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aussiebear

World Stock Markets Trading Discussion - Cranky collaboration

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I don't know if you will see this comment Lee because of your travels but I followed the link you gave to Alahambra's Jeff Snider and he's talking a foreign language to me. "there is no such thing as QT." he says?

I can sort of get this if you don't include the Treasury, I guess. Looking at other articles it's all sort of  Greek to me. At any rate it all seems contrary to your  basic views so I wonder why you linked it?

https://www.alhambrapartners.com/2019/02/20/fomc-minutes-the-new-narrative-takes-shape/

 

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I admit to not understanding him a lot of the time either. I usually read his posts before I post them and if I can't grasp it, which is frequently, I don't post them.  Sometimes, I post them just because I like the charts.  In the end, somebody  is wrong, and I hope it's not me, but I occasionally will post views counter to my own. 

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All Ords 5-day chart

big.chart?nosettings=1&symb=AU:XAO&uf=0&

http://bigcharts.mar...com/default.asp

 

All Ords closed +0.4% for the day with sectors ranging from REITS +1.6% down to Energy -1.7%.

Over in Asia, China +1.9%, Hong Kong +0.7%, Japan -0.2%, India currently -0.1%.

Just open in UK/Europe and it's up: FTSE +0.2%, DAX +0.3%, CAC +0.2%.

 

 

 

 

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Snider's view is that the impact of QE/QT and the rate changes by the Fed since the early 1990's has been peanuts in terms of its impact on markets. He believes the biggest factor is global growth in the EU, the BRIC's and the emerging markets. You can predict the US market better by watching foreign holdings of US assets. And they aren't liquidating US assets due to trade wars, Russian spats, etc. They are liquidating because China, the EU, Russia and the emerging markets are all entering a liquidity crisis. That is his view. China, the EU, Russia and the emerging markets are all anticipating a crisis now and there isn't much the Fed can do about it and therefore the yield curve won't steepen. He believes the Fed is completely misunderstanding what is happening in US markets because they are ignorant about global flows.

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12 minutes ago, sandy beach said:

Snider's view is that the impact of QE/QT and the rate changes by the Fed since the early 1990's has been peanuts in terms of its impact on markets. He believes the biggest factor is global growth in the EU, the BRIC's and the emerging markets. You can predict the US market better by watching foreign holdings of US assets. And they aren't liquidating US assets due to trade wars, Russian spats, etc. They are liquidating because China, the EU, Russia and the emerging markets are all entering a liquidity crisis. That is his view. China, the EU, Russia and the emerging markets are all anticipating a crisis now and there isn't much the Fed can do about it and therefore the yield curve won't steepen. He believes the Fed is completely misunderstanding what is happening in US markets because they are ignorant about global flows.

Very interesting, thanks Sandy 🙂

i think it is possible that the FED doesnt take foreign flows into account to extend which would be necessary. For example Brexit is a huge topic in Europe, which also will have quite the impact on capital flows. You read or hear almost nothing in the US media about that. The biggest problem: China is black box with 1.3 billion citizens. I say: NO ONE on earth knows the amount of money etc. which really flows as „chinese money“ around the globe. This wingohockingmoyamensings up is every liquidity analysis. To a much smaller extend same counts for Russia and the Arabs. Data we get from all these countries/regions is not trustworthy and most of the time simply made up.

The only solution for us is to follow price action, both of US and international stocks. 

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What is also important: The US Dollar. When USD is weak it is better for foreigners to invest in their home market. When USD is strong foreigners better invest in the US stock market.

From 2003 to 2007 foreign markets performed better than US stocks. The simple reason is that the USD was weak and did fall a lot during that time. The monster move in Nikkei during the 80s was to a large extend caused by a rising Yen vs USD (after Plaza Accord).

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1 hour ago, sandy beach said:

Snider's view is that the impact of QE/QT and the rate changes by the Fed since the early 1990's has been peanuts in terms of its impact on markets.

 Well odd Lee would link to that. I'm with Lee. Those things he talks about  best explain the growth of economies but not the rise in the stock markets. A quick look says world GDP is up maybe 80% since 1990. The S&P 750%. Well the former may be inflation adjusted so let's say world GDP is up 200%. Still a huge mismatch.

He's a wealth manager. It figures  he doesn't think asset prices inflate. I suppose he thinks that if the Fed does whatever he thinks it should the S&P will be 21,000 in 2050. That would be excellent for him and his customers. I don't doubt for one second that 21,000 number is the target for the 1%

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36 minutes ago, fxfox said:

There is almost no correlation between GDP growth and stock market growth:

https://www.advisorperspectives.com/articles/2015/04/14/stock-market-returns-the-gdp-growth-rate-myth

I am not saying they do and I will allow stocks have to increase at a rate higher than GDP because of the nature of how the political economy works but I am suggesting at some point there has to be a limit and we have overstepped it.  

That article says total returns  for 130 years of stocks were 50% more than GDP.  Not 300% or whatever just on prices alone, without dividends,  have returned since 1990.

What he means by reforming the monetary system after 08 I don't know. Since I've never even seen a proposal how would that be accomplished?  Make him emperor of the world.

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11 minutes ago, Jorma said:

I am not saying they do and I will allow stocks have to increase at a rate higher than GDP because of the nature of how the political economy works but I am suggesting at some point there has to be a limit and we have overstepped it.  

That article says total returns  for 130 years of stocks were 50% more than GDP.  Not 300% or whatever just on prices alone, without dividends,  have returned since 1990.

I share your view. A bit of a problem is that we are not THAT grossly overvalued like we were say in 2000. We are high, ok, but we are not in the stratosphere. „Permanently high plateau“ comes to mind... After that was said, the market went on with its march quite a bit longer than most thought. Many „advisors“ thaught that LTCM in 98 was THE top. It was not.

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