World Economy

[Gorth]

Thought this was an interesting blog...

 

Commodities Collapsed Just Before The Last Stock Market Crash – So Guess What Is Happening Right Now?

 

It's basically an observation of patterns in the economy and the belief that commodity prices are the early indicators of how the (global) economy changes when demand slows down or speeds up.

 

Oh, and the observation that the prices are heading for a 13 year low, indicating bad things happening within the next few years.

 

Time to bring out the umbrellas in case the sky is falling?

[BruceVC]

The most valid and real concern is the state of Chinese markets..,..while we were all lamenting the state of Greece last month the Chinese had  4 Trillion dollars wiped off there stock market 

 

And there solution was artificial and direct intervention to prevent a stock market crash, not only did the Chinese buy here own shares they forced the various state influenced Chinese investment firms to also buy billions of shares to prevent a free flow collapse  of there stock market

 

Obviously this is not how free markets behave as if people are confidant in a market they won't sell but the Chinese do have the capital and aptitude to intervene 

But this doesn't fix the underlying problem...a  real lack of confidence in the Chinese markets for a variety of reasons  and this leads to mass selling

 

 

We dont want China to be negatively impacted because this will effect the whole world and emerging markets, like South Africa, always get hit the hardest when these types economic fluctuations occur...and I'm worried, very worried  

[BruceVC]

http://freemarketcafe.com/2015/07/china-when-4-trillion-goes-to-stock-market-heaven/

 

http://www.smh.com.au/business/comment-and-analysis/chinese-sharemarket-intervention-and-stabilisation-the-most-likely-scenario-20150728-gilthl.html

 

https://tiananmenstremendousachievements.wordpress.com/2015/07/24/china-regards-intervention-with-its-stock-market-as-a-norm/

 

 

Just some interesting  links to support my perspective

[Keyrock]

I hope those indicators are wrong and we aren't heading for another crash.  We haven't even fully recovered from the 2008 crash yet, a second crash on a similar scale would be devastating right now.  I suppose the silver lining could be that a second crash this close to the previous crash might be so jarring that it could bring about actual reforms, because after the 2008 crash, while there was a lot of crying and Occupy Wall Street organized protests and such, ultimately, in the end, nothing really changed in the way business is conducted and monitored.  The cynic in me believes that a second crash wouldn't bring any reforms either, though, just another round of bitching and moaning and outrage that winds up being counterproductive as it devolves into a contest of who's more underprivileged, meanwhile the bigwigs that sent their companies into nosedives walk away with ridiculous severance packages, the institutions get bailed out by the government yet again, driving the countries further into debt, and the erosion of the middle class continues, further separating the population into the super rich and the poor, with less and less people in the middle ground.  And then back to business as usual of under the table deals and cooking the books while lining their own pockets, and we get to do this all over again a couple decades down the road.  

 

Anyway, hopefully this is just a false alert.

Edited July 28, 2015 by Keyrock

[Monte Carlo]

China's screwed. The Kommunists can't order their economic problems away. 

 

Monte says -

 

[Hurlshort]

I am acually hoping for a real estate bubble to burst. I cannot buy at these prices in the bay area.

[Orogun01]

I am acually hoping for a real estate bubble to burst. I cannot buy at these prices in the bay area.

If Saints Row taught me anything is how to devalue property prices.

[BruceVC]

China's screwed. The Kommunists can't order their economic problems away. 

 

Monte says -

 

 

Well its an interesting economic conundrum..." can and should a government manipulate its own stock market to save a wholesale crash " 

 

In the West we know that were several examples during the 2008 financial crisis of government intervention to prevent the collapse of what were considered key industries..like AIG. But  many companies and banks were allowed to fail like Washington Mutual and Lehman Brothers

 

Also what the USA did was basically provide additional credit channels that companies like AIG have subsequently paid back.,.its nothing  like this artificial stimulation of there stock markets that the Chinese are doing 

 

I remember an interesting statistic, I can find the link if required, that only 8 %  of Chinese people own shares in there stock market yet 40 % of Americans own shares in the USA  . So the Chinese have much less control over there stock market  than most Western countries as there own citizens aren't the majority shareholders which makes it much easier for foreigners  to sell shares and sometimes cause re real mass selling which then impacts the overall Chinese economy

 

 

So maybe they believe they have no choice than to  intervene in such a draconian way ?

[Gorth]

yet 40 % of Americans own shares in the USA

...and the Chinese owns the other 60% of American shares

 

Just kidding. What is not a joke is the reason for why I found the article interesting. Australia's economy has become so dependent on the Chinese manufacturing sector that I expected both to come crashing down within 5 years, based on my own experiences and observation of the Australian commodity market. That was a major motivator for me to leave the country and move somewhere (anywhere) where the economy is more diversified and hopefully provides alternatives, should things turn really bad.

[213374U]

I am acually hoping for a real estate bubble to burst. I cannot buy at these prices in the bay area.

 

Yeah, I wouldn't hold my breath for housing prices to come crashing down spectacularly in the event of a bubble bursting. We had that over here, and a lot of people had banks foreclosing on their mortgages. You'd think that would mean cheaper houses, right? Think again. Mother****ers just sat on a lot of empty houses precisely to avoid a significant decrease in prices, only auctioning a fraction while they waited for the market to recover. And if it didn't and they ran out of time/money, who cares, they'd get bailed out anyway. Free market my ass.

 

Of course that was here and this is there so the experience might be different, but "too-big-to-fail" wasn't coined in Europe.

[Darkpriest]

I am acually hoping for a real estate bubble to burst. I cannot buy at these prices in the bay area.

 

i do not know where do you live, but talking about real estate bubble, I am seeing it first hand in Vancouver, BC, Canada - the real estate prices, for what they offer, are hugely overblown, and it has a lot to do with a lot of Chinese capital escaping Mainland China, and 20yrs ago Hong Kong (with possible second wave coming now). I thought that  prices in some other areas of the world were high when it came to the previous real estate bubble, which later collapsed with the first crisis several years ago, but what I am seeing now in Vancouver is just mind blowing...

Edited July 29, 2015 by Darkpriest

[Zoraptor]

Exactly the same thing is happening here. My sister's house has appreciated 30% in a year, theoretically great for her except all the houses have appreciated near that much or more so unless she wants to cash up and move to Nightcaps* it's only of theoretical benefit to her. The government refuses completely to monitor who is buying the houses so it's pretty obvious they know what is happening, and there is an artificial housing/ accommodation crisis. The real problem is that the Chinese investor class is greater than our entire population, plus our lack of capital gains tax or stamp duty; first is an absolute must and has been for ages but it's political poison because property owners as a whole are selfish morons. Plus, because cow juice has fallen in price we keep getting interest rate cuts.

 

I wish the effects of the Chinese government's need to meddle was limited to their own market and their own very obvious bubble share market- which has only dropped to its value in March/ April, and is still up around 70%, year on year- and wasn't infecting everywhere else as well. I don't know if there is going to be an actual crash, it seems more likely that China will simply shut down the market or otherwise apply controls but China has always been a rather contrived success story. Not at the bottom end where very genuine improvements have happened, but their insistence on constant extreme growth rates via artificial mechanisms is likely to make the correction a lot more extreme, when it does happen.

 

*famous for selling houses for $50, no missing zeroes, in the 1980s.

[Rostere]

The housing market here is absurd as well. I live in a place which costs about $450000 .

It's simply a bet people make about urbanization and population growth/decline. Which in some places is made drastically worse by idiotic government policies. The bubble will only burst when you reinstate correct policies, so it's a vicious circle in that sense.

[Barothmuk]

The cynic in me believes that a second crash wouldn't bring any reforms either, though, just another round of bitching and moaning and outrage that winds up being counterproductive as it devolves into a contest of who's more underprivileged, meanwhile the bigwigs that sent their companies into nosedives walk away with ridiculous severance packages, the institutions get bailed out by the government yet again, driving the countries further into debt, and the erosion of the middle class continues, further separating the population into the super rich and the poor, with less and less people in the middle ground.  And then back to business as usual of under the table deals and cooking the books while lining their own pockets, and we get to do this all over again a couple decades down the road.  

Basically. 

[Meshugger]

Watch from https://youtu.be/yb9x2br--h4?t=2430 until 43:57.

 

The "people", or "nations" have no control over the market. Soros himself proudly tells how a few wealthy investors and speculators can put a central bank to its knees if there is a incentive to do so...with a profit. I predict that the cycle will continue with less ownership of the many into the hands of the few, eroding of nationstates turning into just lines on a paper, displacement of millions viewed as assets in hunt for the cheapest labour, masked as "multiculture". Historically, crashes happen in the fall for some reason, so lets say that september will be quite interesting. 

 

And people wonder why so many are playing video games to escape the lunacy of it all. 

 

Monte has the right idea.

[BruceVC]

Watch from https://youtu.be/yb9x2br--h4?t=2430 until 43:57.

 

The "people", or "nations" have no control over the market. Soros himself proudly tells how a few wealthy investors and speculators can put a central bank to its knees if there is a incentive to do so...with a profit. I predict that the cycle will continue with less ownership of the many into the hands of the few, eroding of nationstates turning into just lines on a paper, displacement of millions viewed as assets in hunt for the cheapest labour, masked as "multiculture". Historically, crashes happen in the fall for some reason, so lets say that september will be quite interesting. 

 

And people wonder why so many are playing video games to escape the lunacy of it all. 

 

Monte has the right idea.

 

I don't know...this just sounds like " first world country  rhetoric "  and a specious view of how global trading works and more importantly the inherent risks. Its an exaggeration 

 

For much  of the world they consider, for example, the Europeans as "owning the real capital "...yet ironically you think that " the nefarious few " somehow own the wealth 

 

So your view on who controls the wealth is very subjective because in the minds of many Africans...you control the wealth and have gained it  unfairly

 

Yet this is of course unfair and untrue and ignores the main reasons why for example the EU is such a successful trading block 

Edited July 29, 2015 by BruceVC

[Meshugger]

Did you even watch the video?

[teknoman2]

in the early 2000s there were only 7 countires in the world who's central bank was not owned by Rothchild (thus they had control over their own economy). Iran, Iraq, Lybia, China, N.Korea, Syria, Afghanistan

now only China, N.Korea and Iran are left

Edited July 29, 2015 by teknoman2

[Hiro Protagonist]

Time to get my application in to buy another investment property.

[BruceVC]

Did you even watch the video?

Yes I watched from minute 42 and it doesn't in anyway change my fundamental point. For example  In the video they talk   about the government having no control over its markets and you see that annoying trader gloating over all the money his bank made selling the pound

 

But that has been my point from the beginning of this thread...no government can really control the free market. So you cannot prevent people and corporations from  selling shares, buying shares and trading in currency. But  you have regulations and certain expected business practices that exist nowadays and when financial firms are in contravention of this they are fined and there are real consequences 

 

http://www.fin24.com/Companies/Financial-Services/Deutsche-Bank-fined-record-25bn-20150424

 

http://www.bloomberg.com/news/articles/2013-12-04/deutsche-bank-to-rbs-fined-by-eu-for-rate-rigging

 

Also of course  speculators and short-term traders exist and profit on the expense of certain countries economic woes..but there is no tenebrous and surreptitious organisation that manipulates currencies and wants to "dominate " the worlds governments like that video suggests through manipulation of the worlds  stock markets 

 

 

That is just "conspiracy theory 101 " and I reject it  as I mentioned as gross exaggeration

Edited July 29, 2015 by BruceVC

[BruceVC]

in the early 2000s there were only 7 countires in the world who's central bank was not owned by Rothchild (thus they had control over their own economy). Iran, Iraq, Lybia, China, N.Korea, Syria, Afghanistan

now only China, N.Korea and Iran are left

 

Please....lets not play the old " The Jews control the worlds financial markets "card ....that's a very outdated view of the world economy and its very 1990's   

[teknoman2]

 

in the early 2000s there were only 7 countires in the world who's central bank was not owned by Rothchild (thus they had control over their own economy). Iran, Iraq, Lybia, China, N.Korea, Syria, Afghanistan

now only China, N.Korea and Iran are left

 

Please....lets not play the old " The Jews control the worlds financial markets "card ....that's a very outdated view of the world economy and its very 1990's   

 

a mathematician in 2011 made a study to see who are those infamous markets that the entire world owes money to. by using all his math knowledge he followed the money trail from coutries to banks to companies and arrived at 128 trust funds that are owned by 23 people... yes the entire world is in debt to 23 people (he did not mention nationality)

and since the sum of the private and public monetary debt of the world is 3 or 4 times bigger than the actual material wealth (gold, cars, houses, food etc), these 23 people literally own the world... countries exist because they allow it and will end because they will it (be it USA, Germany, Greece or Uganda).

[Meshugger]

 

 

in the early 2000s there were only 7 countires in the world who's central bank was not owned by Rothchild (thus they had control over their own economy). Iran, Iraq, Lybia, China, N.Korea, Syria, Afghanistan

now only China, N.Korea and Iran are left

 

Please....lets not play the old " The Jews control the worlds financial markets "card ....that's a very outdated view of the world economy and its very 1990's   

 

a mathematician in 2011 made a study to see who are those infamous markets that the entire world owes money to. by using all his math knowledge he followed the money trail from coutries to banks to companies and arrived at 128 trust funds that are owned by 23 people... yes the entire world is in debt to 23 people (he did not mention nationality)

and since the sum of the private and public monetary debt of the world is 3 or 4 times bigger than the actual material wealth (gold, cars, houses, food etc), these 23 people literally own the world... countries exist because they allow it and will end because they will it (be it USA, Germany, Greece or Uganda).

 

 

Source please.

[teknoman2]

there is no source on the internet for it (that i know of, maybe it's on youtube though). he talked about his research while part of the audience of a tv talk show where the audience could speak directly with the politicians that were interviewed. he asked the finance minister that was there at the time if he was aware of how the markets worked or if anyone in the government had any idea besides what the bankers told them... of course the minister made a completely clumsy attempt to conceal his ignorance on the matter

Edited July 29, 2015 by teknoman2

[Meshugger]

What TV show?

What Finance Minister?

What Country?