I think what Brazen is probably also referring to is that selling volume spike on the DOW... The initial low was 10 Oct 08, lower volume on the lowest low of 20 Nov 08, but Fri 27 Feb's volume was a hair's breadth short of the Oct volume and significantly more than 20 and 21 Nov 08's volumes. And, the Oracle's utterance's over the weekend ain't going to help either.
I can't believe that as a bear I'm actually now really getting a bietjie bang at what I'm seeing at a macro level. This market is now behaving very different from what we saw in dotcom. I agree with you that we could see another 30% to 40% downside as it's now getting difficult to see any significant support levels and, if I'm getting jittery, then I don't want to know what the bulls feel like. What scares me is that we're now entering the kind of territory where the scale of wealth destruction is going to cause real structural damage that is going to take many years to recover. I'm really trying hard to be unbiased about this. Let's hope we're just entering a normal capitulation phase and not the start of a deflationary spiral. I'm so disconcerted by our government's utter lack of vision and understanding of what's happening and just how vulnerable we really are... I think I need horse tranquilizers, anyone got some?
Ya nova I hear some of what u are saying...that ZAR is looking pretty vulnerable and I am not sure the "models" have taken the levels of ZAR weakness we may see into account...pretty sure the banks havent...we should see ZAR 12 to the USD
I don't think we're near capitulation. This thing has no relationship to any market we've been lived through and every time I hear someone saying "SA is protected" I want to shake them. Dot-com was a bit of a shakeout, but it wasn't structural. The US is spending all its bullets on the way down and I'm worried it won't have enough ammo for later.
You're on the button as usual Chartist. It's that blooming deficit, and it's going to get much, much worse at the rate that our exports are crumbling, and we do not have treasury reserves to even speak of. Can you imagine, a gold producing nation where only 9% of forex reserves are held in AU, a measly 124 tonnes (if I'm right). We are oh so vulnerable here. With our economic framework, at the rate this thing is picking up steam we could see a deflationary spiral in real assets (credit backed type assets) and hyperinflation in consumables/staples since we import just about everything we consume. The ZAR is on ultra thin ice. Inflation still at 8% is guaranteed ZAR devaluation against all those currencies now at virtual 0% inflation and while it says inflation, the dynamics of the kind of macro conditions we are now seeing don't quite fit the overall inflation model. In a normal recession you get GDP contraction and with a falling CPI you'd expect some mitigation of the drop in personal consumption expenditure. That's not what is happening this time. Our demand still seems kinda ok but we do lag the rest of the world some. Look to the US as a LEI for this kind of thing. Unlike their previous recessions where a drop in CPI encourages spending, this time it's not happening. There is a secular change happening in consumer behaviour in the US. Their GDP is tumbling, their CPI is crumbling, and the US consumer's Personal Consumption Expenditure is heading south at an alarming rate. The stimulus is NOT working. I will not be surprised if I'm paying ZAR50 for a can of tuna two years from now. Here's a lesser warning sing of what could be ahead. All of you, think about this whether you work for yourself or a company: Has there been any talk of no bonuses or increases this year? Has there been any subtle hints of possible salary cuts? For me the prior is already a fact and the latter has been hinted at twice. That folks, is where deflation begins.
Nowadays the weathers *****py,we dont know wheter to wear shorts or longs..u dont wana get caught wearing short pants when it snows(rallies 5-10%),we due sum "snow" no??Dow under 7000,sum bargain hunting and we could see big rallies...so just be careful...