and long EEM/SPX recommendation with potential gains of roughly 11.3% and 2.3% respectively. With the US cyclical data (ISM and Payrolls) surprising on the upside last week, initial jobless claims continuing to trend lower, and inflation and policy tightening back squarely on the EM policy agenda, the near term outlook for this type of relative trade versus the US is more muddied than it has been for some time. The China (HSCEI) equities top trade too has moved up strongly in the last few months on the back of better cyclical data and easier policy. With successive inflation prints above the policymakers’ comfort zone, another hike in the reserve rate earlier today, and more policy tightening likely in the works, the near-term risk/reward for this position also looks unappealing as we approach the year-end ‘roll-off’. This “risk-management” aside, we continue to like the long-term outlook for EM equities: growth remains robust, and low interest rates in the majors should continue to exert downward pressure on the cost of funding for EM corporates. In the near term the inflation risk in some EM economies is growing and real, but as long as it is dealt with, equities should remain broadly well-supported, but after a strong run since September, it will be important to be more selective going forward.

As for how Goldman's top 9 trades of 2010 have fared so far, below is a summary - of the 9 original trades, 4 have been closed (2 at a loss, 2 at profit), and 5 remain still open.

Stay short S&P 500 Dec10/Dec11 Forward Starting Variance Swap, opened at 28.20, with a target of 21, now at 25.466.
Stay long Russian Equities (RDXUSD), opened at 1645.9 for a target of 2050, now at 1804.00.
Stay long GBP/NZD, opened at 2.29, with a target of 2.60, now at 2.0531.
Close short 2-yr GBP swap rates vs. long 2-yr AUD swap rates on a 1-yr forward basis, opened at -268.5 bp, for a potential loss of 24 bp (inclusive of carry).
Close short 2-yr TRY rates through cross-currency swaps, opened at 8.77%, with a target of 12.0%, for a potential loss of 168 bp (inclusive of carry).
Close long 5yr credit protection in Spain vs. short 5yr credit protection in Ireland at 13 bp, opened at 70 bp, with a target of 20 bp, for a potential profit of 2.9% (inclusive of carry).
Stay long the GS FX Growth Current, opened at 103.5, with a target of 111.8, now at 104.1.
Stay long PLN/JPY, opened at 32.1, with a target of 37.5, now at 28.9471.
Close long Chinese Equities (HSCEI), opened at 12616.01 on 01 April 2010, with a target of 15000, for a potential profit of 11.3%.

HOW CAN HSI LONG,HSCEI SELL?THIS NEVER HAPPEN IN HISTORY!!!LETS CHECK THE PERFORMANCE OF HSI, HSCEI AFTER THE GOLDMAN REPORT

HSI:24876 ON NOV 5TH 2010(day of report) DEC 15:22975---DOWN 7.6PERCENT

hscei:13889 ON NOV 10 2010( day of report) DEC 15: 12585---DOWN 9.3PERCENT

BOTH DOWN RIGHT?I WANT TO SEE HOW HSCEI CAN PLUNGE WHEN HSI GO UP TO 29K

GOLDMAN SUCKS

wed 1dec 2010:
same pattern as monday: hangseng, sti rally in late afternoon.
at night, us surge up 2+pc

commodities surge,wheat up 6.5pc

TUES nov30 manipulation pattern
hsi drop 158 points,sti drop 13 points.

this drop is a far cry from shanghai comp dropping 3.5pc in the day when hsi drop only 1.1pc.--suggesting more upside

HENCE WE GOT THE ANSWER from usmkt at nite..
usmkt drop also by same %tage--hence this drop is factored in by hsi yesterday.

gold,silver surge at night,breaking the 50mark.

LOOK AT THE SIMILARITY:

STAGE ONE

FROM MAR 09 2010 SP500 UP FROM 672 TO 930 MAY4TH 2010:9WEEKS

FROM AUG30 2010,SP500 UP FROM 1030 TO 1227 IN 10 WEEKS:NOV1ST WEEK

AFTER 1ST LEG OF CHIONG MUST REST RIGHT??

STAGE TWO:

FROM MAY4TH 2010 ,SP500 DROP TO 878 AND RESTED FOR 3 WEEKS

THIS IS WHAT EXACTLY IS HAPPENING NOW:
WEEK STARTING 29NOV 2010 IS THE 4TH WEEK:

Sp500 drop from 1227 to 1173--either this week we get a surge OR its the last week of consolidation

next STAGE 3

will come the fake surge to 1240-1250,IN DEC 1ST,2ND WEEK,THEN A ONE MONTH(4WEEK) FALL OF 100POINTS TO 1140

exactly like 1st week june to 1st week july2010


SO TECHNICAL!!!1140 WAS THE BREAKOUT POINT

now lets look at hangseng:

STAGE ONE:

mar09:hsi rose from 11344 to 15977:4500points in6 weeks(same as usmkt)

aug30 to oct 1st week:7weeks hsi rose from 20372 to 23866: 3500POINTS

STAGE TWO:

THEN IT RESTED FOR TWO WEEKS IN MAY2010:DROP A TOTAL OF 15977 TO 14457 :1500 !!

NOW it also drop about 1000points from 23866 and rested for 2 weeks(approx 3500/4500 x 1500)

STAGE 3:

then it shoot up in 1st week of may:to 17442(up about 3000points)

now IT AlsO SHOOT UP about 2000points from 22800s to 24988

STAGE 4:the REST

hsi drop 1000points from 1st week of may 2010 to 3rd week of may 2010

now hsi drop 2000 points from 1st wek of nov to 4th week of november

STAGE 5:THE SHOOT!!

hsi shoots up 2800 points from last week of may to 2nd week of june 2010.
the high on june8th 2010 is 19161,higher than 17440,may1st week high

hence we can conclude december 1st,2nd week will be the shoot!!
AND LIKELY TO GO AT LEAST 2800 POINTS FROM 22870 TO ABOUT 25600S in dec 2nd week 2010


WE WILL CONTINUE ONCE WE REACH DECEMBER 2ND WEEK

from today 30nov2010 onwards,i will be creating a new compilation of every day manipulation patterns in hsi,sti,usmkt

30nov2010

hsi started by going lower all the wy to the last hour at 3pm,then it shoot up 300points,1.3pc.

Sti also followed suit and close flat.

US market opened down 1.3pc and rocket up also in the last hour at 4am 1.3pc and close flat

RATIONALE?

HSI HAS FALLEN MORE THAN STI AND DOW.HENCE HSI CLOSE UP IN LAST HOUR WHILE DOW OPENED LOWER BY 1.3PC AND CLOSE FLAT.

LETS CHECK THE RATIONALE:

HSI 24988 DROP TO 22782,TOTAL 8.8PC
SP500 ONLY FROM 1227 TO 1173 TOTAL: 4.4PC

EXACTLY HALF!!!!!
HENCE U ALSO CAN DEDUCE THAT 22782 HSI AND 1173 SP500,3150STI IS GOING TO BE THE BASE TO PROJECT UPWARDS FROM:

HENCE HSI WILL "OUTPERFORM" BOTH STI AND DOW IN THE COMINNG DAYS UNTIL WE REACH 1225-1227 IN SP500.

THE SURGE IN HANGSENG WILL BE "AIDED" BY A KELONGLY "COINCIDENTAL" RISE IN THE SHANGHAI COMPOSITE.

China Hedge Funds Outperformed Rivals in 2009 0 comments
Jan 23, 2010 1:09 AM
Font: PrintEmail Recommend 0 Share this page
Share0 I made a list of 2009 performance results for mainland China-based hedge fund managers. Needless to say, it is very impressive that those managers had done well in the past year, especially comparing to their rivals in other Asian regions.



Here is a table with the top performing hedge fund managers for 2009.



Fund
Return in 2009
Strategy
Manager

Golden China Fund
182.40%
Equity Long Short
Greenwoods Asset Management

Pinpoint Opportunities Fund
142.23%
Equity Long Short
Pinpoint Capital Management

Springs China Opportunities US Fund
105.45%
Equity Long Short
Springs Capital

Rising ABH Growth Fund
96.78%
Global Macro
Rising Fund Management

China Dragon Engine Fund
79.72%
Multi-Strategies
Cypress House Asset Management

Pinpoint China Fund
78.65%
Equity Long Short
Pinpoint Capital Management

Greenwoods China Plus
70.63%
Equity Long Short
Greenwoods Asset Management

Congrong Advantage Fund II
64.80%
Equity Long Only
Congrong Investment Management

Congrong Advantage Fund I
59.76%
Equity Long Only
Congrong Investment Management

SMC China Fund
53.01%
Equitly Long Only
Simon Murray & Co. Cayman

Wisdom Sustainable Growth
46.77%
Equitly Long Only
Wisdom Investment Management

Congrong Advantage Fund III
46.43%
Equity Long Only
Congrong Investment Management

Pinpoint Asia Strategies
40.26%
Multi-Strategies
Pinpoint Capital Management

Source: Bloomberg




As you can see, hedge funds run by local Chinese performed well in 2009, especially Lu Jun’s Congrong Investment Management. I just heard that the firm would relocate to another building and want to enlarge their investment team in the next year. It is an amazing time for Chinese hedge funds. If you check other performance results which haven’t been tracked by Bloomberg, you would get to know more outstanding fund managers. For instance, Guangdong-based New Value Investment’s flagship fund, New Value II fund, was up 192.57% in 2009 and ranked No. 1 in all Chinese onshore hedge funds. New Value fund, another product managed by the house, gained 156.47%. But now, only local Chinese investors are allowed to access these funds. Once those fund managers could launch offshore products, it will be a wonderful time for global investors to enjoy their capabilities in stock market.


LOOK AT MY DARLING PINPOINT!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!I AM A PROUD INVESTOR IN PINPOINT SINCE 2006

compare the 1966-1982 bear market with 2000-2016??bear market many many similiarities.
1.the shape
2.the subprime bottom in 2008 looks exactly like the 1975,which made a lower low

LETS WELCOME THE SECULAR BULL IN THE US MARKET

Brian Kelly: QE2 Could Be Bullish for US Dollar
Published: Monday, 18 Oct 2010 | 11:35 AM ET Text Size By: Brian Kelly, "Fast" Contributor


On Friday, the financial markets were abuzz with the notion that Ben Bernanke stated “all other things being equal, there appears to be a case for more action.” The knee jerk reaction was predictable, the US Dollar fell and bonds climbed, however, by the end of the US trading session these trends had reversed … why?

I would point to other portions of Chairman Bernanke’s speech where he spoke about the risk and rewards of unconventional monetary policy. One of the most surprising admissions by the Chairman was that he did not know the ultimate impact of QE2. From the speech:

"One disadvantage of asset purchases relative to conventional monetary policy is that we have much less experience in judging the economic effects of this policy instrument, which makes it challenging to determine the appropriate quantity and pace of purchases and to communicate this policy response to the public."

Perhaps this was simply refreshing honesty which the market is unaccustomed too after the Greenspeak era. However, the fact remains that the Chairman of the US Federal Reserve, who did his doctoral work on the Great Depression and the deleterious impact of a waning money supply, is concerned about the unintended and unknown consequences of his actions. The financials markets have been expecting higher bond prices and a weaker dollar, but this expectation is flawed. Through QE2 the US Fed is attempting to spur financial speculation which they hope will foster real investment in property, plant, and equipment. By extension these facilities will need to be filled with workers and voila…unemployment drops.

Lower Bond Prices, Higher Yield

While the market has focused in the mechanism for QE2, i.e. asset purchases, it has completely ignored the primary tool used by the US Federal Reserve…communication. Chairman Bernanke, in numerous speeches and papers, has argued that Federal Reserve policy is not limited to interest rates and money supply, he suggests that the first step for policy makers is to communicate the Fed’ s intentions. If executed flawlessly, the Fed may not even need to write one buy ticket for Treasury securities. So has it worked?




The above chart illustrates market expectations for inflation over the next five years; it is simply the 5 year Treasury Rate minus the 5 year TIPs rate. As the chart shows, without buying a single Treasury Bill, Note or Bond, the US Fed has successfully increased inflation expectations from 1.2% to over 1.6%...in less than a month. At this pace, inflation expectations will be at 2% (the Fed’s target) by the time of the November FOMC meeting. The implication is that market expectations of a massive bond buying program could be incorrect. Furthermore, if financial speculation leads to real economic investment and hiring then further QE is not needed.

Impact on the Dollar

Without a massive bond buying program the linchpin of the dollar bear argument disappears - the Fed will not be “printing money” and will not destroy the dollar. In fact, QE2 could be bullish for the US dollar. The Fed’s verbal commitment to support asset prices coupled with its ability to buy assets should provide support in the US financial markets. Moreover, while yields may move slightly higher due to inflationary expectations the US stock market will remain relatively attractive as compared to bonds. Therefore, from an investor’s perspective US assets become attractive. The “Goldilocks” environment the Fed is attempting to create could result in foreign investor interest in the US markets as relatively low rates and the Bernanke “put option” make the US a safer place to invest. This foreign investment interest would be supportive of the US dollar. Moreover, as other countries attempt to weaken their currency the US dollar will strengthen, making US investments even more attractive.

How We Are Playing It

The simplest way to play a stronger US dollar is a long position in the US Dollar Bullish ETF [UUP 22.3193 -0.0207 (-0.09%) ]. This ETF gives an investor broad exposure to dollar strength; additionally, the US equity markets may need a period of adjustment to a stronger dollar. A strong US Dollar does not always mean lower stock prices; in fact if the Fed is successful the real economy will begin to improve. However, the current market mindset is that a strong dollar is bad for stock prices. It may take some time before the markets change their view and thus the direct currency play via UUP appears to be the most attractive investment.

Disclosure: Accounts managed by Kanundrum Capital are long UUP.


exactly my view

1st half in the sp500

666 to 950:mar09 to jun09(went thru the 200day MA)
950 to 870:jun 09 to jul09(retest the 200day MA and bounce off the 200day MA)
870 to 1150:jul09 to jan10
1150 to 1040:jan10 to feb10
1040 to 1220:feb10 to apr2010

IF WE EXTRAPOLATE THE SAME TREND into the 2nd half:lets see the stunning coincidence!

1040 to 1320:sept2010 to dec2010(go thru the 200 WEEK MA at currently around 1200)
1320 to 1240:dec2010 to jan 2011(the 200wk value will increase when sp500 goes up,around 1220-1240 then)
1240 to 1520:jan 2011 to jul2011
1520 to 1410:jul2011 to aug2011
1410 to 1590: aug2011 to oct2011

HOW COINCIDENTAL THE MANNER THAT SP500 AFTER THE CORRECTION IN DEC2010 WILL BOUNCE OFF THE 200WEEK MA THE SAME MANNER AS IT BOUNCES OFF THE 200DAY MA
PLUS the final value of the 2nd half will be also the same 1590 the all time highs!!!

More want transfer out of Singapore
By Elizabeth Soh
http://www.straitstimes.com/STI/STIMEDIA/image/20101009/ST_17798250.jpg
A poster at an agency in Lucky Plaza advertises transfers for maids to Hong Kong. There, experienced maids can earn about double their pay here. -- ST PHOTO: NG SOR LUAN

THE 'maid crunch' may get worse, with agencies reporting a recent surge in inquiries from maids here who are hoping to transfer to places like Hong Kong and Taiwan.

As it is, employers here are already finding it more difficult to hire maids after the Philippine authorities recently tightened rules on Filipinos leaving for jobs abroad. The shortfall in supply could worsen with more maids here choosing to leave for other places, instead of renewing their contracts.

While such a trend is not new, maid agencies say they have noticed a surge in such inquiries this year. Of the 10 maid agencies polled by The Straits Times, eight say they have seen a 50 to 70 per cent jump in inquiries from maids in the past six months about transferring to places like Hong Kong and Taiwan.

Said maid agent Agnes Tan, 46: 'Out of the 30 applications I handle each month, about 10 are overseas transfers, compared to fewer than five a month last year.'

Ms Shirley Ng, president of the Association of Employment Agencies Singapore, confirmed such a trend.

Better pay is a key pull factor. An Indonesian or Filipino maid with four to six years of experience can earn $800 in Hong Kong, compared to just $450 here.

With fewer maids heading to Singapore, agencies are also increasingly publicising such transfer services as an alternative source of revenue.

At Lucky Plaza, a sign on the door of one maid agency advertises: 'Quick transfer to Hong Kong, Higher Pay!'

Over at Orchard Plaza, a maid agency has pamphlets on its desk advertising transfers to places like Saudi Arabia, Spain and even Norway.

Maids have to fork out about $2,300 to $3,000 to pay for transfers. Agencies here take a cut of about $300 - roughly the same amount they make bringing in a maid to Singapore.

'The only way we can make money now is to cater to the needs of those already here,' said an agent who declined to be named.

Mrs Marylou Cuneta, 37, is a maid who left for Hong Kong in January after eight years here. She now earns about $900 a month - double what she used to make.

She told The Straits Times: 'I am very happy in my current job - but I know I would not have got it if I didn't work in Singapore first.'

Additional reporting by Teh Joo Lin


THIS IS MY MESSAGE TO SINGAPOREANS.DONT EVER THINK YOUR MONEY TOO BIG..RIDICULOUS.I HAVE HEARD OF CASES(my ex nus classmate) ONE MAID IN CHARGE OF A 6PEOPLE HOUSEHOLD,2STOREY HUDC,think what?pay very big?can even tell me maid dont do, can hire another one.soon, all maids will shun singapore,and only the lousy ones come here.want to have more children, live in bigger house,BE PREPARED TO PAY MORE!!
dont ever take maids for granted
IN HONGKONG,SMALLER HOUSE plus LOWER BIRTH RATE, plus HIGHER pay,who doesnt want?

By Tara Lachapelle and Nikolaj Gammeltoft

Sept. 27 (Bloomberg) -- The Dow Jones Industrial Average will surge to 38,820 in an eight-year “super boom” beginning in 2017, according to Jeffrey A. Hirsch, editor in chief of the “Stock Trader’s Almanac.”

“All previous major economic booms and secular bull markets were driven by peace, inflation from war and crisis spending, and ubiquitous enabling technologies that created major cultural paradigm shifts and sustained prosperity,” he wrote in a press release sent with the 44th edition of the book.

Hirsch’s forecast comes more than a decade after James K. Glassman and Kevin A. Hassett predicted the Dow would rise to 36,000 by 2005 in “Dow 36,000,” a New York Times bestseller. The 114-year-old average ended 1999 at 11,497.12 and sank as low as 7,286.27 in 2002 following the Internet bubble. The Dow then jumped to a record 14,164.53 in 2007 and fell to 6,547.05 in March 2009 after the worst financial crisis since the 1930s.

“He’s got some crazy number on there,” said Frank Ingarra, a Stamford, Connecticut-based money manager at Hennessy Advisors Inc., which oversees about $900 million. “We’ve had probably one of the worst 10-year periods in history, and I think there’s just too much overhang with the government for it to get to those numbers.”

259% Surge

The Dow closed today at 10,812.04, meaning it must gain 259 percent, or about 8.9 percent annually in 15 years, to reach Hirsch’s projection. It has lost an average of about 1.3 percent a year since the end of 1999. The Standard & Poor’s 500 Index slipped 0.9 percent a year including dividends between 1999 and 2009, the first negative return for a decade since data began in 1927, according to S&P.

The withdrawal of U.S. troops from Iraq and Afghanistan and inflation caused by the wars and spending to end the financial crisis will help push the Dow higher, Jeffrey Hirsch said in the statement. Advances in energy technology or biotechnology may also help spur the rally between 2017 and 2025, he said.

“I can’t throw a dart that far,” said Liam Dalton, president of Axiom Capital Management Inc. in New York, which oversees $1.4 billion. “It’s too unknowable with regard to the things that would set up that kind of move.”

The “Stock Trader’s Almanac,” first published by Hirsch’s father Yale Hirsch in 1967, is known for revealing seasonal patterns in equity market returns. The “Best Six Months” strategy shows that since 1950, investors made the most money owning shares of Dow companies between Nov. 1 and April 30 and avoiding them the rest of the year. The book includes data showing the third year of U.S. presidents’ terms -- such as 2011 -- produce the best returns.

Jeremy Siegel

Glassman and Hassett based their forecast on work by Jeremy Siegel, a professor of finance at the University of Pennsylvania’s Wharton School, who had noted that since the early 1800s, equities had never offered a negative return, after inflation, if held for 17 years or more. To the authors, that meant stocks were a safe bet for long-term investors if they could handle short-run volatility.

Glassman served as President George W. Bush’s undersecretary of state for public diplomacy and is now executive director of the George W. Bush Institute. Hassett is the director of economic-policy studies at the Washington-based American Enterprise Institute and a Bloomberg News columnist.

The Dow, created on May 26, 1896, by Wall Street Journal co-founder Charles Dow, was initially valued at 40.94 and included American Cotton Oil, Chicago Gas, Distilling & Cattle Feeding, National Lead and Tennessee Coal & Iron. General Electric Co. is the only remaining original member, though it wasn’t in the average for nine years starting in 1898.

The Dow surpassed 100 in 1906 and reached 1,000 in 1972. It topped 5,000 in 1995 after jumping 1,000 points in nine months. It was made up of 12 stocks initially, increased to 20 in 1916 and expanded to 30 in 1928. The average’s biggest single-day point loss was 777.68, or 7 percent, on Sept. 29, 2008.

EXACTLY WHAT I FEEL..REMEMBER I SAY BASED ON HANGSENG CHARTS,HANGSENG TO REACH 32K IN END 2011 TO 2012 THEN A DROP OF 50% TO 2015-2016,THEN A SUPER RALLY IN 2016,2017!!!

REMEMBER WHAT I SAID???
CASE SHILLER HOME PRICE INDEX COULD FALL BACK TO YEAR 2000LEVELS AS THE JOBLESS RATE IN US STILL VERY HIGH

BUT ITS TIME TO HAVE THE US STOCK MARKET CHEONG UP!!!

AS I SAID U DONT NEED TO USE REAL MONEY TO PUSH UP A STOCK MARKET...IF U UNDERSTAND WHAT I MEAN...

ITS NOT ABOUT OBAMA QUANT EASING 2
ITS NOT ABOUT MIDTERM ELECTIONS

STOP LISTENING TO MEDIA NOISE

ITS ALL ABOUT ONE UP,THE OTHER DOWN





Home Price Double Dip Begins
Published: Wednesday, 15 Sep 2010 | 11:31 AM ET Text Size By: Diana Olick
CNBC Real Estate Reporter
DiggBuzz FacebookTwitter More Share


The trouble with many of the "indicators" we report is that some are pretty current and others are severely lagging. Home sales are generally the former and home prices the latter.

That's why, given the combination of the expiration of the home buyer tax credit and the increasing number of loans moving to final foreclosure, we knew that home prices overall would take a hit, but it would take a while.

Well we're here.

Two new reports out today prove the consequences of oversupply of organic inventory (12.5 months on existing homes in July according to the National Association of Realtors) and the shadow inventory of foreclosed properties (estimates vary widely and wildly). CoreLogic's Home Price Index shows home prices "flat" in July as transaction volume continues to decline. "This was the first time in five months that no year-over-year gains were reported," according to the release. In June, prices were up 2.4 percent year over year. In addition, "36 states experienced price declines in July, twice the number in May and the highest number since last November when prices nationally were still declining."

And there's the rub.

Prices have been recovering since last Fall, largely thanks to the artificial stimulus of the $8000/$6500 home buyer tax credit. But prices were also benefiting from a slight bump in confidence in the housing market, fed by an apparent drop in the foreclosure numbers. In reality, the foreclosure numbers were dropping only because banks and states were delaying the process, as they tried to cram as many borrowers as possible into what we now know is a largely unsuccessful government-backed mortgage modification program.


"Sellers on the market today have cut $29 billion off their collective home equity."

Trulia.com
August Report
Now home buyer confidence is back in the dumps, which is clear from another report out today showing that for the 3rd straight month the percentage of home sellers on the market who have slashed their asking prices at least once has gone up. Twenty-six percent of sellers on the market in August, according to Trulia.com, had lowered their expectations, and hence their prices. Sellers on the market today have cut $29 billion off their collective home equity.

We spoke to two sellers in Northern Virginia, Stephanie and Gabriel Mikulasek, who have dropped their asking price by $21,000. "We thought it was the value of the house that we could probably get, if the market would pick up a little bit, and people were a little positive," Gabriel told us. "What we found out is that the market is pretty slow; people are very hesitant to make bids, so we decided to make it a little more attractive and lessen it, and see how it goes."


Mortgages


30 yr fixed 4.50% 4.67%
30 yr fixed jumbo 5.36% 5.53%
15 yr fixed 3.88% 4.24%
15 yr fixed jumbo 4.80% 5.05%
5/1 ARM 3.37% 3.29%
5/1 jumbo ARM 4.03% 3.52%

Find personalized rates:


Bankrate.com


They say today's buyers are only looking for great deals, so if you price the home at its actual value, nobody's interested. You have to go below.

Some of you responding on the blog yesterday said that your markets are just fine, even seeing competition in offers again; I'm sure this is true in many local areas. The trouble is that those areas are in the vast minority. Unless we see a marked, widespread increase in home sales over the next several months, prices will go from flat to down once again.

why sp will break 1130 on the upside???

because silver just cheong up more than gold cheong up...

goldsilver ratio is a very crucial indicator...

sp500 has rebounded from 666 to today sept 14 1120,70 percent and goldsilver ratio has dropped 30plus percent from 90s in mar 2009.
assuming this ratio holds constant,

sp500 has 450 more points to go up to 1570,alltime highs in year 2000 and 2007
how much can goldsilver ratio fall?another 15 to 20 percent from current sept 2010 60s to 50,the crucial level in chart...

THREE SCENARIOS:
CASE ONE:if gold FALLS while silver rises, then sp500 will hit 1570 faster,hsi hit 32K by mar 2011

CASE2:IF GOLD FLAT WHILE SILVER RISES:then my target will be hit on sept 2011

CASE3:if gold rises and silver rises,then MAY drag to mar2012

http://uk.finance.yahoo.com/echarts?s=%5EHSI#chart1:symbol=^hsi;range=my;charttype=candlestick;crosshair=on;ohlcvalues=0;logscale=off;source=undefined

please download the hangseng chart from 1986 to 2010..

its trading in uptrend channel...
HERE IS THE ARITHMETRIC TREND

TIME PERIOD 1:
jan 1994 to jan 1995,hangseng drop for 1 year
jan 1995 to july 1997,hangseng up for 2.5 years

difference:1.5years

TIME PERIOD 2:
AUG 1997 TO AUG 1998:HANGSENG DROP FOR 1 YEAR
aug 1998 to 2000 aug,hangseng up for 2 years

difference:1year

TIME PERIOD 3:
aug 2000 to apr 2003:hangseng down for approx 2.5years
apr 2003 to oct 2007:hangseng up for 4.5years

difference:2 years

NOW:2007 nov to 2009 march:hangseng down for 1.5years
mar2009 to...??hangseng up for ???

the norm is u add 1 to 2 years to the down years from the hangseng bottom to get the expected time line and the target

HENCE I CONCLUDE: SELL HANGSENG IF U SEE
1.NEAR 32K ON 2011 SEPT
2.NEAR 32K ON 2012 MARCH
3.NEAR 32K ON 2012SEPT
4.OR ANY VALUES GREATER THAN 32K ON ANY OF THESE DATES...

SEE WHETHER IM CORRECT IN 2012

let us do the evaluation:

from the US HOUSING AND STOCK MARKET CHARTS, A AND B

SCENARIO 1.the us stckmarket MAY dangle in this consolidation band for another 10 years from 2010 to 2020 with us housing market to the downside to 2000levels.

we see that the rest in the stock market is TWENTY YEARS, namely1930 to 1950 and 1960 to 1980 roughly.and the us housing market is the MAIN CULPRIT in 2007, the rest in the us house market is fourty years, namely 1900 to 1940s hovering on the 5 line,even the GREAT DEPRESSION IN THE STOCK MARKET in 1930s cant bring the housing market in us to go below the 5 line,and didnt erase ALL gains from 1900 to 1930s.THE US STCK MARKET is the cause of 1930s depression, hence u see a return to 1900s levels in 1930s.so this tells us FURTHER DOWNSIDE IN THE US HOUSING MARKET IF WE SUPERIMPOSE THE HOUSING TO THE STOCKMARKET CHARTS IN 1930S as 2007 was caused by the US subprime.

SCENARIO2:SINCE subprime was us housing caused,and not the us stockmarket, hence it also suggests the opposite of 1930s that us stockmarket to break out UPWARDS of the band MUCH EARLIER than the us housing market.we can see that the us housing market broke off in 1940s when the us stckmkt hover in the band to 1950s.

so which scenario is MORE LIKELY to happen?we look at signs from us and other parts of the world.

fact 1. look at the hangseng charts.even with us subprime hangseng is unable to go below the uptrend channel from 1986.a TWENTY FIVE YEAR CHANNEL!!!and the hangseng level now in 2010 exceeds that of 1997,sugggesting a cheong to above 32K in the hangseng to about 36K!!(draw a diagonal straight trendline connecting highs)

BUT the HONGKONG HOUSING MARKET (chart C) was unable to go above 1997 highs for the smaller flats,other than GCBs,it was only the GCBs that return to higher than 1997 highs,suggesting EVEN WITH INTEREST RATES AT RECORD LEVELS, AND HKD SUPER LOW NOW, STILL UNABLE TO PUSH THE OVERALL HONGKONG HOUSING MARKET TO NEW HIGHS,suggest weakness in the HK salary terms and the HK economy.(same for singapore also)

WITH THIS HANGSENG CHART,I DEDUCE SINCE HANGSENG IS STILL WAY ABOVE 1997 LEVELS,14K VERSUS NOW 20K,HANGSNEG WILL GO RETEST THE UPTREND CHANNEL RESISTANCE AT 36K,HENCE THAT IS LIKELY TO BE CAUSED BY US STOCK MARKET GOING TO NEW HIGHS IN THE 2010 TO 2020 PERIOD--SCENARIO 2!!!!!

CHART C:

chart A

CHART B

S&P 500 PE S&P 500 Price S&P 500 Earnings S&P 500 Dividend Yield Interest Rate Inflation more ▼ multpl

Case Shiller National Home Price Index



Chart | Table | CSV |
Current Index: 131.81

January 2010

The Case Shiller Home Price Index is an indicator of U.S. housing prices nationally.

The data presented is in nominal (non-inflation-adjusted) dollars. For an inflation-adjusted (and more striking) view see Case Shiller Home Price Index, Inflation Adjusted

The steep decline in US home prices, starting near the end of 2007, is the largest drop since the great depression and the 1930s.

Data is courtesy Robert Shiller, from his book, Irrational Exuberance, and Standard and Poor's, which provides more information on the methodology for calculating the Case Shiller Home Price Idices.

Information is provided 'as is' and solely for informational purposes, not for trading purposes or advice, and may be delayed.

Copyright © 2010 | contact@multpl.com

NOW COMPARE TO THE STOCK MARKET IN NOMINAL TERMS---chart A

we shall track from 1900s- great depression to now to see a similarity in us markets and now

time period 1:1900 to 1930:
us dow jones OUTPERFORM US PROPERTY MARKET 60 TO 300 IN DOW JONES VERSUS A 3 TO 6 PT RISE IN CASE SHILLER

TIME PERIOD 2: 1930 TO 1940
STOCK MARKET RECOVER TO 200 FROM DOWN FROM 300 TO 40.PROPERTY MARKET RECOVER MUCH LESSER THAN DOW---FROM 7 TO 4 THEN TO 5

THIS CLEARLY SHOWS EVEN IN A STOCK MARKET CRISIS 1930, THE STOCK MARKET OUTPERFORM THE PROPERTY MARKET

time period 3:1940-1950
CASE SHILLER rocket from 5 to 11, BUT DOW is flat for a decade!!!!

TIME PERIOD 4:1950-1970
CASE SHILLER IS FLAT BUT DOW UP FROM 300 TO 1000!!!

time period 5:1970-1980

DOW FLAT AT 1000!!!! BUT CASE SHILLER CHEONG 2X!!!

TIME PERIOD 6:1980-2000

GOLDEN PERIOD FOR US!!!
dow up 10 TIMES from 1k to 10k
BUT CASESHILLER UP ONLY 2X!!

TIME PERIOD7:YEAR 2000 TO 2010:
DOW STUCK AT 10K FOR A DECADE!!
BUT HOUSES ARE STILL HIGHER THAN 2000!!

WHAT ARE LESSONS LEARNT?
1.PROPERTY AND STOCK MARKET TAKE TURNS TO CHEONG UP but STOCKMARKET OUTPERFORM PROPERTY IN LONG RUN DUE TO FASTER AND BIGGER RISES CONSISTENTLY OVER A CENTURY!!

2. HANGSENG BEHAVES LIKE DOW JONES STUCK AT 20k FROM 2000 TO 2010 but snp500 is below 2000 highs of 1560 showing weakness in us general economy.dowjones having more overseas business companies eg caterpillar is at the 2k year highs

hence i conclude that hangseng will trade like the dow going back to 32K AND BREAKING IT in the next few years prob 2012 as hangseng hasnt moved much for past 10 years

hsi chart for past 20 years:
http://uk.finance.yahoo.com/echarts?s=%5EHSI#chart1:symbol=^hsi;range=my;charttype=candlestick;crosshair=on;ohlcvalues=0;logscale=off;source=undefined

hongkong property prices also at year 1997 levels BUT the difference is that hsi is above year 1997levels but hk property price at 1997highs EVEN AS INTEREST RATES KEEP ON GOING DOWN.SHOWING BUYERS FATIGUE IN PROPERTY.SUPER LOW INTEREST RATES CANT PUSH PROPERTY TO SUPER HIGHS--CHART C

from the dow jones chart,1930s was stckmkt caused ,2007 was housing caused,u superimpose 1930s stckmkt chart to be housing 2010 chart and we know us housing going to be stuck for a long time prob 20 years in the mud, whereas the dow jones with the hangseng in 2012? will break to new highs(due to MNCs,companies deriving their revenues from overseas like china,asia.)as shown by the case shiller in the 1940s

property is like an inferior good,rising much lesser and slower than the stock market overall.

Forget the Double-Dip: Stocks Still Can Rise in Bad Economy
Published: Wednesday, 25 Aug 2010 | 12:02 PM ET Text Size By: Jeff Cox
CNBC.com Staff Writer
DiggBuzz FacebookTwitter More Share
Even if the economy performs as poorly as expected for the rest of the year, that may not mean bad times on Wall Street.


Stocks often rise even in bad economic times.


Some analysts maintain that cheap valuation will provide a boost to the markets in the current downtrend.
In fact, during times of slow economic growth since 1990, stocks have risen twice as often as they have fallen. The trend is important to remember amid a series of GDP downgrades from major analysts and worries that the economy even could fall into a double-dip or worse.

Many major analysts—Goldman Sachs and JPMorgan among them—have cut their GDP projections to below 2 percent for the third quarter and about 2 percent for the fourth. What that means for the stock market, though, may not be so obvious.

"Basically when you look at GDP numbers coming out they usually are not a very good predictor of the stock market," says Sam Stovall, chief investment strategist at Standard & Poor's. "It's sort of the other way around. The stock market tends to predict movements in the economy by six months."

The recent history of economic slowdowns is one of opportunity for stock-buying investors, sometimes in the extreme.

Take 1995, for instance. With GDP trudging along at a respective 1 and 0.9 percent pace in the first and second quarters, stocks were booming. The Standard & Poor's 500

[.SPX 1056.04 4.17 (+0.4%) ] gained 9 percent in the first quarter, then kept the momentum going with an 8.8 percent rise in the following three months.


AP
--------------------------------------------------------------------------------


The 2001-2003 recession also saw good times for the market. GDP grew 1.4 percent in the fourth quarter of 2001, while the S&P rose 10.3 percent; growth was 0.1 percent in the fourth quarter of 2002, vs. an S&P gain of 7.9 percent.

The average stock market result on the 18 quarters between 1990 to 2010 when GDP was between zero and 2 percent was a gain of just under 3 percent.

One of the keys to the reverse coordination between the two measuring sticks is that stocks tend to do well when nobody expects it.

"When you have lowered expectations you can have a potentially good rally," says Ryan Detrick, senior analyst at Schaeffer's Investment Research in Cincinnati. "It makes sense that at times when you have lukewarm growth but overall expectations are probably lowered, you can have those upward surprises in the stock market."

Stocks even have held their own during times of economic contraction.

Of the seven negative GDP readings during the same time period, the S&P rose three times, including the 15.8 percent gain in the second quarter of 2009 when GDP fell 4.9 percent, and a 13.6 percent rise in the first quarter of 1991 when GDP fell 1.9 percent. The average was a gain of 1.23 percent.




Jeff Cox
Staff Writer
CNBC.com
"You've got this economic growth piece, but then you've got this other piece which is, 'What do I do with all this money in a money market paying me 0.25 percent?'" says Nadav Baum, executive vice president at BPU Investment Management in Pittsburgh. "That's the dilemma that investors are looking at, and they're starting to realize that 'I'm probably OK to go out and buy big dividend-paying stocks.'"

With the possibility of the US economy slipping back into negative growth posing an increasingly high danger, the notion that stocks can still rise might provide some comfort to equities investors.

Economist David Rosenberg of Gluskin Sheff on Tuesday reiterated his assertion that the US economy is not in a recession but rather a depression. But even he pointed out that stocks rallied sharply for several years during the Great Depression before falling again.

The Dow Jones Industrial Average [.DJIA 10067.32 26.87 (+0.27%) ] rallied about 64 percent in 1933, another 38 percent in 1935 and 24 percent in 1936, before falling 32 percent in 1937.



"Even though the GDP number is getting weak, that doesn't mean stocks can't go higher," Baum says. "It's not just a factor of GDP. There are other forces that can help stock prices go up right now. The bigger factor is, 'Where can I do to make the money on my money?'"

S&P's Stovall argues that valuations continue to be attractive based on current consensus earnings estimates.

The current S&P price-to-earnings ratio on a non-Generally Accepted Accounting Principles basis is 14, which Stovall says is a 26 percent discount to the average P/E on trailing earnings on records dating back 22 years. On a GAAP basis, that number goes to 17, which is actually a 36 percent discount to average over the same 22-year period, and is level with the average GAAP basis since 1936.

S&P actually is projecting that stocks could fall on a short-term basis back to a bear market—20 percent drop from the April 23 highs—before shoring up and turning positive. The firm has a 1,190 price target for the "500" in the next 12 months, a jump of about 13.5 percent from the current level. The index has fallen 14 percent from the April high.


RELATED LINKS
Current DateTime: 09:03:07 25 Aug 2010
LinksList Documentid: 38849832
'QE': Why Should Investors Care?Depression, Not Recession: Rosenberg
"Unless we expect earnings to actually decline moving forward, rather than advance at a slower pace, I would tend to say that valuations would stop us from seeing anything more than a light to average bear market," Stovall says. "The market is readjusting itself. Maybe we could end up seeing a sharper move downward in the next month because investors want to get it over with."

© 2010 CNBC.com

REMEMBER MY SMS TO SOME OF U ALL IN MID APRIL 2010 WHEN I WAS IN HONGKONG--WHEN STOCKMKT GO UP WITHOUT POSITIVE DIVERGENCE, THIS IS THE END RESULT...
TECHNICAL ANALYSIS DIFFERENTIATE A FAKE RALLY FROM A TRUE RALLY, BUT NO ONE IS GONNA PREDICT 100PERCENT WHEN EXACTLY.
I DONT KNOW WHY SOME IDIOTS TELL ME FUNDAMENTAL REASONS LIKE US GOVT CANT MAKE STOCKMKT FALL BECAUSE HAVENOT REMOVE BAILOUT PACKAGE,ETC.
STOCKMKT NEVER LISTEN TO FUNDAMENTALS, TEXTBOOK STLY UNIVERSITY ECONOMICS

John said...
thanks skeptic.
I was pleasantly surprised that my comments was highlighted in your blog. My name is John, so I guess you can put a name to anonymous.

I do apologise for the typo and grammer mistakes in my previous blog. I also realize my comments could have offended some people but I have no ill intent.

I have met many Singaporeans who took the plunge abroad but at the end chose family first and decided to return to Singapore. I respect that, especially for those with children. It is not easy. But like I say, working and succeeding overseas require sacrifices. Unless you have a cushy expatriate package (which are rare these days), you need to be separated from your love ones and tough choices need to be made. The point I was trying to make is that if you make a conscious decision to work abroad, then start planning ahead, mentally prepare to make sacrifices, it is possible to find jobs abroad. It is not a bed of roses but the benefits outweigh the shortcomings.

What worked for me may not not work for the rest, but here it goes:
1) decide which country you want to go. sounds obvious, but you will be surprised that most people have no clue what they want. I decided on China because I saw the opportunities to extend my career by easily 15-20 years especially for my industry. I looked at my colleagues in their 40s struggling to do something in a tiny market like Singapore and decided that I need to do something before I hit 40.
2) your next employer are likely to be abroad so it only makes sense to find any opportunities you can find on overseas conferences, job fairs, network and get to know people overseas. Pay for the trips yourself. "The prophet is never acceptable in his own country', basically, local employers in Singapore and headhunter will give you a huge discount when you tell them you want to work abroad. It is almost discrimination. No different from government treating foreigners better than Singaporeans. To give you an example I once wrote to an international headhunting firm based in Singapore and after the interview, I was so demoralized I wanted to give up. I wrote in to HK (same firm) directly, met with their partner, cleared all the interviews and was eventually hired. You need to find a way to present yourself in front of your prospective employer and show them you are hungry and willing to compete on local terms. If you are competent, you will get the job. More importantly, finance and legal sector in HK pays much better than Singapore. I eventually find my way to China, but that is another story. The jobs you are looking for are not on internet or classified ads, especially for senior positions. Attend overseas conferences, trade fairs, and pay for it yourself if you have to and network like crazy. I just don't see many singaporeans hungry enough to do this.
3) I once told a Singaporean to apply for CEIBS (a business school in Shanghai) instead of NUS if he really wants to work in China one day. I was given the usual, cost of living, ROI, value for money analysis. 40% of the participants in CEIBS are foreigners, where most of them eventually found jobs in China. Today, CEIBS is the top 10 business school in FT and NUS is still well..you know. Most Singaporeans, if they can help it, would like to stay in Singapore and use Singapore as a base to travel. It used to work, but I don't think it is feasible anymore. My point is, if you want to work in that country, best to study in that country as well. If all you have is a local degree in NUS/NTU, either you have a lot of overseas assignments to back you up or you have something else to offer.
4) Start the first few years alone and once you build some foundation and cash, bring your family over. The first few years are the toughest, but if you survive, it gets easier. How to survive is probably another topic for another day.
5) be aware of the forces that hold us back. Going overseas is a personal change process, and the comfortable lifestyle here in Singapore, girlfriends, wives, parents desire for children to stay close to them, all could be possible forces that hold us back. If you cannot afford to leave your love ones, then don't go abroad. There are friends of mine who refused overseas posting because they don't want to be apart from family. I respect that and it is a very personal choice. On another note, I am also aware that this friend of mine is struggling to find a meaningful job for 3 years since he was retrenched at 40. His company was moved to China.If he had gone with the posting, he probably still have a job and probably clocked a lot of useful experiences abroad as well.
6) there are people who are still doing very well without leaving Singapore. Your girlfriends and wives will be reminding you this as well. HR professionals, never seem to have problems looking for jobs. You make an assessment of your own industry, where is it heading and if having overseas experience benefits you.

I wish everyone the best and thank you for reading this.

May 1, 2009 3:14 AM