Knowing What Needs To Be Done

Another day, another Saturday and another week.

Dow is down again for week. Surprised anyone? And for those keeping score, that's stocks down for 4th straight week!

That's how the SPX is faring so far. Note the declining volume. Note where the new trend line could be developing.

The Warning Signs From The Dry Bulk Sector Again? Baltic Dry Index closed down another 1% yesterday at 2985. Yes the BDI is below 3k again. How fast it had broken back down, yes?

Remember the issue of the potential shipping glut mentioned in the above posting?

• 1000 new ships are hitting the market this year and again next year, compared to 300 in normal years. There is obviously a horrendous shipping glut!

ps. wouldn't this distort future bdi readings? And wouldn't this distort one's reliance on the bdi as a leading indicator? ( See The Fool's Game In The Baltic Dry Index )

Everyone is now well aware of China recent stimulus program or rather how China had chosen to allow a loan bubble to be created.

Yes, this is The China Accident Waiting To Happen To Every One Of Us!

And if you need to know the size of the new loan package China had announced, do see RMB 1.5 trillion in new Chinese lending — can we turn this thing off?.

Solving a bubble with a bubble?

Need one to be a genius to figure out where this is heading? Jesse had a piece on this also. The China Bubble and the Convergence of Oligarchies

• Conclusion: It is difficult to see what Chinese leaders expect to happen once the bubble busts. Maybe they are gambling that they can control the unrest that will come in its wake. Maybe they assume the bubble will not bust for many years. (And this is different from the US now in what way? - Jesse)
  
  But articles like the one excerpted above show us that sooner or later China's overheated and pseudo-Western economy will implode, and likely even more violently than Western economies ever have. And here's a thought: The Chinese in the meantime are said to be big buyers of gold on a government level and also personally. Perhaps what is going to eventually happen is better known in China than the West.

Oh yeah, so the Chinese banks are lending out money like crazy to the Chinese people.

What are the stuff we are seeing? We see the incredible run in commodity inventory. We have seen exploding vehicle sales. Money for nothing, what!

And my, look at how China's stock market has been doing the past 6 months.

LOL! What? A bear market? They have been on a tear! Yes sir me! It's the market that could fly up, up and away!

And what about crude oil?



See where it is at. Wanna guess where it most likely to head in the near future?

And what about Malaysia's FCPO. How are they doing?



Looking good? Wanna guess where it most likely to head in the near future?

And the Malaysian Ringgit. See how the USD is gaining strength against our ringgit? Yeah, our ringgit has been doing rather poor lately.


Some comments from Business Times's on Ringgit's performance.

• MALAYSIA'S ringgit fell yesterday, capping its biggest weekly loss since February, as reports suggesting the nation slipped into a recession in the second quarter deterred investment in local stocks.
  
  The currency weakened after reports this week showed exports and factory production extended a slump into May.
  
  The Kuala Lumpur Composite Index of local stocks slipped for a second week as Bank Negara Malaysia said the second-quarter economic performance was “the same as what we saw in the first quarter,” when gross domestic product contracted 6.2 per cent. The GDP report isn’t due until late August.
  
  “The summer is typically a volatile season and the ringgit is going to be affected by thinning fund flows,” said Suresh Kumar Ramanathan, a strategist at CIMB Investment Bank Bhd. in Kuala Lumpur.
  
  “There’s bound to be risk aversion as data aren’t pointing to an imminent recovery yet.”
  
  The ringgit dropped 1.5 per cent to 3.5785 per dollar as of 4.35 pm in Kuala Lumpur from a week ago, according to data compiled by Bloomberg. It fell 0.4 per cent yesterday, after touching 3.5855 Thursday, the lowest level since April 29.
  
  Factory output fell for a ninth month in May, shrinking 11 per cent from a year earlier, the statistics department reported Thursaay. Exports tumbled 30 per cent as electronics shipments slowed, the trade ministry said on July 3.
  
  Global investors withdrew US$365 million from Asia ex-Japan equity funds in the week ended July 8 amid “doubts about US appetite for exports,” said Cambridge, Massachusetts-based EPFR, which tracks US$10 trillion globally.

How?

Know which flow to go with?

:D