Inverted yield curve (again)

cloud_dog

Al, the link doesn't seem to work (do you need to be a registered user?).

cloud_dog

free4440273

I am standing by my initial posts. this recession is going to be ever so nasty. we are now entering a period of massive stagflation. people have generally been saying that a housing crash will precipiate a recession. quite the opposite. the housing market will indeed crash - but the recession will necessitate the housing crash. Plus, as i have said before, both bernanke and king have probably come to the view that we deserve a recession (and we do - irresponsible financial and monetary policy is always punished by the markets at some stage).i realise that many will say this is just a self-fulfiling prophecy on my part; in other words, wishful thinking on my part. no, everything i see is indicating trouble ahead - massive current account deficit in the states; the yen 'carry-trade' which could unfold anytime as investors lose their nerve; the conundrum with bonds; over-inflated stocks; interest rates on the rise in uk, eu, and us.
come the reckoning, come the recession. :eek:

Deemy

errr over inflated stocks ?

On what measure ?

blinko

i have another interesting theory i think that the BNP will do better in the next coming election !!! i dont know if this sounds reasonable but usually when the economy is doing badly and everything seems to be going wrong isnt that when the extremist parties seem to start doing well !!

free4440273

Deemy wrote:

errr over inflated stocks ?

On what measure ?

the p/e ratio.

EdInvestor

THe UK market p/e has been under the average for years, indicating that stocks are good value.:)

It's generally thought that the next move (which may be a while coming) in UK rates will be down, not up.

free4440273

EdInvestor wrote:

THe UK market p/e has been under the average for years, indicating that stocks are good value.:)

It's generally thought that the next move (which may be a while coming) in UK rates will be down, not up.

without wanting to be pedantic, in my earlier post i did not refer to over-inflated stocks specific to the uk - i mean worldwide (and for me the uk also). i beg to differ - interest rates are going up (or at least they should be going up). nice to see that the ecb did indeed raise rates last week also. mr bernanke will do so at the next fed meeting. japan too is 'giving up' on zero rates policy. house prices in the uk still on the rise; inflation on the rise (utility, council tax, wages, etc) in the uk - common sense would dictate that rates should go up. Everything is pointing to a period of stagflation in the world economy - worrying times ahead (but we only have ourselves to blame) :eek:

EdInvestor

I think you'll find that the other countries are actually following us - we were one of the first countries (IIRC Australia was the first) to start raising interest rates after the general lowering after the market collapse /Sept 11 events 4 or 5 years ago.We raised from mid 2004, you'll remember which bought the housing market to a complete halt and also knocked retail spending for six. That cycle peaked last year, when rates were lowered once.

Inflation is well within the BoE target at the moment IIRC, so the signals are not for a raising of rates, more likely a lowering or just steady. Have you not noticed what happened to growth last year ( partly as a result of the effect on consumer spending of fear of higher interest rates?)

blinko

so you think the markets will continue to go up !! and wont crash !!
im in japan at the moment and they are doing teribly its up n down like a yoyo anyone think that this may happen to the UK !!

Deemy

blinko wrote:

so you think the markets will continue to go up !! and wont crash !!
im in japan at the moment and they are doing teribly its up n down like a yoyo anyone think that this may happen to the UK !!

In the longer term Japan looks .... okay...

Definetly not an india, but should rise, in the immediate future, well we are passing that time window for positive stock prices and approaching the window for downward pressure on stock prices, so likely Japan will follow much of the rest of the markets lower, how far and to what degree, I don't know ???

But I will likely re-enter Japan on an IT trust on say a decline to 15,000 to 14,000. Somewhere in that range, if the market looks like bottoming , I'll buy back in.... not much just a little, since the moneys much better elsewhere, as you know if you still hold india