Stock market today

[The-Shoveler]

“underlying certainty things are always going to rebound ”

If not then expect you local gov to declare BK soon as well.

[spdrun]

Things will likely rebound eventually. On the micro scale, if you understand psychology, you’ll understand that some people will always buy on dips, and any path down (or up) isn’t a straight slope.

So, if the markets fall 3-4% in a week, a leg up of 1-2% is expected, at least for the short term. Macroscopically, even if you get a 20-30% dip, it will eventually rebound. Maybe in a year, maybe in five, maybe in ten. If you’re willing to buy and hold quality stocks, you’ll be OK.

Lastly, not all stocks move with the markets — the right stocks can even be undervalued in the mother of all bull markets.

[The-Shoveler]

There were quite a few in California that came very close even the 8000 pound gorilla that is LA.

The City of LA goes the whole planet California goes.

[spdrun]

No way — even a 25% haircut on stocks would just take us back a year. I didn’t see very many local governments (other than those who had been profligately stupid and/or corrupt) folding in 2012-2013.

Not that local BK would be a BAD thing. It would allow cities to let overpaid and/or corrupt employees go without too many consequences.

[spdrun]

^^^

Maybe at 2009-2010 stock market levels — there’s next to no risk at late 2012/early 2013 levels unless we’re dealing with profoundly stupid investment managers.

Secondly, L.A. is too geographically large to govern efficiently — a split up of L.A. and ability to let the corrupt, inept and overpaid go might actually be a good thing in the long run.

[scaredyclassic]

The time to buy is as they say when there is blood in the streets…but I don’t think we’ve seen more than a bit of pus in the gutter.

[FlyerInHi]

Seems to me cycles occur because of credit and leverage. If people generally paid cash, they would never have to sell and we wouldn’t have boom and bust cycles.

The big worry is china. People borrowing money in that shadow financial markets yo speculate. Asset prices have way outpaced incomes so unless china is able to engineer a consumer market with a rising middle class, there will be a crash.

After unprecedented money printing around the world, policy makers need to find ways to put money into the hands of consumers who will spend it.

[The-Shoveler]

The slowdown in China is self-induced by policy changes.
Look for that to reverse soon IMO.
They are just flapping the markets for political reasons.

They will hit the print fast button again soon IMO.

[spdrun]

China crashing might be a cause for celebration, not a worry, for some. For all we know, this may be a deliberately engineered crisis — get them hooked on some QE opium, then pull their source and watch them twitch.

[spdrun]

Depends — labor costs in China are going up, making their products more expensive (their workers want a higher standard of living). The market for consumer electronics, at least in countries that can afford them, is glutted (see also: Apple iPhone sales).

Lastly, if *we* wanted to crash the competition, what better way than to flood the markets with cheap money that is used to buy their goods and stocks, then pull the rug out, leaving them holding the bag?

[The-Shoveler]

The ones left holding the bag will be anyone who is holding renminbi (RMB).
They have far far far out printed the whole world.
This is how we are losing the stimulus game LOL
They build infrastructure, we make enemies destroying it.
Turning dollars into smoke, noise and ash.

[spdrun]

They build infrastructure, we make enemies destroying it.
Turning dollars into smoke, noise and ash.

Sadly, agreed.

[paramount]

Capital Controls at HSBC:

Following research last week suggesting that HSBC has a major capital shortfall, the fact that several farmer’s co-ops were unable to pay back depositors in China, and, of course, the liquidity crisis in China itself, news from The BBC that HSBC is imposing restrictions on large cash withdrawals raising a number of red flags. The BBC reports that some HSBC customers have been prevented from withdrawing large amounts of cash because they could not provide evidence of why they wanted it. HSBC admitted it has not informed customers of the change in policy, which was implemented in November for their own good: “We ask our customers about the purpose of large cash withdrawals when they are unusual… the reason being we have an obligation to protect our customers, and to minimize the opportunity for financial crime.” As one customer responded: “you shouldn’t have to explain to your bank why you want that money. It’s not theirs, it’s yours.”

[spdrun]

^^^

I wouldn’t worry about that story, personally. I saw it last weekend — it seems to have come from one source and spread virally to a bunch of conspiracy sites. Plus the policy change in question was in Nov 2013, not recently.

I’m betting that either (a) they don’t want to keep large amounts of cash on hand at all branches or (b) they’re catching flak over money-laundering accusations and want to play the good guy for a while.

Also, HSBC plc stock has been trading in the 52-57 range (40-60 the last four years) for the past year. While it’s at the low end of the 1-year range now, its behaviour doesn’t indicate people with inside information looking to get out of Dodge.

This looks more like a poor attempt at stock manipulation than a genuine issue, but I could be wrong.

[livinincali]

[quote=The-Shoveler]The ones left holding the bag will be anyone who is holding renminbi (RMB).
They have far far far out printed the whole world.
This is how we are losing the stimulus game LOL
They build infrastructure, we make enemies destroying it.
Turning dollars into smoke, noise and ash.[/quote]

No we are losing the stimulus game because demand is local and supply is global. In addition the stimulus game doesn’t work when you’re already deeply in debt (i.e. Japan). There is no fiscal solution to the too much debt problem we face. The solution is to embrace default and deflation and get back to a point where we can grow the economy again.

Granted that destroys plenty cities and pension funds but that already happened. There’s nothing you can do to change the fact that those plans are unfunded and there’s no way to make good on them. We just haven’t decided to realize that yet.

[Author]

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